Document:

exv10w22

Exhibit 10.22

 

Registration Rights Agreement

Dated as of April 28, 2009

among

DIGITALGLOBE, INC,

the Guarantors

and

Morgan Stanley & Co. Incorporated

As Representative of the Initial Purchasers

 

 

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (the “Agreement”) is made and entered into this
28th day of April, 2009 among DigitalGlobe, Inc., a Delaware corporation (the
“Company”), the Guarantors listed on the signature pages hereto (the “Guarantors”)
and Morgan Stanley & Co. Incorporated as representative (the “Representative”) of the
initial purchasers named in Schedule I hereto (collectively, the “Initial Purchasers”).

          This Agreement is made pursuant to the Purchase Agreement, dated April 28, 2009 among the
Company, the Guarantors and the Representative (the “Purchase Agreement”), which provides
for the sale by the Company to the Initial Purchasers of an aggregate of $355,000,000 principal
amount of the Company’s 10.5% Senior Secured Notes Due 2014 (the “Notes”). The Notes will
be unconditionally guaranteed, jointly and severally, on a secured basis as to the payment of
principal and interest by the Guarantors (such guarantees, the “Guarantees”, and the Notes
with the Guarantees, the “Securities”) In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under the Purchase
Agreement.

          In consideration of the foregoing, the parties hereto agree as follows:

          1. Definitions.

          As used in this Agreement, the following capitalized defined terms shall have the following
meanings:

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

          “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

          “Additional Interest” shall have the meaning set forth in Section 2.5.

          “Business Day” shall mean any day except (i) a Saturday, Sunday or other day in The
City of New York on which banks are required or authorized to close or (ii) any other day on which
the SEC is closed.

          “Closing Date” shall mean April 28, 2009, the date the Securities were originally
issued.

          “Company” shall have the meaning set forth in the preamble and shall also include the
Company’s successors.

          “Depositary” shall mean The Depository Trust Company, or any other depositary
appointed by the Company, provided, however, that such depositary must have an address in the
Borough of Manhattan, in the City of New York.

 

 

          “Effectiveness Period” shall have the meaning set forth in Section 2.2(b) herein.

          “Exchange Offer” shall mean the offer by the Company to exchange the Exchange
Securities for Registrable Securities pursuant to Section 2.1 hereof.

          “Exchange Offer Registration” shall mean a registration under the 1933 Act effected
pursuant to Section 2.1 hereof.

          “Exchange Offer Registration Statement” shall mean an exchange offer registration
statement on Form S-4 (or, if applicable, on another appropriate form), and all amendments and
supplements to such registration statement, including the Prospectus contained therein, all
exhibits thereto and all documents incorporated by reference therein.

          “Exchange Period” shall have the meaning set forth in Section 2.1 hereof.

          “Exchange Securities” shall mean the 10.5% Senior Secured Notes Due 2014 issued by the
Company under the Indenture containing terms identical to the Securities in all material respects
(except that the additional interest rate, restrictions on transfers and restrictive legends shall
be eliminated), to be offered to Holders of Securities in exchange for Registrable Securities
pursuant to the Exchange Offer.

          “Freely Transferable” shall mean the time at which a Security (i) may be sold to the
public pursuant to Rule 144 under the 1933 Act by a person that is not an “affiliate” (as defined
in Rule 144 under the 1933 Act) of the Company without regard to any of the conditions specified
therein (other than the holding period requirement in paragraph (d) of Rule 144 so long as such
holding period requirement is satisfied at such time of determination) and (ii) does not bear any
restrictive legends relating to the 1933 Act.

          “Guarantees” has the meaning set forth in the preamble.

          “Guarantors” shall have the meaning set forth in the preamble and shall also include
successor and subsequent guarantors.

          “Holder” shall mean an Initial Purchaser, for so long as it owns any Registrable
Securities, and each of its successors, assigns and direct and indirect transferees who become
registered owners of Registrable Securities under the Indenture and each Participating
Broker-Dealer that holds Exchange Securities for so long as such Participating Broker-Dealer is
required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities.

          “Indenture” shall mean the Indenture relating to the Securities, dated as of April 28,
2009, among the Company, the Guarantors and U.S. Bank National Association, as trustee, as the same
has been or may be amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.

          “Initial Purchaser” or “Initial Purchasers” shall have the meaning set forth
in the preamble.

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          “Issuer FWP” shall have the meaning set forth in Section 4(a)(i).

          “Majority Holders” shall mean the Holders of a majority of the aggregate principal
amount of outstanding Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company or any Affiliate (as defined in the Indenture) of the Company shall
be disregarded in determining whether such consent or approval was given by the Holders of such
required percentage amount.

          “Participating Broker-Dealer” shall mean each of the Initial Purchasers and any other
broker-dealer which makes a market in the Securities and exchanges Registrable Securities in the
Exchange Offer for Exchange Securities.

          “Person” shall mean an individual, partnership (general or limited), corporation,
limited liability company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.

          “Private Exchange” shall have the meaning set forth in Section 2.1 hereof.

          “Private Exchange Securities” shall have the meaning set forth in Section 2.1 hereof.

          “Prospectus” shall mean the prospectus included in a Registration Statement, including
any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus
supplement, including any such prospectus supplement with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective amendments, and in each
case including all materials incorporated by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble.

          “Registrable Securities” shall mean the Securities and, if issued, the Private
Exchange Securities; provided, however, that Securities and, if issued, the Private Exchange
Securities, shall cease to be Registrable Securities (i) when a Registration Statement with respect
to such Securities or Private Exchange Securities shall have become or been declared effective
under the 1933 Act and such Securities or Private Exchange Securities shall have been disposed of
pursuant to such Registration Statement, (ii) when such Securities or Private Exchange Securities
have been sold to the public pursuant to Rule l44 (or any similar provision then in force, but not
Rule 144(A)) under the 1933 Act, (iii) when such Securities or Private Exchange Securities shall
have ceased to be outstanding, (iv) when the Exchange Offer is consummated (except in the case of
Securities and Private Exchange Securities purchased from the Company and continued to be held by
the Initial Purchasers) or (v) upon the date when such Securities or Private Exchange Securities
become Freely Transferable.

          “Registration Default” shall have the meaning set forth in Section 2.5.

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          “Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company and the Guarantors with this Agreement, including without limitation:
(i) all SEC registration and filing fees, (ii) all fees and expenses incurred by the Company in
connection with compliance with state securities or blue sky laws in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities and any filings with the
Financial Industry Regulatory Authority, (iii) all expenses of the Company in preparing or
assisting in preparing, word processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, and other documents relating to the performance
of and compliance with this Agreement, (iv) all rating agency fees, incurred by the Company, if
any, (v) the reasonable and documented fees and disbursements of counsel for the Company and of the
independent registered public accounting firm of the Company, including the expenses of any special
audits required by or incident to such performance and compliance, (vi) the reasonable and
documented fees and expenses of the Trustee, and any escrow agent or custodian, (vii) the
reasonable and documented fees and disbursements of one firm special counsel representing the
Holders of Registrable Securities and (viii) the reasonable and documented fees and expenses of any
special experts retained by the Company in connection with any Registration Statement, but
excluding the fees and expenses of counsel to the holders of Registrable Securities (except as set
forth in (vii) above) any transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.

          “Registration Statement” shall mean any registration statement of the Company which
covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained therein, all exhibits
thereto and all materials incorporated by reference therein.

          “SEC” shall mean the Securities and Exchange Commission or any successor agency or
government body performing the functions currently performed by the United States Securities and
Exchange Commission.

          “Securities” shall have the meaning set forth in the preamble.

          “Shelf Registration” shall mean a registration effected pursuant to Section 2.2
hereof.

          “Shelf Registration Statement” shall mean a “shelf” registration statement of the
Company pursuant to the provisions of Section 2.2 of this Agreement which covers all of the
Registrable Securities or all of the Private Exchange Securities on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all materials incorporated by
reference therein.

          “Suspension Period” shall have the meaning set forth in Section 2.2 hereof.

          “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

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          2. Registration Under the 1933 Act.

          2.1 Exchange Offer. If the Securities are not Freely Transferable by the 366th
calendar day following the Closing Date, then, unless the Exchange Offer shall not be permissible
under applicable law or SEC policy, the Company shall, for the benefit of the Holders use its
commercially reasonable efforts to, (A) prepare and file with the SEC, an Exchange Offer
Registration Statement on an appropriate form under the 1933 Act with respect to a proposed
Exchange Offer and the issuance and delivery to the Holders, in exchange for the Registrable
Securities (other than Private Exchange Securities), of a like principal amount of Exchange
Securities, (B) cause the Exchange Offer Registration Statement to become or be declared effective
under the 1933 Act, (C) keep the Exchange Offer Registration Statement effective until the closing
of the Exchange Offer and (D) cause the Exchange Offer to be consummated on or prior to the
456th calendar day following the Closing Date. Upon the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Exchange Offer.

          In connection with the Exchange Offer, the Company shall:

          (a) mail as promptly as practicable after the commencement of the Exchange Offer to each
Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;

          (b) keep the Exchange Offer open for acceptance for a period of not less than 20 Business Days
after the date notice thereof is mailed to the Holders (or longer if required by applicable law)
(such period referred to herein as the “Exchange Period”);

          (c) utilize the services of the Depositary for the Exchange Offer;

          (d) permit Holders to withdraw tendered Registrable Securities at any time prior to the
expiration of the Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange, and a statement that such Holder
is withdrawing such Holder’s election to have such Securities exchanged;

          (e) notify each Holder that any Registrable Security not tendered will remain outstanding and
continue to accrue interest, but will not retain any rights under this Agreement (except in the
case of the Initial Purchasers and Participating Broker-Dealers as provided herein); and

          (f) otherwise comply in all material respects with all applicable laws relating to the
Exchange Offer.

          If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Securities
acquired by them and having the status of an unsold allotment in the initial distribution, the
Company upon the request of any Initial Purchaser shall, simultaneously with the delivery of the
Exchange Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in exchange
(the “Private Exchange”) for the Securities held by such Initial Purchaser,

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a like principal amount of debt securities of the Company on a senior basis, that are
identical (except that such securities shall bear appropriate transfer restrictions) to the
Exchange Securities (the “Private Exchange Securities”).

          The Exchange Securities and the Private Exchange Securities shall be issued under (i) the
Indenture or (ii) an indenture identical in all material respects to the Indenture and which, in
either case, has been qualified under the Trust Indenture Act of 1939, as amended (the
“TIA”), or is exempt from such qualification and shall provide that the Exchange Securities
shall not be subject to the transfer restrictions set forth in the Indenture but that the Private
Exchange Securities shall be subject to such transfer restrictions. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange Securities and the
Securities shall vote and consent together on all matters as one class of securities under the
Indenture and that none of the Exchange Securities, the Private Exchange Securities or the
Securities will have the right to vote or consent as a separate class on any matter under the
Indenture. If the customary procedures of the Depositary and the CUSIP Bureau allow, the Private
Exchange Securities shall be of the same series as and the Company shall use its commercially
reasonable efforts to have the Private Exchange Securities bear the same CUSIP number as the
Exchange Securities. The Company shall not have any liability under this Agreement solely as a
result of such Private Exchange Securities not bearing the same CUSIP number as the Exchange
Securities.

          As soon as practicable after the close of the Exchange Offer and/or the Private Exchange, as
the case may be, the Company shall:

     (i) accept for exchange all Registrable Securities duly tendered and not validly
withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal;

     (ii) accept for exchange all Securities properly tendered pursuant to the Private
Exchange;

     (iii) deliver to the Trustee for cancellation all Registrable Securities so accepted
for exchange; and

     (iv) cause the Trustee promptly to authenticate and deliver Exchange Securities or
Private Exchange Securities, as the case may be, to each Holder of Registrable Securities so
accepted for exchange in a principal amount equal to the principal amount of the Registrable
Securities of such Holder so accepted for exchange.

          Interest on each Exchange Security and Private Exchange Security will accrue from the last
date on which interest was paid on the Registrable Securities surrendered in exchange therefor (or
if the Exchange Security is authenticated between a record date and an interest payment date, from
such interest payment date) or, if no interest has been paid on the Registrable Securities, from
the Closing Date. The Exchange Offer and the Private Exchange shall not be subject to any
conditions, other than (i) that the Exchange Offer or the Private Exchange, or the making of any
exchange by a Holder, does not violate applicable law, rule or regulation or any applicable
interpretation of the staff of the SEC, (ii) the due tendering of

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Registrable Securities in accordance with the Exchange Offer and the Private Exchange,
(iii) that each Holder of Registrable Securities exchanged in the Exchange Offer shall have
represented that (A) it is not an affiliate (as defined in Rule 405 under the 1933 Act) of the
Company or, if it is such an affiliate, it will comply with the registration and prospectus
delivery requirements of the 1933 Act, to the extent applicable; (B) all Exchange Securities to be
received by it shall be acquired in the ordinary course of its business and that at the time of the
consummation of the Exchange Offer it shall have no arrangement or understanding with any person to
participate in the distribution (within the meaning of the 1933 Act) of the Exchange Securities,
(C) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage
in, the distribution of the Exchange Securities, (D) if such Holder is a broker-dealer, that it
will receive Exchange Securities for its own account in exchange for the Securities that were
acquired as a result of market-making activities or other trading activities and that it will be
required to acknowledge that it will deliver a prospectus in connection with any resale of such
Exchange Securities and (E) shall have made such other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4
or other appropriate form under the 1933 Act available and (iv) that no action or proceeding shall
have been instituted or threatened in any court or by or before any governmental agency with
respect to the Exchange Offer or the Private Exchange which, in the Company’s judgment, would
reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer or
the Private Exchange. The Company shall inform the Initial Purchasers of the names and addresses
of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right
to contact such Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.

          2.2 Shelf Registration. If the Securities are not Freely Transferable by the
366th calendar day after the Closing Date and (i) if, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the SEC, the Company is
not permitted to effect the Exchange Offer as contemplated by Section 2.1 hereof, (ii) for any
other reason the Exchange Offer is not consummated within 456 calendar days of the Closing Date or
(iii) if and to the extent that a Holder that is not an affiliate is not permitted to participate
in the Exchange Offer or does not receive fully tradable Exchange Securities pursuant to the
Exchange Offer, then in case of each of clauses (i) through (iii) the Company shall use
commercially reasonable efforts to:

          (a) as promptly as reasonably practicable, and in any event on or prior to the 30th
calendar day after such filing obligation arises, but in no event earlier than the 456th
calendar day after the Closing Date, file with the SEC, a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities by the Holders from time to time in accordance
with the methods of distribution elected by the Majority Holders participating in the Shelf
Registration and set forth in such Shelf Registration Statement;

          (b) cause such Shelf Registration Statement to be declared effective under the Securities Act
on or prior to the 90th calendar day after such filing;

          (c) keep the Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for (i) a period of two years

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from the Closing Date, or (ii) for such shorter period that will terminate when all
Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement, become Freely Transferable Securities or cease to be outstanding or
otherwise to be Registrable Securities (the “Effectiveness Period”); and

          (d) notwithstanding any other provisions hereof, use its commercially reasonable efforts to
ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus
forming part thereof and any supplement thereto complies in all material respects with the 1933 Act
and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they were made, not misleading; provided that
clauses (ii) and (iii) of this paragraph shall not apply to any information furnished in writing by
or on behalf of the Initial Purchasers or any Holder for inclusion therein.

          Subject to the limitation set forth in the next succeeding paragraph and subject to the
provisions of Section 3, the Company shall be entitled to suspend its obligation to file any
amendment to the Shelf Registration Statement, furnish any supplement or amendment to a Prospectus
included in the Shelf Registration Statement, make any other filing with the SEC, cause the Shelf
Registration Statement or other filing with the SEC to remain effective or take any similar action
(collectively, “Registration Actions”) upon (A) the issuance by the SEC of a stop order
suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings
with respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the 1933 Act (or
successor provision), (B) the occurrence of any event or the existence of any fact as a result of
which the Shelf Registration Statement would or shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or the related Prospectus would or shall contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any corporate development that, in the
discretion of the Company, makes it appropriate to postpone or suspend the availability of the
Shelf Registration Statement and the related Prospectus, it being understood that the Company may
not invoke this clause C for the purpose of avoiding its obligations under this Agreement. Upon
the occurrence of any of the conditions described in (A), (B) or (C) above, the Company shall give
prompt notice (a “Suspension Notice”) thereof to the Holders. Upon the termination of such
condition, the Company shall give prompt notice thereof to the Holders and shall promptly proceed
with all Registration Actions that were suspended pursuant to this paragraph and comply as promptly
as practicable with the requirements of Section 3(1) hereof, if applicable.

          The Company may suspend Registration Actions pursuant to the preceding paragraph for one or
more periods (each, a “Suspension Period”) not to exceed, in the aggregate,

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120 days in any twelve month period, during which no Additional Interest (as defined in
Section 2.5) shall be payable. If one or more Suspension Periods exceed 120 days in any twelve
month period, then Additional Interest will begin to accrue on the 121st day until such
Registration Default is cured. Each Suspension Period shall be deemed to begin on the date the
relevant Suspension Notice is given to the Holders and shall end on the date on which the Company
gives the Holders a notice that the Suspension Period has terminated. The Company shall extend the
Effectiveness Period (or the period during which Participating Broker-Dealers are entitled to use
the Prospectus included in the Exchange Offer Registration Statement in connection with the resale
of the Exchange Securities described in Section 3(f) below) by the total number of days during
which a Suspension Period was in effect, so long as there are Registrable Securities.
Notwithstanding anything to the foregoing, the Company shall at all times use its reasonable best
efforts to end any Suspension Period at the earliest possible time.

          The Company further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, as required by Section 3(b) below, and to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being used or filed with
the SEC.

          2.3 Expenses. The Company shall pay all Registration Expenses in connection with the
registration pursuant to Section 2.1 or 2.2. Each Holder shall pay all transfer taxes, if any,
relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf
Registration Statement.

          2.4 Effectiveness.

          (a) Other than with respect to a Suspension Period, the Company will be deemed not to have
used its commercially reasonable efforts to cause the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, to become, or to remain, effective during the
requisite period if the Company voluntarily takes any action that would, or omits to take any
action which omission would, result in any such Registration Statement not becoming or being
declared effective or in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless such action is required by applicable law, rule, regulation, order,
judgment or decree.

          (b) An Exchange Offer Registration Statement pursuant to Section 2.1 hereof or a Shelf
Registration Statement pursuant to Section 2.2 hereof will not be deemed to have become effective
unless either it has been declared effective by the SEC or it automatically becomes effective
pursuant to the rules and regulations under the 1933 Act; provided, however, that if, after it has
become or been declared effective, the offering of Registrable Securities pursuant to an Exchange
Offer Registration Statement or a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have become effective during the period of
such interference, until the offering of Registrable Securities pursuant to such Registration
Statement may legally resume.

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          2.5 Interest. If any Securities are not Freely Transferable by the 366th calendar day
after the Closing Date and either (i) the Exchange Offer is not consummated on or prior to the
456th calendar day following the Closing Date, (ii) a Shelf Registration Statement applicable to
the Registrable Securities, if required, is not filed or declared effective when required, or (iii)
a Registration Statement applicable to the Registrable Securities is declared effective as required
but thereafter fails to remain effective or usable in connection with resales for more than 120
calendar days in the aggregate in any twelve month period (each such event referred to in clauses
(i) through (iii) above, a “Registration Default”), the interest rate borne by such
Registrable Securities shall be increased (“Additional Interest”) by one-half of one
percent per annum upon the occurrence of each Registration Default, provided that the maximum
aggregate increase in the interest rate will in no event exceed half of one percent (0.50%) per
annum. Following the earlier of (i) the time the Registrable Securities become Freely Transferable
or (ii) the cure of all Registration Defaults, the accrual of Additional Interest on such
Registrable Securities will cease and the interest rate will revert to the original rate.

          Additional Interest shall be computed based on the actual number of days elapsed in each
period in which the Shelf Registration Statement is unusable.

          The Company shall notify the Trustee within five Business Days after each and every date on
which an event occurs in respect of which Additional Interest is required to be paid (an “Event
Date”). Additional Interest shall be paid by depositing with the Trustee, in trust, for the
benefit of the Holders of Registrable Securities, on or before the applicable semiannual interest
payment date, immediately available funds in sums sufficient to pay the Additional Interest then
due. The Additional Interest due shall be payable on each interest payment date to the record
Holder of Registrable Securities entitled to receive the interest payment to be paid on such date
as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to
accrue from and including the day following the applicable Event Date.

          3. Registration Procedures.

          In connection with the obligations of the Company with respect to Registration Statements
pursuant to Sections 2.1 and 2.2 hereof, the Company shall, subject to the rights of the Company to
invoke and maintain a Suspension Period in accordance with Section 2.2 without being in violation
of any of the provisions hereunder:

          (a) prepare and file with the SEC a Registration Statement, within the relevant time period
specified in Section 2, on the appropriate form under the 1933 Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf Registration, be available for the sale
of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include or incorporate by
reference all financial statements required by the SEC to be filed therewith or incorporated by
reference therein, and (iv) shall comply in all material respects with the applicable requirements
of Regulation S-T under the 1933 Act, and use its commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective in accordance with Section 2
hereof;

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          (b) prepare and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary under applicable law to keep such Registration Statement
effective for the Effectiveness Period (subject to Company’s ability to declare Suspension Periods)
and cause each Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the
1933 Act and comply during the Effectiveness Period with the provisions of the 1933 Act, the 1934
Act and the rules and regulations thereunder required to enable the disposition of all Registrable
Securities covered by each Registration Statement in accordance with the intended method or methods
of distribution by the selling Holders thereof (including sales by any Participating
Broker-Dealer);

          (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities of
the filing of the Shelf Registration Statement with respect to the Registrable Securities; (ii)
furnish to each Holder of Registrable Securities, without charge, electronic copies of each
Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder may reasonably request, including financial statements and schedules
and, if the Holder so requests, all exhibits in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) hereby consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto;

          (d) use its commercially reasonable efforts to register or qualify the Registrable Securities
under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of
Registrable Securities covered by a Registration Statement shall reasonably request in writing by
the time the applicable Registration Statement becomes or is declared effective by the SEC, and do
any and all other acts and things which may be reasonably necessary or advisable to enable each
such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities
owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), or (ii) take any action which would subject it to
general service of process or taxation in any such jurisdiction where it is not then so subject;

          (e) notify as promptly as practicable each Holder of Registrable Securities under a Shelf
Registration or any Participating Broker-Dealer who has notified the Company that it is utilizing
the Exchange Offer Registration Statement as provided in paragraph (f) below and, if requested by
such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective amendments thereto become
effective, (ii) of any request by the SEC or any state securities authority for post-effective
amendments and supplements to a Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the issuance by the SEC or any
state securities authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) of the happening of any event
or the discovery of any facts during the period a Shelf Registration Statement is effective which
makes any statement made in such Registration

-11-

 

Statement or the related Prospectus untrue in any material respect or which requires the
making of any changes in such Registration Statement or Prospectus in order to make the statements
therein (in the case of the Prospectus in light of the circumstances under which they were made)
not misleading, provided, however, that no notice by the Company shall be required pursuant to this
clause (v) in the event that the Company either promptly files a Prospectus supplement to update
the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into such Registration Statement, which, in either case, contains the requisite
information with respect to such event or facts that results in such Registration Statement no
longer containing any untrue statement of material fact or omitting to state a material fact
necessary to make the statements contained therein not misleading, (vi) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Registrable
Securities or the Exchange Securities, as the case may be, for sale in any jurisdiction or the
initiation or, to the Company’s knowledge, threatening of any proceeding for such purpose and
(vii) of any determination by the Company that a post-effective amendment to such Registration
Statement would be appropriate, other than post-effective amendment solely to add selling Holders;

          (f) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer
Registration Statement a section entitled “Plan of Distribution” which section shall be reasonably
acceptable to the Representative on behalf of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made by the staff of the SEC with
respect to the potential “underwriter” status of any broker-dealer that holds Registrable
Securities acquired for its own account as a result of market-making activities or other trading
activities and that will be the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of
Exchange Securities to be received by such broker-dealer in the Exchange Offer, whether such
positions or policies have been publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of the Representative on behalf of the Participating
Broker-Dealers and its counsel, represent the prevailing views of the staff of the SEC, including a
statement that any such broker-dealer who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities,
(ii) furnish to each Participating Broker-Dealer, without charge, electronic copies of each
Prospectus included in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may
reasonably request for a period not to exceed 90 days after the consummation of the Exchange Offer,
(iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery
requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or
transfer of the Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (iv) include in the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the following provision:

“If the exchange offeree is a broker-dealer holding Registrable Securities acquired
for its own account as a result of market-making activities or other trading
activities, it will deliver a prospectus meeting the requirements of the 1933 Act in

-12-

 

	 	 	 	connection with any resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer;” and

	 	 	(y) a statement to the effect that by a broker-dealer making the acknowledgment described in
clause (x) and by delivering a Prospectus in connection with the exchange of Registrable
Securities, the broker-dealer will not be deemed to admit that it is an underwriter within
the meaning of the 1933 Act;

          (g) use commercially reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement as soon as practicable;

          (h) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
without charge, at least one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without documents incorporated
therein by reference and all exhibits thereto, unless requested);

          (i) if electronic global certificates for the Registrable Securities are not then available,
cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and not bearing any
restrictive legends (other than as required by applicable law); and enable such Registrable
Securities to be in such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders may reasonably request at least three Business Days
prior to the closing of any sale of Registrable Securities;

          (j) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of
any facts, each as contemplated by Sections 3(e)(ii), (iii), (iv), (v), (vi) and (vii) hereof and
subject to the Company’s ability to declare Suspension Periods, as promptly as practicable after
the occurrence of such an event, use its commercially reasonable efforts to prepare a supplement or
post-effective amendment to the Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities or Participating Broker-Dealers, such
Prospectus will not contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. At such time as such public disclosure
is otherwise made or the Company determines that such disclosure is not necessary, in each case, to
correct any misstatement of a material fact or to include any omitted material fact, the Company
agrees promptly to notify each Holder Registrable Securities covered by such Registration Statement
of such determination and to furnish each Holder such number of copies of the Prospectus as amended
or supplemented, as such Holder may reasonably request;

          (k) in the case of a Shelf Registration, a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus (except for any document filed under the 1934 Act and which is to be
incorporated by reference into a Registration Statement or a Prospectus, and except for amendments
and supplements that are filed solely to name selling Holders) after initial

-13-

 

filing of a
Registration Statement, provide copies of such document to the Initial Purchasers on
behalf of such Holders; and make representatives of the Company as shall be reasonably
requested by the Holders of Registrable Securities, or the Initial Purchasers on behalf of such
Holders, available for discussion of such document;

          (l) obtain a CUSIP number for all Exchange Securities, Private Exchange Securities or
Registrable Securities, as the case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with printed certificates for the Exchange Securities, Private
Exchange Securities or the Registrable Securities, as the case may be, in a form eligible for
deposit with the Depositary;

          (m) (i) cause the Indenture to be qualified under the TIA in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the
Trustee and the Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use its
commercially reasonable efforts to cause the Trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;

          (n) in the case of a Shelf Registration or if a Prospectus is required to be delivered by any
Participating Broker-Dealer in the case of an Exchange Offer, make available for inspection during
business hours by representatives of the Holders of the Registrable Securities, any Participating
Broker-Dealer and one legal firm counsel or accountant retained by any of the foregoing, all
financial and other records, pertinent corporate documents of the Company reasonably requested by
any such persons, and cause the respective officers, directors, employees, and any other agents of
the Company to supply all information reasonably requested by any such representative, special
counsel or accountant in connection with a Registration Statement, and make such representatives of
the Company available for discussion of such documents as shall be reasonably requested by the
Initial Purchasers;

          (o) (i) in the case of an Exchange Offer Registration Statement, a reasonable time prior to
the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any
amendment to an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide electronic copies of such document to the Initial Purchasers and to counsel to
the Initial Purchasers and not file any such Exchange Offer Registration Statement, Prospectus or
amendment to which an Initial Purchaser or counsel to the Initial Purchasers shall reasonably
object, and make the representatives of the Company available for discussion of such documents as
shall be reasonably requested by the Initial Purchasers;

               (ii) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf
Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to such Prospectus (except for any document filed
under the 1934 Act and which is to be incorporated by reference into a Registration Statement or a
Prospectus, and except for amendments and supplements that are filed solely to name selling
Holders), provide electronic copies of such document to the Holders

-14-

 

of Registrable Securities, to
the Initial Purchasers and to counsel for the Holders, if any, not file
any such Exchange Offer Registration Statement, Prospectus or amendment to which an Initial
Purchaser or counsel to the Initial Purchasers shall reasonably object, and make the
representatives of the Company available for discussion of such document as shall be reasonably
requested by the Holders of Registrable Securities, the Initial Purchasers on behalf of such
Holders or counsel for the Holders of Registrable Securities; and

          (p) otherwise comply in all material respects with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the
1933 Act and Rule 158 thereunder.

          In the case of a Shelf Registration Statement, the Company may (as a condition to such
Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to
furnish to the Company such information regarding the Holder and the proposed distribution by such
Holder of such Registrable Securities as the Company may from time to time reasonably request in
writing.

          In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(ii), (iii), (iv), (v), (vi) and (vii) hereof or a Suspension Period,
such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(l) hereof, and, if so directed by the Company, such Holder
will deliver to the Company (at its expense) all copies in such Holder’s possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.

          4. Indemnification; Contribution.

          (a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold
harmless the Initial Purchasers, each Holder, each Participating Broker-Dealer, and each Person, if
any, who controls any Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act and each affiliate of any Holder within the meaning of Rule 405 under the 1933 Act from
and against any and all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any amendment thereof or any Prospectus included therein
(as amended or supplemented if the Company shall have furnished any amendments or supplements
thereto) or in any Preliminary Prospectus or “issuer free writing prospectus,” as defined in Rule
433 (“Issuer FWP”) of the 1933 Act, relating to a Shelf Registration, pursuant to which
Exchange Securities or Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, if any, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or

-15-

 

omission or alleged untrue statement or omission based upon information relating to any Holder
furnished to the Company in writing by or on behalf of such Holder expressly for use therein.

          (b) Each Holder agrees severally, but not jointly, to indemnify and hold harmless the Company,
each Guarantor, the Initial Purchasers, and the other selling Holders and each of their respective
directors and officers, and each Person, if any, who controls the Company, the Initial Purchasers,
or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, to the same extent as the foregoing indemnity contained in Section 4(a) hereof, but only
with reference to information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in such Registration Statement, Prospectus or amendment or supplement
thereto or in any Preliminary Prospectus or Issuer FWP. In no event shall the liability of any
Holder hereunder be greater in amount than the dollar amount of the proceeds received by or on
behalf of such Holder upon the sale of the Registrable Securities pursuant to the Registration
Statement (or any amendment thereto) giving rise to such indemnification obligation.

          (c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 4(a) or 4(b)
hereof, such person (the “indemnified party”) shall promptly notify the person against whom such
indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 4(a) and, in the case of
parties indemnified pursuant to Section 4(b), the Company and the Guarantors. The indemnifying
party shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii) such

-16-

 

indemnifying party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days’ prior written notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (y) does not include a
statement as to or admission of fault, culpability or a failure to act, by or on behalf of an
indemnified party.

          (d) To the extent that the indemnification provided for in Section 4(a) or 4(b) is unavailable
to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the indemnified party or
parties on the other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and each Guarantor shall be deemed to be equal to the
total net proceeds from the initial placement pursuant to the Purchase Agreement (before deducting
expenses) of the Registrable Securities to which such losses, claims, damages or liabilities
relate. The relative benefits received by any Holders and the Initial Purchasers shall be deemed
to be equal to the value of receiving registration rights under this Agreement for the Registrable
Securities. The relative fault of the Holders and the Initial Purchasers on the one hand and the
Company and each Guarantor on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Holders and the
Initial Purchasers or by the Company and each Guarantor, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Holders’ and the Initial Purchasers’ respective obligations to contribute pursuant to this
Section 4(d) are several in proportion to the respective number of Registrable Securities they have
sold pursuant to a Registration Statement, and not joint.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 4(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or
claim. Notwithstanding this Section 4(d), no Initial Purchaser shall be required to

-17-

 

contribute any amount in excess of the amount by which the total price at which the Securities sold
by it were offered exceeds the amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          (e) The remedies provided for in this Section 4 are not exclusive and shall not limit any
rights or remedies which may otherwise be available to an indemnified party at law or in equity,
hereunder, under the Purchase Agreement or otherwise.

