Document:

exv10w9

Exhibit 10.9

Dated 31 March 2010

 

MARFIN EGNATIA BANK Societe Anonyme

as Lender

-and-

GRAND RODOSI INC.

and

NEWLEAD SHIPPING S.A.

and

NEWLEAD BULKERS S.A.

as joint and several Borrowers

 

FINANCIAL AGREEMENT

revolving credit facility of up to US $35,000,000

 

 

 

INDEX

	 	 	 	 	 	 	 	 	 

	 	1.	 	 	PURPOSE

	 	 	1	 
	 	2.	 	 	DEFINITIONS

	 	 	1	 
	 	3.	 	 	THE FACILITY — THE BORROWERS JOINT AND SEVERAL LIABILITY

	 	 	14	 
	 	4.	 	 	AVAILABILITY

	 	 	15	 
	 	5.	 	 	NOTICE OF DRAWDOWN

	 	 	15	 
	 	6.	 	 	INTEREST PERIODS

	 	 	17	 
	 	7.	 	 	INTEREST

	 	 	17	 
	 	8.	 	 	DEFAULT INTEREST

	 	 	18	 
	 	9.	 	 	SUBSTITUTE BASIS

	 	 	18	 
	 	10.	 	 	PREPAYMENT

	 	 	19	 
	 	11.	 	 	REPAYMENT

	 	 	21	 
	 	12.	 	 	APPLICATION

	 	 	22	 
	 	13.	 	 	EVIDENCE OF DEBT

	 	 	23	 
	 	14.	 	 	PAYMENTS

	 	 	23	 
	 	15.	 	 	CHANGE OF CIRCUMSTANCES

	 	 	24	 
	 	16.	 	 	REPRESENTATIONS AND WARRANTIES

	 	 	25	 
	 	17.	 	 	SECURITIES

	 	 	30	 
	 	18.	 	 	CONDITIONS PRECEDENT

	 	 	30	 
	 	19.	 	 	FINANCIAL AND GENERAL UNDERTAKINGS

	 	 	34	 
	 	20.	 	 	INSURANCE UNDERTAKINGS

	 	 	37	 
	 	21.	 	 	OPERATIONAL UNDERTAKINGS

	 	 	40	 
	 	22.	 	 	EARNINGS ACCOUNTS

	 	 	45	 
	 	23.	 	 	SECURITY MARGIN

	 	 	46	 
	 	24.	 	 	EVENTS OF DEFAULT

	 	 	46	 
	 	25.	 	 	SET-OFF

	 	 	49	 
	 	26.	 	 	FEES

	 	 	50	 
	 	27.	 	 	EXPENSES

	 	 	50	 
	 	28.	 	 	INDEMNITY

	 	 	50	 
	 	29.	 	 	ENVIRONMENTAL INDEMNITY

	 	 	50	 
	 	30.	 	 	STAMP DUTIES

	 	 	50	 
	 	31.	 	 	DETERMINATIONS

	 	 	51	 
	 	32.	 	 	NO WAIVER

	 	 	51	 
	 	33.	 	 	PARTIAL INVALIDITY

	 	 	51	 
	 	34.	 	 	TRANSFER, ASSIGNMENT, PARTICIPATION, CHANGE OF LENDING BRANCH

	 	 	51	 
	 	35.	 	 	NON-IMMUNITY

	 	 	52	 
	 	36.	 	 	NOTICES

	 	 	52	 
	 	37	 	 	SUPPLEMENTAL

	 	 	54	 
	 	38.	 	 	LAW AND JURISDICTION

	 	 	54	 
	 	39.	 	 	THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS

	 	 	55	 
	 	SCHEDULE 1: FORM OF NOTICE OF DRAWDOWN	 	 	57	 
	 	SCHEDULE 2: FORM OF ACKNOWLEDGEMENT	 	 	59	 
	 	SCHEDULE 3: FORM OF BUDGET	 	 	60	 

 

 

THIS
AGREEMENT is made the 31st day of March 2010

BETWEEN

	1)	 	MARFIN EGNATIA BANK Societe Anonyme as lender; and
	 
	2)	 	GRAND RODOSI INC., NEWLEAD SHIPPING S.A. and NEWLEAD BULKERS S.A. as joint and several
borrowers.
	 
	1.	 	PURPOSE
	 
	 	 	This Agreement sets out the terms and conditions on which the Lender has agreed to
make available to the Borrowers as joint and several borrowers a revolving credit
facility, not exceeding at any relevant time the aggregate amount of Thirty Five
million Dollars ($35,000,000) in multiple Advances in the following amounts and for
the following purposes:

	 	(i)	 	an Advance (the “Refinancing Advance ”) in an amount of up to Fifteen million
Dollars ($15,000,000) for the purpose of initially assisting, inter alios, the Rodosi
Borrower in refinancing part of certain existing outstanding indebtedness in relation
to, inter alia, the Ship pursuant to the Existing Financial Agreement; and
	 
	 	(ii)	 	Advances in amounts approved by the Lender (the “Working Capital Advances”)
for the purpose of providing the Borrowers or any of them with working capital.

	2.	 	DEFINITIONS
	 
	2.1	 	In this Agreement the following terms shall have the following meanings, unless the context
otherwise requires:
	 
	 	 	“Advance” means the principal amount of each borrowing by the Borrowers under this
Agreement (including for the avoidance of doubt each of the Refinancing Advance and the
Working Capital Advances) or, if the context may require, so much thereof as shall for the
time being be outstanding to the Lender hereunder or, as the case may be, the principal
amount of that portion of each borrowing by the Borrowers under this Agreement for which
the Borrowers select an Interest Period of a particular duration and, in the plural, means
all of them;
	 
	 	 	“Anemi” means Grand Anemi Limited, a company duly formed and existing under the laws of the
Republic of Malta, having its registered office at 198 Old Bakery Street, Valletta, Malta;
	 
	 	 	“Applicable Accounting Principles” means those accounting principles, standards and
practices on which preparation of the Financial Statements is based, which are
International Financial Reporting Standards (IFRS) and principles and practices adopted by
the Grandunion Guarantor and its Subsidiaries at the date hereof or at any time hereafter
and notified to and accepted by the Lender;

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	 	 	“Applicable Limit” means the maximum amount available for drawing hereunder at any relevant
time and being on the date hereof Thirty Five million Dollars ($35,000,000) as it may from
time to time be reduced in accordance with Clause 3.1 (ii) and any other provisions of this
Agreement;
	 
	 	 	“Applicable Margin” means three point
seventy five per cent (3.75 %) per annum;
	 
	 	 	“Approved Brokers” means the insurance brokers appointed by the Borrowers with the
Lender’s prior approval;
	 
	 	 	“Auditors” means any first class firm of international accountants to be approved by the
Lender;
	 
	 	 	“Availability Period” means the period commencing from the date of this Agreement and
ending on the Termination Date;
	 
	 	 	“Banking Day” means a day on which banks and financial markets are open for business
in Athens, New York and London and any other financial centre which the Lender may deem
appropriate for the operation of the provisions of this Agreement;
	 
	 	 	“Borrowers” means together the Rodosi Borrower, the Newlead Shipping Borrower and the
Newlead Bulkers Borrower and, in the singular, means any of them;
	 
	 	 	“Budget” means, in respect of the Ship, a budget substantially in the form set out in
Schedule 3 referred to in Clause 19.25;
	 
	 	 	“Charter” means the time charter in respect of the Ship dated 7 January 2009 made between
the Owner as owner and the Charterer as charterer for a period of about three (3) years
(about means sixty (60) days more or less in Charterer’s option) at a daily hire rate of
Ten thousand Two hundred Dollars ($10,200) including overtime, as the same may from time to
time be amended, varied or supplemented, with the Lender’s prior written consent;
	 
	 	 	“Charter Assignment” means in relation to the Ship, the first priority deed of assignment
of the Charter made or, as the context may require, to be made between the Rodosi Borrower
and the Lender in form and substance satisfactory to the Lender in its sole discretion as
the same may from time to time hereafter be amended, varied or supplemented;
	 
	 	 	“Charterer” means TMT Bulk Corp. of Taipei, Taiwan;
	 
	 	 	“Classification Society” means, in respect of the Ship, Bureau Veritas, or such other
classification society member of the IACS, as may be approved in writing by the Lender;
	 
	 	 	“Commitment Letter” means the letter dated 30 March 2010, issued by the Lender addressed to
the Borrowers and the Grandunion Guarantor and accepted by the

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	 	 	Grandunion Guarantor for and on behalf of itself, the Borrowers and the Personal Guarantor
on 30 March 2010;
	 
	 	 	“Compulsory Acquisition” means requisition for title or other compulsory acquisition,
requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for
any reason of the Ship by any Government Entity or other competent authority, whether
de jure or de facto, but shall exclude requisition for use or hire not involving
requisition of title;
	 
	 	 	“Control” means in relation to a body corporate:

	 	(a)	 	the power (whether by way of ownership of shares, proxy, contract, agency or
otherwise) to:

	 	(i)	 	cast, or control the casting of, more than fifty per cent
(50%) of the maximum number of votes that might be cast at a general meeting
of such body corporate; or
	 
	 	(ii)	 	appoint or remove all, or the majority, of the directors or
other equivalent officers of such body corporate; or
	 
	 	(ii)	 	give directions with respect to the operating and financial
polices of such body corporate with which the directors or other equivalent
officers of such body corporate are obliged to comply; and/or

	 	(b)	 	the holding beneficially of more than fifty per cent (50%) of the issued share
capital of such body corporate (excluding any part of that issued capital that carries
no right to participate beyond a specified amount in a distribution of either profits
or capital),

	 	 	and “Controlled” shall be construed accordingly;
	 
	 	 	“Corporate Security Party” means a Security Party which is a company or a corporation;
	 
	 	 	“Default Rate” means the interest rate referred to in Clause 8.1;
	 
	 	 	“Demand Date” means the date on which the Lender shall make a demand upon the Borrowers for
repayment of the Facility in accordance with Clause 11.1;
	 
	 	 	“Dollars” or “$” means the lawful currency for the time being of the United States of
America;
	 
	 	 	“Drawdown” means the making of an Advance by the Lender to the Borrowers;
	 
	 	 	“Drawdown Date” means, in relation to each Advance, the date requested by the Borrowers for
that Advance to be made available or (as the context requires) the date on which that
Advance is actually made available;

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	 	 	“Earnings” means in relation to the Ship all freight, hire, passage monies and any other
amounts whatsoever which may at any time be earned by or become payable to or for the
account of the Owner or its agents arising out of or as a result of the ownership,
possession, management and/or operation of the Ship by the Owner or its agents or
under any charter (including, without limitation, the Charter), contract or carriage
or other contract (including a salvage or towage contract) for the use, operation or
management of the Ship, all payments for any variation of any such contract and all
damages for any breach of any such contract, all general average and salvage
remuneration and all compensation for requisition for hire;
	 
	 	 	“Earnings Accounts” means collectively the interest bearing deposit accounts opened by the
Rodosi Borrower, each numbered 0169089429, 0338786425, 0169091427, 0338788426 into which
all the Earnings of the Ship are to be paid, in accordance with Clauses 21.2 and 22.2, each
such account to include any substitute account or sub-account or revised account or revised
designation or number whatsoever and any deposit account to which monies from any Earnings
Account may from time to time be paid on a time deposit basis and, in the singular, means
any of them;
	 
	 	 	“Earnings Account Charge” means, in relation to each Earnings Account, the first priority
assignment, pledge and charge relating to that Earnings Account opened in the name of the
Rodosi Borrower executed or, as the context may require, to be executed by the Rodosi
Borrower in favour of the Lender in form and substance satisfactory to the Lender as the
same may from time to time hereafter be amended, varied or supplemented and, in the plural,
means all of them;
	 
	 	 	“Encumbrance” means a mortgage, pledge, lien, charge (whether fixed or floating),
assignment, hypothecation, security interest, title retention, preferential right or trust
arrangement and any other security agreement or arrangement whether now existing or arising
in the future on the assets or revenue of the Borrowers or any of them or any other
Security Party other than a pledge or lien arising by operation of law;
	 
	 	 	“Environmental Approvals” means any permit, licence, approval, ruling, certification,
exemption or other authorisation relating to the Ship required under applicable
Environmental Laws;
	 
	 	 	“Environmental Claim” means:

	 	(a)	 	any claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or which relates
to any Environmental Law; or
	 
	 	(b)	 	any claim by any other person which relates to an Environmental Incident or
to an alleged Environmental Incident;

	 	 	and “claim” means a claim for damages, compensation, fines, penalties or any other payment
of any kind whether or not similar to the foregoing; an order or direction to take, or

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	 	 	not to take, certain action or to desist from or suspend certain action; and any form of
enforcement or regulatory action, including the arrest or attachment of any asset;
	 
	 	 	“Environmental Incident” means:

	 	(a)	 	any release of Environmentally Sensitive Material from a Relevant Ship; or
	 
	 	(b)	 	any incident in which Environmentally Sensitive Material is released from a
vessel other than a Relevant Ship and which involves a collision between a Relevant
Ship and such other vessel or some other incident of navigation or operation, in
either case, in connection with which a Relevant Ship is actually or potentially
liable to be arrested, attached, detained or injuncted and/or a Relevant Ship and/or
any owner and/or any other operator or manager thereof is at fault or otherwise liable
to any legal or administrative action; or
	 
	 	(c)	 	any other incident in which Environmentally Sensitive Material is released
otherwise than from a Relevant Ship and in connection with which any Relevant Ship is
actually or potentially liable to be arrested and/or where any owner and/or any
operator or manager of any Relevant Ship is at fault or otherwise liable to any legal
or administrative action;

	 	 	“Environmental Law” means any law relating to pollution or protection of the environment,
to the carriage of Environmentally Sensitive Material or to actual or threatened releases
of Environmentally Sensitive Material;
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products and any other substance
(including any chemical, gas or other hazardous or noxious substance), which is (or is
capable of being or becoming) polluting, toxic or hazardous;
	 
	 	 	“Event of Default” means any event referred to in Clause 24;
	 
	 	 	“Excess Risks” means in relation to the Ship the proportion of claims for general average
and salvage charges and under the ordinary running-down clause, which is not recoverable in
consequence of the value at which the Ship is assessed for the purpose of such claims
exceeding her insured value;
	 
	 	 	“Existing Borrowers” means together the Rodosi Borrower and Anemi and, in the singular,
means either of them;
	 
	 	 	“Existing Financial Agreement” means the financial agreement dated 28 August 2009 made by
and among the Lender as lender and the Existing Borrowers as joint and several borrowers
pursuant to which the Lender made available to the Existing Borrowers a revolving credit
facility of One hundred Twelve million Dollars ($112,000,000) for the purposes and under
the terms and conditions therein set forth;
	 
	 	 	“Expiration Date” means the Original Expiration Date or any other date as the Lender may
agree in writing in accordance with the provisions of Clauses 11.2 and 11.3, provided that
if

5

 

	 	 	any such day is not a Banking Day the Expiration Date shall be the next succeeding day
which is a Banking Day unless such next succeeding Banking Day falls in another calendar
month in which event the Expiration Date shall be the immediately preceding Banking Day;
	 
	 	 	“Facility” means a revolving credit facility in the principal amount of up to Thirty
Five million Dollars ($35,000,000) at any time outstanding to be made available to the
Borrowers by the Lender in multiple Advances pursuant to the terms of Clauses 1 and Clause
3 or, if the context may so require, so much thereof as shall for the time being be
outstanding to the Lender hereunder;
	 
	 	 	“Finance Documents” means:

	 	(a)	 	this Agreement;
	 
	 	(b)	 	the Security Documents; and
	 
	 	(c)	 	any other document (whether creating an Encumbrance or not) which is executed at
any time by any Security Party or any other person as security for, or to establish
any form of subordination or priorities’ arrangement in relation to any amount payable
to the Lender under this Agreement or any of the documents referred to in this
definition or in any other Clause of this Agreement;

	 	 	“Financial Statements” means the audited by the Auditors or unaudited annual or
quarterly financial statements of the Group, referred to in Clause 19.1 comprising in each
case of a statement of income, balance sheet, cash flow statement and relative notes;
	 
	 	 	“Flag State” means, in relation to the Ship, the Republic of Liberia or any other flag
state which shall be acceptable to the Lender in its sole discretion;
	 
	 	 	“General Assignment” means, in relation to the Ship, the first priority deed of assignment
relative to the Insurances, the Earnings and the Requisition Compensation of the Ship made
or, as the context may require, to be made by and between the Owner and the Lender in form
and substance satisfactory to the Lender as the same may from time to time hereafter be
amended, varied or supplemented;
	 
	 	 	“Government Entity” means and includes (whether having a distinct legal personality or not)
any national or local government authority, board, commission, department, division, organ,
instrumentality, court or agency or tribunal and any association, organisation or
institution of which any of the foregoing is a member or to whose jurisdiction any of the
foregoing is subject or in whose activities any of the foregoing is a participant;
	 
	 	 	“Grandunion Guarantee” means the guarantee and indemnity in respect of the Borrowers’
obligations under this Agreement and the other Finance Documents executed or, as the
context may require, to be executed by the Grandunion Guarantor in favour of the Lender in
form and substance satisfactory to the Lender in its sole discretion as the same may from
time to time be amended, varied or supplemented;

6

 

	 	 	“Grandunion Guarantor” means Grandunion Inc., a corporation organized and existing
under the laws of the Republic of the Marshall Islands, having its registered office at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands;
	 
	 	 	“Group” means the Grandunion Guarantor and its Subsidiaries (whether direct or
indirect and including without limitation the Borrowers) from time to time during the
Security Period and “members of the Group” shall be construed accordingly;
	 
	 	 	“Guarantees” means together the Grandunion Guarantee and the Personal Guarantee and, in the
singular, means either of them;
	 
	 	 	“Guarantors” means together the Grandunion Guarantor and the Personal Guarantor and, in the
singular, means either of them;
	 
	 	 	“Indebtedness” means any and all moneys, liabilities and obligations (whether actual or
contingent, whether existing or hereafter arising, whether or not for the payment of money
and any obligation or liability to pay damages) which are now or which may at any time and
from time to time hereafter be due, owing, payable or incurred or expressed to be due,
owing, payable or incurred from the Borrowers or any of them (whether as principal, surety
or otherwise) to the Lender under this Agreement and the other Finance Documents;
	 
	 	 	“Insurance Documents” means all slips, cover notes, contracts, policies, certificates
of entry or other insurance documents evidencing or constituting the Insurances from time
to time in effect;
	 
	 	 	“Insurances” means, collectively in relation to the Ship, all policies and contracts
of insurance (which expression includes all entries of the Ship in a protection and
indemnity or mutual hull or war risks association) or such other arrangements by way of
insurance which are from time to time taken out or entered into in respect of or in
connection with the Ship and/or its Earnings or any equipment on board thereof pursuant to
this Agreement and including all benefits thereof including all claims of whatsoever nature
and return of premiums;
	 
	 	 	“Insurers” means the underwriters, insurance companies, mutual insurance associations
with or by which the Insurances are effected;
	 
	 	 	“Interest Determination Date” means the Banking Day which is two (2) Banking Days
prior to the commencement of an Interest Period;
	 
	 	 	“Interest Payment Date” means each day on which interest is payable in accordance with
Clause 7, provided that if any such day is not a Banking Day, the relevant Interest Payment
Date shall be the next succeeding day which is a Banking Day, unless such next succeeding
Banking Day falls into another calendar month, in which event, the relevant Interest
Payment Date shall be the immediately preceding Banking Day;

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	 	 	“Interest Period” means, for each Advance, each of the successive periods determined
in accordance with Clause 6 of this Agreement during which such Advance or any part thereof
is outstanding and for which an Interest Rate in respect thereof is to be established
hereunder;
	 
	 	 	“Interest Rate” means for each Advance (save as provided in Clause 9) the rate of
interest applicable to that Advance (or any part thereof) during each Interest Period in
respect thereof which is/are conclusively certified by the Lender to the Borrowers to be
the aggregate of (a) the Applicable Margin and (b) LIBOR or the Lender’s cost of funding
the relevant Advance, for Interest Periods of longer than six (6) months;
	 
	 	 	“ISM Code” means, in relation to its application to the Manager, the Owner, the Ship and
her operation:

	 	(a)	 	‘The International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by
the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4
November 1993 and incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
	 
	 	(b)	 	all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of the
International Maritime Organisation or any other entity with responsibility for
implementing the ISM Code, including without limitation, the ‘Guidelines on
implementation or administering of the International Safety Management (ISM) Code by
Administrations produced by the International Maritime Organisation pursuant to
Resolution A.788(19) adopted on 25 November 1995,

	 	 	as the same may be amended, supplemented or replaced from time to time;
	 
	 	 	“ISM Code Documentation” includes, in relation to the Ship:

	 	(a)	 	the document of compliance (DOC) and safety management certificate (SMC)
issued pursuant to the ISM Code in relation to the Ship within the periods specified
by the ISM Code; and
	 
	 	(b)	 	all other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require; and
	 
	 	(c)	 	any other documents which are prepared or which are otherwise relevant to
establish and maintain compliance of the Ship or the compliance of the Owner and/or
the Manager with the ISM Code which the Lender may require;

	 	 	“ISM SMS” means, in relation to the Ship, the safety management system for the Ship which
is required to be developed, implemented and maintained by the Owner under the ISM Code;

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	 	 	“ISPS Code” means the International Ship and Port Facility Security Code adopted by the
International Maritime Organization Assembly as the same may have been or may be amended or
supplemented from time to time;
	 
	 	 	“ISPS Code Documentation” includes, in relation to the Ship:

	 	(a)	 	the International Ship Security Certificate issued pursuant to the ISPS Code
in relation to the Ship within the periods specified by the ISPS Code; and
	 
	 	(b)	 	all other documents and data which are relevant to the ISPS Code and its
implementation and verification which the Lender may require;

	 	 	“Lender” means Marfin Egnatia Bank Societe Anonyme, a company duly incorporated under the
laws of the Republic of Greece, having its registered office at 20 Mitropoleos and
Komninon, 546 24 Thessaloniki, Greece and acting in this case through its office at 91 Akti
Miaouli, 185 38 Piraeus, Greece and shall include its successors and assigns;
	 
	 	 	“Letter of Undertaking” means a letter of undertaking executed or, as the context may
require, to be executed by Anemi in favour of the Lender, in such terms as the Lender may
approve or require;
	 
	 	 	“LIBOR” means, for an Interest Period:

	 	(a)	 	the rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest Period which
appears on the appropriate page of the Reuters Monitor Money Rates Service at or about
11.00 a.m. (London time) on the Interest Determination Date for that Interest Period
(or on such other service as may be nominated by the British Bankers’ Association as
the information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for Dollars); or
	 
	 	(b)	 	if no rate is quoted on the appropriate page of the Reuters Monitor Money
Rates Service, the rate per annum determined by the Lender to be the arithmetic mean
(rounded upwards, if necessary, to the nearest one-sixteenth of one per cent) of the
rates per annum at which deposits in Dollars are offered to the Lender by leading
banks in the London Interbank Market at the Lender’s request at or about 11.00 a.m.
(London time) on the Interest Determination Date for that Interest Period for a period
equal to that Interest Period and for delivery on the first Banking Day of it;

	 	 	“Loan Account” means collectively the account or accounts maintained by the Lender
referred to in Clause 13;
	 
	 	 	“Major Casualty” means, in relation to the Ship, any casualty to the Ship in respect of
which the claim or the aggregate of the claims against all insurers, before adjustment
for any relevant franchise or deductible, exceeds Three hundred thousand Dollars
($300,000) or the equivalent thereof in any other currency;

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	 	 	“Management Agreement” means, in relation to the Ship, the management agreement made
or to be made between the Rodosi Borrower and the Manager, in form and substance
satisfactory to the Lender as the same may from time to time be amended, varied or
supplemented with the Lender’s prior written consent;
	 
	 	 	“Manager” means Newlead Bulkers S.A., a corporation organized and existing under the laws
of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia,
Liberia and an office established in Greece under Greek Law 89/67 as amended at 1-7 Flessa
& 83 Akti Miaouli, 185 38 Piraeus, Greece, or any other company approved by the Lender as
manager of the Ship;
	 
	 	 	“Manager’s Undertaking” means, in relation to the Ship, a letter of undertaking
including, where appropriate, an assignment of any obligatory insurances executed or, as
the context may require, to be executed by the Manager in favour of the Lender, in such
terms as the Lender may approve or require;
	 
	 	 	“Market Value” means in respect of the Ship, the value thereof determined in accordance
with the provisions of Clause 21.26;
	 
	 	 	“Mortgage” means, in relation to the Ship, the first preferred Liberian mortgage, granted
or, as the context may require, to be granted by the Owner to the Lender to secure the due
payment of the Indebtedness in form and substance satisfactory to the Lender as the same
may from time to time hereafter be amended, varied or supplemented;
	 
	 	 	“Newlead Bulkers Borrower” means Newlead Bulkers S.A., a corporation organized and existing
under the laws of the Republic of Liberia, having its registered office at 80 Broad Street,
Monrovia, Liberia;
	 
	 	 	“Newlead Shipping Borrower” means Newlead Shipping S.A., a corporation organized and
existing under the laws of the Republic of Panama, having its resident agent’s address at
HSBC Building, Samuel Lewis Avenue, Panama, Republic of Panama;
	 
	 	 	“Nomination Date” means the Banking Day which is three (3) Banking Days prior to the
commencement of an Interest Period;
	 
	 	 	“Notice of Drawdown” means each written notice given by the Borrowers to the Lender
pursuant to Clause 5.1.4 substantially in the form set out in Schedule 1 hereto;
	 
	 	 	“Original Expiration Date” means the date falling one (1) year from the Drawdown Date of
the Advance first to occur;
	 
	 	 	“Owner” means the Rodosi Borrower;
	 
	 	 	“Permitted Liens” means any supplier’s, carrier’s, workman’s or similar lien arising in the
ordinary course of business automatically by statute or by operation of law and not by way

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	 	 	of contract in respect of amounts not yet due and payable but excluding any lien arising
from any default or omission of the Security Parties or any of them;
	 
	 	 	“Personal Guarantee” means the guarantee in respect of the Borrowers’ obligations, under
this Agreement and the other Finance Documents, executed or, as the context may require, to
be executed by the Personal Guarantor in favour of the Lender, in form and substance
satisfactory to the Lender, in its sole discretion as same may from time to time be
amended, varied or supplemented;
	 
	 	 	“Personal Guarantor” means the individual acceptable to the Lender in its sole
discretion who shall execute the Personal Guarantee;
	 
	 	 	Pertinent Jurisdiction”, in relation to a company, means:

	 	(a)	 	England and Wales;
	 
	 	(b)	 	the country under the laws of which the company is incorporated or formed;
	 
