Document:

Exhibit 10.3

 

[CONFORMED COPY

with Exhibits E, F-1, F-2, G & H

Conformed as Executed]

 

CREDIT AGREEMENT

 

among

 

FLEET ACQUISITION LLC,

GENCO SHIPPING & TRADING LIMITED,

VARIOUS LENDERS

and

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

 

as Administrative Agent

 

Dated as of December 3,
2004

 

and

CITIGROUP GLOBAL MARKETS LIMITED

and

 

NORDEA BANK FINLAND PLC,
NEW YORK BRANCH

as Joint Lead Arrangers and Joint Book Runners

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.
  Amount and Terms of Credit Facilities

  
	
   

  	
  1.01
  The Commitments

  	
   

  
	
   

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

  	
   

  
	
   

  	
  1.03 Notice of Borrowing

  	
   

  
	
   

  	
  1.04 Disbursement of Funds

  	
   

  
	
   

  	
  1.05 Notes

  	
   

  
	
   

  	
  1.06 Pro Rata Borrowings

  	
   

  
	
   

  	
  1.07
  Interest

  	
   

  
	
   

  	
  1.08 Interest Periods

  	
   

  
	
   

  	
  1.09 Increased
  Costs, Illegality, etc

  	
   

  
	
   

  	
  1.10
  Compensation

  	
   

  
	
   

  	
  1.11 Change of Lending
  Office

  	
   

  
	
   

  	
  1.12 Replacement of Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2. Reserve
  Account

  	
   

  
	
   

  	
   

  
	
  SECTION 3. Commitment Commission;
  Reductions of Commitment

  	
   

  
	
   

  	
   

  
	
   

  	
  3.01 Commitment Commission

  	
   

  
	
   

  	
  3.02 Voluntary Termination
  of Unutilized Commitments

  	
   

  
	
   

  	
  3.03 Mandatory Reduction of
  Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  Prepayments; Payments; Taxes

  	
   

  
	
   

  	
   

  
	
   

  	
  4.01 Voluntary Prepayments

  	
   

  
	
   

  	
  4.02 Mandatory Repayments

  	
   

  
	
   

  	
  4.03 Method and Place
  of Payment

  	
   

  
	
   

  	
  4.04 Net Payments; Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5. Conditions Precedent to
  the Initial Borrowing Date

  	
   

  
	
   

  	
   

  
	
   

  	
  5.01 Initial Borrowing Date;
  Notes

  	
   

  
	
   

  	
  5.02 Pro forma Balance
  Sheets; Projections

  	
   

  
	
   

  	
  5.03 Opinions of Counsel

  	
   

  
	
   

  	
  5.04 Corporate
  Documents; Proceedings; etc

  	
   

  
	
   

  	
  5.05 Common Equity
  Financing

  	
   

  
	
   

  	
  5.06
  Appraisals

  	
   

  
	
   

  	
  5.07 Subsidiaries Guaranty

  	
   

  
	
   

  	
  5.08
  Borrower/Subsidiary Pledge and Security Agreement

  	
   

  
	
   

  	
  5.09
  Holdings Pledge and Security Agreement; Control Agreement

  	
   

  
	
   

  	
  5.10 Vessel
  Acquisition Document Assignment

  	
   

  
	
   

  	
  5.11
  Solvency Certificate

  	
   

  
	
   

  	
  5.12 Vessel Acquisition
  Documents

  	
   

  
	
   

  	
  5.13 Approvals

  	
   

  

 

(i)

 

	
  SECTION 6. Conditions
  Precedent to each Borrowing Date

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.01 No Default;
  Representations and Warranties

  	
   

  
	
   

  	
  6.02 Notice of Borrowing

  	
   

  
	
   

  	
  6.03 Consummation of
  the Vessel Acquisitions; etc

  	
   

  
	
   

  	
  6.04 Common Equity
  Financing

  	
   

  
	
   

  	
  6.05 Indebtedness

  	
   

  
	
   

  	
  6.06 Opinions of Counsel

  	
   

  
	
   

  	
  6.07 Assignments of Earnings, Insurances
  and Charter

  	
   

  
	
   

  	
  6.08 Mortgages

  	
   

  
	
   

  	
  6.09 Certificates of Ownership; Searches;
  Class Certificates; Appraisal Reports; Mortgages

  	
   

  
	
   

  	
  6.10 Employment of Vessel; Consent to
  Assignment of Charters

  	
   

  
	
   

  	
  6.11 Approvals

  	
   

  
	
   

  	
  6.12 Litigation

  	
   

  
	
   

  	
  6.13 Environmental Laws

  	
   

  
	
   

  	
  6.14 Material Adverse Effect

  	
   

  
	
   

  	
  6.15 Officer’s Certificate

  	
   

  
	
   

  	
  6.16 Fees, etc

  	
   

  
	
   

  	
  6.17 No Conflicts

  	
   

  
	
   

  	
  6.18 Management and Service Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.
  Representations, Warranties and Agreements

  	
   

  
	
   

  	
   

  
	
   

  	
  7.01 Corporate/Limited Liability
  Company/Limited Partnership Status

  	
   

  
	
   

  	
  7.02 Corporate Power and Authority

  	
   

  
	
   

  	
  7.03 No Violation

  	
   

  
	
   

  	
  7.04 Governmental Approvals

  	
   

  
	
   

  	
  7.05 Balance Sheets; Financial Condition;
  Undisclosed Liabilities

  	
   

  
	
   

  	
  7.06 Litigation

  	
   

  
	
   

  	
  7.07 True and Complete Disclosure

  	
   

  
	
   

  	
  7.08 Use of Proceeds; Margin Regulations

  	
   

  
	
   

  	
  7.09 Tax Returns and Payments

  	
   

  
	
   

  	
  7.10 Compliance with ERISA

  	
   

  
	
   

  	
  7.11 The Security Documents

  	
   

  
	
   

  	
  7.12 Representations and Warranties in
  Documents

  	
   

  
	
   

  	
  7.13 Capitalization

  	
   

  
	
   

  	
  7.14 Subsidiaries

  	
   

  
	
   

  	
  7.15 Compliance with Statutes, etc

  	
   

  
	
   

  	
  7.16 Investment Company Act

  	
   

  
	
   

  	
  7.17 Public Utility Holding Company Act

  	
   

  
	
   

  	
  7.19 Labor Relations

  	
   

  
	
   

  	
  7.20 Patents, Licenses, Franchises and
  Formulas

  	
   

  
	
   

  	
  7.21 Indebtedness

  	
   

  
	
   

  	
  7.22 Insurance

  	
   

  
	
   

  	
  7.23 Concerning the Top Glory Vessels

  	
   

  
	
   

  	
  7.24 Citizenship

  	
   

  
	
   

  	
  7.25 Vessel
  Classification

  	
   

  

 

(ii)

 

	
   

  	
  7.26 No Immumty

  	
   

  
	
   

  	
  7.27 Fees and Enforcement

  	
   

  
	
   

  	
  7.28 Form of Documentation

  	
   

  
	
   

  	
  7.29 Vessel Acquisitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.
  Affirmative Covenants

  	
   

  
	
   

  	
   

  
	
   

  	
  8.01 Information Covenants

  	
   

  
	
   

  	
  8.02 Books, Records and Inspections

  	
   

  
	
   

  	
  8.03 Maintenance of Property; Insurance

  	
   

  
	
   

  	
  8.04 Corporate Franchises

  	
   

  
	
   

  	
  8.05 Compliance with Statutes, etc

  	
   

  
	
   

  	
  8.06 Compliance with Environmental Laws

  	
   

  
	
   

  	
  8.07 ERISA

  	
   

  
	
   

  	
  8.08 End of Fiscal Years; Fiscal Quarters

  	
   

  
	
   

  	
  8.09 Performance of Obligations

  	
   

  
	
   

  	
  8.10 Payment of Taxes

  	
   

  
	
   

  	
  8.11 Further Assurances

  	
   

  
	
   

  	
  8.12 Deposit of Earnings

  	
   

  
	
   

  	
  8.13 Ownership of Subsidiaries

  	
   

  
	
   

  	
  8.14 Flag of Mortgaged Vessels; Vessel
  Classifications

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.
  Negative Covenants

  	
   

  
	
   

  	
   

  
	
   

  	
  9.01 Liens 40

  	
   

  
	
   

  	
  9.02 Consolidation, Merger, Sale of Assets,
  etc

  	
   

  
	
   

  	
  9.03 Dividends

  	
   

  
	
   

  	
  9.04 hndebtedness

  	
   

  
	
   

  	
  9.05 Advances, Investments and Loans

  	
   

  
	
   

  	
  9.06 Transactions with Affiliates

  	
   

  
	
   

  	
  9.07 Capital Expenditures

  	
   

  
	
   

  	
  9.08 Consolidated Interest Coverage Ratio

  	
   

  
	
   

  	
  9.09 Maximum Leverage Ratio

  	
   

  
	
   

  	
  9.10 Collateral Maintenance

  	
   

  
	
   

  	
  9.11 Minimum Cash Balance

  	
   

  
	
   

  	
  9.12 Limitation on Modifications of
  Certificate of Incorporation and By-Laws; etc

  	
   

  
	
   

  	
  9.13 Limitation on Certain Restrictions on
  Subsidiaries

  	
   

  
	
   

  	
  9.14 Limitation on Issuance of Capital
  Stock

  	
   

  
	
   

  	
  9.15 Business

  	
   

  
	
   

  	
  9.16 Vessel Acquisitions

  	
   

  
	
   

  	
  9.17 Bank Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.
  Events of Default

  	
   

  
	
   

  	
   

  
	
   

  	
  10.01 Payments

  	
   

  
	
   

  	
  10.02 Representations, etc

  	
   

  
	
   

  	
  10.03 Covenants

  	
   

  
	
   

  	
  10.04 Default Under Other Agreements

  	
   

  
	
   

  	
  10.05
  Bankruptcy, etc

  	
   

  

 

(iii)

 

	
   

  	
  10.06 ERISA

  	
   

  
	
   

  	
  10.07 Security Documents

  	
   

  
	
   

  	
  10.08 Guaranty

  	
   

  
	
   

  	
  10.09 Judgments

  	
   

  
	
   

  	
  10.10 Change of Control

  	
   

  
	
   

  	
  10.11 Vessel Acquisition Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.
  Definitions and Accounting Terms

  	
   

  
	
   

  	
   

  
	
   

  	
  11.01 Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.
  Agency and Security Trustee Provisions

  	
   

  
	
   

  	
   

  
	
   

  	
  12.01 Appointment

  	
   

  
	
   

  	
  12.02 Nature of Duties

  	
   

  
	
   

  	
  12.03 Lack of Reliance
  on the Agents

  	
   

  
	
   

  	
  12.04 Certain Rights of
  the Agents

  	
   

  
	
   

  	
  12.05 Reliance

  	
   

  
	
   

  	
  12.06 Indemnification

  	
   

  
	
   

  	
  12.07 The
  Administrative Agent in its Individual Capacity

  	
   

  
	
   

  	
  12.08 Holders

  	
   

  
	
   

  	
  12.09 Resignation by the
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.
  Miscellaneous

  	
   

  
	
   

  	
   

  
	
   

  	
  13.01 Payment of Expenses, etc

  	
   

  
	
   

  	
  13.02 Right of Setoff

  	
   

  
	
   

  	
  13.03 Notices

  	
   

  
	
   

  	
  13.04 Benefit of
  Agreement

  	
   

  
	
   

  	
  13.05 No
  Waiver; Remedies Cumulative

  	
   

  
	
   

  	
  13.06 Payments Pro Rata

  	
   

  
	
   

  	
  13.07
  Calculations; Computations

  	
   

  
	
   

  	
  13.08 GOVERNING LAW;
  SUBMISSION TO JURISDICTION; VENUE; WAIVER
  OF JURY TRIAL

  	
   

  
	
   

  	
  13.09 Counterparts

  	
   

  
	
   

  	
  13.10 Effectiveness

  	
   

  
	
   

  	
  13.11 Headings
  Descriptive

  	
   

  
	
   

  	
  13.12 Amendment or Waiver;
  etc

  	
   

  
	
   

  	
  13.13 Survival

  	
   

  
	
   

  	
  13.14 Domicile of Loans

  	
   

  
	
   

  	
  13.15 Limitation on
  Additional Amounts, etc

  	
   

  
	
   

  	
  13.16 Confidentiality

  	
   

  
	
   

  	
  13.17 Register

  	
   

  
	
   

  	
  13.18 Judgment Currency

  	
   

  
	
   

  	
  13.19 Language

  	
   

  
	
   

  	
  13.20 Waiver of Immunity

  	
   

  
	
   

  	
  13.21 USA PATRIOT Act
  Notice

  	
   

  

 

(iv)

 

CREDIT AGREEMENT, dated as of December 3, 2004,
among FLEET ACQUISITION LLC, a limited liability company organized under the
laws of the Republic of the Marshall Islands (“Holdings”), GENCO
SHIPPING & TRADING LIMITED, a corporation organized under the laws of
the Republic of Marshall Islands (the “Borrower”), the Lenders party
hereto from time to time, CITIBANK GLOBAL MARKETS LIMITED (“CGML”) and NORDEA
BANK FINLAND PLC, NEW YORK BRANCH, as Joint Lead Arrangers and Joint Book
Runners (“NBF” and together with CGML, the “Lead Arrangers”), and NORDEA
BANK FINLAND PLC, NEW YORK BRANCH, as Administrative Agent (in such capacity,
the “Administrative Agent”) and as Collateral Agent under the Security
Documents (in such capacity, the “Collateral Agent”). All capitalized
terms used herein and defined in Section 11 are used herein as therein
defined.

 

W I T N E S S E T H:

 

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

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1.  Amount and Terms
of Credit Facilities.

 

1.01 The Commitments.
Subject to and upon the terms and conditions set forth herein, each Lender
severally agrees to make a term loan or term loans (each a “Loan” and,
collectively, the “Loans”) to the Borrower, which Loans (i) shall
bear interest in accordance with Section 1.07, (ii) may only be
incurred on a date occurring on or after the Initial Borrowing Date and prior
to the Commitment Termination Date on which a Top Glory Vessel is acquired by a
Subsidiary of the Borrower pursuant to the Vessel Acquisition Documents (each a
“Vessel  Acquisition” and collectively, the “Vessel
Acquisitions”);  provided that no more than two Vessel Acquisitions
may be made after April 1, 2005, (iii) shall be denominated in
Dollars, (iv) shall not exceed in aggregate principal amount on any
Borrowing Date (x) when added to the aggregate principal amount of all Loans
then outstanding, an amount equal to 85% of the sum of the Appraised Value of
all Top Glory Vessels acquired by the Borrower and its Subsidiaries on or prior
to such Borrowing Date (including the Top Glory Vessels then being acquired)
and (y) for any Top Glory Vessel, an amount equal to the lesser of (x) 85% of
the Appraised Value of such Top Glory Vessel and (y) the Maximum Loan Amount
for such Top Glory Vessel, and (v) shall not exceed for any Lender, that
amount which equals the Commitment of such Lender as in effect on such
Borrowing Date (determined before giving effect on such Borrowing Date to the
reduction thereto required by Section 3.03). Once repaid, Loans incurred
hereunder may not be reborrowed.

 

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

 

(b) More than one Borrowing may occur on the same
date, but at no time shall there be outstanding more than (x) 16 Borrowings of
Loans subject to different Interest Periods in the aggregate at any time prior
to the Commitment Termination Date or (y) six Borrowings of

 

 

Loans subject to different Interest Periods in the aggregate at any
time after the Commitment Termination Date.

 

1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Administrative Agent at its Notice
Office at least two Business Days’ prior written notice of each Loan to be made
hereunder, provided that any such notice shall be deemed to have been
given on a certain day only if given before 4:00 P.M. (New York time).
Each such written notice (each a “Notice of Borrowing”), except as
otherwise expressly provided in Section 1.09, shall be irrevocable and
shall be given by the Borrower in the form of Exhibit A, appropriately
completed to specify (i) the aggregate principal amount of the Loans to be
made pursuant to such Borrowing, (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the initial Interest Period to be
applicable thereto, (iv) the Top Glory Vessels to be acquired with the
proceeds of the Loans to be made pursuant to such Borrowing, and (v) to
which account the proceeds of such Loans are to be deposited. The
Administrative Agent shall promptly give each Lender which is required to make
Loans, notice of such proposed Borrowing, of such Lender’s proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.

 

(b) Without
in any way limiting the obligation of the Borrower to deliver a written Notice
of Borrowing in accordance with Section 1.03(a), the Administrative Agent
may act without liability upon the basis of telephonic notice of such
Borrowing, believed by the Administrative Agent in good faith to be from an
Authorized Officer of the Borrower prior to receipt of Notice of Borrowing. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent’s record of the terms of such telephonic notice of such
Borrowing of Loans, absent manifest error.

 

1.04 Disbursement of Funds.
Except as otherwise specifically provided in the immediately succeeding
sentence, no later than 12:00 Noon (New York time) on the date specified in
each Notice of Borrowing, each Lender will make available its pro  rata
portion of each such Borrowing requested to be made on such date. All such
amounts shall be made available in Dollars and in immediately available funds
at the Payment Office of the Administrative Agent and the Administrative Agent
will make available to the Borrower (prior to 1:00 P.M. (New York Time) on
such day to the extent of funds actually received by the Administrative Agent
prior to 12:00 Noon (New York Time) on such day) at the Payment Office, in the
account specified in the applicable Notice of Borrowing, the aggregate of the
amounts so made available by the Lenders. Unless the Administrative Agent shall
have been notified by any Lender prior to the date of Borrowing that such
Lender does not intend to make available to the Administrative Agent such
Lender’s portion of any Borrowing to be made on such date, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date of Borrowing and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand

 

2

 

from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Lender, at the
overnight Federal Funds Rate and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 1.07. In this connection, in order to facilitate a Vessel
Acquisition on a Borrowing Date, the Administrative Agent may (but shall not be
obligated to) on the Business Day immediately preceding such Borrowing Date
issue a Swift MT 199 or other similar communication to Societe Generale, Hong
Kong Branch (which is the agent for the Seller’s lenders) (“Societe Generale”)
confirming the Administrative Agent’s irrevocable and unconditional commitment
to make available to Societe Generale on such Borrowing Date an amount equal to
the aggregate principal amount of the Loans required to fund the Vessel
Acquisition(s) on such Borrowing Date if a duly executed Protocol of Delivery
and Acceptance in respect of such Vessel Acquisition is delivered to the
Administrative Agent c/o Johnson Stokes & Master, the Administrative
Agent’s special Hong Kong counsel (each such communication, a “Funding
Commitment”). Unless a Lender shall have given the Administrative Agent
notice by no later than 11:00 A.M. (New York time) on such immediately
preceding Business Day that it does not intend to fund its pro rata portion of
the Loans on such Business Date because a condition to lending is not
satisfied, in the event that the Administrative Agent issues such Funding
Commitment and funds the Loans pursuant thereto, such Lender shall be
irrevocably obligated to fund its portion of the Loan on such Borrowing Date
whether or not the applicable conditions precedent set forth in Sections 5 and
6 are satisfied on such Borrowing Date or a Default or Event of Default then
exists. For the avoidance of doubt, the parties hereto acknowledge and agree
that the issuance of a Funding Commitment shall not be deemed to be a waiver of
any condition precedent to the Loans on such Borrowing Date and the Borrower
agrees that it shall not deliver a Protocol of Delivery and Acceptance on a
Borrowing Date (i) if the Administrative Agent shall have given the
Borrower notice that the applicable conditions precedent set forth in Sections
5 and 6 are not satisfied on such Borrowing Date or (ii) if the applicable
conditions set forth in Sections 5 and 6 are not satisfied on such Borrowing
Date.

 

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

 

(b)           Each
Note shall (i) be executed by the Borrower, (ii) be payable to the
order of such Lender and be dated the Initial Borrowing Date (or, in the case
of Notes issued after the Initial Borrowing Date, be dated the date of issuance
thereof), (iii) be in a stated principal amount equal to the Commitment of
such Lender on the Initial Borrowing Date before giving effect to any
reductions thereto on such date (or, in the case of Notes issued after the
Initial Borrowing Date, be in a stated principal amount equal to the
outstanding principal amount of Loans of such Lender on the date of the
issuance thereof) and be payable in the principal amount of the Loans evidenced
thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in

 

3

 

Section 1.07, (vi) be subject to voluntary prepayment and
mandatory repayment as provided in Sections 4.01 and 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

 

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

 

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

 

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

 

1.07
Interest. (a) The
Borrower agrees to pay interest in respect of the unpaid principal amount of
each Loan from the date the proceeds thereof are made available to the Borrower
until the maturity (whether by acceleration or otherwise) of such Loan at a
rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Applicable Margin plus the Eurodollar Rate for such
Interest Period.

 

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

 

4

 

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

 

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

 

1.08
Interest Periods.
At the time the Borrower gives any Notice of Borrowing in respect of the making
of any Loan (in the case of the initial Interest Period applicable thereto) or
on the third Business Day prior to the expiration of an Interest Period
applicable to such Loan (in the case of any subsequent Interest Period)
(provided that any such notice shall be deemed to be given on a certain day
only if given before 11:00 A.M. (New York time)), it shall have the right
to elect, by giving the Administrative Agent notice thereof, the interest
period (each an “Interest  Period”) applicable to such Loan, which
Interest Period shall, at the option of the Borrower, be a one, three, six or,
to the extent available and agreed by all Lenders, nine or twelve month period;
provided that:

 

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

 

(ii)           the initial Interest
Period for any Loan shall commence on the Borrowing Date of such Loan and
teuLiinate on (x) in the case of any Interest Period which commences prior to December 29,
2004, December 29, 2004 and (y) in the case of any Interest Period which
commences on and after December 29, 2004, the first Business Day of the
immediately succeeding calendar month (provided that any such Interest Period
which commences prior to January 1, 2005, shall terminate on the first
Business Day in February 2005), provided that the initial Interest
Period for any Loan made after the Amortization Commencement Date shall
commence on the date of such Loan and end on the first Payment Date to occur
thereafter;

 

(iii)          subject to clause (vi) below,
each Interest Period for any Loan for each Interest Period after the initial
Interest Period with respect thereto shall commence on the day on which the
immediately preceding Interest Period applicable thereto expires and end on the
first Business Day of a calendar month (or in the case of the Interest Period
commencing on December 29, 2005, the first Business Day of February 2005);

 

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

 

(v)           if any Interest Period would
otherwise expire on a day which is not a Business Day, such Interest Period
shall expire on the first succeeding Business Day;

 

5

 

provided,
however, that if any Interest Period for a Loan would otherwise expire
on a day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the immediately preceding Business Day;

 

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

 

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

 

(viii)        no Interest Period in respect of any
Borrowing of Loans shall be selected which extends beyond any date upon which a
mandatory repayment of Loans will be required to be made under Section 4.02(a) if
the aggregate principal amount of Loans which have Interest Periods which will
expire after such date will be in excess of the aggregate principal amount of
Loans then outstanding less the aggregate amount of such required repayment on
such date; and

 

(ix)           the selection of Interest Periods
shall be subject to the provisions of Section 1.02(b).