     The indemnity and contribution provisions contained in this Section 4 shall remain operative
and in full force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Holder or Initial Purchaser, any person controlling any
Holder or Initial Purchaser or any affiliate of any Holder or Initial Purchaser or by or on behalf
of the Company or any Guarantor, its officers or directors or any person controlling the Company or
any Guarantor and (iii) the sale of any Registrable Securities by any Holder or Initial Purchaser.

          5. Miscellaneous.

          5.1 No Inconsistent Agreements. Neither the Company nor any Guarantor has entered
into and the Company or any Guarantor will not after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not and will not for the term of this Agreement in any way conflict with the
rights granted to the holders of the Company’s or the Guarantors other issued and outstanding
securities under any such agreements.

          5.2 Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement, waiver or departure.

          5.3 Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any
courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the provisions of this
Section 5.3, which address initially is the address set forth in the Purchase Agreement with
respect to the Initial Purchasers; and (b) if to the Company and the Guarantors, initially at the
Company’s address set forth in the Purchase Agreement, and thereafter at such other address of
which notice is given in accordance with the provisions of this Section 5.3.

-18-

 

          All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; two Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

          Copies of all such notices, demands, or other communications shall be concurrently delivered
by the person giving the same to the Trustee under the Indenture, at the address specified in such
Indenture.

          5.4 Successor and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties, including, without
limitation and without the need for an express assignment, subsequent Holders; provided
that nothing herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement, the Indenture
and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the
benefits hereof.

          5.5 Third Party Beneficiaries. The Initial Purchasers (even if the Initial Purchasers
are not Holders of Registrable Securities) shall be third party beneficiaries to the agreements
made hereunder between the Company and the Guarantors, on the one hand, and the Holders, on the
other hand, and shall have the right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.
Each Holder of Registrable Securities shall be a third party beneficiary to the agreements made
hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, and shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights hereunder.

          5.6 Restriction on Resales. Until the expiration of two years after the original
issuance of the Securities, the Company will not, and will cause its “affiliates” (as such term is
defined in Rule 144(a)(1) under the 1933 Act) that it controls (including, but not limited to any
executive officers of the Company) not to, resell any Securities which are “restricted securities”
(as such term is defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by any
of them and shall immediately upon any purchase of any such Securities submit such Securities to
the Trustee for cancellation.

          5.7 Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

-19-

 

          5.8 Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

          5.10 Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

-20-

 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	DIGITALGLOBE, INC.

 	 
	 	By:  	/s/ Yancey L. Spruill	 
	 	 	Name:  	Yancey L. Spruill 	 
	 	 	Title:  	Executive Vice President, Chief Financial Officer and
Treasurer 	 
	 
	 
	 
	 	DG CONSENTS SUB, INC.

 	 
	 	By:  	/s/ Erwin D. Sontani	 
	 	 	Name:  	Erwin D. Sontani 	 
	 	 	Title:  	Secretary 	 
	 
	 
	 
	 	DIGITALGLOBE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Erwin D. Sontani 	 
	 	 	Name:  	Erwin D. Sontani 	 
	 	 	Title:  	Secretary 	 

 

 

	 	 	 	 	 
	Confirmed and accepted as

of the date first above

written:

MORGAN STANLEY & CO. INCORPORATED

 	 
	By:  	/s/ Todd Jannucci	 	 
	 	Name:  	Todd Jannucci 	 	 
	 	Title:  	Managing Director 	 
	 

For itself and the other several Initial

Purchasers named in Schedule I hereto

 

 

Schedule I

Morgan Stanley & Co. Incorporated

J.P. Morgan Securities Inc.

Citigroup Global Markets Inc.

Banc of America Securities LLCExhibit 4.19

Exhibit 4.19

	 	 	 
	 Private
& Confidential
	 	EXECUTION VERSION

Dated 27 October 2009

TAIZHOU HULL NO. WZL 0501 L.L.C.

TAIZHOU HULL NO. WZL 0502 L.L.C.

TAIZHOU HULL NO. WZL 0503 L.L.C.

DHJS HULL NO. 2007-001 L.L.C.

DHJS HULL NO. 2007-002 L.L.C.

(as Borrowers)

and

CALYON

and others

(as Original Lenders)

and

CALYON

(as Agent)

and

CALYON

(as Security Trustee)

and

CALYON

(as Arranger)

 

FACILITY AGREEMENT

for up to US$122,000,000 Loan Facility

 

 

 

 

	 	 	 	 	 
	CONTENTS	 	Page	 
	 
	 	 	 	 
	1 Definitions and Interpretation
	 	 	2	 
	 
	 	 	 	 
	2 The Facility and its Purpose
	 	 	21	 
	 
	 	 	 	 
	3 Conditions precedent and subsequent for the Loans
	 	 	22	 
	 
	 	 	 	 
	4 Representations and Warranties
	 	 	24	 
	 
	 	 	 	 
	5 Repayment and Prepayment
	 	 	28	 
	 
	 	 	 	 
	6 Interest
	 	 	30	 
	 
	 	 	 	 
	7 Fees
	 	 	31	 
	 
	 	 	 	 
	8 Security and Application of Moneys
	 	 	32	 
	 
	 	 	 	 
	9 Covenants
	 	 	32	 
	 
	 	 	 	 
	10 Events Of Default
	 	 	47	 
	 
	 	 	 	 
	11 Set-Off and Lien
	 	 	53	 
	 
	 	 	 	 
	12 Assignment and Sub-Participation
	 	 	54	 
	 
	 	 	 	 
	13 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
	 	 	55	 
	 
	 	 	 	 
	14 Communications
	 	 	59	 
	 
	 	 	 	 
	15 General Indemnities
	 	 	60	 
	 
	 	 	 	 
	16 Appointment of Agent and Security Trustee
	 	 	62	 
	 
	 	 	 	 
	17 Miscellaneous
	 	 	78	 
	 
	 	 	 	 
	18 Law and Jurisdiction
	 	 	81	 
	 
	 	 	 	 
	SCHEDULE 1
	 	 	82	 
	The Original Lenders, the Commitments and the Proportionate Shares
	 	 	82	 
	 
	 	 	 	 
	SCHEDULE 2
	 	 	83	 
	The Vessels
	 	 	83	 
	 
	 	 	 	 
	SCHEDULE 3
	 	 	84	 
	Conditions Precedent and Subsequent
	 	 	84	 

 

 

 

	 	 	 	 	 
	CONTENTS	 	Page	 
	 
	 	 	 	 
	Part I: Initial conditions precedent
	 	 	84	 
	Part II: Conditions precedent to each Drawdown
	 	 	85	 
	Part III: Conditions subsequent
	 	 	87	 
	 
	 	 	 	 
	SCHEDULE 4
	 	 	88	 
	Form of Transfer Certificate
	 	 	88	 
	 
	 	 	 	 
	SCHEDULE 5
	 	 	91	 
	Form of Drawdown Notice
	 	 	91	 
	Calculation of the Mandatory Cost
	 	 	92	 
	 
	 	 	 	 
	SCHEDULE 7
	 	 	95	 
	Form of Compliance Certificate
	 	 	95	 
	 
	 	 	 	 
	SCHEDULE 8
	 	 	96	 
	Repayment Schedules
	 	 	96	 

 

 

 

LOAN FACILITY AGREEMENT

Dated: 27 October 2009

BETWEEN:

	(1)	 	TAIZHOU HULL NO. WZL 0501 L.L.C., TAIZHOU HULL NO. WZL 0502 L.L.C., TAIZHOU HULL NO. WZL 0503
L.L.C., DHJS HULL NO. 2007-001 L.L.C. and DHJS HULL NO. 2007-002 L.L.C., each being a limited
liability company formed and existing under the laws of the Marshall Islands whose principal
place of business is at Fourth Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM08
Bermuda (each a “Borrower” and together the “Borrowers”);

	(2)	 	the banks listed in Schedule 1, each acting through its office at the address indicated
against its name in Schedule 1 (together the “Original Lenders” and each an “Original
Lender”);

	(3)	 	CALYON, acting as agent through its office at 9 quai du Président Paul Doumer, 92920 Paris,
La Défense Cedex, France for the Lenders (in that capacity the “Agent”);

	(4)	 	CALYON, acting as security trustee through its office at 9 quai du Président Paul Doumer,
92920 Paris, La Défense Cedex, France for the Lenders (as more particularly described below)
(in that capacity the “Security Trustee”); and

	(5)	 	CALYON, acting as arranger through its office at 9 quai du Président Paul Doumer, 92920
Paris, La Défense Cedex, France (in that capacity the “Arranger”).

WHEREAS:

	(A)	 	Each Borrower has agreed to purchase the relevant Vessel from the Seller on the terms of the
relevant Purchase Contract and intends to register that Vessel on delivery on the primary
registry and to flag such vessel on the bareboat registry in each case listed opposite that
Vessel in Schedule 2.

	(B)	 	Each of the Lenders has agreed to advance to the Borrowers on a joint and several basis its
Commitment (aggregating, with all the other Commitments from the Lenders, up to one hundred
and twenty two million Dollars ($122,000,000)) to assist each of the Borrowers in financing
(or, where the Purchase Price has previously been paid by a Borrower to the Seller,
reimbursing to such Borrower) part of the Purchase Price of the relevant Vessel pursuant to
the relevant Purchase Contract (each as defined below) (the “Loan” as more particularly
defined in clause 1.1 below).

	(C)	 	Each Borrower has agreed to bareboat charter the Vessel which it owns to the Charterer (as
defined below) pursuant to the terms of the relevant Charter (as defined below).

	(D)	 	Pursuant to this Agreement, and as a condition precedent to the several obligations of the
Lenders to make the Loan available to the Borrowers, each Borrower has, amongst other things,
agreed to execute and deliver a first priority Bahamas mortgage over each Vessel, together
with a Deed of Covenants, as security for the payment of the Indebtedness.

	(E)	 	The obligations of the Borrowers towards the Finance Parties (as defined below) shall be the
subject of an irrevocable on-demand guarantee in respect of each Vessel given by

 

 

 

	 	 	Teekay LNG Partners L.P. (as more particularly provided for
therein) in favour of the Agent to be dated on or about the
date hereof (the “Guarantee”).

IT IS AGREED as follows:-

	1	 	Definitions and Interpretation

	 	1.1	 	Definitions

In this Agreement:-

	 	1.1.1	 	“Account Charge” means the deed of charge over the Borrower
Earnings Account, as referred to in clauses 8.1.5.

	 	1.1.2	 	“Administration” has the meaning given to it in paragraph
1.1.3 of the ISM Code.

	 	1.1.3	 	“Affiliate” means, in relation to any entity, a Subsidiary of
that entity, a Holding Company of that entity or any other Subsidiary of any
Holding Company of that entity.

	 	1.1.4	 	“Approved Brokers” means H. Clarkson & Co. Ltd, Simpson Spence
& Young Shipbrokers Ltd, Compass Maritime Services LLC, Fearnley AS, R. S.
Platou AS and P.F. Bassoe AS.

	 	1.1.5	 	“Assigned Property” means the Insurances, the Earnings and the
Requisition Compensation in respect of a Vessel.

	 	1.1.6	 	“Assignments” means the deeds of assignment of the Assigned
Property in respect of each of the Vessels as referred to in Clause 8.1.4 (each
an “Assignment”).

	 	1.1.7	 	“Availability Termination Date” means 31 October 2012, or such
later date as is agreed by the Agent.

	 	1.1.8	 	“Available Credit Lines” means any undrawn committed revolving
credit lines, other than committed revolving credit lines with less than six
(6) months to maturity, available to be drawn by any member of the Guarantor
Group, as reflected in the Guarantor’s most recent quarterly management
accounts forming part of the Guarantor’s Accounts.

	 	1.1.9	 	“Authorisation” means an authorisation, consent, approval,
resolution, licence, exemption, filing, notarisation or registration.

	 	1.1.10	 	“Balloon Repayment Amount” means:

	 	(a)	 	in respect of each of Vessel A, Vessel B
and Vessel C, the amount of $8,300,000; and

	 	(b)	 	in respect of each of Vessel D and Vessel
E, the amount of $12,900,000.

	 	1.1.11	 	“Bareboat Registry” means, in respect of a Vessel, the bareboat registry
referred to in respect of that Vessel in Schedule 2.

 

2

 

	 	1.1.12	 	“Borrower Earnings Account” means the account numbered 00.247.575.234 and
designated “Teekay — 5 LPG Earnings Account” held in the name of the Borrowers
with the Security Trustee.

	 	1.1.13	 	“the Borrowers’ Obligations” means all of the liabilities and obligations of
the Borrowers to the Finance Parties under or pursuant to the Borrowers’
Security Documents, whether actual or contingent, present or future, and
whether incurred alone or jointly or jointly and severally with any other and
in whatever currency, including (without limitation) interest, commission and
all other charges and expenses.

	 	1.1.14	 	“the Borrowers’ Security Documents” means those of the Security Documents to
which any of the Borrowers is or is to be a party.

	 	1.1.15	 	“Break Costs” means all documented costs, losses, premiums or penalties
incurred by any of the Finance Parties in the circumstances contemplated by
Clause 15.4 or as a result of any of them receiving any prepayment of all or
any part of the Facility (whether pursuant to Clause 5.4, Clause 5.5, Clause
5.7 or otherwise) or any other payment under or in relation to the Security
Documents on a day other than the due date for payment of the sum in question,
and includes (without limitation) any losses or costs incurred in liquidating
or re-employing deposits from third parties acquired to effect or maintain the
Facilities, and any liabilities, expenses or losses incurred by any of the
Finance Parties in terminating or reversing, or otherwise in connection with,
any interest rate and/or currency swap, transaction or arrangement entered into
by any of the Finance Parties with any member of the Guarantor Group to hedge
any exposure arising under this Agreement, or in terminating or reversing, or
otherwise in connection with, any open position arising under this Agreement.

	 	1.1.16	 	“Business Day” means a day on which banks are open for the transaction of
business of the nature contemplated by this Agreement (and not authorised by
law to close) in New York City, United States of America; London, England;
Paris, France; Beijing, China and any other financial centre which the Agent
may reasonably consider appropriate for the operation of the provisions of this
Agreement.

	 	1.1.17	 	“Change of Control” means the occurrence of any of the following:

	 	(a)	 	prior to the Delivery Date in respect of
Vessel D and Vessel E respectively to its relevant Owner, Teekay
Corporation shall cease, for any reason whatsoever (save with the
prior written consent of the Agent, acting on the instructions of
the Lenders, pursuant to Clause 5.7 or otherwise), to own or control
directly or indirectly 100% of the shares or membership interests of
such Owner; or

	 	(b)	 	(i) on or from the Delivery Date in
respect of Vessel D and Vessel E respectively to its relevant Owner;
and

 

3

 

(ii) at any time in respect of the Owner of Vessel A, Vessel B
and Vessel C respectively,

the Guarantor shall cease, for any reason whatsoever (save with
the prior written consent of the Agent, acting on the
instructions of the Lenders, pursuant to clause 5.7 or
otherwise), to own or control directly or indirectly 100% of the
 shares or membership interests of such Owner; or

	 	(c)	 	Teekay Corporation ceases to hold,
directly or indirectly, fifty one per cent. (51%) of the voting
power in Teekay GP L.L.C., the general partner in the Guarantor; or

	 	(d)	 	Teekay GP L.L.C. ceases to be the general
partner in the Guarantor.

	 	1.1.18	 	“Charter Assignments” means the deeds of assignment of the Charters in
respect of each of the Vessels as referred to in clause 8.1.1 (each a “Charter
Assignment”).

	 	1.1.19	 	“Charterer” means I.M. Skaugen Marine Services Pte. Ltd., a company
incorporated in Singapore whose registered office is at 78 Shenton Way, Lippo
Centre, #17-03, Singapore 079120.

	 	1.1.20	 	“Charterer’s Assignment” means, in relation to a Vessel, an assignment by the
Charterer of its interest in the Insurances, Earnings and Requisition
Compensation of the Vessel as referred to in Clause 8.1.8.

	 	1.1.21	 	“Charterer’s Undertaking” means, in relation to a Vessel, a subordination
undertaking by the Charterer in favour of the Security Trustee referred to in
Clause 8.1.9.

	 	1.1.22	 	“Charterhire Amount” means:

	 	(a)	 	in respect of each of Vessel A, Vessel B
and Vessel C, $9,776 per day; and

	 	(b)	 	in respect of each of Vessel D and Vessel
E, such amount as shall be determined pursuant to and in accordance
with clause 11 of the relevant Charter.

	 	1.1.23	 	“Charters” means:

	 	(a)	 	in respect of each of Vessel A, Vessel B
and Vessel C, the bareboat charters dated 31 January 2008 as amended
by an addendum no.1 dated 2 October 2008; and

	 	(b)	 	in respect of each of Vessel D and Vessel
E, the bareboat charters dated 28 July 2008,

in each case entered into between the relevant Owner and the
Charterer (and “Charter” means any one of them).

 

4

 

	 	1.1.24	 	“Civil Law Security Documents” means the Account Charges or (where the
context permits) any one of them and any other agreement or document which may
at any time be designated as such by the Agent and the Borrowers.

	 	1.1.25	 	“Commitment” means, in relation to a Lender, the amount of the Loan which
that Lender agrees to advance to the Borrowers as its several liability as
indicated against the name of that Lender in Schedule 1 and/or, where the
context permits, the Facility Outstandings and “Commitments” means more than
one of them.

	 	1.1.26	 	“Commitment Commission” means the commitment commission to be paid by the
Borrowers to the Agent on behalf of the Lenders pursuant to Clause 7.1.2.

	 	1.1.27	 	“Common Law Security Documents” means this Agreement, the Charter
Assignments, the Assignments, the Share Pledges, the Mortgages, the Deeds of
Covenants, the Charterer’s Undertakings, the Charterer’s Assignments, the
Manager’s Undertakings, the Fee Letter or (where the context permits) any one
of them and any other agreement or document which may at any time be designated
as such by the Agent and the Borrowers.

	 	1.1.28	 	a “Communication” means any notice, approval, demand, request or other
communication from one party to this Agreement to any other party to this
Agreement.

	 	1.1.29	 	“the Communications Address” means c/o Teekay Shipping (Canada) Ltd, Suite
2000, Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C 2K2, fax no:
+1 604 681 3011 marked for the attention of Director, Finance.

	 	1.1.30	 	“Company” means at any given time the company responsible for a Vessel’s
compliance with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and or
(ii) the ISPS Code (as the case may be).

	 	1.1.31	 	“Compliance Certificate” means a certificate substantially in the form set
out in Schedule 7.

	 	1.1.32	 	“Compulsory Acquisition” in relation to a Vessel means requisition for title
or other compulsory acquisition, requisition, appropriation, expropriation,
deprivation, forfeiture or confiscation for any reason of that Vessel 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 for title.

	 	1.1.33	 	“Currency of Account” means, in relation to any payment to be made to a
Finance Party pursuant to any of the Security Documents or the Guarantee, the
currency in which that payment is required to be made by the terms of the
relevant Security Document or the Guarantee.

	 	1.1.34	 	“Deeds of Covenants” means the deeds of covenants referred to in Clause 8.1.3
(each a “Deed of Covenant”).

 

5

 

	 	1.1.35	 	“Default Rate” means the rate which is the aggregate of LIBOR, any Mandatory
Cost, the Margin and one point five per centum (1.5%) per annum.

	 	1.1.36	 	“Delivery Date”, in respect of each Vessel, means the date on which that
Vessel is actually delivered by the Seller to the relevant Owner pursuant to
the relevant Purchase Contract.

	 	1.1.37	 	“Disposal Repayment Date” means in relation to:

	 	(a)	 	a Total Loss of a Vessel, the applicable
Total Loss Repayment Date; and

	 	(b)	 	a sale of a Vessel by the relevant Owner,
the date upon which such sale is completed by the transfer of title
to the purchaser in exchange for payment of all or part of the
relevant purchase price.

	 	1.1.38	 	“Dollars”, “US$” and “$” each means available and freely transferable and
convertible funds in lawful currency of the United States of America.

	 	1.1.39	 	“Dollar Equivalent” means, on any day, an amount in any currency other than
Dollars converted into Dollars at the Spot Exchange Rate on that day;

	 	1.1.40	 	“Drawdown Date” means the date on which a Drawing is advanced.

	 	1.1.41	 	“Drawdown Notice” means a notice substantially in the form set out in the
relevant part of Schedule 5.

	 	1.1.42	 	“Drawing” means a part of the Facility advanced by the Lenders to the
Borrowers in accordance with Clause 2.

	 	1.1.43	 	“Earnings”, in relation to a Vessel, means all hires including (without
limitation) all time charter hire and bareboat charter hire, freights, pool
income and other sums payable to or for the account of the relevant Owner or
the Charterer (as the case may be) in respect of that Vessel including (without
limitation) all remuneration for salvage and towage services, demurrage and
detention moneys, contributions in general average, compensation in respect of
any requisition for hire and damages and other payments (whether awarded by any
court or arbitral tribunal or by agreement or otherwise) for breach,
termination or variation of any contract for the operation, employment or use
of that Vessel.

	 	1.1.44	 	“Encumbrance” means any mortgage, charge, pledge, lien, assignment,
hypothecation, preferential right, option, title retention or trust arrangement
or any other agreement or arrangement which, in any of the aforementioned
instances, has the effect of creating security.

	 	1.1.45	 	“Environmental Affiliate” means an agent or employee of an Owner or a person
in a contractual relationship with an Owner in respect of the

 

6

 

	 	 	 	Vessel owned by it (including without limitation, the operation of or the
carriage of cargo of such Vessel).

	 	1.1.46	 	“Environmental Approvals” means any present or future permit, licence,
approval, ruling, variance, exemption or other authorisation required under the
applicable Environmental Laws.

	 	1.1.47	 	“Environmental Claim” means any and all enforcement, clean-up, removal,
administrative, governmental, regulatory or judicial actions, orders, demands
or investigations instituted or completed pursuant to any Environmental Laws or
Environmental Approvals together with any claims made by any third person
relating to damage, contribution, loss or injury resulting from any
Environmental Incident.

	 	1.1.48	 	“Environmental Incident” means:

	 	(a)	 	any release of Environmentally Sensitive
Material from a Vessel; or

	 	(b)	 	any incident in which Environmentally
Sensitive Material is released from a vessel other than a Vessel and
which involves a collision between a Vessel and such other vessel or
some other incident of navigation or operation, in either case, in
connection with which the relevant Vessel is actually or potentially
liable to be arrested, attached, detained or injuncted and/or where
any guarantor, any manager (or any sub-manager of such Vessel) or
any of its officers, employees or other persons retained or
instructed by it (or such sub-manager) are at fault or allegedly 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
such Vessel and in connection with which that Vessel is actually or
potentially liable to be arrested and/or where any guarantor, any
manager (or any sub-manager of the relevant Vessel) or any of its
officers, employees or other persons retained or instructed by it
(or such sub-manager) are at fault or allegedly at fault or
otherwise liable to any legal or administrative action.

	 	1.1.49	 	“Environmental Laws” means all present and future laws, regulations, treaties
and conventions of any applicable jurisdiction which:

	 	(a)	 	have as a purpose or effect the protection
of, and/or prevention of harm or damage to, the environment;

	 	(b)	 	relate to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;

	 	(c)	 	provide remedies or compensation for harm
or damage to the environment; or

 

7

 

	 	(d)	 	relate to Environmentally Sensitive
Materials or health or safety matters.

	 	1.1.50	 	“Environmentally Sensitive Material” means (i) oil and oil products and (ii)
any other waste, pollutant, contaminant or other substance (including any
liquid, solid, gas, ion, living organism or noise) that may be harmful to human
health or other life or the environment or a nuisance to any person or that may
make the enjoyment, ownership or other territorial control of any affected
land, property or waters more costly for such person to a material degree.

	 	1.1.51	 	“Equity” means the aggregate of the amount paid up on the issued share
capital of any relevant entity and the amount standing to the credit of its
capital and revenue reserves (including any share premium account or capital
redemption reserve but excluding any revaluation reserve,) plus or minus the
amount standing to the credit or debit (as the case may be) of its profit and
loss account.

	 	1.1.52	 	“Event of Default” means any of the events set out in Clause 10.2.

	 	1.1.53	 	“Execution Date” means the date on which this Agreement is executed by each
of the parties hereto.

	 	1.1.54	 	“Facility” means the credit facility made available by the Lenders to the
Borrowers pursuant to this Agreement and more particularly described in clause
2.1.

	 	1.1.55	 	“the Facility Outstandings” at any time means the total of all Drawings made
at that time, to the extent not reduced by repayments, prepayments and
voluntary reductions.

	 	1.1.56	 	“the Facility Period” means the period beginning on the Execution Date and
ending on the date when the whole of the Facility Outstandings and all other
amounts due and owing under this Agreement have been repaid in full and the
Borrowers have ceased to be under any further actual or contingent liability to
the Finance Parties under or in connection with the Security Documents.

	 	1.1.57	 	“Fee Letter” means the letter dated on or about the date hereof between the
Borrowers and the Agent setting out any of the fees referred to in Clause 7
other than Commitment Commission or the Participation Fee.

	 	1.1.58	 	“Final Delivery Date” means the later of the Delivery Date in respect of
Vessel A, the Delivery Date in respect of Vessel B, the Delivery Date in
respect of Vessel C, the Delivery Date in respect of Vessel D and the Delivery
Date in respect of Vessel E.

	 	1.1.59	 	“the Finance Parties” means the Lenders, the Security Trustee, the Arranger
and the Agent.

	 	1.1.60	 	“Free Liquidity”, in relation to the Guarantor, has the meaning given to that
term in the Guarantee.

 

8

 

	 	1.1.61	 	“GAAP” means the generally accepted accounting principles in the United
States of America.

	 	1.1.62	 	“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 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.

	 	1.1.63	 	“Guarantee” has the meaning ascribed to it in Recital (E).

	 	1.1.64	 	“Guarantor” means Teekay LNG Partners, L.P., a limited partnership formed
under the laws of the Marshall Islands and with its registered office at c/o
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH96960.

	 	1.1.65	 	“Guarantor Group” means the Guarantor and any company which is a Subsidiary
of the Guarantor from time to time (including, for the avoidance of doubt, the
Shareholder).

	 	1.1.66	 	“Guarantor’s Accounts” means the consolidated financial accounts of the
Guarantor to be provided to the Agent pursuant to clause 5.1 of the Guarantee.

	 	1.1.67	 	“Holding Company” means, in relation to any entity, any other entity in
respect of which it is a Subsidiary.

	 	1.1.68	 	“the Indebtedness” means all Liabilities now or hereafter due, owing or
incurred by any Security Party to the Lenders or any of them (or any Finance
Party) under or in connection with the Security Documents.

	 	1.1.69	 	“Insurance Amount” means one hundred and ten per centum (110%) of the
aggregate from time to time of the Facility Outstandings.

	 	1.1.70	 	“Insurances”, in relation to a Vessel, means all policies and contracts of
insurance (including but not limited to hull and machinery, all entries in
protection and indemnity or war risks associations) which are from time to time
taken out or entered into in respect of or in connection with that Vessel or
her increased value and (where the context permits) all benefits thereof,
including all claims of any nature and returns of premium.

	 	1.1.71	 	“Interest Payment Date” means each date for the payment of interest in
accordance with Clause 6.

	 	1.1.72	 	“Interest Period” means each interest period selected by the Borrowers or
agreed by the Lenders pursuant to Clause 6.

	 	1.1.73	 	“the ISM Code” means the International Management Code for the Safe Operation
of Ships and for Pollution Prevention.

 

9

 

	 	1.1.74	 	“ISSC” means a valid international ship security certificate for a Vessel
issued under the ISPS Code.

	 	1.1.75	 	“the ISPS Code” means the International Ships and Port Security Code as
adopted by the Conference of Contracting Governments to the Safety of Life at
Sea Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the
Safety of Life at Sea Convention 1974.

	 	1.1.76	 	“law” or “Law” means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other legislative or
quasi-legislative rule or measure, or any order or decree of any government,
judicial or public or other body or authority, or any directive, code of
practice, circular, guidance note or other direction issued by any competent
authority or agency (whether or not having the force of law).

	 	1.1.77	 	“Lenders” means the Original Lenders and any bank, financial institution,
trust, fund or other entity which has become a party to this agreement as a
Lender in accordance with clause 12 (Assignment and sub-Participation) (each a
“Lender”).

	 	1.1.78	 	“Liabilities” means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent.

	 	1.1.79	 	“LIBOR” means the rate, rounded to the nearest four decimal places downwards
(if the digit displayed in the fifth decimal place is 1,2,3 or 4) or upwards
(if the digit displayed in the fifth decimal place is 5,6,7,8 or 9) displayed
on Reuters page LIBOR 01 (or such other page or pages which replace(s) such
page for the purposes of displaying offered rates of leading banks, for
deposits in Dollars of amounts equal to the amount of the relevant Drawing for
a period equal in length to the relevant Interest Period or if there is no such
display rate then available for Dollars for an amount comparable to the
Drawing, the arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple of one-sixteenth per centum (1/16%)) of the respective rates
notified to the Agent by each of the Reference Banks as the rate at which it is
offered deposits in Dollars and for the required period by prime banks in the
London Interbank Market.

	 	1.1.80	 	“Loan” means the aggregate amount advanced or to be advanced by the Lenders
to the Borrowers under Clause 2 or, where the context permits, the amount
advanced and for the time being outstanding.

	 	1.1.81	 	“Majority Lenders” means a Lender or Lenders whose Commitments in respect of
the Loan aggregate more than sixty six and two thirds per cent (66 2/3%) of the
aggregate of all the Commitments in respect of the Loan.

	 	1.1.82	 	“Manager” means either Teekay Corporation, the Guarantor or the Charterer, or
another management company which is controlled by Teekay Corporation, the
Guarantor or the Charterer, or such other company as may be nominated by the
Borrowers and approved by the Agent.

 

10

 

	 	1.1.83	 	“Manager’s Undertaking” means, in relation to a Vessel, an undertaking by any
Manager of the Vessel to the Security Trustee referred to in clause 8.1.6.

	 	1.1.84	 	“Mandatory Cost” means for each Lender to which it applies, the cost imputed
to that Lender of compliance with the mandatory liquid asset requirements of
the Bank of England and/or the banking supervision or other costs imposed by
the Financial Services Authority, determined in accordance with Schedule 6
(Calculation of the Mandatory Cost).

	 	1.1.85	 	“Margin” means two point seven five per cent. (2.75%) per annum.

	 	1.1.86	 	“Master” means the master of a Vessel from time to time.

	 	1.1.87	 	“Material Adverse Effect” means a material adverse change in, or a material
adverse effect on:

	 	(a)	 	the financial condition, assets,
prospects or business of any Security Party or on the consolidated
financial condition, assets, prospects or business of the Guarantor
Group;

	 	(b)	 	the ability of any Security Party to
perform and comply with its obligations under any Security Document
or the Guarantee to which it is a party or to avoid any Event of
Default;

	 	(c)	 	the validity, legality or enforceability
of any Security Document or the Guarantee; or

	 	(d)	 	the validity, legality or enforceability
of any security expressed to be created pursuant to any Security
Document or the priority and ranking of any such security,

provided that, in determining whether any of the forgoing
circumstances shall constitute such a material adverse change or material
adverse effect for the purposes of this definition, the Finance Parties
shall consider such circumstance in the context of (x) the Guarantor Group
taken as a whole and (y) the ability of each of the Security Parties to
perform each of its obligations under the Security Documents or the
Guarantee.

	 	1.1.88	 	“Material Subsidiary” means:

	 	(a)	 	the Borrowers;

	 	(b)	 	any other Subsidiary of the Guarantor
whose assets, as determined in accordance with GAAP and as shown
from the most recent financial statements available to the Agent
relating to it, as multiplied by the Relevant Percentage in respect
of such Subsidiary, equal or exceed 10% of the aggregate value of
the assets of the Guarantor as determined in accordance with GAAP
and as shown from the most recently available financial statements
of the Guarantor Group, provided that:

 

11

 

	 	(i)	 	in respect of any Subsidiary of
the Guarantor, only the value of its assets as multiplied by
the Relevant Percentage in respect of such Subsidiary shall be
taken into account in the computation of the value of the
assets of the Guarantor Group; and

	 	(ii)	 	a statement by the auditors of
the Guarantor to the effect that, in their opinion, a
Subsidiary of the Guarantor is or is not or was or was not at
any particular time a Material Subsidiary shall, in the absence
of manifest error, be conclusive and binding on each of the
parties to this Agreement.