	 	(c)	 	a country in which the company’s central management and control is or has
recently been exercised;
	 
	 	(d)	 	a country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax;
	 
	 	(e)	 	a country in which assets of the company (other than securities issued by, or
loans to, related companies) having a substantial value are situated, in which the
company maintains a permanent place of business, or in which a Security Interest
created by the company must or should be registered in order to ensure its validity or
priority; and
	 
	 	(f)	 	a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to
in paragraphs (b) or (c) above;

	 	 	“Protection and Indemnity risks” means the usual risks covered by a protection and
indemnity association that is a member of the International Group of Protection and
Indemnity Associations, including the proportion not otherwise recoverable in case of
collision under the ordinary running-down clause;
	 
	 	 	“Refinancing Advance” shall have the meaning ascribed to it in Clause 1 (i);
	 
	 	 	“Relevant Ship” means the Ship and any other ship from time to time owned, managed or
crewed by, or demise or bareboat chartered to, the Owner, any other Borrower or any other
member of the Group;
	 
	 	 	“Repayment Date” means the earlier of the dates referred to in Clause 11.1, provided that
if any such day is not a Banking Day the relevant Repayment Date shall be the next
succeeding day which is a Banking Day unless such next succeeding Banking Day falls in
another calendar month in which event the relevant Repayment Date shall be the immediately
preceding Banking Day;

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	 	 	“Requisition Compensation” means all compensation payable by reason of any Compulsory
Acquisition of the Ship;
	 
	 	 	“Rodosi Borrower” means Grand Rodosi Inc., a corporation organized and existing under the
laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia,
Republic of Liberia;
	 
	 	 	“Security Documents” means collectively the Mortgage, the General Assignment, the
Charter Assignment, the Guarantees, the Manager’s Undertaking, the Letter of Undertaking
the Earnings Accounts’ Charges and where the context so admits this Agreement and any other
agreement or document that may be executed at any time by the Borrowers, the other Security
Parties or any other person as security for the due payment of the Indebtedness;
	 
	 	 	“Security Parties” means each party to the Finance Documents (other than the Lender
and the Charterer) and, in the singular, means any of them;
	 
	 	 	“Security Period” means the period during which the Finance Documents remain in effect
and ending when the Indebtedness is paid in full;
	 
	 	 	“Ship” means the m.v. “GRAND RODOSI”, a bulk carrier vessel, with gross tonnage of 37,519
tons and net tonnage of 22,604 tons, registered in the ownership of the Owner, under the
laws and flag of the Flag State;
	 
	 	 	“Subject Documents” means all of the Finance Documents, the Charter and the Management
Agreement (none to be amended, varied, supplemented or modified without the consent of the
Lender), and together with any other instrument, document or memorandum, scheduled to any
of the documents referred to above, and any notice, consent to acknowledgement referred to
in or required pursuant to any of the documents referred to above and any document,
instrument or memorandum which secures any of the obligations of the Borrowers or any of
them under any of the Finance Documents or under any other Subject Document;
	 
	 	 	“Subsidiary” of a person means: (a) any other person directly or indirectly Controlled
by that person; or (b) any other person whose dividends or distributions on ordinary voting
share capital that person is entitled to receive more than fifty per cent (50%); or (c) any
entity (whether or not so Controlled) treated as a Subsidiary in the financial statements
of that person from time to time;
	 
	 	 	“Taxes” means all present and future taxes, levies, imposts, duties, charges, fees,
deductions and withholdings, and any restrictions or conditions resulting in a charge
(other than taxes on the overall net income of the Lender) and “Tax” and “Taxation” shall
be construed accordingly;
	 
	 	 	“Termination Date” means:

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	 	(i)	 	for the Refinancing Advance: 31 March 2010; and
	 
	 	(ii)	 	for each Working Capital Advance: the date falling one (1) month prior to the
relevant Expiration Date

	 	 	or, in each case, such later date as the Lender may approve in writing;
	 
	 	 	“Total Loss” means in relation to the Ship:

	 	(a)	 	the actual or constructive or compromised or arranged or agreed total loss of
the Ship; or
	 
	 	(b)	 	Compulsory Acquisition of the Ship; or
	 
	 	(c)	 	the hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of the Ship (other than where the same amounts to the Compulsory
Acquisition of the Ship by any Government Entity or by persons acting or purporting to
act on behalf of any Government Entity) unless the Ship be released and restored to
the Owner from such hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation within thirty (30) days after the occurrence thereof or such
lesser period provided in the Ship’s War Risks Insurances;

	 	 	“War Risks” includes all risks referred to in the Institute Time Clauses (Hulls)
(1/10/83) and (1/11/95) including, but not limited to, the risk of mines, blocking and
trapping, missing vessel, confiscation and all risks excluded by Clause 23 of the
Institute Time Clauses (Hulls) (1/10/83) or Clause 24 of the Institute Time Clauses
(Hulls) (1/11/1995); and
	 
	 	 	“Working Capital Advances” shall have the meaning ascribed to them in Clause 1(ii).
	 
	2.2	 	In this Agreement clause headings are for ease of reference only and shall be disregarded in
the construction of this Agreement.
	 
	2.3	 	In this Agreement unless the context otherwise requires:
	 
	2.3.1	 	words importing the singular number shall include the plural and vice versa;
	 
	2.3.2	 	fees, costs and expenses shall be exclusive of any value added tax or similar tax (if any)
which shall accordingly be payable in addition;
	 
	2.3.3	 	any reference to a document or instrument is a reference to that document or instrument as
the same may have been, or may from time to time be amended or supplemented;
	 
	2.3.4	 	the liquidation, winding-up or dissolution of a company or body corporate or the appointment
of a receiver, administrative receiver, manager or administrator of or in relation to a
company or corporation or any of its assets shall be construed so as to

13

 

	 	 	include any equivalent or analogous proceedings under the laws of the jurisdiction
in which it is incorporated or any jurisdiction in which it carries on business or
has assets or liabilities;
	 
	2.3.5	 	references to persons include any individual, partnership, firm, trust, body corporate,
government, governmental body, authority, agency, unincorporated body of persons or
association;
	 
	2.3.6	 	a reference to any enactment or statutory provision include any enactment or statutory
provision which amends, extends, consolidates or replaces the same or which has been amended,
extended, consolidated or replaced by the same and shall include any orders, regulations,
codes of practice, instruments or other subordinated legislation made under the relevant
enactment or statutory provision; and
	 
	2.3.7	 	the words “herein”, “hereto” and “hereunder” refer to this Agreement as a whole and not to
the particular Clause or Schedule in which the words may be used.
	 
	3.	 	THE FACILITY – THE BORROWERS JOINT AND SEVERAL LIABILITY
	 
	3.1	 	The Lender hereby agrees to make available to the Borrowers subject to the terms and the
conditions hereof the Facility for the purposes stated in Clause 1 in an aggregate amount not
exceeding at any relevant time Thirty Five million Dollars ($35,000,000) provided however that
(a) no Working Capital Advance shall be drawn down unless specifically approved by the Lender
and (b) in the event that the aggregate amount of (i) the Refinancing Advance and (ii) the
Working Capital Advances actually drawn down on the Drawdown Date first to occur is less than
Thirty Five million Dollars ($35,000,000), the Applicable Limit shall be reduced to an amount
equal to the amount of the Advances actually drawn down on such Drawdown Date.
	 
	3.2	 	The Borrowers undertake to use the proceeds of each Advance in accordance with and for the
purposes referred to in Clause 1; the Lender (although entitled) shall not be obliged to
monitor the application of such proceeds.
	 
	3.3	 	All the liabilities and obligations of the Borrowers under this Agreement shall, whether
expressed to be so or not, be joint and several so that each Borrower shall be jointly and
severally responsible with the other Borrowers for all liabilities and obligations of the
Borrowers under this Agreement and so that such liabilities and obligations shall not be
impaired by:

	 	(a)	 	any failure of this Agreement to be legal, valid, binding and enforceable in
relation to any of the Borrowers whether as a result of lack of corporate capacity,
due authorisation, effective execution or otherwise;
	 
	 	(b)	 	any giving of time, forbearance, indulgence, waiver or discharge in relation
to any of the Borrowers or to any other party to the Finance Documents; or

14

 

	 	(c)	 	any other matter or event whatsoever which might have the effect of impairing
all or any of the liabilities and obligations of any of the Borrowers.

	3.4	 	Each of the Borrowers declares that it is and will, throughout the Security Period, remain a
principal debtor for all amounts owing under this Agreement and none of the Borrowers shall in
any circumstances be construed to be a surety for the obligations of the other Borrowers
hereunder.
	 
	3.5	 	Until all sums owing to the Lender by the Borrowers under this Agreement and the other
Finance Documents have been paid in full none of the Borrowers (hereinafter called a “Creditor
Borrower”) will without the prior written consent of the Lender ask, demand, sue for, take or
receive from the other Borrowers or any other member of the Group (hereinafter called a
“Debtor Borrower”) by set-off or any other manner the whole or any part of all present and
future sums, liabilities and obligations payable or owing by the Debtor Borrower to the
Creditor Borrower whether actual or contingent jointly or severally or otherwise howsoever
(such sums being hereinafter called the “Subordinated Liabilities”) so long as any Senior
Liabilities are outstanding to the Lender (for which purpose “Senior Liabilities” shall mean
all present and future sums, liabilities and obligations whatsoever payable or owing by the
Borrowers (or any of them) pursuant to the Finance Documents or any of them or otherwise
whatsoever, whether actual or contingent jointly or severally or otherwise howsoever).
	 
	4.	 	AVAILABILITY
	 
	 	 	Subject as herein provided, the Facility is available to the Borrowers to be drawn down
during the Availability Period. Any part of the Facility which remains undrawn at the close
of business in Athens on the relevant Termination Date shall be automatically cancelled.
	 
	5.	 	NOTICE OF DRAWDOWN
	 
	5.1	 	Subject to:

	5.1.1	 	the receipt by the Lender of the documents specified in Clause 18.1 in form and substance
satisfactory to the Lender and its legal advisers before the relevant Drawdown Date; and
	 
	5.1.2	 	no Event of Default having occurred or an event which with the giving of notice or passage
of time or a determination by the Lender and/or the satisfaction of any other condition or any
combination of the foregoing, may become an Event of Default; and
	 
	5.1.3	 	the representations and warranties set out in Clause 16 (updated mutatis mutandis on the
relevant Drawdown Date) being true and correct; and

15

 

	5.1.4	 	the receipt by the Lender of a Notice of Drawdown in the form set out in Schedule 1 hereto
not later than 11.00 a.m. (London time) two (2) Banking Days prior to the relevant Drawdown
Date setting out the date of the proposed Drawdown,

	 	 	each Advance shall be made available to the Borrowers in accordance with and on the terms
and conditions of this Agreement.
	 
	5.2	 	Without prejudice to the generality of the foregoing provisions of this Clause 5 the Lender
shall not be obliged to make available any Advance if, following its drawing, the covenant
contained in Clause 23 (Security Margin) would cease to be complied with.
	 
	5.3	 	Unless otherwise expressly agreed between the Borrowers and the Lender no Advance shall be
made:

	5.3.1	 	if by being drawn down it would increase the Facility to a sum in excess of the
Applicable Limit prevailing at the relevant time; and/or
	 
	5.3.2	 	in an amount of less than One million Dollars ($1,000,000) or multiples thereof.

	5.4	 	Each Notice of Drawdown shall be irrevocable and the Borrowers shall be bound to borrow in
accordance with such notice.
	 
	5.5	 	On payment of each Advance drawn down the Borrowers shall sign an Acknowledgement in the form
set out in Schedule 2 hereto.
	 
	5.6	 	If the Borrowers give a Notice of Drawdown pursuant to Clause 5.1.4 and the Lender makes
arrangements on the basis of such notice to acquire Dollars in the London Interbank Market to
fund an Advance or any part thereof and the Borrowers are not permitted or otherwise fail to
borrow in accordance with such Notice of Drawdown (either on account of any condition
precedent not being fulfilled or otherwise) the Borrowers shall indemnify the Lender against
any damages, losses or expenses which the Lender may incur (either directly or indirectly) as
a consequence of the failure by the Borrowers to borrow in accordance with such Notice of
Drawdown.
	 
	5.7	 	The Borrowers may, at any time during the Availability Period, cancel the Facility or, as the
case may be, any part thereof which remains undrawn in whole or in part (but if in part in a
minimum of One hundred thousand Dollars ($100,000) or a multiple thereof upon giving the
Lender three (3) Banking Days’ notice in writing to that effect. Such notice once given shall
be irrevocable and upon such cancellation taking effect the Facility shall be reduced
accordingly. Notwithstanding any such cancellation pursuant to this Clause 5.7 the Borrowers
shall continue to be liable for any and all amounts due to the Lender under this Agreement
including without limitation any amounts due to the Lender under Clauses 7, 9, 15 and 28.

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	6.	 	INTEREST PERIODS
	 
	6.1	 	Subject to Clause 6.2, the Interest Periods applicable to each Advance shall (subject to
market availability) be periods of a duration of three (3) or six (6) months (or such other
periods as the Lender and the Borrowers may agree) as selected by the Borrowers by written
notice to be received by the Lender not later than 11.00 a.m. (London time) on the relevant
Nomination Date;
	 
	6.2	 	Notwithstanding the provisions of Clause 6.1:

	6.2.1	 	the initial Interest Period in respect of each Advance shall commence on the Drawdown Date
thereof and shall end on the expiry date thereof and each subsequent Interest Period for that
Advance shall commence on the expiry of the preceding Interest Period in respect thereof;
	 
	6.2.2	 	if any Interest Period would otherwise end on a day which is not a Banking Day, that
Interest Period shall be extended to the next succeeding day which is a Banking Day unless
such next succeeding Banking Day falls in another calendar month in which event that Interest
Period shall end upon the immediately preceding Banking Day;
	 
	6.2.3	 	no Interest Period shall extend beyond the Repayment Date;
	 
	6.2.4	 	if the Borrowers fail to select an Interest Period in accordance with the above, such
Interest Period shall be of three (3) months duration or of such other duration as the Lender
in its sole discretion may select; and
	 
	6.2.5	 	save as provided in Clause 6.2.1 the Borrowers shall not select more than one (1) Interest
Period at any one time.

	7.	 	INTEREST
	 
	7.1	 	Subject to the terms of this Agreement the Borrowers shall pay to the Lender interest in
respect of each Advance (or the relevant part thereof) accruing at the Interest Rate for each
Interest Period relating thereto in arrears on the last day of each Interest Period, provided
that where such Interest Period is of a duration longer than three (3) months, accrued
interest in respect of such Advance (or such part thereof) shall be paid every three (3)
months during such Interest Period and on the last day of such Interest Period.
	 
	7.2	 	Interest shall be calculated on the basis of the actual number of days elapsed and a three
hundred and sixty (360) day year.
	 
	7.3	 	The Interest Rate applicable for each Interest Period shall be calculated and determined by
the Lender on each Interest Determination Date and each such determination of an Interest Rate
hereunder shall be promptly notified by the Lender to the Borrowers at the beginning of each
Interest Period in respect thereof. The Lender’s certificate as to the Interest Rate

17

 

	 	 	applicable shall be final and (except in the case of manifest error) binding on the
Borrowers and the other Security Parties.
	 
	8.	 	DEFAULT INTEREST
	 
	8.1	 	In the event of a failure by the Borrowers to pay any amount on the date on which such amount
is due and payable pursuant to this Agreement and/or the other Finance Documents and
irrespective of any notice by the Lender or any other person to the Borrowers in respect of
such failure, the Borrowers shall pay interest on such amount on demand from the date of such
default up to the date of actual payment (as well after as before judgment) at the per annum
rate which is the aggregate of (a) two point five per cent (2.5%) and (b) the Applicable
Margin and (c) the rate at which the Lender in accordance with its normal practice is offered
deposits in Dollars in the London Interbank Market for such period as the Lender may select at
or about 11.00 a.m. (London time) on the Banking Day immediately following that on which the
Lender becomes aware of the default and, so long as the default continues, such rate shall be
recalculated on the same basis thereafter.
	 
	8.2	 	Any interest which shall have accrued under Clause 8.1 in respect of an unpaid amount shall
be due and payable at the end of the period by reference to which it is calculated or such
other date or dates as the Lender may specify by written notice to the Borrowers.
	 
	8.3	 	Clauses 7.2 and 7.3 shall apply to the calculation of interest on amounts in default.
	 
	9.	 	SUBSTITUTE BASIS
	 
	9.1	 	If the Lender determines (which determination shall be conclusive) that:

	9.1.1	 	at 11.00 a.m. (London time) on any Interest Determination Date the Lender was not being
offered by banks in the London Interbank Market deposits in Dollars in the required amount and
for the required period; or
	 
	9.1.2	 	LIBOR would not adequately reflect the cost of the Lender of making, funding or maintaining
the Facility or any part thereof for the duration of the next succeeding Interest Period; or
	 
	9.1.3	 	by reason of circumstances affecting the London Interbank Market such deposits are not
available to the Lender in such market; or
	 
	9.1.4	 	adequate and reasonable means do not or will not exist for the Lender to ascertain the
Interest Rate applicable to the next succeeding Interest Period; or
	 
	9.1.5	 	Dollars will or may not continue to be freely transferable;

	 	 	then, and in any such case the Lender shall give notice of any such event to the Borrowers
and in case any of the above occurs on the Interest Determination Date prior to a

18

 

	 	 	Drawdown Date the Borrowers’ right to borrow an Advance which remains available for
borrowing shall be suspended during the continuation of such circumstances.
	 
	9.2	 	If, however, any of the events described in Clause 9.1 occurs on any other Interest
Determination Date relative to an Advance or any part thereof, then the duration of the
relevant Interest Period(s) shall be up to one (1) month and during such Interest Period the
Interest Rate applicable to such Advance or the relevant part thereof shall be the rate per
annum determined by the Lender rounded upwards to the nearest whole multiple of one sixteenth
per cent (1/16th%) to be the aggregate of the Applicable Margin and the cost (expressed as a
percentage rate per annum) to the Lender of funding the amount of such Advance or any part
thereof during such Interest Period(s).
	 
	9.3	 	During such Interest Period(s) the Borrowers and the Lender shall negotiate in good faith in
order to agree an Interest Rate or Rates and Interest Period or Periods satisfactory to the
Borrowers and the Lender to be substituted for those which but for the occurrence of any such
event as specified in this Clause would have applied. If the Borrowers and the Lender are
unable to agree on such an Interest Rate(s) and Interest Period(s) by the day which is two (2)
Banking Days before the end of the Interest Period referred to above, the Borrowers shall
repay the Facility together with accrued interest thereon at the Interest Rate set out above
together with all other amounts due under this Agreement relative to the Facility but without
any prepayment fee, on the last day of such Interest Period, whereupon both Facility shall be
cancelled and no further Advances shall be made hereunder.
	 
	10.	 	PREPAYMENT
	 
	10.1	 	The Borrowers shall be obliged to prepay the Indebtedness in full, if the Ship is sold or to
the Ship becomes a Total Loss or in the case that the Mortgage on the Ship is discharged.
	 
	10.2	 	Any prepayment referred to in Clause 10.1 shall be effected on the following dates (as
appropriate):

	 	(a)	 	in the case of a sale of the Ship, on or before the date on which such sale
is completed by delivery of the Ship to its buyer; or
	 
	 	(b)	 	in the case of a Total Loss, on the earlier of the date falling one hundred
eighty (180) days after the date of occurrence of such Total Loss and the date or
receipt by the Lender of the proceeds of insurance relating to such Total Loss; or
	 
	 	(c)	 	in the case the Mortgage on the Ship is discharged (other than in the
circumstances referred to in paragraph (a) above and where the Borrowers and the other
Security Parties have discharged all their obligations under this Agreement and the
other Finance Documents), on or before the date on which the Mortgage on the Ship is
discharged.

	10.3	 	For the purposes of this Clause 10.1, a Total Loss shall be deemed to have occurred:

19

 

	 	(a)	 	in the case of an actual total loss of the Ship on the actual date and at the
time the Ship was lost or if such date is not known, the date on which the Ship was
last reported;
	 
	 	(b)	 	in the case of a constructive total loss of the Ship upon the date and at the
time notice of abandonment of the Ship is given to the Insurers of the Ship for the
time being (provided a claim for such total loss is admitted by the Insurers) or, if
the Insurers do not admit such a claim, or, in the event that such notice of
abandonment is not given by the Owner to the Insurers of the Ship, on the date and at
the time on which the incident which may result, in the Ship being subsequently
determined to be a constructive total loss has occurred;
	 
	 	(c)	 	in the case of a compromised or arranged total loss of the Ship, on the date
upon which a binding agreement as to such compromised or arranged total loss has been
entered into by the Insurers of the Ship;
	 
	 	(d)	 	in the case of Compulsory Acquisition of the Ship, on the date upon which the
relevant Compulsory Acquisition occurs; and
	 
	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Ship (other than where the same amounts to Compulsory
Acquisition of the Ship by any Government Entity, or by persons purporting to act on
behalf of any Government Entity), which deprives the Owner of the use of the Ship for
more than thirty (30) days or for a lesser period in the Ship’s War Risk Insurances,
upon the expiry of the said period after the date upon which the relevant hijacking,
theft, condemnation, capture, seizure, arrest, detention or confiscation occurred.

	10.4	 	By giving not less than fifteen (15) Banking Days’ prior written notice to the Lender the
Borrowers may prepay all or any part of the Facility (but if in part the amount to be prepaid
shall be One hundred thousand Dollars ($100,000) or a multiple thereof) at the end of the then
current Interest Period. The Borrowers shall obtain any consent or approval from the relevant
authorities that may be necessary to make any such prepayment of the Facility or any part
thereof and if it fails to obtain and/or comply with the terms of such consent or approval and
in consequence thereof the Lender has to repay the amount prepaid or the Lender incurs any
penalty or loss then the Borrowers shall indemnify the Lender forthwith against all amounts so
repaid and/or against all such penalties and losses incurred.
	 
	10.5	 	Unless the Lender otherwise expressly agrees in writing, all prepayments under Clause 10.4
shall be applied towards prepayment of the Facility; provided however that unless the Lender
otherwise requires any sums so prepaid shall be available for reborrowing up to the Applicable
Limit prevailing at the relevant time in accordance with the provisions of Clause 10.8.
	 
	10.6	 	Save as otherwise herein expressly provided, any prepayment of the Facility or any part
thereof made or deemed to be made under this Agreement shall, if made otherwise than at

20

 

	 	 	the end of an Interest Period relative to the amounts prepaid, be made together with accrued
interest thereon and such additional amount (if any) as the Lender may certify as necessary
to compensate the Lender for any costs incurred or to be incurred by it as a result of such
prepayment.
	 
	10.7	 	Any notice of prepayment given by the Borrowers under this Agreement shall be irrevocable and
the Borrowers shall be bound to prepay in accordance with each such notice.
	 
	10.8	 	Subject to other provisions of this Agreement (including, without limitation, Clauses 9.1,
10.10, 11.1, 11.2, 11.3, 15.1 and 24) any prepayment made under this Agreement and applied
against the Facility or any part thereof may be reborrowed hereunder.
	 
	10.9	 	The Borrowers may not prepay all or any part of the Facility except in accordance with the
express terms of this Agreement.
	 
	10.10	 	At the end of each period to which each Budget relates, the Lender shall determine on the
basis of trading accounts for the Ship and such other evidence as the Lender may require,
whether the Owner had a surplus of funds (the “Surplus Earnings”) over the Owner’s
requirements for operation and maintenance of the Ship during the relevant quarterly period
(after meeting their other obligations to the Lender under this Agreement). Upon such
determination by the Lender, the Borrowers shall forthwith pay to the Lender an amount equal
to the amount of the Surplus Earnings and such amount shall be applied towards prepayment of
the Facility; provided however that, unless the Lender determines otherwise, upon prepayment
and application of such amounts towards the Facility in accordance with this Clause 10.10, the
Applicable Limit shall be reduced by the amounts so prepaid and applied and such amounts may
not be re-borrowed.
	 
	11.	 	REPAYMENT
	 
	11.1	 	Subject as hereinafter provided, the aggregate of all outstanding amounts of the Facility
shall be repaid by the Borrowers upon the earlier of:

	 	i)	 	the Original Expiration Date or, subject to Clause 11.2 in the case of
any extension or renewal of the Facility pursuant to Clause 11.3, the last Banking Day
of the period specified in the Lender’s notice referred to in Clause 11.3; and
	 
	 	ii)	 	the Demand Date, provided however that unless an Event of Default has occurred
the Lender shall give a ninety (90) days prior written notice to the Borrowers of its
intention to make a demand for repayment hereunder

	 	 	whereupon in either such case, the Facility shall be cancelled and no further Advances
shall be drawn down.
	 
	11.2	 	The Borrowers may request in writing an extension of the Facility for further periods of
up to twelve (12) months, PROVIDED THAT such request must be addressed to the Lender at least
twenty (20) Banking Days prior to the Original Expiration Date or (in case the Facility has

21

 

	 	 	already been extended pursuant to the terms of this Clause) twenty (20) Banking Days prior
to the relevant Expiration Date specified in the Lender’s notice referred to in Clause 11.3
	 
	11.3	 	The Lender may (in its sole and absolute discretion) by a notice in writing to the
Borrowers, consent to the request of the Borrowers referred to in Clause 11.2 above and agree
to the extension of the Facility for one or more periods of up to twelve (12) months. PROVIDED
HOWEVER THAT the Lender may at its discretion, upon giving its consent to such extension
adjust the Applicable Limit as it may deem appropriate. If the Lender does not give such
consent as aforesaid, all outstanding amounts of the Facility shall be repayable in accordance
with Clause 11.1. Any such notice shall be without prejudice to the Lender’s right to make
demand upon the Borrowers at any time pursuant to Clause 11.1 (ii).
	 
	12.	 	APPLICATION
	 
	 	 	All moneys received by the Lender under or pursuant to this Agreement and/or any of the
other Finance Documents and expressed to be applicable in accordance with the provisions of
this Clause 12 shall be held by the Lender, to be applied in the following manner:

	 	(a)	 	first, in or towards payment of all sums other than principal of or interest
on the Facility which may be owing to the Lender under this Agreement and the other
Finance Documents or any of them;
	 
	 	(b)	 	second, in or towards payment to the Lender of any default interest and/or
overdue principal payments payable to the Lender under the Finance Documents;
	 
	 	(c)	 	third, in or towards payment to the Lender of any interest owing in respect
of the Facility or any part thereof;
	 
	 	(d)	 	fourth, in or towards payment to the Lender of principal owing in respect of
the Facility;
	 
	 	(e)	 	fifth, in or towards payment to the Lender of any amount due to it in
accordance with the provisions of Clauses 10.6 and 28 by reason of any such payment in
respect of the Facility not being effected on the last day of an Interest Period in
respect of the total amount of the Facility;
	 
	 	(f)	 	sixth, at any time on or after the occurrence of an Event of Default or any
event which with the giving of notice or passage of time or a determination by the
Lender and/or satisfaction of any condition or any continuation of the foregoing may
become an Event of Default in retention of a sum equal to the total of any and all
other amounts which (in the reasonable opinion of the Lender) although not then due to
the Lender under this Agreement and the other Finance Documents will become so due to
the Lender, such sums thereafter to be applied by the Lender from time to time in
accordance with this Clause 12; and

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	 	(g)	 	seventh, the surplus (if any) shall be paid to the Borrowers or to whomsoever
else may be entitled to receive such surplus.