 

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

 

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

 

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

 

(ii)           at any time, that such Lender shall
incur increased costs or reductions in the amounts received or receivable
hereunder with respect to any Loan because of (x) any change since the
Effective Date in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of any
new law or govern-mental rule, regulation, order, guideline or request, such
as, for example, but not limited to: (A) a change in the basis of taxation
of payment to any Lender of the principal of or interest on such Loan or any
other amounts payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income, gross receipts or net profits of
such Lender, or any franchise tax based on net income, net profits or net
worth, of such

 

6

 

Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which such Lender’s principal office or
applicable lending office is located or any subdivision thereof or therein),
but without duplication of any amounts payable in respect of Taxes pursuant to Section 4.04,
or (B) a change in official reserve requirements but, in all events,
excluding reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate and/or (y) other circumstances arising since
the Effective Date affecting such Lender or the interbank Eurodollar market or
the position of such Lender in such market; or

 

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

 

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

 

7

 

such Lender may lawfully continue to maintain and fund such Loans) or
immediately (if such Lender may not lawfully continue to maintain and fund such
Loans to such day) and (B) in the case of an event of the type described
in clause (iii)(z) above, the Commitment of such Lender shall be terminated in
its entirety and the Borrower shall pay to such Lender any accrued and unpaid
Commitment Commission which may be due to such Lender under this Agreement, and
all outstanding Loans of such Lender shall, from the date such notice is
delivered to the Borrower and thereafter until such time as the Administrative
Agent or such Lender shall notify the Borrower that the circumstances giving
rise to the operation of clause (iii)(z) above with respect to such Lender no
longer exist, bear interest at a rate equal to the Base Rate, as in effect from
time to time, plus the Applicable Margin as in effect from time to time minus
1.00%. The Administrative Agent and each Lender (to the extent it continues to
be a Lender hereunder) agree that if any of them gives notice to the Borrower
of any of the events described in clause (i) or (iii) above, it shall
promptly notify the Borrower and, in the case of any such Lender, the
Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Lender (to the
extent it continues at such time to be a Lender hereunder), the obligations of
such Lender to make Loans on the terms and conditions contained herein shall to
the extent of such Lender’s outstanding Loans and Commitments as in effect at
such time, be immediately reinstated.

 

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

 

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

 

8

 

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

 

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

 

1.12 Replacement of Lenders.
(x) If any Lender defaults in its obligations to make Loans, (y) upon the
occurrence of any event giving rise to the operation of Section 1.09(a)(ii) or
(iii), Section 1.09(b) or Section 4.04 with respect to any
Lender which results in such Lender charging to the Borrower increased costs in
excess of those being generally charged by the other Lenders, or (z) as
provided in Section 13.12(b) in the case of certain refusals by a
Lender to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders, the Borrower shall have the right, if no Default or Event of
Default will exist immediately after giving effect to the respective
replacement, to either replace such Lender (the “Replaced Lender”) with
one or more other Eligible Transferee or Eligible Transferees (collectively,
the “Replacement Lender”) reasonably acceptable to the Administrative
Agent, provided that:

 

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

 

9

 

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

 

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

 

SECTION 2.
Reserve Account. As provided in Section 8.12, all earnings
derived from each of the Mortgaged Vessels (including, without limitation,
charter revenues and proceeds) shall be deposited in the Concentration Accounts
maintained by the Subsidiary Guarantors owning such Mortgaged Vessel. On the
last Business Day of each month during the period commencing March 2005
through the Maturity Date, the Borrower shall transfer (each, a “Reserve
Transfer”) from the Concentration Accounts to an additional account of the
Borrower maintained with the Administrative Agent (the “Reserve Account”)
an amount equal to 33 1/3% of the Required Debt Service Amount for the
immediately succeeding Payment Date. During any monthly period, the Borrower
and the Subsidiary Guarantors shall be permitted to apply amounts in the
Concentration Accounts to the payment of the operating expenses and other
expenditures permitted under this Agreement of the Borrower and the Subsidiary
Guarantors, to the extent that the amounts to be applied are not otherwise
required to fund a Reserve Transfer. On each Payment Date and on each date on
which interest is payable under Section 1.07(c), amounts on deposit in the
Reserve Account shall be applied to the payment of principal and interest of
the Loans then due and payable.

 

SECTION 3. Commitment
Commission; Reductions of Commitment.

 

3.01
Commitment Commission. (a) The Borrower
agrees to pay the Administrative Agent for distribution to each Lender a
commitment commission (the “Commitment Commission”) for the period from
the Effective Date to and including the Commitment Termination Date (or such
earlier date as the Total Commitment shall have been terminated) computed at a
rate for each day equal to a per annum rate of 0.61875% on the daily average
Commitment of such Lender. Accrued Commitment Commission shall be due and payable
on the Payment Dates occurring in April 2005 and July 2005.

 

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

 

3.02 Voluntary Termination of
Unutilized Commitments. (a) Upon at least three Business Days’
prior notice to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, to terminate or reduce

 

10

 

the Total Commitment, in whole or in part, in integral multiples of
$5,000,000 in the case of partial reductions thereto, provided that each
such reduction shall apply proportionately to permanently reduce the Commitment
of each Lender.

 

(b)           In
the event of certain refusals by a Lender as provided in Section 13.12(b) to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Lenders, the
Borrower may, subject to the requirements of said Section 13.12(b) and
upon five Business Days’ written notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), terminate all of the Commitment (if any) of such Lender
so long as all Loans, together with accrued and unpaid interest, Commitment
Commission and all other amounts, owing to such Lender are repaid concurrently
with the effectiveness of such termination (at which time Schedule I shall
be deemed modified to reflect such changed amounts), and at such time such
Lender shall no longer constitute a “Lender” for purposes of this Agreement,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.09, 1.10, 4.04, 13.01 and 13.06),
which shall survive as to such repaid Lender.

 

3.03 Mandatory Reduction
of Commitments. The Total Commitment (i) shall be reduced on each
Borrowing Date (after giving effect to the incurrence of Loans on each such
date) in an amount equal to the aggregate principal amount of Loans incurred on
such date and (ii) (and the Commitment of each Lender) shall terminate in
its entirety on the Commitment Termination Date, after giving effect to all
Borrowings of Loans on such date. Each reduction to the Total Commitment
pursuant to this Section 3.03 shall be applied proportionately to reduce
the Commitment of each Lender with such a Commitment.

 

SECTION 4. Prepayments;
Payments; Taxes.

 

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

 

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

 

(ii)           each prepayment shall be in an
aggregate principal amount of at least $5,000,000 or such lesser amount of a
Borrowing which is outstanding, provided that no partial prepayment of
Loans made pursuant to any Borrowing shall reduce the outstanding Loans made
pursuant to such Borrowing to an amount less than $5,000,000;

 

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

 

11

 

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

 

(v)           except as expressly provided in the
preceding clause (iv), each prepayment in respect of any Loans made pursuant to
a Borrowing shall be applied pro rata among the Loans comprising such
Borrowing; and

 

(vi)          each prepayment of principal of Loans
pursuant to this Section 4.01 shall be applied to reduce the then
remaining Scheduled Repayments of Loans pro rata based upon the then
remaining principal amounts of the Scheduled Repayments of Loans after giving
effect to all prior reductions thereto.

 

4.02 Mandatory Repayments.
(a) In addition to any other mandatory repayments pursuant to this Section 4.02,
on each Payment Date set forth below, the Borrower shall be required to repay
that aggregate principal amount of Loans set forth opposite such Payment Date
below (provided that, in any event, all then outstanding Loans shall be
due in full on the Maturity Date)(each such repayment, as the same may be
reduced as provided in Sections 4.01, 4.02(b) and 4.02(c), a “Scheduled
Repayment”):

 

	
  Payment Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 1,
  2005

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  September 1,
  2005

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  December 1,
  2005

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  March 1,
  2006

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  June 1,
  2006

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  September 1,
  2006

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  December 1,
  2006

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  March 1,
  2007

  	
   

  	
  $

  	
  20,625,000

  	
   

  
	
  June 1,
  2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 1,
  2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 1,
  2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 1,
  2008

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 1,
  2008

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 1,
  2008

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 1,
  2008

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 1,
  2009

  	
   

  	
  $

  	
  7,500,000

  	
   

  

 

12

 

	
  June 1,
  2009

  	
   

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 1,
  2009

  	
   

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 1,
  2009

  	
   

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  Maturity
  Date

  	
   

  	
   

  	
  $

  	
  109,500,000

  	
   

  

 

; provided that in the event that the Total Commitment on the
Initial Borrowing Date (and before giving effect to the Loans being made on
such date) exceeds the aggregate principal amount of the Loans made on or prior
to the Commitment Termination Date, the amount of such excess shall reduce each
Scheduled Repayment to occur after the Commitment Termination Date pro  rata
based upon the then remaining principal amounts of the Scheduled Repayments of
Loans after giving effect to all prior reduction thereto.

 

(b)         In addition to any other mandatory
repayments required pursuant to this Section 4.02, but without
duplication, on (i) the Business Day following the date of any Collateral
Disposition involving a Mortgaged Vessel (other than a Collateral Disposition
constituting an Event of Loss or a Collateral Disposition in connection with a
Vessel Exchange) and (ii) the earlier of (A) the date which is 180
days following any Collateral Disposition constituting an Event of Loss
involving a Mortgaged Vessel and (B) the date of receipt by the Borrower,
any of its Subsidiaries or the Administrative Agent of the insurance proceeds
relating to such Event of Loss, the Borrower shall be required to repay an
aggregate principal amount of outstanding Loans in an amount equal to (x) the
sum of the then outstanding aggregate principal amount of Loans multiplied by a
fraction (A) the numerator of which is equal to the Appraised Value of the
Mortgaged Vessel or Mortgaged Vessels which is/are the subject of such
Collateral Disposition and (B) the denominator of which is equal to the
Aggregate Appraised Value or (y) if such Collateral Disposition occurs prior to
the Trigger Date and if such amount is greater than the amount determined
pursuant to clause (x), 100% of the net sale or insurance proceeds, as the case
may be, received from such Collateral Disposition; provided that without
limiting anything otherwise provided for in this Agreement, the Borrower hereby
acknowledges that it is obliged to comply with Section 9.10 at all times
(including, without limitation, after giving effect to any payment contemplated
by this Section 4.02(b)). The amount of each principal repayment of Loans
required by this Section 4.02(b) shall be applied to reduce the then
remaining Scheduled Repayments pro rata based upon the then remaining
principal amounts of such Scheduled Repayments after giving effect to all prior
reductions thereto.

 

(c)          In addition to any other mandatory
repayments required pursuant to this Section 4.02, on each Payment Date
occurring prior to the Trigger Date, the Borrower shall be required to repay an
aggregate principal amount of outstanding Loans in an amount equal to the
excess of (x) Available Cash on such Payment Date less (y) the Required
Debt Service Amount for such Payment Date. The amount of each principal
repayment of Loans required by this Section 4.02(c) shall be applied
to reduce the then remaining Scheduled Repayments pro rata based upon
the then remaining principal amounts of such Scheduled Repayments after giving
effect to all prior reductions thereto.

 

(d)         With respect to each repayment of Loans
required by this Section 4.02, the Borrower may designate the specific
Borrowing or Borrowings pursuant to which such Loans were made, provided
that (i) repayments of Loans pursuant to this Section 4.02 may only
be made on the last day of an Interest Period applicable thereto unless all
Loans with Interest

 

13

 

Periods ending on such date of required repayment have been paid in
full and (ii) each repayment of any Loans comprising a Borrowing shall be
applied pro  rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the preceding provisions of this clause
(d), make such designation in its sole reasonable discretion with a view, but
no obligation, to minimize breakage costs owing pursuant to Section 1.10.

 

(e)           The
Loans repaid pursuant to Section 4.01 and this Section 4.02 may not
be reborrowed.

 

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

 

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

 

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

 

14

 

from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrower
will furnish to the Administrative Agent within 45 days after the date of
payment of any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.

 

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

 

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

 

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

 

5.01 Initial Borrowing Date; Notes. On or prior to the Initial Borrowing Date (i) the Effective Date
shall have occurred and (ii) if requested by a Lender, there shall have
been delivered to the Administrative Agent, for the account of such Lender, the
appropriate Note for such Lender executed by the Borrower, in each case in the
amount, maturity and as otherwise provided herein.

 

5.02 Pro forma Balance
Sheets; Projections. On or prior to the Initial
Borrowing Date, the Administrative Agent shall have received and the
Administrative Agent shall be

 

15

 

reasonably satisfied with (i) pro  forma balance
sheet of Holdings and its Subsidiaries prepared assuming that the Transaction
has been consummated and (ii) detailed projected consolidated financial
statements of the Borrower and its Subsidiaries for the five fiscal years ended
after the Initial Borrowing Date (the “Projections”).

 

5.03 Opinions of Counsel.
(a) On the Initial Borrowing Date, the Administrative Agent shall have
received from Kramer Levin Naftalis & Frankel LLP, special New York
counsel to Holdings and its Subsidiaries, an opinion addressed to the
Administrative Agent and each of the Lenders and dated the Initial Borrowing
Date covering the matters set forth in Exhibit C-1 which shall (x)
be in form and substance reasonably acceptable to the Administrative Agent and
(y) cover the perfection of the security interests (other than those to be
covered by opinions delivered pursuant to clauses (b) through (c) below)
granted pursuant to the Security Documents and such other matters incidental to
the transactions contemplated herein as the Administrative Agent may reasonably
request.

 

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

 

(c)           On the Initial Borrowing Date, the
Administrative Agent shall have received from Johnson Stokes & Master,
special Hong Kong and Marshall Islands counsel to the Administrative Agent, an
opinion addressed to the Administrative Agent and each of the Lenders and dated
the Initial Borrowing Date covering the matters set forth in Exhibit C-3,
which shall (x) be in form and substance reasonably acceptable to the
Administrative Agent and (y) cover the perfection of the security interests
granted pursuant to the relevant Vessel Mortgage(s) and such other matters
incidental thereto as the Administrative Agent may reasonably request.

 

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

 

(b)           All
corporate, limited liability company, partnership and legal proceedings, and
all material instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Documents, shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate, limited liability company
and partnership proceedings, governmental approvals, good standing

 

16

 

certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent may have reasonably requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.

 

5.05 Common Equity Financing .
On or prior to the Initial Borrowing Date, Holdings shall have received net
cash proceeds from the Common Equity Financing of at least $63,474,990 and of
$2,500,00 from the Holdings Loan and shall have used the proceeds thereof to (x)
make deposits with the Seller pursuant to the Vessel Acquisition Documents an
aggregate amount of $63,116,883 and (y) used the remainder thereof to make a
cash capital contribution to the Borrower. All terms and conditions (and the
documentation) in connection with the Common Equity Financing (including the
identity of any equity investors (including management) other than the
Investors in Holdings and the relative amounts of their equity investments in
Holdings) shall be reasonably satisfactory to the Lead Arrangers (it being
understood that the form of Fleet LLC Agreement delivered to the Lead Arrangers
prior to the Effective Date is reasonably satisfactory to the Lead Arrangers).

 

5.06 Appraisals.
On or prior to the Initial Borrowing Date, the Administrative Agent shall have
received Appraisals from at least two Approved Appraisers of each Top Glory
Vessel of a recent date (and in no event dated earlier than 90 days prior to
the Initial Borrowing Date) in scope, form and substance, the results of which
shall be reasonably satisfactory to the Administrative Agent.

 

5.07 Subsidiaries Guaranty.
On the Initial Borrowing Date, each Subsidiary of the Borrower which is to
acquire a Top Glory Vessel shall have duly authorized, executed and delivered
to the Administrative Agent the Subsidiaries Guaranty in the form of Exhibit E
(as modified, supplemented or amended from time to time, the “Subsidiaries
Guaranty”), and the Subsidiaries Guaranty shall be in full force and
effect.

 

5.08
Borrower/Subsidiary Pledge and Security Agreement. On the Initial Borrowing Date, each of the Borrower and each of the
Subsidiary Guarantors shall have (x) duly authorized, executed and delivered
the Borrower/Subsidiary Pledge and Security Agreement in the form of Exhibit F-1
(as modified, supplemented or amended from time to time, the “Borrower/Subsidiary
Pledge Agreement”) and shall have (A) delivered to the Collateral
Agent, as pledgee, all the Pledged Securities referred to therein, together
with executed and undated stock powers in the ease of capital stock
constituting Pledged Securities, and (B) otherwise complied with all of
the requirements set forth in the Borrower/Subsidiary Pledge Agreement and (y)
duly authorized, executed and delivered any other related documentation
necessary or advisable to perfect the Lien on the Pledge Agreement Collateral
referred to therein in the respective jurisdictions of formation of the
respective Subsidiary Guarantor or the Borrower, as the case may be.

 

5.09 Holdings Pledge
and Security Agreement; Control Agreement. On the
Initial Borrowing Date, Holdings shall have (x) duly authorized, executed and
delivered the Holdings Pledge and Security Agreement in the form of Exhibit F-2
(as modified, supplemented or amended from time to time, the “Holdings Pledge
Agreement”) and shall have (A) delivered to the Collateral Agent, as
pledgee, all the Pledged Securities referred to therein, together with executed
and undated stock powers in the case of capital stock constituting Pledged
Securities,

 

17

 

and (B) otherwise complied with all of the requirements set forth
in the Holdings Pledge Agreement and (y) duly authorized, executed and
delivered any other related documentation necessary or advisable to perfect the
Lien on the Pledge Agreement Collateral referred to therein in the jurisdiction
of formation of Holdings.

 

(b)           On the Initial Borrowing Date, the
Borrower, each Subsidiary Guarantor, the Collateral Agent and Nordea Bank
Finland plc, New York Branch, as deposit bank shall have duly executed and
delivered a Control Agreement in the form attached to the Borrower/Subsidiary
Pledge Agreement with respect to each Concentration Account and the Reserve
Account.

 

5.10 Vessel Acquisition
Document Assignment. On the Initial Borrowing Date, Holdings, the
Borrower and each of the Subsidiary Guarantors shall have (x) duly authorized,
executed and delivered the Vessel Acquisition Document Assignments in the form
of Exhibit G hereto (as modified, supplemented or amended from time to
time, the “Vessel Acquisition  Document Assignment”) and (y) taken
all actions necessary or advisable to perfect the Lien on the collateral
described therein.

 

5.11 Solvency Certificate. On the Initial Borrowing Date, the Borrower shall cause to be delivered
to the Administrative Agent a solvency certificate from the senior financial
officer of the Borrower, in the form of Exhibit H, which shall be
addressed to the Administrative Agent and each of the Lenders and dated the
Initial Borrowing Date, setting forth the conclusion that, after giving effect
to the incurrence of all the financings contemplated hereby, the Borrower
individually, and the Borrower and its Subsidiaries taken as a whole, are not
insolvent and will not be rendered insolvent by the incurrence of such
indebtedness, and will not be left with unreasonably small capital with which
to engage in their respective businesses and will not have incurred debts
beyond their ability to pay such debts as they mature.

 

5.12 Vessel Acquisition Documents. On or prior to Initial Borrowing Date, the Lead Arrangers shall have
received copies of the Acquisition Agreements and all other documentation for
all Vessel Acquisitions (the “Vessel Acquisition Documents”); all Vessel
Acquisition Documents shall be in full force and effect and all the terms and
the structure of the Vessel Acquisitions and the Vessel Acquisition Documents
shall be reasonably satisfactory in form and substance to the Lead Arrangers
(it being understood that the Acquisition Agreements furnished to the Lead
Arrangers prior to the Effective Date are satisfactory in form and substance to
the Lead Arrangers).

 

5.13 Approvals. On or
prior to the Initial Borrowing Date, all necessary governmental (domestic and
foreign) and third party approvals and/or consents in connection with the
Loans, and the granting of Liens under the Credit Documents (other than the
registration of the Vessel Mortgages in respect of the Top Glory Vessels not
being acquired on such date) shall have been obtained and remain in effect, and
all applicable waiting periods with respect thereto shall have expired without
any action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the making of the Loans and the performance
by the Credit Parties of the Credit Documents. On the Initial Borrowing Date,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially

 

18

 

adverse conditions upon the making of the Loans or the performance by
the Credit Parties of the Credit Documents.

 

SECTION 6. Conditions Precedent to each Borrowing Date. The obligation of each Lender to make Loans on
each Borrowing Date (including the Initial Borrowing Date) is subject at the
time of the making of such Loans to the satisfaction or waiver of the following
conditions:

 

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

 

6.02 Notice of Borrowing.
Prior to the making of each Loan, the Administrative Agent shall have received
the Notice of Borrowing required by Section 1.03(a).

 

6.03 Consummation of the
Vessel
Acquisitions; etc. (a) On
or prior to each Borrowing Date, there shall have been delivered to the
Administrative Agent true and correct copies of the Vessel Acquisition
Documents in respect of the Vessel Acquisition(s) being consummated on such
date, all of which Vessel Acquisition Documents shall be in full force and
effect. Each of such Vessel Acquisition Documents shall not have been amended
or modified in violation of Section 9.12(b) since the Initial
Borrowing Date unless such amendment is approved by the Administrative Agent
and each of the Lead Arrangers.

 

(b)           On or prior to each Borrowing Date (i) the
Vessel Acquisition(s) occurring on such Borrowing Date shall have been consummated
in all material respects in accordance with the respective Vessel Acquisition
Documents and all applicable laws, and (ii) all conditions precedent to
the consummation of such Vessel Acquisition, as set forth in the related Vessel
Acquisition Documents, shall have been satisfied, and not waived except with
the consent of the Lead Arrangers.