	 	1.1.89	 	“Maturity Date” in respect of a Vessel Tranche means the date falling seven
(7) years after the Drawdown Date in respect of the relevant Vessel Tranche.

	 	1.1.90	 	“Maximum Amount” means one hundred and twenty two million Dollars
($122,000,000).

	 	1.1.91	 	“Minimum Value” means:

	 	(a)	 	on the Minimum Value Test Start Date and
the first anniversary thereof, the amount in Dollars which is 105%
of the Loan;

	 	(b)	 	on the second and third anniversary of
the Minimum Value Test Start Date, the amount in Dollars which is
110% of the Loan; and

	 	(c)	 	thereafter, on each Minimum Value Test
Date the amount in Dollars which is 115% of the Loan,

and, in each case, in relation to any Mortgaged Vessel which has
become a Total Loss but whose Disposal Repayment Date has not then
occurred, minus such proportion of the Loan as the market value of such
Mortgaged Vessel determined in accordance with clause 9.5 (Minimum
security value) bore to the aggregate market value of all the Mortgaged
Vessel (including the relevant Vessel) immediately before its Total Loss.

	 	1.1.92	 	“Minimum Value Test Date” means the Minimum Value Test Start Date and
thereafter each date on which the audited consolidated annual accounts of the
Guarantor are delivered to the Agent under clause 5.1 of the Guarantee.

	 	1.1.93	 	“Minimum Value Test Start Date” means the earlier of (a) the first
anniversary of the Final Delivery Date and (b) 1 December 2010.

	 	1.1.94	 	“Mortgaged Vessel” mean, at any relevant time, any Vessel which is subject to
a Mortgage and/or whose Earnings, Insurances and Requisition Compensation are
subject to a security interest under the Security Documents.

 

12

 

	 	1.1.95	 	“Mortgage Period” means, in relation to a Mortgaged Vessel, the period from
the date the Mortgage over that Vessel is executed and registered until the
date such Mortgage is released and discharged or its Total Loss Date.

	 	1.1.96	 	“Mortgages” means together (i) the first priority statutory ship mortgages
together in each case with a deed of covenants collateral thereto or (ii) the
first preferred ship mortgages (as applicable by reference to the relevant
Primary Registry) over each of the Vessels made or to be made between the
relevant Owners and the Security Trustee referred to in Clause 8.1.3 (each a
“Mortgage”).

	 	1.1.97	 	“Necessary Authorisations” means all Authorisations of any person including
any government or other regulatory authority required by applicable Law to
enable a party to:

	 	(a)	 	lawfully enter into and perform its
obligations under the Security Documents or the Guarantee to which
it is party;

	 	(b)	 	ensure the legality, validity,
enforceability or admissibility in evidence in England and, if
different, its jurisdiction of incorporation, of such Security
Documents or Guarantee to which it is party; and

	 	(c)	 	carry on its business from time to time.

	 	1.1.98	 	“Net Debt” has the meaning given to that term in the Guarantee.

	 	1.1.99	 	“Net Debt to Net Debt Plus Equity” has the meaning given to that term in the
Guarantee.

	 	1.1.100	 	“Obligatory Insurances” means in respect of each Vessel the insurances and
entries referred to in clause 9.3.1 and, where applicable, those referred to in
clauses 9.3.2, 9.3.5 and/or 9.4.17(d).

	 	1.1.101	 	“Owner” means in respect of a Vessel the Borrower whose name appears beside
that Vessel in Schedule 2.

	 	1.1.102	 	“Participation Fee” means the participation fee to be paid by the Borrower
to the Agent on behalf of the Lenders pursuant to clause 7.1.4.

	 	1.1.103	 	“Permitted Liens” means:

	 	(a)	 	security interests created by the
Security Documents;

	 	(b)	 	liens for unpaid crew’s wages;

	 	(c)	 	liens for salvage;

	 	(d)	 	liens arising by operation of law for not
more than 2 months’ prepaid hire under any charter in relation to
the Vessel not prohibited by the Relevant Documents;

 

13

 

	 	(e)	 	liens for Master’s disbursements incurred
in the ordinary course of trading;

	 	(f)	 	other liens arising by operation of law
or otherwise in the ordinary course of the operation, repair or
maintenance of a Vessel and which secure amounts not exceeding five
million Dollars ($5,000,000) per Vessel where (to the extent such
amounts are overdue) the Owner or the Charterer of a Vessel is
contesting the claim giving rise to such lien in good faith by
appropriate steps and for the payment of which adequate reserves
have been made in case the relevant Owner or the Charterer finally
has to pay such claim so long as any such proceedings shall not, and
may reasonably be considered unlikely to lead to the arrest, sale,
forfeiture or loss of the relevant Vessel, or any interest in the
relevant Vessel;

	 	(g)	 	any security interest created in favour
of a claimant or defendant in any action of the court or tribunal
before whom such action is brought as security for costs and
expenses where the Owner or the Charterer of a Vessel is prosecuting
or defending such action in good faith by appropriate steps or which
are subject to a pending appeal and for which there shall have been
granted a stay of execution pending such appeal and for the payment
of which adequate reserves have been made so long as any such
proceedings or the continued existence of such security interest
shall not and may reasonably be considered unlikely to lead to the
arrest, sale, forfeiture or loss of, the relevant Vessel or any
interest in the relevant Vessel; and

	 	(h)	 	security interests arising by operation
of law in respect of taxes which are not overdue for payment or
taxes which are overdue for payment but which are being contested in
good faith by appropriate steps and in respect of which appropriate
reserves have been made so long as any such proceedings or the
continued existence of such security interest shall not and may
reasonably be considered unlikely to lead to the arrest, sale,
forfeiture or loss of a Vessel, or any interest in a Vessel.

	 	1.1.104	 	“Potential Event of Default” means any event which, with the giving of
notice and/or the passage of time and/or the satisfaction of any materiality
test, would constitute an Event of Default.

	 	1.1.105	 	“Pre-Approved Classification Society” means any of Det norske Veritas,
Lloyds Register, American Bureau of Shipping (ABS), Germanischer Lloyd or
Bureau Veritas.

	 	1.1.106	 	“Pre-Approved Flag” means Singapore, Marshall Islands, Liberia, Panama,
Cayman Islands, Bermuda, Norwegian International Ship Registry or Bahamas.

	 	1.1.107	 	“Primary Registry” means, in respect of a Vessel, the port of registry
referred to in respect of that Vessel in Schedule 2.

 

14

 

	 	1.1.108	 	“Proceedings” means any suit, action or proceedings begun by any of the
Finance Parties arising out of or in connection with the Security Documents or
the Guarantee.

	 	1.1.109	 	“Proportionate Share” in respect of the Loan means, for each Lender, the
percentage that its Commitment relating to the Loan bears to the aggregate
Commitments of all Lenders for the Loan from time to time, being initially the
percentage indicated against the name of that Lender in Schedule 1;

	 	1.1.110	 	“Purchase Contracts” means:

	 	(a)	 	in respect of each of Vessel A, Vessel B
and Vessel C, the memorandum of agreement dated 6 December 2006 as
amended by and agreement dated 31 January 2008, an addendum no.1
dated 2 October 2008 and an addendum no.2 dated 12 March 2009; and

	 	(b)	 	in respect of each of Vessel D and Vessel
E, the acquisition agreement dated 28 July 2008,

in each case entered into between the relevant Owner and the Seller
relating to the sale and purchase of the relevant Vessel (and “Purchase
Contract” means any one of them).

	 	1.1.111	 	“Purchase Price” means the amount payable for a Vessel as set out in the
relevant Purchase Contract.

	 	1.1.112	 	“Qualifying Lender” means a Lender which is entitled to receive interest
payable to that Lender in respect of an advance under a Security Document free
and clear of any deductions or withholdings for or on account of Tax.

	 	1.1.113	 	“Receiver” means any receiver or receivers or manager appointed by the
Security Trustee in accordance with any Security Document or the Guarantee.

	 	1.1.114	 	“Reference Banks” means, in relation to LIBOR, the principal London offices
of Calyon and such other banks as may be appointed by the Agent in consultation
with the Borrowers.

	 	1.1.115	 	“Relevant Documents” means the Security Documents, the Guarantee and the
Charters.

	 	1.1.116	 	“Relevant Percentage” means, in respect of any Subsidiary of the Guarantor
at any time, the percentage of the equity share capital or the partnership
capital, as the case may be, of such Subsidiary which is beneficially owned
(free from Encumbrances) by the Guarantor at such time.

	 	1.1.117	 	“Repayment Date” means any date for payment of a Repayment Instalment in
accordance with Clause 5.

 

15

 

	 	1.1.118	 	“Repayment Instalment” means any instalment of a Loan to be repaid by the
Borrowers in accordance with Clause 5.

	 	1.1.119	 	“Requisition Compensation”, in relation to a Vessel, means all compensation
or other money which may from time to time be payable to the relevant Owner or
the Charterer (as the case may be) as a result of that Vessel being
requisitioned for title or in any other way compulsorily acquired (other than
by way of requisition for hire).

	 	1.1.120	 	“the Security Documents” means the Common Law Security Documents and the
Civil Law Security Documents or (where the context permits) any one or more of
them, and any other agreement or document which may at any time be executed as
security for the payment of all or any part of the Indebtedness.

	 	1.1.121	 	“Security Parties” means, at any relevant time, the Borrowers, the
Guarantor, the Shareholder and any other party (other than the Charterer, and
any Manager who is not a member of the Guarantor Group) who may (with the prior
written consent of the Borrowers) at any time during the Facility Period be
liable for, or provide security for, all or any part of the Indebtedness, and
“Security Party” means any one of them.

	 	1.1.122	 	“Security Trustee” means Calyon in its capacity as security trustee for the
purposes of the Common Law Security Documents and as security holder for the
purposes of the Civil Law Security Documents.

	 	1.1.123	 	“Security Value” means, at any time, the amount in Dollars which, at that
time, is the aggregate of (a) the value of all of the Mortgaged Vessels which
have not then become a Total Loss (or, if less, the maximum amount capable of
being secured by the Mortgages of such Vessels) and (b) the value of any
additional security then held by the Security Trustee provided under clause 9.5
(Minimum security value).

	 	1.1.124	 	“Seller” means I.M. Skaugen Marine Services Pte. Ltd., a company
incorporated in Singapore whose registered office is at 78 Shenton Way, Lippo
Centre, #17-03, Singapore 079120.

	 	1.1.125	 	“Shareholder” means Teekay LNG Operating L.L.C., a limited liability company
formed and existing under the laws of the Marshall Islands whose registered
office is at c/o Trust Company Complex, Ajeltake Island, Ajeltake Road,
Marshall Islands MH96960 and who shall be the registered holder of all of the
membership interests in each Borrower on and from the date on which such
Borrower takes delivery of the Vessel in respect of which it shall be the
owner.

	 	1.1.126	 	“Share Pledges” means the share pledges in respect of the membership
interests in each Borrower as referred to in clause 8.1.7.

	 	1.1.127	 	“Spot Exchange Rate” means on any day in relation to any currency other than
Dollars, the rate determined by the Agent as the rate quoted by Calyon at which
the Agent is able to purchase that currency with Dollars in London at or about
11.00 a.m. two (2) Business Days prior to

 

16

 

such day for delivery on such day and the Agent’s determination of any
such rate shall be conclusive and binding on the Borrowers for all
purposes.

	 	1.1.128	 	“Subsidiary” means a subsidiary undertaking, as defined in section 1159
Companies Act 2006 or any analogous definition under any other relevant system
of law.

	 	1.1.129	 	“Tangible Net Worth” has the meaning given to that term in the Guarantee.

	 	1.1.130	 	“Taxes” means all taxes, levies, imposts, duties, charges, fees, deductions
and withholdings (including any related interest and penalties) and any
restrictions or conditions resulting in any charge, other than taxes on the
overall net income of a Finance Party or branch thereof, and “Tax” and
“Taxation” shall be interpreted accordingly.

	 	1.1.131	 	“Teekay Group” means Teekay Corporation and any company which is a
Subsidiary of Teekay Corporation from time to time

	 	1.1.132	 	“Threshold Amount” means five million Dollars ($5,000,000) or its equivalent
in any other currency.

	 	1.1.133	 	“Total Loss”, in relation to a Vessel, means:-

	 	(a)	 	an actual, constructive, compromised,
agreed or arranged total loss of that Vessel; or

	 	(b)	 	the Compulsory Acquisition of that Vessel;
or

	 	(c)	 	the hijacking, theft, condemnation,
capture, seizure, arrest, detention or confiscation of that Vessel
(other than where the same amounts to the Compulsory Acquisition of
that Vessel) by any Government Entity, or by persons acting or
purporting to act on behalf of any Government Entity, unless the
Vessel is released and restored to its Owner from such hijacking,
theft, condemnation, capture, seizure, arrest, detention or
confiscation within ninety (90) days after the occurrence thereof.

	 	1.1.134	 	“Total Loss Date” means, in relation to the Total Loss of a Vessel:

	 	(a)	 	in the case of an actual total loss, the
date it happened or, if such date is not known, the date on which the
Vessel was last reported;

	 	(b)	 	in the case of a constructive, compromised,
agreed or arranged total loss, the earliest of:

	 	(i)	 	the date notice of
abandonment of the Vessel is given to its insurers; or

 

17

 

	 	(ii)	 	if the insurers do not
admit such a claim, the date later determined by a
competent court of law to have been the date on which the
total loss happened; or

	 	(iii)	 	the date upon which a
binding agreement as to such compromised or arranged total
loss has been entered into by the Vessel’s insurers;

	 	(c)	 	in the case of a requisition for title,
confiscation or compulsory acquisition, the date it happened; and

	 	(d)	 	in the case of hijacking, theft,
condemnation, capture, seizure, arrest or detention, the date 90
days after the date upon which it happened.

	 	1.1.135	 	“Total Loss Repayment Date” means where a Mortgaged Vessel has become a
Total Loss the earlier of:

	 	(a)	 	the date 180 days after its Total Loss
Date; and

	 	(b)	 	the date upon which insurance proceeds or
Requisition Compensation for such Total Loss are paid by insurers or
the relevant Government Entity.

	 	1.1.136	 	“Transfer Certificate” means a certificate materially in the form set forth
in Schedule 4 signed by a Lender and a Transferee whereby:-

	 	(a)	 	such Lender seeks to procure the transfer
to such Transferee of all or a part of such Lender’s rights and
obligations under this Agreement upon and subject to the terms and
conditions set out in Clause 12; and

	 	(b)	 	such Transferee undertakes to perform the
obligations it will assume as a result of delivery of such
certificate to the Agent as is contemplated in Clause 12.

	 	1.1.137	 	“Transfer Date” means, in relation to any Transfer Certificate, the date for
the making of the transfer specified in the schedule to such Transfer
Certificate.

	 	1.1.138	 	“Transferee” means a bank or other financial institution to which a Lender
seeks to transfer all or part of such Lender’s rights and obligations under
this Agreement.

 

18

 

	 	1.1.139	 	“the Trust Property” means (i) the security, powers, rights, titles,
benefits and interests (both present and future) constituted by and conferred
on the Security Trustee or any of the other Finance Parties under or pursuant
to the Security Documents and any notices or acknowledgements or undertakings
given in connection with any of the Security Documents (including, without
limitation, the benefit of all covenants, undertakings, representations,
warranties and obligations given, made or undertaken to any Finance Party in
the Security Documents and any notices or acknowledgements or undertakings
given in connection with any of the Security Documents), (ii) the proceeds of
any claims made under policies of insurance taken out by the Security Trustee
on behalf of the other Finance Parties in respect of the Vessels or any of
them, (iii) all moneys, property and other assets payable, paid or transferred
to or vested in the Security Trustee or any other Finance Party or any Receiver
or receivable, received or recovered by the Security Trustee or any other
Finance Party or any Receiver pursuant to, or in connection with, any of the
Security Documents and any notices or acknowledgements or undertakings given in
connection with any of the Security Documents whether from any Finance Party or
any other person and (iv) all moneys, investments, property and other assets at
any time representing or deriving from any of the foregoing, including all
interest, income and other sums at any time received or receivable by the
Security Trustee or any other Finance Party or any Receiver in respect of the
same (or any part thereof);

	 	1.1.140	 	“Valuation” means in relation to a Vessel, the written valuation of that
Vessel expressed in Dollars prepared by one of the Approved Brokers (or such
other firms of reputable independent shipbrokers as may be acceptable to the
Agent), to be nominated by the Borrowers. Such valuations shall be prepared at
the Borrowers’ expense, without a physical inspection, on the basis of a sale
for prompt delivery for cash at arm’s length between a willing buyer and a
willing seller without the benefit of any charterparty or other engagement.

	 	1.1.141	 	“Value Added Tax” means value added tax as provided for in the Value Added
Tax Act 1994 and any other tax of a similar nature.

	 	1.1.142	 	“Vessels” means the vessels listed in Schedule 2 as “Vessel A”, “Vessel B”,
“Vessel C”, “Vessel D” and “Vessel E”, and everything now or in the future
belonging to them on board and ashore (each a “Vessel)”.

	 	1.1.143	 	“Vessel Tranche” in respect of each Vessel means that portion of the Loan to
be lent to the relevant Borrower in respect of that Vessel which shall at no
time exceed the relevant Vessel Tranche Maximum Amount.

	 	1.1.144	 	“Vessel Tranche Maximum Amount” means, as at the date of this Agreement, in
respect of each Vessel, the lower of:

	 	(a)	 	sixty per cent. (60%) of its Purchase
Price; and

	 	(b)	 	(i) in respect of each of Vessel A,
Vessel B and Vessel C, $20,000,000; and

 

19

 

	 	(ii)	 	in respect of each of
Vessel D and Vessel E, $31,000,000.

	 	1.2	 	Interpretation

In this Agreement:-

	 	1.2.1	 	words denoting the plural number include the singular and vice versa;

	 	1.2.2	 	words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice versa;

	 	1.2.3	 	references to Recitals, Clauses, Schedules and Appendices are
references to recitals and clauses of, and schedules and appendices to, this
Agreement;

	 	1.2.4	 	references to this Agreement include the Recitals, the
Schedules and the Appendices;

	 	1.2.5	 	the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be ignored in
the interpretation of this Agreement;

	 	1.2.6	 	references to any document (including, without limitation, to
all or any of the Security Documents or the Guarantee) are, unless the context
otherwise requires, references to that document as amended, supplemented,
novated or replaced from time to time;

	 	1.2.7	 	references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted;

	 	1.2.8	 	references to any of the Finance Parties include its
successors, transferees and assignees;

	 	1.2.9	 	in the case of the Borrowers, references to company,
incorporation, shares, officers, directors and shareholders shall be construed
as references to a limited liability company, formation, limited liability
company interests and members/membership, respectively; and

	 	1.2.10	 	references to times of day are unless otherwise stated to London time.

	 	1.3	 	Joint and several liability

	 	1.3.1	 	All obligations, covenants, representations, warranties and
undertakings in or pursuant to the Security Documents assumed, given, made or
entered into by the Borrowers shall, unless otherwise expressly provided, be
assumed, given, made or entered into by the Borrowers jointly and severally.

	 	1.3.2	 	Each of the Borrowers agrees that any rights which it may have
at any time during the Facility Period by reason of the performance of its
obligations under the Security Documents to be indemnified by any other
Borrower

 

20

 

	 	 	 	and/or to take the benefit of any security taken by the Lenders or by the
Agent pursuant to the Security Documents shall be exercised only in
accordance with this Agreement. Each of the Borrowers agrees to hold any
sums received by it as a result of its having exercised any such right on
trust for the Agent (as agent for the Lenders) absolutely.

	 	1.3.3	 	Each of the Borrowers agrees that it will not at any time
during the Facility Period claim any set-off or counterclaim against any other
Borrower in respect of any liability owed to it by that other Borrower under or
in connection with the Security Documents, nor prove in competition with the
Finance Parties in any liquidation of (or analogous proceeding in respect of)
the other Borrower in respect of any payment made under the Security Documents
or in respect of any sum which includes the proceeds of realisation of any
security held by the Lenders or the Agent for the repayment of the
Indebtedness.

	2	 	The Facility and its Purpose

	 	2.1	 	Agreement to lend Subject to the terms and conditions of this Agreement, and
in reliance on each of the representations and warranties made or to be made in or in
accordance with each of the Security Documents and the Guarantee, each of the Lenders
agrees to advance to the Borrowers its Commitment of an aggregate principal amount not
exceeding the Maximum Amount to be used by the Borrowers for the purposes referred to
in Recital (B), with the relevant Vessel Tranche Maximum Amount being the maximum
amount that may be drawn down under the Loan for each Vessel.

	 	2.2	 	Drawdown Request The Borrowers may request a Drawing to be advanced in one
amount on any Business Day prior to the Availability Termination Date by delivering to
the Agent a duly completed Drawdown Notice not more than ten (10) and not fewer than
five (5) Business Days before the proposed Drawdown Date. Only one Drawing may be
made in respect of each Vessel.

	 	2.3	 	Lenders’ participation Subject to Clauses 2 and 3, the Agent shall promptly
notify each Lender of the receipt of a Drawdown Notice and not less than three (3)
Business Days before the proposed Drawdown Date, following which each Lender shall
advance its Proportionate Share of the relevant Drawing to the Borrowers through the
Agent on the relevant Drawdown Date. Any notice from the Agent to a Lender pursuant to
this clause 2.3 shall contain a confirmation by the Agent to each Lender that either
(a) all conditions precedent to the making of the relevant Drawing pursuant to clause 3
of this Agreement have been satisfied in full or (b) the Agent shall not release the
amount of the relevant Drawing to the relevant Borrower until all such conditions
precedent have been satisfied or waived to the satisfaction of all Lenders.

	 	2.4	 	Availability Termination Date No Lender shall be under any obligation to
advance all or any part of its Commitment after the Availability Termination Date.

2.5 Several obligations

	 	(a)	 	The obligations of each Finance Party under this Agreement are
several. No Finance Party is responsible for the obligations of any other
Finance

 

21

 

Party. Even if one or more Finance Parties fails to perform its
obligations, the other Finance Parties will continue to perform their
obligations and will be able to enforce their rights in respect of the other
parties to this Agreement.

	 	(b)	 	The obligations of the Borrowers under this Agreement are as follows:

	 	(i)	 	the Borrowers will pay to the Security Trustee,
when they are due for payment, the full amount of the Loan and all
other amounts (including interest, commission and expenses) payable by
the Borrowers under the Security Documents;

	 	(ii)	 	the Borrowers will pay to each Lender, when
they are due for payment, that proportion of the Loan which was lent by
that Lender and all interest, commission and other amounts payable in
relation to it;

	 	(iii)	 	the Borrowers will pay to the Agent, when they
are due for payment, all amounts owing to it under the Security
Documents;

	 	(iv)	 	the obligations of the Borrowers to (on the one
hand) the Security Trustee and (on the other) each other Finance Party
are several;

	 	(v)	 	payment either to the Security Trustee or to
another Finance Party of an amount which is due to both of them will
reduce both of those liabilities by that amount; and

	 	(vi)	 	if an amount would otherwise be payable under
this clause 2.5 to the same person in two different capacities, the
Borrowers will only have an obligation to pay that amount once.

	 	(c)	 	Each Finance Party can enforce its rights without joining the
Security Trustee or any other Finance Parties. However, the security documents
listed in Clause 8.1 below (excluding clause 8.1.2 ) can only be enforced by
the Security Trustee.

	 	2.6	 	Application of Facility Without prejudice to the obligations of the Borrowers
under this Agreement, no Finance Party shall be obliged to concern itself with the
application of the Facility by the Borrowers.

	 	2.7	 	Loan facility and control accounts The Agent will open and maintain such loan
facility account or such other control accounts as the Agent shall in its discretion
consider necessary or desirable in connection with the Facility.

	3	 	Conditions precedent and subsequent for the Loans

	 	3.1	 	Conditions precedent Before any Lender shall have any obligation to advance
any Drawing under the Loan the Borrowers shall deliver or cause to be delivered to or
to the order of the Agent all of the documents and other evidence listed in Part I of
Schedule 3. In addition, as a condition precedent to the advancing of each Drawing
under the Loan, the Borrowers shall deliver or cause to be delivered to or to the order
of the Agent all of the documents and other evidence listed in Part II of Schedule 3,
save that references to “the Vessel” or to any

 

22

 

	 	 	 	person or document relating to a Vessel shall be deemed to relate solely to the
Vessel specified in the relevant Drawdown Notice or to any person or document
relating to that Vessel respectively.

	 	3.2	 	Further conditions precedent The Lenders will only be obliged to advance a
Drawing if on the date of the Drawdown Notice and on the proposed Drawdown Date:

	 	3.2.1	 	no Event of Default or Potential Event of Default is
continuing unremedied or unwaived or would result from the advance of that
Drawing; and

	 	3.2.2	 	the representations made by the Borrowers under Clause 4 are
true in all material respects.

	 	3.3	 	Drawing limit The Lenders will only be obliged to advance a Drawing if:

	 	3.3.1	 	that Drawing will not exceed the relevant Vessel Tranche
Maximum Amount, and will not increase the outstanding amount of the Loan to a
sum in excess of the Maximum Amount;

	 	3.3.2	 	in respect of Vessel A and (if the Delivery Date in respect of
Vessel B has occurred prior to the proposed Drawdown Date in respect of that
Vessel) Vessel B, the Drawing will be applied in reimbursement to the relevant
Owner or to any other account designated by the Owner and acceptable to the
Majority Lenders of part of the Purchase Price previously paid by it or on its
behalf to the Seller pursuant to the relevant Purchase Contract; and

	 	3.3.3	 	in respect of Vessel B (if the Delivery Date in respect of
Vessel B has not occurred prior to the proposed Drawdown Date in respect of
that Vessel), Vessel C, Vessel D and Vessel E the proposed Drawdown Date of the
relevant Drawing:

	 	(a)	 	coincides with the due date for payment by a
Borrower of the Purchase Price of a Vessel under a Purchase Contract
and that Drawing will be applied in payment of the Purchase Price; or

	 	(b)	 	falls within three months of the payment of the
Purchase Price of a Vessel under a Purchase Contract (which payment
shall be evidenced in a manner satisfactory to the Agent) and that
Drawing will be applied in reimbursement to the Borrower or to any
other account designated by the Borrower and acceptable to the Majority
Lenders of part of that Purchase Price paid by the Borrower or on the
Borrower’s behalf in respect of the relevant Vessel.

	 	(c)	 	Conditions subsequent The Borrowers undertake to deliver or to cause to be
delivered to the Agent on, or as soon as practicable after, the relevant Drawdown Date
the additional documents and other evidence listed in Part III of Schedule 3, save that
references to “the Vessel” or to any person or document relating to a Vessel shall be
deemed to relate solely to the Vessel specified in the relevant Drawdown Notice or to
any person or document relating to that Vessel respectively.

 

23

 

	 	(d)	 	No Waiver If the Lenders in their sole discretion agree to advance a Drawing
to the Borrowers before all of the documents and evidence required by Clause 3.1 have
been delivered to or to the order of the Agent, the Borrowers undertake to deliver all
outstanding documents and evidence to or to the order of the Agent no later than thirty
(30) days after the relevant Drawdown Date or such other date specified by the Agent.

	 	 	 	The advance of a Drawing under this Clause 3.5 shall not be taken as a waiver of the
Lenders’ right to require production of all the documents and evidence required by
Clause 3.1.

	 	(e)	 	Form and content All documents and evidence delivered to the Agent under this
Clause 3 shall:

	 	(f)	 	be in form and substance reasonably acceptable to the Agent;
and

	 	(g)	 	if reasonably required by the Agent, be certified, notarised,
legalised or attested in a manner acceptable to the Agent.

	4	 	Representations and Warranties

Each of the Borrowers represents and warrants jointly and severally to each of the Finance
Parties at the Execution Date and (by reference to the facts and circumstances then
pertaining) at the date of each Drawdown Notice, at each Drawdown Date and at each Interest
Payment Date as follows (except that the representation and warranty contained at Clause 4.6
shall only be made on the first Drawdown Date in respect of each Loan and that the
representations and warranties contained at Clauses 4.2 and 4.21 shall only be made on the
Execution Date):-

	 	4.1	 	Status and Due Authorisation Each of the Security Parties is a limited
partnership or limited liability company duly organised or formed under the laws of its
jurisdiction of incorporation, organisation or formation (as the case may be) with
power to enter into the Security Documents to which it is a party and (in the case of
the Guarantor) the Guarantee and to exercise its rights and perform its obligations
under the Security Documents to which it is a party and (in the case of the Guarantor)
the Guarantee and all action required to authorise its execution of the Security
Documents to which it is a party and (in the case of the Guarantor) the Guarantee and
its performance of its obligations thereunder has been duly taken.

	 	4.2	 	No Deductions or Withholding Under the laws of the Security Parties’
respective jurisdictions of incorporation or formation in force at the date hereof,
none of the Security Parties will be required to make any deduction or withholding from
any payment it may make under any of the Security Documents to which it is a party or
(in the case of the Guarantor) under the Guarantee.

	 	4.3	 	Claims Pari Passu Under the laws of the Security Parties’ respective
jurisdictions of incorporation or formation in force at the date hereof, the
Indebtedness will, to the extent that it exceeds the realised value of any security
granted in respect of the Indebtedness, rank at least pari passu with all the Security
Parties’ other unsecured indebtedness save that which is preferred solely by any
bankruptcy, insolvency or other similar laws of general application.

 

24

 

	 	4.4	 	No Immunity In any proceedings taken in any of the Security Parties’
respective jurisdictions of incorporation or formation in relation to any of the
Security Documents or (in the case of the Guarantor) the Guarantee, none of the
Security Parties will be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process.

	 	4.5	 	Governing Law and Judgments In any proceedings taken in any of the Security
Parties’ jurisdiction of incorporation or formation in relation to the Guarantee or any
of the Security Documents in which there is an express choice of the law of a
particular country as the governing law thereof, that choice of law and any judgment or
(if applicable) arbitral award obtained in that country will be recognised and
enforced.

	 	4.6	 	Validity and Admissibility in Evidence As at the date hereof, all acts,
conditions and things required to be done, fulfilled and performed in order (a) to
enable each of the Security Parties lawfully to enter into, exercise its rights under
and perform and comply with the obligations expressed to be assumed by it in the
Security Documents to which they are a party or (in the case of the Guarantor) the
Guarantee, (b) to ensure that the obligations expressed to be assumed by each of the
Security Parties in the Security Documents to which they are a party and (in the case
of the Guarantor) the Guarantee are legal, valid and binding and (c) to make the
Security Documents to which they are a party and (in the case of the Guarantor) the
Guarantee admissible in evidence in the jurisdictions of incorporation or formation of
each of the Security Parties, have been done, fulfilled and performed.

	 	4.7	 	No Filing or Stamp Taxes Under the laws of the Security Parties’ respective
jurisdictions of incorporation, organisation or formation in force at the date hereof,
it is not necessary that any of the Security Documents to which they are a party or (in
the case of the Guarantor) the Guarantee be filed, recorded or enrolled with any court
or other authority in its jurisdiction of incorporation or formation (other than the
Registrar of Companies for England and Wales or the relevant maritime registry, to the
extent applicable) or that any stamp, registration or similar tax be paid on or in
relation to any of such Security Documents or the Guarantee.

	 	4.8	 	Binding Obligations The obligations expressed to be assumed by each of the
Security Parties in the Security Documents and (in the case of the Guarantor) the
Guarantee are legal and valid obligations, binding on each of them in accordance with
the terms of the Security Documents and the Guarantee and no limit on any of their
powers will be exceeded as a result of the borrowings, granting of security or giving
of Guarantee contemplated by the Security Documents or the Guarantee or the performance
by any of them of any of their obligations thereunder.

	 	4.9	 	No Winding-up Neither the Borrowers, the Guarantor, any Material Subsidiary of
the Guarantor nor any other Security Party has taken any limited liability company or
limited partnership action nor have any other steps been taken or legal proceedings
been started or (to the best of the Borrowers’ knowledge and belief) threatened against
the Borrowers, the Guarantor, any Material Subsidiary of the Guarantor or any other
Security Party for its winding-up, dissolution, administration or reorganisation or for
the appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of it or of any or

 

25

 

	 	 	 	all of its assets or revenues which might have a material adverse effect on the
business or financial condition of the Guarantor Group taken as a whole.