	13.	 	EVIDENCE OF DEBT
	 
	13.1	 	The Lender shall maintain in accordance with its usual practice one or more Loan Accounts in
the name of the Borrowers evidencing the Indebtedness.
	 
	13.2	 	In any legal action or proceedings arising out of or in connection with this Agreement and/or
the other Finance Documents the entries made in the Loan Account(s) maintained pursuant to
Clause 13.1 shall be conclusive evidence (save in the case of manifest error) of the existence
and amounts of the liabilities of the Borrowers therein recorded.
	 
	14.	 	PAYMENTS
	 
	14.1	 	All amounts payable under this Agreement and/or the other Finance Documents by the Borrowers,
including amounts payable under this Clause 14, shall be paid in full to the Lender without
set-off or counterclaim or retention and free and clear of and without any deduction or
withholding for or on account of any Taxes.
	 
	14.2	 	In the event the Borrowers are required by law to make any such deduction or withholding from
any payment hereunder then the Borrowers shall forthwith pay to the Lender such additional
amount as will result in the immediate receipt by the Lender (as the case may be) of the full
amount which would have been received hereunder had no such deduction or withholding been
made, but if the Lender shall be or become entitled to any Tax credit or relief in respect of
any Tax which is deducted from any payment by the Borrowers and if the Lender in its sole
determination actually receives a benefit from such Tax credit or relief in its country of
domicile, incorporation or residence, the Lender shall, subject to any laws or regulations
applicable thereto, pay to the Borrowers after such benefit is effectively received by the
Lender such amounts (which shall be conclusively certified by the Lender) as shall ensure that
the net amount actually retained by the Lender is equal to the amount which would have been
retained if there had been no such deduction; the Borrowers shall immediately forward to the
Lender official receipt of the relevant taxation or other authority or other evidence
acceptable to the Lender of the amount deducted or withheld as aforesaid, provided that in the
event that it shall be illegal for the Borrowers to pay such additional amount as is referred
to in this Clause 14.2 then the Indebtedness shall be repayable by the Borrowers to the Lender
on demand.
	 
	14.3	 	All payments to be made by the Borrowers under this Agreement and/or the other Finance
Documents shall be made in Dollars in immediately available and freely transferable and
convertible funds not later than 11.00 a.m. London time on the date upon which the relevant
payment is due to the Lender at such account as the Lender may from time to time nominate by
written notice to the Borrowers.
	 
	14.4	 	The Borrowers undertake to indemnify the Lender against any loss incurred by the Lender as a
result of any judgment or order being given or made for the payment of any amount due under
this Agreement and/or the other Finance Documents and such judgment or order

23

 

	 	 	being expressed in a currency other than the currency in which the payment was due under
this Agreement and/or the other Finance Documents and as a result of any variation having
occurred in rates of exchange between the date on which the currency is converted for the
purpose of such judgment or order and the date of actual payment thereof. This indemnity
shall constitute a separate and independent liability of the Borrowers and shall continue
in force and effect notwithstanding any such judgment or order as aforesaid.
	 
	15.	 	CHANGE OF CIRCUMSTANCES
	 
	15.1	 	If:

	15.1.1	 	any law, regulation, treaty or official directive (whether or not having the force of law)
or the interpretation thereof by any authority charged with the administration thereof:

	 	(a)	 	subjects the Lender to any Tax with respect to payments of
principal of or interest on the Facility or any other amount payable
hereunder; or
	 
	 	(b)	 	changes the basis of Taxation of payments to the Lender of
principal of or interest on the Facility or of any other amount payable
hereunder (other than a change in the rate of Tax on the overall net income of
the Lender); or
	 
	 	(c)	 	imposes, modifies or deems applicable any reserve and/or
special deposit requirements against or in respect of assets or liabilities
of, or deposits with or for the account of, or loans or credit extended by any
office of the Lender; or
	 
	 	(d)	 	imposes on the Lender any other condition affecting this
Agreement, the Facility or any part thereof or its funding; or

	15.1.2	 	the Lender complies with any request, law, regulation (including any which relates to
capital adequacy or liquidity control or which affects the manner in which the Lender
allocates capital resources to its obligations under this Agreement (including without
limitation, those resulting from the implementation or application of or compliance with the
“International Convergence of Capital Measurement and Capital Standards, a Revised Framework”
published by the Basel Committee on Banking Supervision in June 2004 in the form existing on
the date of this Agreement (“Basel ll”) or any other law or regulation which implements Basel
II) or directive from any applicable fiscal or monetary authority (whether or not having the
force of law) and as a result of any of the foregoing either directly or indirectly:

	 	(a)	 	the cost to the Lender of making, funding or maintaining the
Facility or any part thereof is increased; or

24

 

	 	(b)	 	the amount of principal, interest or other amount payable to
the Lender or the effective return to the Lender hereunder is reduced; or
	 
	 	(c)	 	the Lender makes any payment or foregoes any interest or
other return on or calculated by reference to the gross amount receivable by
it from the Borrowers hereunder,

	 	 	then and in each such case upon demand from time to time the Borrowers shall pay to the
Lender such amount as shall compensate the Lender for such increased cost, reduction,
payment or foregone interest or other return. If the Lender is entitled to make a claim
pursuant to this Clause it shall notify the Borrowers of the event by reason of which it is
so entitled and shall submit to the Borrowers a certificate setting out details of the
event giving rise to such compensation, the amount thereof and the manner in which it has
been calculated and in the absence of manifest error such certificate shall be conclusive.
	 
	 	 	On receipt of such certificate the Borrowers shall have the option to prepay within ninety
(90) days the Facility together with all interest accrued thereof and all costs and other
amounts (including amounts payable referred to above and any amount payable under Clause
10.6) payable to the Lender hereunder. If the Borrowers decide to exercise such option they
shall give written notice to the Lender and prepay the amount due to the Lender within
ninety (90) days of the receipt of the certificate referred to above. The Lender’s duties
and liabilities hereunder shall be cancelled on the giving of such notice.
	 
	15.2	 	Notwithstanding anything to the contrary herein contained, if any change in law, regulation
or treaty or in the interpretation or application thereof by any authority charged with the
administration thereof shall make it unlawful for the Lender to make, fund or maintain the
Facility or any part thereof, the Lender may by written notice thereof to the Borrowers
declare that the Lender’s duty to provide the Borrowers with the Facility shall be terminated
forthwith whereupon the Borrowers will prepay forthwith (or if permitted by law on the next
following Interest Payment Date) the Facility together with all interest accrued thereon and
all other amounts payable to the Lender hereunder including the amounts due under Clause 10.6.
The Lender’s duties and liabilities hereunder shall be cancelled on the giving of such notice.
	 
	15.3	 	If any of the events referred to in Clause 15.1 or Clause 15.2 shall occur, but without
prejudice to the liability of the Borrowers to prepay the Facility, the Borrowers and the
Lender concerned shall negotiate in good faith with a view to agreeing terms for making the
Facility available from another jurisdiction, or funding the Facility from alternative sources
or otherwise restructuring the Facility on a basis which is not unlawful.
	 
	16.	 	REPRESENTATIONS AND WARRANTIES
	 
	16.1	 	The Borrowers hereby represent and warrant to the Lender that:

	16.1.1	 	each Security Party is a company or corporation duly formed and validly existing under the
laws of the country of its incorporation and has the power and authority

25

 

	 	 	to own its assets and carry on business in each jurisdiction in which it owns
assets or carries on business;
	 
	16.1.2	 	each Security Party has power to enter into this Agreement and the other Subject Documents
to which such Security Party is a party and to perform and discharge its/his/her duties and
liabilities hereunder and thereunder and (in the case of the Borrowers) to borrow hereunder
and to enter into Designated Transactions and each Security Party has taken all necessary
action (whether corporate or otherwise) required to authorise the execution, delivery and
performance of this Agreement and the other Subject Documents and the borrowings to be made
hereunder;
	 
	16.1.3	 	the execution, delivery and performance of this Agreement and the other Subject Documents
will not contravene or exceed the powers granted to each Security Party or by, or any
provision of, any law or regulation in any jurisdiction to which the Security Parties or any
of them are/is subject, any order or decree of any governmental agency or court of or in any
jurisdiction to which the Security Parties or any of them are/is subject, the certificates of
incorporation, the other constitutional documents of the Security Parties or any of them or
any mortgage, deed, contract or agreement to which the Security Parties or any of them is/are
a party and which is binding upon the Security Parties’ assets, and will not cause any
Encumbrance to arise over or attach to all or any part of any Security Party’s revenues or
assets nor require any Security Party to create any such Encumbrance;
	 
	16.1.4	 	all consents, licences, approvals, registrations, authorisations or declarations (including,
without limitation, all foreign exchange control approvals) in any jurisdiction to which the
Security Parties or any of them is/are subject required to enable the Borrowers to borrow
hereunder and to enter into Designated Transactions and the Borrowers and the other Security
Parties lawfully to enter into and perform and discharge their respective duties and
liabilities under this Agreement and the other Subject Documents to which each of them is a
party and to ensure that the duties and liabilities of each of the Borrowers and the other
Security Parties hereunder and thereunder are legal, valid and enforceable in accordance with
the terms of this Agreement and the other Subject Documents to which each of them is a party
and to make this Agreement and the other Subject Documents admissible in evidence in such
aforesaid jurisdictions have been obtained or made and are in full force and effect;
	 
	16.1.5	 	this Agreement and each of the other Subject Documents to which each Security Party is a
party constitute the legal, valid, binding and unconditional duties and liabilities of such
Security Party as is a party thereto, enforceable against such Security Party in accordance
with the terms hereof or thereof;
	 
	16.1.6	 	no Security Party has failed to pay when due any material amount or to perform any material
duty under the provisions of any agreement relating to indebtedness in

26

 

	 	 	excess in aggregate of Three hundred thousand Dollars ($300,000) to which such
Security Party is a party or by which it may be bound and no event has occurred and
is continuing which constitutes, or which with the giving of notice or lapse of
time or both would constitute, a material breach or default by such Security Party
under any such agreement;
	 
	16.1.7	 	no litigation or administrative proceedings in any court, arbitration tribunal or
governmental authority are pending or threatened against any Security Party or any of its
assets which might materially adversely affect such Security Party’s ability to perform and
discharge its duties and liabilities hereunder and under the other Subject Documents to which
it/he/she is a party thereto;
	 
	16.1.8	 	the Financial Statements provided by the Borrowers to the Lender in accordance with Clause
19.1 are complete and correct and present fairly the position of the members of the Group
therein stated and the results of the operations of the members of the Group ended on such
date, and have been prepared in accordance with the Applicable Accounting Principles
consistently applied and give a true and fair view of the financial condition, assets and
liabilities of the members of the Group therein stated at the date to which such Financial
Statements have been prepared and since that date there has been no adverse change in the
financial conditions of the business, assets or operation of the members of the Group therein
stated or the Group taken as a whole (as the case may be);
	 
	16.1.9	 	the information provided to the Lender in relation to this transaction is true and correct
in all material respects and does not omit any information necessary to make any of the
information so provided not misleading;
	 
	16.1.10	 	the copy of each Subject Document delivered by the Borrowers to the Lender is a true and
complete copy thereof;
	 
	16.1.11	 	none of the parties to the Subject Documents is in default thereunder;
	 
	16.1.12	 	none of the Security Parties is in default under any agreement to which it/he is a party or
by which it may be bound and no litigation, arbitration, tax claim, administrative proceeding
or investigation is current or pending or (to its knowledge) threatened;
	 
	16.1.13	 	the financial condition of the Borrowers and the other Security Parties has not suffered
any material deterioration since that condition was last disclosed to the Lender;
	 
	16.1.14	 	all the obligations and liabilities of the Borrowers hereunder rank and will rank at least
pari passu in right of payments with all other unsubordinated indebtedness of the Borrowers or
any of them;

27

 

	16.1.15	 	save as disclosed to the Lender in writing none of the Borrowers nor any other Security
Party has incurred any indebtedness or authorised or accepted any capital commitments (other
than that normally associated with the day to day operation or trading of the Ship, where
appropriate);
	 
	16.1.16	 	no Taxes are imposed by deduction withholding or otherwise or any other payment to be made
by any Security Party under this Agreement and/or any other of the Subject Documents or are
imposed on or by virtue of the execution or delivery of the Agreement and/or any other of the
Subject Documents or any document or instrument to be executed or delivered hereunder or
thereunder and all relevant tax returns have been filed;
	 
	16.1.17	 	the choice of law agreed to govern this Agreement and/or any other Subject Document and the
submission to the jurisdiction of the courts agreed in each of the Subject Documents are or
will be on execution of the respective Subject Documents valid and binding on the Borrowers
and any other Security Party which is a party thereto;
	 
	16.1.18	 	no Encumbrance exists on any Security Party’s assets except as permitted by this Agreement;
	 
	16.1.19	 	the giving of the Grandunion Guarantee is to the commercial benefit of the Grandunion
Guarantor in that the Grandunion Guarantor belongs to the same group of companies as the
Borrowers and has a commercial interest in the Facility being extended to the Borrowers and by
giving its Guarantee, the Grandunion Guarantor furthers its own business interests within the
scope of its constitutional documents;
	 
	16.1.20	 	the giving of the Personal Guarantee pursuant to this Agreement by the Personal Guarantor
is to the commercial benefit of the Personal Guarantor;
	 
	16.1.21	 	each of the Subject Documents is in full force and effect and constitutes the valid binding
and enforceable obligations of the Borrowers and each other Security Party which is a party
thereto, and the other parties to it and there has been no breach of the terms or the
obligations of any party to it thereunder and no person has disputed or repudiated or
disclaimed any liability under it or indicated that it does not consider itself bound by or
does not intend to comply with any of the terms of any such documents;
	 
	16.1.22	 	the Borrowers and the other Security Parties have filed all tax and other fiscal returns
required to be filed by any tax authority to which they are subject and none of the Borrowers
nor any other Security Party has an office in England or in the United States of America;
	 
	16.1.23	 	no member of the Group is overdue in the payment of any amount in respect of Tax;

28

 

	16.1.24	 	the Owner is the legal and beneficial owner of the Ship under the laws of the Flag State;
	 
	16.1.25	 	the Ship is in the absolute and (as of the Drawdown Date first to occur) unencumbered
ownership of the Owner save as contemplated by this Agreement and the other Finance Documents;
	 
	16.1.26	 	the Ship maintains the highest class with her Classification Society free of all
recommendations and qualifications of her Classification Society or other conditions or
notations affecting class;
	 
	16.1.27	 	the Ship is operationally seaworthy;
	 
	16.1.28	 	except for the registration of the Mortgage at the appropriate registry of the Flag State,
it is not necessary or advisable to ensure the legality, validity, enforceability or
admissibility in evidence of this Agreement and the other Subject Documents, that any of them
be filed, recorded or enrolled with any governmental authority or agency or that they be
stamped with any stamp, registration or similar transaction tax in the United Kingdom or in
the Republic of Greece or in the Republic of Liberia or in the Republic of Panama or in any
other country where any Security Party carries on business;
	 
	16.1.29	 	the Ship complies with all relevant laws, regulations and requirements (statutory or
otherwise), including without limitation, the ISM Code, the ISPS Code, the ISM Code
Documentation, the ISPS Code Documentation as are applicable to (i) ships registered under the
laws of the Flag State and (ii) engaged in the same or a similar service as the Ship is or is
to be engaged;
	 
	16.1.30	 	the Ship is insured in accordance with the provisions of this Agreement in respect of
Insurances;
	 
	16.1.31	 	the Ship is managed by the Manager under the terms of the Management Agreement;
	 
	16.1.32	 	the Owner and the Manager comply with the provisions of all Environmental Laws in respect
of the Ship;
	 
	16.1.33	 	the Owner and the Manager have obtained all Environmental Approvals and are in compliance
with all such Environmental Approvals in respect of the Ship as appropriate;
	 
	16.1.34	 	neither the Owner nor the Manager have received notice of any Environmental Claim that
alleges that the Owner and/or the Manager is not in compliance with any Environmental Law or
any Environmental Approval in respect of the Ship;

29

 

	16.1.35	 	there is no Environmental Claim pending against the Owner, the Manager, the Ship or any of
them; and
	 
	16.1.36	 	no Environmental Incident has occurred which could or might give rise to any Environmental
Claim against the Owner, the Manager and the Ship.

	16.2	 	The representations and warranties of the Borrowers set out in Clause 16.1 above shall
survive the execution of this Agreement and shall be deemed to be repeated on each Drawdown
Date and on each Interest Payment Date with respect to the facts and circumstances existing at
each such time as if made at such time.
	 
	17.	 	SECURITIES
	 
	17.1	 	The Borrowers hereby agree that the Security Documents shall secure with first priority, the
due payment of the Indebtedness.
	 
	17.2	 	It is declared and agreed in relation to the security created by the Security Documents that:

	17.2.1	 	it shall be held by the Lender as a continuing security for the payment of the Indebtedness;
	 
	17.2.2	 	the security so created shall not be satisfied or discharged by intermediate payment or
satisfaction of any part of the amount secured thereunder;
	 
	17.2.3	 	the security so created shall be in addition to and shall not in any way be prejudiced or
affected by any collateral or other security now or hereafter held by the Lender for all or
any part of the amounts thereby secured; and
	 
	17.2.4	 	every power and right given to the Lender hereunder shall be in addition to and not in
limitation of any and every other power or right of the Lender under the Security Documents
and may be exercised from time to time in such order and as often as the Lender may consider
appropriate.

	18.	 	CONDITIONS PRECEDENT
	 
	18.1	 	Notwithstanding the provisions of Clause 5, the agreement of the Lender to permit the
Drawdown of any Advance hereunder is subject to the condition that the Lender shall have
received not later than the Drawdown Date in respect of such Advance the following documents
or evidence in form and substance satisfactory to the Lender and its legal advisers:

	18.1.1	 	a certificate signed by the secretary or a director of each Security Party, stating, inter
alia, the full names of the persons or persons legally and beneficially entitled as
shareholders/stockholders of the entire issued and outstanding shares/stock of that Security
Party and a copy, certified as a true copy by the secretary of each Security Party of the
resolutions of the board of directors and of the shareholders of

30

 

	 	 	each Security Party authorising the transaction contemplated hereby and authorising
a person or persons to sign or execute on behalf of each Security Party this
Agreement, each Notice of Drawdown (as in the form of Schedule 1 thereof), each
Acknowledgement (as in the form of Schedule 2 hereof) and the other Finance
Documents as is a party thereto;
	 
	18.1.2	 	the originals of any power or powers of attorney granted pursuant to Clause 18.1.1;
	 
	18.1.3	 	specimen signatures, duly authenticated of the person or persons referred to in Clause
18.1.1;
	 
	18.1.4	 	certificates or other evidence satisfactory to the Lender in its sole discretion of the
existence and good standing of each Security Party, dated not more than fifteen (15) days
before the date of this Agreement;
	 
	18.1.5	 	copies, duly certified as a true copy by the respective secretaries of each Security Party
of the certificate of incorporation and the other constitutional documents of each Security
Party;
	 
	18.1.6	 	evidence that the Earnings Accounts has been duly opened by the Rodosi Borrower as
appropriate and all mandate forms, signature cards and authorities have been duly delivered
and that the Earnings Accounts are free of all liens or charges other than the liens and
charges in favour of the Lender referred to herein;
	 
	18.1.7	 	certified copies of all documents (with a certified translation if an original is not in
English) evidencing any other necessary action (including but without limitation governmental
approval, consents, licences, authorisations, validations or exemptions which the Lender or
its legal advisers may require) by the Security Parties or any of them with respect to this
Agreement and the other Finance Documents;
	 
	18.1.8	 	the Grandunion Guarantee duly executed by the Grandunion Guarantor;
	 
	18.1.9	 	the Personal Guarantee duly executed by the Personal Guarantor;
	 
	18.1.10	 	the Earnings Accounts’ Charges duly executed by the Rodosi Borrower, as appropriate;
	 
	18.1.11	 	evidence that the fees payable to the Lender in accordance with Clause 26 have been duly
paid;
	 
	18.1.12	 	such documentation and other evidence (in form and substance satisfactory to the Lender) as
is reasonably requested by the Lender in order for the Lender to comply with all necessary
“know your customer” or similar identification procedures in relation to the transactions
contemplated in the Subject Documents;

31

 

	18.1.13	 	evidence that an amount of Fifteen thousand Euros (€15,000) has been paid to the Lender’s
Greek and English law legal advisors in respect of their fees in connection with this
Agreement and the other Finance Documents;
	 
	18.1.14	 	evidence that an amount of One thousand Euros (€1,000) has been paid to the Lender’s
Liberian law legal advisors in respect of their fees in connection with this Agreement and the
other Finance Documents;
	 
	18.1.15	 	letter from HFW Nominees Limited to the Lender confirming acceptance of their appointment
as agents for service of process in England under Clause 38.4;
	 
	18.1.16	 	a letter from Mrs. Stella Nikolaou to the Lender confirming acceptance of her appointment
as agent for service of process in Greece under Clause 38.5;
	 
	18.1.17	 	the opinion letters from Liberian, Panamanian and such other legal counsels as the
Lender may require, all acceptable to the Lender, in relation to this Agreement and the other
Finance Documents referred to in this Clause 18.1, and in form and substance satisfactory to
the Lender;
	 
	18.1.18	 	copies of the Management Agreement and of the Charter certified as true and complete copies
thereof by the Borrowers’ legal counsel;
	 
	18.1.19	 	the Letter of Undertaking duly executed by Anemi;
	 
	18.1.20	 	the Mortgage over the Ship duly executed by the Owner and notarised or legalised as
appropriate and duly recorded at the appropriate shipping registry of the Flag State;
	 
	18.1.21	 	the General Assignment and the Charter Assignment in respect of the Ship duly executed by
the parties thereto;
	 
	18.1.22	 	the notices of assignment of the Insurances and of the Earnings in respect of the Ship duly
signed by the Owner;
	 
	18.1.23	 	the notices of assignment of the Earnings and of the Charter in respect of the Ship duly
signed by the Owner thereof and acknowledged by the Charterer as appropriate;
	 
	18.1.24	 	if required by the Lender, a survey report for the Ship issued by a surveyor appointed by
and/or acceptable to the Lender at the expense of the Owner certifying the condition of the
Ship;
	 
	18.1.25	 	evidence that save for the Encumbrances created by the relevant Finance Documents there is
no Encumbrance whatsoever on the Ship except in favour of the Lender;

32

 

	18.1.26	 	evidence that the Ship is insured in accordance with the provisions of this Agreement;
	 
	18.1.27	 	evidence that the Ship is classed at the highest classification status with the
Classification Society, free of overdue recommendations or other conditions or notations
affecting her class;
	 
	18.1.28	 	market valuations on the basis specified in Clause 21.26 issued by reputable sale and
purchase brokers appointed by or acceptable to the Lender, at the expense of the Owner,
certifying the Market Value of the Ship;
	 
	18.1.29	 	certified copies of the classification and international safety and trading certificates of
the Ship issued by the Classification Society of the Ship free of recommendations or other
conditions or notations affecting her class;
	 
	18.1.30	 	evidence that the Ship is registered in the ownership of the Owner under the laws of the
Flag State, free from registered Encumbrances other than the Mortgage registered thereon;
	 
	18.1.31	 	copies of the ISM Code Documentation and the ISPS Code Documentation in relation to the
Ship, the Owner and the Manager;
	 
	18.1.32	 	the Manager’s Undertaking and the notice of assignment of insurances in relation thereto in
respect of the Ship duly executed by the Manager; and
	 
	18.1.33	 	evidence that on or before the Drawdown Date first to occur (i) the indebtedness in
relation to the Existing Financial Agreement shall be prepaid by an amount equal to the
aggregate amount of the Advances drawn down on the Drawdown Date first to occur and the
Applicable Limit (as defined therein) shall have been reduced by such amount so prepaid and
applied and such amount may not be re-borrowed by the Existing Borrowers thereunder;
	 
	18.1.34	 	copy of each Government’s Gazette Issue, wherein the joint ministerial decision regarding
the establishment of an office of each of the Newlead Shipping Borrower and the Newlead
Bulkers Borrower in Greece under Law 89/67 as amended, has been published, together with any
amendment(s) thereof;
	 
	18.1.35	 	certificate issued by the Greek Ministry of Merchant Marine in respect of each of the
Newlead Shipping Borrower and the Newlead Bulkers Borrower, evidencing the establishment of an
office of each of the Newlead Shipping Borrower and the Newlead Bulkers Borrower respectively
in Greece under Law 89/67;
	 
	18.1.36	 	valid certificate dated not later than fifteen (15) days prior to the relevant Drawdown
Date issued by the competent authority confirming that each of the Newlead Shipping Borrower
and the Newlead Bulkers Borrower is current with its obligations with regard to social
security contributions; and

33

 

	18.1.37	 	such further documents and evidence as the Lender may hereafter request.

	18.2	 	If the Lender, at its discretion, permits an Advance or any part thereof to be borrowed
before certain of the conditions referred to in Clause 18.1 are satisfied, the Borrowers shall
ensure that those conditions are satisfied within five (5) Banking Days after the relevant
Drawdown Date (or such longer period as the Lender specifies).
	 