 

6.04 Common Equity Financing.
(a) On each Borrowing Date, the Borrower shall have received from Holdings
through an equity contribution net cash proceeds in an amount equal to the sum
of (x) 15% of the aggregate purchase price for the Vessel Acquisition(s) being
made on such Borrowing Date (it being understood that the obligation of
Holdings to make such contribution shall be satisfied to the extent of the
application of the deposits established pursuant to the Vessel Acquisition
Documents and the direct payment thereof to the Seller) and (y) in the event
that the Maximum Loan Amount of the Top Glory Vessel being acquired on such
Borrowing Date exceeds 85% of the Appraised Value of such Top Glory Vessel, an
amount equal to the amount by which such Maximum Loan Amount exceeds 85% of
such Appraised Value.

 

19

 

(b)           On the earlier of (x) the first Borrowing Date to
occur on or after December 15, 2004 and (y) the Borrowing Date on which
the fourth Vessel Acquisition is consummated, Holdings shall have received
additional net cash proceeds from the Common Equity Financing of at least
$11,525,010 plus the accrued and unpaid interest on the Holdings Loan (which
amount shall be in addition to the amounts described in Sections 5.05 and 6.04
in respect of previous Borrowing Dates and under Section 6.04(a) on
such Borrowing Date) and shall have (x) used the proceeds to repay in full the
Holdings Loans and interest thereon and contributed an amount equal to such net
cash proceeds remaining after the repayment of Holdings Loan as a cash capital
contribution to the Borrower.

 

(c)           On each Borrowing Date, the Lead Arrangers shall
have received evidence, in form and substance satisfactory to the Lead
Arrangers that the equity contributions required to be made on or before such
Borrowing Date pursuant to Section 5.05 and clauses (a) and (b) of
this Section 6.04 have been made.

 

6.05 Indebtedness. On each Borrowing Date and
after giving effect to the related Vessel Acquisition, the Borrower and its
Subsidiaries shall have no outstanding Indebtedness or contingent liabilities,
except for Indebtedness incurred pursuant to this Agreement, and all equity
interests of the Borrower’s Subsidiaries shall be owned directly by the
Borrower, in each case free and clear of Liens (other than under the Credit
Documents) and all equity interests of the Borrower shall be owned directly by
Holdings free and clear of Liens (other than under the Credit Documents).

 

6.06 Opinions of Counsel. On each Borrowing
Date, the Administrative Agent shall have received from Johnson Stokes &
Master, special Hong Kong and Marshall Islands counsel to the Administrative
Agent, an opinion addressed to the Administrative Agent and each of the Lenders
and dated such Borrowing Date, which shall (x) be in form and substance
reasonably acceptable to the Administrative Agent and (y) cover the perfection
of the security interests granted pursuant to the Vessel Mortgage(s) and such
other matters incident thereto as the Administrative Agent may reasonably
request.

 

6.07 Assignments of Earnings, Insurances and
Charter. On each Borrowing Date, each Credit Party which is consummating a
Vessel Acquisition on such date shall have duly authorized, executed and
delivered an Assignment of Earnings in the form of Exhibit I-1 (as
modified, supplemented or amended from time to time, the “Assignment of
Earnings”), an Assignment of Insurances in the form of Exhibit I-2
(as modified, supplemented or amended from time to time, the “Assignment of
Insurances”) and an Assignment of Charters in the form of Exhibit B to
the Assignment of Earnings (as modified, supplemented or amended from time to
time, the “Assignment of Charters”), together covering all of such
Credit Party’s present and future Earnings and Insurance Collateral, in each
ease together with:

 

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

 

20

 

(ii)           certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, listing all effective
financing statements that name any Credit Party as debtor and that are filed in
the jurisdictions referred to in Section 6.07(i) above, together with
copies of such other financing statements (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens unless in respect of
which the Collateral Agent shall have received Form UCC-3
Termination Statements (or such other termination statements as shall be
required by local law) fully executed for filing if required by applicable
laws); and

 

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

 

6.08  Mortgages. (i) On
each Borrowing Date, each Credit Party which is consummating a Vessel
Acquisition on such Borrowing Date shall have duly authorized, executed and
delivered, and caused to be recorded in the appropriate vessel registry a
Vessel Mortgage with respect to each of the Top Glory Vessels being acquired on
such Borrowing Date and the Vessel Mortgages shall be effective to create in
favor of the Collateral Agent and/or the Lenders a legal, valid and enforceable
first priority security interest, in and lien upon such Top Glory Vessels,
subject only to Permitted Liens. Except as specifically provided above, all
filings, deliveries of instruments and other actions necessary or desirable in
the reasonable opinion of the Collateral Agent to perfect and preserve such
security interests shall have been duly effected and
the Collateral Agent shall have received evidence thereof in form and substance
reasonably satisfactory to the Collateral Agent.

 

6.09 Certificates of Ownership;
Searches; Class Certificates; Appraisal Reports;  Mortgages. On
each Borrower Date, the Administrative Agent shall have received each of the
following with respect to each Top Glory Vessel being acquired on such
Borrowing Date:

 

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

 

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

 

(iii)          class certificates from a classification society
listed on Schedule VIII hereto or another internationally recognized
classification society acceptable to the Collateral Agent, indicating that such
Top Glory Vessel meets the criteria specified in Section 7.25;

 

(iv)          if
requested by the Administrative Agent prior to such Borrowing Date, Appraisals
from at least two Approved Appraisers of such Top Glory Vessel of recent date
in scope, form and substance reasonably satisfactory to the Administrative
Agent; and

 

21

 

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

 

6.10 Employment of Vessel Consent to Assignment of
Charters. ‘(a) On each Borrowing Date and after giving effect to the
related Vessel Acquisition, each Top Glory Vessel being acquired on such
Borrowing Date shall (i) be employed under a fixed rate charter for a term
ending no sooner than 24 months immediately following such Borrowing Date or (ii) be
employed on a basis equivalent to that set forth in clause (i) above and
arranged through the freight derivatives market, in the case of both clauses (i) and
(ii), on teens and with counterparties reasonably satisfactory to the Lead
Arrangers (the arrangements set forth in clauses (i) and (ii) with
respect to a Top Glory Vessel are hereinafter referred to as the “Initial
Charter Arrangements” for such Top Glory Vessel) (it being understood
that the Lead Arrangers shall receive from the Borrower, upon reasonable
request, such information (including, without limitation, financial
information) in respect of such charter counterparties as may be reasonably
requested).

 

(b) On or before each Borrowing Date, the Borrower shall use its
commercially reasonable efforts to cause each charter counterparty which is
party to a charter described in clause (i) of Section 6.10(a) with
respect to each Top Glory Vessel being acquired on such Borrowing Date to
execute and deliver to the Administrative Agent a Charterers’ Consent and
Agreement in substantially the form attached as Annex 1 to Exhibit B to
the Assignment of Charters with such changes as may be approved by the
Administrative Agent.

 

6.11 Approvals. On or prior to each Borrowing
Date, all necessary governmental (domestic and foreign) and third party
approvals and/or consents (including any necessary anti-trust approvals or
consents) in connection with the Vessel Acquisition(s) being consummated on
such Borrowing Date, the transactions contemplated by the Documents with
respect to such Vessel Acquisition(s) and otherwise referred to herein or
therein shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any competent
authority which, in the reasonable judgment of the Administrative Agent,
restrains, prevents or imposes materially adverse conditions upon the
consummation of such Vessel Acquisition(s) or the transactions contemplated by
this Agreement or the other Documents. Additionally, there shall not exist any judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon such Vessel
Acquisition(s) or the other transactions contemplated by this Agreement.

 

6.12  Litigation. On each
Borrowing Date, no actions, suits, investigations or proceedings of any Credit
Party by any entity (private or governmental) shall be pending or, to the
knowledge of any Credit Party, threatened with respect to (i) the Vessel
Acquisition(s) being

 

22

 

consummated
on such date, (ii) any Top Glory Vessels, (iii) any Document, or (iv) which
the Administrative Agent shall determine could be reasonably to have a Material
Adverse Effect.

 

6.13 Environmental Laws. On each Borrowing
Date, there shall not exist any condition or occurrence on or arising from any
Top Glory Vessel or property owned or operated or occupied by the Borrower or
any of its Subsidiaries that (a) results in noncompliance by the Borrower
or such Subsidiary with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of a Environmental Claim against the
Borrower or any of its Subsidiaries or any such Top Glory Vessel or property,
which in any such case individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

 

6.14 Material Adverse Effect. On each
Borrowing Date and after giving effect to the related Vessel Acquisition,
nothing shall have occurred (and neither the Lead Arrangers nor any of the
Lenders shall have become aware of facts or conditions not previously known to
them) which any Agent or the Required Lenders shall determine has had, or could
reasonably be expected to have, a Material Adverse Effect.

 

6.15 Officer’s Certificate. On each Borrowing
Date, the Administrative Agent shall have received a certificate in the form of
Exhibit J from an Authorized Officer of the Borrower certifying that (x)
the conditions set forth in Sections 5.05, 5.13, 6.01, 6.03, 6.04(a) and
(b), 6.05, 6.11 through 6.14, and 6.17 are satisfied on such Borrowing Date (to
the extent that, in each case, such conditions are not required to be
acceptable (reasonably or otherwise) to the Lead Arrangers or the Required
Lenders) and (y) in the event a charter counterparty consent is not delivered
in respect of the Vessel Acquisition being consummated on such Borrowing Date,
it has used its commercially reasonably efforts to get such consent.

 

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

 

6.17 No Conflicts. (a) On each Borrowing
Date and after giving effect to the related Vessel Acquisitions, there shall be
no material conflict with, or material default under,
any material agreement of Holdings or any of its Subsidiaries (including,
without limitation, any Vessel Acquisition Document).

 

(b)           On
each Borrowing Date, all Loans shall be in full compliance with all applicable
requirements of law, including, without limitation, Regulations T, U and X.

 

6.18 Management and Service Agreements. On or
prior to the each Borrowing Date, there shall have been delivered to the
Administrative Agent or its counsel true and correct copies of the following
documents:

 

(a) all agreements
with respect to the management of the Borrower or any of its Subsidiaries or
any of the Mortgaged Vessels not delivered pursuant to this Section 6.18
on a prior Borrowing Date (collectively, the “Management Agreements”);
and

 

23

 

(b) all service
agreements entered into between the Borrower and its Subsidiaries not delivered
pursuant to this Section 6.18 on a prior Borrowing Date (“Service  Agreement”);

 

all of which Management
Agreements and Service Agreements shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall be in full force and effect
on such Borrowing Date.

 

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

 

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

 

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

 

7.02  Corporate Power and
Authority. Each Credit Party has the corporate or other applicable power
and authority to execute, deliver and perfoim the terms and provisions of each
of the Documents to which it is party and has taken all necessary corporate or
other applicable action to authorize the execution, delivery and performance by
it of each of such Documents. Each Credit Party has duly executed and delivered
each of the Documents to which it is party, and each of such Documents
constitutes the legal, valid and binding obligation of such

 

24

 

Credit Party enforceable
against such Credit Party in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws generally affecting creditors’ rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).

 

7.03 No Violation. Neither the execution,
delivery or performance by any Credit Party of the Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, will (i) contravene
any material provision of any applicable law, statute, rule or regulation
or any applicable order, writ, injunction or decree of any court or
governmental instrumentality, (ii) conflict with or result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except pursuant to the Security Documents) upon any
of the material properties or assets of Holdings or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other material agreement, contract or
instrument, to which Holdings or any of its Subsidiaries is a party or by which
it or any of its material property or assets
is bound or to which it may be subject or (iii) violate any provision of
the Certificate of Incorporation or By-Laws (or equivalent organizational
documents) of Holdings or any of its Subsidiaries.

 

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

 

7.05 Balance Sheets; Financial Condition; Undisclosed
Liabilities. (a) The pro
forma consolidated balance sheet of the Borrower has been prepared as of
December 3, 2004, as if the Transaction and the financing therefor had
been consummated on such date. Such pro  forma consolidated
balance sheet presents fairly in all material respects the pro  forma
consolidated financial position of the Borrower as of the date first referenced
in the preceding sentence.

 

(b) On
and as of each Borrowing Date and after giving effect to the Transaction and to
all Indebtedness (including the Loans) being incurred or assumed and Liens
created by the Credit Parties in connection therewith (i) the sum of the
assets, at a fair valuation, of the Borrower and on a stand-alone basis and of
the Borrower and its Subsidiaries taken as a whole will exceed their respective
debts, (ii) each of the Borrower on a stand-alone basis and the Borrower
and its Subsidiaries taken as a whole have not incurred and do not intend to
incur, and do not believe that they will incur, debts beyond their respective
ability to pay such debts as such debts mature, and (iii) the Borrower on
a stand-alone basis and the Borrower and its Subsidiaries taken as a whole will
have sufficient capital with which to conduct their respective businesses. For
purposes of this Section 7.05(b), “debt” means any liability on a claim,
and “claim” means

 

25

 

(a) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured or (b) right to an equitable
remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

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

 

(d)           The
Projections delivered to the Administrative Agent and the Lenders prior to the
Initial Borrowing Date have been prepared in good faith and are based on
reasonable assumptions (it being understood that such financial projections are
subject to uncertainties and contingencies, which may be beyond the control of
the Borrower and its Subsidiaries and that no assurances is given by the
Borrower that the Projections will be realized).

 

(e)           Since
November 19, 2004, nothing has occurred that has had or could reasonably
be expected to have a Material Adverse Effect.

 

(I)            Neither Holdings nor the Borrower has paid any Dividends.

 

7.06  Litigation. There are no
actions, suits, investigations or proceedings by any entity (private or
governmental) pending or, to the knowledge of any Credit Party, threatened with
respect to (i) any Vessel Acquisition, (ii) any Top Glory Vessel, (iii) any
Document or (iv) which could reasonably be expected to have a Material
Adverse Effect.

 

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

 

26

 

7.08 Use of Proceeds; Margin Regulations. (a) All
proceeds of the Loans shall be used (i) to finance the Vessel Acquisitions
and (ii) to pay fees and expenses relating to the Transaction.

 

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

 

7.09 Tax Returns and Payments. Holdings and
each of its Subsidiaries has timely filed all U.S. federal income tax returns,
statements, forms and reports for taxes and all other material U.S. and
non-U.S. tax returns, statements, forms and reports for taxes required to be
filed by or with respect to the income, properties or operations of Holdings
and/or any of its Subsidiaries (the “Returns”). The Returns accurately
reflect in all material respects all liability for taxes of Holdings and its
Subsidiaries as a whole for the periods covered thereby. Holdings and each of
its Subsidiaries have at all times paid, or have provided adequate reserves (in
accordance with GAAP) for the payment of, all material U.S. federal, state and
non-U.S. income taxes applicable for all taxes payable by them. There is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of Holdings or any of its Subsidiaries, threatened by any
authority regarding any taxes relating to Holdings or any of its Subsidiaries.
As of the Effective Date, neither Holdings nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of Holdings or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of Holdings or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations.

 

7.10  Compliance with ERISA. (i) Schedule VI
sets forth, as of the Effective Date, each Plan; each Plan, other than any
Multiemployer Plan (and each related trust, insurance contract or fund), is in
substantial compliance with its terms and with all applicable laws, including
without limitation ERISA and the Code; each Plan, other than any Multiemployer
Plan (and each related trust, if any), which is intended to be qualified under Section 401(a) of
the Code has received a determination letter from the Internal Revenue Service
to the effect that it meets the requirements of Sections 401(a) and 501(a) of
the Code; no Reportable Event has occurred; to the best knowledge of Holdings
or any of its Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer
Plan is insolvent or in reorganization; no Plan has an Unfunded Current
Liability in an amount material to Holding’s operation; no Plan (other than a
Multiemployer Plan) which is subject to Section 412 of the Code or Section 302
of ERISA has an accumulated funding deficiency, within the meaning of such
sections of the Code or ERISA, or has applied for or received a waiver of an
accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304
of ERISA; all contributions required to be made with respect to a Plan have
been or will be timely made (except as disclosed on Schedule VI); neither
Holdings nor any of its Subsidiaries nor any ERISA Affiliate has incurred any
material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the

 

27

 

Code or expects to incur
any such liability under any of the foregoing sections with respect to any Plan;
no condition exists which presents a material risk to Holdings or any of its
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account
of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted by the PBGC to terminate or appoint a trustee
to administer any Plan (in the case of a Multiemployer Plan, to the best
knowledge of Holdings or any of its Subsidiaries or ERISA Affiliates) which is
subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Plan (other than routine claims for benefits) is pending, or,
to the best knowledge of Holdings or any of its Subsidiaries, expected or
threatened which could reasonably be expected to have a Material Adverse
Effect; using actuarial assumptions and computation methods consistent with Part 1
of subtitle E of Title IV of ERISA, Holdings and its Subsidiaries and ERISA
Affiliates would have no liabilities to any Plans which are Multiemployer Plans
in the event of a complete withdrawal therefrom in an amount which could
reasonably be expected to have a Material Adverse Effect; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) which covers or has covered employees or former employees of
Holdings, any of its Subsidiaries, or any ERISA Affiliate has at all times been
operated in material compliance with the provisions of Part 6 of subtitle
B of Title I of ERISA and Section 4980B of the Code; no lien imposed under
the Code or ERISA on the assets of Holdings or any of its Subsidiaries or any
ERISA Affiliate exists nor has any event occurred which could reasonably be
expected to give rise to any such lien on account of any Plan; and Holdings and
its Subsidiaries do not maintain or contribute to any employee welfare plan (as
defined in Section 3(1) of ERISA) which provides benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or any Plan the obligations with respect to which could reasonably be
expected to have a Material Adverse Effect.

 

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

 

7.11  The Security Documents.
After the execution and delivery thereof and upon the taking of the actions
mentioned in the immediately succeeding sentence, each of the Security
Documents creates in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable fully perfected first priority
security interest in and Lien on all right, title and interest of the Credit
Parties party thereto in the Collateral described therein, subject to no other
Liens subject only to Permitted Liens. No filings or recordings are required in
order to perfect the security interests created under any Security Document
except for filings or recordings which shall have been made (y) on or prior to
the respective Borrowing Date, in the case of the respective Vessel Mortgages,
Assignment of Earnings, Assignment of Insurances and Assignment of Charters in
respect of the Vessels acquired on such Borrowing Date or (z) on or

 

28

 

prior
to the tenth day after the Initial Borrowing Date or the respective Borrowing
Date (as applicable) in the case of all other Collateral.

 

7.12 Representations and Warranties in Documents.
On each Borrowing Date, all representations and warranties made by Holdings and
its Subsidiaries in the other Documents were true and correct in all material
respects at the time as of which such representations and warranties were made
(or deemed made).

 

7.13 Capitalization. (a) On the Initial
Borrowing Date, the capital contributions of the Members (as defined in the
Fleet LLC Company Agreement) of Holdings shall be as follows: Peter C.
Georgiopoulos in the amount of $10,675,000, 0CM Fleet Acquisition LLC in the
amount of $50,000,000 and the other Investors in the aggregate additional
amount of $2,799,999. In addition, 0CM Fleet Acquisition LLC has made a loan to
Holdings in the amount of $2,500,000 (the “Holdings Loan”). The
following units representing Membership Interests (as defined in the Fleet LLC
Company Agreement) of Holdings have been issued to the Members: Peter C.
Georgiopoulos in the amount of 10,675, 0CM Fleet Acquisition LLC in the amount
of 50,000 and other Investors in the about of 2799.9. All such outstanding
Membership Interests have been issued free of preemptive rights, except as set
forth in the Limited Liability Company Agreement of Holdings (the “Fleet LLC
Company Agreement”). As of the Initial Borrowing Date, Holdings has no
outstanding membership interests convertible into or exchangeable for its
membership interests or outstanding any rights to subscribe for or to purchase,
or any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its membership interests, except as set forth in the
Fleet LLC Company Agreement.

 

(b) On the earlier of (x) the first
Borrowing Date to occur on or after December 15, 2004 and (y) the
Borrowing Date on which the fourth Vessel Acquisition is consummated, (A) the
capital contributions of the Members of Holdings shall be as follows: Peter C.
Georgiopoulos in the amount of $20,000,000, 0CM Fleet Acquisition LLC in the
amount of $50,000,000 and the other Investors in the aggregate additional
amount of $5,000,000 and (B) the units representing Membership Interests
of Holdings issued to the Members shall be as follows: Peter C. Georgiopoulos
in the amount of 20,000, 0CM Fleet Acquisition LLC in the amount of 50,000 and
other Investors in the amount of 5,000.

 

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

 

7.15  Compliance with Statutes,
etc. Holdings and each of its Subsidiaries is in compliance in all material
respects with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

29

 

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

 

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

 

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

 

7.19  Labor Relations. Neither
Holdings nor any of its Subsidiaries is engaged in any unfair labor practice
that could reasonably be expected to have a Material Adverse Effect and there
is (i) no unfair labor practice complaint pending against Holdings or any
of its Subsidiaries or, to Holdings’ knowledge, threatened against any of them
before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings or any of its Subsidiaries or, to
Holdings’ knowledge, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against Holdings or any of its
Subsidiaries or, to Holdings’ knowledge, threatened against Holdings or any of
its Subsidiaries and (iii) no union representation proceeding pending with
respect to the employees of Holdings or any of its

 

30

 

Subsidiaries, except
(with respect to the matters specified in clauses (i), (ii) and (iii) above)
as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

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

 

7.23 Concerning the Top Glory Vessels. The
name (after giving effect to the respective Vessel Acquisition), registered
owner (which shall be a Subsidiary Guarantor after giving effect to such Vessel
Acquisition), official number, and jurisdiction of registration and flag of
each Top Glory Vessel (after giving effect to such Vessel Acquisition) are set
forth on Schedule III. At the time of the consummation of the respective
Vessel Acquisition, and thereafter, each Top Glory Vessel will be operated in
material compliance with all applicable law, rules and regulations.

 

7.24 Citizenship. At the time of the
consummation of the respective Vessel Acquisition, and thereafter, the Borrower
and each other Credit Party which owns or operates, or will own or operate, one
or more Top Glory Vessels is, or will be, qualified to own and operate such Top
Glory Vessels under the laws of Hong Kong or the Republic of the Marshall
Islands, as may be applicable, or such other jurisdiction in which any such Top
Glory Vessels are permitted, or will be permitted, to be flagged in accordance
with the terms of the respective Vessel Mortgages.