	 	4.10	 	Solvency

	 	4.10.1	 	Neither the Borrowers, the Guarantor, any other Security Party nor the
Guarantor Group taken as a whole is unable, or admits or has admitted its
inability, to pay its debts or has suspended making payments in respect of any
of its debts.

	 	4.10.2	 	Neither the Borrowers, the Guarantor nor any Material Subsidiary of the
Guarantor or any other Security Party by reason of actual or anticipated
financial difficulties, has commenced, or intends to commence, negotiations
with one or more of its creditors with a view to rescheduling any of its
indebtedness.

	 	4.10.3	 	The value of the assets of each of the Borrowers, the Guarantor and the
Guarantor Group or any other Security Party taken as a whole is not less than
the liabilities of such entity or the Guarantor Group taken as a whole (as the
case may be) (taking into account contingent and prospective liabilities).

	 	4.10.4	 	No moratorium has been, or may, in the reasonably foreseeable future be,
declared in respect of any indebtedness of the Borrowers, the Guarantor or any
Material Subsidiary of the Guarantor or any other Security Party.

	 	4.11	 	No Material Defaults

	 	4.11.1	 	Without prejudice to Clause 4.11.2, neither the Borrowers, the Guarantor nor
any Material Subsidiary of the Guarantor or any other Security Party is in
breach of or in default under any agreement to which it is a party or which is
binding on it or any of its assets to an extent or in a manner which might have
a material adverse effect on the business or financial condition of such entity
or the Guarantor Group taken as a whole (as the case may be).

	 	4.11.2	 	No Event of Default is continuing or might reasonably be expected to result
from the advance of any Drawing.

	 	4.12	 	No Material Proceedings No action or administrative proceeding of or before
any court, arbitral body or agency which is not covered by adequate insurance or which
might, if adversely determined, have a material adverse effect on the business or
financial condition of the Guarantor Group taken as a whole has been started or is
reasonably likely to be started.

	 	4.13	 	Guarantor’s Accounts The first set of Guarantor’s Accounts and all other
annual financial statements relating to the Guarantor Group required to be delivered
under clause 5.1 of the Guarantee were prepared in accordance with GAAP, give (in
conjunction with the notes thereto) a true and fair view of (in the case of annual
financial statements) or fairly represent (in the case of quarterly accounts) the
financial condition of the Guarantor Group at the date as of which they were prepared
and the results of the Guarantor Group’s operations during the financial period then
ended.

 

26

 

	 	4.14	 	No Material Adverse Change Since the publication of the last financial
statements relating to the Guarantor Group delivered pursuant to clause 5.1 of the
Guarantee, there has been no change that has a Material Adverse Effect.

	 	4.15	 	No Undisclosed Liabilities As at the date to which the Guarantor’s Accounts
were prepared neither the Borrowers, the Guarantor nor any Material Subsidiary of the
Guarantor had any material liabilities (contingent or otherwise) which were not
disclosed thereby (or by the notes thereto) or reserved against therein nor any
unrealised or anticipated losses arising from commitments entered into by it which were
not so disclosed or reserved against therein.

	 	4.16	 	No Obligation to Create Security The execution of the Security Documents and
the Guarantee by the Security Parties and their exercise of their rights and
performance of their obligations thereunder will not result in the existence of nor
oblige the Borrowers or the Guarantor to create any Encumbrance over all or any of
their present or future revenues or assets, other than pursuant to the Security
Documents or the Guarantee.

	 	4.17	 	No Breach The execution of the Security Documents and the Guarantees by each
of the Security Parties and their exercise of their rights and performance of their
obligations under any of the Security Documents and the Guarantee do not constitute and
will not result in any breach of any agreement or treaty to which any of them is a
party.

	 	4.18	 	Ownership and Security

	 	4.18.1	 	Each of the Borrowers is a Subsidiary of the Guarantor.

	 	4.18.2	 	Each of the Security Parties is the legal and beneficial owner of all assets
and other property which it purports to charge, mortgage, pledge, assign or
otherwise secure pursuant to each Security Document and those Security
Documents to which it is a party create and give rise to valid and effective
security having the ranking expressed in those Security Documents.

	 	4.19	 	Necessary Authorisations The Necessary Authorisations required by each
Security Party are in full force and effect, and each Security Party is in compliance
with the material provisions of each such Necessary Authorisation relating to it and,
to the best of its knowledge, none of the Necessary Authorisations relating to it are
the subject of any pending or threatened proceedings or revocation.

	 	4.20	 	Money Laundering Any amount borrowed hereunder, and the performance of the
obligations of the Security Parties under the Security Documents or the Guarantee, will
be for the account of members of the Guarantor Group and will not involve any breach by
any of them of any law or regulatory measure relating to “money laundering” as defined
in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities.

	 	4.21	 	Disclosure of material facts The Borrowers are not aware of any material facts
or circumstances which have not been disclosed to the Agent and which might, if
disclosed, have reasonably been expected to adversely affect the decision of a

 

27

 

	 	 	 	person considering whether or not to make loan facilities of the nature contemplated
by this Agreement available to the Borrowers.

	 	4.22	 	Use of Facility The Facility will be used for the purposes specified in the
Recitals.

	 	4.23	 	Vessel Status Each Vessel will on its Delivery Date be registered in the name
of the relevant Owner through the relevant Primary Registry as a vessel under the laws
of that Primary Registry and classed with the relevant Pre-Approved Classification
Society free from material recommendations and conditions of the relevant
classification society. Such Vessel will, within 5 Business Days of its Delivery Date,
be registered in the name of the relevant Owner with the flag of the relevant Bareboat
Registry.

	 	4.24	 	Representations Limited The representation and warranties of the Borrowers in
this Clause 4 are subject to:

	 	4.24.1	 	the principle that equitable remedies are remedies which may be granted or
refused at the discretion of the court;

	 	4.24.2	 	the limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, administration and other
laws generally affecting or limiting the rights of creditors;

	 	4.24.3	 	the time barring of claims under any applicable limitation acts;

	 	4.24.4	 	the possibility that a court may strike out provisions for a contract as
being invalid for reasons of oppression, undue influence or similar; and

	 	4.24.5	 	any other reservations or qualifications of law expressed in any legal
opinions obtained by the Agent in connection with the Facility.

	5	 	Repayment and Prepayment

	 	5.1	 	Repayment of Loan The Borrowers agree to repay the Vessel Tranches to the
Agent for the account of the Lenders by twenty eight consecutive Repayment Instalments
following a profile of seven years to the relevant Balloon Repayment Amount as per the
relevant indicative repayment schedule set out in Schedule 8. Schedule 8 may be
replaced prior to (or promptly following) the relevant Drawdown Date by the Agent
(acting with the approval of the Majority Lenders, such approval not to be unreasonably
withheld) in consultation with the Borrowers. Any such replacement schedule shall be
deemed to be incorporated into this Agreement in place of the existing Schedule on each
Repayment Date. The first Repayment Instalment in respect of each Vessel Tranche will
fall due on the date falling three months after the Drawdown Date and each succeeding
Repayment Instalment to be payable quarterly in arrears on each of the dates falling at
three monthly intervals thereafter up to and including the Maturity Date. In addition,
on the Maturity Date (without prejudice to any other provision of this Agreement), the
relevant Balloon Repayment Amount shall be repaid in full.

	 	5.2	 	Reduction of Repayment Instalments If, following each Drawdown Date, the
aggregate amount advanced to the Borrowers under the relevant Vessel Tranche is less
than the relevant Vessel Tranche Maximum Amount, the amount of each

 

28

 

	 	 	 	Repayment Instalment in respect of that Vessel Tranche shall be reduced pro rata to
the amount actually advanced and the Balloon Repayment Amount shall remain the same
(save that where the aggregate amount advanced is less than the relevant Balloon
Repayment Amount, the Balloon Repayment Amount shall be the aggregate amount
advanced).

	 	5.3	 	Reborrowing The Borrowers may not reborrow any part of the Loan which is
repaid or prepaid.

	 	5.4	 	Prepayment and Cancellation The Borrowers may prepay the Facility Outstandings
in whole or in part, or cancel the Loan in whole or in part, in each case in integral
multiples of one million Dollars ($1,000,000) (or as otherwise may be agreed by the
Agent) provided that they have first given to the Agent not fewer than ten (10)
Business Days’ prior written notice expiring on a Business Day of their intention to do
so. Any notice pursuant to this Clause 5.4 once given shall be irrevocable and shall
(in the case of a prepayment) oblige the Borrowers to make the prepayment referred to
in the notice on the Business Day specified in the notice, together with all interest
accrued on the amount prepaid and all accrued Commitment Commission up to and including
that Business Day.

	 	5.5	 	Mandatory Prepayment on Total Loss In the event that any Vessel becomes a
Total Loss, on the Total Loss Repayment Date, the Borrowers shall prepay the relevant
Vessel Tranche together with all interest accrued thereon up to and including the day
of prepayment. Any such prepayment shall not be reborrowed.

	 	5.6	 	Mandatory Prepayment on Change of Control If without the prior written consent
of the Agent (acting upon the instructions of all Lenders) a Change of Control shall
occur the Borrowers shall, if so requested by the Agent (acting upon the instructions
of the Majority Lenders) in writing, be obliged within thirty (30) days of such event
to prepay the whole of the Loan, together with all interest accrued thereon up to and
including the day of prepayment. Any such prepayment shall not be reborrowed.

	 	5.7	 	Right of Prepayment and cancellation in relation to a single Lender

	 	5.7.1	 	If any Lender claims indemnification from the Borrowers under
clause 13.6 (Change in law), the Borrowers may (save where an Event of Default
is continuing unremedied or unwaived), whilst the circumstance giving rise to
the requirements for indemnification continues, if no other Lender is willing
to take over the affected Lender’s participation in the Loan or the Borrowers
are not able to find an alternative lender acceptable to the Agent acting
reasonably to take over such Lender’s participation, give the Agent notice of
cancellation of the Commitment of that Lender and their intention to procure
the prepayment of that Lender’s participation in the Loan.

	 	5.7.2	 	On receipt of a notice referred to in clause 5.7.1 above, the
Commitment of that Lender shall immediately be reduced to zero.

	 	5.7.3	 	On the last day of each Interest Period which ends after the
Borrowers have given notice under clause 5.7.1 (or, if earlier, the date
specified by the Borrowers in that notice), the Borrowers shall prepay that
Lender’s outstanding participation in that Loan.

 

29

 

	 	5.7.4	 	Any notice of cancellation or prepayment given by any Party
under clause 5.7.1 shall be irrevocable and, unless a contrary indication
appears in this Agreement, shall specify the date or dates upon which the
relevant cancellation or prepayment is to be made and the amount of that
cancellation or prepayment.

	 	5.7.5	 	Any prepayment under this Agreement shall be made together
with accrued interest on the amount prepaid and, subject to any Break Costs,
without premium or penalty.

	 	5.7.6	 	No amount of any of the Commitments cancelled under this
Agreement may be subsequently reinstated.

	 	5.7.7	 	If the Agent receives a notice under this clause 5.7 it shall
promptly forward a copy of that notice to the affected Lender.

	 	5.8	 	Prepayment indemnity If the Borrowers shall make a prepayment on a Business
Day other than the last day of an Interest Period, they shall pay to the Agent on
behalf of the Lenders any amount which is necessary to compensate the Lenders for any
Break Costs incurred by the Agent or any of the Lenders as a result of the prepayment
in question.

	 	5.9	 	Application of prepayments Any prepayment in an amount less than the
Indebtedness shall be applied in accordance with clause 16.7 (Payment Mechanics).

	 	5.10	 	No other prepayments The Borrowers shall not repay or prepay all or any part
of the Loan or cancel all or any part of any Commitment except at the times and in the
manner expressly provided for in this Agreement.

	6	 	Interest

	 	6.1	 	Interest Periods The period during which any Drawing shall be outstanding
pursuant to this Agreement shall be divided into consecutive Interest Periods of three
months’ duration.

	 	6.2	 	Beginning and end of Interest Periods The first Interest Period in respect of
each Vessel Tranche shall begin on the Drawdown Date of that Vessel Tranche and shall
end on the first Repayment Date in respect of that Vessel Tranche. Any subsequent
Interest Period in respect of each Vessel Tranche shall commence on the day following
the last day of its previous Interest Period and shall end on the next following
Repayment Date.

	 	6.3	 	Interest rate During each Interest Period, interest shall accrue on each
Vessel Tranche at the rate determined by the Agent to be the aggregate of (a) the
Margin and (b) LIBOR determined at or about 11:00 am (London time) on the second
Business Day prior to the beginning of the Interest Period relating to that Vessel
Tranche.

	 	6.4	 	Accrual and payment of interest During the Facility Period, interest shall
accrue from day to day, shall be calculated on the basis of a 360 day year and the
actual number of days elapsed (or, in any circumstance where market practice differs,
in accordance with the prevailing market practice) and shall be paid by the

 

30

 

Borrowers to the Agent on behalf of the Lenders on the last day of each Interest
Period.

	 	6.5	 	Ending of Interest Periods If any Interest Period would end on a day which is
not a Business Day, that Interest Period shall end on the next succeeding Business Day
(unless the next succeeding Business Day falls in the next calendar month, in which
event the Interest Period in question shall end on the immediately preceding Business
Day).

	 	6.6	 	Default Rate If an Event of Default shall occur pursuant to clause 10.2.1 or
clause 10.2.2, the whole of the Indebtedness shall, from the date of the occurrence of
the Event of Default, bear interest up to the date of actual payment (both before and
after judgment) at the Default Rate, compounded at such intervals as the Agent shall in
its reasonable discretion determine, which interest shall be payable from time to time
by the Borrowers to the Agent on behalf of the Lenders on demand.

	 	6.7	 	Determinations conclusive Each determination of an interest rate made by the
Agent in accordance with Clause 6 shall (save in the case of manifest error or on any
question of law) be final and conclusive.

	 	6.8	 	Mandatory Costs If applicable the Borrowers shall reimburse the Agent for any
Mandatory Costs relating to the Vessel Tranche in question incurred by a Lender as a
result of funding its Commitment of the Loan.

	7	 	Fees

	 	7.1	 	The Borrowers shall pay the following fees:

	 	7.1.1	 	Arrangement fee The Borrowers shall pay to the Arranger an
arrangement fee in the amount and at the time agreed in the Fee Letter.

	 	7.1.2	 	Commitment fee The Borrowers shall pay to the Agent (for the
account of the Lenders in proportion to their Commitments) a commitment fee
computed at the rate of one per cent 1.00% per annum on the undrawn and
uncancelled amount of the Maximum Amount from time to time from the date of
this Agreement until the earlier to occur of (i) the Drawdown Date in respect
of the final Loan Drawing, (ii) the last Availability Termination Date and
(iii) the date on which the Commitments have been cancelled in full. The
accrued commitment fee is payable on the last day of each successive period of
three months from the Execution Date and on such Availability Termination Date.

	 	7.1.3	 	Agency fee The Borrowers shall pay to the Agent (for its own
account) an agency fee in the amount and at the times agreed in the Fee Letter.

	 	7.1.4	 	Participation fee The Borrowers shall pay to the Agent for
the account of each Lender on the date of this Agreement a fee in Dollars equal
to zero point seven five per cent. (0.75%) of that Lender’s Commitment, which
fee shall be non-refundable.

 

31

 

	8	 	Security and Application of Moneys

	 	8.1	 	Security Documents and Guarantee As security for the repayment of the
Indebtedness, the Borrowers shall execute and deliver to the Security Trustee or cause
to be executed and delivered to the Security Trustee the following documents in such
forms and containing such terms and conditions as the Security Trustee shall require:

	 	8.1.1	 	a first priority deed of assignment of each of the Charters
from the relevant Owner;

	 	8.1.2	 	the Guarantee;

	 	8.1.3	 	a first priority statutory or first preferred mortgage over
each of the Vessels together with a collateral deed of covenants;

	 	8.1.4	 	a first priority deed of assignment of the Insurances,
Earnings and Requisition Compensation of each of the Vessels from the Owner;

	 	8.1.5	 	a first priority deed of charge over the Borrower Earnings
Account;

	 	8.1.6	 	a Manager’s Undertaking from the Manager of each of the
Vessels;

	 	8.1.7	 	a first priority charge over the entire issued share capital
of each Borrower;

	 	8.1.8	 	a first priority assignment of the Insurances, Earnings and
Requisition Compensation of each of the Vessels from the Charterer; and

	 	8.1.9	 	a charterer’s undertaking to be entered into between the
Security Trustee and the Charterer.

	 	8.2	 	Accounts

The Borrowers shall procure that all Earnings received by them are paid to the
Borrower Earnings Account.

	 	8.3	 	General application of moneys Whilst an Event of Default is continuing
unremedied or unwaived each Borrower irrevocably authorises the Agent and the Security
Trustee to apply all sums which either of them may receive:

	 	8.3.1	 	pursuant to a sale or other disposition of a Vessel or any
right, title or interest in the Vessel; or

	 	8.3.2	 	by way of payment of any sum in respect of the Insurances,
Earnings or Requisition Compensation; or

	 	8.3.3	 	otherwise arising under or in connection with any Security
Document,

in accordance with the terms of the Security Documents.

	9	 	Covenants

The Borrowers covenant with the Finance Parties in the following terms.

 

32

 

	 	9.1	 	General Undertakings

	 	9.1.1	 	Maintenance of Legal Validity The Borrowers shall obtain,
comply with the terms of and do all that is necessary to maintain in full force
and effect all authorisations, approvals, licences and consents required in or
by the laws and regulations of their respective jurisdictions of incorporation
or formation and all other applicable jurisdictions, to enable them lawfully to
enter into and perform their obligations under the Security Documents and to
ensure the legality, validity, enforceability or admissibility in evidence of
the Security Documents in their respective jurisdictions of incorporation or
organisation and all other applicable jurisdictions.

	 	9.1.2	 	Notification of Default The Borrowers shall promptly, upon
becoming aware of the same, inform the Agent in writing of the occurrence of
any Event of Default and, upon receipt of a written request to that effect from
the Agent, confirm to the Agent that, save as previously notified to the Agent
or as notified in such confirmation, no Event of Default has occurred.

	 	9.1.3	 	Claims Pari Passu The Borrowers shall ensure that at all
times the claims of the Finance Parties against any of them under the Security
Documents rank at least pari passu with the claims of all their other unsecured
creditors save those whose claims are preferred by any bankruptcy, insolvency,
liquidation, winding-up or other similar laws of general application.

	 	9.1.4	 	Use of Proceeds The proceeds of Drawings will be used
exclusively for the purposes specified in Recital (B).

	 	9.1.5	 	Classification The Borrowers shall ensure that each Vessel
which they own maintains the highest classification required for the purpose of
the relevant trade of such Vessel which shall be with a Pre-Approved
Classification Society or such other society as may be acceptable to the Agent
acting on the instructions of the Majority Lenders (such approval not to be
unreasonably withheld or delayed), in each case, free from any recommendations
and conditions affecting that Vessel’s class which have not been complied with
in accordance with their terms.

	 	9.1.6	 	Certificate of Financial Responsibility Each Borrower shall
procure that a certificate of financial responsibility is obtained and
maintained in relation to any Vessel which it owns which is to call at the
United States of America.

	 	9.1.7	 	Negative Pledge The Borrowers shall not create, or permit to
subsist, any Encumbrance (other than pursuant to the Security Documents) over
all or any part of their present or future revenues or assets (including but
not limited to their shares), other than a Permitted Lien.

	 	9.1.8	 	Registration No Borrower shall change or permit a change to
the Primary Registry or to the Bareboat Registry or flag of the Vessel owned by
it other than to a Pre-Approved Flag or such other flag as may be approved by
the Agent acting on the instructions of the Majority Lenders, such approval not
to be unreasonably withheld or delayed.

 

33

 

	 	9.1.9	 	ISM and ISPS Compliance The Borrowers shall ensure that the
relevant Company and any Environmental Affiliate complies in all material
respects with the ISM Code and the ISPS Code or any replacements thereof and in
particular (without prejudice to the generality of the foregoing) shall ensure
that the Company holds (i) a valid and current Document of Compliance issued
pursuant to the ISM Code, (ii) a valid and current Safety Management
Certificate issued in respect of such Vessel pursuant to the ISM Code, and
(iii) an ISSC in respect of such Vessel, and the Borrowers shall promptly, upon
request, supply the Agent with copies of the same.

	 	9.1.10	 	Necessary Authorisations Without prejudice to Clause 9.1.9 or any other
specific provision of the Security Documents relating to an Authorisation, the
Borrowers shall (i) obtain, comply with and do all that is necessary to
maintain in full force and effect all Necessary Authorisations if a failure to
do the same may cause a Material Adverse Effect; and (ii) promptly upon
request, supply certified copies to the Agent of all Necessary Authorisations.

	 	9.1.11	 	Compliance with Applicable Laws Each Borrower shall comply with all
applicable laws to which it may be subject if a failure to do the same may have
a Material Adverse Effect.

	 	9.1.12	 	Loans and Guarantees Each of the Borrowers shall be permitted to make loans
or grant credit upon such terms as it may determine to any other member of the
Guarantor Group but shall not otherwise make any loans or grant any credit
(save in the ordinary course of business) or give any guarantee or indemnity
(except in the ordinary course of business or pursuant to the Security
Documents); provided that the Borrowers shall not make any such loans following
the occurrence of an Event of Default which is continuing unremedied or
unwaived .

	 	9.1.13	 	Dividends After an Event of Default has occurred which is continuing
unremedied and unwaived, the Borrowers shall not pay, make or declare any
dividend or other distribution.

	 	9.1.14	 	Other Business Except to the extent expressly permitted by the Security
Documents, the Borrowers shall not carry on any business other than that of
owning, chartering and operating the relevant Vessel.

	 	9.1.15	 	Further Assurance The Borrowers shall at their own expense, promptly take
all such action as the Agent may reasonably require for the purpose of
perfecting or protecting any Finance Party’s rights with respect to the
security created or evidenced (or intended to be created or evidenced) by the
Security Documents or its rights under the Guarantee.

	 	9.1.16	 	Other information The Borrowers will promptly supply to the Agent such
information and explanations as the relevant Majority Lenders may from time to
time reasonably require in connection with the operation of the Vessels and the
Guarantor’s profit and liquidity and will procure that the Agent be given the
like information and explanations relating to all other Security Parties.

 

34

 

	 	9.1.17	 	Inspection of records The Borrowers will permit the inspection of its
financial records and accounts on reasonable notice from time to time during
business hours by the Agent or its nominee.

	 	9.1.18	 	Valuations The Borrowers will deliver to the Agent a Valuation of each of
the Vessels (i) in accordance with clause 9.5.2, and (ii) following the
occurrence of an Event of Default which is continuing unremedied or unwaived on
such other occasions as the Agent may request.

	 	9.1.19	 	“Know your customer” checks If:

	 	(a)	 	the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation
made after the date of this Agreement;

	 	(b)	 	any change in the status of the Borrowers after
the date of this Agreement; or

	 	(c)	 	a proposed assignment or transfer by a Lender
of any of its rights and obligations under this Agreement to a party
that is not a Lender prior to such assignment or transfer,

obliges the Agent or any Lender (or, in the case of (c) above, any
prospective new Lender) to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information
is not already available to it, the Borrowers shall promptly upon the
request of the Agent or any Lender supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by the Agent
(for itself or on behalf of any Lender) or any Lender for itself (or, in the
case of (c) above, on behalf of any prospective new Lender) in order for the
Agent or that Lender (or, in the case of (c) above, any prospective new
Lender) to carry out and be satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Relevant
Documents.

	 	9.1.20	 	Intercompany borrowings The Borrowers will only borrow from other members of
the Guarantor Group or the Teekay Group on a subordinated and unsecured basis,
provided that the Borrowers may repay such subordinated unsecured loans as long
as no Event of Default has occurred or is continuing.

	 	9.2	 	Financial covenants

The Borrowers shall (subject to the express provisions of the Guarantee) procure
that throughout the Facility Period the Guarantor shall comply with the financial
covenants set out in clause 5.2 of the Guarantee and shall procure that the
Guarantor shall deliver to the Agent together with each set of Guarantor’s Accounts
a Compliance Certificate.

	 	9.3	 	Insurances

 

35

 

	 	9.3.1	 	Each Borrower covenants to ensure at its own expense
throughout the Facility Period that the Vessel which it owns:-

	 	(a)	 	remains insured against marine risks and war
risks (including blocking and trapping) for an amount which when
aggregated with the insured value of the other Vessels is not less than
the Insurance Amount;

	 	(b)	 	remains entered in a protection and indemnity
association in both protection and indemnity classes, or remains
otherwise insured against protection and indemnity risks and
liabilities (including, without limitation, protection and indemnity
war risks);

	 	(c)	 	remains insured against oil pollution caused by
that Vessel for one billion Dollars (US$1,000,000,000) or such amounts
as the Agent may from time to time approve unless that risk is covered
to the satisfaction of the Agent by that Vessel’s protection and
indemnity entry or insurance. The Agent shall not approve a lesser
amount under this sub-clause (c) without the prior written approval of
all Lenders.

	 	9.3.2	 	The Agent agrees that, if and for so long as a Vessel may be
laid up, the relevant Owner may at its own expense take out port risk insurance
on that Vessel in place of hull and machinery insurance.

	 	9.3.3	 	Each Borrower undertakes to place the Obligatory Insurances in
such markets, in such currency, on such terms and conditions, and with such
brokers, underwriters and associations as the Agent shall have previously
approved in writing. The Borrowers shall not alter the terms of any of the
Obligatory Insurances without the prior written consent of the Agent, and will
supply the Agent from time to time on request with such information as the
Agent may reasonably require with regard to the Obligatory Insurances and the
brokers, underwriters or associations through or with which the Obligatory
Insurances are placed.

	 	9.3.4	 	The Borrowers undertake duly and punctually to pay all
premiums, calls and contributions, and all other sums at any time payable in
connection with the Obligatory Insurances, and, at their own expense, to
arrange and provide any guarantees from time to time required by any protection
and indemnity or war risks association. From time to time at the Agent’s
request, the Borrower will provide the Agent with evidence satisfactory to the
Agent that such premiums, calls, contributions and other sums have been duly
and punctually paid; that any such guarantees have been duly given; and that
all declarations and notices required by the terms of any of the Obligatory
Insurances to be made or given by or on behalf of the Borrowers to brokers,
underwriters or associations have been duly and punctually made or given.

	 	9.3.5	 	The Borrowers will comply in all respects with all terms and
conditions of the Obligatory Insurances and will make all such declarations to
brokers, underwriters and associations as may be required to enable the Vessels
to operate in accordance with the terms and conditions of the Obligatory
Insurances. The Borrowers will not do, nor permit to be done, any act,

 

36

 

nor make, nor permit to be made, any omission, as a result of which any of
the Obligatory Insurances may become liable to be suspended, cancelled or
avoided, or may become unenforceable, or as a result of which any sums
payable under or in connection with any of the Obligatory Insurances may be
reduced or become liable to be repaid or rescinded in whole or in part. In
particular, but without limitation, the Borrowers will not permit the
Vessels to be employed other than in conformity with the Obligatory
Insurances without first taking out additional insurance cover in respect of
that employment in all respects to the satisfaction of the Agent.

	 	9.3.6	 	The Borrowers will, no later than seven days before the expiry
of any of the Obligatory Insurances (other than entry in a protection and
indemnity association) and one day before the expiry of entry in the protection
and indemnity association renew them and shall immediately give the Agent such
details of those renewals as the Agent may require.

	 	9.3.7	 	The Borrowers shall deliver to the Agent upon its request
certified copies of all policies, certificates of entry and other documents
relating to the Insurances (including, without limitation, receipts for
premiums, calls or contributions) and shall procure that letters of undertaking
in the customary form for the market in which such brokers or managers operate
shall be issued to the Agent by the brokers through which the Insurances are
placed (or, in the case of protection and indemnity or war risks associations,
by their managers). If any of the Vessels are at any time during the Facility
Period insured under any form of fleet cover, the Borrowers shall procure that
those letters of undertaking contain confirmation that the brokers,
underwriters or association (as the case may be) will not set off claims
relating to the relevant Vessel or Vessels against premiums, calls or
contributions in respect of any other vessel or other insurance, and that the
insurance cover of the relevant Vessel or Vessels will not be cancelled by
reason of non-payment of premiums, calls or contributions relating to any other
vessel or other insurance. Failing receipt of those confirmations, the
Borrowers will instruct the brokers, underwriters or association concerned to
issue a separate policy or certificate for the relevant Vessel or Vessels in
the sole name of the relevant Owner or of the relevant Owner’s brokers as
agents for the relevant Owner.

	 	9.3.8	 	The Borrowers shall promptly upon becoming aware thereof
provide the Agent with full information regarding any casualty or other
accident or damage to a Vessel unless the Borrowers reasonably expect the cost
thereof not to exceed the Threshold Amount.

	 	9.3.9	 	The Borrowers agree that, at any time after the occurrence and
during the continuation of an Event of Default which is unremedied or unwaived,
the Agent shall be entitled to collect, sue for, recover and give a good
discharge for all claims in respect of any of the Insurances; to pay collecting
brokers the customary commission on all sums collected in respect of those
claims; to compromise all such claims or refer them to arbitration or any other
form of judicial or non-judicial determination; and otherwise to deal with such
claims in such manner as the Agent shall in its discretion think fit.

 

37

 

	 	9.3.10	 	Whether or not an Event of Default shall have occurred or be continuing
unremedied or unwaived, the proceeds of any claim under any of the Insurances
in respect of a Total Loss shall be paid to the Agent and applied by the Agent
in accordance with clause 16.5.

	 	9.3.11	 	The Agent agrees that any amounts which may become due under any protection
and indemnity entry or insurance shall be paid to the relevant Owner to
reimburse the relevant Owner for, and in discharge of, the loss, damage or
expense in respect of which they shall have become due, unless, at the time the
amount in question becomes due, an Event of Default shall have occurred and be
continuing unwaived or unremedied, in which event the Agent shall be entitled
to receive the amounts in question and to apply them either in reduction of the
Indebtedness or, at the option of the Agent, to the discharge of the liability
in respect of which they were paid.

	 	9.3.12	 	The Borrowers shall not settle, compromise or abandon any claim under or in
connection with any of the Insurances (other than a claim of less than the
Threshold Amount arising other than from a Total Loss) without the prior
written consent of the Agent.

	 	9.3.13	 	If the relevant Owner fails to effect or keep in force the Obligatory
Insurances, the Agent may (but shall not be obliged to) effect and/or keep in
force such insurances on the Vessel and such entries in protection and
indemnity or war risks associations as the Agent in its discretion considers
desirable, and the Agent may (but shall not be obliged to) pay any unpaid
premiums, calls or contributions. The Borrowers will reimburse the Agent from
time to time on demand for all such premiums, calls or contributions paid by
the Agent, together with interest at the Default Rate from the date of payment
by the Agent until the date of reimbursement.

	 	9.3.14	 	The Borrowers shall comply strictly with the requirements of any legislation
relating to pollution or protection of the environment which may from time to
time be applicable to the Vessels in any jurisdiction in which the Vessels
shall trade and in particular (if a Vessel is to trade in the United States of
America and Exclusive Economic Zone (as defined in the Act)) the relevant Owner
shall comply strictly with the requirements of the United States Oil Pollution
Act 1990 (“the Act”). Before any such trade is commenced and during the entire
period during which such trade is carried on, the relevant Owner shall:-

	 	(a)	 	pay any additional premiums required to
maintain protection and indemnity cover for oil pollution up to the
limit available to the Owner for that Vessel in the market; and

	 	(b)	 	make all such quarterly or other voyage
declarations as may from time to time be required by that Vessel’s
protection and indemnity association in order to maintain such cover;
and

	 	(c)	 	submit that Vessel to such additional periodic,
classification, structural or other surveys which may be required by
that Vessel’s protection and indemnity insurers to maintain cover for
such trade; and

 

38

 

	 	(d)	 	implement any recommendations contained in the
reports issued following the surveys referred to in Clause 9.3.14(c)
within the time limit specified therein; and

	 	(e)	 	in addition to the foregoing (if such trade is
in the United States of America and Exclusive Economic Zone):

	 	(i)	 	obtain and retain a certificate
of financial responsibility under the Act in form and substance
satisfactory to the United States Coast Guard and upon request
provide the Agent with a copy; and

	 	(ii)	 	procure that the protection and
indemnity insurances do not contain a US Trading Exclusion
Clause or any other provision analogous thereto and upon
request provide the Agent with evidence that this is so; and

	 	(iii)	 	comply strictly with any
operational or structural regulations issued from time to time
by any relevant authorities under the Act so that at all times
that Vessel falls within the provisions which limit strict
liability under the Act for oil pollution.

