Document:

Exhibit 10.3

 

EXECUTION COPY

 

$330,000,000

 

CREDIT AGREEMENT

 

Dated as of June [•], 2005

 

 

Among

 

EAGLE BULK SHIPPING INC.

 

as Borrower,

 

CARDINAL SHIPPING LLC

CONDOR SHIPPING LLC

FALCON SHIPPING LLC

GRIFFON SHIPPING LLC

HARRIER SHIPPING LLC

HAWK SHIPPING LLC

KITE SHIPPING LLC

OSPREY SHIPPING LLC

PEREGRINE SHIPPING LLC

SHIKRA SHIPPING LLC

SPARROW SHIPPING LLC

 

and the Additional Guarantors party hereto from time to time,

 

as Guarantors,

 

and

 

THE ROYAL BANK OF SCOTLAND PLC

 

as Lender

 

 

	
  ARTICLE I
  - DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01. Certain Defined Terms

  	
   

  
	
  SECTION 1.02. Interpretation

  	
   

  
	
  SECTION 1.03. Computation of Time
  Periods

  	
   

  
	
  SECTION 1.04. Accounting Terms

  	
   

  
	
   

  	
   

  
	
  ARTICLE II
  - AMOUNTS AND TERMS OF THE ADVANCES

  	
   

  
	
  SECTION 2.01. The Commitment

  	
   

  
	
  SECTION 2.02. Additional Vessels

  	
   

  
	
  SECTION 2.03. Drawdown

  	
   

  
	
  SECTION 2.04. Repayment

  	
   

  
	
  SECTION 2.05. Reduction of Commitment

  	
   

  
	
  SECTION 2.06. Interest

  	
   

  
	
  SECTION 2.07. Interest Rate
  Determination

  	
   

  
	
  SECTION 2.08. Fees

  	
   

  
	
  SECTION 2.09. Master Agreement

  	
   

  
	
  SECTION 2.10. Increased Costs

  	
   

  
	
  SECTION 2.11. Illegality

  	
   

  
	
  SECTION 2.12. Payments and Computations

  	
   

  
	
  SECTION 2.13. Taxes

  	
   

  
	
   

  	
   

  
	
  ARTICLE III
  - CONDITIONS OF LENDING

  	
   

  
	
  SECTION 3.01. Conditions Precedent to
  First Notice of Drawdown

  	
   

  
	
  SECTION 3.02. Conditions Precedent to
  the First Advance

  	
   

  
	
  SECTION 3.03. Conditions Precedent to
  Each Advance for Remaining and Additional Vessels

  	
   

  
	
  SECTION 3.04. Conditions Precedent to
  Each Advance

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV
  - REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  SECTION 4.01. Representations and
  Warranties

  	
   

  
	
   

  	
   

  
	
  ARTICLE V
  - GUARANTY

  	
   

  
	
  SECTION 5.01. Guaranty

  	
   

  
	
  SECTION 5.02. Obligations Absolute

  	
   

  
	
  SECTION 5.03. Guaranty Unconditional

  	
   

  
	
  SECTION 5.04. Waiver of Subrogation;
  Contribution

  	
   

  
	
  SECTION 5.05. Reinstatement

  	
   

  
	
  SECTION 5.06. Waiver

  	
   

  
	
  SECTION 5.07. Payments; No Reductions

  	
   

  
	
  SECTION 5.08. Set-Off

  	
   

  
	
  SECTION 5.09. Continuing Guarantee

  	
   

  
	
  SECTION 5.10. Right of Contribution

  	
   

  
	
  SECTION 5.11. Limitation of Liability

  	
   

  
	
   

  	
   

  
	
  ARTICLE VI
  - FINANCIAL COVENANTS

  	
   

  
	
  SECTION 6.01. Financial Covenants

  	
   

  
	
  SECTION 6.01. Financial Covenants

  	
   

  

 

 

	
  ARTICLE VII
  - COVENANTS OF THE BORROWER

  	
   

  
	
  SECTION 7.01. Affirmative Covenants

  	
   

  
	
  SECTION 7.02. Negative Covenants

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII
  - EVENTS OF DEFAULT

  	
   

  
	
  SECTION 8.01. Events of Default

  	
   

  
	
   

  	
   

  
	
  ARTICLE IX
  - MISCELLANEOUS

  	
   

  
	
  SECTION 9.01. Amendments, Etc

  	
   

  
	
  SECTION 9.02. Notices, Etc

  	
   

  
	
  SECTION 9.03. No Waiver, Remedies

  	
   

  
	
  SECTION 9.04. Costs; Expenses

  	
   

  
	
  SECTION 9.05. Right of Set-off

  	
   

  
	
  SECTION 9.06. Assignments and
  Participations

  	
   

  
	
  SECTION 9.07. Judgment

  	
   

  
	
  SECTION 9.08. Governing Law;
  Submission to Jurisdiction

  	
   

  
	
  SECTION 9.09. Execution in
  Counterparts

  	
   

  
	
  SECTION 9.10. WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 9.11. Entire Agreement

  	
   

  
	
  SECTION 9.12. Severability of
  Provisions

  	
   

  

 

	
  Exhibit A

  	
  -

  	
  Form of Notice of Drawdown

  
	
  Exhibit B

  	
  -

  	
  Form of Note

  
	
  Exhibit C

  	
  -

  	
  Form of Account Charge

  
	
  Exhibit D

  	
  -

  	
  Form of Master Agreement Security Deed

  
	
  Exhibit E

  	
  -

  	
  Form of Mortgage

  
	
  Exhibit F

  	
  -

  	
  Form of Assignment of Earnings

  
	
  Exhibit G

  	
  -

  	
  Form of Assignment of Insurances

  
	
  Exhibit H

  	
  -

  	
  Form of Approved Manager’s Undertaking

  
	
  Exhibit I

  	
  -

  	
  Form of Credit Agreement Supplement

  
	
  Exhibit J

  	
  -

  	
  Form of Compliance Certificate

  

 

ii

 

CREDIT AGREEMENT dated as of June [•], 2005 (as such may be amended, supplemented
(including, without limitation, by way of each Credit Agreement Supplement
executed and delivered from time to time), or otherwise modified, this “Agreement”)
among (i) EAGLE BULK SHIPPING INC., a Marshall Islands corporation (the “Borrower”),
(ii) CARDINAL SHIPPING LLC, CONDOR SHIPPING LLC, FALCON SHIPPING LLC,
GRIFFON SHIPPING LLC, HARRIER SHIPPING LLC, HAWK SHIPPING LLC, KITE SHIPPING
LLC, OSPREY SHIPPING LLC, PEREGRINE SHIPPING LLC, SHIKRA SHIPPING LLC and
SPARROW SHIPPING LLC, each a Marshall Islands limited liability company
(collectively, the “Initial Guarantors”), and the Additional Guarantors
party hereto from time to time, and (ii) THE ROYAL BANK OF SCOTLAND PLC,
as Lender (the “Lender”).

 

PRELIMINARY STATEMENTS:

 

1.              The
Borrower has requested that the Lender advance an aggregate amount up to
$330,000,000 to the Borrower in order (a) together with the proceeds of
the IPO, to fully repay existing indebtedness of the Initial Guarantors under
the Existing Credit Agreement in respect of Delivered Vessels, (b) to
finance a portion of the purchase price of the Remaining Vessels, (c) to
provide working capital in an amount up to $10,000,000, and (d) to finance
a portion of the purchase price of Additional Vessels.

 

2.              The
Initial Guarantors have agreed, in order to induce the Lender to make such
amounts available to the Borrowers hereunder, to guarantee all of the
obligations of the Borrower under this Agreement, the Note and the other Loan
Documents.

 

3.              The
Lender has agreed to make available a reducing revolving credit facility in the
initial principal amount of up to $330,000,000 to the Borrower upon the terms
and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants and agreements contained herein, the parties
hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01. Certain 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):

 

“Account Charges” means each of the
deeds containing, among other things, a first priority account charge made or
to be made by a Guarantor in favor of the Lender in respect of such Guarantor’s
Operating Account and in substantially the form of Exhibit C (as amended
from time to time in accordance with its terms).

 

“Accounting Information” means the
quarterly financial statements and/or the annual audited financial statements
to be provided by the Borrower to the Lender in accordance with Section 7.01(h).

 

 

“Accounting Period” means each
consecutive period of approximately three months (ending on the last day in
March, June, September and December of each year) for which quarterly
Accounting Information is required to be delivered in accordance with Section 7.01(h).

 

“Additional Guarantor” means any
wholly-owned Subsidiary of the Borrower formed under the laws of the Republic
of the Marshall Islands that (i) is acceptable to the Lender in its sole
and absolute discretion, and (ii) shall execute and deliver to the Lender
a Credit Agreement Supplement.

 

“Additional Vessel” means any dry bulk
carrier (other than a Delivered Vessel or Remaining Vessel) which the Borrower
notifies to the Lender pursuant to Section 2.02 as a vessel which the
Borrower wishes to finance or purchase with the assistance of an Advance of
Tranche C, and which the Lender, in its sole and absolute discretion, shall
notify to the Borrower as being acceptable to the Lender, in accordance with Section 2.02,
and which is or is to be registered in the ownership of a Guarantor under the
laws and flag of the Marshall Islands, and everything belonging to such vessel;
and “Additional Vessels” means, collectively, all such vessels approved
by the Lender in accordance with Section 2.02.

 

“Adjusted Net Worth” means, in respect
of an Accounting Period, the amount of Total Assets less Consolidated Debt.

 

“Advance” has the meaning specified in Section 2.01 hereof.

 

“Affiliate” means, as to any Person,
any other Person that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer of such
Person. For purposes of this definition, the term “control” (including the
terms “controlling”, “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 50% or
more of the voting stock, membership or partnership interests, or other similar
interests of such Person or to direct or cause direction of the management and
policies of such Person, whether through the ownership of voting stock,
membership or partnership interests, or other similar interests, by contract or
otherwise.

 

“Agreement” has the meaning specified
in the recital hereto.

 

“Applicable Margin” means ninety-five
hundredths of one percent (0.95%) per annum.

 

“Approved Broker” means, as the
context may require, any of H. Clarkson & Company, Galbraiths Limited,
Braemar Seascope or such other independent London based sale and purchase ship
broker as may from time to time be appointed by the Lender.

 

“Approved Manager” means, as the
context may require, either of (i) Eagle Shipping International (USA) LLC,
a Marshall Islands limited liability company with offices currently at 29
Broadway, New York, New York, or any other company approved by the Lender from
time to time as the commercial manager of a Vessel, which approval shall not
unreasonably be withheld, and (ii) V Ships Management Ltd., an Isle of Man
company with offices at Eaglehurst, Belmont Hill, Douglas, Isle of Man, or any
other company approved by the Lender from time to time as the technical manager
of a Vessel, which approval shall not unreasonably be withheld.

 

2

 

“Approved Manager’s Undertakings”
means each of the undertakings made or to be made by an Approved Manager in
favor of the Lender in respect of a Vessel and in substantially the form of Exhibit H
(as amended from time to time in accordance with its terms).

 

“Assignments of Earnings” means each
of the first priority assignments of earnings made or to be made by a Guarantor
in favor of the Lender in respect of a Vessel and in substantially the form of Exhibit F
(as amended from time to time in accordance with its terms).

 

“Assignments of Insurances” means each
of the first priority assignments of insurances made or to be made by a
Guarantor in favor of the Lender in respect of a Vessel and in substantially
the form of Exhibit G (as amended from time to time in accordance with its
terms).

 

“Available Free Cash” means, for any
Accounting Period, (i) EBITDA less Interest Expenses for such Accounting
Period, minus (ii) a reasonable reserve for drydocking and maintenance for
all Vessels during the twelve months following such Accounting Period.

 

“Availability Date” means the date on
which all the conditions precedent specified in Sections 3.01, 3.02 and, to the
extent applicable, 3.04 hereof have been satisfied (in the opinion of the
Lender) in full and shall in no event be later than July 30, 2005 unless
the Lender otherwise agrees in its sole and absolute discretion.

 

“Borrower” has the meaning specified
in the recital hereof.

 

“Business Day” means a day of the year
on which dealings are carried on in the London interbank market and banks are
open for business in London and not required or authorized to close in New York
City.

 

“Change of Control” means the
occurrence of any of the following:  (a) the
Borrower ceases directly to own one hundred percent (100%) of the membership
interests of each of the Guarantors, or (b) Kelso & Company shall
at any time cease, directly or indirectly, beneficially or of record, to own
shares representing more than 50% of the outstanding voting or economic equity
interests of the Borrower, and a Person or group (as such term is defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) other than Kelso &
Company shall at any time become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 30% of the
outstanding voting or economic equity interests of the Borrower and such Person
or group shall at such time own more shares of the Borrower than Kelso &
Company, or (c) the board of directors of the Borrower ceases to consist
of a majority of the existing directors who constitute the board of directors
as of the date hereof or directors nominated by such existing directors or
Kelso & Company, or (d) Sophocles Zoullas shall cease to be the
chief executive officer of the Borrower.

 

“Classification Society” means in
respect of any Vessel, Bureau Veritas, Det norske Veritas, Nippon Kaiji Kyokai
or, in any case, such other classification society as is selected by the
Borrower with the prior consent of the Lender.

 

“Collateral” means all “Collateral”
referred to in the Collateral Documents and all other property that is or is
intended to be subject to any Lien in favor of the Lender.

 

“Collateral Documents” means (a) this
Agreement (where the context so admits), (b) the Account Charges, (c) the
Master Agreement Security Deed, (d) the Mortgages, (e) the
Assignments of

 

3

 

Earnings, (f) the
Assignments of Insurances, (g) the Approved Manager’s Undertakings, and (h) any
other document that provides for the guarantee of the obligations of any Person
under any Loan Document or that creates, or purports to create, a Lien in favor
of, or for the benefit of, the Lender.

 

“Commitment” means, at any time,
the maximum sum available to be advanced at such time by the Lender to the
Borrower pursuant to Section 2.01 of this Agreement, as such amount may be
reduced from time to time pursuant to Sections 2.05, 2.10, 2.11 or 8.01 hereof.

 

“Commitment Period” has the meaning
specified in Section 2.01.

 

“Commitment Termination Date” means (i) the
tenth anniversary of the date of the drawdown of the first Advance or, if such
day is not a Business Day, the next succeeding Business Day, provided that, if
such succeeding Business Day would fall in the next following calendar month,
the Commitment Termination Date shall be the immediately preceding Business
Day, or (ii) such earlier day as the Commitment shall have been canceled
in full pursuant to the provisions of this Agreement.

 

“Compliance Certificate” means, as of
any relevant date, a certificate of the chief financial officer of the Borrower
which sets forth the calculations required to establish whether the Borrower
was in compliance with the provisions of Article VI as of such date in
substantially the form of Exhibit J.

 

“Consolidated Debt” means, in respect
of an Accounting Period, the aggregate amount of Debt due by the members of the
Group (other than any such Debt owing by any member of the Group to another
member of the Group) as stated in the then most recent Accounting Information.

 

“Credit Agreement Supplement” means a
supplement to this Agreement made or to be made by an Additional Guarantor by
which it becomes a Guarantor hereunder, substantially the form of Exhibit I
(as amended from time to time in accordance with its terms).

 

“Current Assets” means, in respect of
each Accounting Period on a consolidated basis for the Group, the aggregate of
the cash and marketable securities, trade and other receivables from persons
other than a member of the Group realizable within one year, inventories and
prepaid expenses which are to be charged to income within one year less any
doubtful debts and any discounts or allowances given as stated in the then most
recent Accounting Information.

 

“Debt” means in relation to any member of the Group
(the “debtor”):

 

(a)           Financial Indebtedness of the debtor;

 

(b)           liability for any credit to the debtor from a supplier of
goods or services or under any instalment purchase or payment plan or other
similar arrangement;

 

(c)           contingent liabilities of the debtor (including without
limitation any taxes or other payments under dispute) which have been or, under
GAAP, should be recorded in the notes to the Accounting Information;

 

(d)           deferred tax of the debtor; and

 

4

 

(e)           liability under a guarantee, indemnity or similar
obligation entered into by the debtor in respect of a liability of another
person who is not a member of the Group which would fall within (a) to (d) if
the references to the debtor referred to the other person.

 

“Default” means any Event of Default
or any event that would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.

 

“Delivered Vessels” means, collectively,
the vessels described in Part A of Schedule II hereto and, if the
vessel SEA BEAUTY (to be renamed PEREGRINE) shall have been acquired by
Peregrine Shipping LLC prior to the date of the first Advance, such vessel.

 

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

 

“Drawdown Date” means each requested
date for the borrowing of an Advance, which shall not be later than the
Commitment Termination Date.

 

“Eagle Ventures” means Eagle Ventures
LLC, a Marshall Islands limited liability company.

 

“Early Termination Date” has the
meaning ascribed thereto in Section 14 of the Master Agreement.

 

“EBITDA” means, in respect of an
Accounting Period, the aggregate amount of consolidated pre-tax profits of the
Group before extraordinary or exceptional items, depreciation, interest,
rentals under finance leases and similar charges payable as stated in the then
most recent Accounting Information.

 

“Environmental Action” means any
administrative, regulatory or judicial action, suit, demand, demand letter,
claim, notice of non-compliance or violation, investigation, proceeding,
consent order or consent agreement based upon or arising out of any
Environmental Law including without limitation (a) any claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions, or fines, penalties or damages pursuant to
any Environmental Law, and (b) any claim by any third party seeking
damages, contribution, or injunctive relief arising from alleged injury or
threat of injury to health, safety or the environment.

 

“Environmental Laws” means any and all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment,
including, without limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial, toxic
or hazardous substances or wastes or the clean-up or other remediation thereof.

 

“Environmentally Sensitive Material”
means oil, oil products, any other substance which is polluting, toxic or
hazardous or any substance the release of which into the environment is
regulated, prohibited or penalized by or pursuant to any Environmental Law.