	19.	 	FINANCIAL AND GENERAL UNDERTAKINGS
	 
	 	 	The Borrowers hereby jointly and severally undertake with the Lender that throughout the
Security Period the Borrowers shall (and shall procure that each other relevant Security
Party shall) comply with the following provisions of this Clause 19, except as the Lender
may otherwise permit:
	 
	19.1	 	to supply the Lender with such number of copies as the Lender may require of (i) the annual
Financial Statements of the Group audited by the Auditors as soon as available but in any
event not later than one hundred and eighty (180) days after the end of the relevant period to
which they relate starting with the 2009 Financial Statements, (ii) the quarterly unaudited
Financial Statements of the Group as soon as available but in any event not later than ninety
(90) days after the end of the relevant quarterly period starting with the accounts for the
quarterly period ending 31 December 2009 and (iii) such other information with regard to the
business, properties or condition, financial or otherwise, of each member of the Group as the
Lender may from time to time reasonably request;
	 
	19.2	 	to procure that the Financial Statements to be delivered from time to time in accordance with
Clause 19.1 shall be prepared in accordance with the Applicable Accounting Principles and
practices consistently applied, which shall present fairly the financial position of the Group
as at the end of each period, to which they relate and the results of the operations for the
period which they relate;
	 
	19.3	 	to obtain promptly at any time and from time to time such registrations, licenses, consents
and approvals as may be required in respect of this Agreement and the Subject Documents under
any applicable law or regulation to enable them to perform and discharge their duties and
liabilities hereunder and thereunder and promptly supply the Lender with copies thereof;
	 
	19.4	 	to ensure that at all times the claims of the Lender against each Security Party under this
Agreement and the other Finance Documents rank at least pari passu with the claims of all its
other unsecured creditors save those whose claims are preferred by any bankruptcy, insolvency
or other similar laws of general application;
	 
	19.5	 	to deliver to the Lender translations into English (certified by an authorised translator) of
any documents which have to be delivered to the Lender under the terms of this Agreement or
the other Finance Documents, the originals of which are not in the English language;

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	19.6	 	not to make any loans or advances to, or any investments in, any person, firm, corporation or
joint venture (or to any officer, director, stockholder, employee or customer of any such
person);
	 
	19.7	 	not to borrow any money or permit any such borrowing to continue or incur any indebtedness
whatsoever other than the Facility or other than by way of subordinated shareholders’ loans or
enter into any agreement for payment on deferred terms (otherwise than on customary suppliers’
credit terms) or any equipment lease or contract hire agreement other than in the ordinary
course of business;
	 
	19.8	 	not to assume, guarantee or otherwise undertake the liability of any person, firm or company
(otherwise than pursuant to the terms hereof and in the ordinary course of operation or
trading of the Ship);
	 
	19.9	 	not to authorise or accept any capital commitments (save and except in connection with the
ordinary course of operation or trading of the Ship where appropriate);
	 
	19.10	 	not to declare or pay any dividends or repay any shareholders’ loans or make any
distributions to their shareholders in any form whatsoever;
	 
	19.11	 	not to and procure that the Manager and each other Security Party shall not change the
nature of their/its business or commence any business other than the ownership and operation
of ships;
	 
	19.12	 	not to (save and except as provided in this Agreement or otherwise in favour of the Lender),
create or permit to exist any Encumbrance whatsoever on the Ship or on any of the other
property or assets, real or personal of the Borrowers or any of them whether now owned or
hereafter acquired, other than a Permitted Lien without the prior written consent of the
Lender;
	 
	19.13	 	without prejudice to the obligations of the Borrowers under Clause 19.14, promptly after the
happening of an Event of Default or any event which with the giving of notice or passage of
time or a determination of the Lender and/or satisfaction of any condition or any combination
of the foregoing, may become an Event of Default has occurred, to notify the Lender of such
event and of the steps (if any) which are being taken to nullify or mitigate its effect;
	 
	19.14	 	from time to time (but not more than once every six (6) months) on request by the Lender, to
deliver to it a certificate signed by a director or officer of the Borrowers confirming that,
save as may be notified in detail in such certificate, no Event of Default or an event which
with the giving of notice or passage of time or a determination of the Lender and/or
satisfaction of any condition or any combination of the foregoing, may become an Event of
Default has occurred and is then subsisting to be accompanied by such evidence as to the
information and matters contained in such certificate as the Lender may from time to time
reasonably require;

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	19.15	 	to maintain and ensure and procure that each Security Party shall maintain its corporate
existence under the laws of the country of its incorporation and shall comply with all
relevant legislation and laws and regulations applicable to it;
	 
	19.16	 	to pay and to ensure and procure that the other Security Parties shall pay all Taxes,
assessments and other governmental charges when the same fall due and ensure and procure that
all relevant tax returns of the Borrowers and the other Security Parties shall be properly and
timely filed;
	 
	19.17	 	not to and ensure that the Grandunion Guarantor and the Personal Guarantor shall not convey,
assign, transfer, sell or otherwise or dispose of the Ship or any of the other property,
assets or rights owned by the Borrowers or by the Grandunion Guarantor or by the Personal
Guarantor whether present or future, without the prior written consent of the Lender;
	 
	19.18	 	to send (or procure that it is sent) to the Lender as soon as the same is instituted details
of any litigation, arbitration or administrative proceedings against or involving any one or
more of the Borrowers, the other Security Parties, the Charterer or the Ship, which is likely
to have a material adverse effect on the Borrowers (or any of them), the other Security
Parties (or any of them) or the operation of the Ship;
	 
	19.19	 	to comply (and ensure that each other Security Party will comply) with all laws regulations
treaties and conventions applicable to the Borrowers, the other Security Parties and the Ship
and to ensure and procure that the Owner will carry on the Ship all certificates and other
documents which may from time to time be required to evidence such compliance;
	 
	19.20	 	not to and ensure and procure that each other Corporate Security Party shall not dissolve,
merge into or consolidate with any other company or person and procure that no change in the
management or the legal or beneficial ownership of the Borrowers, the other Corporate Security
Parties and the Ship shall be effected;
	 
	19.21	 	to ensure and procure that no change of Control in the Grandunion Guarantor shall occur
without the Lender’s prior written consent;
	 
	19.22	 	to execute and procure the execution by each other Security Party of any further document or
documents required by the Lender in order to perfect or complete the security created by the
Finance Documents;
	 
	19.23	 	to use the proceeds of the Facility for the Borrowers’ benefit and under their full
responsibility and exclusively for the purposes specified in this Agreement;
	 
	19.24	 	to ensure and procure that at all times throughout the Security Period the Borrowers and/or
the Grandunion Guarantor shall maintain with the Lender to the credit of any account held with
the Lender (including the Earnings Accounts) free cash deposits having minimum average
quarterly balances equal to five per cent (5%) of the outstanding amount under the Facility;

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	19.25	 	to supply the Lender with quarterly Budgets showing all forecasted operating expenses and
disbursements of whatsoever nature in relation to the Ship in such detail and in such form as
the Lender shall require. The said Budgets shall be delivered to the Lender as soon as
possible prior to, and in any event not later than seven (7) days before the expiry of the
quarterly period to which the previous Budget relates with the first such period expiring on
30 June 2010; and
	 
	19.26	 	to provide the Lender with such documents as the Lender may from time to time require on the
basis of laws and regulations applicable from time to time and the Lender’s own internal
guidelines and “know your customer” requirements applicable from time to time and required to
identify the Borrowers and each other Security Party, including without limitation, documents
and information in respect of the ultimate legal and beneficial owners of the Borrowers and
each other Security Party.
	 
	20.	 	INSURANCE UNDERTAKINGS
	 
	 	 	The Borrowers hereby jointly and severally undertake with the
Lender that throughout the Security Period the Borrowers shall
(at the expense of the Borrowers and upon such terms, in such
amounts and with such Insurers as shall from time to time be
approved in writing by the Lender) comply with the following
provisions of this Clause 20, except as the Lender may otherwise
permit:
	 
	20.1	 	to ensure and procure that the Owner will insure and keep insured the Ship in Dollars or such
other currency as may be approved in writing by the Lender, in the full insurable value of the
Ship but in no event for an amount less than the higher of (a) one hundred and thirty per cent
(130%) of the aggregate of (i) the outstanding amount of the Facility and (ii) any amount
available for drawing under the Facility and (b) the Market Value of the Ship save for the
period commencing on the Drawdown Date first to occur and ending on the date falling six (6)
months thereafter where the Owner will insure and keep insured the Ship in the full insurable
value of the Ship but in no event for an amount less than One hundred per cent (100%) of the
Market Value of the Ship against fire, marine and other risks (including Excess Risks) and War
Risks covered by hull and machinery policies;
	 
	20.2	 	to ensure and procure that the Owner will enter the Ship in its name for her full value and
tonnage in a protection and indemnity association approved by the Lender with unlimited
liability if available otherwise for the highest possible standard cover for the time being
$1,000,000,000 for oil pollution and for excess oil spillage and pollution liability insurance
for the highest possible standard cover against all Protection and Indemnity Risks;
	 
	20.3	 	if the Ship enters the territorial waters of the United States of America for any reason
whatsoever, to ensure and procure that the Owner will take out such additional insurance to
cover such risks as may be necessary in order to obtain a Certificate of Financial
Responsibility from the United States Coastguard;

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	20.4	 	upon the Lender’s request, to ensure and procure that the Owner will effect loss of hire
and/or Earnings, Insurance on the Ship (as may be required by the Lender) in respect of
charterparties which exceed six (6) months duration (including the Charter) and otherwise on
such terms and in such amounts as the Lender may instruct the Borrowers as being necessary or
appropriate;
	 
	20.5	 	to ensure and procure that the Owner will effect such additional Insurances as may reasonably
be requested by the Lender to maintain the scope of the existing cover of the Insurances;
	 
	20.6	 	to ensure and procure that the Owner will renew the Insurances at least fourteen (14) days
before the relevant Insurances expire and to procure that the Approved Brokers shall promptly
confirm in writing to the Lender as and when each such renewal is effected;
	 
	20.7	 	to ensure and procure that the Owner will punctually pay all premiums, calls, contributions
or other sums payable in respect of the Insurances and to produce all relevant receipts when
so required in writing by the Lender;
	 
	20.8	 	to ensure and procure that the Owner will pay to the Lender on demand all premiums or other
amounts payable by the Lender in effecting a mortgagee’s interest policy and a mortgagee’s
interest (additional perils) insurance policy in the name of the Lender upon such terms and
conditions and with such insurers and for such amounts as the Lender may require, the
aggregate of which amounts shall not be less than one hundred and ten per cent (110%) of the
aggregate of (a) the outstanding amount under the Facility and (b) any amount available for
drawing under the Facility save for the period commencing on the Drawdown Date first to occur
and ending on the date falling six (6) months thereafter where such amounts shall not be less
than One hundred per cent (100%) of the Market Value of the Ship and under such wording and
conditions acceptable to the Lender;
	 
	20.9	 	to ensure and procure that the Owner will arrange for the execution of such guarantees as may
from time to time be required by any Protection and Indemnity or War Risks association;
	 
	20.10	 	to ensure and procure that the Owner will give notice of assignment of the Insurances to the
Insurers in the form set out in Schedule 2 to the General Assignment and to procure that a
copy of each notice of assignment shall be endorsed upon or attached to the relevant Insurance
Documents;
	 
	20.11	 	to procure that the Insurance Documents shall be deposited with the Approved Brokers and
that such brokers shall provide the Lender with certified copies thereof and shall issue to
the Lender a letter or letters of undertaking in such form as the Lender shall reasonably
require;
	 
	20.12	 	to procure that the Protection and Indemnity and/or War Risks associations in which the Ship
is entered shall provide the Lender with a letter or letters of undertaking in their standard
form and shall provide the Lender with a copy of the certificates of entry;

38

 

	20.13	 	to procure that the Insurance Documents (including all certificates of entry in any
Protection and Indemnity and/or War Risks association) shall contain loss payable clauses in
the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to the General
Assignment;
	 
	20.14	 	to procure that the Insurance Documents shall provide that the lien or set off for unpaid
premiums or calls shall be limited to only the premiums or calls due in relation to the
Insurances on the Ship and for fourteen (14) days prior written notice to be given to the
Lender by the Insurers (such notice to be given even if the Insurers have not received an
appropriate enquiry from the Lender) in the event of cancellation or termination of Insurances
and in the event of the non-payment of the premium or calls, the right to pay the said premium
or calls within a reasonable time;
	 
	20.15	 	promptly to provide the Lender with full information regarding any casualties or damage to
the Ship in an amount in excess of Three hundred thousand Dollars ($300,000) or in consequence
whereof of the Ship has become or may become a Total Loss;
	 
	20.16	 	at the request of the Lender, to provide the Lender, at the Borrowers’ cost, with a detailed
report issued by a firm of marine insurance brokers or consultants appointed by the Lender in
relation to the Insurances;
	 
	20.17	 	not to and ensure and procure that the Owner will not do any act nor voluntarily suffer nor
permit any act to be done whereby any Insurance shall or may be suspended or avoided and to
ensure and procure that the Owner will not suffer nor permit the Ship to engage in any voyage
nor to carry any cargo not permitted under the Insurances in effect without first covering the
Ship to the amount herein provided for with insurance satisfactory to the Lender for such
voyage or the carriage of such cargo;
	 
	20.18	 	(without limitation to the generality of the foregoing) in particular to ensure and procure
that the Owner will not permit the Ship to enter or trade to any zone which is declared a war
zone by any Government or by the Ship’s War Risks Insurers unless there shall have been
effected by the Owner and at its expense such special insurance as the War Risk Insurers may
require;
	 
	20.19	 	to procure that all amounts payable under the Insurances are paid in accordance with the
loss payable clause in the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to
the General Assignment and to apply and procure that all amounts as are paid to the Owner are
applied to the repair of the damage and the reparation of the loss in respect of which the
said amounts shall have been received; and
	 
	20.20	 	should the Ship be laid up for any period, to ensure and procure that the Owner will arrange
“lay up” Insurances for the Ship during such period, at its own cost and upon such terms and
conditions, in such amounts and with such Insurers as shall from time to time be approved in
writing by the Lender.

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	21.	 	OPERATIONAL UNDERTAKINGS
	 
	 	 	The Borrowers hereby jointly and severally undertake with the Lender that throughout the
Security Period the Borrowers shall (and shall procure that each other relevant Security
Party shall) comply with the following provisions of this Clause 21.1 except as the Lender
may otherwise permit:
	 
	21.1	 	to ensure and procure that the Ship shall be kept duly registered under the laws and flag of
the Flag State (or under such other registration or such other port to which the Lender may
agree) in the ownership of the Owner and the Owner shall not do or suffer to be done anything
whereby such registration may be forfeited or imperilled;
	 
	21.2	 	to ensure that all Earnings of the Ship shall be paid into the Earnings Accounts or any of
them and to procure that the Owner shall not open or maintain any accounts other than the
Earnings Accounts with any bank other than the Lender without the Lender’s prior written
consent;
	 
	21.3	 	to ensure that when due and payable, all taxes, assessments, levies, governmental charges,
fines and penalties lawfully imposed on and enforceable against the Ship shall be paid by the
Owner ;
	 
	21.4	 	to ensure that the Ship (or any share thereof or interest therein) shall not be sold
transferred, mortgaged, charged, hypothecated or abandoned (save in the case of maritime
necessity) and neither the Insurances nor the Earnings of the Ship will be assigned without
the prior written consent of the Lender which it shall have the power to withhold;
	 
	21.5	 	to ensure that the Ship shall not be operated in any manner contrary to any law or
regulations in any relevant jurisdiction, including, without limitation the ISM Code and ISPS
Code and neither the Owner nor the Manager shall engage in any unlawful trade or carry any
cargo that will expose the Ship to penalty, forfeiture or capture and in the event of
hostilities in any part of the world (whether a war be declared or not) not employ the Ship or
voluntarily suffer her employment in carrying any contraband goods;
	 
	21.6	 	to ensure that the Owner shall not create or permit to be created or continued any lien or
Encumbrance(s) on the Ship and/or the Insurances and/or the Earnings (other than Permitted
Liens) and/or shall satisfy all claims and demands which if unpaid might in law or by statute
or otherwise create a lien or Encumbrance(s) and (without prejudice to the generality of the
foregoing) no lien or Encumbrance(s) shall be created or permitted to be created or continued
on the Ship for any reason whatsoever other than Permitted Liens;
	 
	21.7	 	to ensure that on the request of the Lender, the Owner shall provide and procure that the
Lender shall be provided with satisfactory evidence that the wages, allotments, insurance and
pension contributions of the Master and crew of the Ship are being paid in accordance with the
articles of agreement relating to the Ship and the relevant regulations and that all
deductions from the remuneration of the Master and crew in respect of any tax liability
(including social insurance contributions) are being made and accounted for to the relevant

40

 

	 	 	authority and that the Master of the Ship has no claim for disbursements other than those
properly incurred by him in the ordinary trading of the Ship on the voyage then in
progress;
	 
	21.8	 	if any writ or proceedings shall be issued against the Ship or if the Ship shall be otherwise
attached, arrested or detained by any proceeding in any court or tribunal or by any government
or other authority, to ensure and procure that the Owner shall immediately notify and procure
that the Lender shall be notified thereof by telefax confirmed by letter and as soon as
practicably possible thereafter and in any event not later than fourteen (14) days from the
date of occurrence of any of the aforesaid events cause the Ship to be released and all liens
or Encumbrance(s) (except for the Mortgage and any Permitted Liens on the Ship) thereon to be
discharged;
	 
	21.9	 	save for the Charter, to ensure and procure that the Owner shall not without the prior
written consent of the Lender (which consent shall not be unreasonably withheld) voyage or
time charter the Ship or place her under contract for employment for any period which when
aggregated with any optional periods of extension contained in the said charter or contract,
would exceed six (6) months duration; provided however that in the event of the Ship being
employed (with the Lender’s prior written consent) under any demise or bareboat charter or any
charter which when aggregated with any optional periods contained in such charter would exceed
six (6) months duration, the Lender shall be furnished forthwith with (a) details and
documentary evidence satisfactory to the Lender in its sole discretion in respect of the new
employment, (b) upon Lender’s request, a specific assignment in favour of the Lender of the
benefit of such charter together with a notice of any such assignment addressed to the
relevant charterer and endorsed with an acknowledgement of receipt by the relevant charterer
all in form and substance satisfactory to the Lender and (c) upon Lender’s request, a specific
agreement of subordination of the rights of such charterer to the rights of the Lender;
	 
	21.10	 	to ensure and procure that the Owner shall not without the prior written consent of the
Lender (which it shall have full power to withhold) demise charter the Ship for any period
whatsoever;
	 
	21.11	 	to ensure and procure that the Owner shall not without the prior written consent of the
Lender (which it shall have full power to withhold) deliver the Ship into the possession of
any person or persons for effecting repairs or renewals to the Ship the cost of which will
exceed the amount of Three hundred thousand Dollars ($300,000) unless such person or persons
shall have given a written undertaking to the Lender not to exercise any lien or right of
detention on the Ship in respect of the cost of such repairs or renewals;
	 
	21.12	 	to ensure and procure that the Owner at all times and at the Owner’s own expense, shall
maintain the Ship in a seaworthy condition and in good running order and repair in accordance
with first class ship ownership and ship management practice and keep and procure that the
Ship is kept in such condition as will entitle it to the highest classification status with
the Classification Society free from recommendations and notations and procure that the Lender
is provided with certificates issued by the Classification Society that such

41

 

	 	 	classification status is maintained and with copies of all other classification
certificates as the Lender may request in writing;
	 
	21.13	 	to ensure and procure that the Owner shall submit the Ship regularly to such periodical or
other surveys as may be required for classification purposes and, if so required by the Lender
in writing, supply and procure that the Lender is supplied with copies of all survey reports
issued in respect thereof;
	 
	21.14	 	to ensure and procure that the Owner shall notify and procure that the Lender is notified
immediately by telefax of any recommendation or requirement imposed on the Ship by the
Classification Society, its Insurers or by any other competent authority that is not complied
with in accordance with its terms;
	 
	21.15	 	to ensure and procure that the Owner shall give and procure that the Lender is given with
reasonable prior notice of any proposed dry docking or any underwater survey of the Ship so
that the Lender (if it so desires) can arrange for a representative to be present;
	 
	21.16	 	to ensure and procure that the Owner shall authorise and procure that the Classification
Society and all other regulatory authorities of the Ship are authorised to disclose to the
Lender any information or documents requested by the Lender relating to the classification,
repair, maintenance or seaworthiness of the Ship;
	 
	21.17	 	to ensure and procure that the Owner shall comply with all legal requirements whether
imposed by enactment, regulation, common law or otherwise and have on board the Ship as and
when legally required valid certificates showing compliance therewith;
	 
	21.18	 	without prejudice to Clause 21.17, to ensure and procure that the Owner shall take all
necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of
1986 of the United States of America or any similar legislation applicable to the Ship in any
jurisdiction in or to which the Ship shall be employed or trade or which may otherwise be
applicable to the Ship, the Owner or either of them or any other Security Party and, if the
Lender shall so require, to ensure and procure that the Owner shall enter into a “Carrier
Initiative Agreement” with the United States Customs Service and to procure that such
agreement (or any similar agreement hereafter introduced by any agency of the United States of
America) is maintained in full force and effect by the Owner;
	 
	21.19	 	to ensure and procure that the Owner shall comply with and procure that the Manager and all
servants and agents of the Owner and the Manager or any charterer of the Ship (including,
without limitation, the Charterer) shall comply with, the ISM Code, the ISM Code
Documentation, the ISPS Code, the ISPS Code Documentation, all Environmental Laws and all
legislation of any state or government in relation to the Ship, its ownership, operation and
management or to the business of the Owner including, without limitation, requirements
relating to manning, submission of oil spill response plans, designation of qualified
individuals and establishing financial responsibility;

42

 

	21.20	 	to ensure and procure that the Owner shall hold or procure that the Manager shall hold all
appropriate ISM Documentation and provide the Lender with copies of the relevant ISM Code
Documentation and ISPS Code Documentation duly issued to the Owner, the Manager and the Ship
pursuant to the ISM Code and the ISPS Code;
	 
	21.21	 	to ensure and procure that the Owner shall keep or procure that it is kept onboard the Ship
a copy of all relevant ISM Code Documentation and ISPS Code Documentation respectively;
	 
	21.22	 	to ensure and procure that the Owner shall perform and discharge all duties and liabilities
imposed on the Owner under any charter (including, without limitation, the Charter), bill of
lading or other contract relating to the Ship;
	 
	21.23	 	to ensure and procure that the Owner shall not remove or permit the removal of any part of
the Ship or any equipment belonging thereto, nor make or permit to be made any alteration in
the structure type or speed of the Ship which materially reduced the value of the Ship (unless
such removal or alteration is required by statute or by her Classification Society) without
the prior written consent of the Lender which it shall have full power to withhold;
	 
	21.24	 	to ensure and procure that, at all reasonable times and on reasonable notice, the Owner
shall permit and procure that the Lender or its authorised representative is permitted full
and complete access to the Ship for the purpose of inspecting the state and condition of the
Ship and its cargo and papers and at the written request of the Lender deliver and procure the
delivery for inspection copies of any and all contracts and documents relating to the Ship
whether on board or not;
	 
	21.25	 	to ensure and procure that the Owner shall keep and procure that the Lender is kept fully
informed as to the use, the employment and the position of the Ship and promptly provide and
procure that the Lender is provided with information concerning the classification, status and
insurance of the Ship from time to time as and when so required in writing by the Lender;
	 
	21.26	 	when so requested by the Lender, to ensure and procure that the Owner shall appoint and
procure that two (2) independent sale and purchase shipbrokers shall be appointed, nominated
by the Lender to give valuations of the Ship without physical inspection and on the basis of
an arms length purchase by a willing buyer from a willing seller and, unless the Lender
otherwise requires, without taking into account the Charter or any other charterparty in
respect thereof; all costs and fees payable in connection with such valuations shall be paid
by the Owner and the Market Value of the Ship shall be determined by taking into account the
average of the aforesaid valuations;
	 
	21.27	 	in the event of Compulsory Acquisition of the Ship by any Government Entity, to ensure and
procure that the Owner shall execute and procure the execution of any assignment that the
Lender may request in relation to any and all amounts which such Government Entity shall be
liable to pay as Requisition Compensation for the Ship or for her use and if received by the
Owner to pay and procure the payment of such amounts immediately to the Lender;

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	21.28	 	to ensure and procure that the Owner shall appoint and procure the appointment of the
Manager as manager of the Ship and shall not vary or terminate this appointment without the
Lender’s prior written consent;
	 
	21.29	 	to ensure and procure that the Owner shall execute and deliver to the Lender such documents
of transfer as the Lender may require in the event of sale of the Ship pursuant to any power
of sale contained in the Mortgage or which the Lender may have in law;
	 
	21.30	 	to ensure and procure that the Owner shall not employ the Ship nor allow its employment in
any manner contrary to any law or regulation in any relevant jurisdiction including, but not
limited to, the ISM Code, the ISM Code Documentation, the ISPS Code and the ISPS Code
Documentation;
	 
	21.31	 	to ensure and procure that the Owner shall immediately notify the Lender by fax, confirmed
forthwith by letter, of:

	 	(i)	 	any casualty in respect of the Ship which is or is likely to be or to become
a Major Casualty;
	 
	 	(ii)	 	any occurrence as a result of which the Ship has become or is, by the passing
of time or otherwise, likely to become a Total Loss;
	 
	 	(iii)	 	any requirement or recommendation made by any insurer or classification
society or by any competent authority in respect of the Ship which is not complied
with in accordance with its terms;
	 
	 	(iv)	 	any arrest or detention of the Ship, any exercise or purported exercise of
any lien on the Ship or her Earnings or her Insurances or any requisition of the Ship
for hire;
	 
	 	(v)	 	any intended dry docking of the Ship;
	 
	 	(vi)	 	any Environmental Claim made against the Owner or the Manager or either of
them or in connection with the Ship or any Environmental Incident in respect thereof;
	 
	 	(vii)	 	any claim for breach of the ISM Code or the ISPS Code, being made against
the Owner and/or the Manager or otherwise in connection with the Ship; or
	 
	 	(viii)	 	any other matter, event or incident, actual or threatened the effect of which will
or could lead to the ISM Code and/or the ISPS Code not being complied with;

	 	 	and advise and procure that the Lender shall be advised in writing on a regular basis and
in such detail as the Lender shall require of the Owner’s or any other person’s response to
any of those events or matters;
	 
	21.32	 	to ensure and procure that the Owner shall keep prominently in the Chart Room and in the
Master’s cabin of its Ship a framed duly completed notice printed in plain type of such size

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	 	 	that the area of print shall cover a space not less than six inches wide and nine inches
high reading as follows:

“NOTICE OF MORTGAGE

	 	 	This Ship is owned by GRAND RODOSI INC. (the “Owner”) and is subject to a first preferred
Mortgage in favour of MARFIN EGNATIA BANK Societe Anonyme under the authority of Title 21
of the Liberian Code of Laws of 1956 as amended. Under the terms of the said mortgage a
certified copy of which is preserved with the Ship’s papers neither the Owner nor the
Captain nor any officer or agent nor any charterer of this Ship nor any other person
whatsoever has any power, right or authority whatever to create, incur or permit the
imposition on this Ship any commitments or encumbrances except for crews wages accrued for
not more than three (3) months or salvage.”; and
	 
	21.33	 	to comply and ensure and procure that each other Security Party will comply with its
respective obligations under each Subject Document to which it/he is a party and not to and
ensure and procure that each other Security Party will not vary, amend or terminate any of the
aforesaid documents to which it/he is a party.
	 