	 	9.3.15	 	The Borrowers shall promptly reimburse to the Agent the cost (as conclusively
certified by the Agent) of taking out and keeping in force in respect of each
Vessel on terms approved by the Lenders, or in considering or making claims
under:

	 	(a)	 	a mortgagee’s interest insurance and a
mortgagee’s additional perils (all P&I risks) cover for the benefit of
the Finance Parties for an amount up to its Insurance Amount; and

	 	(b)	 	any other insurance cover which the Agent
reasonably requires in respect of any Finance Party’s interests and
potential liabilities (whether as mortgagee of the Vessel or
beneficiary of the Security Documents).

	 	9.3.16	 	Without prejudice to the obligations of the Borrowers hereunder, the Lenders
agree that certain of the obligations of the Borrowers under this clause 9.3
may and shall be performed by the Charterer on behalf of the Borrowers pursuant
to the Charters and that performance by the Charterer of such obligations shall
be deemed to be performance by the Borrower of the same such obligations
hereunder.

	 	9.4	 	Operation and Maintenance

	 	9.4.1	 	General

Each Borrower undertakes in favour of the Finance Parties to comply with
the following provisions at all times during the Facility Period (in
respect of each Vessel after that Vessel has been delivered to the relevant
Borrower under the relevant Purchase Contract) until such time as the
Vessel is sold except as the Agent may otherwise permit in writing.

 

39

 

Without prejudice to the obligations of the Borrowers hereunder, the
Lenders agree that certain of the obligations of the Borrowers under this
clause 9.4 may and shall be performed on behalf of the Borrowers by the
Charterer pursuant to the Charters and that performance by the Charterer of
such obligations shall be deemed to be performance by the Borrower of the
same such obligations hereunder.

	 	9.4.2	 	Supply and crewing

Throughout the Facility Period the Borrower shall procure that the Vessel
is manned, victualled, navigated, operated, supplied, fuelled, maintained
and repaired, all at no cost to the Agent.

	 	9.4.3	 	Condition of the Vessel

The Borrower shall procure that the Vessel and every part thereof is kept
in a good and safe condition and state of repair, ordinary wear and tear
excepted and shall ensure that all repairs to or replacements of lost,
damaged or worn parts and equipment are effected in such a manner so as not
to diminish the value of the Vessel and in any event:

	 	(a)	 	consistent with first-class ship ownership and
management standards in relation to ships of the Vessel’s age and type;

	 	(b)	 	so as to maintain the Vessel’s present class,
namely, in respect of Vessel A, Vessel B and Vessel C, “Germanischer
Lloyd: GL/ +100 A5 ESP Liquefied Gas Tanker Type-2G, Chemical Tanker
Type-II,IW,BWM,+MC AUT, RI, INERT” at Germanischer Lloyd, and in
respect of Vessel D and Vessel E, “Germanischer Lloyd: GL/ +100 A5 E
Liquefied Gas Tanker Type-2G, IW,BWM,+MC AUT, RI, INERT” at
Germanischer Lloyd; and

	 	(c)	 	the Borrower shall maintain all certificates,
licences and permits applicable to vessels registered in the state of
registration for the time being of the Vessel being and to vessels
trading to any jurisdiction to which the Vessel may trade from time to
time in any such case unless waived and to carry on board the Vessel
all certificates and other documents which may from time to time be
required to evidence such compliance.

	 	9.4.4	 	Master, officers and crew

The Master, officers and crew of the Vessel shall be the servants of the
Borrower or the Charterer for all purposes whatsoever. The Borrower shall
ensure that the wages and allotments and the insurance and pension
contributions as appropriate of the Master, officers and crew shall be
regularly paid and all deductions from their wages in respect of tax
liability shall be properly accounted for and the Master shall have no
valid claim for disbursements other than those incurred by him in the
ordinary course of trading of the Vessel.

 

40

 

	 	9.4.5	 	Modifications

The Borrower shall procure that no modification is made to the Vessel which
would:

	 	(a)	 	materially and adversely alter the structure,
type or performance characteristics of the Vessel unless required by
the classification society of the Vessel from time to time; or

	 	(b)	 	reduce the value of the Vessel,

and the Borrower shall notify the Agent of any modifications which are made
to the Vessel the cost of which exceeds or will when completed exceed five
million Dollars ($5,000,000).

	 	9.4.6	 	Surveys

The Borrower shall procure that the Vessel is submitted to such periodical
or other surveys as may be required by the Vessel’s flag state or for
classification purposes and shall comply with all conditions and
recommendations affecting the Vessel’s class of the relevant Pre-Approved
Classification Society of the Vessel from time to time in accordance with
their terms unless waived and the Borrower shall supply copies of any
survey reports to the Agent upon request from the Agent.

	 	9.4.7	 	Drydocking

The Borrower shall procure that the Vessel is drydocked as often as may be
required to ensure that the Vessel maintains its classification with its
relevant Pre-Approved Classification Society and otherwise in accordance
with good commercial practice. If the Borrower fails to comply with the
requirements of the relevant Pre-Approved Classification Society, the Agent
shall have the right to inspect the Vessel in accordance with clause 9.4.14.
If requested by the Agent, the Borrower shall give the Agent reasonable
prior written notice of any intended drydocking of the Vessel.

	 	9.4.8	 	Release from arrest

The Borrower shall promptly pay and discharge all debts, damages,
liabilities and outgoings whatsoever which have given or which may
reasonably be expected to give rise to maritime, statutory or possessory
liens on, or claims enforceable against, the Vessel or the Insurances or
any part thereof. If at any time during the Facility Period any writ or
equivalent claim or pleading in admiralty is filed against the Vessel or
the Insurances or any part thereof, or the Vessel or the Insurances or any
part thereof is arrested or detained or attached or levied upon pursuant to
legal process or purported legal process or in the event of the detention
of the Vessel in the exercise or the purported exercise of any such lien or
claim as aforesaid (other than by reason of a Compulsory Acquisition), the
Borrower shall procure the release of the Vessel and the Insurances from
such arrest, detention, attachment or levy or, as the case may be, the
discharge of the writ or equivalent claim or pleading in admiralty as soon
as reasonably practicable and in any event within sixty (60) days (or such

 

41

 

longer period as the Agent may agree) of receiving notice thereof by
providing bail or procuring the provision of security or otherwise as
circumstances may require.

	 	9.4.9	 	Manuals and technical records

The Borrower shall procure that:

	 	(a)	 	all such records, logs, manuals, technical data
and other materials and documents which are required to be maintained
in respect of the Vessel to comply with any applicable laws or the
requirements of the Vessel’s flag state and classification society are
maintained;

	 	(b)	 	accurate, complete and up-to-date logs and
records of all voyages made by the Vessel and of all maintenance,
repairs, alterations, modifications and additions to the Vessel are
kept; and

	 	(c)	 	following the occurrence of an Event of Default
and for as long as it is continuing on reasonable advance notice from
the Agent, the Agent or its representatives is permitted at any time to
examine and take copies of such logs and records and other records.

	 	9.4.10	 	Vessel’s Software

The Borrower shall obtain and maintain and procure that there are obtained
and maintained for the benefit of the Agent, the Borrower and the Charterer
and any other person hiring or chartering or operating the Vessel from time
to time all licences and permits (without liability on the part of the
Agent for the payment of any royalties as may be required from time to time
in respect of the computer software which is required for the operation of
the Vessel, including, but not limited to, navigation software) and shall
procure that all such licences and permits are granted without any
limitation or expiry (or are renewed prior to any such expiry).

	 	9.4.11	 	Manager

The Borrower shall procure that no commercial or technical manager of the
Vessel is appointed which is not a Manager without the prior written consent
of the Agent (acting upon the instructions of the Majority Lenders), such
consent not to be unreasonably withheld or delayed, and the Borrower shall
ensure that the Vessel which it owns is at all times under such commercial
or technical management.

	 	9.4.12	 	Safe operation

The Borrower shall take all steps necessary so as to ensure that the Vessel
should be navigated and operated in a proper, safe and seaman-like manner
and in the manner prescribed by any legislation, including Environmental
Laws, in force in the state of registration for the time being of the
Vessel and all other applicable jurisdictions.

 

42

 

	 	9.4.13	 	Charterhire amount

The amount of charterhire payable by the Charterer under a Vessel’s Charter
shall at all times until repayment in full of all amounts owing to the
Finance Parties in respect of the Vessel Tranche to which the relevant
Vessel relates be no less than the Charterhire Amount.

	 	9.4.14	 	Inspection

The Borrower shall ensure that the Agent, its surveyors or other persons
appointed by it will be permitted to inspect the Vessel, upon reasonable
notice and without interfering with the Vessel’s operation. Such
inspections shall be without cost to the Borrower unless either such
inspection reveals that the requirements of this clause 9.4 are not then
being complied with in all material respects or they are made after the
occurrence of an Event of Default that is continuing unremedied or
unwaived, in which case they (and any repairs as shall be required to
ensure compliance with this clause 9.4) shall be at the cost of the
Borrower.

	 	9.4.15	 	Notification of certain events

The Borrower shall, immediately upon the same coming to its attention and to
the best of its then current knowledge, notify the Agent by email (confirmed
forthwith by letter) of:

	 	(a)	 	any casualty of the Vessel which is or is
likely to give rise to a loss or cost of five million Dollars
(US$5,000,000) or more;

	 	(b)	 	any occurrence as a result of which the Vessel
has become or is, by the passing of time or otherwise, likely to become
a Total Loss;

	 	(c)	 	any requirement or recommendation made by any
existing insurer or classification society or by any relevant competent
authority which is not complied with within any applicable time period
for compliance stipulated by such authority;

	 	(d)	 	any arrest or detention of the Vessel, any
exercise or purported exercise of any lien on the Vessel or its
earnings or any requisition of the Vessel for hire;

	 	(e)	 	any change of name of the Vessel;

	 	(f)	 	any Environmental Claim made against the Agent
of which it is or becomes aware or in connection with the Vessel, or
any Environmental Incident or Environmental Claim in an amount in
excess of five million Dollars ($5,000,000) or the Dollar Equivalent
(in the case of a claim in any other currency) made against the
Borrower or any other Security Party or the Charterer in connection
with the Vessel;

 

43

 

	 	(g)	 	any claim for breach of the ISM Code or the
ISPS Code being made against the Borrower or any other Security Party
or the Charterer in connection with the Vessel;

	 	(h)	 	any other matter, event or incident in
connection with the Vessel or the Borrower which will lead to the ISM
Code or the ISPS Code not being complied with;

	 	(i)	 	any claims made in connection with a bodily
injury to a third party involving amounts in excess of an amount of
five million Dollars ($5,000,000) or the Dollar Equivalent (in the case
of a claim in any other currency);

	 	(j)	 	any security interest (other than a Permitted
Lien) arising over the Vessel or the Insurances or Requisition
Compensation;

	 	(k)	 	any other legal proceeding or arbitration
involving the Vessel or the Owner where the amount claimed by any party
(ignoring any counterclaim or defence of set-off) exceeds or may
reasonably be expected to exceed the Threshold Amount,

and the Borrower shall keep the Agent advised in writing on a regular basis
and in such detail as the Agent shall require of the response to any of
those events or matters by the Borrower or the applicable Security Party or
any other person.

	 	9.4.16	 	Restrictions on chartering

The Borrower shall not, without the prior written consent of the Agent
(acting upon the instructions of the Lenders, acting reasonably) in respect
of the Vessel owned by it:

	 	(a)	 	let or otherwise charter the Vessel to any
other party, except pursuant to the Charter, or any party approved
pursuant to clause 10.2.25 below;

	 	(b)	 	make any material amendment to the Charter or
waive any material provision of the Charter or terminate the Charter;

	 	(c)	 	put the Vessel into the possession of any
person for the purpose of work being done upon it in an amount
exceeding or likely to exceed five million Dollars (US$5,000,000) (or
the Dollar Equivalent (in the case of a claim in any other currency))
unless either:

	 	i)	 	that person has
first given to the Agent and in terms satisfactory to
it a written undertaking not to exercise any lien on
the Vessel or its earnings for the cost of such work or
for any other reason; or

	 	ii)	 	the cost of
such work is covered by insurances; or

	 	iii)	 	the Borrower
establishes to the reasonable satisfaction of the Agent
that it has sufficient funds

 

44

 

	 	 	 	to pay for the cost of such work.

	 	9.4.17	 	Each Borrower further covenants with the Agent in respect of the Vessel owned
by it:-

	 	(a)	 	to maintain the registration of
that Vessel under its current Primary Registry and the bareboat
charter registration under its current Bareboat Registry or
another Pre-approved Flag; to effect and maintain registration
of the Mortgage at that Vessel’s Primary Registry; and not
cause nor permit to be done any act or omission as a result of
which either of those registrations might be defeated or
imperilled; and

	 	(b)	 	in the event of any requisition
or seizure of that Vessel, to take all lawful steps to recover
possession of that Vessel as soon as it is entitled to do so;
and

	 	(c)	 	to give to the Agent from time
to time during the Facility Period on request such information
as the Agent may require with regard to that Vessel’s
employment, position and state of repair; and

	 	(d)	 	not during hostilities (whether
or not a state of war shall formally have been declared and
including, without limitation, any civil war) to permit that
Vessel to be employed in carrying any goods which may be
declared to be contraband of war or which may render that
Vessel liable to confiscation, seizure, detention or
destruction, nor to permit that Vessel to enter any area which
is declared a war zone by any governmental authority or by that
Vessel’s insurers unless the Owner has effected at its own
expense such additional insurances as shall be necessary or
customary for first class shipowners. The Owner shall promptly
notify the Agent thereof and, if required by the Agent,
specifically assign those insurances to the Agent by such
documents as the Agent, acting reasonably, may require; and

	 	(e)	 	to employ the Vessel under the
Charter (or such other charter as may be approved by the Agent
pursuant to clause 10.2.31) from the Delivery Date until the
date upon which the Indebtedness has been paid, performed
and/or discharged in full; and

	 	(f)	 	not without the prior written
consent of the Agent (acting upon the instructions of the
Majority Lenders) to enter into any agreement or arrangement
for sharing the Earnings; and

	 	(g)	 	not at any time during the
Facility Period without the prior written consent of the Agent
(acting upon the instructions of all Lenders) (and then subject
to such conditions as the Agent (acting upon the instructions
of all Lenders) may impose) to create nor grant nor permit to
exist any

 

45

 

	 	 	 	Encumbrance over that Vessel or any share in that Vessel or
any of the Assigned Property other than any Permitted Liens
existing from time to time; and

	 	(h)	 	to take all reasonable
precautions to prevent any infringements of any anti drug
legislation in any jurisdiction in which that Vessel shall
trade and in particular (if that Vessel is to trade in the
United States of America) to take all reasonable precautions to
prevent any infringements of the Anti-Drug Abuse Act of 1986 of
the United States of America and for this purpose, if required,
to enter into a “Carrier Initiative Agreement” with the United
States’ Customs Service and to procure that the same or a
similar agreement is maintained in full force and effect and
that the Owner’s obligations thereunder are performed in
respect of that Vessel.

	 	9.5	 	Minimum security value

Each Borrower undertakes that this clause 9.5 will be complied with throughout any
Mortgage Period.

	 	9.5.1	 	Valuation of assets

	 	 	 	For the purpose of the Security Documents, the value at any time of any
Mortgaged Vessel or any other asset over which additional security is
provided under this clause 9.5 will be its value as most recently determined
in accordance with this clause 9.5.

	 	9.5.2	 	Valuation frequency

	 	 	 	Valuation of each Mortgaged Vessel and each such other asset in accordance
with this clause 9.5 shall be obtained as at each Minimum Value Test Date
(or within no more than 14 days thereof).

	 	9.5.3	 	Expenses of valuation

	 	 	 	The Borrowers shall bear, and reimburse to the Agent where incurred by the
Agent, all reasonable costs and expenses of providing such a Valuation.

	 	9.5.4	 	Valuations procedure

	 	 	 	The value of any Mortgaged Vessel shall be determined in accordance with,
and by valuers approved and appointed in accordance with, this clause 9.5.
Additional security provided under this clause 9.5 shall be valued in such a
way, on such a basis and by such persons (including the Agent itself) as may
be approved by the Majority Lenders or as may be agreed in writing by the
Borrowers and the Agent (on the instructions of the Majority Lenders).

	 	9.5.6	 	Information required for Valuation

 

46

 

	 	 	 	The Borrowers shall promptly provide to the Agent and any such valuer any
information which they reasonably require for the purposes of providing such
a Valuation.

	 	9.5.7	 	Security shortfall

	 	 	 	If at any time the Security Value is less than the Minimum Value, the Agent
may, and shall, if so directed by the Majority Lenders, by notice to the
Borrowers require such deficiency be remedied. The Borrowers shall then
within 30 days of receipt of such notice ensure that the Security Value
equals or exceeds the Minimum Value. For this purpose, the Borrowers may:

	 	(a)	 	provide additional security over other assets
approved by the Majority Lenders in accordance with this clause 9.5;
and/or

	 	(b)	 	cancel part of the Commitments and/or prepay
part of the Loan under clause 5.4 (Prepayment and Cancellation).

	 	9.5.8	 	Creation of additional security

	 	 	 	The value of any additional security which the Borrowers offer to provide to
remedy all or part of a shortfall in the amount of the Security Value will
only be taken into account for the purposes of determining the Security
Value if and when:

	 	(a)	 	that additional security, its value and the
method of its valuation have been approved by the Majority Lenders;

	 	(b)	 	a Security Interest over that security has been
constituted in favour of the Security Trustee in an approved form and
manner;

	 	(c)	 	this Agreement has been unconditionally amended
in such manner (if any) as the Agent requires in consequence of that
additional security being provided; and

	 	(d)	 	the Agent, or its duly authorised
representative, has received such documents and evidence it may require
in relation to that additional security (including legal opinions) in
relation to that additional security and its execution and (if
applicable) registration.

	10	 	Events Of Default

	 	10.1	 	The Agent’s rights If any of the events set out in Clause 10.2 occurs, the
Agent may at its discretion (and, on the instructions of the Majority Lenders, will):

	 	10.1.1	 	by notice to the Borrowers declare the Lenders to be under no further
obligation to the Borrowers under or pursuant to this Agreement and may (and,
on the instructions of the Majority Lenders, will) declare all or any part of
the Indebtedness (including such unpaid interest and Commitment Commissions as
shall have accrued and any Break Costs incurred by the Finance Parties) to be
immediately payable, whereupon the Indebtedness

 

47

 

	 	 	 	(or the part of the Indebtedness referred to in the Agent’s notice) shall
immediately become due and payable without any further demand or notice of
any kind; and/or

	 
	 	10.1.2	 	declare that any undrawn portion of the Facility shall be cancelled,
whereupon the same shall be cancelled and the corresponding Commitment of each
Lender shall be reduced to zero; and/or

	 
	 	10.1.3	 	exercise any rights and remedies in existence or arising under the Security
Documents or the Guarantee.

	 	10.2	 	Events of Default The events referred to in Clause 10.1 are:-

	 	10.2.1	 	Borrowers’ Failure to Pay under this Agreement The Borrowers fail to pay any
amount due from them under this Agreement at the time, in the currency and
otherwise in the manner specified herein provided that, if the Borrowers can
demonstrate to the reasonable satisfaction of the Agent that all necessary
instructions were given to effect such payment and the non-receipt thereof is
attributable solely to an error in the banking system, such payment shall
instead be deemed to be due, solely for the purposes of this paragraph 10.2.1,
within three (3) Business Days of the date on which it actually fell due under
this Agreement; or

	 
	 	10.2.2	 	Security Parties’ Failure to Pay under the Security Documents A Security
Party fails to pay any other amount due from it to a Finance Party under a
Security Document or the Guarantee and such failure continues unremedied for
five (5) Business Days or, in the case of sums payable on demand, ten (10)
Business Days, after such demand has been duly made on the relevant Security
Party; or

	 
	 	10.2.3	 	Misrepresentation Any representation or statement made by any Security Party
in favour of a Finance Party in any Security Document to which it is a party or
in the Guarantee or in any notice or other document, certificate or statement
delivered by it pursuant thereto or in connection therewith is or proves to
have been incorrect or misleading, where the circumstances causing the same
give rise to a Material Adverse Effect; or

	 
	 	10.2.4	 	Specific Covenants A Security Party fails duly to perform or comply with any
of the obligations expressed to be assumed by or procured by the Borrowers
under Clauses 9.1.1, 9.1.3, 9.1.7 or 9.1.13 or clauses 5.1.2 (Consents and
Licences) and 5.1.3 (Pari Passu) of the Guarantee; or

	 
	 	10.2.5	 	Financial Covenants and Value of Security The Guarantor is in breach of its
financial covenants set out in clause 5.2 of the Guarantee at any time or the
Borrowers do not comply with clause 9.5 (Minimum Security Value); or

	 
	 	10.2.6	 	Other Obligations A Security Party fails duly to perform or comply with any
of the obligations expressed to be assumed by it in favour of a Finance Party
in any Security Document or in the Guarantee (other than those referred to in
Clause 10.2.3 or Clause 10.2.4) and such failure is

 

48

 

	 	 	 	not remedied within thirty (30) days after the Agent or the Security
Trustee has given notice thereof to the Borrowers; or

	 
	 	10.2.7	 	Cross Default Any indebtedness of a member of the Guarantor Group is not
paid when due (or within any applicable grace period) or any indebtedness of a
member of the Guarantor Group is declared to be or otherwise becomes due and
payable prior to its specified maturity where (in either case) the aggregate of
all such unpaid or accelerated indebtedness:

	 	(a)	 	of the Guarantor or the Shareholder is equal
to or greater than fifty million Dollars ($50,000,000) or its
equivalent in any other currency; or

	 
	 	(b)	 	of any of the Borrowers is equal to or
greater than five million Dollars ($5,000,000) or its equivalent in
any other currency; or

	 
	 	(c)	 	of any other member of the Guarantor Group is
equal to or greater than twenty five million Dollars ($25,000,000) or
its equivalent in any other currency; or

	 	10.2.8	 	Insolvency and Rescheduling A Security Party is unable to pay its debts as
they fall due, commences negotiations with any one or more of its creditors
with a view to the general readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of its creditors or a composition
with its creditors; or

	 
	 	10.2.9	 	Winding-up A Security Party takes any corporate action or other steps are
taken or legal proceedings are started for its winding-up, dissolution,
administration or re-organisation or for the appointment of a liquidator,
receiver, administrator, administrative receiver, conservator, custodian,
trustee or similar officer of it or of any or all of its revenues or assets; or

	 
	 	10.2.10	 	Execution or Distress

	 	(a)	 	Any Security Party fails to comply with or
pay any sum due from it (within thirty (30) days of such amount
falling due) under any final judgment or any final order made or
given by any court or other official body of a competent jurisdiction
in an aggregate:

	 	(i)	 	in respect of the Guarantor
or the Shareholder equal to or greater than fifty million
Dollars ($50,000,000) or its equivalent in any other currency;
or

	 
	 	(ii)	 	in respect of any of the
Borrowers equal to or greater than five million Dollars
($5,000,000) or its equivalent in any other currency, or

	 
	 	(iii)	 	in respect of any other
Security Party equal to or greater than twenty five million
Dollars ($25,000,000) or its equivalent in any other currency,

	 	 	 	being a judgment or order against which there is no right of

 

49

 

	 	 	 	appeal or if a right of appeal exists, where the time limit for
making such appeal has expired.

	 
	 	(b)	 	Any execution or distress is levied
against, or an encumbrancer takes possession of, the whole or any
part of, the property, undertaking or assets of a Security Party in
an aggregate amount:

	 	(i)	 	in respect of the Guarantor
or the Shareholder equal to or greater than fifty million
Dollars ($50,000,000) or its equivalent in any other currency

	 
	 	(ii)	 	in respect of any of the
Borrowers equal to or greater than five million Dollars
($5,000,000) or its equivalent in any other currency, or

	 
	 	(iii)	 	in respect of any other
Security Party equal to or greater than twenty five million
Dollars ($25,000,000) or its equivalent in any other currency,

	 	 	 	other than any execution or distress which is being contested in
good faith and which is either discharged within thirty (30) days
or in respect of which adequate security has been provided within
thirty (30) days to the relevant court or other authority to enable
the relevant execution or distress to be lifted or released.

	 
	 	(c)	 	Notwithstanding the foregoing paragraphs
of this Clause 10.2.10, any levy of any distress on or any arrest,
condemnation, confiscation, requisition for title or use, compulsory
acquisition, seizure, detention or forfeiture of a Vessel (or any
part thereof) or any exercise or purported exercise of any lien or
claim on or against a Vessel where the release of or discharge the
lien or claim on or against such Vessel has not been procured within
thirty (30) days; or

	 	10.2.11	 	Similar Event Any event occurs which, under the laws of any jurisdiction,
has a similar or analogous effect to any of those events mentioned in Clauses
10.2.8, 10.2.9 and 10.2.10; or

	 
	 	10.2.12	 	Insurance Insurance is not maintained in respect of any Vessel in
accordance with the terms of the relevant Security Documents in respect of that
Vessel; or

	 
	 	10.2.13	 	Environmental Matters

	 	(a)	 	Any Environmental Claim is pending or
made against a Security Party or any of a Security Party’s
Environmental Affiliates or in connection with a Vessel, where such
Environmental Claim has a Material Adverse Effect; or

	 
	 	(b)	 	Any actual Environmental Incident occurs
in connection with a Vessel, where such Environmental Incident has a
Material Adverse Effect; or

 

50

 

	 	10.2.14	 	Repudiation Any Security Party repudiates any Security Document to which it
is a party or (in the case of the Guarantor) the Guarantee or does or causes to
be done any act or thing evidencing an intention to repudiate any such Security
Document or the Guarantee; or

	 
	 	10.2.15	 	Validity and Admissibility At any time any act, condition or thing required
to be done, fulfilled or performed in order:

	 	(a)	 	to enable any Security Party lawfully to
enter into, exercise its rights under and perform the respective
obligations expressed to be assumed by it in the Security Documents
and/or the Guarantee;

	 
	 	(b)	 	to ensure that the obligations expressed
to be assumed by each of the Security Parties in the Security
Documents and/or the Guarantee are legal, valid and binding; or

	 
	 	(c)	 	to make the Security Documents and/or the
Guarantee admissible in evidence in any applicable jurisdiction,

	 	 	 	is not done, fulfilled or performed within thirty (30) days after
notification from the Agent to the relevant Security Party requiring the
same to be done, fulfilled or performed; or

	 
	 	10.2.16	 	Illegality At any time it is or becomes unlawful for any Security Party to
perform or comply with any or all of its obligations under the Security
Documents to which it is a party and/or (in the case of the Guarantor) the
Guarantee or any of the obligations of the Borrowers hereunder are not or cease
to be legal, valid and binding and such illegality is not remedied or mitigated
to the satisfaction of the Agent within thirty (30) days after it has given
notice thereof to the relevant Security Party; or

	 
	 	10.2.17	 	Material Adverse Change At any time there shall occur a change in the
business or operations of a Security Party or a change in the financial
condition of any Security Party which, in the reasonable opinion of the
Majority Lenders, materially impairs such Security Party’s ability to discharge
its obligations under the Security Documents to which it is a party and/or (in
the case of the Guarantor) the Guarantee in the manner provided therein and
such change, if capable of remedy, is not so remedied within thirty (30)
Business Days of the delivery of a notice confirming such change by the Agent
to the relevant Security Party; or

	 
	 	10.2.18	 	Qualifications of Financial Statements The auditors of the Guarantor Group
qualify their report on any audited consolidated financial statements of the
Guarantor Group in any regard which, in the reasonable opinion of the Agent,
has a Material Adverse Effect; or

	 
	 	10.2.19	 	Conditions Subsequent If any of the conditions set out in Clause 3.4 is not
satisfied within thirty (30) days or such other time period specified by the
Agent in its discretion; or

 

51

 

	 	10.2.20	 	Revocation or Modification of consents etc. If any Necessary Authorisation
which is now or which at any time during the Facility Period becomes necessary
to enable any of the Security Parties to comply with any of their obligations
in or pursuant to any of the Security Documents or the Guarantee is, save as
expressly contemplated therein, revoked, withdrawn or withheld, or modified in
a manner which the Agent reasonably considers is, or may be, prejudicial to the
interests of a Finance Party in a material manner, or if such Necessary
Authorisation ceases to remain in full force and effect; or

	 
	 	10.2.21	 	Curtailment of Business If the business of any of the Security Parties is
wholly or materially curtailed by any intervention by or under authority of any
government, or if all or a substantial part of the undertaking, property or
assets of any of the Security Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any government or any Security
Party disposes or threatens to dispose of a substantial part of its business or
assets; or

	 
	 	10.2.22	 	Challenge to Registration If the registration of any Vessel or any Mortgage
becomes void or voidable or liable to cancellation or termination; or

	 
	 	10.2.23	 	War If the country of registration of any Vessel becomes involved in war
(whether or not declared) or civil war or is occupied by any other power and
the Agent reasonably considers that, as a result, the security conferred by the
Security Documents or the Guarantee is materially prejudiced save that the
Borrowers may, with the prior written consent of the Agent, register the Vessel
in a different country within 60 days of the existing country of registration
becoming involved in war or being occupied by any other power provided that (i)
no other Event of Default or Potential Event of Default is continuing, (ii) the
Agent considers that such action shall not prejudice its rights under the
Security Documents or the Guarantee, (iii) the Borrower shall provide the
Finance Parties with such additional security and legal opinions as may
reasonably be required by the Finance Parties and (iv) the Borrower shall
reimburse the Finance Parties for all costs and expenses relating thereto in
accordance with clause 15.2; or

	 
	 	10.2.24	 	Notice of Termination If the Guarantor gives notice to the Agent to
determine its obligations under the Guarantee; or

	 
	 	10.2.25	 	Charter If a cancellation, termination or default entitling either party to
terminate the Charter under any Charter occurs and is continuing or a Charter
otherwise ceases to be in full force and effect save that in circumstances
where:

	 	(a) 	 	either party to the Charter becomes entitled to terminate the Charter
prior to expiry and the Agent, acting reasonably, considers that such
default is capable of remedy, the relevant Owner shall be given sixty
(60) days (the Remedy Period”) after such right to terminate has arisen
to remedy or procure a remedy for such default; or

 

52

 

	 	(b) 	 	a Charter is terminated, cancelled or ceases to be in full force and
effect prior to expiry as a result of a default by the Charterer, the
relevant Owner shall be given sixty (60) days (the “Remarketing Period”)
after such termination in which to deliver the relevant Vessel to a new
charterer (which charterer shall be approved by the Lenders) under a new
charter (which charter shall be in a form and substance satisfactory to
all Lenders),

	 	 	 	Provided that in each case the Borrowers shall provide the Finance
Parties in connection therewith such additional security (which
additional security shall put the Finance Parties in substantially the
same position in terms of security and credit support as they were in at
the date of this Agreement in respect of the relevant Charter) and legal
opinions as may be required by the Finance Parties and shall reimburse
the Finance Parties for all costs and expenses relating thereto and
further Provided that the Agent may exercise its rights under clause 10.1
during the Remedy Period and/or the Remarketing Period if (a) an Event of
Default has occurred and is continuing or (b) it considers in its opinion
that its rights under the Security Documents are being or may be
materially prejudiced by a failure to exercise such rights during the
Remarketing Period.

	11	 	Set-Off and Lien

	 	11.1	 	Set-off The Borrowers irrevocably authorise each of the Finance Parties at any
time after all or any part of the Indebtedness shall have become due and payable to set
off without notice any liability of the Borrowers to any of the Finance Parties
(whether present or future, actual or contingent, and irrespective of the branch or
office, currency or place of payment) against any credit balance from time to time
standing on any account of the Borrowers (whether current or otherwise and whether or
not subject to notice) with any branch of any of the Finance Parties in or towards
satisfaction of the Indebtedness and, in the name of that Finance Party or the
Borrowers, to do all acts (including, without limitation, converting or exchanging any
currency) and execute all documents which may be required to effect such application.

	 
	 	11.2	 	Lien If an Event of Default has occurred and is continuing, unremedied or
unwaived, each Finance Party shall have a lien on and be entitled to retain and realise
as additional security for the repayment of the Indebtedness any cheques, drafts,
bills, notes or negotiable or non-negotiable instruments and any stocks, shares or
marketable or other securities and property of any kind of any of the Borrowers (or of
that Finance Party as agent or nominee of the Borrowers) from time to time held by that
Finance Party, whether for safe custody or otherwise.