 

“Event of Loss”, means any of the following events:  (x) the actual or constructive total loss or
the agreed or compromised total loss of a Vessel; or (y) the capture,
condemnation, confiscation,

 

5

 

requisition (excluding any
requisition for hire for a fixed period not in excess of ninety (90) days),
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 noon Greenwich
Mean Time on the date of such loss or if that is not known 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 noon
Greenwich Mean Time 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 noon Greenwich Mean
Time on the date on which such event is expressed to take effect by the Person
making the same.  Notwithstanding the
foregoing, if the relevant Vessel shall have been returned to the relevant
Borrower following any capture, requisition or seizure referred to in clause
(y) above prior to the date upon which payment if required to be made under Section 2.04(d) hereof,
no Event of Loss shall be deemed to have occurred by reason of such capture,
requisition or seizure.

 

“Events of Default” has the meaning
specified in Section 8.01.

 

“Existing Credit Agreement” means the
Credit Agreement dated as of April 12, 2005 between the Initial Guarantors
and the Lender.

 

“Fair Market Value” means, in relation
to any Vessel, the fair market value of such Vessel determined by means of a
valuation made (at the expense of the Borrower) at any relevant time by an
Approved Broker.  Such valuation shall be
made with or without physical inspection of such Vessel (as the Lender may
require), on the basis of a sale for prompt delivery for cash at arms’ length
on normal commercial terms as between a willing seller and a willing buyer,
free of any existing charter or other contracts of employment, and shall be
conclusive evidence of the fair market value of such Vessel at the date of such
valuation.

 

“Financial Indebtedness” means, in relation to any
member of the Group (the “debtor”), a liability of the debtor:

 

(a)           for principal, interest or any other sum payable in
respect of any moneys borrowed or raised by the debtor;

 

(b)           under any loan stock, bond, note or other security issued
by the debtor;

 

(c)           under any acceptance credit, guarantee or letter of credit
facility made available to the debtor;

 

(d)           under a financial lease, a deferred purchase consideration
arrangement (in each case, other than in respect of assets or services obtained
on normal commercial terms in the ordinary course of business) or any other
agreement having the commercial effect of a borrowing or raising of money by
the debtor;

 

(e)           under any foreign exchange transaction, interest or
currency swap or any other kind of derivative transaction entered into by the
debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount;
or

 

6

 

(f)            under a guarantee, indemnity or similar obligation
entered into by the debtor in respect of a liability of another person which
would fall within (a) to (e) if the references to the debtor referred
to the other person.

 

“GAAP” means accounting principles,
concepts, bases and policies generally adopted and accepted in the United
States of America consistently applied.

 

“Group” means the Borrower and its
Subsidiaries (whether direct or indirect and including, but not limited to, the
Guarantors) from time to time and “member of the Group” shall be construed
accordingly.

 

“Guaranteed Obligations” has the
meaning specified in Section 5.01.

 

“Guarantors” means, collectively, the
Initial Guarantors and each Additional Guarantor, if any, and “Guarantor”
means any of them as the context may require.

 

“Guaranty” means the joint and several
guaranty of the Guarantors provided in Article V as supplemented by each
Credit Agreement Supplement executed and delivered from time to time.

 

“Indemnified Party” has the meaning
specified in Section 9.04(c).

 

“Initial Guarantors” has the meaning
specified in the recital hereto.

 

“Interest Expenses” means, in respect
of an Accounting Period, the aggregate on a consolidated basis of all interest
incurred by any member of the Group (excluding any amounts owing by one member
of the Group to another member of the Group) and any net amounts payable under
interest rate hedge agreements.

 

“Interest Period” means, in relation
to each Advance (or any relevant portion thereof), (x) in the case of the first
such period, the period commencing on the Drawdown Date for such Advance (or
any relevant portion thereof) and ending on the last day of the period selected
by the Borrower pursuant to the provisions below and (y) thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. 
The duration of each such Interest Period shall be three, six or twelve
months (or such other period as may be requested by the Borrower and consented
to by the Lender so as to ensure that the Commitment Termination Date is the
last day of an Interest Period) as the Borrower may, upon notice received by
the Lender not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select or
request;  provided, however,
that:

 

(a)             the Borrower may not select any Interest Period that
ends after (A) any Scheduled Commitment Reduction Date, unless the
aggregate outstanding principal amount of Advances which have Interest Periods
which end or are deemed to end after such Scheduled Commitment Reduction Date
will not exceed the aggregate amount of the Lender’s Commitment on such
Scheduled Commitment Reduction Date or (B) the Commitment Termination
Date;

 

(b)            whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such

 

7

 

Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;

 

(c)             whenever the first day of any Interest Period occurs on
a day in a calendar month for which there is no numerically corresponding day
in the calendar month that succeeds such initial calendar month by the number
of months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar month;

 

(d)            any notice given by the Borrower selecting the duration
of an Interest Period shall be irrevocable and, if the Borrower fail to select
an Interest Period then, subject as provided herein, the Borrower shall be deemed
to have selected an Interest Period of three (3) months;  and

 

(e)             the Lender, in its sole and absolute discretion, is
satisfied that deposits in Dollars for a period equal to such Interest Period
will be available to the Lender in the London Interbank Market at the
commencement of such Interest Period and, if the Lender is not so satisfied,
such Interest Period shall be of such duration as the Lender and the Borrower
shall agree (or, in the absence of such agreement, as the Lender shall
specify).

 

“IPO” means an underwritten initial
public offering registered under the Securities Act of 1933, as amended, of
shares of common stock of the Borrower.

 

“ISM Code” means in relation to its
application to each Guarantor, any relevant Approved Manager, each Vessel and
its operation, the International Safety Management Code (including the
guidelines on its implementation) adopted by the International Maritime
Organization (“IMO”) as Resolution A.741(18) and Resolution A.913(22)
(superseding Resolution A.788(19)), as the same may be amended, supplemented or
replaced from time to time (and the terms “safety management system”, “Safety
Management Certificate” and “Document of Compliance” have the meanings
specified in the ISM Code).

 

“ISPS Code” means in relation to its
application to each Guarantor, any relevant Approved Manager, each Vessel and
its operation, the International Ship and Port Facility Security Code
constituted pursuant to resolution A.924(22) of the IMO adopted by a Diplomatic
Conference of the IMO on Maritime Security on 13 December 2002 and now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974
(as amended).

 

“Kelso & Company” means,
collectively, Kelso & Company, L.P., a Delaware limited partnership,
and its Affiliates.

 

“Lender” has the meaning ascribed
thereto in the recital hereof.

 

“Lender’s Account” means the account
of the Lender maintained by the Lender with American Express Bank Limited, 3
World Financial Center, 23rd Floor, New York, New York 10285-2300,
Account No. 00261123, SWIFT: 
AEIBUS33, or such other account as may from time to time be notified by
the Lender to the Borrower.

 

8

 

“Lien” means any lien, security
interest or other charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the lien or retained
security title of a conditional vendor.

 

“Loan Documents” means this Agreement,
the Master Agreement, the Note and the Collateral Documents.

 

“Mandatory Cost Rate”  means the percentage rate which represents
the cost to the Lender, relative to the Advances, of compliance with the
requirements of the Bank of England, the Financial Services Authority or any
other regulatory authority, as determined by the Lender in accordance with the
formula detailed in Schedule I hereto.

 

“Margin Stock” has the meaning
specified in Regulation U of the Board of Governors of the Federal Reserve
System and any successor regulations thereto, as in effect from time to time.

 

“Master Agreement” means the Master
Agreement (on the 1992 ISDA (Multicurrency-Cross Border) form as amended) dated
as of the date hereof between the Borrower and the Lender pursuant to which the
Borrower and the Lender may enter into one or more interest rate swap
transactions to hedge the Borrower’ exposure under this Agreement to interest
rate fluctuations, and includes all transactions from time to time entered into
and confirmations from time to time exchanged under such Master Agreement, and
any amending, supplementing or replacement agreements made from time to time.

 

“Master Agreement Security Deed” means
the deed containing, among other things, a charge in respect of the Master
Agreement made or to be made by the Borrower in favor of the Lender in
substantially in the form of Exhibit D (as amended from time to time in
accordance with its terms).

 

“Material Adverse Effect” means, with
respect to any Person, a material adverse effect upon (a) the condition
(financial or otherwise), operations, assets or business of such Person and its
Subsidiaries, taken as a whole, (b) the ability of such Person to perform
any of its material obligations under any Loan Document to which it is a party,
or (c) the material rights and remedies of the Lender under any Loan
Document to which such Person is a party.

 

“Memorandum of Agreement” means, in
relation to a Remaining Vessel or an Additional Vessel, a memorandum of
agreement executed by the owner of such Vessel, as seller, and a Guarantor, as
buyer, providing for the purchase by such Guarantor of such Vessel (as amended
from time to time in accordance with its terms).

 

“Mortgage” means each of the first
preferred mortgages made or to be made by a Guarantor in favor of the Lender in
respect of a Vessel and in substantially the form of Exhibit E (as amended
from time to time in accordance with its terms).

 

“Note” means the promissory note of
the Borrower payable to the order of the Lender, in substantially the form of Exhibit B
hereto, evidencing the aggregate indebtedness of the Borrower to the Lender
resulting from the Advances made or to be made by the Lender.

 

“Notice of Drawdown” has the meaning
specified in Section 2.03(a).

 

“Obligors” means, collectively, the
Borrower and the Guarantors, and “Obligor” means any of them as the
context may require.

 

9

 

“Operating Accounts” means each of the accounts opened or to be
opened in the name of a Guarantor with the Lender (or such other account with
any other branch of the Lender or with a bank or financial institution other
than the Lender (whether associated with the Lender or not) substituted
therefor pursuant to this Agreement).

 

“Other Taxes” has the meaning specified in Section 2.13(b).

 

“Permitted Encumbrances” has the
meaning specified in the Mortgages.

 

“Person” means an individual,
partnership, corporation (including a business trust), joint stock company,
limited liability company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency thereof.

 

“Public Offering Documents” means the
Borrower’s registration statement on Form S-1, as filed with the
Securities Exchange Commission on [•], and each other agreement or document
executed in connection with the IPO (as amended from time to time).

 

“RBS LIBOR” means, for any Interest
Period, the rate per annum at which deposits in Dollars in an amount
approximately equal to the Advances (or any relevant portion thereof) are (or
would have been) offered by the Lender to leading banks in the London Interbank
Dollar Market at or about 11.00 a.m. (London time) on the second Business
Day prior to the commencement of such Interest Period for a period equal to
such Interest Period and for delivery on the first Business Day thereof.

 

“Relevant Interest Rate” means RBS
LIBOR, or, in the case where a Transaction is to be, or has been entered into
under the Master Agreement and the Borrower have not made an election pursuant
to Section 2.06(d), TELERATE.

 

“Relevant Percentage” shall mean, in
relation to any Vessel that is sold or becomes the subject of an Event of Loss,
a fraction (expressed as a percentage, rounded up to the nearest tenth of a
percent) where (i) the numerator is the Fair Market Value of the Vessel
sold or lost, and (ii) the denominator is the aggregate amount of the Fair
Market Values of all Vessels (including the Vessel sold or lost) subject to a
Mortgage immediately prior to such sale or loss, in each case determined on the
basis of the most recent valuation delivered pursuant to Section 3.03(c)(iv) or
Section 7.01(l).

 

“Remaining Vessels” means the vessels
described in Part B of Schedule II hereto, but shall not include the
vessel SEA BEAUTY (to be renamed PEREGRINE) if such vessel shall have been
acquired by Peregrine Shipping LLC prior to the date of the first Advance.

 

“Scheduled Commitment Reduction Date”
means the day six months after the fifth anniversary of the date of the
drawdown of the first Advance and each day every six (6) months thereafter
until and including the Commitment Termination Date or, if any such day is not
a Business Day, the next succeeding Business Day, provided that, if such
succeeding Business Day would fall in the next following calendar month, the
Scheduled Commitment Reduction Date shall be the immediately preceding Business
Day.

 

“Securities and Exchange
Commission” shall mean the United States Securities and Exchange Commission
or any other governmental authority of the United States of America at the time
administrating the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, or the Securities Exchange Act of 1934, as amended.

 

10

 

“Solvent” means, with respect to any
Person on a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the
present fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
an unreasonably small capital. 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.

 

“Subsidiary” of any Person means any
corporation, limited liability company, partnership, joint venture, trust or
estate or other entity of which (or in which) more than 50% of (a) the
voting stock or membership interests of such corporation or company, (b) the
interest in the capital or profits of such partnership or joint venture or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.

 

“Tangible Fixed Assets” means, in
respect of an Accounting Period, the value (less depreciation computed in
accordance with GAAP) on a consolidated basis of all tangible fixed assets of
the Group as stated in the then most recent Accounting Information;  provided that, for the purposes of
determining compliance with the covenants set forth in Article VI, the
amount of Tangible Fixed Assets attributable to the Vessels shall be equal to
the aggregate market value of the Vessels (as determined by an independent
London shipbroker acceptable to the Lender) rather than the value of the
Vessels as stated in the then most recent Accounting Information.

 

“Taxes” has the meaning specified in Section 2.13(a).

 

“TELERATE”  means, for any
Interest Period:

 

(a)             the rate per annum equal to the offered quotation for
deposits in Dollars for a period equal to, or as near as possible equal to,
that Interest Period or other relevant period which appears on Telerate Page 3750
at or about 11.00 a.m. (London time) on the second Business Day prior to
the commencement of that Interest Period or other period (and, for the purposes
of this Agreement, “Telerate Page 3750” means the display designated as “page 3750”
on the Telerate Service or such other page as may replace Page 3750
on that service for the purpose of displaying rates comparable to that rate or
on such other service as may be nominated by the British Bankers’ Association
as the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for Dollars); or

 

(b)            if no rate is quoted on Telerate Page 3750, the rate
per annum determined by the Lender to be the rate per annum which leading banks
in the London Interbank Market offer for deposits in Dollars in the London
Interbank Market at or about 11.00 a.m. (London time) on the second
Business Day prior to the commencement of that Interest Period or other period
for a period equal to that Interest Period or other period and for delivery on
the first Business Day of it;

 

11

 

“Total Assets” means, in respect of an
Accounting Period, the aggregate of Current Assets and Tangible Fixed Assets.

 

“Tranche” means any of Tranche A,
Tranche B or Tranche C, as the context may require.

 

“Tranche A” has the meaning specified
in Section 2.01(a).

 

“Tranche B” has the meaning specified
in Section 2.01(b).

 

“Tranche B Repayment Date” means,
initially, the day eighteen months after the date of the drawdown of the first
Advance;  provided, however, the Lender
shall be entitled to conduct a review of the Borrower’s utilization of Advances
of Tranche B prior to such initial Tranche B Repayment Date (and annually
thereafter until the Commitment Termination Date) and, if following such
review, the Lender in its sole and absolute discretion determines to extend the
date for repayment of the Advances of Tranche B for twelve months, then the
Lender shall notify the Borrower accordingly and the Tranche B Repayment Date then
in effect shall be so extended for twelve months.

 

“Tranche C” has the meaning specified
in Section 2.01(c).

 

“Transaction” has the meaning ascribed
thereto in the introductory paragraph of the Master Agreement.

 

“Vessels” means, collectively, the
Delivered Vessels, the Remaining Vessels and the Additional Vessels, and
everything belonging to each such vessel, in the case of each Remaining Vessel,
to be purchased by the Initial Guarantor specified in Part B of Schedule II,
and, in the case of each Additional Vessel, to be purchased by a Guarantor, and
in each case registered or to be registered by such Guarantor in its ownership
under the laws and flag of the Republic of the Marshall Islands, and “Vessel”
means any of them as the context may require.

 

SECTION 1.02. Interpretation.  When
used in this Agreement, (i) the words “herein”, “hereof” and “hereunder”
and words of similar import shall refer to this Agreement as a whole and not to
any provision of this Agreement, and the words “Article”, “Section”, “Schedule”
and “Exhibit” shall refer to Articles and Sections of, and Schedules and
Exhibits to, this Agreement unless otherwise specified and (ii)whenever the
context so requires, the neuter gender includes the masculine or feminine, the
masculine gender includes the feminine, and the singular number includes the
plural, and vice versa.

 

SECTION 1.03. Computation of Time Periods.  In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”.

 

SECTION 1.04. Accounting Terms.  All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES

 

SECTION 2.01. The Commitment.  The
Lender agrees, on the terms and conditions hereinafter set forth, to make
available advances (each an “Advance”) to the Borrower from time to time
on any Business Day during the period from the Availability Date until the
Commitment Termination Date

 

12

 

(the “Commitment Period”)
in an aggregate amount not to exceed at any time an aggregate principal amount
of $330,000,000 in three (3) Tranches as follows:

 

(a)            Up
to an aggregate principal amount of $150,000,000 (“Tranche A”), in up to
four (4) Advances, whereof:

 

(i)              the first Advance shall be in an amount up to
$60,000,000 ($90,000,000 if the vessel SEA BEAUTY (to be renamed PEREGRINE)
shall have been acquired by Peregrine Shipping LLC prior to the date of the
first Advance), and shall be applied by the Borrower, together with the
proceeds of the IPO, to assist the Initial Guarantors fully to repay
indebtedness under the Existing Credit Agreement in relation to the Delivered
Vessels; and

 

(ii)             each additional Advance shall be applied by the Borrower
to assist the relevant Initial Guarantor to finance up to 100% of the purchase
price of the relevant Remaining Vessel under the relevant Memorandum of
Agreement;

 

(b)            Up
to an aggregate principal amount of $10,000,000 (“Tranche B”), in one or
more Advances for working capital purposes; 
provided, however, no Advance of Tranche B shall be made on or after the
Tranche B Repayment Date; and

 

(c)            The
balance of the Commitment, after deducting the aggregate principal amount of
all Advances of Tranche A or Tranche B outstanding as of the date of any Notice
of Drawdown (such balance as of any relevant date, “Tranche C”), in one
or more Advances, whereof each such Advance shall be applied by the Borrower to
assist a Guarantor to finance a portion of the purchase price of an Additional
Vessel under the relevant Memorandum of Agreement, and shall be an amount
which, together with all other Advances of the Commitment then outstanding, shall
not exceed sixty percent (60%) of the aggregate amount of the Fair Market
Values of all Vessels which would be subject to a Mortgage immediately after
the making of such Advance (determined on the basis of the most recent
valuation for each Vessel delivered pursuant to Section 3.03(c)(iv)).