 

7.25 Vessel Classification. At the time of the
consummation of each Vessel Acquisition, and thereafter, each Mortgaged Vessel
is or will be, classified in the highest class available for Vessels of its age
and type with a classification society listed on Schedule VIII hereto or
another internationally recognized classification society acceptable to the
Administrative Agent, free of any conditions or recommendations, other than as
permitted, or will be permitted, under the Vessel Mortgages.

 

7.26  No Immunity. Holdings
does not, nor does any other Credit Party or any of their respective
properties, have any right of immunity on the grounds of sovereignty or

 

31

 

otherwise
from the jurisdiction of any court or from setoff or any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) under the laws of any jurisdiction. The
execution and delivery of the Credit Documents by the Credit Parties and the
performance by them of their respective obligations thereunder constitute
commercial transactions.

 

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

 

7.28 Form of Documentation. Each of the
Credit Documents is in proper legal form under the laws of the applicable
Acceptable Flag Jurisdiction for the enforcement thereof under such laws,
subject only to such matters which may affect enforceability arising under the
law of the State of New York. To ensure the legality, validity, enforceability
or admissibility in evidence of each such Credit Document in the applicable
Acceptable Flag Jurisdiction, it is not necessary that any Credit Document or
any other document be filed or recorded with any court or other authority in
the applicable Acceptable Flag Jurisdiction, except as have been made, or will
be made, in accordance with Section 6.

 

7.29 Vessel Acquisitions. (a) At the time
of the consummation thereof, each Vessel Acquisition will have been consummated
in all material respects in accordance with the terms of the respective Vessel
Acquisition Documents and all applicable laws. At the time of consummation of
each Vessel Acquisition, all necessary material consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate such Vessel Acquisition will have been obtained, given,
filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). All applicable waiting
periods with respect thereto have or, prior to the time when required, will
have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or imposes material adverse
conditions upon any Vessel Acquisition. Additionally, there does not exist any judgment, order or injunction prohibiting or
imposing material adverse conditions upon any Vessel Acquisition, or the
incurrence of any Loan or the performance by the Borrower or any other Credit
Party of their respective obligations under the respective Credit Documents. At
the time of the consummation thereof, all actions taken by the Borrower
pursuant to or in furtherance of the Vessel Acquisitions have been taken in all
material respects in compliance with the respective Vessel Acquisition
Documents and all applicable laws.

 

(b) The
purchase price paid for each Top Glory Vessel pursuant to each Vessel
Acquisition does not and will not exceed the purchase price set forth for each
respective Top Glory Vessel on Schedule IX.

 

32

 

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

 

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

 

(a)           Quarterly Financial Statements. Within 45 days after the close of the first
three quarterly accounting periods in each fiscal year of the Borrower, (i) the
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such quarterly accounting period and the related consolidated statements of
income and cash flows, in each case for such quarterly accounting period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, and in each case, setting forth comparative
figures for the related periods in the prior fiscal year, all of which shall be
certified by the senior financial officer of the Borrower, subject to normal
year-end audit adjustments and (ii) management’s discussion and analysis
of the important operational and financial developments during the fiscal
quarter and year-to-date periods.

 

(b)           Annual Financial Statements. Within 120 days after the close of each fiscal
year of the Borrower, (i) the consolidated balance sheets of the Borrower
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal
year and certified by an independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent, together
with a report of such accounting firm stating that in the course of its regular
audit of the financial statements of the Borrower and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of Default
pursuant to Sections 9.08 through 9.11, inclusive, which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof and (ii) management’s discussion and analysis of the important
operational and financial developments during such fiscal year.

 

(c)           Appraisal
Reports. Within 45 days after the close of the second and the fourth
quarterly accounting periods in each fiscal year of the Borrower, and at any
other time within 33 days of the written request of the Administrative Agent,
Appraisals for each Mortgaged Vessel of recent date in form and substance and
from at least two Approved Appraisers. All such Appraisals shall be conducted
by, and made at the expense of, the Borrower (it being understood that the
Administrative Agent may and, at the request of the Required Lenders, shall,
upon notice to the Borrower, obtain such Appraisals and that the cost of all
such Appraisals will be for the account of the Borrower); provided that unless
a Default or Event of Default has occurred and is continuing, in no event shall
the Borrower be required to pay for Appraisals obtained pursuant to this Section 8.01(c) on
more than two occasions in any single fiscal year of the Borrower, with the cost
of any such reports in excess thereof to be paid by the Lenders on a pro
rata basis.

 

33

 

(d)           Projections, etc. As soon as available but not more than 45 days
after the commencement of each fiscal year of the Borrower beginning with its
fiscal year commencing on January 1, 2005, a budget of the Borrower and
its Subsidiaries in reasonable detail for each of the twelve months and four
fiscal quarters of such fiscal year.

 

(e)           Officer’s Compliance Certificates. (i) At the time of the delivery of the
financial statements provided for in Sections 8.01(a) and (b), a
certificate of the senior financial officer of the Borrower in the form of Exhibit K
to the effect that, to the best of such officer’s knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof (in reasonable detail), which certificate shall, (x) set forth the
calculations required to establish whether the Borrower was in compliance with
the provisions of Sections 9.08 through 9.11, inclusive, at the end of such
fiscal quarter or year, as the case may be and (y) certify that there have been
no changes to any of Schedule VII and Annexes A through F of the Pledge
Agreement since the Initial Borrowing Date or, if later, since the date of the
most recent certificate delivered pursuant to this Section 8.01(e)(i), or
if there have been any such changes, a list in reasonable detail of such
changes (but, in each case with respect to this clause (y), only to the extent
that such changes are required to be reported to the Collateral Agent pursuant
to the terms of such Security Documents) and whether the Borrower and the other
Credit Parties have otherwise taken all actions required to be taken by them
pursuant to such Security Documents in connection with any such changes.

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.02  Books, Records and
Inspections. The Borrower will, and will cause each of its Subsidiaries to,
keep proper books of record and account in which full, true and correct
entries, in conformity in all material respects with generally accepted
accounting principles and all requirements of law, shall be made of all
dealings and transactions in relation to its business.

 

35

 

The Borrower will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent and the Lenders as a group to visit
and inspect, during regular business hours and under guidance of officers of
the Borrower or any of its Subsidiaries, any of the properties of the Borrower
or its Subsidiaries, and to examine the books of account of the Borrower or
such Subsidiaries and discuss the affairs, finances and accounts of the
Borrower or such Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants, all upon reasonable advance notice
and at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may request; provided that,
unless an Event of Default exists and is continuing at such time, the
Administrative Agent and the Lenders shall not be entitled to request more than
two such visitations and/or examinations in any fiscal year of the Borrower.

 

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

 

8.04 Corporate Franchises. The Borrower will,
and will cause each of its Subsidiaries, to do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents (if any) used in its
business; provided,  however, that nothing in this Section 8.04
shall prevent (i) sates or other dispositions of assets, consolidations or
mergers by or involving the Borrower or any of its Subsidiaries which are
permitted in accordance with Section 9.02, (ii) any Subsidiary
Guarantor from changing the jurisdiction of its organization to the extent
permitted by Section 9.12 or (iii) the abandonment by the Borrower or
any of its Subsidiaries of any rights, franchises, licenses and patents that
could not be reasonably expected to have a Material Adverse Effect.

 

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

 

8.06  Compliance with
Environmental Laws. (a) The Borrower will, and will cause each of its
Subsidiaries to, comply in all material respects with all Environmental Laws
applicable to the ownership or use of any Vessel or property now or hereafter
owned or operated by the Borrower or any of its Subsidiaries, will within a
reasonable time period pay or cause to be paid all costs and expenses incurred
in connection with such compliance (except to the extent

 

36

 

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

 

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

 

8.07  ERISA. As soon as
reasonably possible and, in any event, within ten (10) days after the
Borrower or any of its Subsidiaries or any ERISA Affiliate knows or has reason
to know of the occurrence of any of the following, the Borrower will deliver to
the Administrative Agent, with sufficient copies for each of the Lenders, a
certificate of the senior financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant
or the Plan administrator with respect thereto: that a Reportable Event has
occurred (except to the extent that the Borrower has previously delivered to
the Administrative Agent a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of
ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof), and an

 

37

 

event described in subsection .62, .63, .64, .65, .66, .67 or .68 of
PBGC Regulation Section 4043 is reasonably expected to occur with respect to
such Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments)
or an extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Plan; that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not been
timely made and such failure could result in a material liability for the
Borrower or any of its Subsidiaries; that a Plan has been or may be reasonably
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA with a material amount of unfunded benefit liabilities; that
a Plan (in the case of a Multiemployer Plan, to the best knowledge of the
Borrower or any of its Subsidiaries or ERISA
Affiliates) has a material Unfunded Current Liability; that proceedings may be
reasonably expected to be or have been instituted by the PBGC to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a material delinquent contribution to a Plan; that the Borrower, any of
its Subsidiaries or any ERISA Affiliate will or may reasonably expect to incur
any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(1) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code; or that the Borrower, or any of its
Subsidiaries may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan or any Foreign Pension Plan. Upon request, the
Borrower will deliver to the Administrative Agent with sufficient copies to the
Lenders (i) a complete copy of the annual report (on Internal Revenue Service
Form 5500 series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service and (ii) copies of any records, documents or
other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, copies of
annual reports and any records, documents or other information required to be
furnished to the PBGC, and any notices received by the Borrower, any of its
Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign Pension
Plan with respect to any circumstances or event that could reasonably be
expected to result in a material liability shall be delivered to the Lenders no
later than ten (10) days after the date such annual report has been filed with
the Internal Revenue Service or such records, documents and/or information has
been furnished to the PBGC or such notice has been received by the Borrower,
such Subsidiary or such ERISA Affiliate, as applicable.

 

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

 

38

 

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

 

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

 

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

 

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

 

(c)           To
the extent that any Vessel Acquisition is made by a Subsidiary of the Borrower
which is not a Credit Party at the time of such acquisition (and which has not
otherwise executed and delivered the documents described below in this Section 8.11(c)),
the Borrower will cause such Subsidiary (and any Subsidiary which directly owns
the stock of such Subsidiary to the extent not a Credit Party) to execute and
deliver to the Administrative Agent a counterpart of the Borrower/Subsidiary
Pledge Agreement (including any supplemental agreement required to give effect
to such security interests purported to be created by the Borrower/Subsidiary
Pledge Agreement under applicable local law), the Subsidiaries Guaranty, Assignment
of Earnings, Assignment of Insurances, Assignment of Charters (if applicable)
and

 

39

 

the appropriate Vessel
Mortgage(s), together with all related documentation (including, without
limitation, opinions of counsel, corporate documents and proceedings and
officer’s certificates) as such Subsidiary would have been required to deliver
pursuant to Sections 5 and 6 of this Agreement had such Subsidiary been a
Credit Party on a Borrowing Date.

 

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

 

8.13  Ownership of Subsidiaries.
(a) Holdings will directly own 100% of the capital stock and other equity
interests of the Borrower.

 

(b)           Holdings
and the Borrower shall cause each Subsidiary Guarantor, to at all times, be
directly wholly-owned by one or more Credit Parties (other than Holdings).

 

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

 

(b)           The
Borrower will, and will cause each of its Subsidiaries to, insure that the
representation set forth in Section 7.25 is true and correct in all
respects at all times.

 

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

 

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

 

40

 

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

 

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

 

(iii)          Permitted
Encumbrances;

 

(iv)          Liens
created pursuant to the Security Documents;

 

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

 

(vi)          Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, Liens to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds, statutory
bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations in each case incurred in
the ordinary course of business (exclusive of obligations for the payment of
borrowed money) and Liens arising by virtue of deposits made in the ordinary
course of business to secure liability for premiums to insurance carriers; provided
that the aggregate value of all cash and property at any time encumbered
pursuant to this clause (vi) shall not exceed $2,500,000; and

 

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

 

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

 

41

 

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

 

(i)                the Borrower and each of its Subsidiaries may
sell, lease or otherwise dispose of any Mortgaged Vessel, provided that
(x)(A) such sale is made at fair market value (as determined in accordance
with the Appraisals most recently delivered to the Administrative Agent (or
obtained by the Administrative Agent) pursuant to Sections 5.14, 6.09(iv) or
8.01(c) or delivered at the time of such sale to the Administrative Agent
by the Borrower), (B) 100% of the consideration in respect of such sale
shall consist of cash or Cash Equivalents received by the Borrower, or the
respective Subsidiary Guarantor which owned such Mortgaged Vessel, on the date
of consummation of such sale, (C) the Net Cash Proceeds of such sale or
other disposition shall be applied as required by Section 4.02(b) to
repay outstanding Loans or (y) so long as no Default or Event of Default has
occurred and is continuing (or would arise after giving effect thereto) and so
long as all representations and warranties made by the Borrower pursuant to Section 7
of this Agreement are true and correct both before and after any such exchange,
such Mortgaged Vessel is exchanged for a Acceptable Replacement Vessel pursuant
to a Vessel Exchange; provided further that in the case of both clause
(x) and (y) above, that the Borrower shall have delivered to the Administrative
Agent an officer’s certificate, certified by the senior financial officer of
the Borrower, demonstrating pro  forma compliance (giving effect
to such Collateral Disposition and, in the case of calculations involving the
Appraised Value of Mortgaged Vessels, using valuations consistent with the
Appraisals most recently delivered to the Administrative Agent (or obtained by
the Administrative Agent) pursuant to Sections 5.14, 6.09(iv) or 8.01(c))
with each of the covenants set forth in Sections 9.08 through 9.11, inclusive,
for the most recently ended Test Period (or at the time of such sale, as
applicable) and projected compliance with such covenants for the one year
period following such Collateral Disposition, in each case setting forth the
calculations required to make such determination in reasonable detail;

 

(ii)               the Borrower and its Subsidiaries may sell or
discount, in each case with-out recourse and in the ordinary course of
business, overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk sale);

 

(iii)              (A) any
Subsidiary Guarantor may transfer assets or lease to or acquire or lease assets
from any other Subsidiary Guarantor and (B) any Subsidiary of the Borrower
(other than a Subsidiary Guarantor) may transfer assets or lease to or acquire
or lease assets from any other Subsidiary of the Borrower (other than a
Subsidiary Guarantor) or any Subsidiary of the Borrower (other than a
Subsidiary Guarantor) may be merge into any Subsidiary of the Borrower (other
than a Subsidiary Guarantor) or any Subsidiary Guarantor may be merged into any
other Subsidiary Guarantor, in each case so long as all actions necessary or
desirable to preserve, protect and maintain the security interest and

 

42

 

Lien of the Collateral
Agent in any Collateral held by any Person involved in any such transaction are
taken to the satisfaction of the Administrative Agent; and

 

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

 

Notwithstanding the
foregoing, the Borrower will not, and will not permit ariy Subsidiary Guarantor
to, enter into any bareboat charter of any Mortgaged Vessel without the prior
written consent of the Required Lenders.

 

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

 

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

 

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

 

(ii)               at
any time after the earlier of (x) the Modified Trigger Date and (y) the Trigger
Date, the Borrower may pay Dividends in an aggregate amount not to exceed 50% of Consolidated Net Income of the Borrower and its
Subsidiaries for the period commencing on the first day of the fiscal quarter
immediately succeeding the Modified Trigger Date or Trigger Date, as the case
may be, and ending on the last day of the fiscal quarter immediately preceding
the date such Dividends are paid for which financial statements are available; provided
that (x) no Default or Event of Default exists at the time of the payment
thereof, (y) immediately after giving effect to the payment of such Dividend
the Borrower will be in compliance with the covenants set forth in Sections
9.08 through 9.11, inclusive, on a pro  forma basis and (z) the
Borrower shall have delivered an officer’s certificate of a senior officer of
the Borrower certifying the

 

43

 

satisfaction of the
conditions set forth in clauses (x) and (y) above and setting forth the
calculations of the permitted amount of such Dividend and such pro  forma
compliance in reasonable detail;

 

(iii)            provided that no Default or Event of Default is
then in existence, the Borrower may pay Dividends to Holdings (x) so long as
the proceeds of such Dividends are used promptly to pay fees and expenses
relating to the Transaction and (y) in an aggregate amount not to exceed
$250,000 in any fiscal year so long as the proceeds of such Dividends are used
promptly to pay operating expenses of Holdings which are consistent with its
operations as a holding company;

 

(iv)            provided that no Default or Event of Default is
then in existence, the Borrower may pay Dividends to Holdings in an aggregate
amount not to exceed $250,000 so long as the proceeds of such Dividends are
used promptly by Holdings to repurchase stock held by officers and employees
upon the death, retirement or disability of such officers or employees (it
being understood that reductions to the $250,000 basket set forth in this
clause (iv) may be negated by amounts equal to no more the Net Cash
Proceeds received by Holdings from the issuance of stock to officers and
employees after the Initial Borrowing Date to the extent that such Net Cash
Proceeds are contributed by Holdings to the Borrower as an equity
contribution); and

 

(v)             provided that no Default or Event of Default is
then in existence, during any fiscal year the Borrower may pay Dividends under
this clause (v) in an aggregate amount not to exceed the lesser of (a) $250,000
or (b) the product of (I) the excess of (A) the Borrower’s Subpart F
income (within the meaning of Section 952 of the Code) for such fiscal
year, over (B) the aggregate amount of Dividends, if any, paid by Borrower
pursuant to clause (ii) of this Section 9.03 with respect to such
fiscal year and (II) forty (40) percent, reduced by any credits for foreign
income taxes allowable under Section 901(a) of the Code with respect
to such fiscal year (without regard to Section 904 of the Code).

 

9.04  Indebtedness. (a) The
Borrower will not, and will not permit any of its Subsidiaries to, contract,
create, incur, assume or suffer to exist any Indebtedness (other than
Indebtedness incurred pursuant to this Agreement and the other Credit
Documents) except that:

 

(i)              after
the Trigger Date, the Borrower may incur Indebtedness so long as (x) no Default
or Event of Default has occurred and is continuing, (y) such Indebtedness would
not cause any Default or Event of Default, either on a pro  forma
basis for the most recently ended Test Period (or at the time of such
incurrence, as applicable), or on. a projected basis for the one year period
following such incurrence, with each of the covenants set forth in Sections
9.08 through 9.11, inclusive, and (z) the Borrower shall have delivered an
officer’s certificate from a senior officer of the Borrower certifying that the
conditions set forth in clause (x) and (y) above are satisfied and setting
forth the calculations of the pro  forma compliance described in
clause (y) above in reasonable detail;

 

44

 

(ii)             the
Borrower and its Subsidiaries may enter into and remain liable under Interest
Rate Protection Agreements and Other Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes; and

 

(iii)            the
Borrower and its Subsidiaries (other than a Subsidiary Guarantor) may incur
unsecured Indebtedness in respect of letters of credit in the ordinary course
of business; provided that the aggregate principal amount of such
Indebtedness shall not exceed $1,000,000 at any one time outstanding.

 

(b) Notwithstanding
anything to the contrary set forth above in this Section 9.04, (i) no
Subsidiary Guarantor shall incur any Indebtedness for borrowed money (including
Contingent obligation in respect thereof) except for (x) Indebtedness incurred
pursuant to this Agreement and the other Credit Documents and (y) intercompany
Indebtedness permitted pursuant to Section 9.05(iii) and (ii) the
Borrower and the Subsidiary Guarantors shall not assume, incur or suffer to
exist any Contingent Obligations in respect of any Indebtedness of Holdings or
any of its Subsidiaries which is not a Credit Party.

 

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

 

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

 

(ii)             so
long as no Event of Default exists or would result therefrom, the Borrower and
its Subsidiaries may make loans and advances in the ordinary course of business
to its employees so long as the aggregate principal amount thereof at any time
outstanding which are made on or after the Effective Date (determined without
regard to any write-downs or write-offs of such loans and advances) shall not
exceed $250,000;

 

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

 

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

 

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

 

45

 

(vi)          so
long as no Event of Default exists or could result therefrom, the Borrower and
its Subsidiaries may make Investments in joint ventures in the ordinary course
of business so long as the aggregate amount of all such Investments does not
exceed $2,500,000; provided that prior to the Trigger Date the aggregate
amount of such Investments shall not exceed $1,000,000; and

 

(vii)         the
Borrower may acquire the stock of Top Glory Shipping Company Ltd. pursuant to
the Sale and Purchase Agreement, dated November 19, 2004, between Top
Glory Shipping (Holdings) Limited and the Borrower, provided that at the time
of such acquisition Top Glory Shipping Company Ltd. becomes a party to the
Subsidiaries Guaranty and all of the stock of Top Glory Shipping Company Ltd.
shall he pledged by the Borrower pursuant to the Borrower/Subsidiaries Pledge
Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

9.07  Capital Expenditures.
The Borrower will not, and will not permit any of its Subsidiaries to, make any
Capital Expenditures prior to the Trigger Date other than

 

(i)            Vessel
Acquisitions,

 

(ii)           maintenance
and dry dock capital expenditures related to the Top Glory Vessels (to the
extent (x) such Top Glory Vessels are then owned by the Borrower or any of its
Subsidiaries and (y) such amounts expended shall be reasonably necessary to
maintain compliance with classification society requirements or to maintain
such Top Glory Vessels in good working order in accordance with customary
industry practice),

 

(iii)          capital expenditures
made with net insurance proceeds received by the Borrower and its Subsidiaries
to the extent related to an Event of Loss), and

 

46

 

(iv)          other Capital Expenditures (other than acquisitions of Vessels)
in an aggregate amount not to exceed $1,000,000.

 

9.08 Consolidated Interest Coverage Ratio. The
Borrower will not permit the Consolidated Interest Coverage Ratio for any Test
Period, in each case taken as one accounting period, ended on the last day of
any fiscal quarter of the Borrower (commencing with the fiscal quarter ending March 31,
2005, to be less than 2.50:1.00.

 

9.09 Maximum Leverage Ratio. The Borrower will
not permit the Leverage Ratio on the last day of any fiscal quarter of the
Borrower (x) ended on or after January 1, 2006 and prior to January 1,
2007, to be greater than 0.70:1.00 and (y) ended after January 1, 2007, to
be greater than 0.60:1.00.