	 
	 	11.3	 	Restrictions on withdrawal Despite any term to the contrary in relation to any
deposit or credit balance at any time on any account of any of the Borrowers with any
of the Finance Parties, no such deposit or balance shall be repayable or capable of
being assigned, mortgaged, charged or otherwise disposed of or dealt with by the
Borrower in question after an Event of Default has occurred and while such Event of
Default is continuing unremedied or unwaived, but any Finance Party may from time to
time permit the withdrawal of all or any part of any such deposit or balance without
affecting the continued application of this Clause.

 

53

 

	12	 	Assignment and Sub-Participation

	 	12.1	 	Right to assign Subject to clause 12.2 below, each of the Lenders may assign
or transfer all or any of its rights under or pursuant to the Security Documents and
the Guarantee or assign or grant sub-participations in all or any part of its
Commitment (i) to any other branch or Affiliate of that Lender or (ii) to any other
bank provided that in the case of sub-clause (ii) above such assignment or transfer
will only be effective on receipt by the Agent of written confirmation from the
incoming lender (in a form and substance satisfactory to the Agent) that such incoming
lender will assume the same obligations to the other Finance Parties as it would have
been under if it was a Lender listed in Schedule 1 hereto Provided that where a
purported transferee or assignee pursuant to this clause 12.1 is not a Qualifying
Lender, the transfer or assignment shall be subject to the prior written consent of the
Borrowers; and

	 
	 	12.2	 	Conditions The consent of the Borrowers is required for an assignment to
another bank which is not already a Lender unless an Event of Default is continuing
unremedied or unwaived. The Borrowers’ consent may not be unreasonably withheld or
delayed and will be deemed to have been given five Business Days after the relevant
Lender has requested consent unless consent is expressly refused within that time.

	 
	 	12.3	 	Borrowers’ co-operation The Borrowers will co-operate fully and will procure
that the Guarantor co-operates fully with the Lenders in connection with any
assignment, transfer or sub-participation pursuant to Clause 12.1; will execute and
procure the execution of such documents as the Lenders may require in connection
therewith; and irrevocably authorise each of the Finance Parties to disclose to any
proposed assignee, transferee or sub-participant (whether before or after any
assignment, transfer or sub-participation and whether or not any assignment, transfer
or sub-participation shall take place) all information relating to the Security
Parties, the Facility, the Security Documents or the Guarantee which each such Finance
Party may in its discretion consider necessary or desirable (subject to any duties of
confidentiality applicable to the Lenders generally).

	 
	 	12.4	 	Rights of assignee Any assignee, transferee or sub-participant of a Lender
shall (unless limited by the express terms of the assignment, transfer or
sub-participation) take the full benefit of every provision of the Security Documents
and the Guarantee benefiting that Lender. Such transfer shall not result in an
increased cost to or liability of the Borrowers at the time of the transfer that would
have not have arisen other than directly as a result of such transfer.

	 
	 	12.5	 	Transfer Certificates If any Lender wishes to transfer all or any of its
Commitment as contemplated in Clause 12.1 then such transfer may be effected by the
delivery to the Agent of a duly completed and duly executed Transfer Certificate in
which event, on the later of the Transfer Date specified in such Transfer Certificate
and the fifth Business Day after the date of delivery of such Transfer Certificate to
the Agent:

	 	12.5.1	 	to the extent that in such Transfer Certificate the Lender which is a party
thereto seeks to transfer its Commitment in whole, the Borrowers and such
Lender shall be released from further obligations towards each other under this
Agreement and their respective rights against each other

 

54

 

	 	 	 	shall be cancelled other than existing claims against such Lender for
breach of this Agreement (such rights, benefits and obligations being
referred to in this Clause 12.4 as “discharged rights and obligations”);

	 
	 	12.5.2	 	the Borrowers and the Transferee which is a party thereto shall assume
obligations towards each other and/or acquire rights against each other which
differ from such discharged rights and obligations only insofar as the
Borrowers and such Transferee have assumed and/or acquired the same in place of
the Borrowers and such Lender; and

	 
	 	12.5.3	 	the Finance Parties and the Transferee shall acquire the same rights and
benefits and assume the same obligations between themselves as they would have
acquired and assumed had such Transferee been an original party to this
Agreement as a Lender with the rights, benefits and/or obligations acquired or
assumed by it as a result of such transfer.

	 	12.6	 	Power of Attorney In order to give effect to each Transfer Certificate the
Finance Parties and the Borrowers each hereby irrevocably and unconditionally appoint
the Agent as its true and lawful attorney with full power to execute on their
respective behalves each Transfer Certificate delivered to the Agent pursuant to Clause
12.4 without the Agent being under any obligation to take any further instructions from
or give any prior notice to, any of the Finance Parties or, subject to the Borrowers’
rights under Clause 12.1, the Borrowers before doing so and the Agent shall so execute
each such Transfer Certificate on behalf of the other Finance Parties and the Borrowers
immediately on their receipt of the same pursuant to Clause 12.4.

	 
	 	12.7	 	Notification The Agent shall promptly notify the other Finance Parties, the
Transferee and the Borrowers on the execution by it of any Transfer Certificate
together with details of the amount transferred, the Transfer Date and the parties to
such transfer.

	 
	 	12.8	 	No Assignment or transfer by the Borrowers The Borrowers may not assign any of
their rights or transfer any of their rights or obligations under the Security
Documents without the prior written consent of the Lenders.

	 
	 	12.9	 	Original Lender For the benefit of The Export-Import Bank of China but without
prejudice to the rights of the Borrowers hereunder, Calyon hereby agrees that so long
as The Export-Import Bank of China remains a Lender Calyon shall ensure that its
Commitment shall at all times be not less than twenty per cent. (20%) of the aggregate
Commitments of all Lenders.

	13	 	Payments, Mandatory Prepayment, Reserve Requirements and Illegality

	 	13.1	 	Payments All amounts payable by the Borrowers to the Finance Parties under or
pursuant to any of the Security Documents shall be paid to such accounts at such banks
as the Agent may from time to time direct to the Borrowers and shall be paid in Dollars
in same day funds (or such funds as are required by the authorities in the United
States of America for settlement of international payments for immediate value).
Payments shall be deemed to have been received by the Agent on the date on which the
Agent receives authenticated advice of receipt, unless that advice is received by the
Agent on a day other than a Business Day or at a time of day (whether on a Business Day
or not) when the Agent in its reasonable

 

55

 

	 	 	 	discretion considers that it is impossible or impracticable for the Agent to utilise
the amount received for value that same day, in which event the payment in question
shall be deemed to have been received by the Agent on the Business Day next
following the date of receipt of advice by the Agent.

	 
	 	13.2	 	No deductions or withholdings All payments (whether of principal or interest
or otherwise) to be made by the Borrowers to the Finance Parties pursuant to the
Security Documents shall, subject only to Clause 13.3, be made free and clear of and
without deduction for or on account of any Taxes or other deductions, withholdings,
restrictions, conditions or counterclaims of any nature, and the Borrowers will not
claim any equity in respect of any payment due from them to the Finance Parties under
or in relation to any of the Security Documents.

	 
	 	13.3	 	Grossing-up If at any time any law requires (or is interpreted to require) the
Borrowers to make any deduction or withholding from any payment, or to change the rate
or manner in which any required deduction or withholding is made, the Borrowers will
promptly notify the Agent and, simultaneously with making that payment, will pay to the
Agent whatever additional amount (after taking into account any additional Taxes on, or
deductions or withholdings from, or restrictions or conditions on, that additional
amount) is necessary to ensure that, after making the deduction or withholding, the
Agent and the Lenders receive a net sum equal to the sum which they would have received
had no deduction or withholding been made.

	 
	 	13.4	 	Evidence of deductions If at any time the Borrowers are required by law to
make any deduction or withholding from any payment to be made by it to the Finance
Parties pursuant to any of the Security Documents, the Borrowers will pay the amount
required to be deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty (30) days after making that
payment, deliver to the Agent an original receipt issued by the relevant authority, or
other evidence reasonably acceptable to the Agent, evidencing the payment to that
authority of all amounts required to be deducted or withheld. If the Borrowers make any
deduction or withholding from any payment to the Finance Parties under or pursuant to
any of the Security Documents, and a Lender subsequently receives a refund or allowance
from any tax authority which that Lender at its sole discretion identifies as being
referable to that deduction or withholding, that Lender shall, as soon as reasonably
practicable, pay to the Borrowers an amount equal to the amount of the refund or
allowance received, if and to the extent that it may do so without prejudicing its
right to retain that refund or allowance and without putting itself in any worse
financial position than that in which it would have been had the deduction or
withholding not been required to have been made. Nothing in this Clause shall be
interpreted as imposing any obligation on any Lender to apply for any refund or
allowance nor as restricting in any way the manner in which any Lender organises its
tax affairs, nor as imposing on any Lender any obligation to disclose to the Borrowers
any information regarding its tax affairs or tax computations. All costs and expenses
incurred by any Lender in obtaining or seeking to obtain a refund or allowance from any
tax authority pursuant to this Clause shall be for the Borrowers’ account.

	 
	 	13.5	 	Adjustment of due dates If any payment to be made to the Finance Parties under
any of the Security Documents, other than a payment of interest on the Facility (to
which Clause 6.7 applies), shall be due on a day which is not a Business Day, that
payment shall be made on the next succeeding Business Day

 

56

 

	 	 	 	(unless the next succeeding Business Day falls in the next calendar month in which
event the payment shall be made on the next preceding Business Day). Any such
variation of time shall be taken into account in computing any interest in respect
of that payment.

	 
	 	13.6	 	Change in law If, by reason of the introduction of any law, or any change in
any law, or the interpretation or administration of any law, or in compliance with any
request or requirement from any central bank or any fiscal, monetary or other
authority:-

	 	13.6.1	 	any Finance Party (or the Holding Company of any Finance Party) shall be
subject to any Tax with respect to payments of all or any part of the
Indebtedness; or

	 
	 	13.6.2	 	the basis of Taxation of payments to any Finance Party in respect of all or
any part of the Indebtedness shall be changed; or

	 
	 	13.6.3	 	any reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans by any
branch of any Finance Party or its direct or indirect Holding Company; or

	 
	 	13.6.4	 	any ratio (whether cash, capital adequacy, liquidity or otherwise) which any
Finance Party or its direct or indirect Holding Company is required or
requested to maintain shall be affected; or

	 
	 	13.6.5	 	there is imposed on any Finance Party (or on the direct or indirect Holding
Company of any Finance Party) any other condition in relation to the
Indebtedness or the Security Documents or the Guarantee;

	 	 	 	and the result of any of the above shall be to increase the cost to any Lender (or
to the direct or indirect Holding Company of any Lender) of that Lender making or
maintaining its Commitment or its Drawing, or to cause any Finance Party to suffer
(in its reasonable opinion) a material reduction in the rate of return on its
overall capital below the level which it reasonably anticipated at the Execution
Date and which it would have been able to achieve but for its entering into this
Agreement and/or performing its obligations under this Agreement, the Finance Party
affected shall notify the Agent and, on demand to the Borrowers by the Agent, the
Borrowers shall from time to time pay to the Agent for the account of the Finance
Party affected the amount which shall compensate that Finance Party or the Agent (or
the relevant Holding Company) for such additional cost or reduced return. A
certificate signed by an authorised signatory of the Agent or of the Finance Party
affected setting out the amount of that payment and the basis of its calculation
shall be submitted to the Borrowers and shall be conclusive evidence of such amount
save for manifest error or on any question of law.

	 
	 	13.7	 	Illegality and impracticality Notwithstanding anything contained in the
Security Documents, the obligations of a Lender to advance or maintain its Commitment
shall terminate in the event that a change in any law or in the interpretation of any
law by any authority charged with its administration shall make it unlawful for that
Lender to advance or maintain its Commitment. In such event the Lender affected shall
notify the Agent and the Agent shall, by written notice to the Borrowers, declare that
Lender’s obligations to be immediately

 

57

 

	 	 	 	terminated. If all or any part of the Facility shall have been advanced by the
Lenders to the Borrowers, the portion of the Indebtedness (including all accrued
interest and Commitment Commission) advanced by the Lender so affected shall be
prepaid within thirty (30) days from the date of such notice, or sooner if
illegality is determined. Clause 5.4 shall apply to that prepayment if it is made
on a day other than the last day of an Interest Period. During that period, the
affected Lender shall negotiate in good faith with the Borrowers to find an
alternative method or lending base in order to maintain the Facility.

	 
	 	13.8	 	Changes in market circumstances If at any time a Lender determines (which
determination shall be final and conclusive and binding on the Borrowers) that, by
reason of changes affecting the London Interbank market, adequate and fair means do not
exist for ascertaining the rate of interest on the Facility or any part thereof
pursuant to this Agreement:-

	 	13.8.1	 	that Lender shall give notice to the Agent and the Agent shall give notice to
the Borrowers of the occurrence of such event; and

	 
	 	13.8.2	 	the Agent shall as soon as reasonably practicable certify to the Borrowers in
writing the effective cost to that Lender of maintaining its Commitment for
such further period as shall be selected by that Lender and the rate of
interest payable by the Borrowers for that period; or, if that is not
acceptable to the Borrowers,

	 
	 	13.8.3	 	the Agent in accordance with instructions from that Lender and subject to
that Lender’s approval of any agreement between the Agent and the Borrowers,
will negotiate with the Borrowers in good faith with a view to modifying this
Agreement to provide a substitute basis for that Lender’s Commitment which is
financially a substantial equivalent to the basis provided for in this
Agreement.

	 	 	 	If, within thirty (30) days of the giving of the notice referred to in
Clause 13.8.1, the Borrowers and the Agent fail to agree in writing on a substitute
basis for such Lender’s Commitment the Borrowers will immediately prepay the amount
of such Lender’s Commitment and the Maximum Amount will automatically decrease by
the amount of such Commitment and such decrease shall not be reversed. Clause 5.4
shall apply to that prepayment if it is made on a day other than the last day of an
Interest Period.

	 
	 	13.9	 	Non-availability of currency If a Lender is for any reason unable to obtain
Dollars in the London Interbank market and is, as a result, or as a result of any other
contingency affecting the London Interbank market, unable to advance or maintain its
Commitment in Dollars, that Lender shall give notice to the Agent and the Agent shall
give notice to the Borrowers and that Lender’s obligations to make the Facility
available shall immediately cease. In that event, if all or any part of the Facility
shall have been advanced by that Lender to the Borrowers, the Agent in accordance with
instructions from that Lender and subject to that Lender’s approval of any agreement
between the Agent and the Borrower, will negotiate with the Borrowers in good faith
with a view to establishing a mutually acceptable basis for funding the Facility or
relevant part thereof from an alternative source. If the Agent and the Borrowers have
failed to agree in writing on a basis for funding the Facility or relevant part thereof
from an alternative source by 11.00 a.m. on the second Business Day prior to the end of
the then

 

58

 

	 	 	 	current relevant Interest Period, the Borrowers will (without prejudice to its other
obligations under or pursuant to this Agreement, including, without limitation, its
obligation to pay interest on the Facility, arising on the expiry of the then
relevant Interest Period) prepay the Indebtedness (or relevant part thereof) to the
Agent on behalf of that Lender on the expiry of the then current relevant Interest
Period.

	14	 	Communications

	 	14.1	 	Method Any Communication may be given, delivered, made or served (as the case
may be) under or in relation to this Agreement by letter or fax or (subject to Clause
14.3) electronic mail and shall be in the English language and sent addressed:-

	 	14.1.1	 	in the case of any of the Lenders to the Agent at Calyon, 9 quai du Président
Paul Doumer, 92920 Paris, La Défense Cedex, France, Fax: (+33) 1 41 89 29 87,
Attn: Shipping Department, copy to: Calyon, London Shipping Department,
Broadwalk House, 5 Appold Street, London EC2A 2DA, Fax: (+44) (0) 20 7214 6689,
Attn: Head of Shipping;

	 
	 	14.1.2	 	in the case of the Agent, at Calyon, 9 quai du Président Paul Doumer, 92920
Paris, La Défense Cedex, France, Fax: (+33) 1 41 89 29 87, Attn: Shipping
Department, copy to: Calyon, London Shipping Department, Broadwalk House, 5
Appold Street, London EC2A 2DA, Fax: (+44) (0) 20 7214 6689, Attn: Head of
Shipping;

	 
	 	14.1.3	 	in the case of the Security Trustee, at Calyon, 9 quai du Président Paul
Doumer, 92920 Paris, La Défense Cedex, France, Fax: (+33) 1 41 89 29 87, Attn:
Shipping Department, copy to: Calyon, London Shipping Department, Broadwalk
House, 5 Appold Street, London EC2A 2DA, Fax: (+44) (0) 20 7214 6689, Attn:
Head of Shipping;

	 
	 	14.1.4	 	in the case of the Arranger, at Calyon, 9 quai du Président Paul Doumer,
92920 Paris, La Défense Cedex, France, Fax: (+33) 1 41 89 29 87, Attn: Shipping
Department, copy to: Calyon, London Shipping Department, Broadwalk House, 5
Appold Street, London EC2A 2DA, Fax: (+44) (0) 20 7214 6689, Attn: Head of
Shipping;

	 
	 	14.1.5	 	in the case of the Borrowers and/or the Guarantor to the Communications
Address;

	 	 	 	or to such other address or fax number as such party may designate for themselves by
written notice to the others.

	 
	 	14.2	 	Timing A Communication shall be deemed to have been duly given, delivered,
made or served to or on, and received by a party to this Agreement:-

	 	14.2.1	 	in the case of a fax when the sender receives one or more transmission
reports showing the whole of the Communication to have been transmitted to the
correct fax number; or

 

59

 

	 	14.2.2	 	if delivered to an officer of the relevant party or (in the case of the
Borrowers) left at the Communications Address at the time of delivery or
leaving; or

	 
	 	14.2.3	 	if posted, at 9.00 a.m. on the fifth Business Day after posting by prepaid
first class post. PROVIDED ALWAYS that Communications to the Agent and (to the
extent that they relate to the matters specified in clause 16.1.13 only) the
Lenders shall be effective only upon receipt; or

	 
	 	14.2.4	 	if by electronic mail, in accordance with Clause 14.3;

	 	 	 	Any Communication by fax shall be promptly confirmed in writing by post or hand
delivery.

	 
	 	14.3	 	Electronic communication

	 	14.3.1	 	Any communication to be made in connection with this Agreement may be made by
electronic mail or other electronic means, if the Borrowers and the relevant
Finance Party:

	 	(a)	 	agree that, unless and until notified to the
contrary, this is to be an accepted form of communication;

	 
	 	(b)	 	notify each other in writing of their
electronic mail address and/or any other information required to enable
the sending and receipt of information by that means; and

	 
	 	(c)	 	notify each other of any change to their
address or any other such information supplied by them.

	 	14.3.2	 	Any electronic communication made between the Borrowers and the relevant
Finance Party will be effective only when actually received in readable form
and acknowledged by the recipient (it being understood that any system
generated responses do not constitute an acknowledgement) and in the case of
any electronic communication made by the Borrowers to a Finance Party only if
it is addressed in such a manner as the Finance Party shall specify for this
purpose.

	 
	 	14.3.3	 	Any electronic communication made in accordance with this clause 14.3 shall
be confirmed in writing as soon as reasonably practicable thereafter.

	15	 	General Indemnities

	 	15.1	 	Currency In the event of any Finance Party receiving or recovering any amount
payable under any of the Security Documents in a currency other than the Currency of
Account, and if the amount received or recovered is insufficient when converted into
the Currency of Account at the date of receipt to satisfy in full the amount due, the
Borrowers shall, on the Agent’s written demand, pay to the Agent such further amount in
the Currency of Account as is sufficient to satisfy in full the amount due and that
further amount shall be due to the Agent on behalf of the Finance Parties as a separate
debt under this Agreement.

 

60

 

	 	15.2	 	Costs and expenses The Borrowers will, within fourteen days of the Agent’s
written demand, reimburse the Agent (on behalf of each of the Finance Parties) for all
reasonable out of pocket expenses including internal and external legal costs
(including stamp duty, Value Added Tax or any similar or replacement tax if applicable)
of and incidental to:-

	 	15.2.1	 	the negotiation, syndication, preparation, execution and registration of the
Security Documents and the Guarantee (whether or not any of the Security
Documents are actually executed or registered and whether or not all or any
part of the Facility is advanced);

	 
	 	15.2.2	 	any amendments, addenda or supplements to any of the Security Documents or
the Guarantee (whether or not completed);

	 
	 	15.2.3	 	any other documents (including legal opinions) which may at any time be
required by any Finance Party to give effect to any of the Security Documents
or the Guarantee or which any Finance Party is entitled to call for or obtain
pursuant to any of the Security Documents or the Guarantee; and

	 
	 	15.2.4	 	the exercise of the rights, powers, discretions and remedies of the Finance
Parties under or pursuant to the Security Documents or the Guarantee.

	 	15.3	 	Events of Default The Borrowers shall indemnify the Finance Parties from time
to time on demand against all losses and costs incurred or sustained by any Finance
Party as a consequence of any Event of Default, including (without limitation) any
Break Costs.

	 
	 	15.4	 	Funding costs The Borrowers shall indemnify the Finance Parties from time to
time on demand against all losses and costs incurred or sustained by any Finance Party
if, for any reason due to a default or other action by the Borrowers, any Drawing is
not advanced to the Borrowers after the relevant Drawdown Notice has been given to the
Agent, or is advanced on a date other than that requested in the Drawdown Notice,
including (without limitation), any Break Costs.

	 
	 	15.5	 	Protection and enforcement The Borrowers shall indemnify the Finance Parties
from time to time on demand against all losses, costs and liabilities which any Finance
Party may from time to time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on the Finance Parties
by the Security Documents or the Guarantee or in or about the exercise or purported
exercise by the Finance Parties of any of the rights, powers, discretions or remedies
vested in them under or arising out of the Security Documents or the Guarantee,
including (without limitation) any losses, costs and liabilities which any Finance
Party may from time to time sustain, incur or become liable for by reason of any
Finance Party being mortgagees of any Vessel, assignees of any Mortgage and/or a lender
to the Borrowers, or by reason of any Finance Party being deemed by any court or
authority to be an operator or controller, or in any way concerned in the operation or
control, of any Vessel. No such indemnity will be given to a Finance Party where any
such loss, cost or liability has occurred due to gross negligence or wilful misconduct
on the part of that Finance Party; however this shall not affect the right of any other
Finance Party to receive any such indemnity.

 

61

 

	 	15.6	 	Liabilities of Finance Parties The Borrowers will from time to time reimburse
the Finance Parties on demand for all sums which any Finance Party may pay on account
of any of the Security Parties or in connection with any Vessel (whether alone or
jointly or jointly and severally with any other person) including (without limitation)
all sums which any Finance Party may pay or guarantees which any Finance Party may give
in respect of the Insurances, any expenses incurred by any Finance Party in connection
with the maintenance or repair of any Vessel or in discharging any lien, bond or other
claim relating in any way to any Vessel, and any sums which any Finance Party may pay
or guarantees which they may give to procure the release of any Vessel from arrest or
detention.

	 
	 	15.7	 	Taxes The Borrowers shall pay all Taxes imposed on the Finance Parties in
respect of the Security Documents or to which all or any part of the Indebtedness or
any of the Security Documents or the Guarantee may be at any time subject and shall
indemnify the Finance Parties on demand against all liabilities, costs, claims and
expenses incurred in connection therewith, including but not limited to any such
liabilities, costs, claims and expenses resulting from any omission to pay or delay in
paying any such Taxes. The indemnity contained in this Clause shall survive the
repayment of the Indebtedness.

	 
	 	15.8	 	Value Added Tax All amounts set out, or expressed to be payable by the
Borrowers to the Finance Parties pursuant to the Security Documents which (in whole or
in part) constitute consideration for a supply for Value Added Tax purposes shall be
deemed to be exclusive of any Value Added Tax which is chargeable on such supply, and
accordingly, if Value Added Tax is chargeable on any supply made by any Finance Party
to a Borrower under a Security Document, that Borrower shall pay to the Finance Party
(in addition to and at the same time as paying the consideration) an amount equal to
the amount of the Value Added Tax.

	16	 	Appointment of Agent and Security Trustee

	 	16.1	 	Agent

	 	16.1.1	 	Each other Finance Party irrevocably appoints the Agent to act as its agent in
connection herewith and with each other Security Document and the Guarantee and each
Lender authorises the Agent to exercise such rights, powers and discretions as are
specifically delegated to such party by the terms hereof or thereof together with all
such rights, powers and discretions as are reasonably incidental hereto or thereto.

	 
	 	16.1.2	 	The Agent may:

	 	(a)	 	assume that no Event of Default has occurred and that no
party to any Security Document or the Guarantee is in breach of or default
under its obligations under any Security Document or the Guarantee unless the
Agent has actual knowledge or actual notice to the contrary;

	 
	 	(b)	 	assume that each Lender’s lending office is that specified in
schedule 1 or (as the case may be) in the Transfer Certificate whereby such
Lender became a party hereto until it has received from such Lender a notice
designating some other office of such Lender as its lending office (that
complies with the requirements of this Agreement and the other Security

 

62

 

	 	 	 	Documents) and act upon any such notice until the same is superseded by a
further such notice;

	 
	 	(c)	 	engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may to it
seem necessary, expedient or desirable and rely upon any advice so obtained;

	 
	 	(d)	 	rely as to any matters of fact which might reasonably be
expected to be within the knowledge of any Borrower or any other party to the
Security Documents or the Guarantee upon a certificate signed by or on behalf
of that Borrower or such other party, as the case may be;

	 
	 	(e)	 	rely upon any communication or document reasonably believed
by it to be genuine;

	 
	 	(f)	 	refrain from exercising any right, power or discretion vested
in it hereunder or under any Security Document or the Guarantee unless and
until instructed by the Majority Lenders as to whether or not such right,
power or discretion is to be exercised and, if it is to be exercised, as to
the manner in which it should be exercised;

	 
	 	(g)	 	refrain from acting in accordance with any instructions of
the Majority Lenders to begin any legal action or proceedings arising out of
or in connection with this Agreement or any other Security Document or the
Guarantee until it shall have been indemnified and/or secured (whether by way
of payment in advance or otherwise) to its satisfaction against any and all
costs, claims, expenses (including legal fees) and liabilities which it will
or may expend or incur in complying with such instructions; and

	 
	 	(h)	 	take such action as is, in the opinion of the Agent,
necessary or advisable to preserve all or any of the rights of the Lenders
under any Security Document or the Guarantee whether or not it is practicable
to consult with or inform the Lenders or any of them prior to the taking of
such action.

	 
	 	 	 	For the purpose of this clause 16.1 the Agent shall not be treated as having
actual knowledge of any matter of which the corporate finance or any other
division outside the agency or loan administration department of the person
for the time being acting as such Agent may become aware in the context of
corporate finance, advisory or lending activities from time to time
undertaken by that Agent for any Borrower or any member of the Guarantor
Group or any other person which may be a trade competitor of any Borrower.

	 	16.1.3	 	The Agent shall:

	 	(a)	 	promptly inform each Lender of the contents of any
notice or document received by it in its capacity as Agent hereunder or
under any other Security Document or the Guarantee;

	 
	 	(b)	 	promptly notify each Lender of the occurrence of
any Event of Default of which the Agent has actual knowledge or actual
notice;

 

63

 

	 	(c)	 	subject to the foregoing provisions of this
clause 16.1, act in accordance with any instructions given to it by the
Majority Lenders; and

	 
	 	(d)	 	if so instructed by the Majority Lenders, refrain
from exercising a right, power or discretion vested in it hereunder or
under any other Security Document or the Guarantee.

	 	16.1.4	 	Notwithstanding anything to the contrary expressed or implied herein, the Agent
shall not:

	 	(a)	 	be bound to enquire as to the occurrence or otherwise
of any Event of Default or as to the performance by any Borrower or any
other party to the Security Documents or the Guarantee of its obligations
hereunder or under any other Security Document or the Guarantee unless
instructed in any specific case to do so by the Majority Lenders;

	 
	 	(b)	 	be bound to account to any Lender for any sum or the
profit element of any sum received by it for its own account;

	 
	 	(c)	 	be bound to disclose to any other person any
information relating to any Borrower or any other party to the Security
Documents or the Guarantee if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be otherwise
actionable at the suit of any person; or

	 
	 	(d)	 	be under any obligations other than those for which
express provision is made herein and in the other Security Documents and
the Guarantee.

	 	16.1.5	 	Each Lender shall indemnify the Agent, to the extent the same are not reimbursed by
the Borrowers, such Lender’s Proportionate Share of any and all costs, claims, out of
pocket expenses (including legal fees) and liabilities which the Agent may incur in
connection with the performance of its functions hereunder or under any other Security
Document or the Guarantee, Provided that the Agent shall not be entitled to be
indemnified by the Lenders for any such costs, claims, expenses or liabilities incurred
by the Agent as a result of its recklessness or wilful misconduct.

	 
	 	16.1.6	 	The Agent accepts no responsibility for the legality, validity, effectiveness,
adequacy or enforceability of this Agreement or any other Security Document or the
Guarantee and neither the Agent nor any of its respective directors, officers or
employees shall be under any liability as a result of taking or omitting to take any
action in relation to this Agreement or any other Security Document or the Guarantee
save in the case of the Agent’s gross negligence or wilful misconduct.

	 
	 	16.1.7	 	Each of the Lenders agrees that it will not assert or seek to assert against any
director, officer or employee of the Agent any claim it might have against any of them
in respect of any of the matters referred to in clause 16.1.6.

 

64

 

	 	16.1.8	 	The Agent may without liability to account accept deposits from, lend money to and
generally engage in any kind of banking or other business with any other party to the
Security Documents or the Guarantee.

	 
	 	16.1.9	 	It is understood and agreed by each Lender that it has itself been, and will continue
to be solely responsible for making its own independent appraisal of and investigations
into the financial condition, creditworthiness, condition, affairs, status and nature
of any Security Party and the other parties to the Security Documents and accordingly
each Lender confirms to the Agent that it has not relied and will not hereafter rely on
the Agent:

	 	(a)	 	to check or enquire on its behalf into the adequacy, accuracy
or completeness of any information provided by any Borrower, the Guarantor or
any other party to the Security Documents in connection with this Agreement or
any other Security Document or the Guarantee or the transactions herein or
therein contemplated (whether or not such information has been or is hereafter
circulated to such Lender by any Security Party); or

	 
	 	(b)	 	to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any
Security Party or any other party to the Security Documents.

	 	16.1.10	 	The Agent may retire at any time without assigning any reason by giving to the
Borrowers and each Lender not less than forty five (45) days’ notice of its intention to
do so and may be removed by the Majority Lenders, provided that (a) no such resignation
or removal shall be effective until a successor for the Agent is appointed in accordance
with the provisions of this clause 16.1.10 and (b) the Agent must at the same time
retire as Security Trustee and the Agent’s resignation will only take effect upon the
effective transfer of the Civil Law Security Documents to a successor Security Trustee;
the Majority Lenders may, with the agreement of the Borrowers (unless a Event of Default
is then continuing unremedied, in which case no consent of the Borrowers shall be
required) appoint a successor during such period but if none does so the Agent may,
with the agreement of the Borrowers appoint as its successor a reputable and experienced
bank or other financial institution; any such appointment shall (subject to the
foregoing provisions of this clause 16.1.10) take effect upon notice thereof being given
to the Borrowers and each Lender.

	 
	 	 	 	Any corporation into which the Agent may be merged or converted or any corporation
with which the Agent may be consolidated or any corporation resulting from any
merger, conversion, amalgamation, consolidation or other reorganisation to which the
Agent shall be a party shall, to the extent permitted by applicable law, be the
successor agent under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement, save that
notice of any such merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to the Borrowers and the Lenders.

	 
	 	16.1.11	 	If a successor to the Agent is appointed pursuant to clause 16.1.10, (i) the retiring
Agent shall be discharged of any further obligation but shall remain entitled to the
benefit of the provisions of this clause 16.1 and (ii) its successor and each of the
other parties to this Agreement and each other Security Document and the

 

65

 

	 	 	 	Guarantee shall have the same rights and obligations amongst themselves as they
would have had if such successor had been a party hereto and to those other Security
Documents to which the retiring Agent was a party and the Guarantee, but without
prejudice to any obligations accrued prior thereto.