	22.	 	EARNINGS ACCOUNTS
	 
	22.1	 	The Lender acknowledges that the Borrowers shall, unless and until an Event of Default (or
any event which only with the giving of notice or passage of time or a determination by the
Lender and/or satisfaction of any condition or any combination of the foregoing may become an
Event of Default) shall occur and the Lender shall direct to the contrary, be entitled from
time to time, to require that moneys for the time being standing to the credit of the Earnings
Accounts or any of them be transferred in such amounts and for such periods as the Borrowers
select to fixed-term deposit accounts (“deposit accounts”) opened in the name of the Borrowers
with the Lender. None of the Borrowers shall be entitled to withdraw moneys standing to the
credit of the Earnings Accounts or any of them which are the relevant subject of a fixed term
deposit until the expiry of the period of such deposit unless the Borrowers shall, on
withdrawing such moneys pay to the Lender on demand any loss or expense which the Lender shall
certify that it has sustained or incurred as a result of such withdrawal being made prior to
the expiry of the period of the relevant deposit and the Lender shall be entitled to debit the
Earnings Accounts for the amount so certified prior to such withdrawal being made. Without
prejudice to the foregoing in the event that any moneys so deposited are to be applied
pursuant to Clause 12, the Borrowers shall, on such application being made, pay to the Lender
on demand any loss or expense which the Lender shall certify that it has sustained or incurred
as a result of such application being made prior to the expiry of the period of the relevant
deposit and the Lender shall be entitled to debit the relevant Earnings Account for the amount
so certified prior to such application being made. Any deposit accounts shall, for all the
purposes of the Finance Documents, be deemed to be sub-accounts of the relevant Earnings
Account from which the moneys deposited in the deposit accounts were transferred and all
references in the Finance Documents to the relevant Earnings Account shall be deemed to
include the deposit accounts deemed as aforesaid to be sub-accounts thereof.

45

 

	22.2	 	The Rodosi Borrower (without prejudice to the terms of the General Assignment) hereby
undertakes to pay all the Earnings of the Ship to the Earnings Accounts or any of them.
Unless and until the Lender gives notice to the Borrowers that it requires that all Earnings
be paid directly to the Lender (which notice may only be given by the Lender if an Event of
Default has occurred), all amounts in the Earnings Accounts shall be applied as follows:

	 	(i)	 	first, towards the payment of fees and costs that are due and payable by the
Borrowers to the Lender under the Finance Documents; and
	 
	 	(ii)	 	second, any balance thereafter remaining in the Earnings Accounts or any of
them shall be available to the Rodosi Borrower.

	23.	 	SECURITY MARGIN
	 
	 	 	In the event that, any time after the date falling six (6) months after the Drawdown Date
first to occur until the expiry of the Security Period the Market Value of the Ship
determined pursuant to Clause 21.26 and the value of any additional security (each valued
by the Lender in accordance with normal banking practice) previously provided to the Lender
pursuant to this Clause 23, is less than one hundred twenty per cent (120%) of the
aggregate of the Facility and the Swap Exposure, then the Borrowers shall within twenty one
(21) Banking Days of receipt of a notice from the Lender advising the Borrowers of the
amount of such deficiency (which notice shall be conclusive) either provide to the Lender
additional security (valued in accordance with normal banking practice) which shall in all
respects be satisfactory to the Lender so that the Market Value of the Ship (determined in
accordance with Clause 21.26) and the value of any additional security (each valued by the
Lender in accordance with normal banking practice) previously provided to the Lender
pursuant to this Clause 23 is at least one hundred twenty per cent (120%) of the aggregate
of the Facility and the Swap Exposure, or prepay part of the Facility in accordance with
Clause 10 so that the Market Value of the Ship (determined in accordance with Clause 21.26)
and the value of any additional security (each valued by the Lender in accordance with
normal banking practice) previously provided to the Lender pursuant to this Clause 23 is at
least one hundred twenty per cent (120%) of the aggregate of the Facility and the Swap
Exposure.
	 
	24.	 	EVENTS OF DEFAULT
	 
	24.1	 	If:

	24.1.1	 	the Borrowers or any of them or any other Security Party fail to pay on the due date for
payment any amount which shall have become due hereunder or under the other Finance Documents;
	 
	24.1.2	 	any representation, warranty or statement made by the Borrowers or any of them or any other
Security Party in this Agreement or in any of the Subject Documents or any certificate,
statement or opinion delivered or made hereunder or under the

46

 

	 	 	Subject Documents or in connection herewith or with the Subject Documents shall be
incorrect or inaccurate when made in any material respect;
	 
	24.1.3	 	an event of default under and as defined in any of the Subject Documents shall occur;
	 
	24.1.4	 	the Borrowers or any of them or any other Security Party fail(s) duly and punctually to
perform or observe any other term of this Agreement and in any such case such failure, if
capable of remedy, shall continue for fourteen (14) days after the Lender shall have given to
the Borrowers notice in writing of such failure;
	 
	24.1.5	 	any other indebtedness of the Borrowers, the other Security Parties or any of them exceeding
in aggregate Three hundred thousand Dollars ($300,000), shall become due and payable or, with
the giving of notice or lapse of time or both, capable of being declared due and payable prior
to its stated maturity by reason of any circumstance entitling the creditor(s) thereof to
declare such indebtedness due and payable and such indebtedness is not paid within fourteen
(14) days thereof;
	 
	24.1.6	 	the Borrowers or any of them or any other Security Party or any other member of the Group
shall enter into voluntary or involuntary bankruptcy, liquidation or dissolution, or shall
become insolvent, or an administrator, administrative receiver, receiver or liquidator shall
be appointed of all or a material part of its undertaking or assets or proceedings are
commenced by or against them/it under any reorganisation, arrangement, readjustment of debts,
dissolution or liquidation law or regulation, or if any event shall occur which, under the
relevant system of law, shall have an equivalent effect;
	 
	24.1.7	 	a petition is presented in any Pertinent Jurisdiction for the winding up or administration,
or the appointment of a provisional liquidator, of the Borrowers or any other Security Party
unless such petition is being contested in good faith and on substantial grounds and is
dismissed or withdrawn within thirty (30) days of the presentation of the petition;
	 
	24.1.8	 	the Borrowers or any of them or any other Security Party or any other member of the Group
shall cease or threaten to cease to carry on the whole or a substantial part of their/its
business;
	 
	24.1.9	 	the Borrowers or any of them or any other Security Party or any other member of the Group
shall transfer or dispose of all or a substantial part of their/its assets whether by one or a
series of transactions, related or not;
	 
	24.1.10	 	the Subject Documents or any of them shall cease, in whole or in part, to be valid, binding
and enforceable;
	 
	24.1.11	 	the Borrowers or any of them shall sell, transfer, dispose of or encumber the Ship or any
interest or share therein, or agree so to do (other than Permitted Liens) without the prior
written consent of the Lender;

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	24.1.12	 	the Ship shall become a Total Loss and the Borrowers shall fail to make the mandatory
prepayment required to be made under Clause 10.1 in respect of such Total Loss within the time
therein set forth;
	 
	24.1.13	 	any governmental or other consent, licence or authority required to make this Agreement
and/or any of the other Finance Documents legal, valid, binding, enforceable and admissible in
evidence or required to enable the Borrowers or any of them or any other Security Party to
perform their/its respective duties and discharge their/its liabilities hereunder or under the
other Finance Documents is withdrawn or ceases to be in full force and effect unless the
Borrowers or such other Security Party procures that such consent, licence or authority is
reinstated or re-issued to the satisfaction of the Lender within fifteen (15) calendar days of
the said withdrawal or cessation;
	 
	24.1.14	 	any distress or execution is levied or enforced against a material (in the opinion of the
Lender) part of the property and assets of the Borrowers or any of them or any other Security
Party and such distress or execution is not withdrawn or discharged within ten (10) Banking
Days;
	 
	24.1.15	 	the Borrowers or any of them or any other Security Party or any other member of the Group
shall stop payment of, or shall be unable to, or shall admit inability to pay their/its debts
as they fall due, or shall enter into any composition or other arrangement with their/its
creditors generally or shall declare a general moratorium on the payment of indebtedness;
	 
	24.1.16	 	the fulfilment of any one or more of the obligations covenants and undertakings contained
in any one or more of this Agreement, the other Finance Documents and any other documents
executed pursuant hereto or thereto or the exercise of any of the rights vested in the Lender
hereunder or thereunder becoming either unlawful under any applicable law or unauthorised by
any authority having jurisdiction or otherwise impossible;
	 
	24.1.17	 	if the Personal Guarantor dies or otherwise ceases to be actively involved in the business
of the Borrowers and the Borrowers failing upon Lender’s request to provide the Lender with a
guarantee from an alternative Personal Guarantor acceptable to the Lender in its sole
discretion within sixty (60) days from such request;
	 
	24.1.18	 	a material adverse change occurs in the financial condition or operation of any one or more
of the Security Parties or any other member of the Group;
	 
	24.1.19	 	if any Security Party and/or the Charterer repudiates or evidences an intention to
repudiate any one or more of the Subject Documents or if any Subject Document is rescinded or
cancelled or terminated or amended or varied, without the Lender’s prior written consent; or

48

 

	24.1.20	 	if the Ship is arrested or detained and such arrest or detention is not released within
fourteen (14) days, or an order for the sale of the Ship is made by a court of competent
jurisdiction or the Owner ceases to retain possession and/or control of the Ship for a period
in excess of fourteen (14) days

	 	 	then, and in any such event and at any time thereafter, the Lender may by written notice to
the Borrowers declare that the Facility of the Lender shall be cancelled, whereupon the
same shall be cancelled and declare the Indebtedness immediately due and payable whereupon
the same shall become so payable to the Lender.
	 
	24.2	 	All amounts received by the Lender under or pursuant to any of the Finance Documents after
the happening of any Event of Default shall be applied by the Lender in payment of the
Indebtedness in accordance with the terms of Clause 12.
	 
	24.3	 	On the occurrence of an Event of Default the Lender shall have the right and power to order
the Ship to proceed forthwith at the Owner’s risk and expense to a port or place nominated by
the Lender. The Owner undertakes to give the necessary instructions to the Master of the Ship
to comply with any such order of the Lender and if the Owner fails to give such instructions
for any reason whatsoever the Lender shall have the right and power to give such instructions
direct to the Master(s).
	 
	25.	 	SET-OFF
	 
	25.1	 	The Lender shall have the right, in addition to all rights of set off, combination, lien or
otherwise which it has at law or under any agreement between the Lender and the Borrowers or
any of them at any time without demand after the occurrence of an Event of Default:

	25.1.1	 	to set off any amount to the credit of any existing accounts of the Borrowers or any of them
and/or the Grandunion Guarantor with the Lender (whether deposit, loan or any other account)
including, without limitation, the Earnings Accounts in or towards satisfaction of all amounts
due from the Borrowers under this Agreement and/or the other Finance Documents; and
	 
	25.1.2	 	to transfer and apply any amount standing to the credit of any such existing accounts of the
Borrowers or any of them and/or the Grandunion Guarantor and/or the Personal Guarantor with
any associate or subsidiary of the Lender in or towards satisfaction of all amounts due from
the Borrowers or any of them under this Agreement and/or the other Finance Documents.

	25.2	 	Where such set-off or transfer requires the conversion of one currency into another, such
conversion shall be calculated at the spot rate as conclusively determined by the Lender for
purchasing such currency with the currency in which the relevant amounts are denominated on
the date of actual payment.

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	26.	 	FEES
	 
	 	 	The Borrowers shall pay to the Lender an arrangement fee (the “Arrangement Fee”) of Fifteen
thousand Dollars ($15,000) on the Drawdown Date of the Advance first to occur.
	 
	27.	 	EXPENSES
	 
	27.1	 	Whether or not the Facility or any part thereof, is actually drawn down the Borrowers shall
reimburse the Lender on demand for all costs, charges and expenses incurred by the Lender in
connection with the preparation, negotiation and conclusion of this Agreement and the other
Finance Documents including fees and expenses of the Lender’s legal advisers.
	 
	27.2	 	The Borrowers shall reimburse the Lender on demand for all charges and expenses (including
legal fees) incurred by the Lender in or in connection with the exercise of the Lender’s
rights and powers under this Agreement and the other Finance Documents (including but not
limited to the fees and charges of auditors, brokers, surveyors and lawyers instructed by the
Lender) and with the actual, attempted or purported enforcement of, or preservation of rights
under this Agreement and the other Finance Documents.
	 
	28.	 	INDEMNITY
	 
	 	 	The Borrowers hereunder jointly and severally undertake and agree to indemnify the Lender,
upon the Lender’s first demand, from and against any losses, costs or expenses (including
legal expenses) which they incur in consequence of any Event of Default including (but
without limitation) all losses (including loss of profit for the current Interest Period),
premiums and penalties incurred or to be incurred in liquidating or redeploying deposits
made by third parties or funds acquired or arranged to advance or maintain the Facility or
any part thereof and any liability items which arise, or are asserted, under or in
connection with any law relating to safety at sea.
	 
	29.	 	ENVIRONMENTAL INDEMNITY
	 
	 	 	The Borrowers jointly and severally undertake to indemnify the Lender against all damages,
losses, liabilities, costs, expenses, penalties, fines or proceedings which may be incurred
or paid by or imposed on the Lender directly or indirectly at any time (whether before or
after the Indebtedness has been repaid in full) pursuant to any Environmental Law or any
other environmental legislation of any state or government which would not have been
incurred or paid by or imposed on the Lender had it not entered into this Agreement and/or
the other Finance Documents.
	 
	30.	 	STAMP DUTIES
	 
	 	 	The Borrowers shall pay any and all stamp, registration and similar
taxes and charges of whatsoever nature which may be payable or
determined to be payable on, or in connection with, the execution,
registration, notarisation, performance or enforcement of this
Agreement or the other Finance Documents. The Borrowers shall
indemnify the Lender

50

 

	 	 	against any and all liabilities with respect to or resulting from delay or omission on the
part of the Borrowers or any of them to pay any such taxes.
	 
	31.	 	DETERMINATIONS
	 
	 	 	Each determination of an Interest Rate or a Default Rate or of any amount in respect of
principal or interest or fees or expenses by the Lender in accordance with this Agreement
and every other determination or certification by the Lender under this Agreement shall be
conclusive and binding on the Borrowers in the absence of manifest error.
	 
	32.	 	NO WAIVER
	 
	 	 	No failure to exercise and no delay on the part of the Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
of any right or power preclude any other or future exercise thereof or the exercise of any
other right or power. The rights, powers and remedies herein provided are cumulative and
not exclusive of any rights, powers or remedies provided by law.
	 
	33.	 	PARTIAL INVALIDITY
	 
	 	 	In the event that any term or condition of this Agreement is rendered or declared illegal,
invalid or inoperative in whole or in part by any statute rule or regulation or any
decision of any court or tribunal of competent jurisdiction then such determination or
declaration shall neither affect the validity of any other term or condition of this
Agreement which (save as aforesaid) will remain in full force and effect nor the legality,
validity or enforceability of such term or condition under the laws of any other
jurisdiction.
	 
	34.	 	TRANSFER, ASSIGNMENT, PARTICIPATION, CHANGE OF LENDING BRANCH
	 
	34.1	 	This Agreement shall bind and be to the benefit of the Borrowers and the Lender and their
respective successors and permitted assigns.
	 
	34.2	 	None of the Borrowers may assign any of its rights, powers, duties or liabilities hereunder
without the prior written consent of the Lender which it shall have full power to withhold.
	 
	34.3	 	The Lender may, without prior notice or the consent of the Borrowers or any other Security
Party, at any time assign, transfer all or part of the Facility and its rights and powers
under this Agreement to any other bank or other financial institution (the “Transferee
Lender”). The Lender shall notify the Borrowers of any such assignment or transfer as soon as
practicable.
	 
	34.4	 	The Lender may at any time and from time to time change its lending office in respect of the
whole or any part of its participation in the Facility. The Lender shall notify the Borrowers
of any such change in the lending office as soon as is practicable.

51

 

	34.5	 	If the Lender transfers or assigns, transfers or in any other manner grants participation in
respect of all or any part of its rights, powers duties and liabilities hereunder pursuant to
Clause 34.3 the Borrowers undertake immediately on being requested to do so by the Lender and
at the cost of the Lender to enter into and procure that the other parties to the Finance
Documents shall enter into, such documents as may be necessary or desirable to transfer to the
relevant assignee, transferee or participant all or the relevant part of the Lender’s interest
in the Finance Documents and all relevant references in this Agreement and the Finance
Documents to the Lender shall thereafter be construed as a reference to the Lender and/or such
assignee, transferee or participant (as the case may be) to the extent of their respective
interests.
	 
	34.6	 	The Lender may disclose to a potential assignee, transferee of participant or to any other
person who may propose entering into contractual relations with the Lender in relation to this
Agreement such information about the Borrowers and the other Security Parties as the Lender
shall consider appropriate.
	 
	35.	 	NON-IMMUNITY
	 
	35.1	 	None of the Borrowers nor any other Security Party has any right of immunity from set-off,
suit or execution, attachment or other legal process under the laws of the United Kingdom, or
the Republic of Greece or the Republic of Liberia or the Republic of Panama or any Flag State.
	 
	35.2	 	The exercise by each of the Borrowers of its rights and performance and discharge of its
duties and liabilities hereunder will constitute commercial acts done and performed for
private and commercial purposes.
	 
	35.3	 	To the extent that the Borrowers or any of them may in any jurisdiction in which proceedings
may at any time be taken for the enforcement of this Agreement and/or any of the other Finance
Documents claim for themselves or their assets immunity from suit, judgment, execution,
attachment (whether, before judgment or otherwise) or other legal process, and to the extent
that in any such jurisdiction there may be attributed to themselves or their assets any such
immunity (whether or not claimed), the Borrowers hereby irrevocably agree not to claim and
hereby irrevocably waive any such immunity to the full extent permitted by the laws of such
jurisdiction.
	 
	36.	 	NOTICES
	 
	36.1	 	Unless otherwise specifically provided, any notice under or in connection with any Finance
Document shall be given by letter or fax; and references in the Finance Documents to written
notices, notices in writing and notices signed by particular persons shall be construed
accordingly.

52

 

	36.2	 	A notice shall be sent:

	 	 	 	 	 	 	 

	 

	 	(a)
	 	to the Borrowers:
	 	c/o NEWLEAD BULKERS S.A.
	 

	 	 	 	 	 	1-7, Flessa & 83 Akti Miaouli
	 

	 	 	 	 	 	185 38 Piraeus
	 

	 	 	 	 	 	Greece
	 

	 	 	 	 	 	Fax No.: +30 213 0148408
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	to the Lender at:
	 	24B Kifissias Avenue
	 

	 	 	 	 	 	151 25 Maroussi
	 

	 	 	 	 	 	Attiki, Greece
	 

	 	 	 	 	 	Fax No: +30 210 6896358

	 	 	or to such other address as the relevant party may notify the other in writing.
	 
	36.3	 	Subject to Clauses 36.4 and 36.5:

	 	(a)	 	a notice which is delivered personally or posted shall be deemed to be
served, and shall take effect, at the time when it is delivered;
	 
	 	(b)	 	a notice which is sent by fax shall be deemed to be served, and shall take
effect, two (2) hours after its transmission is completed.

	36.4	 	However, if under Clause 36.3 a notice would be deemed to be served:

	 	(a)	 	on a day which is not a Banking Day in the place of receipt; or
	 
	 	(b)	 	on such a Banking Day, but after 5 p.m. local time;

	 	 	the notice shall (subject to Clause 36.5) be deemed to be served, and shall take effect, at
9 a.m. on the next day which is such a Banking Day.
	 
	36.5	 	Clauses 36.3 and 36.4 do not apply if the recipient of a notice notifies the sender within
one (1) hour after the time at which the notice would otherwise be deemed to be served that
the notice has been received in a form, which is illegible in a material respect.
	 
	36.6	 	A notice under or in connection with a Finance Document shall not be invalid by reason that
the manner of serving it does not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if the failure to serve it in
accordance with the requirements of this Agreement or other Finance Document, as the case may
be, has not caused any party to suffer any significant loss or prejudice.
	 
	36.7	 	Any notice under or in connection with a Finance Document shall be in English.
	 
	36.8	 	In this Clause “notice” includes any demand, consent, authorisation, approval, instruction,
waiver or other communication.

53

 

	37	 	SUPPLEMENTAL
	 
	37.1	 	The rights and remedies which the Finance Documents give to the Lender are:

	 	(a)	 	cumulative;
	 
	 	(b)	 	may be exercised as often as appears expedient; and
	 
	 	(c)	 	shall not, unless a Finance Document explicitly and specifically states so,
be taken to exclude or limit any right or remedy conferred by any law.

	37.2	 	If any provision of a Finance Document is or subsequently becomes void, unenforceable or
illegal, that shall not affect the validity, enforceability or legality of the other
provisions of that Finance Document or of the provisions of any other Finance Document.
	 
	37.3	 	A Finance Document may be executed in any number of counterparts.
	 
	37.4	 	A person who is not a party to this Agreement has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
	 
	37.5	 	This Agreement supersedes the terms and conditions contained in any correspondence relating
to the subject matter of this Agreement exchanged between the Lender and the Borrowers or
their representatives prior to the date of this Agreement including, without limitation, the
Commitment Letter.
	 
	38.	 	LAW AND JURISDICTION
	 
	38.1	 	This Agreement and any non-contractual obligations connected with it shall be governed by,
and construed in accordance with, English law.
	 
	38.2	 	Subject to Clause 38.3, the courts of England shall have exclusive jurisdiction to settle any
disputes, which may arise out of or in connection with this Agreement and any non-contractual
obligations connected with it.
	 
	38.3	 	Clause 38.2 is for the exclusive benefit of the Lender, which reserves the right:

	 	(a)	 	to commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of the Republic of Greece and/or any
country other than England or Greece and which have or claim jurisdiction to that
matter; and
	 
	 	(b)	 	to commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or Greece or without
commencing proceedings in England or Greece.

54

 

	 	 	The Borrowers shall not commence any proceedings in any country other than England in
relation to a matter, which arises out of or in connection with this Agreement and any
non-contractual obligations connected with it.
	 
	38.4	 	The Borrowers irrevocably appoint HFW Nominees Limited, presently at Friary Court, 65
Crutched Friars, London EC3N 2AE, England, to act as its/their agent to receive and accept on
their/its behalf any process or other document relating to any proceedings in the English
courts which are connected with this Agreement and any non-contractual obligations connected
with it.
	 
	38.5	 	The Borrowers irrevocably designate and appoint Mrs. Stella Nikolaou, an Attorney-at-law with
offices at 83 Akti Miaouli, 185 38 Piraeus, Greece, as agent for the service of process in
Greece (“antiklitos”) and agree to consider any legal process or any demand or notice made
served by or on behalf of the Lender on the said agent as being made to the Borrowers. The
designation of such an authorized agent (“antiklitos”) shall remain irrevocable until all
Indebtedness shall have been paid in full in accordance with the terms of this Agreement and
the other Finance Documents.
	 
	38.6	 	Nothing in this Clause 38 shall exclude or limit any right which the Lender may have (whether
under the law of any country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or enforcement of a judgment
or any similar or related matter in any jurisdiction.
	 
	38.7	 	In this Clause 38, “proceedings” means proceedings of any kind, including an application for
a provisional or protective measure or enforcement court order (diatagi pliromis).
	 
	39.	 	THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS
	 
	 	 	In case of any conflict between the provisions of this Agreement and any of the other
Finance Documents the provisions of this Agreement shall prevail.

AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year
first above written.

55

 

EXECUTION PAGE

	 	 	 

	SIGNED
by Michael Chaelis
	 	) /s/ Michael Chaelis
	and by Stavros Yagos
	 	)  /s/ Stavros Yagos
	for and on behalf of
	 	)
	MARFIN EGNATIA BANK Societe Anonyme
	 	) 
	in the presence of: Vasiliki Katsouli
	 	)  /s/ Vasiliki Katsouli
	 
	 	 
	SIGNED by Michael Livanos
	 	)  /s/ Michael S. Livanos
	for and on behalf of
	 	)
	GRAND RODOSI INC.
	 	) 
	in the presence of: Vasiliki Katsouli
	 	)  /s/ Vasiliki Katsouli
	 
	 	 
	SIGNED by Michael Livanos
	 	)   /s/ Michael S. Livanos
	for and on behalf of
	 	)
	NEWLEAD SHIPPING S.A.
	 	) 
	in the presence of: Vasiliki Katsouli
	 	)  /s/ Vasiliki Katsouli
	 
	 	 
	SIGNED by Michael Livanos
	 	)  /s/ Michael S. Livanos 
	for and on behalf of
	 	)
	NEWLEAD BULKERS S.A.
	 	) 
	in the presence of: Vasiliki Katsouli
	 	)  /s/ Vasiliki Katsouli

56

 

SCHEDULE 1

FORM OF NOTICE OF DRAWDOWN

			
	TO:	 	MARFIN EGNATIA BANK Societe Anonyme

24B Kifissias Avenue

151 25 Maroussi

Attiki, Greece

Date:
[l] 2010

Dear Sirs,

Financial Agreement made to Grand Rodosi Inc., Newlead Shipping S.A. and Newlead Bulkers S.A.

	1.	 	We refer to the financial agreement dated [l] 2010 (the “Financial Agreement”) and made
between ourselves, as joint and several Borrowers and yourselves as Lender, in connection with
a revolving credit facility of up to Thirty Five million Dollars ($35,000,000).
	 
	 	 	Terms defined in the Financial Agreement have their defined meanings when used in this
Notice of Drawdown.
	 
	2.	 	We request to borrow [an] Advance[s] as follows:

	 	(a)	 	Amount: $ [l];
	 
	 	(b)	 	Drawdown Date: [l] 2010;
	 
	 	(c)	 	Duration of the first Interest Period shall be [l] months; and
	 
	 	(d)	 	Payment instructions: account in the name of [l] and numbered [l]
with [l] of [l].

	3.	 	We represent and warrant that:

	 	(a)	 	the representations and warranties in Clause 16 of the Financial Agreement
and in the other Finance Documents would remain true and not misleading if repeated on
the date of this notice with reference to the circumstances now existing;
	 
	 	(b)	 	no Event of Default has occurred or will result from the borrowing of the
above Advance[s].

	4.	 	This notice cannot be revoked without your prior written consent.

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	 	[5. We authorise you to deduct from the proceeds of the above Advance[s] the amount of (a) the
arrangement fee referred to in Clause 26.1 and       (b) all legal fees payable pursuant to Clause
18.1.13]

Yours faithfully,

For and on behalf of

GRAND RODOSI INC.