 

9.10 Collateral Maintenance. The Borrower will
not permit the Aggregate Appraised Value to equal (x) at any time prior to the
first year anniversary of the Initial Borrowing Date, less than 105% of the
aggregate principal amount of outstanding Loans at such time, (y) at any time
on and after the first anniversary of the Initial Borrowing Date and prior to
the second anniversary of the Initial Borrowing Date, less than 120% of the
aggregate principal amount of outstanding Loans at such time and (z) at any
time on and after the second anniversary of the Initial Borrowing Date, 135% of
the aggregate principal amount of outstanding Loans at such time, provided
that, so long as any Default in respect of this Section 9.10 is not caused
by any voluntary Collateral Disposition, such Default shall not constitute an
Event of Default so long as within 60 days after such shortfall, the Borrower
makes such repayments of Loans (which may be funded by additional capital
contributions made to the Borrower) in an amount sufficient to cure such
Default (it being understood that any action taken in respect of this proviso
shall only be effective to cure such default pursuant to this Section 9.10
to the extent that no Default or Event of Default exists hereunder immediately
after giving effect thereto).

 

9.11 Minimum Cash Balance. The Borrower will
not permit the cash and Cash Equivalents held by the Borrower and its
Subsidiaries which is subject to the Lien of the Security Documents on the last
day of any fiscal quarter (commencing with and including the fiscal quarter
ended March 31, 2005) to be less than (x) in all cases where clause (y) is
not applicable $8,000,000 and (y) in the event that on such last day, more than
50% of the Mortgaged Vessels are not employed under fixed rate charters which
terminate no earlier than six months after such last day, $20,000,000 (the
minimum amount of cash and Cash Equivalent required to be held by the Borrower
and its Subsidiaries on any date pursuant to this Section 9.11, is
hereinafter referred to as the “Minimum Cash Balance Amount” for such
date).

 

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

 

47

 

changes
or any such new agreements which are not in any way materially adverse to the
interests of the Lenders.

 

(b) The Borrower will
not, and will not permit any Subsidiary to, amend, modify or waive any (i)
Vessel Acquisition Document in a manner which would modify the purchase price
of a Top Glory Vessel, modify the delivery conditions or would otherwise be
adverse to the interests of the Lenders in any respect, or (ii) any Initial
Charter Arrangement in a manner which would reduce the charter term, or charter
rates, make the early termination thereof more likely, change or release the
charter parties or any guarantor(s) thereof or would otherwise be adverse to
the interests of the Lenders in any respect.

 

{c) Notwithstanding the
foregoing provisions of this Section 9.12 or Section 8.04, upon not less than
30 days prior written notice to the Administrative Agent and so long as no
Default or Event of Default exists and is continuing, any Subsidiary Guarantor
may (x) change its jurisdiction of organization to another jurisdiction and (y)
change its form of organization to another form, in each case to the extent
reasonably satisfactory to the Administrative Agent, provided that such
Subsidiary Guarantor shall promptly take all actions reasonably deemed
necessary by the Collateral Agent to preserve, protect and maintain, without
interruption, the security interest and Lien of the Collateral Agent in any
Collateral owned by such Subsidiary Guarantor to the satisfaction of the
Collateral Agent, and such Subsidiary Guarantor shall have provided to the
Administrative Agent and the Lenders such opinions of counsel as may be
reasonably requested by the Administrative Agent to assure itself that the
conditions of this proviso have been satisfied.

 

9.13 Limitation on Certain Restrictions on
Subsidiaries. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned
by the Borrower or any Subsidiary of the Borrower, or pay any Indebtedness owed
to the Borrower or a Subsidiary of the Borrower, (b) make loans or
advances to the Borrower or any of the Borrower’s Subsidiaries or (c) transfer
any of its properties or assets to the Borrower or any of the Borrower’s
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other
Documents, (iii) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of the Borrower or a Subsidiary of
the Borrower, (iv) customary provisions restricting assignment of any
agreement entered into by the Borrower or a Subsidiary of the Borrower in the
ordinary course of business, (v) any holder of a Permitted Lien may
restrict the transfer of the asset or assets subject thereto and (vi) restrictions
which are not more restrictive than those contained in this Agreement contained
in any documents governing any Indebtedness incurred after the Trigger Date in
accordance with the provisions of this Agreement.

 

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

 

(b)           The
Borrower will not permit any Subsidiary Guarantor to issue any capital stock
(including by way of sales of treasury stock) or any options or warrants to
purchase,

 

48

 

or securities convertible
into, capital stock, except (i) for transfers and replacements of then
outstanding shares of capital stock, (ii) for stock splits, stock
dividends and additional issuances which do not decrease the percentage
ownership of the Borrower or any of its Subsidiaries in any class of the
capital stock of such Subsidiary and (iii) in the case of Foreign
Subsidiaries of the Borrower, to qualify directors to the extent required by
applicable law. All capital stock of any Subsidiary Guarantor issued in
accordance with this Section 9.14(b) shall be delivered to the
Collateral Agent pursuant to the Pledge Agreement.

 

9.15 Business. (a) The Borrower and its
Subsidiaries will not engage in any business other than the businesses in which
they are engaged in as of the Effective Date and activities directly related
thereto, and similar or related businesses.

 

(b)           Holdings will not engage in any business other
than its ownership of the capital stock of, and the management of, the Borrower
and its other Subsidiaries, provided that Holdings may engage in those
activities that are incidental to (i) the maintenance of its corporate
existence in compliance with applicable law, (ii) legal, tax and
accounting matters in connection with any of the foregoing or following
activities, (iii) the entering into, and performing its obligations under,
this Agreement, (iv) the issuance, sale or repurchase of its Equity
Interests to the extent permitted under this Agreement, (v) dividends or
distributions on its Equity Interests, (vi) the filing of registration
statements, and compliance with applicable reporting and other obligations,
under federal, state or other securities laws, (vii) the listing of its
equity securities and compliance with applicable reporting and other
obligations in connection therewith, (viii) the retention of (and the
entry into, and exercise of rights and performance of obligations in respect
of, contracts and agreements with) transfer agents, private placement agents,
underwriters, counsel, accountants and other advisors and consultants, (ix) the
performance of obligations under and compliance with its certificate of
incorporation and by-laws, or any applicable law, ordinance, regulation, rule,
order, judgment, decree or permit, including, without limitation, as a result
of or in connection with the activities of its Subsidiaries, (x) the incurrence
and payment of its operating and business expenses and any taxes for which it
may be liable, and (xi) making loans to or other Investments in, or incurrence
of Indebtedness from, its Subsidiaries as and to the extent not prohibited by
this Agreement.

 

(c)           The
Holdings and the Borrower will not, and will not permit any of their
Subsidiaries to be (i) engaged in (A) the retailing, wholesaling,
trading or importing of goods or services for or with residents of the Republic
of the Marshall Islands; (B) any extractive industry in the Republic of
Marshall Islands; (C) any regulated professional service activity in the
Republic of the Marshall Islands; (D) the export of any commodity or goods
manufactured, processed, mined or made in the Republic of the Marshall Islands;
or (E) the ownership of real property in the Republic of the Marshall
Islands; and (ii) do business in the Republic of the Marshall Islands
except that Holdings, the Borrower and their Subsidiaries may (A) have its
registered office in the Republic of the Marshall Islands and maintain their
respective registered agent in the Republic of the Marshall Islands as required
by the provisions of the Associations Law of 1990, as amended; and (B) secure
and maintain registry in the Republic of the Marshall Islands solely related to
the operation or disposition of any vessel outside of the Republic of the
Marshall Islands.

 

49

 

9.16 Vessel Acquisitions. The Borrower will
not, and will not permit any of its Subsidiaries to, consummate a Vessel
Acquisition unless either (i) the conditions set forth in Sections 5 and 6
with respect to the Top Glory Vessel being acquired are complied with in all
respects on the date of such acquisition whether or not Loans are incurred on
the date of such Vessel Acquisition or (ii) an amount equal to 85% of the
purchase price of such Top Glory Vessel is contributed to the Borrower.

 

9.17 Bank Accounts. The
Borrower will not, and will not permit any Subsidiary Guarantor to, maintain
any deposit, savings, investment or other similar accounts other than the
Reserve Account and the Concentration Accounts, except that the Borrower may
open and maintain any such account provided that it shall have granted to the
Administrative Agent a first priority security interest in such account to
secure the Obligations pursuant to documentation reasonably satisfactory to the
Administrative Agent and all actions necessary or advisable in the reasonable
opinion of the Administrative Agent to perfect such security interest shall
have been taken.Events of Default. Upon the occurrence of any of the
following specified events (each an “Event of Default”):

 

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

 

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

 

10.03 Covenants. Any Credit Party shall (i) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(f)(i), 8.03 (other than clause (i) and (ii) thereof),
8.12 through 8.14, inclusive, or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and, in the case of this clause (ii), such default
shall continue unremedied for a period of 30 days after written notice to the
Borrower by the Administrative Agent or any of the Lenders; or

 

10.04 Default Under
Other Agreements. (i) Holdings or any of its Subsidiaries shall
default in any payment of any Indebtedness (other than the Obligations) beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created or (ii) Holdings or any of its
Subsidiaries shall default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is
required), any such Indebtedness to become due prior to its stated maturity, or
(iii) any Indebtedness (other than the Obligations) of Holdings or any of
its Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior

 

50

 

to the stated maturity
thereof, provided that it shall not be a Default or Event of Default
under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii),
inclusive, exceeds $2,500,000 at any time prior to the Trigger Date and $5,000,000
at any time thereafter; or

 

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

 

10.06  ERISA. (a) Any
Plan shall fail to satisfy the minimum funding standard required for any plan
year or part thereof under Section 412 of the Code or Section 302 of
ERISA or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code or Section 303 or 304
of ERISA, a Reportable Event shall have occurred, a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of
ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof) and an event described in
sub-section .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have
had or is reasonably likely to have a trustee appointed to administer such
Plan, any Plan which is subject to Title IV of ERISA is, shall have been or is
reasonably likely to be terminated or to be the subject of termination proceedings
under ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made with respect to a Plan or a Foreign Pension Plan is not
timely made, the Borrower or any of its Subsidiaries or any ERISA Affiliate has
incurred or events have happened, or reasonably expected to happen, that will
cause it to incur any liability to or on account of a Plan under Section 409,
502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of
the Code, or the Borrower, or any of its Subsidiaries, has incurred or is
reasonably likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b) there
shall result from any such

 

51

 

event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security
interest or liability, individually, and/or in the aggregate, in the reasonable
opinion of the Required Lenders, has had, or could reasonably be expected to
have, a Material Adverse Effect; or

 

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

 

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

 

10.09 Judgments. One or more judgments or
decrees shall be entered against Holdings or any of its Subsidiaries involving
in the aggregate for Holdings and its Subsidiaries a liability (not paid or
fully covered by a reputable and solvent insurance company to the satisfaction
of the Administrative Agent) and such judgments and decrees either shall be
final and non-appealable or shall not be vacated, discharged or stayed or
bonded pending appeal for any period of 60 consecutive days, and the aggregate
amount of all such judgments, to the extent not covered by insurance, exceeds $2,500,000
at any time prior to the Trigger Date and $5,000,000 at any time thereafter; or

 

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

 

10.11 Vessel Acquisition Documents. Any Credit
Party shall default in the performance or observation of any agreement and
conditions of any Vessel Acquisition Document and such defaults could be
reasonably expected to have a Material Adverse Effect;

 

then, and in any such
event, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent, upon the written request of the Required
Lenders, shall by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Lender or the holder of any Note to enforce its claims against any Credit
Party (provided that, if an Event of Default specified in Section 10.05
shall

 

52

 

occur, the result which
would occur upon the giving of written notice by the Administrative Agent to
the Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the
Commitments terminated, whereupon all Commitments of each Lender shall
forthwith terminate immediately and any Commitment Commission shall forthwith
become due and payable without any other notice of any kind; (ii) declare
the principal of and any accrued interest in respect of all Loans and the Notes
and all Obligations owing hereunder and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Credit Party;
and (iii) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents.

 

SECTION 11.  Definitions
and Accounting Terms.

 

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

 

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

 

“Acceptable
Replacement Vessel” shall mean, with respect to a Mortgaged
Vessel, any Vessel with an equal or greater fair market value than the
Appraised Value of such Mortgaged Vessel; provided that such Vessel must
(i) be of at least 28,000 dwt, (ii) have been built after such
Mortgaged Vessel it replaces, (iii) have a class complying with the
requirements of Section 8.14(a), (iv) be registered and flagged in an
Acceptable Flag Jurisdiction and (v) if such Mortgaged Vessel is subject
to an Initial Charter Arrangement at the time of the Vessel Exchange, be
subject to charter or other arrangements satisfactory to the Lead Arrangers.

 

“Acquisition
Agreements” shall mean the Master Ship Sale and Purchase
Agreement, dated as of November 19, 2004, by and among the Seller and the
Borrower (the “Purchase Agreement”) and each MOA (as defined in the Purchase
Agreement).

 

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

 

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

 

53

 

“Agents” shall
mean, collectively, the Administrative Agent, the Collateral Agent and the Lead
Arrangers.

 

“Aggregate Appraised Value” shall mean at any time, the sum of the Appraised Value of all Mortgaged
Vessels owned by the Borrower and its Subsidiaries at such time.

 

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

 

“Amortization Commencement Date” shall mean the Payment Date occurring in June, 2005.

 

“Applicable Margin”
shall mean 1.375% per  annum;  provided that, so long as no
Default or Event of Default is then continuing, from and after the date on
which the Borrower has applied not less than $100,000,000 in repayment of the
Loans from a source other than Collateral Disposition proceeds, the “Applicable
Margin” shall be reduced to 1.250% per  annum.

 

“Appraised Value”
of any Vessel at any time shall mean the arithmetic average of the fair market
values of such Vessel on an individual charter free basis as set forth on the
Appraisals of at least two Approved Appraisers most recently delivered to, or
obtained by, the Administrative Agent prior to such time pursuant to Sections
5.14, 6.09(iv), 8.01(c) or the definition of Vessel Exchange.

 

“Appraisal” shall
mean, with respect to a Vessel, a written appraisal by an Approved Appraiser of
the fair market value of such Vessel on an individual charter free basis.

 

“Approved
Appraiser” shall mean H. Clarksons & Company
Limited, Fearnleys Ltd., R.S. Platou Shipbrokers a.s.
or such other independent appraisal firm as may be accepted to the Required
Lenders.

 

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

 

“Assignment of
Charters” shall have the meaning provided in Section 6.07.

 

“Assignment of
Earnings” shall have the meaning provided in Section 6.07.

 

“Assignment of
Insurances” shall have the meaning provided in Section 6.07.

 

“Authorized
Officer” shall mean, with respect to (i) the delivery of
Notices of Borrowing, the chairman of the board, or the treasurer of the
Borrower, or any other officer of the Borrower designated in writing to the
Administrative Agent by the chief executive officer, president or treasurer of
the Borrower as being authorized to give notices under this Agreement, (ii) delivery
of financial documents and officer’s certificates pursuant to this Agreement,
the chairman of the board, the president, any vice president, the treasurer,
any other financial officer or an authorized manager of any Credit Party and (iii) any
other matter in connection with this Agreement or any other Credit Document,
any officer (or a Person or Persons so designated by

 

54

 

any
two officers) of any Credit Party, in each case to the extent reasonably
acceptable to the Administrative Agent.

 

“Available Cash”
shall mean, at any time, (x) total cash and Cash Equivalents held by the
Borrower and its Subsidiaries on the last day of the immediately preceding fiscal
quarter (including, without limitation, the amounts on deposit in the Reserve
Account and the Concentration Accounts) less (y) $5,000,000 less
(z) the Minimum Cash Balance Amount at such time.

 

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

 

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

 

Agreement.

 

“Borrower”
shall have the meaning provided in the first paragraph of this Section 5.08.

 

“Borrower/Subsidiary
Pledge Agreement” shall have the meaning provided in

 

“Borrowing”
shall mean the borrowing of Loans from all the Lenders having Commitments on a
given date having the same Interest Period.

 

“Borrowing Date”
shall mean each date (including the Initial Borrowing Date) on which Loans are
incurred by the Borrower.

 

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

 

“Capital Expenditures”
shall mean, with respect to any Person, all expenditures by such Person which
should be capitalized in accordance with generally accepted accounting
principles and, without duplication, the amount of Capitalized Lease
Obligations incurred by such Person.

 

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

 

“Cash Equivalents”
shall mean (i) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition, (ii) time deposits and certificates of deposit of any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company having capital, surplus and undivided profits aggregating in
excess of $200,000,000, with maturities of not more than one year from the date
of acquisition by such

 

55

 

Person, (iii) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial
paper issued by any Person incorporated in the United States rated at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody’s and in each case maturing not more than one year after the
date of acquisition by such Person, and (v) investments in money market
funds substantially all of whose assets are comprised of securities of the
types described in clauses (i) through (iv) above.

 

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

 

“Change of Control”
shall mean, at any time and for any reason whatsoever, (a) Holdings shall
fail to directly own 100% on a fully diluted basis of the Borrower’s Equity
Interests, (b) the Borrower shall fail to directly own 100% on a fully
diluted basis of each Subsidiary Guarantor’s Equity Interests, (c) prior
to any Qualified IPO, (i) the Permitted Holders shall cease to own
(directly or indirectly) in the aggregate more than 50% on a fully diluted
basis of Holdings’ voting Equity Interests or (ii) Peter C. Georgiopoulos
(including his immediate family members, trusts for his benefit and/or for the
benefit of his immediate family members and any corporation or other entity
directly or indirectly controlled by Peter Georgiopoulos) shall cease to own
(directly or indirectly) at least 85% of the voting Equity Interests of
Holdings held by him on the Initial Borrowing Date, (d) after a Qualified
IPO has occurred, (i) any “person” or “group” (as such term is used in Section 13(d) and
14(d) under the Exchange Act) other than one or more of the Permitted Holders
shall at any time become the owner, directly or indirectly, beneficially or of
record, of interests representing more than 30% of the outstanding Equity
Interests of Holdings (either voting or economic), or (ii) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors, and (e) a “change of control” or similar event shall occur as
provided in any outstanding Indebtedness of Holdings and its Subsidiaries (or
the documentation governing same).

 

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

 

“Collateral” shall mean
all property (whether real or personal) with respect to which any security
interests have been granted (or purported to be granted) pursuant to any
Security Document, including, without limitation, all Pledge Agreement
Collateral, all Earnings and Insurance Collateral, all Mortgaged Vessels, all
and all cash and Cash Equivalents at any time delivered as collateral
thereunder or as required hereunder.

 

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

 

“Collateral Disposition” shall mean (i) the
sale, lease, transfer or other disposition other than pursuant to a charter by
the Borrower or any of its Subsidiaries to any Person other

 

56

 

than
the Borrower or a Subsidiary Guarantor of any Mortgaged Vessel or (ii) any
Event of Loss of any Mortgaged Vessel.

 

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

 

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

 

“Commitment Termination Date” shall mean any the earlier of (x) the date upon which all Top Glory
Vessels have been acquired pursuant to a Vessel Acquisition and (y) June 30,
2005.

 

“Common Equity Financing” shall mean the (x) contribution by Investors to Holdings of cash common
equity financing in an aggregate amount of at least $75,000,000 and (y) the
contribution thereof by Holdings to the Borrower as contemplated by Sections
5.05 and 6.04.

 

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

 

“Consolidated EBIT”
shall mean, for any period, the Consolidated Net Income for such period, before
interest expense and provision for taxes based on income and without giving
effect to any extraordinary gains or losses or gains or losses from sales of
assets other than inventory sold in the ordinary course of business.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated EBIT, adjusted by adding
thereto the amount of (i) all amortization of intangibles and
depreciation, (ii) non-cash management incentive compensation and (iii) the
amortization of fees and expenses paid in connection with the
Transaction, in each case that were deducted in arriving at Consolidated EBIT
for such period.

 

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

 

“Consolidated
Interest Coverage Ratio” shall mean, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Interest Expense for such period.

 

57

 

“Consolidated Interest Expense” shall mean, for any period, (i) the total consolidated interest
expense of the Borrower and its Subsidiaries for such period (calculated
without regard to any limitations on the payment thereof) plus, without
duplication, that portion of Capitalized Lease Obligations of the Borrower and
its Subsidiaries representing the interest factor for such period, minus (ii) cash
interest income of the Borrower and its Subsidiaries for such period and the
amortization of any deferred financing costs incurred in connection with the
Transaction to the extent otherwise included in the calculations thereof.

 

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

 

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

 

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

 

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

 

“Continuing
Directors” shall mean the directors of Holdings on the
Effective Date, after giving effect to the Transaction and each other director
if, in each case, such other director’s nomination for election to the board of
directors of Holdings is recommended by at least a majority of the then
Continuing Directors or such other director receives the affirmative vote of
those Permitted Holders which then hold a majority of the voting Equity
Interests in Holdings then held by all Peunitted Holders, in his or her
election by the shareholders of Holdings.

 

58

 

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

 

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

 

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

 

“Dividend” with
respect to any Person shall mean that such Person- has declared or paid a
dividend or returned any equity capital to its stockholders or members or
authorized or made any other distribution, payment or delivery of property
(other than common stock or the right to purchase any of such stock of such
Person) or cash to its stockholders or members as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a consideration
any shares of any class of its capital stock or membership interests
outstanding on or after the Effective Date (or any options or warrants issued
by such Person with respect to its capital stock), or set aside any funds for
any of the foregoing purposes, or shall have permitted any of its Subsidiaries
to purchase or otherwise acquire for a consideration any shares of any class of
the capital stock of, or equity interests in, such Person outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or other equity interests). Without limiting the
foregoing, “Dividends” with respect to any Person shall also include all
payments made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any
similar plans or setting aside of any funds for the foregoing purposes.

 

“Documents”
shall mean the Credit Documents and the Vessel Acquisition Documents.

 

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

 

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

 

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

 

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

 

“Environmental
Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any

 

59

 

permit issued, or any
approval given, under any such Environmental Law (hereafter, “Claims”),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b) any
and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.

 

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

 

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

 

“Equity Interests”
of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) equity of such Person, including any preferred stock, any
limited or general partner-ship interest and any limited liability company
membership interest.