	 
	 	16.1.12	 	The Agent may:

	 	(a)	 	refrain from doing anything which would or might in its opinion
be contrary to any law or official directive of any relevant jurisdiction or
otherwise render it liable to any person and may do anything which is in its
opinion necessary to comply with any such law or directive; and

	 
	 	(b)	 	refrain from taking any action (or further action) to protect
or enforce the right of any Lender under this Agreement or any Security
Document or the Guarantee until it has been indemnified and/or secured to its
satisfaction against any and all costs, losses, expenses or liabilities
(including legal fees) which it would or might sustain or incur as a result.

	 	16.1.13	 	Except with the prior written consent of each of the Lenders and subject as otherwise
provided in this Agreement the Agent shall not have authority on behalf of the Lenders
to agree with any Security Party any amendment to this Agreement which would:

	 	(a)	 	reduce the Margin or the amount of any other payment to be made
for account of the Lenders under this Agreement or the other Security Documents
or the Guarantee;

	 
	 	(b)	 	alter the due date, reduce the amount or alter the currency of
any payment of principal, interest or other amount payable under this
Agreement;

	 
	 	(c)	 	alter any Lender’s Commitment or subject any Lender to any
obligations not expressly contemplated by this Agreement or any Security
Document or the Guarantee;

	 
	 	(d)	 	alter the Availability Termination Date;

	 
	 	(e)	 	amend, modify or vary the definition of “Majority Lenders”;

	 
	 	(f)	 	amend, modify, vary, release or discharge any of the Security
Documents, the Guarantee or the security interests constituted thereby or
consent to any of the same save in accordance with the terms of this Agreement
and the other Security Documents or the Guarantee;

	 
	 	(g)	 	amend, modify or vary clauses 16.5 (Order of Application) or
16.7 (Payment Mechanics) of this Agreement or any equivalent clause contained
in any Security Document or the Guarantee; or

	 
	 	(h)	 	waive or defer any condition precedent.

	 	16.1.14	 	Unless otherwise agreed between the Lenders, if at any time a Lender receives or
recovers by way of set-off, the exercise of any lien or otherwise from any Security
Party, an amount greater than that Lender’s Proportionate Share of any sum due from that
Security Party to the Lenders under the Security Documents or the

 

66

 

	 	 	 	Guarantee or greater than such Lender is entitled to (the amount of the excess being
referred to in this clause 16.1.14 and in clause 16.1.15 as the “Excess Amount”)
then:

	 	(a)	 	that Lender shall promptly notify the Agent (which shall
promptly notify each other Lender);

	 
	 	(b)	 	that Lender shall pay to the Agent an amount equal to the
Excess Amount within ten (10) days of its receipt or recovery of the Excess
Amount; and

	 
	 	(c)	 	the Agent shall treat that payment as if it were a payment by
the Security Party in question on account of the sum due from that Security
Party to the Lenders and shall account to the Lenders in respect of the Excess
Amount in accordance with the provisions of this clause 16.1.14.

	 	 	 	However, if a Lender has commenced any legal proceedings to recover sums owing to it
under the Security Documents or the Guarantee and, as a result of, or in connection
with, those proceedings has received an Excess Amount, the Agent shall not
distribute any of that Excess Amount to any other Lender which had been notified of
the proceedings and had the legal right to, but did not, join those proceedings or
commence and diligently prosecute separate proceedings to enforce its rights in the
same or another court.

	 
	 	16.1.15	 	If all or any part of any Excess Amount is rescinded or must otherwise be restored to
any Security Party or to any other third party, the Lenders which have received any part
of that Excess Amount by way of distribution from the Agent pursuant to clause 16.1.14
shall repay to the Agent for the account of the Lender which originally received or
recovered the Excess Amount, the amount which shall be necessary to ensure that the
Lenders share rateably in the amount of the receipt or payment retained in accordance
with the provisions of this Agreement, together with interest on that amount at a rate
equivalent to that (if any) paid by the Lender receiving or recovering the Excess Amount
to the person to whom that Lender is liable to make payment in respect of such amount,
and clause 16.1.14(c) shall apply only to the retained amount.

	 
	 	16.1.16	 	The Agent may, with the prior written approval of the Majority Lenders, amend any
provision of this Agreement or any other Security Document or the Guarantee if such
amendment is necessary to correct any manifest error herein or therein, and any such
amendment shall be binding on all the Lenders.

	 
	 	16.1.17	 	Except with the prior written consent of the Agent, the Lenders shall not have
authority to amend, modify or vary any provision of this Agreement which regulates the
remuneration, rights, duties and/or powers of the Agent.

	 	16.2	 	Security Trustee

	 	16.2.1	 	Each Finance Party irrevocably appoints the Security Trustee to act as its agent and
(for the purposes of the Common Law Security Documents) trustee in connection herewith
and with each other Security Document and each Finance Party authorises the Security
Trustee to exercise such rights, powers and discretions as are specifically delegated to
such party by the terms hereof or thereof together with all such rights, powers and
discretions as are reasonably

 

67

 

	 	 	 	incidental hereto or thereto. Each Finance Party also irrevocably appoints the
Security Trustee as trustee of the Trust Property.

	 
	 	16.2.2	 	The Security Trustee may:

	 	(a)	 	assume that no Event of Default has occurred and that no party
to any Security Document is in breach of or default under its obligations under
any Security Document unless the Security Trustee has actual knowledge or
actual notice to the contrary;

	 
	 	(b)	 	engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may to it
seem necessary, expedient or desirable and rely upon any advice so obtained;

	 
	 	(c)	 	rely as to any matters of fact which might reasonably be
expected to be within the knowledge of any Security Party or any other party to
the Security Documents upon a certificate signed by or on behalf of that
Security Party or such other party, as the case may be;

	 
	 	(d)	 	rely upon any communication or document reasonably believed by
it to be genuine;

	 
	 	(e)	 	refrain from exercising any right, power or discretion vested
in it hereunder or under any Security Document unless and until instructed by
the Majority Lenders as to whether or not such right, power or discretion is to
be exercised and, if it is to be exercised, as to the manner in which it should
be exercised;

	 
	 	(f)	 	refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal action or proceedings arising out of or in
connection with this Agreement or any other Security Document until it shall
have been indemnified and/or secured (whether by way of payment in advance or
otherwise) to its satisfaction against any and all costs, claims, expenses
(including legal fees) and liabilities which it will or may expend or incur in
complying with such instructions; and

	 
	 	(g)	 	take such action as is, in the opinion of the Security Trustee
necessary or advisable to preserve all or any of the rights of the Finance
Parties under any Security Document whether or not it is practicable to consult
with or inform the Finance Parties or any of them prior to the taking of such
action.

	 
	 	 	 	For the purpose of this clause 16.2.2 the Security Trustee shall not be
treated as having actual knowledge of any matter of which the corporate
finance or any other division outside the agency or loan administration
department of the person for the time being acting as such Security Trustee
may become aware in the context of corporate finance, advisory or lending
activities from time to time undertaken by that Security Trustee for any
Borrower or any member of the Guarantor Group or any other person which may be
a trade competitor of any Borrower.

 

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	 	16.2.3	 	The Security Trustee shall:

	 	(a)	 	promptly inform each Finance Party of the contents of any
notice or document received by it in its capacity as Security Trustee hereunder
or under any other Security Document;

	 
	 	(b)	 	promptly notify each Finance Party of the occurrence of any
Event of Default or any default by any Security Party or any other party to the
Security Documents in the due performance of or compliance with its obligations
under this Agreement or any other Security Document of which the Security
Trustee has actual knowledge or actual notice;

	 
	 	(c)	 	subject to the foregoing provisions of this clause 16.2, act in
accordance with any instructions given to it by the Majority Lenders; and

	 
	 	(d)	 	if so instructed by the Majority Lenders, refrain from
exercising a right, power or discretion vested in it hereunder or under any
other Security Document.

	 	16.2.4	 	Notwithstanding anything to the contrary expressed or implied herein, the Security
Trustee shall not:

	 	(a)	 	be bound to enquire as to the occurrence or otherwise of any
Event of Default or as to the performance by any Security Party or any other
party to the Security Documents of its obligations hereunder or under any other
Security Document unless instructed in any specific case to do so by the
Majority Lenders;

	 
	 	(b)	 	be bound to account to any Finance Party for any sum or the
profit element of any sum received by it for its own account;

	 
	 	(c)	 	be bound to disclose to any other person any information
relating to any Security Party or any other party to the Security Documents if
such disclosure would or might in its opinion constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person; or

	 
	 	(d)	 	be under any obligations other than those for which express
provision is made herein and in the other Security Documents.

	 	16.2.5	 	The Security Trustee shall have all the powers and discretions conferred upon trustees
by the Trustee Act 2000 (to the extent not inconsistent herewith) and upon the Security
Trustee by this Agreement and upon a receiver by any Security Document (as though the
Security Trustee were a receiver thereunder) and by way of supplement it is expressly
declared as follows:

	 	(a)	 	the Security Trustee shall be at liberty to place any Security
Document and any other instruments, documents or deeds delivered to it pursuant
hereto or thereto or in connection herewith or therewith for the time being in
its possession in any safe deposit, safe or receptacle selected by the Security
Trustee or with any bank or company whose business includes undertaking the
safe custody of documents or any firm of lawyers and the Security Trustee shall
not be responsible for any loss thereby incurred;

 

69

 

	 	(b)	 	save as provided in this Agreement or any other Security
Document, the Security Trustee shall as regards all rights, trusts, powers,
authorities and discretions hereby vested in it have absolute and uncontrolled
discretion as to the exercise or non-exercise thereof and as to the manner and
time of any such exercise thereof; and

	 
	 	(c)	 	the Security Trustee may whenever it thinks fit delegate by
power of attorney or otherwise to any person or persons or fluctuating body of
persons all or any of the rights, trusts, powers, authorities and discretions
vested in it by virtue of the provisions hereof and such delegation may be made
upon such terms and subject to such conditions and subject to such regulations
as the Security Trustee may think fit and, provided that the Security Trustee
shall have exercised reasonable care in selecting any such delegate or
sub-delegate, the Security Trustee shall not be bound to supervise the
proceedings or be in any way responsible for any loss incurred by reason of any
misconduct or default on the part of any such delegate or sub-delegate.

	 	16.2.6	 	The Security Trustee shall:

	 	(a)	 	be entitled, following consultation with the Majority Lenders,
to invest moneys which in the opinion of the Security Trustee may not be paid
out promptly following receipt in the name or under the control of the Security
Trustee in any of the investments for the time being authorised by law for the
investment by trustees of trust moneys or in any other investments whether
similar to the aforesaid or not which may be requested by the Majority Lenders
or by placing the same on demand in the name or under the control of the
Security Trustee as the Security Trustee may think fit and the Security Trustee
may at any time vary or transpose any such investments for or into any others
of a like nature and shall not be responsible for any loss due to depreciation
in value or otherwise of such investments; and

	 
	 	(b)	 	be entitled at any time to appoint (and subsequently to
dismiss) such other person as it thinks fit to become an additional trustee
under any Security Document to assist it in carrying out the duties imposed on
it by virtue of the provisions hereof and each such additional trustee shall be
entitled to the same rights and subject to the same obligations hereunder as
the Security Trustee.

	 	16.2.7	 	Each Finance Party shall indemnify the Security Trustee (rateably in accordance with
its interest in the Loan) at the time any such costs, claims, expenses or liabilities
are incurred and to the extent the same are not reimbursed by the Security Parties, of
any and all costs, claims, out of pocket expenses (including legal fees) and liabilities
which the Security Trustee may incur in connection with the performance of its functions
hereunder or under any other Security Document, Provided that the Security Trustee shall
not be entitled to be indemnified by the Finance Parties for any such costs, claims,
expenses or liabilities incurred by the Security Trustee as a result of its recklessness
or wilful misconduct.

	 
	 	16.2.8	 	The Security Trustee accepts no responsibility for the legality, validity,
effectiveness, adequacy or enforceability of this Agreement or any other Security
Document and neither the Security Trustee nor any of its respective directors,

 

70

 

	 	 	 	officers or employees shall be under any liability as a result of taking or omitting
to take any action in relation to this Agreement or any other Security Document save
in the case of the Security Trustee’s gross negligence or wilful misconduct.

	 	16.2.9	 	Each of the Finance Parties agrees that it will not assert or seek to assert against
any director, officer or employee of the Security Trustee any claim it might have
against any of them in respect of any of the matters referred to in clause 16.2.8.

	 
	 	16.2.10	 	The Security Trustee may without liability to account accept deposits from, lend
money to and generally engage in any kind of banking or other business with any other
party to the Security Documents.

	 
	 	16.2.11	 	It is understood and agreed by each Finance Party that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition, affairs,
status and nature of any Security Party and the other parties to the Security Documents
and accordingly each Finance Party confirms to the Security Trustee that it has not
relied and will not hereafter rely on the Security Trustee:

	 	(a)	 	to check or enquire on its behalf into the adequacy, accuracy
or completeness of any information provided by any Security Party or any other
party to the Security Documents in connection with this Agreement or any other
Security Document or the transactions herein or therein contemplated (whether
or not such information has been or is hereafter circulated to such Finance
Party by any Security Party); or

	 
	 	(b)	 	to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any
Security Party or any other party to the Security Documents.

	 	16.2.12	 	The Security Trustee may retire at any time without assigning any reason by giving to
the Security Parties and each Finance Party not less than forty five (45) days’ notice
of its intention to do so and may be removed by the Majority Lenders, provided that no
such resignation or removal shall be effective until a successor for the Security
Trustee is appointed in accordance with the provisions of this clause 16.2.12; the
Majority Lenders may appoint a successor during such period but if none does so the
Security Trustee may appoint as its successor a reputable and experienced bank or other
financial institution; any such appointment shall (subject to the foregoing provisions
of this clause 16.2.12) take effect upon notice thereof being given to the Security
Parties and each Finance Party and provided that appropriate arrangements shall have
been made in relation to all security then granted under all the Security Documents, to
the reasonable satisfaction of all Finance Parties and provided further that, prior to
the occurrence of an Event of Default, a Borrower has approved the successor in writing
(such approval not to be unreasonably withheld or delayed).

	 
	 	 	 	Any corporation into which the Security Trustee may be merged or converted or any
corporation with which the Security Trustee may be consolidated or any corporation
resulting from any merger, conversion, amalgamation, consolidation or other
reorganisation to which the Security Trustee shall be a party shall, to the extent
permitted by applicable law, be the successor security trustee under this Agreement
without the execution or filing of any document or any further act on the part of
any of the parties to this Agreement, save that notice of any such

 

71

 

	 	 	 	merger, conversion, amalgamation, consolidation or other reorganisation shall
forthwith be given to the Security Parties and the Finance Parties.

	 
	 	16.2.13	 	If a successor to the Security Trustee is appointed pursuant to clause 16.2.12, (i)
the retiring Security Trustee shall be discharged of any further obligation but shall
remain entitled to the benefit of the provisions of this clause 16.2 and (ii) its
successor and each of the other parties to this Agreement and each other Security
Document shall have the same rights and obligations amongst themselves as they would
have had if such successor had been a party hereto and to each other Security Document,
but without prejudice to any obligations accrued prior thereto.

	 
	 	16.2.14	 	The Security Trustee may:

	 	(a)	 	refrain from doing anything which would or might in its opinion
be contrary to any law or official directive of any relevant jurisdiction or
otherwise render it liable to any person and may do anything which is in its
opinion necessary to comply with any such law or directive; and

	 
	 	(b)	 	refrain from taking any action (or further action) to protect
or enforce the right of any Finance Party under this Agreement or any Security
Document until it has been indemnified and/or secured to its satisfaction
against any and all costs, losses, expenses or liabilities (including legal
fees) which it would or might sustain or incur as a result.

	 	16.2.15	 	Except with the prior written consent of each of the Finance Parties and subject as
otherwise provided in this Agreement the Security Trustee shall not have authority on
behalf of the Finance Parties to agree with any Security Party any amendment to any
Security Document which would:

	 	(a)	 	reduce the amount of any payment to be made for account of the
Finance Parties under the Security Documents;

	 
	 	(b)	 	alter the due date, reduce the amount or alter the currency of
any payment under the Security Documents;

	 
	 	(c)	 	subject any Finance Party to any obligations not expressly
contemplated by any Security Document;

	 
	 	(d)	 	amend, modify or vary the definition of “Majority Lenders”;

	 
	 	(e)	 	amend, modify, vary, release or discharge any of the Security
Documents or the security interests constituted thereby or consent to any of
the same save in accordance with the terms of this Agreement and the other
Security Documents;

	 
	 	(f)	 	amend, modify or vary clauses 16.5 (Order of Application) or
16.7 (Payment Mechanics) of this Agreement or any equivalent clause contained
in any Security Document; or

	 
	 	(g)	 	waive or defer any condition precedent contained in any
Security Document.

 

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	 	16.2.16	 	The Security Trustee may, with the prior written approval of the Majority Lenders,
amend any provision of this Agreement, the Guarantee or any other Security Document if
such amendment is necessary to correct any manifest error herein or therein, and any
such amendment shall be binding on all of the parties to such documents.

	 
	 	16.2.17	 	Except with the prior written consent of the Security Trustee, the Finance Parties
shall not have authority to amend, modify or vary any provision of this Agreement which
regulates the remuneration, rights, duties and/or powers of the Security Trustee.

	 
	 	16.2.18	 	The Security Trustee hereby accepts its appointment under clause 16.2.1 as trustee
under this Agreement and the Security Documents with effect from the date of this
Agreement and acknowledges and declares that it holds and shall hold the same on trust
for the Finance Parties.

	 
	 	16.2.19	 	The trust constituted or evidenced by this Agreement shall remain in full force and
effect until the earlier of:

	 	(a)	 	the expiration of a period of eighty (80) years from the date
of this Agreement, or

	 
	 	(b)	 	all the outstanding Indebtedness under this Agreement and the
Security Documents have been paid, repaid, performed, discharged and satisfied
in full,

	 	 	 	and the parties to this Agreement declare that the perpetuity period applicable to
this Agreement shall, for the purpose of the Perpetuities and Accumulations Act
1964, be a period of eighty (80) years from the date of this Agreement.

	 
	 	16.2.20	 	It is agreed between all parties to this Agreement that in relation to any
jurisdiction the courts of which would not recognise or give effect to the trusts
expressed to be constituted by this Agreement and/or any Security Document, the
relationship of the Finance Parties to the Security Trustee shall be construed simply as
one of principal and agent but, to the fullest extent permissible under the laws of each
and every such jurisdiction, this Agreement shall have full force and effect as between
the parties.

	 
	 	16.2.21	 	The security under the Civil Law Security Documents secures the rights of the Security
Trustee as direct creditor under the Security Documents to which it is a party and as
several creditor under each such Security Document and not as trustee or agent of the
Finance Parties.

	 	16.3	 	Role of the Arranger

	 
	 	 	 	The Arranger has no obligations of any kind to any party under or in connection with
this Agreement or any Security Document or the transactions contemplated thereby.

	 
	 	16.4	 	Common Parties

	 
	 	 	 	Although the Agent and the Security Trustee may from time to time be the same
entity, that entity will have entered into this Agreement and the Security

 

73

 

	 	 	 	Documents (to which it is a party) in its separate capacities as agent for the
Finance Parties and (as appropriate) security agent and trustee for the Finance
Parties. Where this Agreement or any Security Document provides for the Agent or
Security Trustee to communicate with or provide instructions to the other, while
they are the same entity, such communication or instructions will not be necessary.

	 
	 	16.5	 	Order of Application

	 	16.5.1	 	The Security Trustee agrees to apply the Trust Property in accordance with
the following respective claims:

	 	(a)	 	first, as to a sum equivalent to the
amounts payable to the Security Trustee under the Security Documents
(excluding any amounts received by the Security Trustee pursuant to
clause 16.2.7), for the Security Trustee absolutely;

	 
	 	(b)	 	secondly, as to a sum equivalent to the
aggregate amount then due and owing to the other Finance Parties
under the Security Documents, for those Finance Parties absolutely,
and pro-rata to the amounts owing to them under the Security
Documents;

	 
	 	(c)	 	thirdly, until such time as the Security
Trustee is satisfied that all obligations owed to the Finance Parties
have been irrevocably and unconditionally discharged in full, held by
the Security Trustee on a suspense account for payment of any further
amounts owing to the Finance Parties under the Security Documents and
further application in accordance with this clause 16.5 as and when
any such amounts later fall due;

	 
	 	(d)	 	fourthly, to such other persons (if any) as
are legally entitled thereto in priority to the Borrowers; and

	 
	 	(e)	 	fifthly, as to the balance (if any), for
the Borrowers by or from whom or from whose assets the relevant
amounts were paid, received or recovered or other person entitled to
them.

	 	16.5.2	 	The Security Trustee shall make each application as soon as is practicable
after the relevant moneys are received by, or otherwise become available to, it
save that (without prejudice to any other provision contained in any of the
Security Documents) the Security Trustee (acting on the instructions of the
Agent) or any receiver or administrator may credit any moneys received by it to
a suspense account for so long and in such manner as the Security Trustee or
such receiver or administrator may from time to time determine with a view to
preserving the rights of the Finance Parties or any of them to prove for the
whole of their respective claims against the Borrowers or any other person
liable.

	 
	 	16.5.3	 	The Security Trustee shall obtain a good discharge in respect of the amounts
expressed to be due to the other Finance Parties as referred to in this clause
16.5 by paying such amounts to the Agent for distribution in accordance with
clause 16.7 (Payment mechanics).

 

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	 	16.6	 	Sharing among the Finance Parties

	 	16.6.1	 	Payments to Finance Parties

	 
	 	 	 	If a Finance Party (a Recovering Finance Party) receives or recovers
any amount from a Security Party other than in accordance with clause 16.7
(Payment mechanics) and applies that amount to a payment due under the
Security Documents then:

	 	(a)	 	the Recovering Finance Party shall, within
three Business Days, notify details of the receipt or recovery, to
the Agent;

	 
	 	(b)	 	the Agent shall determine whether the
receipt or recovery is in excess of the amount the Recovering Finance
Party would have been paid had the receipt or recovery been received
or made by the Agent and distributed in accordance with clause 16.7
(Payment mechanics), without taking account of any Tax which would be
imposed on the Agent in relation to the receipt, recovery or
distribution; and

	 
	 	(c)	 	the Recovering Finance Party shall, within
three Business Days of demand by the Agent, pay to the Agent an
amount (the Sharing Payment) equal to such receipt or recovery less
any amount which the Agent determines may be retained by the
Recovering Finance Party as its share of any payment to be made, in
accordance with clause 16.7.5 (Partial payments).

	 	16.6.2	 	Redistribution of payments

	 
	 	 	 	The Agent shall treat the Sharing Payment as if it had been paid by
the relevant Security Party and distribute it between the Finance Parties
(other than the Recovering Finance Party) in accordance with clause 16.7.5
(Partial payments).

	 
	 	16.6.3	 	Recovering Finance Party’s rights

	 	(a)	 	On a distribution by the Agent under clause
16.6.2 (Redistribution of payments), the Recovering Finance Party
will be subrogated to the rights of the Finance Parties which have
shared in the redistribution.

	 
	 	(b)	 	If and to the extent that the Recovering
Finance Party is not able to rely on its rights under clause
16.6.3(a) above, the relevant Security Party shall be liable to the
Recovering Finance Party for a debt equal to the Sharing Payment
which is immediately due and payable.

	 	16.6.4	 	Reversal of redistribution

	 
	 	 	 	If any part of the Sharing Payment received or recovered by a
Recovering Finance Party becomes repayable and is repaid by that Recovering
Finance Party, then:

 

75

 

	 	(a)	 	each Finance Party which has received a
share of the relevant Sharing Payment pursuant to clause 16.6.2
(Redistribution of payments) shall, upon request of the Agent, pay to
the Agent for account of that Recovering Finance Party an amount
equal to the appropriate part of its share of the Sharing Payment
(together with an amount as is necessary to reimburse that Recovering
Finance Party for its proportion of any interest on the Sharing
Payment which that Recovering Finance Party is required to pay); and

	 
	 	(b)	 	that Recovering Finance Party’s rights of
subrogation in respect of any reimbursement shall be cancelled and
the relevant Security Party will be liable to the reimbursing Lender
for the amount so reimbursed.

	 	16.6.5	 	Exceptions

	 	(a)	 	This clause 16.6 shall not apply to the
extent that the Recovering Finance Party would not, after making any
payment pursuant to this clause, have a valid and enforceable claim
against the relevant Security Party.

	 
	 	(b)	 	A Recovering Finance Party is not obliged
to share with any other Finance Party any amount which the Recovering
Finance Party has received or recovered as a result of taking legal
or arbitration proceedings in accordance with the terms of this
Agreement, if:

	 	(i)	 	it notified that other Finance
Party of the legal or arbitration proceedings; and

	 
	 	(ii)	 	that other Finance Party had an
opportunity to participate in those legal or arbitration
proceedings but did not do so as soon as reasonably practicable
having received notice and did not take separate legal or
arbitration proceedings.

	 	16.7	 	Payment mechanics

	 	16.7.1	 	Payments to the Agent

	 	(a)	 	On each date on which a Security Party or a
Lender is required to make a payment under a Security Document, that
Security Party or Lender shall make the same available to the Agent
(unless a contrary indication appears in a Finance Document) for
value on the due date at the time and in such funds specified by the
Agent as being customary at the time for settlement of transactions
in the relevant currency in the place of payment and, to the extent
any funds are to be released by the Agent to the Borrowers, the Agent
shall not release such funds to the Borrowers until all conditions
precedent hereunder are satisfied or acceptable to the Majority
Lenders.

	 
	 	(b)	 	Payment shall be made to such account in
the principal financial centre of the country of that currency (or,
in relation to euro, in a

 

76

 

	 	 	 	principal financial centre in a Participating Member State or
London) with such bank as the Agent specifies.

	 	16.7.2	 	Distributions by the Agent

	 
	 	 	 	Each payment received by the Agent under the Security Documents for
another Party shall, subject to clause 16.7.3 (Distributions to a Security
Party) and clause 16.7.4 (Clawback) be made available by the Agent as soon
as practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account of
its facility office), to such account as that party may notify to the Agent
by not less than five Business Days’ notice with a bank in the principal
financial centre of the country of that currency.

	 
	 	16.7.3	 	Distributions to a Security Party

	 
	 	 	 	The Agent may apply any amount received by it for that Security Party in or
towards payment (on the date and in the currency and funds of receipt) of
any amount due from that Security Party under the Security Documents or in
or towards purchase of any amount of any currency to be so applied.

	 
	 	16.7.4	 	Clawback

	 	(a)	 	Where a sum is to be paid to the Agent
under the Security Documents for another party, the Agent is not
obliged to pay that sum to that other party (or to enter into or
perform any related exchange contract) until it has been able to
establish to its satisfaction that it has actually received that sum.

	 
	 	(b)	 	If the Agent pays an amount to another
party and it proves to be the case that the Agent had not actually
received that amount, then the party to whom that amount (or the
proceeds of any related exchange contract) was paid by the Agent
shall on demand refund the same to the Agent together with interest
on that amount from the date of payment to the date of receipt by the
Agent, calculated by the Agent to reflect its cost of funds.

	 	16.7.5	 	Partial payments

	 	(a)	 	If the Agent receives a payment for
application against amounts due under the Security Documents that is
insufficient to discharge all the amounts then due and payable by a
Security Party under those Security Documents, the Agent shall apply
that payment towards the obligations of that Security Party under
those Security Documents in the following order:

	 	(i)	 	first, in or towards payment
pro rata of any unpaid fees, costs and expenses of the Agent,
the Security Trustee or the Arranger under those Security
Documents;

 

77

 

	 	(ii)	 	secondly, in or towards payment
to the Lenders pro rata of any accrued interest, fee or
commission due but unpaid under those Security Documents;

	 
	 	(iii)	 	thirdly, in or towards payment
to the Lenders pro rata of any principal which is due but
unpaid under those Security Documents; and

	 
	 	(iv)	 	fourthly, in or towards payment
pro rata of any other sum due but unpaid under the Security
Documents.

	 	(b)	 	Clause 16.7.5(a) above will override any
appropriation made by a Security Party.

	17	 	Miscellaneous

	 	17.1	 	Waivers No failure or delay on the part of any Finance Party in exercising any
right, power, discretion or remedy under or pursuant to any of the Security Documents
or the Guarantee, nor any actual or alleged course of dealing between any Finance Party
and any of the Security Parties, shall operate as a waiver of, or acquiescence in, any
default on the part of any Security Party, unless expressly agreed to do so in writing
by the Agent, nor shall any single or partial exercise by any Finance Party of any
right, power, discretion or remedy preclude any other or further exercise of that
right, power, discretion or remedy, or the exercise by a Finance Party of any other
right, power, discretion or remedy.

	 
	 	17.2	 	No variations No variation or amendment of any of the Security Documents shall
be valid unless made in accordance with clause 16 of this Agreement.

	 
	 	17.3	 	Severability If at any time any provision of any of the Security Documents or
the Guarantee is invalid, illegal or unenforceable in any respect that provision shall
be severed from the remainder and the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired in any way.

	 
	 	17.4	 	Successors etc. The Security Documents and the Guarantee shall be binding on
the Security Parties and on their successors and permitted transferees and assignees,
and shall inure to the benefit of the Finance Parties and their respective successors,
transferees and assignees. The Borrowers may not assign or transfer any of their
rights or duties under or pursuant to any of the Security Documents without the prior
written consent of the Lenders.

	 
	 	17.5	 	Further assurance If any provision of the Security Documents or the Guarantee
shall be invalid or unenforceable in whole or in part by reason of any present or
future law or any decision of any court, or if the documents at any time held by the
Finance Parties on their behalf are considered by the Lenders for any reason
insufficient to carry out the terms of this Agreement, then from time to time the
Borrowers will promptly, on demand by the Agent, execute or procure the execution of
such further documents as in the reasonable opinion of the Lenders are necessary to
provide adequate security for the repayment of the Indebtedness.

	 
	 	17.6	 	Other arrangements The Finance Parties may, without prejudice to their rights
under or pursuant to the Security Documents or the Guarantee, at any time and from time
to time, on such terms and conditions as they may in their discretion

 

78

 

	 	 	 	determine, and without notice to the Borrowers, grant time or other indulgence to,
or compound with, any other person liable (actually or contingently) to the Finance
Parties or any of them in respect of all or any part of the Indebtedness, and may
release or renew negotiable instruments and take and release securities and hold
funds on realisation or suspense account without affecting the liabilities of the
Borrowers or the rights of the Finance Parties under or pursuant to the Security
Documents or the Guarantee.

	 
	 	17.7	 	Advisers The Borrowers irrevocably authorise the Agent, at any time and from
time to time during the Facility Period, to consult insurance advisers on any matters
relating to the Insurances, including, without limitation, the collection of insurance
claims, and from time to time to consult or retain advisers or consultants to monitor
or advise on any other claims relating to the Vessels. The Borrowers will provide such
advisers and consultants with all information and documents which they may from time to
time reasonably require and will reimburse the Agent on demand for all reasonable costs
and expenses incurred by the Agent in connection with the consultation or retention of
such advisers or consultants.

	 
	 	17.8	 	Delegation The Finance Parties may at any time and from time to time delegate
to any person any of their rights, powers, discretions and remedies pursuant to the
Security Documents or the Guarantee, other than rights relating to actions to be taken
by the Majority Lenders or the Lenders as a group, on such terms as they may consider
appropriate (including the power to sub-delegate).

	 
	 	17.9	 	Rights etc. cumulative Every right, power, discretion and remedy conferred on
the Finance Parties under or pursuant to the Security Documents and the Guarantee shall
be cumulative and in addition to every other right, power, discretion or remedy to
which they may at any time be entitled by law or in equity. The Finance Parties may
exercise each of their rights, powers, discretions and remedies as often and in such
order as they deem appropriate subject to obtaining the prior written consent of the
Majority Lenders. The exercise or the beginning of the exercise of any right, power,
discretion or remedy shall not be interpreted as a waiver of the right to exercise any
other right, power, discretion or remedy either simultaneously or subsequently.

	 
	 	17.10	 	No enquiry The Finance Parties shall not be concerned to enquire into the
powers of the Security Parties or of any person purporting to act on behalf of any of
the Security Parties, even if any of the Security Parties or any such person shall have
acted in excess of their powers or if their actions shall have been irregular,
defective or informal, whether or not any Finance Parties had notice thereof.