                                        

Attorney-in-Fact

For and on behalf of

NEWLEAD SHIPPING S.A.

                                        

Attorney-in-Fact

For and on behalf of

NEWLEAD BULKERS S.A.

                                        

Attorney-in-Fact

58

 

SCHEDULE 2

FORM OF ACKNOWLEDGEMENT

Date: [l] 2010

Financial Agreement dated [l] 2010 (the “Financial Agreement”)

We the undersigned Borrowers declare that in connection with the above Financial Agreement we
received [an] Advance[s] in the amount of [l] Dollars ($[l]) value [l].

Capitalised terms used herein shall have the respective meanings specified in the Financial
Agreement.

Yours faithfully,

For and on behalf of

GRAND RODOSI INC.

                                        

Attorney-in-Fact

For and on behalf of

NEWLEAD SHIPPING S.A.

                                        

Attorney-in-Fact

For and on behalf of

NEWLEAD BULKERS S.A.

                                        

Attorney-in-Fact

59

 

SCHEDULE 3

FORM OF BUDGET

60exv4w6

Exhibit 4.6

FORM OF

SENIOR INDENTURE

by and between

CEREPLAST, INC.

as Issuer,

and

                    ,

as Trustee

Dated as of                     

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	 	 
	SECTION 1.01 Definitions
	 	 	1	 
	SECTION 1.02 Incorporation by Reference of Trust Indenture Act
	 	 	3	 
	SECTION 1.03 Rules of Construction
	 	 	4	 
	ARTICLE II THE SECURITIES
	 	 	 	 
	SECTION 2.01 Unlimited in Amount, Issuable in Series
	 	 	4	 
	SECTION 2.02 Form and Dating
	 	 	6	 
	SECTION 2.03 Execution and Authentication
	 	 	6	 
	SECTION 2.04 Registrar and Paying Agent
	 	 	7	 
	SECTION 2.05 Paying Agent to Hold Assets in Trust
	 	 	7	 
	SECTION 2.06 Holder Lists
	 	 	7	 
	SECTION 2.07 General Provisions Relating to Transfer and Exchange
	 	 	8	 
	SECTION 2.08 Book-Entry Provisions for Global Securities
	 	 	8	 
	SECTION 2.09 Replacement Securities
	 	 	10	 
	SECTION 2.10 Outstanding Securities
	 	 	10	 
	SECTION 2.11 Treasury Securities
	 	 	10	 
	SECTION 2.12 Temporary Securities
	 	 	10	 
	SECTION 2.13 Cancellation
	 	 	10	 
	SECTION 2.14 CUSIP Numbers
	 	 	11	 
	SECTION 2.15 Defaulted Interest
	 	 	11	 
	SECTION 2.16 Special Record Dates
	 	 	11	 
	ARTICLE III REDEMPTION
	 	 	 	 
	SECTION 3.01 Notices to Trustee
	 	 	11	 
	SECTION 3.02 Selection of Securities to Be Redeemed
	 	 	11	 
	SECTION 3.03 Notice of Redemption
	 	 	12	 
	SECTION 3.04 Effect of Notice of Redemption
	 	 	12	 
	SECTION 3.05 Deposit of Redemption Price
	 	 	12	 
	SECTION 3.06 Securities Redeemed in Part
	 	 	13	 
	SECTION 3.07 Holder’s Right to Require Redemption
	 	 	13	 
	SECTION 3.08 Procedure for Requiring Redemption
	 	 	13	 
	ARTICLE IV COVENANTS
	 	 	 	 
	SECTION 4.01 Payment of Securities
	 	 	13	 
	SECTION 4.02 Maintenance of Office or Agency
	 	 	14	 
	SECTION 4.03 Reports
	 	 	14	 
	SECTION 4.04 Compliance Certificate
	 	 	14	 
	SECTION 4.05 Taxes
	 	 	14	 
	SECTION 4.06 Corporate Existence
	 	 	15	 
	ARTICLE V MERGER, ETC.
	 	 	 	 
	SECTION 5.01 When Company May Merge, etc.
	 	 	15	 
	SECTION 5.02 Successor Corporation Substituted
	 	 	15	 
	ARTICLE VI DEFAULTS AND REMEDIES
	 	 	 	 
	SECTION 6.01 Events of Default
	 	 	16	 
	SECTION 6.02 Acceleration
	 	 	17	 
	SECTION 6.03 Other Remedies
	 	 	17	 
	SECTION 6.04 Waiver of Past Defaults
	 	 	17	 
	SECTION 6.05 Control by Majority
	 	 	17	 

i

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 6.06 Limitation on Suits
	 	 	17	 
	SECTION 6.07 Rights of Holders To Receive Payment and to Demand Conversion
	 	 	18	 
	SECTION 6.08 Collection Suit by Trustee
	 	 	18	 
	SECTION 6.09 Trustee May File Proofs of Claim
	 	 	18	 
	SECTION 6.10 Priorities
	 	 	18	 
	SECTION 6.11 Undertaking for Costs
	 	 	19	 
	SECTION 6.12 Stay, Extension and Usury Laws
	 	 	19	 
	SECTION 6.13 Restoration of Positions
	 	 	19	 
	SECTION 6.14 Liability of Stockholders, Officers, Directors and Incorporators
	 	 	19	 
	ARTICLE VII TRUSTEE
	 	 	 	 
	SECTION 7.01 Duties of Trustee
	 	 	20	 
	SECTION 7.02 Rights of Trustee
	 	 	20	 
	SECTION 7.03 Individual Rights of Trustee
	 	 	21	 
	SECTION 7.04 Money Held in Trust
	 	 	21	 
	SECTION 7.05 Trustee’s Disclaimer
	 	 	22	 
	SECTION 7.06 Notice of Defaults
	 	 	22	 
	SECTION 7.07 Reports by Trustee to Holders
	 	 	22	 
	SECTION 7.08 Compensation and Indemnity
	 	 	22	 
	SECTION 7.09 Replacement of Trustee
	 	 	23	 
	SECTION 7.10 Successor Trustee by Merger, Etc.
	 	 	23	 
	SECTION 7.11 Eligibility; Disqualification
	 	 	24	 
	SECTION 7.12 Preferential Collection of Claims Against the Company
	 	 	24	 
	ARTICLE VIII DISCHARGE OF INDENTURE
	 	 	 	 
	SECTION 8.01 Satisfaction and Discharge of Indenture
	 	 	24	 
	SECTION 8.02 Application of Trust Funds; Indemnification
	 	 	25	 
	SECTION 8.03 Legal Defeasance
	 	 	25	 
	SECTION 8.04 Covenant Defeasance
	 	 	26	 
	SECTION 8.05 Repayment to Company
	 	 	27	 
	SECTION 8.06 Reinstatement
	 	 	27	 
	ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	 	 
	SECTION 9.01 Without Consent of Holders
	 	 	27	 
	SECTION 9.02 With Consent of Holders
	 	 	28	 
	SECTION 9.03 Compliance with Trust Indenture Act
	 	 	29	 
	SECTION 9.04 Revocation and Effect of Consents
	 	 	29	 
	SECTION 9.05 Notation on or Exchange of Securities
	 	 	29	 
	SECTION 9.06 Trustee to Sign Amendment, etc.
	 	 	30	 
	ARTICLE X CONVERSION OR EXCHANGE OF SECURITIES
	 	 	 	 
	SECTION 10.01 Provisions Relating to Conversion or Exchange of Securities
	 	 	30	 
	ARTICLE XI SINKING OR PURCHASE FUNDS
	 	 	 	 
	SECTION 11.01 Provisions Relating to Sinking or Purchase Funds
	 	 	30	 
	ARTICLE XII MISCELLANEOUS
	 	 	 	 
	SECTION 12.01 Trust Indenture Act Controls
	 	 	30	 
	SECTION 12.02 Notices
	 	 	30	 
	SECTION 12.03 Communication by Holders with Other Holders
	 	 	31	 
	SECTION 12.04 Certificate and Opinion as to Conditions Precedent
	 	 	31	 
	SECTION 12.05 Statements Required in Certificate or Opinion
	 	 	31	 
	SECTION 12.06 Rules by Trustee and Agents
	 	 	32	 
	SECTION 12.07 Legal Holidays
	 	 	32	 
	SECTION 12.08 Duplicate Originals
	 	 	32	 
	SECTION 12.09 Governing Law
	 	 	32	 
	SECTION 12.10 No Adverse Interpretation of Other Agreements
	 	 	32	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 12.11 Successors
	 	 	32	 
	SECTION 12.12 Severability
	 	 	32	 
	SECTION 12.13 Counterpart Originals
	 	 	32	 
	SECTION 12.14 Submission to Jurisdiction
	 	 	33	 
	SECTION 12.15 Waiver of Jury Trial
	 	 	33	 
	SECTION 12.16 Force Majeure
	 	 	33	 
	SECTION 12.17 Supplemental Indentures Contract
	 	 	33	 
	SECTION 12.18 Table of Contents, Headings, etc.
	 	 	33	 
	SECTION 12.19 When Treasury Securities Disregarded
	 	 	33	 

iii

 

CROSS-REFERENCE TABLE*

	 	 	 	 	 
	Trust Indenture Act Section	 	Indenture Section
	310
	 	(a)(1)	 	7.11
	 
	 	(a)(2)	 	7.11
	 
	 	(a)(3)	 	n/a
	 
	 	(a)(4)	 	n/a
	 
	 	(a)(5)	 	7.11
	 
	 	(b)	 	7.03; 7.11
	 
	 	(c)	 	n/a
	311
	 	(a)	 	7.12
	 
	 	(b)	 	7.12
	 
	 	(c)	 	n/a
	312
	 	(a)	 	2.06
	 
	 	(b)	 	12.03
	 
	 	(c)	 	12.03
	313
	 	(a)	 	7.07
	 
	 	(b)(1)	 	n/a
	 
	 	(b)(2)	 	7.07; 7.08
	 
	 	(c)	 	7.07; 12.02
	 
	 	(d)	 	7.07
	314
	 	(a)(1), (2), (3)	 	4.03;12.05
	 
	 	(a)(4)	 	4.04
	 
	 	(b)	 	n/a
	 
	 	(c)(1)	 	12.04
	 
	 	(c)(2)	 	12.04
	 
	 	(c)(3)	 	n/a
	 
	 	(d)	 	n/a
	 
	 	(e)	 	12.05
	 
	 	(f)	 	n/a
	315
	 	(a)	 	7.01(b)
	 
	 	(b)	 	7.06; 12.02
	 
	 	(c)	 	7.01(a)
	 
	 	(d)	 	7.01(c)
	 
	 	(e)	 	6.11
	316
	 	(a)(last sentence)	 	2.11
	 
	 	(a)(1)(A)	 	6.05
	 
	 	(a)(1)(B)	 	6.04
	 
	 	(a)(2)	 	n/a
	 
	 	(b)	 	6.07
	 
	 	(c)	 	9.04
	317
	 	(a)(1)	 	6.08
	 
	 	(a)(2)	 	6.09
	 
	 	(b)	 	2.04
	318
	 	(a)	 	12.01
	 
	 	(b)	 	n/a
	 
	 	(c)	 	12.01

“n/a” means not applicable.

iv

 

SENIOR INDENTURE (this “Indenture”), dated as of                     , by and between CEREPLAST, INC., a
Nevada corporation (the “Company”), as issuer, and                     , a                     , as trustee (the
“Trustee”).

RECITALS

     The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its debentures, notes or other evidences of indebtedness to be
issued in one or more series (the “Securities”), up to such principal amount as may from time to
time be authorized in or pursuant to one or more resolutions of the Board of Directors or by
supplemental indenture.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually covenanted and agreed for the equal and ratable benefit of the Holders of
the Securities, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.01 Definitions.

          “Affiliate” means, when used with reference to the Company or another Person, any Person
directly or indirectly controlling, controlled by, or under direct or indirect common control with,
the Company or such other Person, as the case may be. For the purposes of this definition,
“control” when used with respect to any specified Person means the power to direct or cause the
direction of management or policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative of the foregoing.

          “Agent” means any Registrar, Paying Agent, authenticating agent or co-Registrar.

          “Bankruptcy Law” means Title 11 of the U.S. Code or any similar federal or state law for the
relief of debtors.

          “Board of Directors” means, with respect to any Person, the Board of Directors of such Person
or any duly authorized committee of such Board of Directors.

          “Board Resolution” means a copy of a resolution certified by the secretary or an assistant
secretary of such Person to have been duly adopted by the Board of Directors of such Person or any
duly authorized committee thereof and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          “Business Day” means a day that is not a Legal Holiday.

          “Company” means the party named as the Company in the first paragraph of this Indenture until
one or more successor corporations shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter means such successors.

          “Consolidated” or “consolidated” means, when used with reference to any amount, such amount
determined on a consolidated basis in accordance with GAAP, after the elimination of intercompany
items.

1

 

          “Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate services business shall be principally administered, which office at the date of
execution of this Indenture is located at _________.

          “Custodian” means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.

          “Default” means any event which is, or after notice or lapse of time or both would be, an
Event of Default.

          “Depositary” means The Depository Trust Company, its nominees and their respective successors.

          “DTC Participants” has the meaning specified in Section 2.08.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute.

          “Event of Default” has the meaning specified in Section 6.01.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute.

          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are applicable from time to time.

          “Global Securities” means a Security issued to evidence all or a part of any series of
Securities that is executed by the Company and authenticated and delivered by the Trustee to a
depositary or pursuant to such depositary’s instructions, all in accordance with this Indenture and
pursuant to Section 2.01, which shall be registered as to principal and interest in the name of
such depositary or its nominee.

          “Holder” means the Person in whose name a Security is registered on the Registrar’s books.

          “Indenture” means this Indenture, as amended, supplemented or modified from time to time.

          “Issue Date” means the date of original issuance of the initial Securities pursuant to this
Indenture.

          “Legal Holiday” has the meaning specified in Section 12.07.

          “Officer” of any Person means the Chairman of the Board, Vice Chairman, the Chief Executive
Officer, the President, any Senior Vice President, any Executive Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the Secretary or the Controller of such
Person.

          “Officers’ Certificate” means a certificate signed by two Officers or by an Officer and an
Assistant Treasurer, Assistant Secretary or Assistant Controller of any Person.

          “Opinion of Counsel” means a written opinion from legal counsel. The counsel may be an
employee of or counsel to the Company.

          “Paying Agent” has the meaning specified in Section 2.04.

          “Person” means an individual, partnership, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental authority or other entity of
whatever nature.

          “Physical Securities” means permanent certificated Securities in registered form, issued in
accordance with Section 2.08 and the terms of any indenture supplemental hereto.

2

 

          “Redemption Date” means, with respect to any Securities to be redeemed, the date fixed for
such redemption pursuant to this Indenture.

          “Redemption Price” means the redemption price fixed in accordance with the terms of the
Securities, plus accrued and unpaid interest, if any, to the date fixed for redemption.

          “Register” has the meaning specified in Section 2.04.

          “Registrar” has the meaning specified in Section 2.04.

          “Responsible Officer” shall mean, when used with respect to the Trustee, any officer within
the corporate trust department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the Persons who at the
time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Indenture.

          “SEC” means the Securities and Exchange Commission and any government agency succeeding to its
functions.

          “Securities” means the securities authenticated and delivered under this Indenture.

          “Securities Act” means the Securities Act of 1933, as amended, or any successor statute.

          “Significant Subsidiary” means any Subsidiary that would constitute a “significant subsidiary”
within the meaning of Article 1 of Regulation S-X of the Securities Act as in effect on the date of
this Indenture.

          “Subsidiary” of any Person means:

	 	(i)	 	a corporation a majority of whose capital stock with voting power,
under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person or by such Person and a
subsidiary or subsidiaries of such Person or by a subsidiary or
subsidiaries of such Person; or
	 
	 	(ii)	 	any other Person (other than a corporation) in which such Person or
such Person and a subsidiary or subsidiaries of such Person or a
subsidiary or subsidiaries of such Persons, at the time, directly or
indirectly, owns at least a majority voting interest under ordinary
circumstances.

          “TIA” means the Trust Indenture Act of 1939, as in effect on the date of this Indenture;
provided , however , that in the event the TIA is amended after such date, “TIA” means, to the
extent required by such amendment, the Trust Indenture Act of 1939, as so amended, or any successor
statute.

          “Trustee” means the party named as such in this Indenture until a successor replaces it and
thereafter, means the successor.

          “U.S. Government Obligations” means (i) direct obligations of the United States of America for
the payment of which the full faith and credit of the United States of America is pledged or (ii)
obligations of a person controlled or supervised by and acting as an agency or instrumentality of
the United States of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America and which in either case, are non-callable at
the option of the issuer thereof.

     SECTION 1.02 Incorporation by Reference of Trust Indenture Act.

          Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. In addition, the provisions of Sections 310 to and
including 317 of the TIA that impose duties on any person are incorporated by reference in, and
form a part of, this Indenture.

3

 

          The following TIA terms used in this Indenture have the following meanings:

               “indenture securities” means the Securities;

               “indenture security holder” means a Holder;

               “indenture to be qualified” means this Indenture;

               “indenture trustee” or “institutional trustee” means the Trustee; and

               “obligor” on the Securities means the Company and any other obligor on the indenture
securities.

          All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned to them by such
definitions.

     SECTION 1.03 Rules of Construction.

     Unless the context otherwise requires:

	 	(i)	 	a term has the meaning assigned to it;
	 
	 	(ii)	 	an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
	 
	 	(iii)	 	“or” is not exclusive;
	 
	 	(iv)	 	“including” means including without limitation;
	 
	 	(v)	 	words in the singular include the plural, and in the plural include the singular; and
	 
	 	(vi)	 	provisions apply to successive events and transactions.

ARTICLE II

THE SECURITIES

     SECTION 2.01 Unlimited in Amount, Issuable in Series, Denomination

     The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series in denominations of
$1,000 and any integral multiple thereof. Prior to the issuance of Securities of a series, the
Company and the Trustee will execute an indenture supplemental hereto which will set forth as to
the Securities of that series, to the extent applicable:

     (a) The title and ranking of such Securities;

     (b) The aggregate principal amount of such Securities and any limit on such aggregate
principal amount that may be issued;

     (c) The denomination of such Securities, if other than $1,000 and any integral multiple
thereof;

     (d) The price (expressed as a percentage of the principal amount thereof) at which such
Securities will be issued and, if other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of the maturity thereof;

     (e) The date or dates, or the method for determining such date or dates, on which the
Securities will mature and the amounts to be paid upon maturity of the Securities;

     (f) The rate or rates (which may be fixed or variable), or the method by which such rate or
rates shall be determined, at which such Securities will bear interest, if any, the date or dates,
or the method for determining such date or dates, from which any such interest will accrue, the
dates on which any such interest will be payable, the record dates for such interest payment dates,
or the method by which such dates shall be determined, the persons to whom such interest shall be
payable, and the basis upon which interest shall be calculated, if other than that of a 360-day
year of twelve 30-day months;

4

 

     (g) The right, if any, of the Company to defer payment of interest and the maximum length of
any such deferral period;

     (h) The place or places where the principal of, and premium and interest, if any, on such
Securities will be payable, where such Securities may be surrendered for registration of transfer
or exchange and where notices or demands to or upon the Company in respect of such Securities and
this Indenture may be served;

     (i) The date or dates, if any, after which, and the price or prices at which, and the other
terms and conditions upon which such Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, as a whole or in part, by the Company;

     (j) The obligation, if any, of the Company to redeem, repay or purchase such Securities
pursuant to any sinking fund or analogous provision or at the option of a Holder thereof, and the
period or periods within which, the price or prices at which and the other terms and conditions
upon which such Securities will be redeemed, repaid or purchased, as a whole or in part, pursuant
to such obligation;

     (k) The terms, if any, on which the Securities of such series are convertible into, or
exchangeable for, shares of common stock or other securities of the Company, including any
mandatory conversion or exchange provisions and any provisions intended to prevent dilution of
those conversion or exchange rights;

     (l) Whether such Securities will be secured or unsecured and the terms relating thereto;

     (m) The restrictions, if any, on the transfer, sale or other assignment of the Securities;

     (n) If other than U.S. dollars, the currency or currencies in which such Securities are
denominated and payable, which may be a foreign currency or units of two or more foreign currencies
or a composite currency or currencies, and the terms and conditions relating thereto;

     (o) Whether the principal of, or premium and interest, if any, on the Securities of the series
is to be payable, at the election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in which such Securities
are denominated or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining the exchange rate between the currency or
currencies, currency unit or units or composite currency or currencies in which such Securities are
denominated or stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;

     (p) Whether the amount of payments of principal of, or premium and interest, if any, on such
Securities may be determined with reference to an index, formula or other method (which index,
formula or method may, but need not be, based on the yield on or trading price of other securities,
including United States Treasury securities, or on a currency, currencies, currency unit or units,
or composite currency or currencies) and the manner in which such amounts shall be determined;

     (q) Any deletions from, modifications of or additions to the Events of Default or covenants of
the Company with respect to Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants described herein;

     (r) Whether and under what circumstances the Company will pay any additional amounts on such
Securities in respect of any tax, assessment or governmental charge and, if so, whether the Company
will have the option to redeem such Securities in lieu of making such payment;

5

 

     (s) Whether Securities of the series are to be issuable as registered securities, bearer
securities (with or without coupons) or both, any restrictions applicable to the offer, sale or
delivery of bearer securities and the terms upon which bearer securities of the series may be
exchanged for registered securities of the series and vice versa (if permitted by applicable laws
and regulations), whether any Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be issuable in permanent global form
with or without coupons and, if so, whether beneficial owners of interests in any such permanent
Global Security may exchange such interests for Securities of such series and of like tenor or any
authorized form and denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided in the indenture, and, if registered securities of the series are
to be issuable as a Global Security, the identity of the depositary for such series;

     (t) The date as of which any bearer securities of the series and any temporary Global Security
representing outstanding Securities of the series shall be dated if other than the date of original
issuance of the first Security of the series to be issued;

     (u) The person to whom any interest on any registered security of the series shall be payable,
if other than the person in whose name that Security (or one or more predecessor securities) is
registered at the close of business on the regular record date for such interest, the manner in
which, or the person to whom, any interest on any bearer security of the series shall be payable,
if otherwise than upon presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any interest payable on a
temporary Global Security on an interest payment date will be paid if other than in the manner
provided in the indenture;

     (v) The applicability, if any, of the legal defeasance and covenant defeasance provisions of
this Indenture to the Securities of the series;

     (w) Whether such Securities will be issued in certificated or book entry form, and if the
Securities of such series are to be issuable in definitive form (whether upon original issue or
upon exchange of a temporary security of such series) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;

     (x) Whether the Securities will be listed for trading on an exchange and the identity of such
exchange, and whether any underwriters will act as market makers for the Securities; and

     (y) Any other terms, preferences, rights or limitations of, or restrictions on, the Securities
of such series, including any restrictions on the transfer, sale or other assignment of the
Securities.

     SECTION 2.02 Form and Dating.

     The Securities of each series will be substantially in the form established by an indenture
supplemental hereto relating to the Securities of that series. The Securities may have notations,
legends or endorsements required by law, stock exchange rules or usage. The Company will approve
the form of the Securities and any notation, legend or endorsement thereon. Each Security will be
dated as of the date of its authentication pursuant to Section 2.03.

     SECTION 2.03 Execution and Authentication.

     Two Officers shall sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the time the Security is
authenticated, the Security shall be valid nevertheless.

     A Security shall not be valid until authenticated by the manual signature of the Trustee. The
signature shall be conclusive evidence that the Security has been authenticated under this
Indenture.

     The Trustee shall, upon a written order of the Company signed by one Officer of the Company,
authenticate for original issue Securities in aggregate principal amount specified in such order.

     The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the Company.

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     SECTION 2.04 Registrar and Paying Agent.

     The Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the “ Registrar ”) and an office or agency where
Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a register
of the Securities (the “Register”) and of their transfer and exchange. The Company may appoint
one or more co-Registrars and one or more additional Paying Agents for the Securities. The term
“Paying Agent” includes any additional paying agent and the term “Registrar” includes any
additional registrar. The Company may change any Paying Agent or Registrar without prior notice to
any Holder.

     The Company shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, which shall incorporate the terms of the TIA and implement the terms of this
Indenture that relate to such Agent. The Company shall give prompt written notice to the Trustee of
the name and address of any Agent who is not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any Affiliate of the Company may act as Paying Agent or Registrar; provided, however,
that none of the Company, its Subsidiaries or the Affiliates of the foregoing shall act (i) as
Paying Agent in connection with redemptions, offers to purchase, discharges and defeasance, as
otherwise specified in this Indenture, and (ii) as Paying Agent or Registrar if a Default or Event
of Default has occurred and is continuing.

     The Company initially appoints The Depository Trust Company to act as Depositary with respect
to the Global Securities.

     The Company hereby initially appoints the Trustee as Registrar and Paying Agent for the
Securities.

     SECTION 2.05 Paying Agent to Hold Assets in Trust.

     Not later than 11:00 a.m. (New York City time) on each due date of the principal and interest
on any Securities, the Company shall deposit with one or more Paying Agents money in immediately
available funds sufficient to pay such principal and interest so becoming due. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall
hold in trust for the benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of and interest on the Securities (whether such money has been paid to it by
the Company or any other obligor on the Securities) and shall notify the Trustee of any failure by
the Company (or any other obligor on the Securities) in making any such payment. While any such
failure continues, the Trustee may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if
other than the Company or a Subsidiary of the Company) shall have no further liability for the
money so paid over to the Trustee.

     If the Company or any Subsidiary of the Company or any Affiliate of any of them acts as Paying
Agent, it shall, prior to or on each due date of any principal of or interest on the Securities,
segregate and hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient with monies held by all other Paying Agents, to pay such principal or interest so
becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as
provided in this Indenture, and will promptly notify the Trustee of its actions or failure to act.

     SECTION 2.06 Holder Lists.

     The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise comply with Section
312(a) of the TIA. If the Trustee is not the Registrar, the Company shall furnish to the Trustee
prior to or on each interest payment date for the Securities and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders relating to such interest payment date or request, as
the case may be.

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     SECTION 2.07 General Provisions Relating to Transfer and Exchange.

     The Securities are issuable only in registered form. A Holder may transfer a Security only by
written application to the Registrar or another transfer agent stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture. No such transfer shall be
effected until, and such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Register. Prior to the
registration of any transfer by a Holder as provided herein, the Company, the Trustee, and any
agent of the Company shall treat the person in whose name the Security is registered as the owner
thereof for all purposes whether or not the Security shall be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary. Furthermore, any Holder of
a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent) and that ownership of a beneficial interest in
the Security shall be required to be reflected in a book-entry.