 

Within the limits of the Commitment and each
Tranche of the Commitment, and of Section 2.02 hereof, the Borrower may
borrow under this Section 2.01, repay pursuant to Section 2.04 and
reborrow under this Section 2.01.

 

SECTION 2.02. Additional Vessels.  Where
the Borrower wishes to borrow an Advance of Tranche C in relation to the
proposed purchase of a vessel by a Guarantor, the Borrower shall notify the
Lender (i) the name of such vessel (ii) the general description and
deadweight tonnage (which shall be between 25,000 and 85,000 deadweight tons), (iii) the
age of such vessel (which shall not be greater than ten years at the date of
the proposed purchase), (iv) the identity of the current owner, (v) the
identity of the Guarantor, (vi) the purchase price of such vessel paid or
to be paid by such Guarantor, and (vii) such further information as the
Lender may require.  If available, the
Borrower shall also provide the Lender with a true and complete copy of the
relevant Memorandum of Agreement for such vessel.  The Lender shall, as soon as reasonably
practical, notify the Borrower of the Lender’s acceptance or rejection of such
vessel for the purposes of an Advance of Tranche C, which acceptance or
rejection shall be in the absolute discretion of the Lender, taking into
account, among other things, (a) the employment of such vessel, and (b) the
Lender’s satisfaction in its sole discretion as to the Borrower’s ability to
raise additional capital via the equity markets of an amount acceptable to the
Lender.  In the absence of any acceptance
of a vessel being notified, the Lender shall be under no obligation to make any
Advance for such vessel.

 

13

 

SECTION 2.03. Drawdown.  (a) 
Each Advance shall be made on notice given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the proposed Drawdown Date
by the Borrower to the Lender.  Each such
notice of drawdown (a “Notice of Drawdown”) shall be in writing, in
substantially the form of Exhibit A hereto, specifying therein (i) the
requested Drawdown Date, which shall be a Business Day during the Commitment
Period, (ii) the relevant Tranche and the aggregate principal amount of
the Advance thereof requested on such Drawdown Date, (iii) the duration of
the initial Interest Period applicable to such Advance, and (iv) the
recipients (including payment instructions) of the proceeds of such
Advance.  Upon fulfillment of the
applicable conditions set forth in Article III, the Lender will make such
funds available to, or for the account of, the Borrower according to the
payment instructions set forth in the Notice of Drawdown.  Each Advance shall be $5,000,000 ($1,000,000
in the case of Tranche B) or an integral multiple of $1,000,000 in excess
thereof.  Anything in this subsection (a) above
to the contrary notwithstanding, there may not be outstanding more than twenty
(20) separate Advances at any time.

 

(b)            Each
Notice of Drawdown shall be irrevocable and binding on the Borrower.  The Borrower shall indemnify the Lender
against any loss, cost or expense incurred by the Lender as a result of any
failure to fulfill on or before the Drawdown Date specified in any Notice of
Drawdown the applicable conditions set forth in Article III, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Lender
to fund the Advance to be made by the Lender on such Drawdown Date when such
Advance, as a result of such failure, is not made on such date.

 

SECTION 2.04. Repayment.  (a) 
On any day on which the aggregate principal amount of the Advances exceeds the
aggregate amount of the Lender’s Commitment, the Borrower shall repay the
principal amount of Advances in an amount equal to such excess.

 

(b)            The
Borrower shall repay any Advance of Tranche B on or before the Tranche B
Repayment Date.

 

(c)            The
Borrower shall repay in full all outstanding Advances immediately upon the
occurrence of a Change of Control.

 

(d)            In
addition to, and without limitation of, the provisions of Section 7.01(l),
on (i) the date of any transfer of title of a Vessel by the relevant
Guarantor, and (ii) the earlier of (A) the date which is one hundred
fifty (150) days following an Event of Loss of a Vessel, and (B) the date
of receipt by the relevant Guarantor, the Borrower or the Lender of the
insurance proceeds relating to such Event of Loss, the Borrower shall repay the
Advances in an amount equal to the Relevant Percentage of the Advances
outstanding immediately prior to such sale or Event of Loss.

 

(e)            The
Borrower may, upon not less than fourteen (14) Business Days’ notice to the
Lender identifying the Advance to be prepaid in whole or in part and stating
the proposed date and aggregate principal amount of such prepayment (which
notice shall be irrevocable), and if such notice is given the Borrower shall,
prepay the outstanding principal amount of such Advance in whole or in part; provided,
however, that each partial prepayment shall be in an aggregate principal
amount not less than $5,000,000 or an integral multiple of $5,000,000 in excess
thereof (or, if the aggregate outstanding principal amount of such Advance is
less, such aggregate principal amount).

 

(f)             Anything
contained in this Agreement to the contrary notwithstanding, all then
outstanding Advances shall be repaid on the Commitment Termination Date.

 

14

 

(g)            With
respect to each repayment of Advances required by this Section 2.04, the
Borrower may designate the specific Advance or Advances pursuant to which a
repayment is made, provided that all Advances with Interest Periods
ending on such date of required repayment shall be paid in full prior to the
payment of any other Advances.  In the
absence of a designation by the Borrower as described in the preceding
sentence, the Lender shall, subject to the preceding provisions of this subsection (g),
make such designation in its sole reasonable discretion with a view, but no
obligation, to minimize breakage costs owing pursuant to Section 9.04(b) hereof.

 

(h)            Each
such repayment of any Advance or relevant part thereof shall be accompanied by
accrued interest to the date of such prepayment on the principal amount so
repaid plus any amount payable pursuant to Section 9.04(b) hereof.

 

SECTION 2.05. Reduction of Commitment.  (a) On
each Scheduled Commitment Reduction Date, the Lender’s Commitment shall be
reduced by an amount equal to $20,500,000; 
provided, however the Lender’s Commitment shall be reduced to nil on the
Commitment Termination Date.

 

(b)           The
Commitment shall be cancelled in full immediately upon the occurrence of a
Change of Control.

 

(c)           The
Borrower may, upon not less than five (5) Business Days’ notice to the Lender,
terminate in whole or reduce in part the unused portion of the Commitment; provided,
however, that each partial reduction of the Commitment shall be in an
aggregate principal amount of $5,000,000 or an integral multiple of $5,000,000
in excess thereof.

 

SECTION 2.06. Interest. (a) Ordinary Interest. Subject to
subsection (c) of this Section 2.06, the Borrower shall pay
interest on the aggregate unpaid principal amount of each Advance from the
relevant Drawdown Date until such principal amount shall be paid in full, at a
rate per annum equal at all times during each Interest Period for such Advance
to the sum of (i) the Relevant Interest Rate for such Interest Period plus
(ii) the Applicable Margin plus (iii) the Mandatory Cost Rate in
effect from time to time, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three (3) months,
on each day that occurs during such Interest Period every three (3) months
from the first day of such Interest Period.

 

(b)            Default
Interest.  The Borrower shall pay on
demand interest on the unpaid principal amount of each Advance and on the
unpaid amount of all interest, fees and other amounts then due and payable
hereunder that is not paid when due from the due date thereof to the date paid,
at a rate per annum equal at such time to two percent (2%) per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a) above.

 

(c)            Interest
Upon Default.  Upon the occurrence
and during the continuance of any Event of Default (or, in the case of any
involuntary proceeding described in Section 8.01(f), a Default), the
Borrower shall pay interest on the aggregate unpaid principal amount of each
Advance from the date of the occurrence of such Event of Default or Default, as
the case may be, until such Event of Default or Default, as the case may be,
shall have been cured or waived, at a rate per annum equal to two percent (2%)
per annum above the rate per annum required to be paid on such Advance pursuant
to clause (a) above.

 

(d)            Interest
Rate when Transactions under Master Agreement.  If a Transaction is to be entered into under
the Master Agreement, the Relevant Interest Rate for each Interest Period

 

15

 

applicable to any Advance the
subject of the Transaction (commencing with the first Interest Period relating
to such Transaction) shall be TELERATE unless the Borrower, by giving written
notice (which shall be irrevocable) to the Lender not later than 11.00 A.M.
(New York City time) three Business Days before the commencement of such first
Interest Period, elects that the Relevant Interest Rate shall be RBS LIBOR
rather than TELERATE.

 

SECTION 2.07. Interest Rate Determination.  The Lender shall give prompt
notice to the Borrower of the applicable interest rate determined by the Lender
for purposes of Section 2.06(a).

 

SECTION 2.08. Fees.  (a) 
The Borrower agrees to pay to the Lender a non-refundable arrangement fee of
$1,200,000, of which $150,000 has been paid and $1,050,000 shall be payable on
the Availability Date.

 

(b)            The
Borrower agrees to pay to the Lender a commitment fee on the unused portion of
the Lender’s Commitment from the Availability Date until the Commitment
Termination Date, calculated on a 360 day year basis, at a rate per annum equal
to 0.40%, payable quarterly in arrears.

 

SECTION 2.09. Master Agreement.  (a) 
If for any reason any Advance is not drawn down under this Agreement but
nonetheless a Transaction has been entered into under the Master Agreement in
relation thereto then, subject to Section 2.09(c), the Lender shall be
entitled but not obliged to amend, supplement, cancel, net out, terminate,
liquidate, transfer or assign all or any part of the rights, benefits and
obligations created by the Master Agreement and/or to obtain or re-establish
any hedge or related trading position in any manner and with any Person the
Lender in its absolute discretion decides, and in the event of the Lender
exercising any part of its entitlement aforesaid the Borrower’s continuing
obligations under the Master Agreement shall, unless agreed otherwise by the
Lender, be calculated so far as the Lender considers it practicable by
reference to the reduction schedule for the Commitment taking into account
the fact that such Advance has not been advanced.

 

(b)           In the case of
repayment of all or part of any Advance under this Agreement or a reduction of
the Commitment (whether scheduled or not) then, subject to Section 2.09(c),
the Lender shall be entitled but not obliged to amend, supplement, cancel, net
out, transfer or assign all or such part of the rights, benefits and
obligations created by the Master Agreement which equate or relate to the
Advance so repaid or prepaid or the part of the Commitment so reduced and/or to
obtain or re-establish any hedge or related trading position in any manner and
with any person the Lender in its absolute discretion decides, and in the case
of such repayment or a partial prepayment or reduction of part of the Commitment
and the Lender exercising any part of its entitlement as aforesaid the Borrower’s
continuing obligations under the Master Agreement shall, unless agreed
otherwise by the Lender, be calculated so far as the Lender considers it
practicable by reference to the reduction schedule (as it may be amended)
for the Commitment taking account of the fact that more or less than the
originally scheduled amount of the Commitment remains outstanding.

 

(c)           If either (i) less
than the full amount of any Advance is drawn down under this Agreement, or (ii) more
or less than the originally scheduled amount of the Commitment remains
outstanding following a repayment or a reduction of the Commitment under this
Agreement, and the Lender in its absolute discretion agrees, following a
written request of the Borrower, that the Borrower may be permitted to maintain
all or part of a Transaction in an amount not wholly matched with or linked to
all or part of an Advance, the Borrower shall within ten (10) days of
being notified by the Lender of such requirement provide the Lender with, or
procure the provision to the Lender

 

16

 

of, such additional security as
shall in the opinion of the Lender acting reasonably be adequate to secure the
performance of such Transaction, which additional security shall take such
form, be constituted by such documentation, and be entered into between such
parties, as the Lender in its absolute discretion may approve or require, and
each document comprising such additional security shall constitute a Credit
Support Document (as defined in Section 14 of the Master Agreement).

 

(d)            The
Borrower shall on the first written demand of the Lender indemnify the Lender
in respect of all loss, cost and expense (including the fees of legal advisers)
incurred or sustained by the Lender as a consequence of or in relation to the
effecting of any matters or transactions referred to in this Section 2.09.

 

(e)            Without
prejudice to or limitation of the obligation of the Borrower under Section 2.09(d),
in the event that the Lender exercises any of its rights under Section 2.09(a) or
(b) and such exercise results in all or part of a Transaction being
terminated, such termination shall be treated under the Master Agreement in the
same manner as if it were a Terminated Transaction (as defined in Section 14
of the Master Agreement) effected by the Lender after an Event of Default by
the Borrower and, accordingly, the Lender shall be permitted to recover from
the Borrower payment for early termination calculated in accordance with the
provisions of Section 6(e)(i) of the Master Agreement.

 

SECTION 2.10. Increased Costs.  (a) 
If, due to either (i) the introduction of or any change (other than any
change in the Mandatory Cost Rate) in or in the interpretation of any law or
regulation or (ii) the compliance by the Lender with any guideline or
request from any central bank or other governmental authority in any case
introduced, changed, interpreted or requested after the date hereof (whether or
not having the force of law), there shall be (x) imposed, modified or deemed
applicable any reserve, special deposit or similar requirement against assets
held by, or deposits in or for the account of, the Lender or (y) imposed on the
Lender any other condition relating to this Agreement or the Advances, and the
result of any event referred to in clause (x) or (y) shall be to increase the
cost to the Lender of agreeing to make or making, funding or maintaining the
Advances, then the Borrower shall from time to time, upon demand by the Lender,
pay to the Lender additional amounts sufficient to compensate the Lender for
such increased cost;  provided, however,
that, before making any such demand, the Lender agrees to use its best efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different lending office for monitoring the Advances if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of the Lender, be
otherwise disadvantageous to the Lender. 
A certificate as to the amount of such increased cost, submitted to the
Borrower by the Lender, shall be conclusive and binding for all purposes,
absent manifest error.

 

(b)            If
the Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental or monetary
authority in regard to capital adequacy (whether or not having the force of
law), in any case in which such law, regulation, guideline or request became
effective or was made after the date hereof, has or would have the effect of
reducing the rate of return on the capital of, or maintained by, the Lender or
any corporation controlling the Lender as a consequence of the Lender’s
Commitment or the Advances hereunder and other commitments of this type, by
increasing the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender, to a level below that which
the Lender or any corporation controlling the Lender could have achieved but
for such adoption, effectiveness, change or compliance (taking into account the
Lender’s or such corporation’s policies with respect to capital adequacy) then
the Borrower shall, from time to time, pay the Lender, upon demand by the
Lender,

 

17

 

such additional amount as may be
specified by the Lender as being sufficient to compensate the Lender for such
reduction in return, to the extent that the Lender reasonably determines such
reduction to be attributable to the existence of the Lender’s commitment to
lend hereunder; provided  however, that before making such demand,
the Lender agrees to use its best efforts (consistent with its internal policy
and legal and regulatory restrictions) to enter into consultations with the
Borrower in good faith and without prejudice to the rights of the Lender under
this Agreement and the other Loan Documents with regard to the impact of such
law, regulation, guideline or request and the amount of compensation required
by the Lender as aforesaid.  A
certificate as to such amounts submitted to the Borrower by the Lender shall be
conclusive and binding for all purposes, absent manifest error.

 

SECTION 2.11. Illegality. 
Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for the Lender to perform its obligations
hereunder to make the Advances or to fund or maintain the Advances or any
portion thereof hereunder, then, upon written notice by the Lender to the
Borrower, the Lender and the Borrower shall negotiate in good faith to agree on
terms for the Lender to continue the Advances or any portion thereof on a basis
which is not unlawful.  If no agreement
shall be reached between the Borrower and the Lender within a period which in
the sole discretion of the Lender is reasonable, the Lender shall be entitled
to give notice to the Borrower that the obligation of the Lender to make or
maintain the Advances or any portion thereof shall be forthwith terminated and
the amount of the Lender’s Commitment shall be reduced accordingly, and
thereupon the aggregate outstanding principal amount of the Advances or any
relevant portion thereof shall become due and payable in full, together with
accrued interest thereon and other sums payable hereunder, and such amounts as
the Borrower shall be obligated to reimburse the Lender pursuant to Section 9.04(b) if
earlier prepayment is required by any law, regulation and/or regulatory
requirement;  provided, however,
that, before making any such demand, the Lender shall designate a different
lending office for monitoring the Advances if the making of such a designation
would avoid the need for giving such notice and demand and would not, in the
judgment of the Lender, be otherwise disadvantageous to the Lender.

 

SECTION 2.12. Payments and Computations.  (a) 
The Borrower shall make each payment hereunder and under the Note not later
than 11:00 A.M. (New York City time) on the day when due in Dollars to the
Lender at the Lender’s Account in same day funds.  Partial payments of overdue amounts in respect
of fees, expenses, interest and/or principal shall (unless specifically
provided for elsewhere herein or in any other Loan Document) be applied to the
payment of such overdue fees, expenses, interest and/or principal, as the case
may be, in such order as the Lender may determine.

 

(b)            The
Borrower hereby authorizes the Lender, if and to the extent payment of
principal, interest or fees owed to the Lender is not made when due hereunder
or under the Note held by the Lender, to charge from time to time against any
or all of the accounts of the Borrower with the Lender any amount so due.

 

(c)            All
computations of interest shall be made by the Lender, 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 is payable.  Each determination by the Lender of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.

 

(d)            Whenever
any payment hereunder or under the Note shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or

 

18

 

commitment fee, as the case may
be;  provided, however, if
such extension would cause payment of interest on or principal of the Advances
to be made in the next following calendar month, such payment shall be made on
the next preceding Business Day.