 

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

 

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

 

“Eurodollar Rate”
shall mean with respect to each Interest Period for a Loan, (a) the
offered rate (rounded upward to the nearest 1/16 of one percent) for deposits
of Dollars for a period equivalent to such period at or about 11:00 A.M.
(London time) on the second Business Day before the first day of such period as
is displayed on Telerate page 3750 (British Bankers’ Association Interest
Settlement Rates) (or such other page as may replace such page 3750
on such system or on any other system of the information vendor for the time
being designated by the British Bankers’ Association to calculate the BBA
Interest Settlement Rate (as defined in the British Bankers’ Association’s
Recommended Terms and Conditions dated August 1985)), provided that
if on such date no such rate is so displayed or, in the case of the initial
Interest

 

60

 

Period in respect of a
Loan, if less than three Business Days’ prior notice of such Loan shall have
been delivered to the Administrative Agent, the Eurodollar Rate for such period
shall be the rate quoted to the Administrative Agent as the offered rate for
deposits of Dollars in an amount approximately equal to the amount in relation
to which the Eurodollar Rate is to be determined for a period equivalent to
such applicable Interest Period by prime banks in the London interbank
Eurodollar market at or about 11:00 A.M. (London time) on the second
Business Day before the first day of such period, in each case divided (and
rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).

 

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

 

“Event of Loss”
shall mean any of the following events: (x) the actual or constructive total
loss of a Vessel or the agreed or compromised total loss of a Vessel; or (y)
the capture, condemnation, confiscation, requisition, purchase, seizure or
forfeiture of, or any taking of title to, a Vessel. An Event of Loss shall be
deemed to have occurred: (i) in the event of an actual loss of a Vessel,
at the time and on the date of such loss or if that is not known at noon
Greenwich Mean Time on the date which such Vessel was last heard from; (ii) in
the event of damage which results in a constructive or compromised or arranged
total loss of a Vessel, at the time and on the date of the event giving rise to
such damage; or (iii) in the case of an event referred to in clause (y) above,
at the time and on the date on which such event is expressed to take effect by
the Person making the same. Notwithstanding the foregoing, if such Vessel shall
have been returned to any Credit Party following any event referred to in
clause (y) above prior to the date upon which payment is required to be made
under Section 4.02(c) hereof, no Event of Loss shall be deemed to
have occurred by reason of such event.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934.

 

“Existing
Indebtedness” shall have the meaning provided in Section 7.21.

 

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

 

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

 

61

 

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

 

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

 

(iii) On each Flag
Jurisdiction Transfer Date:

 

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

 

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

 

(iv) On or prior to
each Flag Jurisdiction Transfer Date, the Administrative Agent shall have
received a certificate, dated the Flag Jurisdiction Transfer Date, signed by an

 

62

 

Authorized Officer,
member or general partner of the Credit Party consummating such Flag
Jurisdiction Transfer, certifying that (A) all necessary governmental
(domestic and foreign) and third party approvals and/or consents in connection
with the Flag Jurisdiction Transfer being consummated on such date and
otherwise referred to herein shall have been obtained and remain in effect, (B) there
exists no judgment, order, injunction or other restraint prohibiting or
imposing materially adverse conditions upon such Flag Jurisdiction Transfer or
the other transactions contemplated by this Agreement and (C) copies of
resolutions approving the Flag Jurisdiction Transfer of such Credit Party and
any other matters the Administrative Agent may reasonably request.

 

(v) On
each Flag Jurisdiction Transfer Date, the Administrative Agent shall have
received such other agreements, documents and certificates as it shall have
reasonably requested.

 

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

 

“Fleet LLC Company Agreement” shall have the meaning provided in Section 7.13.

 

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

 

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

 

“Guaranteed Creditors” shall mean and include each of the Administrative Agent, the Collateral
Agent, the Lenders and each party (other than any Credit Party) party to a Interest Rate Protection Agreement or a Other Hedging
Agreement to the extent such party constitutes a Secured Creditor under the
Security Documents.

 

“Guaranteed
Obligations” shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and all Loans made to, the
Borrower under this Agreement, together with all the other obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), indebtedness and liabilities
(including, without limitation, indemnities, fees and interest (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) thereon) of the
Borrower to the Lenders and the Agents now existing or hereafter incurred
under, arising out of or in connection with this Agreement and each other
Credit Document to which the Borrower is a party and the due perfounance and
compliance by the Borrower with all the terms, conditions and agreements
contained in the Credit Agreement and in each such other Credit Document and (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or

 

63

 

otherwise) of all
obligations (including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness (including
any interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) of the Borrower
owing under each Interest Rate Protection Agreement and Other Hedging Agreement
entered into by the Borrower with any Lender or any affiliate thereof (even if
such Lender subsequently ceases to be a Lender under this Agreement for any
reason) so long as such Lender or affiliate participates in such interest Rate
Protection Agreement or Other Hedging Agreement and their subsequent assigns
party to any such Interest Rate Protection Agreement or Other Hedging
Agreement, if any, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements contained
therein.

 

“Guarantor”
shall means Holdings and each Subsidiary Guarantor.

 

“Guaranty”
shall mean each of the Holdings Guaranty and the Subsidiaries Guaranty.

 

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

 

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

 

“Holdings Loan”
shall have the meaning provided in Section 7.13(a).

 

“Holdings Guaranty”
shall mean the guaranty of Holdings pursuant to Section 14.

 

“Holdings Pledge
Agreement” shall have the meaning provided in Section 5.09.

 

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

 

64

 

obligations, (vi) all
Contingent Obligations of such Person and (vii) all obligations under any
Interest Rate Protection Agreement or Other Hedging Agreement or under any
similar type of agreement; provided that Indebtedness shall in any event
not include trade payables and expenses accrued in the ordinary course of
business.

 

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

 

“Initial Charter
Arrangements” shall have the meaning provided in Section 6.10(a).

 

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

 

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

 

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

 

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

 

“Investors”
shall mean Peter C. Georgiopoulos, 0CM Principal Opportunities Fund III, L.P.,
0CM Principal Opportunities Fund IIIA, L.P., John Georgiopoulos, Constantine
Georgiopoulos, John Tavlarios, Jeffrey Pribor, Leonidas Vrondissis and Matthew
Gruber.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Management
Agreements” shall have the meaning provided in Section 5.06.

 

65

 

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

 

“Material Adverse
Effect” shall mean a material adverse effect on the (i) Transaction,
(ii) business, property, assets, liabilities, condition (financial or
otherwise), operations or prospects (x) of the Top Glory Vessels or (y) the
Borrower and the Subsidiary Guarantors taken as a whole, (iii) the rights
and remedies of the Administrative Agent or the Lenders or (iv) the
ability of any Credit Party to perform its obligations under the Credit
Documents to which it is a party.

 

“Maturity Date”
shall mean the first Business Day to occur in April, 2010.

 

“Maximum Loan
Amount” for a Top Glory Vessel shall mean the amount set
forth opposite such Top Glory Vessel on Schedule IX hereto under the
column “Maximum Loan Amount.”

 

“Minimum Borrowing
Amount” shall mean $5,000,000.

 

“Minimum Cash
Balance Amount” shall have the meaning provided in Section 9.11.

 

“Modified Trigger
Date” shall mean the first
date after the Commitment Termination Date on which (x) the Loans shall have
been repaid by at least $165,000,000 from a source other than Collateral
Dispositions, (y) the ratio of Consolidated Indebtedness to the Aggregate
Appraised Value is less than 0.50:1.00 and (z) no Default or Event of Default
exists.

 

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

 

“Mortgaged Vessels”
shall mean, at any time, each Vessel which is subject to the first priority
perfected Vessel Mortgage at such time.

 

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

 

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

 

“Net Cash Proceeds”
shall mean, with respect to any Collateral Disposition, the aggregate cash
payments (including any cash received by way of deferred payment pursuant to a
note receivable issued in connection with such Collateral Disposition or equity
issuance, other than the portion of such deferred payment constituting
interest, but only as and when received) received by the Borrower from such
Collateral Disposition or equity issuance, net of (i) reasonable
transaction costs (including, without limitation, reasonable attorney’s fees)
and sales commissions and (ii) the estimated marginal increase in income
taxes and any stamp tax payable by the Borrower or any of its Subsidiaries as a
result of such Collateral Disposition.

 

“Net Worth”
shall mean, as to any Person, the sum of its capital stock, capital in excess
of par or stated value of shares of its capital stock, retained earnings and
any other

 

66

 

account
which, in accordance with GAAP, constitutes stockholders’ equity, but excluding
any treasury stock.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Payment Date”
shall mean the first Business Day of each April, July, October and
January, commencing with April 1, 2005 and through, and including, the
Maturity Date.

 

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

 

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

 

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

 

“Permitted Holders”
shall mean (i) Peter Georgiopoulos (including his immediate family members
and trusts for his benefit and/or for the benefit of his immediate family
members) and any corporation or other entity directly or indirectly controlled
by Peter Georgiopoulos and (ii) Oaktree Capital Management, LLC and any
corporation or other entity directly or indirectly controlled by Oaktree
Capital Management, LLC.

 

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

 

67

 

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

 

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

 

“Pledge Agreement”
shall mean and include the Borrower/Subsidiary Pledge Agreement and/or the
Holdings Pledge Agreement.

 

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

 

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

 

“Prime Rate” shall
mean the rate which the Administrative Agent announces from time to time as its
prime lending rate, the Prime Rate to change when and as such prime lending
rate changes. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

 

“Projections”
shall have the meaning provided in Section 5.02.

 

“Qualified IPO”
shall mean a bona fide underwritten sale to the public of Holdings’ Equity
Interests pursuant to a registration statement (other than on Form S-8
or any other form relating to securities issuable under any benefit plan of
Holdings or any of its subsidiaries, as the case may be) that is declared
effective by the Securities and Exchange Commission and such offering results
in gross cash proceeds (exclusive of underwriter’s discounts and commissions
and other expenses) of at least $50,000,000.

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Required Debt Service Amount” shall mean for any Payment Date the sum of (x) the Scheduled Repayment
for such Payment Date plus (y) the aggregate amount of interest in respect of
the Loans with an Interest Period in excess of one month required to be paid
during the period commencing on the day after the immediately preceding Payment
Day and ending on such Payment Date.

 

“Required Lenders”
shall mean Lenders, the sum of whose outstanding Commitments and the then
principal amount of outstanding Loans at such time represent 66-2/3% of
the sum of all outstanding Commitments and the then principal amount of
outstanding Loans at such time.

 

“Reserve Account”
shall have the meaning provided in Section 2.

 

“Reserve Transfer”
shall have the meaning provided in Section 2.

 

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

 

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

 

“Scheduled
Repayment” shall have the meaning provided in Section 4.02(a).

 

69

 

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

 

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

 

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

 

“Service
Agreements” shall have the meaning provided in Section 5.06.

 

“Seller”
shall mean Top Glory Shipping (Holdings) Limited.

 

“Subsidiaries
Guaranty” shall have the meaning provided Section 5.07.

 

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

 

“Subsidiary
Guarantor” shall mean each direct and indirect Subsidiary of
the Borrower which is party to the Subsidiaries Guaranty, or which executes a
counterpart thereof after the Initial Borrowing Date.

 

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

 

“Tax Benefit”
shall have the meaning provided in Section 4.04(c).

 

“Test Period”
shall mean each period of four consecutive fiscal quarters then last ended, in
each case taken as one accounting period, provided that in the case of any
first quarter ending prior to December 31, 2005, the “Test Period” shall
be the period commencing on January 1, 2005 and ending on the last day of
such fiscal quarter.

 

“Top Glory Vessel”
shall mean, collectively, all sea going vessels and tankers listed on Schedule III,
and, individually, any of such vessels.

 

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

 

“Transaction”
shall mean, collectively, (i) the consummation of each Vessel Acquisition,
(ii) the entering into of the Credit Documents and the incurrence of Loans
hereunder and (iii) the payment of all fees and expenses in connection
with the foregoing.

 

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

 

“Trigger Date”
shall mean the later of (i) the first Business Day occurring after the
Payment Date occurring in March 2007 and (ii) the first date on which
(x) the ratio of Consolidated Indebtedness to the Aggregate Appraised Value is
less than 0.60:1.00 and (y) no Default or Event of Default exists.

 

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

 

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

 

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

 

“Vessel”
shall mean sea going vessels and tankers.

 

“Vessel
Acquisition” shall have the meaning provided in Section 1.01.

 

“Vessel
Acquisition Documents” shall have the meaning provided in
Section

 

“Vessel
Acquisition Document Assignment” shall have the meaning
provided in Section 5.10.

 

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

 

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

 

(ii)                                            On
each Vessel Exchange Date, the Administrative Agent shall have received from
counsel to the Credit Parties acceptable to the Administrative Agent
consummating the relevant Vessel Exchange opinions reasonably satisfactory to
the

 

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

 

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

 

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

 

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

 

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

 

(iv) On each Vessel
Exchange Date, the Credit Party which is consummating a Vessel Exchange on such
date shall have duly authorized, executed and delivered, and caused to be
recorded in the appropriate vessel registry a Vessel Mortgage with respect to
each of such Acceptable Replacement Vessel and such Vessel Mortgages shall be
effective to create in favor of the Collateral Agent and/or the Lenders a
legal, valid and enforceable first priority security interest, in and lien upon
such Acceptable Replacement Vessels, subject only to Permitted Liens. Except as
specifically provided above, all filings, deliveries of instruments and other
-actions necessary or desirable in the reasonable opinion of the Administrative
Agent to perfect and preserve such security interests shall have been duly
effected and the Administrative Agent shall have received

 

72

 

evidence
thereof in form and substance reasonably satisfactory to the Administrative
Agent.

 

(v) On each Vessel
Exchange Date, the Administrative Agent shall have received each of the
following with respect to the relevant Acceptable Replacement Vessel:

 

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

 

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

 

(C)                                     class certificates from a classification society
listed on Schedule VIII hereto or another internationally recognized
classification society acceptable to the Administrative Agent, indicating that
such Acceptable Replacement Vessel meets the criteria specified in Section 7.25,

 

(D)                                    Appraisals of recent date and from at least two
Approved Appraisers in scope, form and substance reasonably satisfactory to the
Administrative Agent, and

 

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

 

{vi) On
or prior to each Vessel Exchange Date:

 

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

 

(B)                                the
Administrative Agent shall have received a certificate, dated the Vessel
Exchange Date, signed by an Authorized Officer, member or general partner of
the Credit Party commencing such Vessel Exchange, certifying that (1) all
necessary governmental (domestic and foreign) and third party approvals

 

73

 

and/or consents
(including any necessary anti-trust approvals or consents) in connection with
the Vessel Exchange being consummated on such date and other-wise referred to
herein shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which, in the reasonable judgment of the Administrative
Agent, restrains, prevents or imposes materially adverse conditions upon the
consummation of such Vessel Exchange or the transactions contemplated by this
Agreement and (2) there exists no judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions upon such
Vessel Exchange or the other transactions contemplated by this Agreement,

 

(C)                                the Administrative Agent shall have received such other
documents, certificates and opinions as it shall have reasonably requested.

 

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

 

“Vessel Mortgage”
shall mean a first preferred mortgage in substantially the forma of Exhibit N-1
or N-2, or such other form as may be reasonably satisfactory to the
Administrative Agent, as such first preferred mortgage
may be amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof.

 

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

 

SECTION 12. Agency and Security Trustee Provisions.

 

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

 

74

 

time
to time any or all of its rights, duties and obligations hereunder and under
the Security Documents to any of its banking affiliates.

 

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

 

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

 

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

 

75

 

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

 

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

 

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

 

12.06 Indemnification. To the extent any of
the Agents is not reimbursed and indemnified by the Borrower, the Lenders will
reimburse and indemnify the applicable Agents, in proportion to their
respective “percentages” as used in determining the Required Lenders, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Agents
in performing their respective duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document; provided that no Lender shall be liable in respect to
an Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent’s gross negligence or willful misconduct.

 

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

 

76

 

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

 

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

 

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

 

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

 

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

 

SECTION 13. Miscellaneous.

 

13.01 Payment of Expenses,
etc. The Borrower agrees that it shall: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of each of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case LLP,
Johnson Stokes & Master, other counsel to the Administrative Agent and
the Lead Arrangers and local counsel) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any
amendment, waiver or consent relating hereto or thereto, of the Agents in
connection with their respective syndication efforts with respect to this
Agreement and of the Agents and each of the Lenders in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel (including in-house counsel)
for each of the Agents and for each of the Lenders); (ii) pay and hold
each of the Lenders harmless from and against any and all present

 

77

 

and future stamp, documentary, transfer, sales and use,
value added, excise and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify
the Agents, the Collateral Agent and each Lender, and each of their respective
officers, directors, trustees, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys’ and consultants’ fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of,
or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any of the Agents, the
Collateral Agent or any Lender is a party thereto) related to the entering into
and/or performance of this Agreement or any other Credit Document or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein, or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or (b) the
actual or alleged presence of Hazardous Materials on any Vessel or in the air,
surface water or groundwater or on the surface or subsurface of any property at
any time owned or operated by the Borrower or any of its Subsidiaries, the
generation, storage, transportation, handling, disposal or Environmental
Release of Hazardous Materials at any location, whether or not owned or
operated by the Borrower or any of its Subsidiaries, the non-compliance of any
Vessel or property with foreign, federal, state and local laws, regulations,
and ordinances (including applicable permits thereunder) applicable to any
Vessel or property, or any Environmental Claim asserted against the Borrower,
any of its Subsidiaries or any Vessel or property at any time owned or operated
by the Borrower or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages,
penalties, actions, judgments, suits, costs, disbursements or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified). To the extent that the undertaking to indemnify, pay
or hold harmless each of the Agents or any Lender set forth in the preceding
sentence may be unenforceable because it violates any law or public policy, the
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
Notwithstanding the foregoing, neither any Agent nor any Lender shall be
responsible to any Person for any consequential, indirect, special or punitive
damages which may be alleged by such Person arising out of this Agreement or
the other Documents.

 

13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Subsidiary or
the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general
or special) and any other Indebtedness at any time held or owing by such Lender
(including, without limitation, by branches and agencies of such Lender
wherever located) to or for the credit or the account of the Borrower or any
Subsidiary but in any event excluding assets held in trust for any such Person
against and on account of the Obligations and liabilities of the Borrower or
such Subsidiary, as

 

78

 

applicable, to such
Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased by such
Lender pursuant to Section 13.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.

 

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

 

13.04 Benefit of
Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that (i) no Credit Party
may assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of the
Lenders, (ii) although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a “Lender” for
all purposes hereunder (and may not transfer or assign all or any portion of
its Commitments hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
“Lender” hereunder and (iii) no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (x) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Commitment
Commission thereon (except (m) in connection with a waiver of applicability of
any post-default increase in interest rates and (n) that any amendment or
modification to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest for purposes of this clause (x))
or reduce the principal amount thereof, or increase the amount of the
participant’s participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitments shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (y) consent to the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (z) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided in
the Credit Documents) securing the Loans

 

79

 

hereunder
in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation.

 

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

 

(c)                                  Nothing
in this Agreement shall prevent or prohibit any Lender from pledging its Loans
and Notes hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank and, with the consent of the

 

80

 

Administrative Agent, any
Lender which is a fund may pledge all or any portion of its Notes or Loans to a
trustee for the benefit of investors and in support of its obligation to such
investors.

 

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

 

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

 

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

 

13.07 Calculations;
Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders). In addition, all computations determining compliance with Sections
9.08 through 9.11, inclusive, shall utilize accounting principles and policies
in conformity with those in effect on the Effective Date (with the foregoing
generally accepted accounting principles, subject to the preceding proviso,
herein called “GAAP”). Unless otherwise noted, all references in this

 

81

 

Agreement to “generally
accepted accounting principles” shall mean generally accepted accounting
principles as in effect in the United States.

 

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

 

13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;  WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT
AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND
THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE VESSEL MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE GENERAL OBLIGATIONS LAW). ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER
THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN
ANY OTHER JURISDICTION. IF AT ANY TIME DURING WHICH THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT REMAINS IN EFFECT, THE BORROWER DOES
NOT MAINTAIN A REGULARLY FUNCTIONING OFFICE IN NEW YORK CITY, IT WILL DULY
APPOINT, AND AT ALL TIMES MAINTAIN, AN AGENT IN NEW YORK CITY FOR THE SERVICE OF PROCESS OR SUMMONS, AND
WILL PROVIDE TO THE ADMINISTRATIVE AGENT AND
THE LENDERS WRITTEN NOTICE OF THE
IDENTITY AND ADDRESS OF SUCH AGENT FOR SERVICE OF PROCESS OR SUMMONS; PROVIDED
THAT ANY FAILURE ON THE PART OF
THE BORROWER TO COMPLY WITH THE FOREGOING
PROVISIONS OF THIS SENTENCE SHALL NOT
IN ANY WAY PREJUDICE OR LIMIT THE SERVICE OF PROCESS OR SUMMONS IN ANY OTHER MANNER DESCRIBED
ABOVE IN THIS SECTION 13.08 OR OTHERWISE PERMITTED
BY LAW.

 

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

 

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

 

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

 

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

 

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

 

13.12 Amendment or Waiver;
etc. (a) Neither this Agreement nor any other Credit Document nor any
terms hereof or thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed by the respective
Credit Parties party thereto and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of
each Lender (with Obligations being directly affected in the case of following
clause (i)) and in the case of the following clause (vi), to the extent (in the
case of the following clause (vi)) that any such Lender would be required to
make a Loan in excess of its pro  rata portion provided for in
this Agreement or would receive a payment or prepayment of Loans or a
commitment reduction that (in any case) is less than its pro  rata
portion provided for in this Agreement, in each case, as a result of any such
amendment, modification or waiver referred to in the following clause (vi)), (i) extend
the final scheduled maturity of any Loan or Note, extend the timing for or
reduce the principal amount of

 

83

 

any Scheduled Repayment, or reduce the rate or extend
the time of payment of interest on any Loan or Note or Commitment Commission
(except (x) in connection with the waiver of applicability of any post-default
increase in interest rates and (y) any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in the
rate of interest for purposes of this clause (i)), or reduce the principal
amount thereof (except to the extent repaid in cash), (ii) release any
Vessel Mortgage (except as expressly provided in the Credit Documents), (iii) amend,
modify or waive any provision of this Section 13.12, (iv) reduce the
percentage specified in the definition of Required Lenders (it being understood
that, with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the extensions of Loans and
Commitments are included on the Effective Date), (v) Consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement, (vi) amend, modify or waive Section 1.06 or
amend, modify or waive any other provision in this Agreement to the extent
providing for payments or prepayments of Loans or reductions in Commitments, in
each case, to be applied pro rata among the Lenders entitled to such
payments or prepayments of Loans or reductions in Commitments (it being
understood that the provision of additional extensions of credit pursuant to
this Agreement, or the waiver of any mandatory commitment reduction or any
mandatory prepayment of Loans by the Required Lenders shall not constitute an
amendment, modification or waiver for purposes of this clause (vi)), or (vii) release
any Subsidiary Guarantor from a Subsidiaries Guaranty to the extent same owns a
Mortgaged Vessel; provided,  further, that no such change, waiver,
discharge or termination shall (u) increase the Commitments of any Lender over
the amount thereof then in effect without the consent of such Lender (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Commitments
shall not constitute an increase of the Commitment of any Lender, and that an
increase in the available portion of any Commitment of any Lender shall not
constitute an increase in the Commitment of such Lender), (v) without the
consent of each Agent, amend, modify or waive any provision of Section 12
as same applies to such Agent or any other provision as same relates to the
rights or obligations of such Agent or (w) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights
or obligations of the Collateral Agent.