     When Securities are presented to the Registrar or another transfer agent with a request to
register the transfer or to exchange them for an equal principal amount of Securities of other
authorized denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met (including that such Securities are
duly endorsed or accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the Holder). Subject to
Section 2.03, to permit registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar’s request. No service charge shall be made
for any registration of transfer or exchange or redemption of the Securities, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or other similar governmental
charge payable upon exchanges pursuant to Section 2.12, 3.06 or 9.05 hereof).

     Neither the Registrar nor any other transfer agent nor the Company shall be required to:

     (i) issue, register the transfer of or exchange any Security during a period beginning at
the opening of business 15 Business Days before the day of any selection of Securities for
redemption under Section 3.02 hereof and ending at the close of business on the day of
selection; or

     (ii) register the transfer of or exchange any Security so selected for redemption in whole
or in part, except the unredeemed portion of any Security being redeemed in part.

     Each Holder of a Security agrees to indemnify the Company and the Trustee against any
liability that may result from the transfer, exchange or assignment of such Holder’s Security in
violation of any provision of this Indenture and/or applicable United States Federal or state
securities law.

     The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers between or among DTC
Participants or beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements hereof.

     SECTION 2.08 Book-Entry Provisions for Global Securities.

     (a) The Global Securities initially shall:

          (i) be registered in the name of the Depositary or the nominee of such Depositary; and

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          (ii) be delivered to the Trustee as custodian for such Depositary.

     Members of, or participants in, the Depositary (“DTC Participants”) shall have no rights
under this Indenture with respect to any Global Security held on their behalf by the Depositary, or
the Trustee as its custodian, or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing contained
herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and the DTC Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any Security.

     (b) Transfers of a Global Security shall be limited to transfers of such Global Security in
whole, but not in part, to the Depositary, its successors or their respective nominees. Beneficial
owners may transfer their interests in Global Securities in accordance with the rules and
procedures of the Depositary.

     (c) Any beneficial interest in one of the Global Securities that is transferred to a person
who takes delivery in the form of an interest in another Global Security will, upon transfer, cease
to be an interest in such Global Security and become an interest in such other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Security for as long as it remains such an
interest.

     (d) The registered Holder of a Global Security may grant proxies and otherwise authorize any
Person, including DTC Participants and Persons that may hold interests through DTC Participants, to
take any action that a Holder is entitled to take under this Indenture or the Securities.

     (e) If at any time:

     (i) the Company notifies the Trustee in writing that the Depositary is no longer willing or
able to continue to act as Depositary for the Global Securities or the Depositary ceases to be a
“clearing agency” registered under the Exchange Act, and a successor depositary for the Global
Securities is not appointed by the Company within 90 days of such notice or cessation;

     (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of the Securities in definitive form under this Indenture in exchange for all or
any part of the Securities represented by a Global Security or Global Securities; or

     (iii) an Event of Default has occurred and is continuing and the Registrar has received a
request from the Depositary,

subject to this Section 2.08(e), the Depositary shall surrender such Global Security or Global
Securities to the Trustee for cancellation and then the Company shall execute, and the Trustee
shall authenticate and deliver in exchange for such Global Security or Global Securities, Physical
Securities, as applicable, in an aggregate principal amount equal to the principal amount of such
Global Security or Global Securities. Such Physical Securities shall be registered in such names as
the Depositary shall identify in writing as the beneficial owners, or participant nominees, of the
Securities represented by such Global Security or Securities (or any nominee thereof).

     (f) Notwithstanding the foregoing, in connection with any transfer of a portion of the
beneficial interests in a Global Security to beneficial owners pursuant to paragraph (e) of this
Section 2.08, the Registrar shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal amount of the
beneficial interest in such Global Security to be transferred, and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and
amount.

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     SECTION 2.09 Replacement Securities.

     If a mutilated Security is surrendered to the Trustee or if the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of the Trustee and the
Company are met; provided that, if any such Security has been called for redemption in accordance
with the terms thereof, the Trustee may pay the Redemption Price thereof on the Redemption Date
without authenticating or replacing such Security. The Trustee or the Company may, in either case,
require the Holder to provide an indemnity bond sufficient in the judgment of each of the Trustee
and the Company to protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced or if the Redemption Price therefor is paid pursuant to this
Section 2.09. The Company may charge the Holder who has lost a Security for its expenses in
replacing a Security.

     Every replacement Security is an obligation of the Company and shall be entitled to the
benefits of this Indenture equally and proportionately with any and all other Securities duly
issued hereunder.

     SECTION 2.10 Outstanding Securities.

     The Securities outstanding at any time are all the Securities authenticated by the Trustee,
except for (i) those cancelled by it, (ii) those delivered to it for cancellation and (iii) those
described in this Section as not outstanding.

     If a Security is replaced pursuant to Section 2.09 hereof, it ceases to be outstanding and
interest ceases to accrue unless the Trustee receives proof satisfactory to it that the replaced
Security is held by a bona fide purchaser.

     If all principal of and interest on any Security are considered paid under Section 4.01
hereof, such Security ceases to be outstanding and interest on it ceases to accrue.

     Except as provided in Section 2.11 hereof, a Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds such Security.

     SECTION 2.11 Treasury Securities.

     In determining whether the Holders of the required aggregate principal amount of Securities of
any series have concurred in any direction, waiver or consent, Securities owned by the Company or
an Affiliate of the Company shall be considered as though they are not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which such Trustee actually knows are so owned shall
be so disregarded.

     SECTION 2.12 Temporary Securities.

     Until definitive Securities are ready for delivery, the Company may prepare and execute, and
the Trustee shall authenticate upon a written order of the Company signed by one Officer of the
Company, temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare, and the Trustee shall
authenticate, definitive Securities in exchange for temporary Securities. Holders of temporary
Securities shall be entitled to all of the benefits of this Indenture.

     SECTION 2.13 Cancellation.

     The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar
and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange, payment or repurchase. The Trustee shall cancel all Securities surrendered
for registration of transfer, exchange, payment, repurchase, redemption, replacement or
cancellation and shall return such cancelled Securities to the Company upon the Company’s written
request (subject to the record retention requirements of the Exchange Act). The Company may not
issue new Securities to replace Securities that it has paid or that have been delivered to the
Trustee for cancellation.

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     SECTION 2.14 CUSIP Numbers.

     The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and
the Trustee shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided that any such notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained in any such notice
and that reliance may be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of such numbers. The
Company shall promptly notify the Trustee of any change in the CUSIP numbers.

     SECTION 2.15 Defaulted Interest.

     If the Company fails to make a payment of interest on Securities, it shall pay such defaulted
interest plus (to the extent lawful) any interest payable on the defaulted interest, in any lawful
manner. It may elect to pay such defaulted interest, plus any such interest payable on it, to the
Persons who are Holders of such Securities on which the interest is due on a subsequent special
record date. The Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each such Security. The Company shall fix any such record date and payment
date for such payment. At least 15 days before any such record date, the Company shall mail to
Holders affected thereby a notice that states the record date, interest payment date, and amount of
such interest to be paid.

     SECTION 2.16 Special Record Dates.

     The Company may, but shall not be obligated to, set a record date for the purpose of
determining the identity of Holders of Securities entitled to consent to any supplement, amendment
or waiver permitted by this Indenture. If a record date is fixed, the Holders of Securities
outstanding on such record date, and no other Holders, shall be entitled to consent to such
supplement, amendment or waiver or revoke any consent previously given, whether or not such Holders
remain Holders after such record date. No consent shall be valid or effective for more than 90 days
after such record date unless consents from Holders of the aggregate principal amount of Securities
required hereunder for such amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.

ARTICLE III

REDEMPTION

     SECTION 3.01 Notices to Trustee.

     If the Company elects to redeem any series of Securities pursuant to the optional redemption
provisions set forth in the supplemental indenture relating to such series of Securities, it shall
notify the Trustee in writing of the intended Redemption Date, the principal amount of Securities
to be redeemed and the CUSIP numbers of the Securities to be redeemed. The Company shall give each
notice to the Trustee provided for in this Section 3.01 at least days fifteen (15) days before the
giving of the notice of redemption pursuant to Section 3.03 hereof (unless a shorter period is
satisfactory to the Trustee).

     SECTION 3.02 Selection of Securities to Be Redeemed.

     If fewer than all the Securities of any series are to be redeemed, the Trustee shall select
the Securities of such series to be redeemed from the outstanding Securities of such series by a
method that complies with the requirements of any exchange on which the Securities are listed, or,
if the Securities are not listed on an exchange, on a pro rata basis or by lot or in accordance
with any other method the Trustee considers fair and appropriate. The Trustee will make the
selection from outstanding Securities of that series not previously called for redemption.

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     Securities and portions thereof of any series that the Trustee selects shall be in amounts
equal to the minimum authorized denomination for Securities to be redeemed or any integral multiple
thereof. The Trustee may select for redemption portions of the principal amount of Securities that
have denominations larger than the minimum denomination in which Securities of the applicable
series may be issued. Provisions of this Indenture that apply to Securities of any series called
for redemption also apply to portions of Securities of such series called for redemption. The
Trustee shall notify the Company promptly in writing of the Securities or portions of Securities of
any series to be called for redemption.

     SECTION 3.03 Notice of Redemption.

     At least 30 days but not more than 60 days before the Redemption Date, the Company shall mail
a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed in
whole or in part at the address of such Holder appearing in the Register.

     The notice shall identify the principal amount and series of each Security to be redeemed and
shall state:

     (i) the Redemption Date;

     (ii) the method being used to determine the Redemption Price;

     (iii) if fewer than all outstanding Securities are to be redeemed, the portion of the
principal amount of the Securities to be redeemed and that, after the Redemption Date, upon
surrender of such Security, a new Security in principal amount equal to the unredeemed portion
will be issued;

     (iv) the name and address of the Paying Agent;

     (v) that Securities called for redemption must be presented and surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;

     (vi) that, unless the Company defaults in payment of the Redemption Price, interest on
Securities (or the portions thereof) called for redemption ceases to accrue interest on and
after the Redemption Date, and, if applicable, those Securities (or the portion thereof called
for redemption) will cease on the Redemption Date (or such other date as if provided in the
supplemental indenture relating to the Securities) to be convertible into, or exchangeable for,
other securities or assets;

     (vii) if applicable, the current conversion or exchange price; and

     (viii) the CUSIP numbers, if any, of the Securities to be redeemed.

     At the Company’s written request, the Trustee shall give the notice of redemption in the
Company’s name and at its expense.

     SECTION 3.04 Effect of Notice of Redemption.

     Once the notice of redemption is mailed, Securities called for redemption become irrevocably
due and payable on the Redemption Date at the Redemption Price. Upon surrender to the Paying Agent,
such Securities shall be paid at the Redemption Price, plus accrued and unpaid interest to the
Redemption Date.

     The notice mailed in the manner herein provided shall be conclusively presumed to have been
duly given whether or not the Holder receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the Holder of any Securities shall not affect the validity
of the proceeding for the redemption of Securities of any other Holder.

     SECTION 3.05 Deposit of Redemption Price.

     Prior to 11:00 a.m., New York City time, on the Redemption Date, the Company shall deposit
with the Trustee or with the Paying Agent (or, if the Company or an Affiliate of the Company is
acting as the paying Agent, shall segregate and hold in trust) an amount of money sufficient to pay
the Redemption Price of all Securities to be redeemed on that date, together with accrued and
unpaid interest to the Redemption Date, except for Securities or portions thereof called for
redemption which have been delivered by the Company to the Trustee for cancellation or Securities
which have been surrendered for conversion or exchange. If any Securities called for redemption are
converted or exchanged, any money deposited with the Trustee or Paying Agent for redemption of
those Securities shall be promptly paid to the Company upon its request, or, if the money is held
in trust by the Company or a Subsidiary as Paying Agent, the money will be discharged from the
trust.

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     SECTION 3.06 Securities Redeemed in Part.

     Upon surrender of a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder at the expense of the Company, a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.

     SECTION 3.07 Holder’s Right to Require Redemption.

     Holders of Securities of a series will have the right to require the Company to redeem those
Securities only to the extent, and only on the terms, set forth in the supplemental indenture
relating to the Securities of that series. If Holders of Securities of a series have the right to
require the Company to redeem those Securities, unless otherwise provided in the supplemental
indenture relating to the Securities of that series, the terms of the redemption will include those
set forth in Section 3.08.

     SECTION 3.08 Procedure for Requiring Redemption .

     If a Holder has the right to require the Company to redeem Securities, to exercise that right,
the Holder must deliver the Securities to the Paying Agent, endorsed for transfer and with the form
on the reverse side regarding the option to require redemption completed. Delivery of Securities to
the Paying Agent as provided in this Section 3.07 will constitute an irrevocable election to cause
the specified principal amount of Securities to be redeemed. When Securities are delivered to the
Paying Agent as provided in this Section, unless the Company fails to make the payments due as a
result of the redemption within twenty (20) days after the Securities are delivered to the Paying
Agent, interest on the Securities will cease to accrue and, if the Securities are convertible or
exchangeable, the Holder’s right to convert or exchange the Securities will terminate.

     The Company’s determination of all questions regarding the validity, eligibility (including
time of receipt) and acceptance of any Security for redemption will be final and binding.

ARTICLE IV

COVENANTS

     SECTION 4.01 Payment of Securities.

     The Company shall pay, or cause to be paid, the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and the supplemental Indenture relating to
the series. Principal and interest shall be considered paid on the date due if the Paying Agent, if
other than the Company, a Subsidiary of the Company or any Affiliate of any of them, holds as of
11:00 a.m. (New York City time) on that date immediately available funds designated for and
sufficient to pay all principal and interest then due. If the Company or any Subsidiary of the
Company or any Affiliate of any of them acts as Paying Agent, principal or interest shall be
considered paid on the due date if the entity acting as Paying Agent complies with the second
paragraph of Section 2.05 hereof.

     The Company shall pay interest on overdue principal and premium, and interest on overdue
installments of interest, to the extent lawful, at the rate per annum specified therefor in the
Securities.

     Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the
extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by
the United States of America from principal or interest payments hereunder.

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     SECTION 4.02 Maintenance of Office or Agency.

     The Company shall maintain in the Borough of Manhattan, The City of New York, an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where
the Securities may be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company fails to maintain any such required
office or agency or fails to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

     The Company may also from time to time designate one or more other offices or agencies where
the Securities may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the location of any such
other office or agency.

     The Company hereby designates the New York office of the Trustee located at           
            , as one such office or agency of the Company in accordance
with Section 2.04 hereof.

     SECTION 4.03 Reports.

     (a) The Company shall deliver to the Trustee, within fifteen (15) days after it files them
with the SEC, copies of the annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe)
which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act and posting of such reports on the Company’s web site shall be deemed delivery to the Trustee;
provided, however, the Company shall not be required to deliver to the Trustee any materials for
which the Company has sought and received confidential treatment by the SEC. The Company shall also
comply with the other provisions of Section 314(a) of the TIA.

     (b) Delivery of reports, information and documents to the Trustee pursuant to this Section
4.03 is for informational purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

     SECTION 4.04 Compliance Certificate.

     The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company, an Officers’ Certificate, one of the signers of which is the chief executive officer,
vice chairman, the chief financial officer, executive vice president or the chief accounting
officer of the Company, stating that in the course of the performance by the signers of their
duties as officers of the Company, they would normally have knowledge of any failure by the Company
to comply with all conditions, or Default by the Company with respect to any covenants, under this
Indenture, and further stating whether or not they have knowledge of any such failure or Default
and, if so, specifying each such failure or Default, the nature and status thereof and what action
the Company is taking or proposes to take with respect thereto. For purposes of this Section, such
compliance shall be determined without regard to any period of grace or requirement of notice
provided for in this Indenture. The certificate need not comply with Section 12.04 hereof.

     SECTION 4.05 Taxes.

     The Company shall pay prior to delinquency, all material taxes, assessments, and governmental
levies except as contested in good faith by appropriate proceedings.

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     SECTION 4.06 Corporate Existence.

     Subject to Article V hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its corporate existence and (ii) the material rights
(charter and statutory), licenses and franchises of the Company and its Subsidiaries taken as a
whole; provided, however, that the Company shall not be required to preserve any such right,
license or franchise if the Board of Directors determines that the preservation thereof is no
longer in the best interests of the Company, and that the loss thereof is not adverse in any
material respect to the Holders.

ARTICLE V

MERGER, ETC.

     SECTION 5.01 When Company May Merge, etc.

     The Company shall not consolidate or merge with or into, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets to, any Person unless :

     (i) the Person formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, is a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia;

     (ii) the Person formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, expressly assumes by one or more supplemental indentures satisfactory in
form to the Trustee all of the obligations of the Company under the Securities and this
Indenture;

     (iii) immediately after such transaction, and giving effect thereto, no Default or Event of
Default shall have occurred and be continuing; and

     (iii) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that the consolidation, merger, conveyance, transfer or lease and the
supplemental indenture (or supplemental indentures together) comply with this Article V and that
all conditions precedent herein provided relating to the transaction have been complied with.

     Notwithstanding the foregoing, the Company may merge with another Person or acquire by
purchase or otherwise all or any part of the property or assets of any other corporation or
Person in a transaction in which the surviving entity is the Company.

     SECTION 5.02 Successor Corporation Substituted.

     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all the assets of the Company in accordance with Section
5.01 hereof, the successor corporation formed by such consolidation or into which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had been named as the
Company herein. In the event of any such sale or conveyance, but not any such lease, the Company or
any successor corporation which thereafter will have become such in the manner described in this
Article V shall be discharged from all obligations and covenants under the Securities and this
Indenture and may be dissolved, wound up or liquidated.

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ARTICLE VI

DEFAULTS AND REMEDIES

     SECTION 6.01 Events of Default.

     An “ Event of Default ” with respect to each series of the Securities occurs when any of the
following occurs:

     (i) the Company defaults in the payment of the principal, premium, or sinking fund payment,
if any, of any Security of such series when it becomes due and payable at maturity, upon
acceleration, repurchase, redemption or otherwise, unless the time for payment is extended;

     (ii) the Company defaults in the payment of interest on any Security of such series when it
becomes due and payable and such Default continues for a period of ninety (90) days, unless the
time for payment is extended;

     (iii) the Company fails to comply in any material respect with any of its other agreements
or covenants in, or provisions of, the Securities or this Indenture and the Company and such
Default continues for a period of ninety (90) days after the Company receives written notice of
such Default from the Trustee, or the Company the Trustee receive written notice of such Default
from the Holders of at least 51% in aggregate principal amount of the outstanding Securities of
such series;

     (iv) the Company or a Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

     (a) commences a voluntary case or proceeding;

     (b) consents to the entry of an order for relief against it in an involuntary case or
proceeding;

     (c) consents to the appointment of a Custodian of it or for any substantial part of its
property; or

     (d) makes a general assignment for the benefit of its creditors; or

     (v) a court of competent jurisdiction enters an order or decree under any applicable
Bankruptcy Law that:

     (a) is for relief against the Company or any Significant Subsidiary in an involuntary case
or proceeding against the Company or any Significant Subsidiary;

     (b) appoints a Custodian for the Company or any Significant Subsidiary or for any
substantial part of its property; or

     (c) orders the winding up or liquidation of the Company or any Significant Subsidiary,

     and any such order or decree under this clause (v) remains unstayed and in effect for ninety
(90) days.

     Any notice of default under clause (iii) of this Section 6.01 must specify the Default, demand
that it be remedied and state that the notice is a “Notice of Default.”

     Each of the occurrences described in clauses (i) through (v) of this Section 6.01 will
constitute an Event of Default whatever the reason for the occurrence and whether it is voluntary
or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental body.

     A Default under clause (i), (ii) or (iii) of this Section 6.01 with regard to Securities of a
particular series will not constitute a Default with regard to Securities of any other series
except to the extent, if any, provided in the supplemental indenture relating to the other series.

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     SECTION 6.02 Acceleration.

     If an Event of Default with respect to any series of outstanding Securities (other than an
Event of Default specified in clause (iv) or (v) of Section 6.01 hereof) occurs and is continuing,
the Trustee or the Holders of at least 51% in aggregate principal amount of the outstanding
Securities of the applicable series, by written notice to the Company, and to the Trustee if notice
is given by such Holders, may declare due and payable the unpaid principal amount of all Securities
of such series plus any unpaid premium or accrued and unpaid interest, if any, to the date of
payment. Upon a declaration of acceleration, such principal, premium and accrued and unpaid
interest to the date of payment shall be due and payable.

     If an Event of Default specified in clause (iv) or (v) of Section 6.01 hereof occurs, all
unpaid principal, premium and accrued interest on the Securities shall become and be immediately
due and payable without any notice, declaration or other action on the part of the Trustee or any
Holder.

     The Holders of a majority in aggregate principal amount of any outstanding series of
Securities by written notice to the Trustee may rescind and annul an acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment of principal, premium
or interest on the Securities which have become due solely because of the acceleration, have been
cured or waived and (ii) the rescission would not conflict with any judgment or decree of a court
of competent jurisdiction. Such rescission or annulment will not extend to any subsequent or other
Default or impair any consequent right.

     SECTION 6.03 Other Remedies.

     If an Event of Default with respect to any series of outstanding Securities occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on such series of Securities or to enforce the
performance of any provision of such series of Securities or this Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon the Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All remedies are cumulative to the extent permitted by law.

     SECTION 6.04 Waiver of Past Defaults.

     Subject to Sections 6.07 and 9.02 hereof, the Holders of at least a majority in aggregate
principal amount of any series of outstanding Securities by notice to the Trustee may waive an
existing Default or Event of Default except a Default or Event of Default in the payment of the
principal of or interest on such series of Securities ( provided, however, that, subject to Section
6.07, the Holders of a majority in aggregate principal amount of the then outstanding Securities
may rescind an acceleration and its consequences, including any related payment default that
resulted from such acceleration). When a Default or Event of Default is waived, it is deemed cured
and ceases, but no waiver will extend to any subsequent or other Default or impair any consequent
right.

     SECTION 6.05 Control by Majority.

     The Holders of at least a majority in aggregate principal amount of any outstanding series of
Securities may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that (i) conflicts with law or this Indenture, (ii) the Trustee
determines may be unduly prejudicial to the rights of other Holders of Securities of such series or
(iii) may involve the Trustee in personal liability. The Trustee may take any other action that it
deems proper which is not inconsistent with any such direction.

     SECTION 6.06 Limitation on Suits.

     Subject to the provisions of Section 6.07 hereof, no Holder of Securities of any series may
pursue any remedy with respect to this Indenture or the Securities of such series unless :

     (i) the Holder gives to the Trustee written notice stating that an Event of Default is
continuing;

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     (ii) the Holders of at least 25% in aggregate principal amount of such series of Securities
make a written request to the Trustee to pursue the remedy;

     (iii) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee
against any loss, liability, cost or expense;

     (iv) the Trustee does not comply with the request within sixty (60) days after receipt of
the request and the offer of indemnity; and

     (v) during such 60-day period, the Holders of at least a majority in aggregate principal
amount of such series of Securities do not give the Trustee a direction inconsistent with the
request.

     A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.

     SECTION 6.07 Rights of Holders To Receive Payment and to Demand Conversion.

     Notwithstanding any other provision of this Indenture, the right of any Holder of a Security
to receive payment of principal of, premium, if any, or interest, if any, on the Security (and
interest on overdue principal and interest on overdue installments of interest, if any, as provided
in Section 4.01) on or after the respective due dates expressed or provided for in the Security, or
in the case of redemption, on or after the Redemption Date, or in the case of conversion or
exchange, to receive the security issuable upon conversion or exchange, or to bring suit for the
enforcement of any such payment, conversion or exchange on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.

     SECTION 6.08 Collection Suit by Trustee.

     If an Event of Default specified in Section 6.01(i) or (ii) hereof occurs and is continuing
with respect to the Securities, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company (and any other obligor on the Securities) for the whole amount
of principal, premium, if any, and accrued interest, if any, remaining unpaid on the outstanding
Securities, together with (to the extent lawful) interest on overdue principal and interest, and
such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses
of collection, including the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 7.08 hereof.

     SECTION 6.09 Trustee May File Proofs of Claim.

     The Trustee may file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in any judicial
proceeding relative to the Company (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same, and any custodian in any such
judicial proceedings is hereby authorized by each Holder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.08 hereof. Nothing contained in this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

     SECTION 6.10 Priorities.

     If the Trustee collects any amount of money with respect to the Securities pursuant to this
Article VI, subject to Article XI, it shall pay out the money in the following order:

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     (First) to the Trustee, its agents and attorneys for amounts due under Section 7.08 hereof,
including payment of all compensation, expense and liabilities incurred, and all advances made by
the Trustee and the costs and expenses of collection;

     (Second) to Holders for amounts due and unpaid on the Securities for principal and interest,
if any, ratably, without preference or priority of any kind, according to the amounts due and
payable on the Securities for principal and interest, respectively; and

     (Third) to the Company, or to such party as a court of competent jurisdiction may direct.

     The Trustee, upon prior written notice to the Company, may fix a record date and payment date
for any payment to Holders pursuant to this Section 6.10. The Trustee shall notify the Company in
writing reasonably in advance of any such record date and payment date.

     SECTION 6.11 Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06 hereof, a suit by Holders of more
than 10% in aggregate principal amount of any outstanding series of Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of, premium, if any,
or interest on any Security held by that Holder on or after the due date provided in the Security
or to any suit for the enforcement of the right to convert or exchange any Security in accordance
with the provisions of a supplemental indenture applicable to that Security.

     SECTION 6.12 Stay, Extension and Usury Laws.

     The Company covenants (to the extent that it may lawfully do so) that it shall not at any time
insist upon, plead, or in any manner whatsoever claim and will resist any and all efforts to be
compelled to take the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, which would prohibit or forgive the Company from paying all
or any portion of the principal of, premium, if any, and/or interest on any of the Securities as
contemplated in this Indenture or a supplemental indenture, or which may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though no such law has
been enacted.

     SECTION 6.13 Restoration of Positions .

     If a judicial proceeding by the Trustee or a Holder to enforce any right or remedy under this
Indenture or any supplemental indenture has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, except as
otherwise provided in the judicial proceeding, the Company, the Trustee and the Holders will be
restored severally and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.

     SECTION 6.14 Liability of Stockholders, Officers, Directors and Incorporators .

     No stockholder, officer, director or incorporator, as such, past, present or future, of the
Company, or any of its successor corporations, will have any personal liability in respect of the
Company’s obligations under this Indenture or any Securities by reason of his or its status as such
stockholder, officer, director or incorporator; provided , however , that nothing in this Indenture
or in the Securities will prevent recourse to and enforcement of the liability of any holder or
subscriber to common stock of the Company which has not been fully paid up.

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ARTICLE VII

TRUSTEE

     SECTION 7.01 Duties of Trustee.