 

SECTION 2.13. Taxes.  (a) All
payments by the Borrower of principal of, and interest on, the Advances, the
Note and all other amounts payable by the Borrower hereunder shall be made free
and clear of, and without deduction or withholding for or on account of any
present or future income or franchise taxes and other taxes, fees, levies,
duties, withholdings or other charges of any nature whatsoever now or hereafter
imposed, withheld, collected or assessed by any taxing authority, but excluding
(such non-excluded items being called “Taxes”), in the case of the
Lender, (i) net income, capital, doing business, and franchise taxes
imposed on the Lender by the jurisdiction under the laws of which the Lender is
organized or any political subdivision or taxing authority thereof or therein,
or by any jurisdiction in which the Lender’s lending office with respect to
this Agreement is located, as the case may be, or any political subdivision or
taxing authority thereof or therein; and (ii) any taxes, fees, levies,
duties, withholdings or other charges that would not have been imposed but for
the failure of the Lender to comply with any certification, identification or
other similar requirement with which the Lender is in its reasonable judgment
eligible to comply, to establish entitlement to exemption from such tax.  If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under the
Note to the Lender, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions of Taxes (including
deductions of Taxes applicable to additional sums payable under this Section 2.13)
the Lender receives an amount equal to the sum it would have received had no
such deductions of Taxes been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law;  provided, however,
that the Lender shall designate a different lending office for monitoring the
Advances if, in the judgment of the Lender, such designation would avoid the
need for, or reduce the amount of, any Taxes required to be deducted from or in
respect of any sum payable hereunder to the Lender and would not, in the
judgment of the Lender, be otherwise disadvantageous to the Lender.

 

(b)            In
addition, the Borrower agree to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under the Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or
the Note (hereinafter referred to as “Other Taxes”).

 

(c)            The
Borrower will indemnify the Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) paid by the
Lender and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto.  This indemnification shall be made within 45
days from the date the Lender makes written demand therefor.

 

(d)            Within
30 days (or as soon thereafter as available) after the date of any payment of
Taxes under this Section 2.13, the Borrower will furnish to the Lender, at
its address referred to in Section 9.02, appropriate evidence of payment
thereof.

 

(e)            The
Lender shall, on or prior to the Availability Date and from time to time
thereafter if requested in writing by the Borrower (but only so long as the
Lender is and remains lawfully able to do so), provide the Borrower with two
duly completed copies of Internal Revenue Service Form W-8BEN or W-8ECI,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that the Lender is entitled to benefits under an income tax
treaty to which the United States is

 

19

 

a party that reduces the rate of
withholding tax on payments under this Agreement or the Note or certifying that
the income receivable pursuant to this Agreement or the Note is effectively
connected with the conduct of a trade or business in the United States.

 

(f)             For
any period with respect to which the Lender has failed to provide the Borrower
with the appropriate forms described in subsection (e) above (other
than if such failure is due to a change in law occurring after the date
on which the Lender was originally required to provide such forms, or if such
forms are otherwise not required under subsection (e) above), the
Lender shall not be entitled to increased payments or indemnification under subsection (a) or
(c) above with respect to Taxes imposed by the United States;  provided, however, that should
the Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Borrower such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Lender and would not, in the judgment of the Borrower,
be disadvantageous to the Borrower.

 

(g)            Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 2.13
shall survive the payment in full of principal and interest hereunder and under
the Note.

 

ARTICLE III

 

CONDITIONS OF LENDING

 

SECTION 3.01. Conditions Precedent to First Notice of Drawdown.  The
obligation of the Lender to make any Advance is subject to the conditions
precedent that, on or before the giving of the first Notice of Drawdown for any
Advance, the Lender shall have received, in form and substance satisfactory to
the Lender (unless otherwise specified):

 

(a)           certified
copies of the resolutions of the board of directors of the Borrower approving
(for itself and as sole member of each Initial Guarantor) each Loan Document
and each other document contemplated thereby to which any Obligor is or is to
be a party, and of all documents evidencing other necessary corporate or
company action and governmental approvals of each Obligor, if any, with respect
to such Loan Documents and other documents to which it is or is to be a party;

 

(b)           a
certificate of an officer of the Borrower (for itself and as sole member of
each Initial Guarantor, as the case may be) certifying the names and true
signatures of the respective officers and attorneys-in-fact of each Obligor
authorized to sign each Loan Document and each other document contemplated
thereby to which it is or is to be a party;

 

(c)           a
copy of the articles of incorporation and by-laws, or certificate of formation
and limited liability company agreement, as the case may be, of each Obligor
and each amendment thereto, certified (as of a date reasonably near the first
Drawdown Date) by an officer of the Borrower (for itself or as sole member of
each Initial Guarantor, as the case may be) as being a true and correct copy
thereof;

 

(d)           a
copy of a certificate of goodstanding of each Obligor dated as of a date
reasonably near the first Drawdown Date, certifying that such Obligor is duly
formed and in good standing under the laws of its jurisdiction of
incorporation;

 

20

 

(e)           evidence
that each Obligor has duly opened an Operating Account and has delivered to the
Lender all resolutions, signature cards and other documents or evidence required
in connection with the opening, maintenance and operation of such Operating
Account;

 

(f)            the
Master Agreement, duly executed by the Borrower and the Lender;

 

(g)           the
Master Agreement Security Deed, duly executed by the Borrower;

 

(h)           a
written confirmation from the Borrower as to which individuals are authorized
to give verbal and/or written instructions to the Lender on behalf of the
Borrower in respect of the selection of any Interest Period pursuant to this
Agreement;

 

(i)             a
copy of the Memorandum of Agreement (together with all amendments and addenda
thereto) for each of the Remaining Vessels, duly executed by the relevant
Initial Guarantor and the relevant seller, together with evidence of any
address or similar commission arrangements, all of which shall be on terms
acceptable to the Lender (certified by an officer of the Borrower to be a true,
correct and complete copy thereof);

 

(j)             a
satisfactory review by the Lender’s counsel of the equity structure of the
Borrower, including confirmation that the rights of equity holders of the
Borrower shall be legally or effectively subordinated to the right of the
Lender to payment of any and all amounts due to the Lender under this
Agreement, the Note and the Security Documents; and

 

(k)            such
documents and evidence as the Lender shall require, based on applicable law and
regulations and the Lender’s own internal guidelines, relating to the Lender’s
knowledge of its customers.

 

SECTION 3.02. Conditions Precedent to the First Advance.  The
obligation of the Lender to make the first Advance (which shall be the Advance
specified in Section 2.01(a)(i)) is subject to the following conditions
precedent having been satisfied (or waived in writing by the Lender) on or
prior to the relevant Drawdown Date:

 

(a)            the Lender shall
have received, in form and substance satisfactory to the Lender, evidence that
the IPO has been consummated in all material respects in accordance with the
Public Offering Documents and all applicable law, all of which Public Offering
Documents shall be in form and substance reasonably satisfactory to the Lender,
and the Borrower shall have received net proceeds (after deducting costs and
expenses) not less than $151,450,000 therefrom;

 

(b)            The Lender shall
have received the Note evidencing the Advances dated the date of the first
Drawdown Date, duly executed by the Borrower to the order of the Lender;

 

(c)            The indebtedness of
the Initial Guarantors and all other amounts payable under the Existing Credit
Agreement shall have been paid in full;

 

(d)            the Lender shall
have received on or before the relevant Drawdown Date the following, each dated
as of such Drawdown Date (unless otherwise specified), in form and substance
satisfactory to the Lender (unless otherwise specified):

 

(i)           an
Account Charge relating to the Operating Account of each Initial Guarantor,
duly executed by such Initial Guarantor;

 

21

 

(ii)          a
Mortgage relating to each Delivered Vessel, duly executed by the relevant
Initial Guarantor;

 

(iii)         an
Assignment of Earnings relating to each Delivered Vessel, duly executed by the
relevant Initial Guarantor;

 

(iv)         an
Assignment of Insurances relating to each Delivered Vessel, duly executed by
the relevant Initial Guarantor, together with a signed Notice of Assignment,
substantially in the form attached thereto;

 

(v)          an
Approved Manager’s Undertaking relating to each Delivered Vessel, duly executed
by each Approved Manager of such Delivered Vessel;

 

(vi)         evidence of insurance
in respect of each of the Delivered Vessels naming the Lender as loss payee
and, if required by the Lender, as co-assured with such responsible and
reputable insurance companies or associations, and in such amounts and covering
such risks, as is required pursuant to the relevant Mortgages;

 

(vii)        a favorable opinion
from an independent insurance consultant acceptable to the Lender on such
matters relating to the insurances for each of the Delivered Vessels as the
Lender may require;

 

(viii)       a Certificate of
Ownership and Encumbrance issued by the maritime administrator for the Marshall
Islands (or other relevant authority) stating that each of the Delivered
Vessels is owned by the relevant Initial Guarantor and that there are on record
no Liens on such Delivered Vessel except the relevant Mortgage;

 

(ix)         evidence of the
completion of all other recordings and filings of, or with respect to, the
Collateral Documents executed in connection with the making of the first
Advance that the Lender may deem necessary or desirable in order to perfect and
protect the Liens created thereby, including under the Uniform Commercial Code
of New York (or such other jurisdiction where the relevant Initial Guarantor
and/or any Collateral may be located);

 

(x)          a copy of a
certificate duly issued by the Classification Society, dated within seven (7) days
of the relevant Drawdown Date, to the effect that each of the Delivered Vessels
has received the highest classification and rating for vessels of the same age
and type, free of all recommendations and notations of the Classification
Society affecting class;

 

(xi)         evidence
that each of the Delivered Vessels will, as from the relevant Drawdown Date, be
managed by an Approved Manager on terms acceptable to the Lender, together with
copies of the Document of Compliance and Safety Management Certificate issued
pursuant to the ISM Code in respect of such Delivered Vessel;

 

(xii)        such
other certificates relating any of the Delivered Vessels, or the operation
thereof, as may be reasonably requested by the Lender;

 

(xiii)       a
favorable opinion of Messrs. Seward & Kissel LLP, counsel for the
Obligors, in respect of the Loan Documents executed in connection with the
making of the first Advance and as to such other matters as the Lender may
reasonably request addressed to the Lender in form and substance satisfactory
to the Lender; and

 

22

 

(xiv)       a
favorable opinion of Watson, Farley & Williams, counsel for the
Lender, addressed to the Lender and in form and substance satisfactory to the
Lender.

 

SECTION 3.03.  Conditions Precedent to Each
Advance for Remaining and Additional Vessels.  The obligation of the Lender to make an
Advance of Tranche A in relation to any Remaining Vessel or of Tranche C in
relation to any Additional Vessel is subject to the following conditions
precedent having been satisfied (or waived in writing by the Lender) on or
prior to the relevant Drawdown Date (for purposes of this Section 3.03, “relevant
Advance” means, in relation to a Remaining Vessel or Additional Vessel, the
Advance to be used to assist in financing such Vessel, “relevant Vessel” refers
to the Remaining Vessel or Additional Vessel to be financed by the relevant
Advance, and “relevant Guarantor” refers to the Guarantor acquiring the relevant
Vessel):

 

(a)           the amount of the
relevant Advance shall not exceed the purchase price of such Vessel under the
Memorandum of Agreement for such Vessel;

 

(b)           if the relevant
Vessel is an Additional Vessel, the amount of the relevant Advance shall not
exceed the amount permitted for such Advance under Section 2.01(c);

 

(c)           the Lender shall
have received on or before the relevant Drawdown Date the following, each dated
as of such Drawdown Date (unless otherwise specified), in form and substance
satisfactory to the Lender (unless otherwise specified):

 

(i)            if
the relevant Guarantor is an Additional Guarantor, a Credit Agreement
Supplement duly executed by such Additional Guarantor;

 

(ii)           if
the relevant Guarantor is an Additional Guarantor, documentation respecting
such Additional Guarantor specified mutatis mutandis
in Section 3.01(a), (b), (c) and (d);

 

(iii)          if
the relevant Vessel is an Additional Vessel, a copy of the Memorandum of
Agreement (together with all amendments and addenda thereto) for such Additional
Vessel, duly executed by the relevant Guarantor and the relevant seller,
together with evidence of any address or similar commission arrangements, all
of which shall be on terms acceptable to the Lender (certified by an officer of
the Borrower to be a true, correct and complete copy thereof);

 

(iv)          if
the relevant Vessel is an Additional Vessel, one or more valuation(s), each
dated no more than twenty one (21) days prior to the date of delivery to the
Lender, addressed to the Lender (at the expense
of the Borrower) by an Approved Broker indicating the Fair Market Value of each of the Vessels and the
relevant Vessel;

 

(v)           such
evidence as the Lender and its counsel shall require in relation to the due
authorization and execution by the relevant seller of the Memorandum of
Agreement relating to the relevant Vessel and all documents to be executed by
the relevant seller pursuant thereto;

 

(vi)          evidence
that (i) the relevant Vessel has been unconditionally delivered by the
relevant seller to the relevant Guarantor in accordance with all the terms of
the relevant Memorandum of Agreement, warranted free and clear of all Liens, (ii) the
relevant seller shall

 

23

 

have been paid in full under the terms of the relevant Memorandum of
Agreement; and (iii) the relevant Vessel has been duly registered in the
ownership of the relevant Guarantor under the laws and flag of the Republic of
the Marshall Islands;

 

(vii)         if
the relevant Guarantor is an Additional Guarantor, evidence that the relevant
Guarantor has duly opened an Operating Account and has delivered to the Lender
all resolutions, signature cards and other documents or evidence required in
connection with the opening, maintenance and operation of such Operating
Account;

 

(viii)        if
the relevant Guarantor is an Additional Guarantor, an Account Charge relating
to the Operating Account of such Additional Guarantor, duly executed by such
Additional Guarantor;

 

(ix)           a
Mortgage relating to the relevant Vessel, duly executed by the relevant
Guarantor;

 

(x)            an
Assignment of Earnings relating to the relevant Vessel, duly executed by the
relevant Guarantor;

 

(xi)           an
Assignment of Insurances relating to the relevant Vessel, duly executed by the
relevant Guarantor, together with a signed Notice of Assignment, substantially
in the form attached thereto;

 

(xii)          an
Approved Manager’s Undertakings relating to the relevant Vessel, duly executed
by each Approved Manager of the relevant Vessel;

 

(xiii)         evidence
of insurance in respect of the relevant Vessel naming the Lender as loss payee
and, if required by the Lender, as co-assured with such responsible and
reputable insurance companies or associations, and in such amounts and covering
such risks, as is required pursuant to the relevant Mortgage;

 

(xvi)        a
favorable opinion from an independent insurance consultant acceptable to the
Lender on such matters relating to the insurances for the relevant Vessel as
the Lender may require;

 

(xv)         a
Certificate of Ownership and Encumbrance issued by the maritime administrator
for the Marshall Islands (or other relevant authority) stating that the
relevant Vessel is owned by the relevant Guarantor and that there are on record
no Liens on such Vessel except the relevant Mortgage;

 

(xvi)        evidence
of the completion of all other recordings and filings of, or with respect to,
the Collateral Documents executed in connection with the making of the relevant
Advance that the Lender may deem necessary or desirable in order to perfect and
protect the Liens created thereby, including under the Uniform Commercial Code
of New York (or such other jurisdiction where the relevant Guarantor and/or any
Collateral may be located);

 

(xvii)       a
copy of a certificate duly issued by the Classification Society, dated within seven
(7) days of the relevant Drawdown Date, to the effect that the relevant
Vessel has received the highest classification and rating for vessels of the
same age and type, free of all recommendations and notations of the
Classification Society affecting class;

 

24

 

(xviii)      evidence
that the relevant Vessel will, as from the relevant Drawdown Date, be managed
by an Approved Manager on terms acceptable to the Lender, together with copies
of the Document of Compliance and Safety Management Certificate issued pursuant
to the ISM Code in respect of the relevant Vessel;

 

(xix)         a
copy of any charter to which the relevant Vessel is subject as of the relevant
Drawdown Date;

 

(xx)          such
other certificates relating to the relevant Vessel, or the operation thereof,
as may be reasonably requested by the Lender;

 

(xxi)         a
favorable opinion of Messrs. Seward & Kissel LLP, counsel for the
Obligors, in respect of the Loan Documents executed in connection with the
advance of the relevant Advance and as to such other matters as the Lender may
reasonably request addressed to the Lender in form and substance satisfactory
to the Lender;  and

 

(xxii)        a
favorable opinion of Watson, Farley & Williams, counsel for the
Lender, addressed to the Lender and in form and substance satisfactory to the
Lender.

 

SECTION 3.04.  Conditions Precedent to Each
Advance.  The obligation of the
Lender to make each Advance, including the first Advance on the first Drawdown
Date, is subject to the following conditions precedent having been satisfied
(or waived in writing by the Lender) on or prior to the relevant Drawdown Date:

 

(a)                                    the Lender shall have received a Notice of
Drawdown as required by Section 2.03(a);

 

(b)            the Borrower shall have paid the fees due pursuant to Section 2.08
and any other fees payable pursuant hereto;

 

(c)            immediately after the making of the relevant Advance, (i) the
aggregate outstanding principal amount of the Advances of each Tranche will not
exceed the maximum amount available under such Tranche, and (ii) the
aggregate outstanding principal amount of all Advances will not exceed the
Commitment;

 

(d)            evidence that, if the test set out in Section 7.01(l)(i) were
applied immediately following the making of the relevant Advance, the Borrower
would not be obliged to provide additional security or repay part of the
Advances as therein provided (determined on the basis of the most recent
valuation for each Vessel delivered pursuant to Section 3.03(c)(iv) or
Section 7.01(l)(ii), as the case may be);

 

(e)             immediately after the making of the relevant Advance, no
Default or Event of Default shall have occurred and be continuing;

 

(f)             the representations and warranties of the Obligors
contained in this Agreement shall be true mutatis
mutandis on and as of the date of the relevant Advance, unless such
representation or warranty shall expressly relate to a different date;

 

(g)            the Lender shall have received on or before the relevant
Drawdown Date the following, each dated as of such Drawdown Date (unless
otherwise specified), in form and substance satisfactory to the Lender (unless
otherwise specified):

 

25

 

(i)              a certificate of an officer of the
Borrower (for itself and as sole member of each Guarantor), dated as of the
relevant Drawdown Date (the statements made in such certificate shall be true
on and as of such Drawdown Date), certifying as to (A) the absence of any
amendments to the articles of incorporation and by-laws, or certificate of
formation and limited liability company agreement of each Obligor certified to
the Lender pursuant to Sections 3.01(c) or 3.03(c)(ii) above, (B) the
due incorporation or formation, as the case may be, and good standing of each
Obligor, as a corporation or limited liability company formed under the laws of
the Republic of The Marshall Islands and the absence of any proceeding for the
dissolution or liquidation of such Obligor, (C) the veracity of the
representations and warranties of the Obligors contained in this Agreement mutatis mutandis on and as of the date of the relevant
Advance, unless such representation or warranty shall expressly relate to a
different date, and (D) the absence of any event occurring and continuing,
or resulting from the making of the relevant Advance that constitutes a
Default;

 

(ii)             a duly signed and completed
Compliance Certificate confirming that the Borrower shall be in compliance with
the provisions of Article VI immediately after the making of the relevant
Advance;

 

(iii)            the original of any power of
attorney issued in favor of any Person executing any Loan Document (or any
other document delivered pursuant to a Loan Document) on behalf of any Obligor
in relation to the relevant Advance;

 

(iv)           true and complete copies of any
governmental or regulatory consents, filings, registrations, approvals and
waivers required in connection with the execution, delivery and performance of (A) each
Loan Document executed in relation to the relevant Advance, and (B) the
consummation of the transactions contemplated thereby;

 

(v)            if applicable, the relevant
confirmation exchanged under the Master Agreement and which evidences a
Transaction entered into between the Borrower and the Lender in connection with
the relevant Advance, and any mandates required in connection therewith; and

 

(vi)           such opinions, consents, agreements
and documents in connection with this Agreement, the Master Agreement and the
Collateral Documents as the Lender may reasonably request by notice to the
Borrower prior to the relevant Drawdown Date; 
and

 

(h)            to the extent
required by any change in applicable law and regulation or any changes in the
Lender’s own internal guidelines since the date on which the applicable
documents and evidence were delivered to the Lender pursuant to Section 3.01(k),
such further documents and evidence as the Lender shall require relating to the
Lender’s knowledge of its customers.