 

(b) If, in connection with
any proposed change, waiver, discharge or termination to any of the provisions
of this Agreement as contemplated by clauses (i) through (v), inclusive,
of the first proviso to Sections 13.12(a), the consent of the Required Lenders
is obtained but the consent of one or more of such other Lenders whose consent
is required is not obtained, then the Borrower shall have the right, so long as
all non-consenting Lenders whose individual consent is required are treated as
described in either clauses (A) or (B) below, to either (A) replace
each such non-consenting Lender or Lenders (or, at the option of the Borrower
if the respective Lender’s consent is required with respect to less than all
Loans (or related Commitments), to replace only the respective Commitments
and/or Loans of the respective non-consenting Lender which gave rise to the need
to obtain such Lender’s individual consent) with one or more Replacement
Lenders pursuant to Section 1.12 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting
Lender’s Commitment (if such Lender’s consent is required as a result of its
Commitment), and/or repay outstanding Loans and terminate any outstanding
Commitments of such Lender which gave rise to the need to obtain such Lender’s
consent, in accordance with Sections 3.02(b) and/or 4.01(iv), provided
that, unless the

 

84

 

Commitments are
terminated, and Loans repaid, pursuant to preceding clause (B) are
immediately replaced in full at such time through the addition of new Lenders
or the increase of the Commitments and/or outstanding Loans of existing Lenders
(who in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Required Lenders (determined
before giving effect to the proposed action) shall specifically consent
thereto, provided,  further, that in any event the Borrower shall
not have the right to replace a Lender, terminate its Commitment or repay its
Loans solely as a result of the exercise of such Lender’s rights (and the
withholding of any required consent by such Lender) pursuant to the second
proviso to Section 13.12(a).

 

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

 

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

 

13.15
Limitation on Additional Amounts, etc.
Notwithstanding anything to the contrary contained in Sections 1.09, 1.10 or
4.04 of this Agreement, unless a Lender gives notice to the Borrower that it is
obligated to pay an amount under any such Section within one year after
the later of (x) the date the Lender incurs the respective increased costs,
Taxes, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital or (y) the date such Lender has actual
knowledge of its incurrence of the respective increased costs, Taxes, loss,
expense or liability, reductions in amounts received or receivable or reduction
in return on capital, then such Lender shall only be entitled to be compensated
for such amount by the Borrower pursuant to said Section 1.09, 1.10 or
4.04, as the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Lender giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.09, 1.10 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.09, 1.10 and 4.04.

 

13.16 Confidentiality.
(a) Subject to the provisions of clauses (b) and (c) of this Section 13.16,
each Lender agrees that it will use its best efforts not to disclose without
the prior consent of the Borrower (other than to its employees, auditors,
advisors or counsel or to another Lender if the Lender or such Lender’s holding
or parent company or board of trustees in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender) any information with respect to the Borrower or any of
its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document, provided that

 

85

 

any Lender may disclose
any such information (a) as has become generally available to the public
other than by virtue of a breach of this Section 13.16(a) by the
respective Lender, (b) as may be required in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over such Lender or to the Federal Reserve
Board or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as
may be required in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Lender, (e) to the Administrative Agent or the
Collateral Agent and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of
any of the Notes or Commitments or any interest therein by such Lender, provided
that such prospective transferee expressly agrees to be bound by the
confidentiality provisions contained in this Section 13.16.

 

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

 

13.17
Register. The Borrower
hereby designates the Administrative Agent to serve as the Borrower’s agent,
solely for purposes of this Section 13.17, to maintain a register (the “Register”)
on which it will record the Commitments from time to time of each of the
Lenders, the Loans made by each of the Lenders and each repayment and
prepayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower’s obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Administrative
Agent for acceptance and registration of assignment or transfer of all or part
of a Loan, or as soon thereafter as practicable, the assigning or transferor
Lender shall surrender the Note evidencing such Loan, and thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Lender and/or the new Lender. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 13.17, except to the extent caused by the Administrative
Agent’s own gross negligence or willful misconduct.

 

13.18 Judgment
Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes (the “specified currency”) into

 

86

 

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

 

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

 

13.20
Waiver of Immunity. The Borrower, in respect
of itself, each other Credit Party, its and their process agents, and its and
their properties and revenues, hereby irrevocably agrees that, to the extent
that the Borrower, any other Credit Party or any of its or their properties has
or may hereafter acquire any right of immunity from any legal proceedings,
whether in the United States, the Republic of the Marshall Islands, Hong Kong
or elsewhere, to enforce or collect upon the Obligations of the Borrower or any
other Credit Party related to or arising from the transactions contemplated by
any of the Credit Documents, including, without limitation, immunity from
service of process, immunity from jurisdiction or judgment of any court or tribunal,
immunity from execution of a judgment, and immunity of any of its property from
attachment prior to any entry of judgment, or from attachment in aid of
execution upon a judgment, the Borrower, for itself and on behalf of the other
Credit Parties, hereby expressly waives, to the fullest extent permissible
under applicable law, any such immunity, and agrees not to assert any such
right or claim in any such proceeding, whether in the United States, the
Republic of the Marshall Islands, Hong Kong or elsewhere.

 

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

 

87

 

accordance
with the PATRIOT Act, and each Credit Party agrees to provide such information
from time to time to any Lender.

 

SECTION 14. Holdings
Guaranty.

 

14.01 Guaranty. In order to
induce the Agents and the Lenders to enter into this Agreement and to extend
credit hereunder, and to induce the other Guaranteed Creditors to enter into
Interest Rate Protection Agreements and Other Hedging Agreements and in
recognition of the direct benefits to be received by Holdings from the proceeds
of the Loans and the entering into of such Interest Rate Protection Agreements
and Other Hedging Agreements, Holdings hereby agrees with the Guaranteed
Creditors as follows: Holdings hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, Holdings, unconditionally and
irrevocably, promises to pay such indebtedness to the Administrative Agent
and/or the other Guaranteed Creditors, or order, on demand, together with any
and all expenses which may be incurred by the Administrative Agent and the
other Guaranteed Creditors in collecting any of the Guaranteed Obligations.
This Guaranty is a guaranty of payment and not of collection. This Guaranty is
a continuing one and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon. If claim is ever made upon any Guaranteed Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (i) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Borrower), then and in such
event Holdings agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon Holdings, notwithstanding any revocation of
this Guaranty or other instrument evidencing any liability of the Borrower, and
Holdings shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.

 

14.02 Bankruptcy.
Additionally, Holdings unconditionally and irrevocably guarantees the payment
of any and all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 10.05, and irrevocably and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in lawful money of the United States.

 

14.03 Nature of
Liability. The liability of Holdings hereunder is
primary, absolute and unconditional, exclusive and independent of any security
for or other guaranty of the Guaranteed Obligations of the Borrower, whether
executed by any other guarantor or by any other party,
and the liability of Holdings hereunder shall not be affected or impaired by
any circumstances whatsoever, including, without limitation, (a) any
direction as to application of payment by the Borrower or by any other party,
or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed

 

88

 

Obligations of the
Borrower, or (c) any payment on or in reduction of any such other guaranty
or undertaking (other than payment in cash of the Guaranteed Obligations), or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to any Guaranteed Creditor on the
Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and Holdings waives
any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding, or (f) any action or inaction by the
Guaranteed Creditors as contemplated in Section 14.05, or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor, including, without
limitation, any such invalidity, irregularity or unenforceability caused by a
change in law.

 

14.04 Independent
Obligation. The obligations of Holdings hereunder are
independent of the obligations of any other guarantor, any other party or the
Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any other
party or the Borrower be joined in any such action or actions. Holdings waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to Holdings.

 

14.05 Authorization.  Holdings authorizes the Guaranteed Creditors without notice
or demand (except as shall be required by applicable statute and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to:

 

(i)                                     change
the manner, place or terms of payment of, and/or change or extend the time of
payment of, renew, increase, accelerate or alter, any of the Guaranteed
Obligations (including any increase or decrease in the principal amount thereof
or the rate of interest or fees thereon), any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the Guaranty
herein made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;

 

(ii)                                  take
and hold security for the payment of the Guaranteed Obligations and sell,
exchange, release, impair, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset thereagainst;

 

(iii)                               exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain from
acting;

 

(iv)                              release or substitute any one or more endorsers, guarantors,
the Borrower, other Credit Parties or other obligors;

 

89

 

(v)                                 settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and
may subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than the
Guaranteed Creditors;

 

(vi)                              apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrower remain
unpaid;

 

(vii)                           consent to or waive any breach of, or any act,
omission or default under, this Agreement, any other Credit Document, any
Interest Rate Protection Agreement or any Other Hedging Agreement or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document, any Interest
Rate Protection Agreement or any Other Hedging Agreement or any of such other
instruments or agreements; and/or

 

(viii)                        take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of Holdings from its liabilities under this Guaranty.

 

14.06 Reliance. It
is not necessary for any Guaranteed Creditor to inquire into the capacity or
powers of Holdings or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.

 

14.07 Subordination.  Any
indebtedness of the Borrower now or hereafter owing to Holdings is hereby
subordinated to the Guaranteed Obligations of the Borrower owing to the
Guaranteed Creditors; and if the Administrative Agent so requests at a time
when an Event of Default exists, all such indebtedness of the Borrower to
Holdings shall be collected, enforced and received by Holdings for the benefit
of the Guaranteed Creditors and be paid over to the Administrative Agent on
behalf of the Guaranteed Creditors on account of the Guaranteed Obligations of
the Borrower to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
Guaranty. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any such indebtedness of the Borrower to Holdings,
Holdings shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, Holdings hereby agrees with the Guaranteed Creditors that it will
not exercise any right of subrogation which it may at any time otherwise have
as a result of this Guaranty (whether contractual, under Section 509 of
the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.

 

14.08 Waiver. (a) Holdings
waives any right (except as shall be required by applicable statute and cannot
be waived) to require any Guaranteed Creditor to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any other
party or (iii) pursue any other remedy in any Guaranteed Creditor’s power
whatsoever. Holdings waives any defense based on

 

90

 

or arising out of any
defense of the Borrower, any other guarantor or any other party, other than
payment of the Guaranteed Obligations to the extent of such payment, based on
or arising out of the disability of the Borrower, Holdings, any other guarantor
or any other party, or the validity, legality or unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than payment of the
Guaranteed Obligations to the extent of such payment. The Guaranteed Creditors
may, at their election, foreclose on any security held by the Administrative
Agent, the Collateral Agent or any other Guaranteed Creditor by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Guaranteed Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the Guaranteed Obligations have been paid. Holdings waives any defense arising
out of any such election by the Guaranteed Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Holdings against the Borrower or any other party or
any security.

 

(b) Holdings waives all presentments,
demands for perfoiuiance, protests and notices, including without limitation
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incur-ring of new or additional Guaranteed Obligations. Holdings assumes all
responsibility for being and keeping itself informed of the Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which Holdings assumes and incurs hereunder, and agrees
that neither the Administrative Agent nor any of the other Guaranteed Creditors
shall have any duty to advise Holdings of information known to them regarding
such circumstances or risks.

 

14.09
Maximum Liability. It is the desire and
intent of Holdings and the Guaranteed Creditors that this Guaranty shall be
enforced against Holdings to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
If, however, and to the extent that, the obligations of Holdings under this
Guaranty shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the amount of Holdings’
obligations under this Guaranty shall be deemed to be reduced and Holdings
shall pay the maximum amount of the Guaranteed Obligations which would be
permissible under applicable law.

 

14.10 Payments. All payments
made by Holdings pursuant to this Section 14 will be made without setoff,
counterclaim or other defense, and shall be subject to the provisions of
Sections 4.03 and 4.04.

 

91

 

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

 

	
   

  	
  GENCO
  SHIPPING & TRADING LIMITED,

  as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ John Georgiopoulos

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
  Address:

  	
  c/o M. J. Gruber &
  Co., LTD.

  
	
   

  	
   

  	
   

  	
  425 Park Avenue, 27’h Floor, New York, NY 10022

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kramer Levin Naftalis &
  Frankel LLP

  919 Third Avenue

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Attention: Thomas E.
  Molner, Esq.

  Telephone: (212) 715-9100

  
	
   

  	
   

  	
  Facsimile: (212) 715-8000

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET ACQUISITION LLC,
  as Holdings

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Is/ John Georgiopoulos

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORDEA
  BANK FINLAND PLC, NEW YORK BRANCH,

  as Administrative Agent and Lead Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Is/ Hans Christian
  Kjelsrud

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Is! Gerald E. Chelius, Jr.

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice
  President Credit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIGROUP
  GLOBAL MARKETS LIMITED, as

  Lead Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Pareejat.Singhal

  	
   

  
	
   

  	
   

  	
  Title: Director

  
													

 

 

	
   

  	
   

  	
  NORDEA
  BANK NORGE ASA, GRAND CAYMAN

  BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Is/ Hans Christian
  Kjelsrud

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Gerald E. Chelius, Jr.

  	
  Title:

  
	
   

  	
   

  	
  Senior Vice President
  Credit

  

 

	
   

  	
   

  	
  CITIBANK,
  N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Is/ Charles R.
  Delamater

  	
   

  
	
   

  	
   

  	
  Title: Managing
  Director

  Senior Credit OfficerQuickLinks
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Exhibit 10.1  

 
 

EMPLOYMENT AGREEMENT    
    

        THIS
EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between Steve Berkowitz ("Executive") and AJI Acquisition Corp., a Delaware corporation (the "Company") and, solely for
purposes of Sections 1A and 3A(c), IAC/InterActive Corp., a Delaware corporation ("Parent"), dated as of March 20, 2005 and is effective as of the Effective Date (as defined below). In the
event that the Merger Agreement (as defined below) is terminated, this Agreement shall be void ab initio and of no further force and effect. All
capitalized terms used but not defined herein shall have the meaning set forth in the Merger Agreement. 

        WHEREAS,
Executive is currently serving as Chief Executive Officer of Ask Jeeves, Inc. ("Jeeves"); 

        WHEREAS,
the Company has entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), by and among Parent, Ask Jeeves and the Company, dated as of
March 20, 2005, pursuant to which the Company will merge with and into Ask Jeeves with Ask Jeeves as the surviving corporation in the Merger (the "Merger") to be effective as of the Effective
Time (as defined in the Merger Agreement); 

        WHEREAS,
Parent and the Board of Directors of the Company (the "Board") desire to provide for the employment of Executive by the Company from and after the date upon which the Effective
Time occurs (the "Effective Date"), and Executive is willing to commit himself to serve the Company and its subsidiaries and affiliates, on the terms and conditions herein provided and to the extent
herein provided; 

        WHEREAS,
pursuant to the Merger Agreement, following the Effective Time, Ask Jeeves will assume the obligations and rights of the Company; 

        WHEREAS,
in order to effect the foregoing, the Company and Executive wish to enter into an employment agreement on the terms and conditions set forth below; 

        NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth, Executive and the Company have agreed and do hereby agree as follows: 

1A.    EMPLOYMENT.    The Company agrees to employ Executive as Chief Executive Officer and Executive accepts and agrees to such
employment. During Executive's employment with the Company, Executive shall act diligently and do and perform all services and acts necessary or advisable to fulfill the duties and responsibilities as
are commensurate and consistent with Executive's position and shall render such services on the terms set forth herein. During the first year of Executive's employment with the Company, Executive
shall report directly to the Chief Executive Officer of the Parent and, following the first anniversary of the Effective Time Executive shall report directly to the Chief Executive Officer of the
Parent or, to the extent applicable to other chief executive officers of the Parent's subsidiaries generally, such other person as from time to time may be designated by Parent who reports directly to
the Chief Executive Officer of the Parent and has operational authority with respect to the Parent and its subsidiaries (hereinafter referred to as the "Reporting Officer"). Executive shall have such
powers and duties with respect to the Company as may reasonably be assigned to Executive by the Reporting Officer, to the extent consistent with Executive's position and status. Executive agrees to
devote all of Executive's working time, attention and efforts to the Company and to perform the duties of Executive's position in accordance with the Company's policies as in effect from time to time.
Executive's principal place of employment shall be the Company's offices located in Oakland, California metropolitan area. 

2A.    TERM OF AGREEMENT.    The term ("Term") of this Agreement shall commence on the Effective Date and shall continue for a
period of three (3) years, unless sooner terminated in accordance with the provisions of Section 1 of the Standard Terms and Conditions attached hereto. If 

 

Executive
remains in the Company's employment following the expiration of the Term, he shall be an employee at will. Executive and the Company will discuss extending the Term no later than three
months prior to the end of the Term, provided, that Executive has provided written notice to the Company between six and four months prior to the end of
the Term which sets forth his interest in entering into such discussions. 

3A.    COMPENSATION.    

        (a)    BASE SALARY.    During the Term, the Company shall pay Executive an annual base salary of $500,000 (the "Base
Salary"), payable in equal biweekly installments or in accordance with the Company's payroll practice as in effect from time to time. The Base Salary shall be reviewed by Parent, no less frequently
than annually in a manner consistent with similarly situated executives of Parent's subsidiaries. For all purposes under this Agreement, the term "Base Salary" shall refer to Base Salary as in effect
from time to time. 

        (b)    BONUS PLAN.    During the Term, Executive shall be eligible to receive discretionary annual bonuses,  provided that
Executive's target bonus shall be 80% of Base Salary ("Target Bonus"). 

        (c)    RESTRICTED STOCK UNITS.    Executive shall be granted as of the Effective Date a grant of restricted stock
units for common stock of the Parent with a fair market value of $1,000,000 as of the Effective Date (the "Regular Restricted Stock Units") and a grant of restricted stock units with a fair market
value of $2,000,000 as of the Effective Date (the "Leadership Restricted Stock Units"), pursuant to Parent's Amended and Restated 2000 Stock and Annual Incentive Plan or a successor plan (the "Plan")
and restricted stock unit agreements (the "Restricted Stock Unit Agreement"), subject to the approval by the Compensation Committee of the Board of Directors of the Parent. Subject to Executive's
continued employment with the Company and the provisions of Section 1(d) of the Standard Terms and Conditions attached hereto, the Regular Restricted Stock Units shall vest and no longer be
subject to any restriction in five equal installments on each of the first, second, third, fourth and fifth anniversaries of the Effective Date and the Leadership Restricted Stock Units shall vest on
the fifth anniversary of the Effective Date, provided that the Regular and Leadership Restricted Stock Units shall fully vest and no longer be subject
to any restrictions in the event of a Change in Control (as defined in the Plan). The terms of this Section 3A(c) shall be further supplemented by the terms of the Restricted Stock Unit
Agreements. For purposes of this Section 3A(c), "fair market value" shall mean the average closing prices of the common stock of the Parent over the 5-trading day period immediately
proceeding and including the Effective Date. During the Term, Executive shall be eligible to receive such additional grants of restricted stock units or other equity interests based on considerations
substantially similar to the considerations applicable to similarly situated senior executives of the subsidiaries of the Parent generally. 

        (d)    BENEFITS.    From the Effective Date through the date of termination of Executive's employment with the Company
for any reason, Executive shall be entitled to participate in equivalent welfare, health and life insurance, pension and other benefit programs (including eligibility to participate in incentive plans
or programs) as may be provided to senior executives of the Company generally. Without limiting the generality of the foregoing, Executive shall be entitled to the following benefits: 

        (i)    Reimbursement for Business Expenses.    During the Term, the Company shall reimburse Executive for all
reasonable and necessary expenses incurred by Executive in performing Executive's duties for the Company, on the same basis as similarly situated employees and in accordance with the Company's
policies as in effect from time to time. 

        (ii)    Vacation.    During the Term, Executive shall be entitled to paid vacation per year, in accordance with the
plans, policies, programs and practices of the Company applicable to similarly situated employees of the Company generally. 

2

 

        (e)    RIGHTS UNDER STOCK PLANS.    Upon the Effective Time, all stock options granted to Executive by Ask Jeeves that
are then unvested and outstanding shall fully vest and remain exercisable until the earlier of (i) the expiration of the applicable option term or (ii) should Executive's employment
terminate before the applicable option term expires, the applicable post-termination option exercise period (and will be adjusted, under the Merger Agreement, into options for shares of
common stock of Parent). In addition, the Company acknowledges that immediately prior to the Effective Time, Executive shall become entitled to shares of Ask Jeeves common stock from Ask Jeeves
(which, as adjusted under the Merger Agreement, will result in the receipt of shares of common stock of Parent) to which he would have been entitled under the 1999 Equity Incentive Plan Conditional
Stock Award Agreement dated September 30, 2003, had he incurred an Involuntary Termination (as defined in the Conditional Stock Award Agreement) upon the Effective Date (90,000 shares of common
stock of Ask Jeeves as of the date of this Agreement). 

        (f)    BENEFITS LIMITATIONS.    Notwithstanding anything contained in this Agreement to the contrary, to the extent
that any payment or distribution of any type to Executive by Ask Jeeves or its affiliates, the Company, a Company affiliate, or the Parent, in connection with the Merger, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise (including, without limitation, any accelerated vesting, or payment of stock options or other awards) (collectively,
the "Total Payments") is or will be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Excise Tax"), then the Total Payments will be
reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) will be one dollar ($1) less than the amount that would cause the Total Payments to be subject to the
Excise Tax; provided that such reduction to the Total Payments will be made only if the total after-tax benefit to Executive is greater after giving effect to such reduction than if no
such reduction had been made. 