     (a) If an Event of Default with respect to the Securities has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.

     (b) Except during the continuance of an Event of Default:

     (1) the Trustee need perform only those duties that are specifically set forth in this
Indenture or the TIA, and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the requirements of this Indenture;
provided, however, that in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not, on their face, they conform to the
requirements of this Indenture (but need not investigate or confirm the accuracy of mathematical
calculations or other facts stated therein).

     (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct except that:

     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust
Officer or other officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

     (3) the Trustee shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to this Section 7.01 and to the provisions of the TIA.

     (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or incur any financial liability in the performance of any of its duties under this Indenture or in
the exercise of any of its right or power. The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to it against any loss, liability,
cost or expense (including, without limitation, reasonable fees of counsel).

     (f) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.

     (g) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.

     SECTION 7.02 Rights of Trustee.

     Subject to Section 315(a) through (d) of the TIA:

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     (a) The Trustee may conclusively rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.

     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel, or both. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

     (c) The Trustee may act through attorneys and agents and shall not be responsible for the
misconduct or negligence of any attorney or agent appointed with due care.

     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture, unless the Trustee’s conduct constitutes willful misconduct, negligence or bad faith.

     (e) The Trustee may consult with counsel of its selection and the advice of such counsel as to
matters of law shall be full and complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.

     (f) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the Company.

     (g) The Trustee may request that the Company deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

     (h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.

     (i) In no event shall the Trustee be responsible or liable for special or indirect loss or
damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of
whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the
form of action.

     (j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture.

     SECTION 7.03 Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest (as such term is defined in Section 3.10(b) of the TIA), it must eliminate
such conflict within ninety (90) days, apply to the SEC for permission to continue as trustee (to
the extent permitted under Section 310(b) of the TIA) or resign. Any agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

     SECTION 7.04 Money Held in Trust.

     Money or U.S. Government Obligations held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise agreed in writing
with the Company.

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     SECTION 7.05 Trustee’s Disclaimer.

     The Trustee (i) is not responsible for and makes no representation as to the validity or
adequacy of this Indenture, any supplemental indenture or the Securities, (ii) will not be
accountable for the Company’s use of the proceeds from the Securities, (iii) will not be
responsible for any statement in the Securities, this Indenture or any supplemental indenture,
other than its certificate of authentication, and (iv) will not be responsible for any statement in
any prospectus used in the sales of the Securities, other than statements, if any, provided in
writing by the Trustee for use in such a prospectus.

     SECTION 7.06 Notice of Defaults.

     If a Default or Event of Default with respect to the Securities occurs and is continuing, and
if it is actually known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within ninety (90) days after the occurrence thereof. Except in the case of a
Default or Event of Default in payment of any such Security, the Trustee may withhold the notice if
and so long as it in good faith determines that withholding the notice is in the interests of the
Holders.

     SECTION 7.07 Reports by Trustee to Holders.

     The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required by Section 313 of the TIA at the times and in the manner
provided by the TIA, which initially shall be not less than every twelve (12) months, which report
may be dated as of a date up to 75 days prior to such transmission.

     A copy of each report at the time of its mailing to Holders shall be filed with the SEC, if
required, and each stock exchange, if any, on which the Securities are listed. The Company shall
promptly notify the Trustee when the Securities become listed on any stock exchange.

     SECTION 7.08 Compensation and Indemnity.

     The Company shall pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for its services hereunder. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred
by it, including in particular, but without limitation, those incurred in connection with the
enforcement of any remedies hereunder. Such expenses may include the reasonable fees and
out-of-pocket expenses of the Trustee’s agents and counsel.

     Except as set forth in the next paragraph, the Company shall indemnify and hold harmless the
Trustee and any predecessor trustee against any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based upon, measured by or determined by the income of the
Trustee) incurred by it arising out of or in connection with the acceptance or administration of
the trust under this Indenture. The Trustee shall notify the Company promptly of any claim of which
it has received written notice for which it may seek indemnity. The Company shall defend such claim
and the Trustee shall cooperate in such defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and out-of-pocket expenses of such counsel.

     The Company need not pay for any settlement made without its consent. The Company need not
reimburse any expense or indemnify against any loss, liability, cost or expense incurred by the
Trustee through its own negligence, willful misconduct or bad faith.

     To secure the Company’s payment obligations in this Section 7.08, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the Trustee, except that
held in trust to pay the principal of and interest on particular Securities. The Trustee’s right to
receive payment of any amounts due under this Section 7.08 will not be subordinate to any other
liability or indebtedness of the Company.

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     The Company’s payment obligations pursuant to this Section 7.08 shall survive the satisfaction
and discharge of this Indenture. When the Trustee incurs expenses or renders services after an
Event of Default specified in clause (iv) or (v) of Section 6.01 hereof occurs, the expenses and
the compensation for the services are intended to constitute expenses of administration under any
Bankruptcy Law.

     For the purpose of this Section 7.08, “Trustee” will include any predecessor Trustee, but the
negligence, willful misconduct or bad faith of any Trustee will not affect the rights of any other
Trustee under this Section 7.08, except for a successor Trustee pursuant to Section 7.10 .

     SECTION 7.09 Replacement of Trustee.

     A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section
7.09.

     The Trustee may resign and be discharged from the trust hereby created with respect to the
Securities by so notifying the Company in writing. The Holders of a majority in aggregate principal
amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and
the Company in writing. The Company must remove the Trustee if:

     (i) the Trustee fails to comply with Section 7.10 hereof or Section 310 of the TIA;

     (ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;

     (iii) a Custodian, receiver or other public officer takes charge of the Trustee or its
property; or

     (iv) the Trustee becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office of the Trustee for
any reason, the Company shall promptly appoint a successor Trustee for the Securities. The Trustee
shall be entitled to payment of its fees and reimbursement of its expenses while acting as Trustee.
Within one (1) year after the successor Trustee takes office, the Holders of at least a majority in
aggregate principal amount of then outstanding Securities may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.

     Any Holder of Securities may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee if the Trustee fails to comply with Section
7.10 hereof.

     If an instrument of acceptance by a successor Trustee shall not have been delivered to the
Trustee within thirty (30) days after the giving of such notice of resignation or removal, the
resigning or removed Trustee, as the case may be, may petition, at the expense of the Company, any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the
Securities.

     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The Company shall mail a notice of the successor Trustee’s succession
to the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.08 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.09, the Company’s obligations under Section
7.08 hereof shall continue for the benefit of the retiring Trustee with respect to expenses, losses
and liabilities incurred by it prior to such replacement.

     SECTION 7.10 Successor Trustee by Merger, Etc.

     Subject to Section 7.09 hereof, if the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another corporation or
national banking association, the successor entity without any further act shall be the successor
Trustee.

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     If at the time a successor by merger, conversion or consolidation to the Trustee succeeds to
the trusts created by this Indenture any of the Securities have been authenticated but not
delivered, the successor to the Trustee may adopt the certificate of authentication of the
predecessor Trustee, and deliver the Securities which were authenticated by the predecessor
Trustee; and if at that time any of the Securities have not been authenticated, the successor to
the Trustee may authenticate those Securities either in the name of the predecessor or in its own
name as the successor to the Trustee; and in either case the certificates of authentication will
have the full force provided in this Indenture for certificates of authentication.

     SECTION 7.11 Eligibility; Disqualification.

     The Trustee shall at all times satisfy the requirements of Section 310(a)(1), (2) and (5) of
the TIA. The Trustee shall at all times have a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition, which will be deemed for this
paragraph to be its combined capital and surplus. The Trustee is subject to Section 310(b) of the
TIA, including the optional provision permitted by the second sentence of Section 310(b)(9) of the
TIA.

     SECTION 7.12 Preferential Collection of Claims Against the Company.

     The Trustee is subject to Section 311(a) of the TIA, excluding any creditor relationship
listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the TIA to the extent indicated therein.

ARTICLE VIII

DISCHARGE OF INDENTURE

     SECTION 8.01 Satisfaction and Discharge of Indenture.

     This Indenture shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:

     (i) either:

     (a) all Securities previously authenticated and delivered (other than Securities which
have been destroyed, lost or stolen and which have been replaced or paid) have been delivered
to the Trustee for cancellation; or

     (b) all such Securities not previously delivered to the Trustee for cancellation have
become due and payable (whether at stated maturity, early redemption or otherwise);

and, in the case of clause (b) above, the Company has deposited, or caused to be deposited,
irrevocably with the Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for and dedicated solely to the benefit of the
Holders of Securities, cash in U.S. dollars and/or U.S. Government Obligations which through the
payment of interest and principal in respect thereof, in accordance with their terms, will
provide (and without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay principal of and
interest on all the Securities on the dates such payments of principal or interest are due to
maturity or redemption;

     (ii) the Company has paid or caused to be paid all other sums payable hereunder by the
Company with respect to the Securities; and

24

 

     (iii) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to the Securities have been complied
with.

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.08 hereof shall survive, and, if money will have been
deposited with the Trustee pursuant to subclause (b) of clause (i) of this Section, the obligations
of the Trustee under Sections 8.02 and 8.05 hereof shall survive.

     SECTION 8.02 Application of Trust Funds; Indemnification.

     (a) Subject to the provisions of Section 8.05 hereof, all money and U.S. Government
Obligations deposited with the Trustee pursuant to Section 8.01, 8.03 or 8.04 hereof and all money
received by the Trustee in respect of U.S. Government Obligations deposited with the Trustee
pursuant to Sections 8.01, 8.03 or 8.04 hereof, shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent as the Trustee may determine, to the persons entitled thereto,
of the principal and interest for whose payment such money has been deposited with or received by
the Trustee.

     (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations deposited pursuant to Sections 8.01,
8.03 or 8.04 hereof or the interest and principal received in respect of such obligations other
than any payable by or on behalf of Holders.

     (c) The Trustee shall deliver or pay to the Company from time to time upon the request of the
Company any U.S. Government Obligations or money held by it as provided in Sections 8.01, 8.03 or
8.04 hereof which, in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Trustee, are then in
excess of the amount thereof which then would have been required to be deposited for the purpose
for which such U.S. Government Obligations or money were deposited or received. This provision
shall not authorize the sale by the Trustee of any U.S. Government Obligations held under this
Indenture.

     SECTION 8.03 Legal Defeasance .

     (a) The Company shall be deemed to have been discharged from its obligations with respect to
all of the outstanding Securities of any series on the 91st day after the date of the deposit
referred to in subparagraph (a) hereof, and the provisions of this Indenture, as it relates to such
series of outstanding Securities, shall no longer be in effect (and the Trustee, at the expense of
the Company, shall, upon the request of the Company, execute proper instruments acknowledging the
same), except as to:

     (i) the rights of Holders of Securities of such series to receive, solely from the trust
funds described in subparagraph (a) hereof, payments of the principal of or interest on the
outstanding Securities of such series on the date such payments are due;

     (ii) the Company’s obligations with respect to the Securities of such series under Sections
2.04, 2.05, 2.07, 2.08 and 2.09 hereof; and

     (iii) the rights, powers, trust and immunities of the Trustee hereunder and the duties of
the Trustee under Section 8.02 hereof and the duty of the Trustee to authenticate Securities of
such series issued on registration of transfer of exchange;

provided that the following conditions shall have been satisfied:

     (a) the Company shall have deposited, or caused to be deposited, irrevocably with the
Trustee as trust funds in trust for the purpose of making the following payments, specifically
pledged as security for and dedicated solely to the benefit of the Holders of such series of
Securities, cash in U.S. dollars and/or U.S. Government Obligations which through the payment
of interest and principal in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such Trustee), not later
than one day before the due date of any payment of money, an amount in cash, sufficient, in the
opinion of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay principal of and interest on all
the Securities of such series on the dates such payments of principal or interest are due to
maturity or redemption;

25

 

     (b) such deposit will not result in a breach or violation of, or constitute a Default
under, this Indenture;

     (c) no Default or Event of Default with respect to such series of Securities shall have
occurred and be continuing on the date of such deposit and 91 days shall have passed after the
deposit has been made, and, during such 91 day period, no Default specified in Section 6.01(iv)
or (v) hereof with respect to the Company occurs which is continuing at the end of such period;

     (d) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (B) since the date of execution of this
Indenture, there has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of
such series of Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;

     (e) the Company shall have delivered to the Trustee an Officers’ Certificate stating that
the deposit was not made by the Company with the intent of preferring the Holders of such
series of Securities over any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company;

     (f) such deposit shall not result in the trust arising from such deposit constituting an
“investment company” (as defined in the Investment Company Act of 1940, as amended), or such
trust shall be qualified under such Act or exempt from regulation thereunder; and

     (g) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the defeasance
contemplated by this Section 8.03 have been complied with.

     SECTION 8.04 Covenant Defeasance.

     On and after the 91st day after the date of the deposit referred to in subparagraph (a)
hereof, the Company may omit to comply with any term, provision or condition set forth under
Sections 4.03(a), 4.04, and 4.05 hereof as well as any additional covenants contained in a
supplemental indenture hereto (and the failure to comply with any such provisions shall not
constitute a Default or Event of Default under Section 6.01 hereof) and the occurrence of any event
described in clause (iii) of Section 6.01 hereof shall not constitute a Default or Event of Default
hereunder, with respect to any series of Securities, provided that the following conditions shall
have been satisfied:

     (i) with reference to this Section 8.04, the Company has deposited, or caused to be
deposited, irrevocably (except as provided in Section 8.05 hereof) with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such series of Securities, cash in U.S. dollars and/or U.S. Government
Obligations which through the payment of principal and interest in respect thereof, in
accordance with their terms, will provide (and without reinvestment and assuming no tax
liability will be imposed on such Trustee), not later than one day before the due date of any
payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm
of independent certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay principal and interest on all the Securities of such series on
the dates such payments of principal and interest are due to maturity or redemption;

26

 

     (ii) such deposit will not result in a breach or violation of, or constitute a Default
under, this Indenture;

     (iii) no Default or Event of Default with respect to such series of Securities shall have
occurred and be continuing on the date of such deposit and 91 days shall have passed after the
deposit has been made, and, during such 91 day period, no Default specified in Section 6.01(iv)
or (v) hereof with respect to the Company occurs which is continuing at the end of such period;

     (iv) the Company shall have delivered to the Trustee an Opinion of Counsel confirming that
Holders of such series of Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred;

     (v) the Company shall have delivered to the Trustee an Officers’ Certificate stating the
deposit was not made by the Company with the intent of preferring the Holders of such series of
Securities over any other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;

     (vi) such deposit shall not result in the trust arising from such deposit constituting an
“investment company” (as defined in the Investment Company Act of 1940, as amended), or such
trust shall be qualified under such Act or exempt from regulation thereunder; and

     (vii) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating to
the defeasance contemplated by this Section 8.04 have been complied with.

     SECTION 8.05 Repayment to Company.

          The Trustee and the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two (2) years after the date
upon which such payment shall have become due. After payment to the Company, Holders entitled to
the money must look to the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.

     SECTION 8.06 Reinstatement.

     If the Trustee or the Paying Agent is unable to apply any money deposited with respect to
Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under this Indenture with
respect to the Securities of such series and under the Securities of such series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.01;
provided , however , that if the Company has made any payment of principal of, premium, if any, or
interest with respect to any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to receive such payment
from the money held by the Trustee or the Paying Agent.

ARTICLE IX

AMENDMENTS, SUPPLEMENTS AND WAIVERS

     SECTION 9.01 Without Consent of Holders.

     Without the consent of any Holder, the Company and the Trustee may, at any time, amend this
Indenture and the Securities to:

27

 

     (i) cure any ambiguity, defect or inconsistency, provided that such change does not
adversely affect the rights hereunder of any Holder in any material respect;

     (ii) provide for uncertificated Securities in addition to or in place of certificated
Securities or to alter the provisions of Article II hereof (including the related definitions)
in a manner that does not materially adversely affect any Holder;

     (iii) provide for the assumption of the Company’s obligations to the Holders of Securities
in the case of a merger, consolidation or sale or other disposition of assets pursuant to
Article V hereof;

     (iv) comply with requirements of the SEC in order to effect or maintain the qualification
of this Indenture under the TIA, provided that such change does not adversely affect the rights
hereunder of any Holder in any material respect;

     (v) add to the covenants of the Company and any other restrictions, conditions or
provisions for the benefit of the Holders, to make the occurrence, or the occurrence and the
continuance, of a Default under any such additional covenants, restrictions, conditions or
provisions an Event of Default under this Indenture, or to surrender any right or power herein
conferred upon the Company;

     (vi) add to, delete from or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, or authentication and delivery of Securities,
provided that such change does not adversely affect the rights hereunder of any Holder in any
material respect;

     (vii) secure the Securities of any series;

     (viii) make appropriate provision in connection with the appointment of any successor
Trustee; or

     (ix) make any other change that does not adversely affect in any material respect the
rights hereunder of any Holder.

     Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company
in the execution of any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

     SECTION 9.02 With Consent of Holders.

     Except as provided below in this Section 9.02, this Indenture, the Securities may be amended
or supplemented, and noncompliance in any particular instance with any provision of this Indenture
or the Securities may be waived, in each case with the written consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Securities affected thereby;
provided, however , that any amendment to or supplement of this Indenture or the Securities that by
its terms affects the rights of Holders of any series of then outstanding Securities but not the
others series may be effected, and any default or compliance with any provision of this Indenture
affecting the Holders of any series of then outstanding Securities but not the other series may be
waived, with the consent of at least a majority in aggregate principal amount of the Securities of
the affected series.

     Without the consent of each Holder of Securities that is affected thereby, an amendment or
waiver under this Section 9.02 may not:

     (i) reduce the aggregate principal amount of Securities of any series the Holders of which
must consent to an amendment, supplement modification or waiver of any provision of this
Indenture;

     (ii) reduce the rate of or extend the time for payment of interest on any series of
Securities;

     (iii) reduce the principal of or change the stated maturity of any series of Securities;

28

 

     (iv) change the date on which any Security of any of series may be subject to redemption,
or reduce the premium payable upon the redemption or repurchase thereof;

     (v) make any Security of any series payable in currency other than that stated in the
Security;

     (vi) modify or change any provision of this Indenture affecting the ranking of the
Securities of any series in a manner which adversely affects the Holders thereof;

     (vii) impair the right of any Holder of Securities to institute suit for the enforcement of
any payment in or with respect to any such series of Securities; or

     (viii) make any change in the foregoing amendment and waiver provisions which require each
Holder’s consent.

     It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

     After an amendment or waiver under this Section 9.02 becomes effective, the Company shall mail
to Holders affected thereby a notice briefly describing the amendment or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver.

     SECTION 9.03 Compliance with Trust Indenture Act.

     Every amendment to this Indenture or the Securities shall be set forth in a supplemental
indenture that complies with the TIA as then in effect.

     SECTION 9.04 Revocation and Effect of Consents.

     Until an amendment, supplement modification or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of
the consent is not made on any Security; provided, however, that unless a record date shall have
been established pursuant to Section 2.16 hereof, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives written notice of
revocation before the date the amendment, supplement, modification or waiver becomes effective. An
amendment, supplement modification or waiver becomes effective on receipt by the Trustee of
consents from the Holders of the requisite percentage principal amount of the outstanding
Securities, and thereafter shall bind every Holder of Securities; provided, however, if the
amendment, supplement modification or waiver makes a change described in any of the clauses (i)
through (viii) of Section 9.02 hereof, the amendment, supplement, modification or waiver shall bind
only each Holder of a Security which has consented to it and every subsequent Holder of a Security
or portion of a Security that evidences the same indebtedness as the consenting Holder’s Security.

     SECTION 9.05 Notation on or Exchange of Securities.

     If an amendment, supplement, modification or waiver changes the terms of a Security:

     (a) the Trustee may require the Holder of a Security to deliver such Security to the Trustee,
the Trustee may place an appropriate notation on the Security about the changed terms and return it
to the Holder and the Trustee may place an appropriate notation on any Security thereafter
authenticated; or

     (b) if the Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.

     Failure to make the appropriate notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.

29

 

     SECTION 9.06 Trustee to Sign Amendment, etc.

     The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may but need not sign it. In signing or refusing to sign such amendment, the Trustee
shall be provided with and shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that such amendment is authorized or permitted by this
Indenture.

ARTICLE X

CONVERSION OR EXCHANGE OF SECURITIES

     SECTION 10.01 Provisions Relating to Conversion or Exchange of Securities.

     Any rights which Holders of Securities of a series will have to convert those Securities into
other securities of the Company or to exchange those Securities for securities of other Persons or
other assets, including but not limited to the terms of the conversion or exchange and the
circumstances, if any, under which those terms will be adjusted to prevent dilution or otherwise,
will be set forth in an Indenture supplemental hereto relating to the series of Securities. In the
absence of provisions in a supplemental Indenture relating to a series of Securities setting forth
rights to convert or exchange the Securities of that series into or for other securities or assets,
Holders of the Securities of that series will not have any such rights.

ARTICLE XI

SINKING OR PURCHASE FUNDS

     SECTION 11.01 Provisions Relating to Sinking or Purchase Funds.

     Any requirements that the Company make, or rights of the Company to make at its option,
payments prior to maturity of the Securities of a series which will be used as a fund with which to
redeem or to purchase Securities of that series, including but not limited to provisions regarding
the amount of the payments, when the Company will be required, or will have the option, to make the
payments and when the payments will be applied, will be set forth in an Indenture supplemental
hereto relating to the series of Securities. In the absence of provisions in a supplemental
Indenture relating to a series of Securities setting forth requirements that the Company make, or
rights of the Company to make at its option, payments to be used as a fund with which to redeem or
purchase Securities of the series, the Company will not be subject to any such requirements and
will not have any such rights. However, unless otherwise specifically provided in a supplemental
Indenture relating to a series of Securities, the Company will at all times have the right to
purchase Securities from Holders in market transactions or otherwise.

ARTICLE XII

MISCELLANEOUS

     SECTION 12.01 Trust Indenture Act Controls.

     This Indenture is subject to the provisions of the TIA which are required to be part of this
Indenture, and shall, to the extent applicable, be governed by such provisions.

     SECTION 12.02 Notices.

     Any notice or communication to the Company or the Trustee is duly given if in writing and
delivered in person or mailed by first-class mail to the address set forth below:

     If to the Company:

30

 

     with a copy to:

     If to the Trustee:

_______________

_______________

Attention: _______

The Company or the Trustee, by notice to the other, may designate additional or different addresses
for subsequent notices or communications.

     Any notice or communication to a Holder shall be mailed by first-class mail to his address
shown on the Register kept by the Registrar. Failure to mail a notice or communication to a Holder
or any defect in such notice or communication shall not affect its sufficiency with respect to
other Holders.

     If a notice or communication is mailed or sent in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it, except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.

     If by reason of the suspension of regular mail service, or by reason of any other cause, it is
impossible to mail any notice as required by this Indenture or any supplemental indenture, then any
method of notification which is approved by the Trustee will constitute a sufficient mailing of the
notice.

     If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee
and each Agent at the same time.

     SECTION 12.03 Communication by Holders with Other Holders.

     Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect
to their rights under the Securities or this Indenture. The Company, the Trustee, the Registrar and
anyone else shall have the protection of Section 312(c) of the TIA.

     SECTION 12.04 Certificate and Opinion as to Conditions Precedent.

     Upon any request or application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

     (i) an Officers’ Certificate (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action have been complied with;

     (ii) an Opinion of Counsel (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with; and

     (ii) such other opinions and certificates as may be required by applicable provisions of
this Indenture or an applicable supplemental indenture.

     SECTION 12.05 Statements Required in Certificate or Opinion.

     Each certificate (other than certificates provided pursuant to Section 4.04 hereof) or opinion
with respect to compliance with a condition or covenant provided for in this Indenture shall
include:

31

 

     (i) a statement that each individual signing such certificate or opinion has read such
covenant or condition;

     (ii) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;

     (iii) a statement that, in the opinion of each such person, he or she has made such
examination or investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and

     (iv) a statement as to whether or not, in the opinion of each such person, such condition
or covenant has been complied with; provided, however, that with respect to matters of fact, an
Opinion of Counsel may rely on an Officers’ Certificate or certificate of public officials.

     SECTION 12.06 Rules by Trustee and Agents.

     The Trustee may make reasonable rules for action by or for a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

     SECTION 12.07 Legal Holidays.

     A “ Legal Holiday ” is a Saturday, a Sunday or a day on which banking institutions in The City
of New York are not required or authorized to be open. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

     SECTION 12.08 Duplicate Originals.

     The parties may sign any number of copies of this Indenture. One signed copy is enough to
prove this Indenture.

     SECTION 12.09 Governing Law.

     This Indenture, each supplemental indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.

     SECTION 12.10 No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret another indenture, loan or debt agreement of the
Company or any of its Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

     SECTION 12.11 Successors.

     All agreements of the Company under the Securities and this Indenture shall bind their
respective successors. All agreements of the Trustee in this Indenture shall bind its successor.

     SECTION 12.12 Severability.

     In the event any provision in the Securities or in this Indenture is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     SECTION 12.13 Counterpart Originals.

     This Indenture may be signed in one or more counterparts. Each signed copy shall be an
original, but all of them together represent the same agreement.

32

 

     SECTION 12.14 Submission to Jurisdiction.

     By the execution and delivery of this Indenture, the Company submits to the nonexclusive
jurisdiction of any federal or state court in the State of New York with respect to all matters
related to this Indenture, any supplemental indenture and the Securities.

     SECTION 12.15 Waiver of Jury Trial.

     EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

     SECTION 12.16 Force Majeure.

     In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of
God, and interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

     SECTION 12.17 Supplemental Indentures Contract . .

     If any provision of a supplemental indenture to this Indenture relating to a series of
Securities is inconsistent with any provision of this Indenture, the provisions of the supplemental
indenture will control with regard to the Securities of the series to which it relates.

     SECTION 12.18 Table of Contents, Headings, etc.

     The table of contents, cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only. They are not to be considered a
part of this Indenture, and will in no way modify or restrict any of the terms or provisions of
this Indenture.

     SECTION 12.19 When Treasury Securities Disregarded .

     In determining whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company, or anyone under
direct or indirect control or under direct or indirect common control with the Company will be
disregarded and deemed not to be outstanding, except that for the purposes of determining whether
the Trustee will be protected in relying on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned will be so disregarded. Securities so owned which have been
pledged in good faith will not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right to act with respect to the Securities and that the pledgee is not the
Company or a person directly or indirectly controlling or controlled by, or under common control
with, the Company. Nothing in this Section 12.19 will be construed as requiring that the Company
furnish to the Trustee any evidence of compliance with the conditions and covenants provided for in
the Indenture other than the evidence specified in this Section 12.19.

33

 

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, as of
the day and year first above written.

	 	 	 	 	 
	 	CEREPLAST, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

34

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