 

The making of each Advance hereunder shall be deemed to be a
representation and warranty by the Obligors on the date of such Advance as to
the facts specified in clauses (c), (d), (e) and (f) of this Section 3.04.

 

26

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01. Representations and Warranties.  Each of the Obligors, jointly
and severally, represents and warrants as follows:

 

(a)            Existence
and Power.  Each Obligor (i) is
a corporation or limited liability company duly organized or formed, validly
existing and in good standing under the laws of the Republic of the Marshall
Islands, (ii) is duly qualified and in good standing as a foreign company
in each other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed, and (iii) has
all requisite corporate or company power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted.

 

(b)            Authorization;
No Violation.  The execution,
delivery and performance by each Obligor of this Agreement, the Note and each
other Loan Document to which it is or is to be a party, and the consummation of
other transactions contemplated thereby, are within such Obligor’s corporate or
company powers, have been duly authorized by all necessary company action, and
do not (i) contravene such Obligor’s articles of incorporation or by-laws,
or certificate of formation or limited liability company agreement, as the case
may be, (ii) violate any applicable law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any loan agreement,
contract, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting such Obligor or any of its properties, or (iv) except for
the Liens created by the Collateral Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the
properties of such Obligor.  None of the
Obligors is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
loan agreement, contract, indenture, mortgage, deed of trust, lease or other
instrument.

 

(c)            Governmental
Consents, Etc.  Except for the recording
of the Mortgages and filing of proper financing statements in respect of the
Assignments of Earnings specified in Section 4.01(s), no authorization,
approval, consent or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other consent or approval of
any other Person is required for (i) the due execution, delivery and
performance by any Obligor of this Agreement or the Note or any other Loan
Document to which it is or is to be a party or for the consummation of the
transactions contemplated thereby, (ii) the grant by any Obligor of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof), or (iv) the exercise by the
Lender of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents.

 

(d)            Binding
Effect.  This Agreement has been, and
the Note, and each other Loan Document when delivered hereunder will have been,
duly executed and delivered by each Obligor party thereto.  This Agreement is, and the Note and each
other Loan Document when delivered hereunder will be, the legal, valid and
binding obligations of each Obligor party thereto, enforceable against each
such Obligor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor’s rights generally.

 

27

 

(e)            Compliance
with Laws.  Each Obligor is in
compliance with all applicable statutes, regulations and laws, including,
without limitation, all Environmental Laws.

 

(f)             Financial
Information;  Other Obligations.  The audited consolidated balance sheet of the
Borrower and its Subsidiaries as at March 31, 2005, a copy of which has
been delivered to the Lender by the Borrower, fairly presents, in all material
respects, the financial condition of the Borrower and its Subsidiaries as at
such date.  None of the Obligors has
engaged in any business other than that contemplated by this Agreement and the
Existing Credit Agreement.  Except for
the Existing Credit Agreement and the “Collateral” described therein, none of
the Obligors is a party to any other loan or security agreement and none has
filed or permitted to be filed any financing statement, mortgage, pledge or
charge with respect to any assets owned by it and, as of the date hereof, there
is (except as aforesaid) no Lien of any kind on any of the properties or assets
of any of the Obligors.

 

(g)            No
litigation.  There is no pending or
(to the knowledge of any Obligor) threatened action, proceeding, governmental
investigation or arbitration affecting any Obligor or any of its properties
before any court, governmental agency or arbitrator which may affect the
legality, validity or enforceability of this Agreement, the Note or any other
Loan Document, or the consummation of the transactions contemplated hereby or
thereby.

 

(h)            Margin
Stock.  None of the Obligors is
engaged in the business of extending credit for the purpose of purchasing or
carrying Margin Stock and no proceeds of any Advance will be used to purchase
or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.

 

(i)             ERISA.  None of the Obligors has ever established or
maintained any employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended.

 

(j)             Not
“Investment Company”.  None of the
Obligors is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.

 

(k)            Subsidiaries.  None of the Guarantors has any direct or
indirect Subsidiaries.

 

(l)             Not
“National”.  None of the Obligors is
a “national” of any “designated foreign country”, within the meaning of the
Foreign Asset Control Regulations or the Cuban Asset Control Regulations of the
U.S. Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, or any
regulations or rulings issued thereunder.

 

(m)           No
Restriction.  Neither the making or
any Advance nor the use of the proceeds thereof nor the performance by the
Obligors of this Agreement violates any statute, regulation or executive order
restricting loans to, investments in, or the export of assets to, foreign
countries or entities doing business there.

 

(n)            Ownership
of Obligors.  All of the outstanding
limited liability company interests of each of the Initial Guarantors is, and
each Additional Guarantor shall be, directly owned and controlled by the
Borrower.  As of the date hereof, all of
the issued and outstanding voting stock of the Borrower is directly owned and
controlled by Eagle Ventures.

 

28

 

(o)            Solvency.  Each of the Obligors is, individually, and
the Borrower and its Subsidiaries are, together, Solvent.

 

(p)            Use
of Proceeds.  The Borrower is using
the proceeds of the Advances solely for the purposes set forth in the Preliminary
Statement hereof.

 

(q)            Place
of Business.  None of the Obligors
has a place of business in the United States of America, the District of
Columbia, the United States Virgin Islands, or any territory or insular
possession subject to the jurisdiction of the United States of America.

 

(r)             Veracity
of Statements.  No representation,
warranty or statement made or certificate, document or financial statement
provided by any of the Obligors in or pursuant to this Agreement, the Note or
any other Loan Document, or in any other document furnished in connection
therewith, is untrue or incomplete in any material respect or contains any
misrepresentation of a material fact or omits to state any material fact
necessary to make any such statement herein or therein not misleading.

 

(s)            Collateral
Documents.  The provisions of each of
the Collateral Documents create, or when delivered will create, in favor of the
Lender, (i) in the case of the Mortgages, a valid first “preferred
mortgage” within the meaning of Chapter 3 of the Marshall Islands Maritime Act,
1990, as amended, on the Vessels in favor of the Lender, subject to the
recording of the Mortgages as described in the following sentence, and (ii) in
the case of the Assignments of Earnings and the Assignments of Insurances, a
valid, binding and executed and enforceable security interest and Lien in all
right, title and interest in the Collateral therein described, and shall
constitute a fully perfected first priority security interest in favor of the
Lender in all right, title and interest in such Collateral, subject to no other
Liens and subject in the case of (A) the Assignments of Earnings, to
notice being given to account parties and to filing proper financing statements
in the District of Columbia, and (B) the Assignments of Insurances, to
notice being given to underwriters and protection and indemnity clubs, and
their consent being obtained where policy provisions or club rules so
require.  Upon execution and delivery by
the relevant Guarantor and recording in accordance with the laws of the
Republic of The Marshall Islands, each of the Mortgages will be a first “preferred
mortgage” within the meaning of Chapter 313 of Title 46 of the United States
Code and will qualify for the benefits accorded a “preferred mortgage” under
Chapter 313 of Title 46 of the United States Code and no other filing or
recording or refiling or rerecording or any other act is necessary or advisable
to create or perfect such security interest under the Mortgages or in the
mortgaged property therein described.

 

(t)             No Money
Laundering.  Without prejudice to the
generality of the foregoing provisions of this Section 4.01, in relation
to the borrowing by the Borrower of the Advances, the performance and discharge
of its obligations under this Agreement and the other Loan Documents and the
transactions and other arrangements affected or contemplated by this Agreement
and the other Loan Documents, the Borrower confirms that it is acting for its
own account and that the foregoing will not involve or lead to contravention of
any law, official requirement or other regulatory measure or procedure
implemented to combat “money laundering” (as defined in Article 1 of the
Directive (91/308/EEC) of the Council of the European Communities).

 

29

 

ARTICLE V

 

GUARANTY

 

SECTION 5.01. Guaranty.  In
order to induce the Lender to make Advances to the Borrower, each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the performance and
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Borrower now or hereafter existing under
this Agreement, the Note and any other Loan Document, whether for principal,
interest, fees, expenses or otherwise (collectively the “Guaranteed
Obligations”) due or owing to the Lender, and agrees to pay any and all
expenses (including, without limitation, counsel fees and expenses) incurred by
the Lender in enforcing any rights under this Guaranty.  Each of the Guarantors hereby unconditionally
and irrevocably agrees to indemnify the Lender immediately on demand against
any cost, loss or liability suffered by the Lender (i) if any Guaranteed
Obligation is or becomes unenforceable, invalid or illegal, or (ii) by
operation of law.  The amount of the
cost, loss or liability shall be equal to the amount which the Lender would
otherwise have been entitled to recover. 
The obligations of the Guarantors under this Article V are in
addition to and shall not in any way be prejudiced by any other guaranty or
security now or subsequently held by the Lender.

 

SECTION 5.02. Obligations Absolute.  Each
of the Guarantors guarantees that the Guaranteed Obligations will be performed
and paid to the Lender strictly in accordance with the terms of any applicable
agreement, express or implied, with the Borrower, regardless of any law,
regulation or order of any jurisdiction affecting any term of any Guaranteed
Obligation or the rights of the Lender with respect thereto, including, without
limitation, any law, rule or policy which is now or hereafter promulgated
by any governmental authority (including, without limitation, any central bank)
or regulatory body any of which may adversely affect the Borrower’s ability or
obligation to make, or right of the Lender to receive, such payments,
including, without limitation, any sovereign act or circumstance which might
otherwise constitute a defense to, or a legal or equitable discharge of, the
Borrower.

 

SECTION 5.03. Guaranty Unconditional.  The
liability of each Guarantor under this Guaranty shall be unconditional
irrespective of (i) any amendment or waiver or consent to departure from
the terms of any Guaranteed Obligation, including any extension of the time or
change of the manner or place of payment, (ii) any exchange, release, or
non-perfection of any collateral securing payment of any Guaranteed Obligation,
(iii) any change in the corporate existence, structure or ownership of the
Borrower, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or its assets or any resulting release or
discharge of any of the Guaranteed Obligations, (iv) the existence of any
claim, set-off or other rights which any of the Guarantors may have at any time
against the Borrower, the Lender or any other corporation or person, whether in
connection herewith or any unrelated transactions, and (v) any other
circumstance whatsoever that might otherwise constitute a defense available to,
or a legal or equitable discharge of, the Borrower.

 

SECTION 5.04. Waiver of Subrogation; Contribution.  Notwithstanding any other
provision of this Guaranty, until payment in full of the Guaranteed Obligations
in cash after termination of any of the Lender’s commitments with respect
thereto, (i) each of the Guarantors hereby irrevocably waives any right to
assert, enforce, or otherwise exercise any right of subrogation to any of the
rights, security interests, claims, or liens which the Lender have against the
Borrower in respect of the Guaranteed Obligations, (ii) none of the
Guarantors shall have any right of recourse, reimbursement, contribution,
indemnification, or similar right (by contract or otherwise) against the
Borrower in respect of the 

 

30

 

Guaranteed Obligations, and (iii) each
of the Guarantors hereby irrevocably waives any and all of the foregoing rights
and also irrevocably waives the benefit of, and any right to participate in,
any collateral or other security given to the Lender to secure payment of the
Guaranteed Obligations.

 

SECTION 5.05. Reinstatement.  This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by the Lender.

 

SECTION 5.06. Waiver.  Each
of the Guarantors waives promptness, diligence, notice of acceptance,
presentment, demand, protest and notice of dishonor with respect to any
Guaranteed Obligation and this Guaranty and any requirement that the Lender
exhaust any right or take any action against the Borrower or any other entity
or any Collateral.

 

SECTION 5.07. Payments; No Reductions.  (a) All
payments under this Guaranty shall be made in accordance with Section 2.12
of this Agreement (concerning payments) free and clear of and without deduction
for any and all present or future Taxes. 
If any Guarantor shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
paragraph) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Guarantor shall make
such deductions and (iii) such Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.  In addition, each
of the Guarantors agrees to pay any Other Taxes which arise from any payment
made hereunder or from the execution, delivery or registration by the
Guarantors of, or otherwise with respect to, this Agreement.  Each of the Guarantors will indemnify the
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this paragraph) paid by the Lender and any liability (including,
without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted.  This indemnification
shall be made within 45 days from the date the Lender makes written demand therefor.  Within 30 days after the date of any payment
of Taxes the Guarantors will furnish to the Lender the original or a certified
copy of a receipt evidencing payment thereof. 
If no Taxes are payable in respect of any payment, the Guarantors will
furnish to the Lender a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Lender, in either case stating that
such payment is exempt from or not subject to Taxes.  Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations of the
Guarantors contained in this Section shall survive the payment in full of
the Guaranteed Obligations and principal and interest hereunder and any
termination or revocation of this Guaranty.

 

SECTION 5.08. Set-Off.  If any
of the Guarantors shall fail to pay any of its obligations hereunder when the
same shall become due and payable, the Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
to or for the Guarantor’s credit or account against any and all of the
Guaranteed Obligations, whether or not the Lender shall have made any demand
under this Guaranty.  The Lender agrees
promptly to notify the relevant Guarantor after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. 
The rights of the Lender under this paragraph are in addition to any
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.

 

31

 

SECTION 5.09. Continuing Guarantee.  This
Guaranty is a continuing guaranty, is joint and several with any other
guarantee given in respect of the Guaranteed Obligations, and shall remain in
full force and effect until the later of the termination of any commitment of
the Lender under this Agreement and the payment in full of the Guaranteed
Obligations and all other amounts payable hereunder and shall be binding upon
each of the Guarantors, and their respective successors and permitted assigns.  The obligations of each of the Guarantors
under this Guaranty shall rank pari  passu with all other
unsecured obligations of such Guarantor.

 

SECTION 5.10. Right of Contribution.  At any
time a payment in respect of the Guaranteed Obligations is made under this
Guaranty, the right of contribution of each Guarantor against each other
Guarantor shall be determined as provided in the immediately following
sentence, with the right of contribution of each Guarantor to be revised and
restated as of each date on which a payment (a “Relevant Payment”) is
made on the Guaranteed Obligations under this Guaranty.  At any time that a Relevant Payment is made
by a Guarantor that results in the aggregate payments made by such Guarantor in
respect of the Guaranteed Obligations to and including the date of the Relevant
Payment exceeding such Guarantor’s Contribution Percentage (as defined below)
of the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
“Aggregate Excess Amount”), each such Guarantor shall have a right of
contribution against each other Guarantor who has made payments in respect of
the Guaranteed Obligations to and including the date of the Relevant Payment in
an aggregate amount less than such other Guarantor’s Contribution Percentage of
the aggregate payments made to and including the date of the Relevant Payment
by all Guarantors in respect of the Guaranteed Obligations (the aggregate
amount of such deficit, the “Aggregate Deficit Amount”) in an amount
equal to (x) a fraction the numerator of which is the Aggregate Excess Amount
of such Guarantor and the denominator of which is the Aggregate Excess Amount
of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other
Guarantor.  A Guarantor’s right of
contribution pursuant to the preceding sentences shall arise at the time of
each computation, subject to adjustment to the time of each computation; provided
that no Guarantor may take any action to enforce such right until the
Guaranteed Obligations have been paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor’s right of
contribution arising pursuant to this Section 5.10 against any other
Guarantor shall be expressly junior and subordinate to such other Guarantor’s
obligations and liabilities in respect of the Guaranteed Obligations and any
other obligations under this Guaranty. 
As used in this Section 5.10: 
(i) each Guarantor’s “Contribution Percentage” shall mean
the percentage obtained by dividing (x) the Relevant Net Worth (as defined
below) of such Guarantor by (y) the aggregate Relevant Net Worth of all
Guarantors; (ii) the “Relevant Net Worth” of each Guarantor shall
mean the greater of (x) the Net Worth (as defined below) of such Guarantor and
(y) zero; and (iii) the “Net Worth” of each Guarantor shall mean
the amount by which the fair saleable value of such Guarantor’s assets on the
date of any Relevant Payment exceeds its existing debts and other liabilities
(including contingent liabilities, but without giving effect to any Guaranteed
Obligations arising under this Guaranty) on such date.  All parties hereto recognize and agree that,
except for any right of contribution arising pursuant to this Section 5.10,
each Guarantor who makes any payment in respect of the Guaranteed Obligations
shall have no right of contribution or subrogation against any other Guarantor
in respect of such payment until all of the Guaranteed Obligations have been
irrevocably paid in full in cash.  Each
Guarantor recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution.  In this connection, each
Guarantor has the right to waive its contribution right against any Guarantor
to the extent that after giving effect to such waiver such Guarantor would
remain Solvent, in the determination of the Lender.