        Unless
Executive gives prior written notice specifying a different order to the Company to effectuate the foregoing, the Company will reduce or eliminate the Total Payments, by first
reducing or eliminating any cash severance benefits, then by reducing or eliminating any other remaining Total Payments other than any accelerated vesting of stock options or other awards, then by
reducing or eliminating any accelerated vesting of stock options or other awards. The preceding provisions of this Section take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any benefits or compensation. 

        The
determination of whether the Total Payments will be reduced as provided in this Section, and the determination of the amount of such reduction, will be made at the Company's expense
by a nationally recognized certified independent public account firm selected by the Company (the "Accounting
Firm"). The Accounting Firm will provide its determination (the "Determination"), together with detailed supporting calculations and documentation to Executive and the Company as soon as practicable
following the Effective Date. 

        It
is possible that Total Payments to Executive will initially be reduced to an extent greater than that required under the foregoing provisions of this Section (an "Underpayment"). It
is also possible that Total Payments will not initially be reduced to the extent required by the foregoing provisions of this Section (an "Overpayment"). The determination of any Underpayment or
Overpayment will be made by the Accounting Firm in accordance with the foregoing paragraph. In the event of an Underpayment, the amount of any such Underpayment shall be paid to Executive. In the
event of an Overpayment, Executive will promptly pay to the Company (without interest) the amount of such Overpayment. 

4A.    NOTICES.    All notices and other communications under this Agreement shall be in writing and shall be given by first-class
mail, certified or registered with return receipt requested or hand delivery acknowledged in writing by the recipient personally, and shall be deemed to have been duly given three 

3

 

days
after mailing or immediately upon duly acknowledged hand delivery to the respective persons named below: 

	If to Parent:	 	IAC/InterActiveCorp

152 West 57th Street

New York, NY 10019

Attention: General Counsel
	

If to the Company:	
 	

Ask Jeeves, Inc.

555 12th Street

Suite 500

Oakland, CA 94607

Attention: General Counsel
	

 	
 	

With a copy to Parent at the address set forth above.
	

If to Executive:	
 	

To Executive's address most recently on file with the Company
	

 	
 	

With a copy to David Jacobs

Epstein, Becker & Green, P.C.

1875 Century Park East, Suite 500

Los Angeles, CA 90067

Either
party may change such party's address for notices by notice duly given pursuant hereto. 

5A.    GOVERNING LAW; JURISDICTION.    This Agreement and the legal relations thus created between the parties hereto shall be
governed by and construed under and in accordance with the laws of the State of California without reference to the principles of conflicts of laws. Any and all disputes between the parties which may
arise pursuant to this Agreement will be heard and determined before the appropriate federal court in California; provided, however, if the federal court in California declines jurisdiction, then the
parties may seek relief in the appropriate California state court. The parties acknowledge that such courts have jurisdiction to interpret and enforce the provisions of this Agreement, and the parties
consent to, and waive any and all objections that they may have as to, personal jurisdiction and/or venue in such courts. 

6A.    COUNTERPARTS.    This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument. Executive expressly understands and acknowledges that the Standard Terms and Conditions attached hereto are incorporated herein by
reference, deemed a part of this Agreement and are binding and enforceable provisions of this Agreement. References to "this Agreement" or the use of the term "hereof" shall refer to this Agreement
and the Standard Terms and Conditions attached hereto, taken as a whole. 

4

   
        IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered by its duly authorized officer and Executive has executed and delivered this Agreement on
March 20, 2005. 

	 	 	AJI ACQUISITION CORP.
	

 	
 	

/s/  GREG BLATT      
 By: Greg Blatt

Title: Chairman of the Board and Secretary
	

 	
 	

IAC/INTERACTIVE CORP.

(Solely for purposes of Sections 1A and 3A(c))
	

 	
 	

/s/  GREG BLATT      
 By: Greg Blatt

Title: Senior Vice President,

General Counsel and Secretary
	

 	
 	

STEVE BERKOWITZ
	

 	
 	

/s/  STEVE BERKOWITZ      

5

 
 

STANDARD TERMS AND CONDITIONS    
    

1.    TERMINATION OF EXECUTIVE'S EMPLOYMENT.    

        (a)    DEATH.    In the event Executive's employment hereunder is terminated by reason of Executive's death, the
Company shall pay Executive's designated beneficiary or beneficiaries, within 30 days of Executive's death in a lump sum in cash, Executive's Base Salary through the end of the month in which
death occurs and any Accrued Obligations (as defined in paragraph 1(f) below). 

        (b)    DISABILITY.    If, as a result of Executive's incapacity due to physical or mental illness ("Disability"),
Executive shall have been absent from the full-time performance of Executive's duties with the Company for a period of four consecutive months and, within 30 days after written
notice is provided to Executive by the Board (in accordance with Section 4A hereof), Executive shall not have returned to the full-time performance of Executive's duties,
Executive's employment under this Agreement may be terminated by the Board for Disability. During any period prior to such termination during which Executive is absent from the full-time
performance of Executive's duties with the Company due to Disability, the Company shall continue to pay Executive's Base Salary at the rate in effect at the commencement of such period of Disability,
offset by any amounts payable to Executive under any disability insurance plan or policy provided by the Company, and, to the extent not prohibited by the applicable disability insurance plan or
policy, all benefits which had been provided to Executive as of the time of commencement of the Disability. Upon termination of Executive's employment due to Disability, the Company shall pay
Executive within 30 days of such termination (i) Executive's Base Salary through the end of the month in which termination occurs in a lump sum in cash, offset by any amounts payable to
Executive under any disability insurance plan or policy provided by the Company; and (ii) any Accrued Obligations (as defined in paragraph 1(f) below). 

        (c)    TERMINATION FOR CAUSE/RESIGNATION WITHOUT GOOD REASON.    The Board may terminate Executive's employment under
this Agreement with or without Cause at any time and Executive may resign under this Agreement with or without Good Reason at any time. As used herein, "Cause" shall mean, and be limited to (whether
such conduct occurs prior to or following the Effective Time): (i) the plea of guilty or nolo contendere to, or conviction for, a felony offense
by Executive; provided, however, that after indictment, the Board may suspend Executive from the
rendition of services, but without limiting or modifying in any other way the Company's obligations under this Agreement; (ii) a material breach by Executive of a fiduciary duty owed to the
Company; (iii) a material breach by Executive of any of the covenants made by Executive in Section 2 hereof; (iv) the willful or gross neglect by Executive of the material duties
required by this Agreement other than by reason of Executive's disability; or (v) a knowing and material violation by Executive of any Company policy
pertaining to ethics, wrongdoing or conflicts of interest. Executive shall not be deemed to have engaged in conduct constituting Cause unless (i) Company provides Executive with notice of the
conduct or circumstances allegedly giving rise to a possible Cause determination and, if curable, allows Executive ten (10) days to cure such alleged conduct or circumstances and
(ii) Executive is given the opportunity, with reasonable advance notice, to present to the Board (with counsel) his position with regard to the alleged grounds for termination prior to the
Board making its determination regarding whether there is Cause for Executive's termination. Upon Executive's (A) termination of employment by the Board for Cause prior to the expiration of the
Term or (B) resignation without Good Reason prior to the expiration of the Term, this Agreement shall terminate without further obligation by the Company, except for the payment of any Accrued
Obligations (as defined in Section 1(f) below). 

        (d)    TERMINATION BY THE BOARD OTHER THAN FOR DEATH, DISABILITY OR CAUSE OR RESIGNATION BY EXECUTIVE FOR GOOD
REASON.    Upon termination of Executive's employment prior to expiration of the Term (i) by the Board without Cause (other than for death or Disability) or
(ii) by Executive for Good Reason (as defined below), then (a) the Company shall continue to pay Executive pursuant to its payroll practices, as severance pay, the Base Salary through
the end of the originally scheduled Term over the course thereof (with a minimum severance period of twelve (12) months of Base Salary) and a pro rata Target Bonus for the year of termination
based upon the number of full months in such fiscal year prior to Executive's termination of employment, and 

 

payable
when the Company pays its annual bonuses; provided, that, if so required by Section 409A of the Internal Revenue Code of 1986, as amended
("Section 409A"), such payments will not begin until the date that is six (6) months following Executive's date of termination, and the Company will pay Executive the amounts which would
otherwise have been paid on or prior to such date as of the date payments commence in accordance with this proviso, (b) the Company shall pay Executive within 30 days of the date of such
termination in a lump sum in cash any Accrued Obligations (as defined in Section 1(f) below), (c) notwithstanding the definitions of cause or good reason in the applicable Plan, the
Regular Restricted Stock Units will be vested in one additional 1/5 vesting tranche and the Leadership Stock Units will vest in 1/5 of the units for each anniversary
following the Effective Date prior to Executive's termination of employment plus one additional 1/5 of the units. The payment to Executive of the severance benefits described in this
Section 1(d) shall be subject to Executive's execution and non-revocation of a general release of the Company and its affiliates in a form substantially similar to that used for
similarly situated employees of the Company and its affiliates and Executive's compliance with the restrictive covenants set forth in Section 2. Executive acknowledges and agrees that the
Company's payment of severance benefits described in this Section 1(d) constitutes good and valuable consideration for such release. As used herein, "Good Reason" shall mean the occurrence of
any of the following without Executive's prior written consent: (A) the material reduction in Executive's title, duties or reporting responsibilities as Chief Executive Officer of the Company
(as in place immediately after the Effective Time), excluding for this purpose any such reduction that is an isolated and inadvertent action not taken in bad faith and that is remedied by the Company
promptly after receipt of notice thereof given by Executive or that is authorized pursuant to this Agreement, (B) a reduction in Executive's Base Salary, (C) any material breach of any
material provisions of this Agreement by the Company, (D) the requirement that Executive report to anyone other than the Chief Executive Officer of Parent during at any time prior to the first
anniversary of the Effective Date, or (E) the relocation of Executive's principal place of employment more than 50 miles from the Oakland, California metropolitan area,  provided that in no event
shall Executive's resignation be for "Good Reason" unless (x) an event or circumstance set forth in clauses
(A) through (D) shall have occurred and Executive provides the Company with written notice thereof within 90 days after Executive has knowledge of the occurrence or existence of
such event or circumstance, which notice specifically identifies the event or circumstance that Executive believes constitutes Good Reason, (y) if capable of being cured, the Company fails to
correct the circumstance or event so identified within 30 days after the receipt of such notice, and (z) Executive resigns within 90 days after the date of delivery of the notice
referred to in clause (x) above. 

        (e)    MITIGATION; OFFSET.    In the event of termination of Executive's employment prior to the end of the Term, in
no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of severance benefits or other compensation or benefits. If Executive obtains other
employment during the originally scheduled Term, all future amounts payable by the Company to Executive under Section 1(d)(a) shall be offset by the amount earned by Executive from such other
employment. For purposes of this Section 1(e), Executive shall have an obligation to inform the Company regarding Executive's employment status following termination and during the period
encompassing the Term. 

        (f)    ACCRUED OBLIGATIONS.    As used in this Agreement, "Accrued Obligations" shall mean the sum of (i) any
portion of Executive's accrued but unpaid Base Salary through the date of death or termination of employment for any reason, as the case may be; (ii) accrued vacation pay, to the extent
provided by applicable law, (iii) unpaid expense reimbursements and (iv) any compensation previously earned but deferred by Executive (together with any interest or earnings thereon)
that has not yet been paid, subject to any requirements of Section 409A. Executive shall also be entitled to reimbursement for reimbursable expenses under the Company's medical and dental
insurance plans which are incurred prior to the date of termination of employment, and to conversion and continuation benefits to the extent provided under any benefit plans or applicable law. 

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2.    CONFIDENTIAL INFORMATION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.    

        (a)    CONFIDENTIALITY.    Executive acknowledges that while employed by the Company, Executive will occupy a position
of trust and confidence. Executive shall not, except as may be required to perform Executive's duties hereunder or as required by applicable law, without limitation in time or until such information
shall have become public other than by Executive's unauthorized disclosure, disclose to others or use, whether directly or indirectly, any Confidential Information regarding the Company or any of its
subsidiaries or affiliates. "Confidential Information" shall mean all information about the Company or any of its subsidiaries or affiliates, and their clients and customers that is not disclosed by
the Company or any of its subsidiaries or affiliates without confidentiality restrictions, and that was learned by Executive in the course of employment by the Company or any of its subsidiaries or
affiliates, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information and client and customer lists and all papers, resumes, and records (including computer
records) of the documents containing such Confidential Information. Executive acknowledges that such Confidential Information is specialized, unique in nature and of great value to the Company and its
subsidiaries or affiliates, and that such information gives the Company and its subsidiaries or affiliates a competitive advantage. Executive agrees to deliver or return to the Company, at the
Company's request at any time or upon termination or expiration of Executive's employment or as soon thereafter as possible, all documents, computer tapes and disks, records, lists, data, drawings,
prints, notes and written information (and all copies thereof) furnished by the Company and its subsidiaries or affiliates or prepared by Executive in the course of Executive's employment by the
Company and its subsidiaries or affiliates. If Executive is requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil
investigative demand or similar process) to disclose any of the Confidential Information, Executive shall provide the Company with prompt written notice of any such request or requirement so that the
Company may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Section 2(a). If in the absence of a protective order or other remedy or the
receipt of a waiver by the Company, Executive is nonetheless, in the opinion of Executive's counsel, legally compelled to disclose Confidential Information to any tribunal, Executive may, without
liability under this Section 2(a), disclose only that portion of the Confidential Information which is legally required to be disclosed, provided that Executive uses reasonable efforts to
preserve the confidentiality of the Confidential Information, including, without limitation, by cooperating with the Company to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded to the Confidential
Information by such tribunal. As used in this Agreement, "subsidiaries" and "affiliates" shall mean any company controlled by, controlling or under common control with the Company. 

        (b)    NON-SOLICITATION OF EMPLOYEES.    Executive recognizes that he will possess confidential
information about other employees of the Company and its subsidiaries or affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal
relationships with suppliers to and customers of the Company and its subsidiaries or affiliates. Executive recognizes that the information he will possess about these other employees is not generally
known, is of substantial value to the Company and its subsidiaries or affiliates in developing their respective businesses and in securing and retaining customers, and will be acquired by Executive
because of Executive's business position with the Company. Executive agrees that, during the period of Executive's employment with the Company or any of its subsidiaries and for a period of
12 months beyond Executive's date of termination of employment for any reason following the date hereof (the "Restricted Period"), Executive will not, directly or indirectly, solicit or recruit
any employee of the Company or any of its subsidiaries or affiliates for the purpose of being employed by Executive or by any business, individual, partnership, firm, corporation or other entity on
whose behalf Executive is acting as an agent, representative or employee and that Executive will not convey any such confidential information or trade secrets about other employees of the Company or
any of its subsidiaries or 

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affiliates
to any other person for purposes of such solicitation or recruitment except within the scope of Executive's duties hereunder. 

        (c)    NON-SOLICITATION OF BUSINESS PARTNERS.    During the Restricted Period, Executive shall not,
without the prior written consent of the Company, directly or indirectly, persuade or encourage or attempt to persuade or encourage any business partners or business affiliates of the Company or its
subsidiaries or affiliates (including suppliers, vendors, distributors, licensors or licensees) to (i) cease doing business with the Company or any of its subsidiaries or affiliates or to
(ii) engage in any business competitive with the Company or its subsidiaries or affiliates on its own or with any competitor of the Company or its subsidiaries or affiliates. 

        (d)    PROPRIETARY RIGHTS; ASSIGNMENT.    All Executive Developments shall be made for hire by Executive for the
Company or any of its subsidiaries or affiliates. "Executive Developments" means any discovery, invention, design, method, technique, improvement, enhancement, development, computer program, machine,
algorithm or other work or authorship that (i) relates to the business or operations of the Company or any of its subsidiaries, or (ii) results from or is suggested by any undertaking
assigned to Executive or work performed by Executive for or on behalf of the Company or any of its subsidiaries or affiliates, whether created alone or with others, during or after working hours. All
Confidential Information and all Executive Developments shall remain the sole property of the Company or any of its subsidiaries or affiliates. Executive shall acquire no proprietary interest in any
Confidential Information or Executive Developments developed or acquired during the Term. To the extent Executive may, by operation of law or otherwise, acquire any right, title or interest in or to
any Confidential Information or Executive Development, Executive hereby assigns to the Company all such proprietary rights. Executive shall, both during and after the Term, upon the Company's request,
promptly execute and deliver to the Company all such assignments, certificates and instruments, and
shall promptly perform such other acts, as the Company may from time to time in its discretion deem necessary or desirable to evidence, establish, maintain, perfect, enforce or defend the Company's
rights in Confidential Information and Executive Developments. 

        (e)    COMPLIANCE WITH POLICIES AND PROCEDURES.    During the Term, Executive shall adhere in all material respects to
the policies and standards of professionalism set forth in the Company's policies and procedures as they may exist from time to time and during the period of Executive's employment with the Company or
any of its subsidiaries, Executive shall not, without the prior written consent of the Company, directly or indirectly, engage in or become associated with a business competitive with any business of
the Company and its subsidiaries (a "Competitive Activity"). Executive shall be considered to have become "associated with a Competitive Activity" if Executive becomes directly or indirectly involved
as an owner, principal, employee, officer, director, independent contractor, representative, stockholder, financial backer, agent, partner, member, advisor, lender, or in any other individual or
representative capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity (a "Competitor"). Notwithstanding the foregoing, Executive may
make and retain investments, for investment purposes only, in less than three percent (3%) of the outstanding capital stock of any publicly traded Competitor if the stock of such Competitor is either
listed on a national stock exchange or on the NASDAQ National Market System. Executive hereby consents to, and expressly authorizes the Company's use of Executive's name and likeness in trade
publications and other media for trade or commercial purposes. 

        (f)    REMEDIES FOR BREACH.    Executive expressly agrees and understands that Executive will notify the Company in
writing of any alleged breach of this Agreement by the Company, and the Company will have 30 days from receipt of Executive's notice to cure any such breach. 

        Executive
expressly agrees and understands that the remedy at law for any breach by Executive of this Section 2 will be inadequate and that damages flowing from such breach are
not usually susceptible to being measured in monetary terms. Accordingly, it is acknowledged that upon Executive's violation 

4

 

of
any provision of this Section 2 the Company shall be entitled to obtain from any court of competent jurisdiction immediate injunctive relief and obtain a temporary order restraining any
threatened or further breach as well as an equitable accounting of all profits or benefits arising out of such violation. Nothing in this Section 2 shall be deemed to limit the Company's
remedies at law or in equity for any breach by Executive of any of the provisions of this Section 2, which may be pursued by or available to the Company. 

        (g)    SURVIVAL OF PROVISIONS.    The obligations contained in this Section 2 shall, to the extent provided in
this Section 2, survive the termination or expiration of Executive's employment with the Company and, as applicable, shall be fully enforceable thereafter in accordance with the terms of this
Agreement. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 2 is excessive in duration or scope or is unreasonable or unenforceable
under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. 

3.    INDEMNIFICATION.    The Company shall indemnify and hold Executive harmless for acts and omissions in Executive's capacity as
an officer, director or employee of the Company to the maximum extent permitted under applicable law as provided by its by-laws. 

4.    TERMINATION OF PRIOR AGREEMENTS.    This Agreement constitutes the entire agreement between the parties and terminates and
supersedes any and all prior agreements and understandings (whether written or oral) between Executive and Ask Jeeves with respect to the subject matter of this Agreement including, from and after the
Effective Date, the letter agreement between Executive and the Company, dated January 19, 2005 (the "Prior Agreement"). In the event that the Merger Agreement is terminated, this Agreement
shall be void ab initio and of no further force and effect and the Prior Agreement shall remain fully in effect. Executive acknowledges and agrees that
neither the Company nor anyone acting on its behalf has made, and is not making, and in executing this Agreement, Executive has not relied upon, any representations, promises or inducements except to
the extent the same is expressly set forth in this Agreement. 

5.    ASSIGNMENT; SUCCESSORS.    This Agreement is personal in its nature and none of the parties hereto shall, without the consent
of the others, assign or transfer this Agreement or any rights or obligations hereunder, provided that, in the event of the merger, consolidation, transfer, or sale of all or substantially all of the
assets of the Company with or to any other individual or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor
shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder, and all references herein to the "Company" shall refer to such successor. 

6.    WITHHOLDING.    The Company shall make such deductions and withhold such amounts from each payment and benefit made or
provided to Executive hereunder, as may be required from time to time by applicable law, governmental regulation or order. 

7.    RESIGNATION FROM ALL POSITIONS.    Upon Executive's termination of employment, Executive will at the request of the Company
resign from all directorships and positions at the Company and at any of its subsidiaries or affiliates. 

8.    HEADING REFERENCES.    Section headings in this Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. References to "this Agreement" or the use of the term "hereof" shall refer to these Standard Terms and Conditions and the Employment
Agreement attached hereto, taken as a whole. 

9.    WAIVER; MODIFICATION.    Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall
not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or 

5

 

power
hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. This Agreement shall not be modified in any respect except by a writing
executed by each party hereto. Prior to the Effective Time, the Company and Executive will not amend or modify this Agreement, or waive any rights of any party hereunder, without the prior consent of
Parent. Parent is intended to be, and shall be, a third-party beneficiary of this provision, with full rights of enforcement. Notwithstanding anything to the contrary herein, following the first
anniversary Effective Time neither the assignment of Executive to a different Reporting Officer due to a reorganization or an internal restructuring of the Company or its affiliated companies nor a
change in the title of the Reporting Officer shall constitute a modification or a breach of this Agreement, to the extent such event impacts other chief executive officers of Parent's subsidiaries
generally. 

10.    CODE SECTION 409A.    The parties hereto will act in good faith to equitably restructure any payments provided for in this
Agreement to the extent necessary to comply with Section 409A. 

11.    SEVERABILITY.    In the event that a court of competent jurisdiction determines that any portion of this Agreement is in
violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or
public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement. 

	 	 	AJI ACQUISITION CORP.
	

 	
 	

/s/  AJI ACQUISITION CORP.      

	

 	
 	

STEVE BERKOWITZ
	

 	
 	

/s/  STEVE BERKOWITZ      

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