	 
	 	17.11	 	Continuing security The security constituted by the Security Documents and
the Guarantee shall be continuing and shall not be satisfied by any intermediate
payment or satisfaction until the Indebtedness shall have been repaid in full and none
of the Finance Parties shall be under any further actual or contingent liability to any
third party in relation to the Vessels, the Insurances, Earnings or Requisition
Compensation or any other matter referred to in the Security Documents or the
Guarantee.

	 
	 	17.12	 	Security cumulative The security constituted by the Security Documents and
the Guarantee shall be in addition to any other security now or in the future held by
the Finance Parties or any of them for or in respect of all or any part of the

 

79

 

	 	 	 	Indebtedness, and shall not merge with or prejudice or be prejudiced by any such
security or any other contractual or legal rights of any of the Finance Parties, nor
affected by any irregularity, defect or informality, or by any release, exchange or
variation of any such security. Section 93 of the Law of Property Act 1925 and all
provisions which the Agent considers analogous thereto under the law of any other
relevant jurisdiction shall not apply to the security constituted by the Security
Documents.

	 
	 	17.13	 	Re-instatement If any Finance Party takes any steps to exercise any of its
rights, powers, remedies or discretions pursuant to the Security Documents or the
Guarantee and the result shall be adverse to the Finance Parties, the Borrowers and the
Finance Parties shall be restored to their former positions as if no such steps had
been taken.

	 
	 	17.14	 	No liability None of the Finance Parties, nor any agent or employee of any
Finance Party, nor any receiver and/or manager appointed by the Agent, shall be liable
for any losses which may be incurred in or about the exercise of any of the rights,
powers, discretions or remedies of the Finance Parties under or pursuant to the
Security Documents or the Guarantee nor liable as mortgagee in possession for any loss
on realisation or for any neglect or default of any nature for which a mortgagee in
possession might otherwise be liable unless such Finance Party’s action constitutes
gross negligence or wilful misconduct.

	 
	 	17.15	 	Rescission of payments etc. Any discharge, release or reassignment by any of
the Finance Parties of any of the security constituted by, or any of the obligations of
any Security Party contained in, any of the Security Documents or the Guarantee shall
be (and be deemed always to have been) void if any act (including, without limitation,
any payment) as a result of which such discharge, release or reassignment was given or
made is subsequently wholly or partially rescinded or avoided by operation of any law,
unless such Finance Party’s action constitutes gross negligence or wilful misconduct.

	 
	 	17.16	 	Subsequent Encumbrances If the Agent receives notice of any subsequent
Encumbrance (other than any Encumbrance permitted by the terms of this Agreement)
affecting any Vessel or all or any part of the Insurances, Earnings or Requisition
Compensation, the Agent may open a new account in its books for the Borrowers. If the
Agent does not open a new account, then (unless the Encumbrance is permitted by the
terms of this Agreement or the Agent gives written notice to the contrary to the
Borrowers) as from the time of receipt by the Agent of notice of such subsequent
Encumbrance, all payments made to the Agent shall be treated as having been credited to
a new account of the Borrowers and not as having been applied in reduction of the
Indebtedness.

	 
	 	17.17	 	Releases If any Finance Party shall at any time in its discretion release any
party from all or any part of any of the Security Documents or the Guarantee or from
any term, covenant, clause, condition or obligation contained in any of the Security
Documents or the Guarantee, the liability of any other party to the Security Documents
or the Guarantee shall not be varied or diminished.

	 
	 	17.18	 	Certificates Any certificate or statement signed by an authorised signatory
of the Agent purporting to show the amount of the Indebtedness (or any part of the
Indebtedness) or any other amount referred to in any of the Security Documents or the
Guarantee, or any replacement schedule produced by the Agent pursuant to

 

80

 

	 	 	 	Clause 3.9 above shall, save for manifest error or on any question of law, be
conclusive evidence as against the Borrowers of that amount.

	 
	 	17.19	 	Survival of representations and warranties The representations and warranties
on the part of the Borrowers contained in this Agreement shall survive the execution of
this Agreement and the advance of the Facility or any part thereof.

	 
	 	17.20	 	Counterparts This Agreement may be executed in any number of counterparts
each of which shall be original but which shall together constitute the same
instrument.

	 
	 	17.21	 	Third Party Rights Notwithstanding the provisions of the Contracts (Rights of
Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is
not a party to it.

	18	 	Law and Jurisdiction

	 	18.1	 	Governing law This Agreement and any non-contractual obligations in connection
with it shall in all respects be governed by and interpreted in accordance with English
law.

	 
	 	18.2	 	Jurisdiction For the exclusive benefit of the Finance Parties, the parties to
this Agreement irrevocably agree that the courts of England are to have jurisdiction to
settle any disputes which may arise out of or in connection with this Agreement and
that any Proceedings may be brought in those courts. The Borrowers irrevocably waive
any objection which they may now or in the future have to the laying of the venue of
any Proceedings in any court referred to in this Clause, and any claim that those
Proceedings have been brought in an inconvenient or inappropriate forum. Each of the
Borrowers irrevocably designates, appoints and empowers Teekay Shipping (UK) Limited of
2nd Floor, 86 Jermyn Street, London, SW1 6JD, England to receive for it and on its
behalf service of process issued out of the English courts in any such Proceedings.

	 
	 	18.3	 	Alternative jurisdictions Nothing contained in this Clause shall limit the
right of the Finance Parties to commence any Proceedings against the Borrowers in any
other court of competent jurisdiction nor shall the commencement of any Proceedings
against the Borrowers in one or more jurisdictions preclude the commencement of any
Proceedings in any other jurisdiction, whether concurrently or not.

IN WITNESS of which the parties to this Agreement have executed this Agreement the day and year
first before written.

 

81

 

SCHEDULE 1

The Original Lenders, the Commitments and the Proportionate Shares

	 	 	 	 	 	 	 	 	 
	The Original Lenders	 	The Commitments ($)	 	 	The Proportionate Shares (%)	 
	 
	 	 	 	 	 	 	 	 
	Calyon
	 	 	48,800,000	 	 	 	40	 
	For administration matters:

9. Quai, du President Paul Doumer

92920 Paris La Defense

France
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax no: +33 141 89 19 34

Attention: Middle Office/Shipping / Ms Marie-Claire Vanderperre / M. Godet-Couery
	 
	 	 	 	 	 	 	 	 
	For credit matters:

Broadwalk House

5 Appold Street

London EC2A 2DA
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax no: +44 207 214 6689

Attention: Jerome Duval/Thibaud Escoffier
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	The Export-Import Bank of China
	 	 	73,200,000	 	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	No.30

Fu Xing Men Nei Street

Xicheng District

Beijing

China 100031
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax no: +86 10 83578428 / +86 10 83578428

Attention: Xiong Jie / Li Dan / Derek Wu
	 	 	 	 	 	 	 	 

 

82

 

SCHEDULE 2

The Vessels

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Country of	 	 	 	Primary	 	Bareboat
	Vessel	 	Owner	 	Formation	 	Hull No	 	Registry	 	Registry
	 
	 	 	 	 	 	 	 	 
	Vessel
A

“NORGAS PAN”

	 	Taizhou Hull No.
WZL 0501 L.L.C.
	 	Marshall Islands
	 	WZL 0501
	 	Nassau, Bahamas
	 	Singapore
	 
	 	 	 	 	 	 	 	 	 	 
	Vessel
B 

tbn “NORGAS CATHINKA”
	 	Taizhou Hull No.
WZL 0502 L.L.C.
	 	Marshall Islands
	 	WZL 0502
	 	Nassau, Bahamas
	 	Singapore
	 
	 	 	 	 	 	 	 	 	 	 
	Vessel
C

tbn “NORGAS CAMILLA”

	 	Taizhou Hull No.
WZL 0503 L.L.C.
	 	Marshall Islands
	 	WZL 0503
	 	Nassau, Bahamas
	 	Singapore
	 
	 	 	 	 	 	 	 	 	 	 
	Vessel D

	 	DHJS Hull No.
2007-001 L.L.C.
	 	Marshall Islands
	 	2007-001
	 	Nassau, Bahamas
	 	Singapore
	 
	 	 	 	 	 	 	 	 	 	 
	Vessel E

	 	DHJS Hull No.
2007-002 L.L.C
	 	Marshall Islands
	 	2007-002
	 	Nassau, Bahamas
	 	Singapore

 

83

 

SCHEDULE 3

Conditions Precedent and Subsequent

Part I: Initial conditions precedent

	1	 	Constitutional Documents Copies of the constitutional documents of each Security Party
together with such other evidence as the Agent may reasonably require that each Security Party
is duly formed in its country of formation and remains in existence with power to enter into,
and perform its obligations under, the Relevant Documents to which it is or is to become a
party.

	 
	2	 	Certificates of good standing A certificate of good standing in respect of each Security
Party (if such a certificate can be obtained).

	 
	3	 	Resolutions A copy of a resolution of each Security Party:

	 	(i)	 	approving the terms of, and the transactions contemplated by,
the Relevant Documents to which it is a party and resolving that it execute
those Relevant Documents; and

	 
	 	(ii)	 	authorising a specified person or persons to execute those
Relevant Documents (and all documents and notices to be signed and/or
despatched under those documents) on its behalf.

	4	 	Officer’s certificates A certificate of a duly authorised officer or representative of each
Security Party certifying that each copy document relating to it specified in this Part I of
Schedule 3 is correct, complete and in full force and effect as at a date no earlier than the
date of this Agreement and setting out the names of the directors, officers and (other than in
the case of the Guarantor) shareholders of that Security Party and the proportion of shares
held by each shareholder.

	 
	5	 	Powers of attorney The notarially attested and legalised (where necessary for registration
purposes) power of attorney of each Security Party under which any documents are to be
executed or transactions undertaken by that Security Party.

 

84

 

Part II: Conditions precedent to each Drawdown

	1	 	Security and related documents

	 	(a)	 	Vessel documents A copy, certified as true, accurate and complete by a
director, the secretary or the legal advisers of the relevant Owner, of the Charter;

	 
	 	(b)	 	Ownership Evidence that the relevant Vessel will on the Drawdown Date be:

	 	(1)	 	legally and beneficially owned by the
relevant Owner and registered in the name of the relevant Owner
through the primary registry stated in Schedule 2 as a ship under the
laws of that primary registry;

	 
	 	(2)	 	operationally seaworthy and in every way fit
for service;

	 
	 	(3)	 	delivered, and accepted for service, under
its Charter;

	 
	 	(4)	 	released from any prior registration of the
Vessel in the ownership of the Seller and any Encumbrance registered
against that ownership (or any other security granted by the Borrowers
and/or the Sellers in respect of the Vessel, its Purchase Contract and
its Charter) have been or will on the Drawdown Date be cancelled (or
confirmation from the Seller that there was no such prior
registration) and evidence that on the Drawdown Date the Mortgage will
be capable of being registered against the Vessel with first priority.

	 	(c)	 	Evidence of insurance Evidence that the Vessel is or will on the Drawdown
Date be insured in the manner required by the Security Documents and that letters of
undertaking will be issued in the manner required by the Security Documents, together
with the written approval of the Insurances by Bankserve or any other insurance adviser
appointed by the Agent.

	 
	 	(d)	 	Confirmation of class A Certificate of Confirmation of Class for hull and
machinery confirming that the Vessel is classed with the highest class applicable to
vessels of her type with a Pre-Approved Classification Society or such other
classification society as may be acceptable to the Lenders.

	 
	 	(e)	 	Security Documents The Mortgage, the Deed of Covenant, the Account Charge,
the Share Pledge, the Charter Assignment, the Charterer’s Undertaking, the Charterer’s
Assignment, the Manager’s Undertaking and the Assignment in respect of the Vessel
together with all other documents required by any of them, including, without
limitation, all notices of assignment and/or charge and evidence that those notices
will promptly following delivery of the Vessel to the Borrower under the Purchase
Contract be duly acknowledged by the recipients.

	 
	 	(f)	 	Relevant Documents The Guarantee and the Fee Letter.

	2	 	Legal opinions

	 
	 	 	If a Security Party is formed in a jurisdiction other than England and Wales or if any
Relevant Document is governed by the laws of a jurisdiction other than England and

 

85

 

	 	 	Wales, a legal opinion of the legal advisers to the Lenders in each relevant jurisdiction,
substantially in the form or forms provided to the Agent prior to signing this Agreement or
confirmation satisfactory to the Agent that such an opinion will be given, and to include:-

	 	(a)	 	an opinion of Watson Farley & Williams (New York) LLP on matters of Marshall
Islands law;

	 
	 	(b)	 	an opinion of Lennox Paton on matters of Bahamas law;

	 
	 	(c)	 	an opinion of Norton Rose (Asia) LLP on matters of Singapore law; and

	 
	 	(d)	 	an opinion of Norton Rose LLP on matters of French law.

	3	 	Other documents and evidence

	 	(a)	 	Drawdown Notice A duly completed Drawdown Notice.

	 
	 	(b)	 	Process agent Evidence that any process agent appointed under any Relevant
Document has accepted its appointment.

	 
	 	(c)	 	Other authorisations A copy of any other consent, licence, approval,
authorisation or other document, opinion or assurance which the Agent considers to be
necessary or reasonable (if it has notified the Borrowers accordingly) in connection
with the entry into and performance of the transactions contemplated by any of the
Relevant Documents or for the validity and enforceability of any of the Relevant
Documents.

	 
	 	(d)	 	Financial statements Copies of latest Guarantor’s Accounts for each
Guarantor.

	 
	 	(e)	 	Fees Evidence that the fees, costs and expenses then due from the Borrowers
under Clause 7 and Clause 15 have been paid or will be paid by the relevant Drawdown
Date.

	 
	 	(f)	 	“Know your customer” documents Such documentation and other evidence as is
reasonably requested by the Agent in order for the Lenders to comply with all necessary
“know your customer” or similar identification procedures in relation to the
transactions contemplated in the Relevant Documents.

	 
	 	(g)	 	Bank Accounts Evidence that the Borrower Earnings Account has been opened.

	 
	 	(h)	 	Bringdown certificate Confirmation from a duly authorised officer of each
Security Party that there has been no change in the constitutional documents of the
relevant Security Party since the date on which the same were provided to the Agent
pursuant to paragraph 1 of Part I of this Schedule 3 and that the board resolutions and
powers of attorney referred to in paragraphs 3 and 5 of Part I of this Schedule 3
remain unamended and in full force and effect.

	 
	 	(i)	 	Evidence of Payments Such evidence as the Lenders may reasonably require in
respect of the amount and payment of the Purchase Price of the relevant Vessel by the
Borrower to the Seller if the same has been paid prior to the Drawdown Date.

 

86

 

Part III: Conditions subsequent

	1	 	Evidence of Owner’s title Certificate of ownership and encumbrance (or equivalent) issued
by the Registrar of Vessels (or equivalent official) of the Vessel’s Primary Registry
confirming that (a) the Vessel is permanently registered under that registry in the ownership
of the Owner, (b) the Mortgage has been registered with first priority against the Vessel and
(c) there are no further Encumbrances registered against the Vessel.

	 
	2	 	Bareboat Registration Evidence that the Vessel is registered as a bareboat registration
under the flag of the Bareboat Registry.

	 
	3	 	Letters of undertaking Letters of undertaking in respect of the Insurances as required by
the Security Documents together with copies of the relevant policies or cover notes or entry
certificates duly endorsed with the interest of the Finance Parties.

	 
	4	 	Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge
given pursuant to any Security Documents received by the Agent pursuant to Part II of this
Schedule 3.

	 
	5	 	Legal opinions Such of the legal opinions specified in Part II of this Schedule 3 as have
not already been provided to the Agent.

	 
	6	 	Companies Act registrations Evidence that the prescribed particulars of any Security
Documents received by the Agent pursuant to Part I of this Schedule 3 have been delivered to
the Registrar of Companies of England and Wales within the statutory time limit.

 

87

 

SCHEDULE
4

Form of Transfer Certificate

To: Calyon as agent (the “Agent”)

TRANSFER CERTIFICATE

This transfer certificate relates to a facility agreement (as the same may be from time to time
amended, varied, novated or supplemented, the “Facility Agreement”) dated                                         
2009 whereby a facility of up to $122,000,000 was made
available to the Companies listed as “Owners” in Schedule 2 of the Facility Agreement as joint and
several borrowers by a group of banks on whose behalf the Agent acts as agent and security trustee.

	1	 	Terms defined in the Facility Agreement shall, subject to any contrary indication, have the
same meanings herein. The terms “Lender” and “Transferee” are defined in the schedule to this
transfer certificate .

	 
	2	 	The Lender (i) confirms that the details in the Schedule hereto next to the heading
“Commitment” accurately summarises its Commitment in the Facility Agreement and (ii) requests
the Transferee to accept and procure the transfer to the Transferee of the portion of such
Commitment specified in the Schedule hereto next to the heading “Portion Transferred” by
counter-signing and delivering the Transfer Certificate to the Agent at its address for the
service of Communications specified in the Facility Agreement.

	 
	3	 	The Transferee requests the Agent to accept this Transfer Certificate as being delivered to
the Agent pursuant to and for the purposes of Clause 12.4 of the Facility Agreement so as to
take effect in accordance with the terms thereof on the Transfer Date or on such later date as
may be determined in accordance with the terms thereof.

	 
	4	 	The Transferee confirms that it has received a copy of the Facility Agreement together with
such other information as it has required in connection with this transaction and that it has
not relied and will not in the future rely on the Lender or any other party to the Facility
Agreement to check or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of any such information and further agrees that it has not
relied and will not rely on the Lender or any other party to the Facility Agreement to access
or keep under review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of the Borrowers or any other party to the Facility Agreement.

	 
	5	 	Execution of this Transfer Certificate by the Transferee constitutes its representation to
the Transferor and all other parties to the Facility Agreement that it has power to become a
party to the Facility Agreement as a Lender on the terms herein and therein set out and has
taken all steps to authorise execution and delivery of this Transfer Certificate.

	 
	6	 	The Transferee undertakes with the Lender and each of the other parties to the Facility
Agreement that it will perform in accordance with their terms all those obligations which by
the terms of the Facility Agreement will be assumed by it after delivery of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any) subject to which the
Transfer Certificate is expressed to take effect.

 

88

 

	7	 	The Lender makes no representation or warranty and assumes no responsibility with respect to
the legality, validity, effectiveness, adequacy or enforceability of the Facility Agreement or
any document relating thereto and assumes no responsibility for the financial condition of the
Borrowers or for the performance and observance by the Borrowers of any of their obligations
under the Facility Agreement or any document relating thereto and any and all such conditions
and warranties, whether express or implied by law or otherwise, are hereby excluded.

	 
	8	 	The Lender gives notice that nothing in this transfer certificate or in the Facility
Agreement (or any document relating thereto) shall oblige the Lender to (i) accept a
re-transfer from the Transferee of the whole or any part of its rights, benefits and/or
obligations under the Facility Agreement transferred pursuant hereto or (ii) support any
losses directly or indirectly sustained or incurred by the Transferee for any reason
whatsoever including, without limitation, the non-performance by the Borrowers or any other
party to the Facility Agreement (or any document relating thereto) of its obligations under
any such document. The Transferee acknowledges the absence of any such obligation as is
referred to in (i) or (ii) above.

	 
	9	 	The Security Trustee’s rights under clause 2.5 of the Facility Agreement remain in full force
and effect and are not affected by this transfer.

	 
	10	 	This Transfer Certificate and the rights and obligations of the parties hereunder shall be
governed by and interpreted in accordance with English law.

THE SCHEDULE

	1	 	Lender:

	 
	2	 	Transferee:

	 
	3	 	Transfer Date:

	 
	4	 	Commitment:

	 
	5	 	Portion Transferred:

	 	 	 	 	 	 	 	 	 	 	 
	[Transferor Bank]	 	[Transferee Bank]
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Calyon
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	As agent for and on behalf of itself,

the Borrowers and the other Finance Parties in the presence of:-
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

89

 

	 	 	 	 	 	 	 	 	 	 	 
	Date: [                    ]	 	 	 	 	 	 

 

90

 

SCHEDULE
5

Form of Drawdown Notice

	 	 	 
	To:

	 	Calyon
	 
	 	 
	From:

	 	Taizhou Hull No. WZL 0501 L.L.C.
	 

	 	Taizhou Hull No. WZL 0502 L.L.C.
	 

	 	Taizhou Hull No. WZL 0503 L.L.C.
	 

	 	DHJS Hull No. 2007-001 L.L.C.
	 

	 	DHJS Hull No. 2007-002 L.L.C.

[Date]

Dear Sirs,

Drawdown Notice

We refer to the Loan Agreement dated                      2009 made between, amongst others,
ourselves and yourselves (the “Agreement”).

Words and phrases defined in the Agreement have the same meaning when used in this Drawdown Notice.

Pursuant to Clause 2.2 of the Agreement, we irrevocably request that you in respect of the purchase
of Vessel [A/B/C/D/E] advance a Drawing in the sum of [                    ] to us on
                                         200     , which is a Business Day, by paying the amount of the advance to [insert bank details of
where the Drawing should be paid depending on the purpose stated above].

We warrant that the representations and warranties contained in Clause 4 (other than those in
Clauses 4.2, 4.6 and 4.21) of the Agreement are true and correct at the date of this Drawdown
Notice and will be true and correct on                      200     , that no Event of Default or Potential
Event of Default has occurred and is continuing, and that no Event of Default or Potential Event of
Default will result from the advance of the sum requested in this Drawdown Notice.

Yours faithfully

 

For and on behalf of

Taizhou Hull No. WZL 0501 L.L.C.

Taizhou Hull No. WZL 0502 L.L.C.

Taizhou Hull No. WZL 0503 L.L.C.

DHJS Hull No. 2007-001 L.L.C.

DHJS Hull No. 2007-002 L.L.C.

 

91

 

SCHEDULE 6

Calculation of the Mandatory Cost

	1	 	The Mandatory Cost is an addition to the interest rate to compensate the Lenders for the cost
of compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.

	 
	2	 	On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to
the percentage participation of each Lender in the Loan) and will be expressed as a percentage
rate per annum.

	 
	3	 	The Additional Cost Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Agent. This percentage
will be certified by that Lender in its notice to the Agent to be its reasonable determination
of the cost (expressed as a percentage of that Lender’s participation in all loans made from
that Facility Office) of complying with the minimum reserve requirements of the European
Central Bank in respect of loans made from that Facility Office.

	4	 	The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Agent as follows:

	 	 	 	 	 	 	 
	 

	 	E x 0.01
	 	 
	 

	 	 	300	 	 	per cent. per annum.

	 	 	Where E is the rate of charge payable by a Lender to the Financial
Services Authority under the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for
this purpose by the Agent as being the average of the Fee Tariffs
applicable to that Lender for that financial year).

	 
	5	 	For the purposes of this Schedule:

	 	(a)	 	“Eligible Liabilities and “Special Deposits” have the meanings given to them
from time to time under or pursuant to the Bank of England Act 1998 or (as may be
appropriate) by the Bank of England;

	 
	 	(b)	 	“Facility Office” means the office notified by a Lender to the Agent in writing
on or before the date it becomes a Lender as the office through which it will perform
its obligations under the Agreement;

	 
	 	(c)	 	“Fee Rules” means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in respect
of the payment of fees for the acceptance of deposits;

	 
	 	(d)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fee Rules but taking into account any applicable discount
rate); and

	 
	 	(e)	 	“Participating Member State” means any member state of the European Communities
that adopts or has adopted the euro as its lawful currency in

 

92

 

	 	 	 	accordance with legislation of the European Union relating to European Monetary
Union;

	 
	 	(f)	 	“Parties” means any party to the Agreement, including its successors in title
permitted assigns and permitted transferees; and

	 
	 	(g)	 	“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

	6	 	If requested by the Agent, each Lender shall, as soon as practicable after publication by the
Financial Services Authority, supply to the Agent, the rate of charge payable by that Lender
to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for this purpose by that Lender
as being the average of the Fee Tariffs applicable to that Lender for that financial year).

	 
	7	 	Each Lender shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Lender Shall supply the
following information on or prior to the date on which it becomes a Lender:

	 	(a)	 	the jurisdiction of its Facility Office; and

	 
	 	(b)	 	any other information that the Agent may reasonably require for such purpose.

	 	 	Each Lender shall promptly notify the Agent of any change to the information provided by it
pursuant to this paragraph.

	 
	8	 	The percentages of each Lender for the purpose of E above shall be determined by the Agent
based upon the information supplied to it pursuant to paragraphs 6 and 7 above and on the
assumption that, unless the Lender notifies the Agent to the contrary, each Lender’s
obligations in relation to cash ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as in its Facility Office.

	 
	9	 	The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender pursuant to paragraphs 3, 6 and 7 above is
true and correct in all respects.

	 
	10	 	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost
to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender pursuant to paragraphs 3, 6 and 7 above.

	 
	11	 	Any determination by the Agent pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.

	 
	12	 	The Agent may from time to time, after consultation with the Borrowers and the Lenders
determine and notify to all Parties any amendments which are required to be made to this
Schedule in order to comply with any change in law, regulation or any requirements from time
to time imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any other authority which replaces all or any of

 

93

 

	 	 	its functions) and any such determination shall, in the absence of manifest error, be
conclusive and binding on all Parties.

 

94

 

SCHEDULE
7

Form of Compliance Certificate

	 	 	 
	To:

	 	Calyon (the “Agent”)
	From:

	 	Teekay LNG Partners, LP (the “Guarantor”)
	 
	 	 
	Date:

	 	[•]

Dear Sirs,

We refer to an agreement (the “Agreement”) dated                      2009 and made between
(1) the companies listed at Schedule 2 of the Agreement as borrowers (2) the banks and financial
institutions listed in Schedule 1 of the Agreement as banks, (3) yourselves as Agent (4) yourselves
as Security Trustee (5) yourselves as Arranger (as from time to time amended, varied, novated or
supplemented).

We also refer to the guarantee (the “Guarantee”) dated                      2009 made between
ourselves as Guarantor and yourselves as Agent.

Terms defined or construed in the Agreement have the same meanings and constructions in this
Certificate.

We attach the relevant calculation details applicable on the last day of our financial
[year][quarter] ending [Ÿ] (the “Relevant Period”) which confirm that:-

	1	 	The ratio of Net Debt to Net Debt plus Equity [was at all times equal to or below/increased
above] 80%.

	 
	2	 	the aggregate of Free Liquidity and Available Credit Lines [was at all times equal to or
greater than/fell below] $35,000,000. Therefore the condition contained in clause 5.2 of the
Guarantee [has/has not] been complied with in respect of the Relevant Period.

	 
	3	 	The Tangible Net Worth [was at all times equal to or greater than/fell below] $400,000,000.

	 	 	 	 	 
	Signed:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Duly authorised representative of
	 	 
	 

	 	TEEKAY LNG PARTNERS LP	 	 

 

95

 

SCHEDULE
8

Repayment Schedules

Part A: Vessels A, B and C

	 	 	 	 	 	 	 	 	 
	Quarter	 	 	 	 	 	 
	from	 	 	 	 	 	 
	Delivery	 	Loan Outstanding	 	 	Repayment	 
	1
	 	$	19,660,687	 	 	$	339,313	 
	2
	 	$	19,316,285	 	 	$	344,402	 
	3
	 	$	18,966,717	 	 	$	349,568	 
	4
	 	$	18,611,905	 	 	$	354,812	 
	5
	 	$	18,251,771	 	 	$	360,134	 
	6
	 	$	17,886,235	 	 	$	365,536	 
	7
	 	$	17,515,216	 	 	$	371,019	 
	8
	 	$	17,138,631	 	 	$	376,584	 
	9
	 	$	16,756,398	 	 	$	382,233	 
	10
	 	$	16,368,432	 	 	$	387,967	 
	11
	 	$	15,974,646	 	 	$	393,786	 
	12
	 	$	15,574,953	 	 	$	399,693	 
	13
	 	$	15,169,264	 	 	$	405,688	 
	14
	 	$	14,757,491	 	 	$	411,774	 
	15
	 	$	14,339,541	 	 	$	417,950	 
	16
	 	$	13,915,321	 	 	$	424,219	 
	17
	 	$	13,484,738	 	 	$	430,583	 
	18
	 	$	13,047,697	 	 	$	437,042	 
	19
	 	$	12,604,100	 	 	$	443,597	 
	20
	 	$	12,153,849	 	 	$	450,251	 
	21
	 	$	11,696,844	 	 	$	457,005	 
	22
	 	$	11,232,984	 	 	$	463,860	 

 

96

 

	 	 	 	 	 	 	 	 	 
	Quarter	 	 	 	 	 	 
	from	 	 	 	 	 	 
	Delivery	 	Loan Outstanding	 	 	Repayment	 
	23
	 	$	10,762,166	 	 	$	470,818	 
	24
	 	$	10,284,286	 	 	$	477,880	 
	25
	 	$	9,799,237	 	 	$	485,048	 
	26
	 	$	9,306,913	 	 	$	492,324	 
	27
	 	$	8,807,205	 	 	$	499,709	 
	28
	 	$	8,300,000	 	 	$	507,205	 

Part B: Vessels D and E

	 	 	 	 	 	 	 	 	 
	Quarter	 	 	 	 	 	 
	from	 	 	 	 	 	 
	Delivery	 	Loan Outstanding	 	 	Repayment	 
	1
	 	$	30,475,081	 	 	$	524,919	 
	2
	 	$	29,942,287	 	 	$	532,793	 
	3
	 	$	29,401,502	 	 	$	540,785	 
	4
	 	$	28,852,605	 	 	$	548,897	 
	5
	 	$	28,295,475	 	 	$	557,130	 
	6
	 	$	27,729,987	 	 	$	565,487	 
	7
	 	$	27,156,018	 	 	$	573,970	 
	8
	 	$	26,573,438	 	 	$	582,579	 
	9
	 	$	25,982,121	 	 	$	591,318	 
	10
	 	$	25,381,933	 	 	$	600,188	 
	11
	 	$	24,772,742	 	 	$	609,190	 
	12
	 	$	24,154,414	 	 	$	618,328	 
	13
	 	$	23,526,811	 	 	$	627,603	 
	14
	 	$	22,889,793	 	 	$	637,017	 
	15
	 	$	22,243,221	 	 	$	646,573	 
	16
	 	$	21,586,950	 	 	$	656,271	 
	17
	 	$	20,920,834	 	 	$	666,115	 

 

97

 

	 	 	 	 	 	 	 	 	 
	Quarter	 	 	 	 	 	 
	from	 	 	 	 	 	 
	Delivery	 	Loan Outstanding	 	 	Repayment	 
	18
	 	$	20,244,727	 	 	$	676,107	 
	19
	 	$	19,558,479	 	 	$	686,249	 
	20
	 	$	18,861,937	 	 	$	696,542	 
	21
	 	$	18,154,946	 	 	$	706,990	 
	22
	 	$	17,437,351	 	 	$	717,595	 
	23
	 	$	16,708,992	 	 	$	728,359	 
	24
	 	$	15,969,707	 	 	$	739,285	 
	25
	 	$	15,219,333	 	 	$	750,374	 
	26
	 	$	14,457,704	 	 	$	761,629	 
	27
	 	$	13,684,650	 	 	$	773,054	 
	28
	 	$	12,900,000	 	 	$	784,653	 

 

98

 

IN WITNESS of which the parties to this Agreement have executed this Agreement the day and year
first before written.

	 	 	 	 	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of TAIZHOU HULL NO. WZL 0501 L.L.C.

	 	)

)

)
	 	
	 	Kavita Shah

Attorney-in-Fact
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of TAIZHOU HULL NO. WZL 0502 L.L.C.

	 	)

)

)
	 	
	 	Kavita Shah

Attorney-in-Fact
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of TAIZHOU HULL NO. WZL 0503 L.L.C.

	 	)

)

)
	 	
	 	Kavita Shah

Attorney-in-Fact
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of DHJS HULL NO. 2007-001 L.L.C.

	 	)

)

)
	 	
	 	Kavita Shah

Attorney-in-Fact
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of DHJS HULL NO. 2007-002 L.L.C.

	 	)

)

)
	 	
	 	Kavita Shah

Attorney-in-Fact
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of CALYON (as an Original Lender)

	 	)

)

)
	 		 	 
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of THE EXPORT-IMPORT BANK
OF CHINA
(as an Original Lender)

	 	)

)

)

)

	 		 	 

 

99

 

	 	 	 	 	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of CALYON (as the Agent)

	 	)

)

)
	 		 	 
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of CALYON
(as the Security Trustee)

	 	)

)

)

	 		 	 
	 
	 	 	 
	SIGNED by 

duly authorised for and on behalf 

of CALYON (as the Arranger)

	 	)

)

)
	 		 	 

 

100

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