 

32

 

SECTION 5.11. Limitation of Liability.  Each
Guarantor and the Lender hereby confirms that it is its intention that the
Guaranteed Obligations not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal or state law.  To effectuate the foregoing intention, each
Guarantor and the Lender hereby irrevocably agrees that the Guaranteed
Obligations guaranteed by each Guarantor shall be limited to such amount as
will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such Guarantor that are relevant under such laws and
after giving effect to any rights to contribution pursuant to any agreement
providing for an equitable contribution among such Guarantor and the other
Guarantors, result in the Guaranteed Obligations of such Guarantor in respect
of such maximum amount not constituting a fraudulent transfer or conveyance.

 

ARTICLE VI

 

FINANCIAL
COVENANTS

 

SECTION 6.01. Financial Covenants.  So
long as any Advance shall remain unpaid or the Lender shall have any Commitment
hereunder, the Borrower shall maintain, and each of the Guarantors jointly and
severally covenants and undertakes to cause the Borrower to maintain:

 

(a)            Minimum
Adjusted Net Worth:  At all times on
or after the date hereof Adjusted Net Worth at an amount not less than
$150,000,000;

 

(b)            Minimum
Interest Coverage Ratio:  For each
Accounting Period ending or after the date hereof, EBITDA at an amount not less
than 200% of Interest Expenses; and

 

(c)            Minimum
Liquidity:  At all times on or after
the date hereof, for each Vessel owned by a Guarantor, free cash in an amount
of $500,000 plus an amount adequate to meet anticipated capital expenditures
for such Vessel during the next twelve months, in one or more accounts with the
Lender.

 

ARTICLE VII

 

COVENANTS OF THE BORROWER

 

SECTION 7.01. Affirmative Covenants.  So
long as any Advance shall remain unpaid or the Lender shall have any Commitment
hereunder, each of the Obligors shall:

 

(a)            Compliance
with Laws, Etc.  Comply with all
applicable laws, rules, regulations and orders, including Environmental Laws,
the ISM Code and the ISPS Code in all material respects.

 

(b)            Compliance
with Agreements.  Comply with,
observe and perform all of the terms, covenants and provisions of the Loan
Documents to which it is a party.

 

(c)            Preservation
of Corporate/Company Existence, Etc. 
Preserve and maintain its corporate or company existence, as the case
may be, as well as its material rights and franchises.

 

(d)            Visitation
Rights.  Permit at any reasonable
time and from time to time, upon reasonable prior notice, the Lender or its
representatives, at the Lender’s risk and cost, to the extent reasonably
requested, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, such Obligor and to discuss
the affairs, finances and accounts of

 

33

 

such Obligor with any of its
officers or representatives and with its independent certified public
accountants.

 

(e)            Keeping
of Books.  Keep, and cause to be
kept, proper books of record and account, in which full and correct entries
shall be made in accordance with GAAP of all financial transactions and the
assets and business of such Obligor to the extent necessary to permit the
preparation of the financial statements required to be delivered hereunder.

 

(f)             Maintenance
of Properties, Etc.  Maintain and
preserve all of its properties that are used or useful in the conduct of its
business in good working order and condition, ordinary wear and tear excepted.

 

(g)            Approvals
and Other Consents.  Obtain all such
governmental licenses, authorizations, consents, permits and approvals as are
required, by applicable law or otherwise, for (a) such Obligor to perform
its obligations under this Agreement and all other Loan Documents and (b) the
operation of the Vessels.

 

(h)            Reporting
Requirements.  Furnish, or cause to
be furnished, to the Lender:

 

(i)              as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower and its Subsidiaries, the
consolidated balance sheet of Borrower and its Subsidiaries as of the end of
such year, and the related consolidated statements of profit and loss, and
changes in financial position of the Borrower and its Subsidiaries for the
fiscal year then ended, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and in each case certified
by Ernst & Young or by another independent public or chartered
accountant satisfactory to the Lender stating that in making the examination
necessary for the audit of such financial statements it has obtained no
knowledge of the existence of any condition, event or act which constitutes a
Default or Event of Default, or if it has obtained knowledge of the existence
of any such condition, event or act, specifying the same;

 

(ii)            as soon as available and in any event within 60 days
after the close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, the consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such quarterly period, and the related
consolidated statements of profit and loss, and changes in financial position
of the Borrower and its Subsidiaries for the period then ended, setting forth
in each case in comparative form the corresponding figures for the
corresponding periods in the preceding fiscal year, all of which shall be
certified by an officer of the Borrower and subject only to normal year-end
adjustments;

 

(iii)           simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, (A) a
certificate of an officer of the Borrower stating whether any Default or Event
of Default exists on the date of such certificate and, if any Default or Event
of Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto, and (B) a
duly signed and completed Compliance Certificate confirming that the Borrower
is in compliance with the provisions of Article VI;

 

(iv)           promptly upon the Borrower becoming aware of (A) the
occurrence of a Default or Event of Default, or (B) the commencement of any
action, suit, litigation or

 

34

 

proceeding of the kind described in Section 4.01(g),
a statement of an officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;

 

(v)            promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;

 

(vi)           promptly upon the filing thereof, copies of all
registration statements and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) and other material filings which the Borrower shall have
filed with the Securities and Exchange Commission or any similar governmental
authority, or any national securities exchange, including, any reports or other
disclosures required to be made in relation to the Borrower under Regulation FD
or the Sarbanes-Oxley Act of 2002; and

 

(vii)          from time to time such additional information regarding the
financial position, results of operations, business or prospects of the
Borrower and its Subsidiaries as the Lender may reasonably request.

 

(i)             Payment
of Obligations.  Pay and discharge at
or before maturity, all its material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and maintain in accordance with GAAP
appropriate reserves for the accrual of any of the same.

 

(j)             Use
of Proceeds.  Use the proceeds of the
Advances solely for the purposes set forth in the Preliminary Statement hereof.

 

(k)            Maintenance
of Insurance.  Maintain insurance on
any of its properties other than the Vessels, payable in United States Dollars,
with responsible companies, in such amounts and against such risks as is
usually carried by owners of similar businesses and properties in the same
general areas in which it operates, and as shall be satisfactory to the Lender.

 

(l)             Vessel
Value Maintenance.

 

(i)            Ensure that the aggregate Fair Market Value of the
Vessels subject to a Mortgage (plus the market value of any additional security
for the time being actually provided to the Lender pursuant to this Section 7.01(1)(i))
is at all times not less than one hundred thirty percent (130%) of the sum of (A) the
aggregate outstanding principal amount of the Advances plus (B) the
notional amount if any (determined by the Lender) that would be payable by the
Borrower to the Lender under Section 6(e)(i) of the Master Agreement
if an Early Termination Date was deemed to have occurred in relation to all
then subsisting Transactions after an Event of Default by the Borrower.  If the Obligors at any time shall not be in
compliance with the preceding sentence, and in any event within ten (10) days
of being notified by the Lender of such noncompliance (which notification shall
be conclusive and binding on the Obligors), the Obligors shall either:  (1) provide the Lender with, or procure
the provision to the Lender of, such additional security as shall in the
opinion of the Lender be adequate to make up such deficiency, which additional
security shall take such form, be constituted by such documentation and be
entered into between such parties as the Lender in its absolute discretion may
approve or require (and, if the Obligors do not make proposals satisfactory to
the Lender in relation to such additional security within five (5) days of
the

 

35

 

date of the Lender’s notification to the
Obligors aforesaid, the Obligors shall be deemed to have elected to repay in
accordance with (2) below); or (2) repay (subject to, and in
accordance with Section 2.04(e), (g) and (h)) such part of the
Advances as will ensure compliance with this Section 7.01(l)(i).

 

(ii)           For purposes of this Section 7.01(l), the Obligors at
their expense shall cause a valuation of each Vessel to be made by an Approved Broker indicating the Fair Market Value of such Vessel at any time the Lender
may request upon not less 5 days’ prior written notice
from the Lender to the Borrower.  The Obligors shall supply to the Lender and to
any relevant Approved Broker such information concerning the Vessels and
their condition as such Approved Broker may require for the purpose of making
valuations of the Vessels.

 

(iii)          If the aggregate Fair Market Value of the Vessels subject
to a Mortgage (plus the market value of any additional security for the time
being actually provided to the Lender pursuant to Section 7.01(1)(i)) is
at any time less than one hundred fifty percent (150%) of the sum of (A) the
aggregate outstanding principal amount of the Advances plus (B) the
notional amount if any (determined by the Lender) that would be payable by the
Borrower to the Lender under Section 6(e)(i) of the Master Agreement
if an Early Termination Date was deemed to have occurred in relation to all
then subsisting Transactions after an Event of Default by the Borrower, then
the Borrower shall consult with the Lender as to the action intended to be
taken by the Borrower to prevent any further decline in such ratio, taking into
consideration the employment of the Vessels and the prospects of the dry bulk
market.

 

(m)           Operating
Account.  Cause each Guarantor to
maintain its Operating Account with the Lender and to cause all earnings in respect
of its Vessel to be deposited into such Operating Account.

 

(n)            “Know
Your Customer” Documentation.  The
Borrower will produce such documents and evidence as the Lender shall from time
to time require, based on applicable law and regulations from time to time and
the Lender’s own internal guidelines from time to time relating to the Lender’s
knowledge of its customers.

 

SECTION 7.02. Negative Covenants. So long as any Advance shall remain unpaid or
the Lender shall have any Commitment hereunder, none of the Obligors shall:

 

(a)            Liens,
Etc.  Create, incur, assume or suffer
to exist any Lien on any of its properties whether now owned or hereafter
acquired, or sign or file, under the Uniform Commercial Code (or analogous
statute or law) of any jurisdiction, a financing statement that names it as
debtor, or sign any security agreement authorizing any secured party thereunder
to file such financing statement, or assign any right to receive income, other
than: (i) Liens on Collateral in favor of the Lender, (ii) Liens
permitted by the Loan Documents, (iii) Permitted Encumbrances, and (iv) in
the case of the Borrower, Liens incurred in the ordinary course of its business
and which do not secure Financial Indebtedness.

 

(b)            Consolidations,
Mergers.  Consolidate or merge with
or into any other Person.

 

(c)            Sales,
Etc. of Assets.  Sell, transfer or
otherwise dispose of any assets or grant any option or other right to purchase
or otherwise acquire any Collateral other than in the ordinary course of its
business, except (i) sales in the ordinary course of its business and (ii) dispositions
of obsolete, worn out or surplus property disposed of in the ordinary course of
business; provided, that any Guarantor

 

36

 

may sell the Vessel it owns but
only if the Borrower shall be in compliance with the provisions of Sections
2.04(d) and 7.01(l) immediately after giving effect to such sale.

 

(d)            Restrictions on Chartering.  Without the consent of the Lender, which
consent shall not unreasonably be withheld (i) let any Vessel on demise
charter for any period; (ii) enter into any time or consecutive voyage
charter in respect of any Vessel for a term which exceeds, or which by virtue
of any optional extensions may exceed, 13 months; (iii) enter into any
charter in relation to any Vessel under which more than 2 months’ hire (or the
equivalent) is payable in advance; (iv) charter any Vessel otherwise than
on bona fide arm’s length terms at the time when such Vessel is fixed; (v) de-activate
or lay up any Vessel; or (iv) put any Vessel into the possession of any
Person for the purpose of work being done upon her in an amount exceeding or
likely to exceed $1,000,000 (or the equivalent in any other currency) unless
that Person has first given to the Lender and in terms satisfactory to it a
written undertaking not to exercise any Lien on such Vessel or her earnings for
the cost of such work or for any other reason.

 

(e)            Change
in Nature of Business.  Engage in any
line of business other than directly or indirectly owning and operating the
Vessels.

 

(f)             Debt.  Create, incur, assume or suffer to exist any
Debt other than (i) Debt under the Loan Document and, prior to the first
Drawdown Date, under the Existing Credit Agreement, (ii) Debt for (x) trade
payables and expenses accrued in the ordinary course of business and that are
not overdue, or (y) customer advance payments and customer deposits received in
the ordinary course of business, and (iii) Debt owing to Affiliates
provided that such Debt is subordinated on terms and conditions acceptable to
the Lender and subject in right of payment to the prior payment in full of all
amounts outstanding under this Agreement and the Note.

 

(g)            Dividends.  Declare or pay any dividend of any kind or
make any purchase or redemption of or distribution on any stock, limited
liability company interest or other equity interest without the prior written
consent of the Lender except that (i) any Guarantor may make distributions
to the Borrower, and (ii) for any Accounting Period, the Borrower may pay
a dividend, if and so long as both immediately before and after the declaration
and payment of such dividend, no Default or Event of Default shall have
occurred and be continuing, up to the amount of Available Free Cash at the time
such dividend is declared and paid.

 

(h)            Loans,
Investments.  Make any loan or
advance to, make any investment in, or enter into any working capital
maintenance or similar agreement with respect to any Person whether by
acquisition of stock or indebtedness, by loan, guarantee or otherwise, except
loans to another Obligor to the extent such Obligor is permitted to incur such
Debt under Section 7.02(f).

 

(i)             Acquisitions.  Make any acquisition of an asset (other than
a Vessel) outside the ordinary course of its business.

 

(j)             Constitutive
Document Amendments.  Permit any
amendment of its articles of incorporation and by-laws, or certificate of
formation or limited liability company agreement, as the case may be, without
giving the Lender prior written notice of such proposed amendment.

 

(k)            Transactions
with Affiliates.  Enter into or
become a party to any material transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for, any Affiliate),
except pursuant to (i) the

 

37

 

reasonable requirements of its
business and upon terms which are fair and reasonable and in its best
interests, or (ii) existing arrangements heretofore disclosed to the
Lender in writing and approved by the Lender.

 

(l)             Place of
Business.  Establish a place of
business in the United States of America, the District of Columbia, the United
States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States of America unless sixty (60) days’ prior
written notice of such establishment is given to the Lender.

 

(m)           Approved Manager.  Employ a manager of any Vessel other than an
Approved Manager, or change the terms and conditions of the management of such
Vessel in any material respect other than upon such terms and conditions as the
Lender shall approve.

 

(n)            Operating
Accounts.  Make any withdrawal from
any of the Operating Accounts except, so long as no Event of Default shall have
occurred and be continuing, any amount credited to an Operating Account shall
be available to the relevant Obligor to pay (i) the reasonable operating
expenses of its Vessel, (ii) the principal amount of the Advances,
interest thereon and any other amounts payable to the Lender hereunder or under
the other Loan Documents, (iii) the reasonable overhead, legal and other
expenses of the Obligors and Eagle Ventures incurred in connection with their
involvement in the acquisition, ownership and operation of the Vessels, as well
as any other fees and expenses to which the Lender may in its sole discretion
agree from time to time, and (iv) any dividends or distributions permitted
under Section 7.02(g).

 

(o)            Capital Stock.  Permit the Borrower to issue any class of
capital stock unless such stock is legally or effectively subordinated to the
right of the Lender to payment of any and all amounts due to the Lender under
this Agreement, the Note and the Security Documents.

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

SECTION 8.01. Events of Default.  If any
of the following events (“Events of Default”) shall occur and be
continuing:

 

(a)            The
Borrower shall fail to pay any installment of principal of any Advance when due
and payable; or

 

(b)            The
Borrower shall fail to pay any interest on any Advance or any fee payable to
the Lender hereunder, or the Borrower shall fail to make any other payment
hereunder, in each case within three (3) Business Days after the same
becomes due and payable; or

 

(c)            Any
representation or warranty made by any Obligor under or in connection with any
Loan Document shall prove to have been incorrect in any material respect when
made or deemed made or confirmed; or

 

(d) (i)       Any
Obligor shall fail to perform or observe any term, covenant or agreement
contained in Article VI or in Sections 7.01(h), 7.01(l) and 7.02 to be
observed by it, or (ii) any Obligor shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied (A) beyond
the expiration of any applicable notice and/or grace period or (B) if
there is no applicable notice

 

38

 

and/or grace period, for fifteen
(15) days after written notice thereof shall have been given to the Borrower by
the Lender; or

 

(e)            Any
Obligor shall fail to pay any principal of or premium or interest on any Debt
which such Obligor is liable to pay, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or

 

(f)             Any
Obligor shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Obligor seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of forty-five (45) days, or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or any Obligor shall take any corporate or company action to authorize
any of the actions set forth above in this Section 8.01(f); or

 

(g)            In
the reasonable determination of the Lender, it becomes impossible or unlawful
for any Obligor to fulfill any of the covenants and obligations required to be
fulfilled as contained in any Loan Document or any of the instruments granting
or creating rights in any of the Collateral in any material respect, or for the
Lender to exercise any of the rights or remedies vested in it under any Loan
Document, any of the Collateral or any of such instruments in any material
respect; or

 

(h)            Any
judgment or order shall be rendered against any Obligor that is reasonably
likely to result in a Material Adverse Effect with respect to such Obligor, and
there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have been
vacated, satisfied, discharged or bonded pending appeal; or

 

(i)             Any
material provision of any Loan Document after delivery thereof pursuant to
Sections 3.01, 3.02 or 3.03 shall for any reason cease to be valid and binding
on or enforceable against any Borrower or any such Borrower shall so state in
writing; or

 

(j)             Any
Collateral Document after delivery thereof shall for any reason (other than
pursuant to the terms thereof) cease to create (i) in the case of any
Mortgage, a valid first preferred mortgage under the Marshall Islands Maritime
Act, 1990, as amended, and (ii) in the case of any

 

39

 

Assignment of Earnings or
Assignment of Insurance, a valid and perfected first priority Lien on the Collateral
purported to be covered thereby; or

 

(k)            An
“Event of Default” as defined in any Mortgage shall occur; or

 

(l)             Notice
of an Early Termination Date is given by the Lender under section 6(a) of
the Master Agreement; or

 

(m)           A
person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv) of
the Master Agreement; or

 

(n)            An
Event of Default (as defined in Section 14 of the Master Agreement) shall
occur; or

 

(o)            The
Master Agreement is terminated, cancelled, suspended, rescinded or revoked or
otherwise ceases to remain in full force and effect for any reason; or

 

(p)            Any event occurs or any other circumstances arise or develop
including, without limitation, a change in the financial position, state of
affairs or prospects of the Borrower or its Subsidiaries in the light of which in the judgment of the Lender there is a significant risk that the Borrower is, or will later
become unable to discharge its liabilities as they fall due;

 

then, and in any such event, the Lender may, by notice to the Borrower,
(i) declare the Commitment and the obligation of the Lender to make the
Advances available to be terminated, whereupon the same shall forthwith
terminate, and (ii) declare the Note, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Note, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower;  provided, however, that, in the event of an
actual or deemed entry of an order for relief with respect to any of the
Borrower under the Federal Bankruptcy Code, (A) the obligation of the
Lender to make the Advances available shall automatically be terminated and (B) the
Note, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01. Amendments, Etc.  No
amendment or waiver of any provision of this Agreement or the Note, nor consent
to any departure by any Obligor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

SECTION 9.02. Notices, Etc.  Except
as otherwise provided for in this Agreement, all notices or other
communications under or in respect of this Agreement to any party hereto shall
be in writing (that is by letter or telefacsimile) and shall be deemed to be
duly given or made when delivered (in the case of personal delivery or letter)
and when dispatched (in the case of telefacsimile) to such party addressed to
it at the address appearing below (or at such address as such party may
hereafter specify for such purpose to the other by notice in writing):

 

40

 

(a) if to any Obligor:

 

c/o Eagle Shipping International (USA) LLC

29 Broadway, Room 1610

New York, New York 10006

 

Facsimile No: 
+1 212 785 3311

 

(b) if to the Lender:

 

Shipping Business Centre

5-10 Great Tower Street

London EC3P 3HY

England

Attention: 
Ship Finance Portfolio Management Team

 

Facsimile No: +44 207 615 0112

 

A notice or other communication received on a non-working day or after
business hours in the place of receipt, shall be deemed to be served on the
next following working day in such place.

 

SECTION 9.03. No Waiver, Remedies.  No
failure on the part of the Lender to exercise, and no delay in exercising, any
right hereunder or under the Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 9.04. Costs; Expenses.  (a) Whether
or not any Advance is made or the transactions contemplated by this Agreement
are consummated (including the proposed execution and delivery of the other
Loan Documents), the Borrower agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents and the other documents to be delivered hereunder including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Lender with respect thereto, and for advising the Lender as to its
rights and responsibilities, or the protection or preservation of rights or
interests, under the Loan Documents.  The
Borrower further agrees to pay on demand all reasonable out-of-pocket costs and
expenses of the Lender in connection with the enforcement of the Loan Documents
and the other documents to be delivered hereunder, whether in action, suit,
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors’ rights generally or otherwise (including, without limitation, the
reasonable fees and reasonable expenses of counsel for the Lender with respect
thereto) and expenses in connection with the enforcement of rights under this Section 9.04(a).

 

(b)            If
any payment of principal of any Advance (or any relevant portion thereof) is
made by the Borrower to the Lender other than on the last day of the Interest
Period for such Advance (or relevant portion thereof), as a result of a payment
pursuant to Section 2.04, acceleration of the maturity of the Note
pursuant to Section 8.01 or for any other reason, the Borrower shall, upon
demand by the Lender pay to the Lender (i) any amounts required to
compensate such Lender for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits

 

41

 

or other funds acquired by the
Lender to fund or maintain such Advance (or any relevant portion thereof), plus
(ii) an amount equal to the Applicable Margin which would, but for such
payment of such Advance (or any relevant portion thereof), have accrued on such
Advance (or any relevant portion thereof) from the date of such payment to the
earlier of (A) the end of the current Interest Period, and (B) the
ninetieth (90th) day following the date of such payment.

 

(c)            Each
of the Obligors jointly and severally agrees to indemnify and hold harmless the
Lender and each of its Affiliates, and their respective officers, directors,
employees, agents, advisors and representatives (each, an “Indemnified Party”)
from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and disbursements of counsel),
that may be incurred by or asserted or awarded against any Indemnified Party,
arising out of or in connection with or relating to (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the making of the Advances or consummation of any other transaction
contemplated hereby, (ii) the Advances or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of
Environmentally Sensitive Material on or from any property owned or operated by
any Obligor, or any Environmental Action related in any way to any Obligor, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnified Party is a party thereto, except,
with respect to any particular Indemnified Party, to the extent such claim,
damage, loss, liability or expense is either admitted to by such Indemnified
Party or found in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted from such Indemnified Party’s gross negligence or
willful misconduct, provided that the foregoing exceptions to the liability of
the Obligors with respect to such Indemnified Person shall not limit or affect
the liability of the Obligors to any other Indemnified Party.  Each of the Obligors jointly and severally
further agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract, tort or otherwise) to any Obligor or any of
their respective shareholders, members or creditors for or in connection with
the transactions contemplated hereby, except, with respect to any particular
Indemnified Party, to the extent such liability is either admitted to by such
Indemnified Party or found in a final, non-appealable judgment of a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct.  The
indemnities of this Section 9.04(c) shall survive the termination of
this Agreement and the other Loan Documents.

 

SECTION 9.05. Right of Set-off.  Upon
the occurrence and during the continuance of any Event of Default, the Lender
is hereby authorized at any time and from time to time to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
to the Lender now or hereafter existing under this Agreement and the Note held
by the Lender, whether or not the Lender shall have made any demand under this
Agreement or the Note and although such obligations may be unmatured.  The Lender agrees promptly to notify the
Borrower after any such set-off and application shall be made by the Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
the Lender under this Section 9.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Lender may have.

 

SECTION 9.06. Assignments and Participations.  (a) This Agreement shall
be binding upon and inure to the benefit of the Lender and the Borrower and
their respective successors and permitted assigns.

 

42

 

(b)            The Borrower may
not assign or transfer all or any part of its rights and/or obligations under
this Agreement.

 

(c)            The Lender may, at
the Lender’s expense and with the prior consent of the Borrower which consent
shall not unreasonably be withheld, assign or transfer all or any part of its
rights or obligations under this Agreement and the Loan Documents; provided,
however, the Lender may assign or transfer all or any part of its rights
or obligations under this Agreement and the Loan Documents to any Affiliate of
the Lender or, if an Event of Default shall have occurred and is continuing, to
any other Person without the consent of the Borrower.  The Lender shall notify the Borrower promptly
following any such assignment or transfer.

 

(d)            The Lender may
change its lending office without the consent of the Borrower provided that the
Lender shall notify the Borrower promptly following any such change of lending
office and such change of lending office shall not result in a Material Adverse
Effect with respect to the Borrower and its Subsidiaries, taken as a whole.

 

(e)            The
Lender may, at its own expense, sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under this
Agreement (including without limitation, all or a portion of its Commitment,
any Advance and the Note);  provided,
however, that (i) the Lender’s obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) the Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
Lender shall remain the holder of the Note for all purposes of this Agreement, (iv) the
Borrower shall continue to deal solely and directly with the Lender in
connection with this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce or postpone any date fixed for payment of principal of, or interest on,
the Note or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation.

 

(f)             The
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 9.06, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Borrower to be furnished to the Lender by or on behalf of the
Borrower.

 

SECTION 9.07. Judgment.  (a) 
If for the purposes of obtaining judgment in any court it is necessary to
convert a sum due hereunder or under the Note in Dollars into another currency,
the parties hereto agree, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Lender could purchase Dollars with such other
currency on the Business Day preceding that on which final judgment is given.

 

(b)           The obligation of
each Obligor in respect of any sum due from it to the Lender hereunder or under
the Note or any other Loan Document shall, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt by the Lender of any sum adjudged to be so due
in such other currency the Lender may in accordance with normal banking
procedures purchase Dollars with such other currency;  if the Dollars so purchased are less than the
sum originally due to the Lender in Dollars, such Obligor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Lender

 

43

 

against such loss, and if the
Dollars so purchased exceed the sum originally due to the Lender in Dollars,
the Lender agrees to remit to such Obligor such excess.

 

SECTION 9.08. Governing Law; Submission to Jurisdiction.  (a) This
Agreement and the Note shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

(b)            Each
Obligor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
Obligor hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State Court or, to the extent permitted by law, in such Federal court.  Each Obligor agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Subject to the foregoing and to
paragraph (c) below, nothing in this Agreement shall affect any right that
any party hereto may otherwise have to bring any action or proceeding relating
to this Agreement against any other party hereto in the courts of any
jurisdiction.

 

(c)            Each
Obligor hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any New York State or Federal court and the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court and any immunity from jurisdiction of any court or
from any legal process with respect to itself or its property.

 

(d)            Each
Obligor agrees that service of process may be made on it by personal service of
a copy of the summons and complaint or other legal process in any such suit,
action or proceeding, or by registered or certified mail (postage prepaid) to
its address specified in Section 9.02, or by any other method of service
provided for under the applicable laws in effect in the State of New York.

 

SECTION 9.09. Execution in Counterparts.  This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

SECTION 9.10. WAIVER OF JURY TRIAL.  EACH
OF THE OBLIGORS AND THE LENDER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

 

SECTION 9.11. Entire Agreement.  This
Agreement, the Note and the other Loan Documents embody the entire agreement
between the parties relating to the subject matter hereof and supersede all
prior agreements, representations and understandings, if any, relating to such
subject matter.

 

SECTION 9.12. Severability of Provisions.  Any
provision of the Loan Documents that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent

 

44

 

of such prohibition or
enforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

45

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.

 

	
  EAGLE BULK SHIPPING INC.  

  	
  HAWK SHIPPING LLC  

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  CARDINAL SHIPPING LLC

  	
  KITE SHIPPING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  CONDOR SHIPPING LLC

  	
  OSPREY SHIPPING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  FALCON
  SHIPPING LLC

  	
  PEREGRINE SHIPPING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  GRIFFON
  SHIPPING LLC

  	
  SHIKRA SHIPPING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  HARRIER SHIPPING LLC

  	
  SPARROW SHIPPING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:  

  	
  Name:  

  
	
  Title:

  	
  Title:

  

 

46

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:

  
						

 

47

 

Schedule I

 

The Mandatory Cost Rate will be calculated in accordance with the
following formula:

 

F x 0.01

   300

 

where on the day(s) of application of the formula:

 

F.             is the rate of
charge payable by the Lender to the Financial Services Authority pursuant to
paragraph 2 of the Fees Regulations (but where for this purpose, the figure at
paragraph 2.02b/2.03b shall be deemed to be zero) and expressed in pounds per
£1 million of the Fee Base of the Lender.

 

For the purposes of this Schedule:

 

Fee Base has the meaning ascribed to it for the purposes of, and all be
calculated in accordance with, the Fees Regulations.

 

Fees Regulations means, as appropriate, either the Banking Supervision
(Fees) Regulations 2000 or such regulations as from time to time may be in
force, relating to the payment of fees for banking supervision in respect of
periods subsequent to March 31, 2001.

 

Any reference to a provision of any statute, directive, order or
regulation herein is a reference to that provision as amended or re-enacted
from time to time.

 

If alternative or additional financial requirements are imposed which
in the Lender’s opinion make the formula set out above no longer appropriate,
the Lender shall be entitled to stipulate such other formula as shall be
suitable to apply in substitution for the formula set out above.

 

48

 

Schedule II

 

Part A

 

Delivered Vessels

 

	
  Owner

  	
   

  	
  Vessel

  	
   

  	
  Flag

  	
   

  	
  Official No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Condor Shipping LLC

  	
   

  	
  CONDOR

  	
   

  	
  Marshall Islands

  	
   

  	
  2238

  	
   

  
	
  Falcon Shipping LLC

  	
   

  	
  FALCON

  	
   

  	
  Marshall Islands

  	
   

  	
  2239

  	
   

  
	
  Harrier Shipping LLC

  	
   

  	
  HARRIER

  	
   

  	
  Marshall Islands

  	
   

  	
  2240

  	
   

  
	
  Hawk Shipping LLC

  	
   

  	
  HAWK I

  	
   

  	
  Marshall Islands

  	
   

  	
  2237

  	
   

  
	
  Griffon Shipping LLC

  	
   

  	
  GRIFFON

  	
   

  	
  Marshall Islands

  	
   

  	
  2351

  	
   

  
	
  Cardinal Shipping LLC

  	
   

  	
  CARDINAL

  	
   

  	
  Marshall Islands

  	
   

  	
  2349

  	
   

  
	
  Kite Shipping LLC

  	
   

  	
  KITE

  	
   

  	
  Marshall Islands

  	
   

  	
  2352

  	
   

  
	
  Shikra Shipping LLC

  	
   

  	
  SHIKRA

  	
   

  	
  Marshall Islands

  	
   

  	
  2350

  	
   

  

 

Part B

 

Remaining Vessels

 

	
  Purchaser

  	
   

  	
  Vessel

  	
   

  	
  Flag

  	
   

  	
  Register No.

  	
   

  	
  To be renamed

  	
   

  
	
  Peregrine Shipping LLC

  	
   

  	
  SEA BEAUTY

  	
   

  	
  Bahamas

  	
   

  	
  8000315

  	
   

  	
  PEREGRINE

  	
   

  
	
  Osprey Shipping LLC

  	
   

  	
  AVENTURERO DOS

  	
   

  	
  Maltese

  	
   

  	
  9241504

  	
   

  	
  OSPREY I

  	
   

  
	
  Sparrow Shipping LLC

  	
   

  	
  SEA BLUE

  	
   

  	
  Panama

  	
   

  	
  28679-PEXT-3

  	
   

  	
  SPARROW

  	
   

  

 

49QuickLinks
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Exhibit 10.6  

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

EAGLE VENTURES LLC

A MARSHALL ISLANDS LIMITED LIABILITY COMPANY  

  

 
 

Table of Contents  
    

	 
	 	 
	 	Page

	

ARTICLE I DEFINED TERMS
	

Section 1.1	
 	

Definitions	
 	

1
	

ARTICLE II FORMATION OF THE COMPANY
	

Section 2.1	
 	

Formation	
 	

13
	Section 2.2	 	Company Name	 	13
	Section 2.3	 	The Certificate, etc.	 	13
	Section 2.4	 	Term of Company	 	13
	Section 2.5	 	Registered Agent and Office	 	13
	Section 2.6	 	Principal Place of Business	 	14
	Section 2.7	 	Qualification in Other Jurisdictions	 	14
	Section 2.8	 	Fiscal Year; Taxable Year	 	14
	

ARTICLE III PURPOSE AND POWERS OF THE COMPANY
	

Section 3.1	
 	

Purpose	
 	

14
	Section 3.2	 	Powers of the Company	 	14
	Section 3.3	 	Certain Tax Matters	 	14
	

ARTICLE IV MEMBERS
	

Section 4.1	
 	

Powers of Members	
 	

15
	Section 4.2	 	Units Generally	 	15
	Section 4.3	 	Meetings of Members	 	15
	Section 4.4	 	Business Transactions of a Member with the Company	 	17
	Section 4.5	 	No Cessation of Membership upon Bankruptcy	 	17
	Section 4.6	 	Confidentiality; Nonsolicitation; Non-Disparagement	 	17
	Section 4.7	 	Other Business for Kelso Members and Certain Members	 	19
	Section 4.8	 	Additional Members	 	20
	

ARTICLE V MANAGEMENT
	

Section 5.1	
 	

Board	
 	

21
	Section 5.2	 	Meetings of the Board	 	22
	Section 5.3	 	Quorum and Acts of the Board	 	22
	Section 5.4	 	Electronic Communications	 	23
	Section 5.5	 	Committees of Directors	 	23
	Section 5.6	 	Compensation of Directors	 	23
	Section 5.7	 	Resignation	 	24
	Section 5.8	 	Removal of Directors	 	24
	Section 5.9	 	Vacancies	 	24
	Section 5.10	 	Directors as Agents	 	24
	Section 5.11	 	Subsidiaries	 	24
	

ARTICLE VI INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS
	

Section 6.1	
 	

Representations, Warranties and Covenants of Members	
 	

25
	Section 6.2	 	Additional Representations and Warranties of Management Members, Outside Investor Members and Other Investor Members	 	27
	Section 6.3	 	Additional Representations and Warranties of Kelso Members	 	28
	Section 6.4	 	Additional Representations and Warranties of Zoullas, the Management Members and the Outside Investor Members	 	28
	Section 6.5	 	Certain Members	 	29
	

ARTICLE VII CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS
	

Section 7.1	
 	

Capital Accounts	
 	

29
	Section 7.2	 	Adjustments	 	29
	Section 7.3	 	Initial Capital Contributions; Initial SMI Funds Advance	 	30
	 	 	 	 	 

i

 

	Section 7.4	 	Additional Capital Contributions by Kelso	 	30
	Section 7.5	 	Additional Capital Contributions	 	30
	Section 7.6	 	Negative Capital Accounts	 	31
	

ARTICLE VIII POINTS
	

Section 8.1	
 	

Points	
 	

32
	Section 8.2	 	Ex-Management Members	 	33
	Section 8.3	 	Allocation of Points to Management Members upon Termination of Employment	 	33
	Section 8.4	 	Nontransferability of Awards	 	36
	Section 8.5	 	Amendment to the Points Plan	 	36
	

ARTICLE IX ALLOCATIONS
	

Section 9.1	
 	

Book Allocations of Net Profit and Net Loss	
 	

36
	Section 9.2	 	Special Book Allocations	 	37
	Section 9.3	 	Tax Allocations	 	37
	

ARTICLE X DISTRIBUTIONS
	

Section 10.1	
 	

Explanation of Terms	
 	

38
	Section 10.2	 	Distributions Generally	 	40
	Section 10.3	 	Distributions In Kind	 	42
	Section 10.4	 	No Withdrawal of Capital	 	42
	Section 10.5	 	Withholding	 	42
	Section 10.6	 	Restricted Distributions	 	43
	Section 10.7	 	Tax Distributions	 	43
	Section 10.8	 	Eagle Bulk Shipping Advances	 	43
	

ARTICLE XI BOOKS AND RECORDS
	

Section 11.1	
 	

Books, Records and Financial Statements	
 	

44
	Section 11.2	 	Filings of Returns and Other Writings; Tax Matters Partner	 	44
	Section 11.3	 	Accounting Method	 	45
	Section 11.4	 	Appraisal	 	45
	

ARTICLE XII LIABILITY, EXCULPATION AND INDEMNIFICATION
	

Section 12.1	
 	

Liability	
 	

45
	Section 12.2	 	Exculpation	 	45
	Section 12.3	 	Fiduciary Duty	 	46
	Section 12.4	 	Indemnification	 	46
	Section 12.5	 	Expenses	 	46
	Section 12.6	 	Severability	 	46
	

ARTICLE XIII TRANSFERS OF INTERESTS
	

Section 13.1	
 	

Restrictions on Transfers of Interests or Special Membership Interests by Management Members, Outside Investor Members and Other Investor Members	
 	

47
	Section 13.2	 	Estate Planning Transfers; Transfers upon Death of a Management Member, Outside Investor Members or Other Investor Members	 	47
	Section 13.3	 	Effect of Assignment	 	48
	Section 13.4	 	Overriding Provisions	 	48
	Section 13.5	 	Put Rights with respect to Interests and Special Membership Interests Owned by Zoullas and the Outside Investor Members	 	49
	Section 13.6	 	Involuntary Transfers	 	51
	Section 13.7	 	Assignment by the Company	 	52
	Section 13.8	 	Substitute Members	 	52
	Section 13.9	 	Release of Liability	 	52
	Section 13.10	 	Tag-Along and Drag-Along Rights; Initial Members Participation Rights	 	53
	Section 13.11	 	Initial Public Offering	 	55
	Section 13.12	 	Right of First Offer	 	55
	

ARTICLE XIV DISSOLUTION, LIQUIDATION AND TERMINATION
	 	 	 	 	 

ii

 

	

Section 14.1	
 	

Dissolving Events	
 	

56
	Section 14.2	 	Dissolution and Winding-Up	 	57
	Section 14.3	 	Distributions in Cash or in Kind	 	58
	Section 14.4	 	Termination	 	58
	Section 14.5	 	Claims of the Members	 	58
	

ARTICLE XV MISCELLANEOUS
	

Section 15.1	
 	

Notices	
 	

59
	Section 15.2	 	Securities Act Matters	 	60
	Section 15.3	 	Headings; Interpretation	 	60
	Section 15.4	 	Entire Agreement	 	60
	Section 15.5	 	Counterparts	 	60
	Section 15.6	 	Governing Law; Attorneys' Fees; Forum; Jurisdiction; Service of Process	 	60
	Section 15.7	 	Waiver of Jury Trial	 	61
	Section 15.8	 	Waiver of Partition	 	61
	Section 15.9	 	Severability	 	61
	Section 15.10	 	Further Actions	 	61
	Section 15.11	 	Amendments	 	61
	Section 15.12	 	Outside Investor Members Representative; Power of Attorney	 	62
	Section 15.13	 	Power of Attorney	 	62
	Section 15.14	 	Fees and Expenses	 	63

	

EXHIBITS	
 	

 
	

Exhibit A	
 	

Joinder Agreement
	

SCHEDULES	
 	

 
	

Schedule A	
 	

Initial Capital Commitments by Kelso Members, Management Members, Outside Investor Members and Other Investor Members
	

Schedule B	
 	

Management Points
	

Schedule C	
 	

Initial Directors
	

Schedule D	
 	

Post IPO Performance Percentages—Definitions
	

Schedule E	
 	

Special Membership Interests
	

Schedule F	
 	

Vested IPO Percentages for Management Members

iii

 
 

SECOND AMENDED AND RESTATED
  
  LIMITED LIABILITY COMPANY AGREEMENT    
    

        This Second Amended and Restated Limited Liability Company Agreement of Eagle Ventures LLC, a Marshall Islands limited liability company (the
"Company"), is made as of June    , 2005 by and among the individuals or entities listed under the heading "Kelso Members" on  Schedule A hereto (each a "Kelso Member" and collectively, the "Kelso
Members"), Sophocles Zoullas ("Zoullas"), Edward H. James ("James "), Claude
Thouret ("Thouret"), Alan Ginsberg ("Ginsberg"), Intercontinental Shipping and Trading Corp.
("IST"), Maria Zoullas ("Maria "), George S. Kaufman
("Kaufman"), Jeffrey S. Nordhaus ("Nordhaus"), David Hiley
("Hiley"), and Magnetite Asset Investors III L.L.C. ("Magnetite," and, together with the Kelso Members,
Zoullas, James, Thouret, Ginsberg, IST, Maria, Kaufman, Nordhaus and Hiley, the "Initial Members") and such other Persons as may become Members of the
Company after the date hereof in accordance with Section 4.8 of this Agreement. Zoullas, James, Thouret and Ginsberg and such other employees of the Company or any Subsidiary of the Company as
shall become members of the Company after the date hereof are referred to as the "Management Members." IST, Maria, Kaufman and Nordhaus are collectively
referred to as the "Outside Investor Members." Hiley and Magnetite are collectively referred to as the "Other Investor
Members." The Kelso Members, Management Members, Outside Investor Members and Other Investor Members are collectively referred to herein as the
"Members." 

 
 

ARTICLE I
  
  DEFINED TERMS    
    

        Section 1.1    Definitions.    

        "Accounting Period" means, for the first Accounting Period, the period commencing on the day after the Initial Capital Contribution Date
and ending on the next Adjustment Date. All succeeding Accounting Periods shall commence on the day after an Adjustment Date and end on the next Adjustment Date. 

        "Additional Capital Contribution Event" has the meaning set forth in Section 7.4(a) of this Agreement. 

        "Additional Member" has the meaning set forth in Section 4.8(a) of this Agreement. 

        "Adjusted Aggregate Post IPO Performance Percentage" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Adjusted Carry Percentage" means, with respect to any Management Member, the product of (x) such Management Member's Carry
Percentage multiplied by (y) the Carry Adjustment Factor. 

        "Adjusted Total Service Percentage" shall have the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Adjusted Total Vested IPO Percentage" has the meaning set forth in Section 10.1(a)(iii) of this Agreement. 

        "Adjusted Total Vested Service Percentage" shall have the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Adjustment Date" means the last day of each fiscal year of the Company or any other date determined by the Board, in its sole discretion,
as appropriate for an interim closing of the Company's books. 

        "Affiliate" means, with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the specified Person. As used in this definition, the term "control" means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through 

 

ownership
of voting securities, by contract or otherwise; provided, that, for purposes of this Agreement, the Company shall not be considered an Affiliate of any Kelso Member or any affiliate or
portfolio company of any Kelso Member. 

        "Aggregate Investment" has the meaning set forth in Section 10.2(c) of this Agreement. 

        "Aggregate Post IPO Performance Percentage" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Aggregate Retainable Service Points" has the meaning set forth in Section 8.3(d) of this Agreement. 

        "Agreement" means this Limited Liability Company Agreement of the Company, as this agreement may be amended, modified, supplemented or
restated from time to time after the date hereof. 

        "Appraisal" has the meaning set forth in Section 11.4 of this Agreement. 

        "Appraisal Date" has the meaning set forth in Section 11.4 of this Agreement. 

        "Appraiser" has the meaning set forth in Section 11.4 of this Agreement. 

        "Benchmark Amount" has the meaning set forth in Section 10.1(b) of this Agreement. 

        "Board" has the meaning set forth in Section 5.1(a) of this Agreement. 

        "Bulk Advance" has the meaning set forth in Section 10.8 of this Agreement. 

        "Capital Account" has the meaning set forth in Section 7.1 of this Agreement. 

        "Capital Contribution" means, for any Member, the total amount of cash and the Fair Market Value of any property contributed to the
Company by such Member. For the avoidance of doubt, Special Membership Interest Funds shall not be considered Capital Contributions. 

        "Carry Adjustment Factor" means a fraction, the numerator of which is $125,000,000, and the denominator of which is the aggregate value of
all Capital Contributions and advances of Special Membership Interest Aggregate Funds made to the Company since January 31, 2005 (other than Capital Contributions or advances of Special
Membership Interest Funds not made to the Company for good faith bona fide Company purposes); provided that in no event shall the Carry Adjustment
Factor be more than 1. 

        "Carry Percentage" has the meaning set forth in Section 10.1 of this Agreement. 

        "Carrying Value" means with respect to any Interest of any Management Member, Outside Investor Member or Other Investor Member purchased
by the Company, the value equal to the Capital Contribution made by the selling Management Member, Outside Investor Member or Other Investor Member in respect of any such Interest plus simple interest
at a rate per annum equal to 6%, which shall be deemed to be the carrying cost, from the date of such Capital Contribution by such Management Member, Outside Investor Member or Other Investor Member
through the date of such purchase by the Company, less the amount of distributions made in respect of such Interest (to the extent the amount of such distributions does not exceed simple interest). 

        "Certificate" means the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on
behalf of the Company pursuant to the Marshall Islands Act with the Republic of the Marshall Islands Registrar of Corporations. 

        "Code" means the U.S Internal Revenue Code of 1986, as amended. 

        "Company" has the meaning set forth in the recitals to this Agreement. 

        "Compensation Committee" has the meaning set forth in Section 5.5 of this Agreement. 

2

 

        "Confidential Information" has the meaning set forth in Section 4.6(a) of this Agreement. 

        "Covered Person" means a current or former Member or Director, an Affiliate of a current or former Member or Director, any officer,
director, shareholder, partner, member, employee, representative or
agent of a current or former Member or Director or any of their respective Affiliates, or any current or former officer, employee or agent of the Company or any of its Affiliates. 

        "Deficit" has the meaning set forth in Section 9.2(a) of this Agreement. 

        "Director" has the meaning set forth in Section 5.1(a) of this Agreement. 

        "Disability" means with respect to a Management Member, the termination of the employment of any Management Member by the Company or any
Subsidiary of the Company that employs such individual (or by the Company on behalf of any such Subsidiary) as a result of such Management Member's incapacity due to reasonably documented physical or
mental illness that shall have prevented such Management Member from performing his or her duties for the Company on a full-time basis for more than six months and within 30 days
after written notice has been given to such Management Member, such Management Member shall not have returned to the full time performance of his or her duties, in which case the date of termination
shall be deemed to be the last day of the aforementioned 30-day period, provided that in the case of any Management Member who, as of the
date of determination, is party to an effective services, severance or employment agreement with the Company or any of its Subsidiaries, "Disability" shall have the meaning, if any, specified in such
agreement. 

        "Distributable Amounts" has the meaning set forth in Section 10.2 of this Agreement. 

        "Drag-Along Rights" has the meaning set forth in Section 13.10(b) of this Agreement. 

        "Eagle Shipping" means Eagle Shipping International (USA) LLC, a Marshall Islands Limited Liability Company. 

        "Economic Interest" means a Member's or Ex-Management Member's share of the profits and losses of the Company and such
Member's or Ex-Management Member's right to receive distributions of the Company's assets, but shall not include the right to vote on or participate in any decision or action of or by the
Members or any right to receive information concerning the business and affairs of the Company. 

        "Ex-Management Member" has the meaning set forth in Section 8.2 of this Agreement. 

        "Exit Event" shall mean a transaction or series of transactions (other than an Initial Public Offering): 

	(a)
	involving
the sale, transfer or other disposition by the Kelso Members to one or more Persons that are not, immediately prior to such sale, Affiliates of the Company or any Kelso
Member, of all or substantially all of both the Interests and Special Membership Interests of the Company beneficially owned by the Kelso Members as of the date of such transaction; or

	(b)
	involving
the sale, Transfer or other disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to one or more Persons that are not,
immediately prior to such sale, Transfer or other disposition, Affiliates of the Company or any Kelso Member. 

        "Fair Market Value" means, as of any date, 

	(a)
	for
purposes of determining the value of any property contributed to or distributed by the Company, (i) in the case of publicly-traded securities, the average of their last
sales prices on the applicable trading exchange or quotation system on each trading day during the five trading-day period ending on such date and (ii) in the case of any other
property, the fair market value of such property, as determined in good faith by the Board, or 

3

 

	(b)
	for
purposes of determining the value of any Member's Interest or Special Membership Interest in connection with Section 13.5 ("Put Rights"), Section 13.6 ("Involuntary
Transfers") or for other purposes contemplated in this Agreement, (i) the fair market value of such Interest as reflected in the most recent Appraisal without additional premiums for control or
discounts for minority interests or restrictions on transfer or (ii) in the event no such Appraisal exists with respect thereto or the Appraisal Date is more than one year prior to the date of
determination or the Board otherwise determines in good faith that the use of such Appraisal is inappropriate, the fair market value of such Interest or Special Membership Interest, as applicable, as
determined in good faith by the Board; 

provided that, in the event fair market value is to be determined by the Board hereunder and such
determination is disputed in good faith on reasonable grounds by a majority of the Members directly affected by such determination, then fair market value shall be finally determined by arbitration in
New
York City in accordance with the commercial rules of the American Arbitration Association, and any such determination by the arbitration panel shall be final and binding (the expenses of such
arbitration to be borne equally by the Company, on the one hand, and the affected disputing Members, on the other hand). 

        "Financing Documents" has the meaning set forth in Section 13.5(b) of this Agreement. 

        "Ginsberg" has the meaning set forth in the recitals to this Agreement. 

        "Hiley" has the meaning set forth in the recitals to this Agreement. 

        "Initial Capital Commitment" means, with respect to any Member, the amount as set forth opposite the name of such Member on  Schedule A hereto under the heading
"Initial Capital Commitment." 

        "Initial Capital Contribution" means, for any Member, the amount of cash and the Fair Market Value of any property contributed to the
Company by such Member on or prior to the Initial Capital Contribution Date. 

        "Initial Capital Contribution Date" shall mean May 11, 2005. 

        "Initial SMI Funds Advance" means, for any Member, the amount of Special Membership Interest Funds advanced to the Company by such Member
on or prior to the Initial Capital Contribution Date. 

        "Initial Members" has the meaning set forth in the recitals to this Agreement. 

        "Initial Public Offering" or "IPO" means the first underwritten public offering of the
common stock of a Subsidiary of the Company to the general public through a registration statement filed with the Securities and Exchange Commission that covers (together with prior effective
registrations) (i) not less than 25% of the then outstanding shares of common stock of such Subsidiary of the Company on a fully diluted basis or (ii) shares of such Subsidiary of the
Company that will be traded on any of the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automated Quotation System after the close of any such
general public offering. 

        "Interest" means a Member's limited liability interest in the Company (other than any Special Membership Interest), including such
Member's Economic Interest, the right, if any, to vote on or participate in any decision or action of or by the Members (as such voting rights are represented by such Member's Units) and the right to
receive information concerning the business and affairs of the Company, in each case to the extent provided for herein or as otherwise required by the Marshall Islands Act. 

        "Involuntary Transfer" has the meaning set forth in Section 13.6 of this Agreement. 

        "Involuntary Transferee" has the meaning set forth in Section 13.6 of this Agreement. 

4

   
        "IST" has the meaning set forth in the recitals to this Agreement. 

        "James" has the meaning set forth in the recitals to this Agreement. 

        "Kaufman" has the meaning set forth in the recitals to this Agreement. 

        "Kelso" means KIA VII together with KEP VI. 

        "Kelso Investment Multiple" has the meaning set forth on Schedule D to this Agreement. 

        "Kelso IRR" has the meaning set forth on Schedule D to this Agreement. 

        "Kelso Member" has the meaning set forth in the recitals to this Agreement. 

        "Kelso Restriction Period" has the meaning set forth in Section 13.10(b) of this Agreement. 

        "Kelso Threshold Date" shall be deemed to occur at such time as the Kelso Total Invested Capital has reached and amount equal to
$126,681,771. 

        "Kelso Total Invested Capital" means the aggregate amount of all Capital Contributions and advances of Special Membership Interest
Aggregate Funds by the Kelso Members. 

        "KEP VI" means KEP VI, LLC, a Delaware limited liability company. 

        "KIA VII" means Kelso Investment Associates VII, L.P., a Delaware limited partnership. 

        "Management Member" has the meaning set forth in the recitals to this Agreement. A Management Member shall be deemed not to be a "manager"
within the meaning of the Marshall Islands Act (except to the extent Section 5.1(b)(i) of this Agreement applies). 

        "Majority in Interest" means the holders of a majority of the Units held by Members having the right to vote at a meeting of the Members. 

        "Magnetite" has the meaning set forth in the recitals to this Agreement. 

        "Maria" has the meaning set forth in the recitals to this Agreement. 

        "Marshall Islands Act" means the Marshall Islands Limited Liability Company Act of 1996 (SS.22.1 et
seq of the Republic of the Marshall Islands Associations Law), as the same may be amended from time to time. 

        "Maximum Amount" has the meaning set forth in Section 13.5(c) of this Agreement. 

        "Member" has the meaning set forth in the recitals to this Agreement and includes any Person admitted as an additional or substitute
Member of the Company pursuant to this Agreement. 

        "Net Profits" and "Net Losses" means, with respect to any Accounting Period, net income or
net loss of the Company for such Accounting Period, determined in accordance with § 703(a) of the Code, including any items that are separately stated for purposes of § 702(a)
of the Code, as determined in accordance with federal income tax accounting principles with the following adjustments: 

	(a)
	any
income of the Company that is exempt from United States federal income tax shall be included as income;

	(b)
	any
expenditures of the Company described in § 705(a)(2)(B) of the Code or treated as expenditures pursuant to § 1.704-1(b)(2)(iv)(i) of the
Treasury Regulations shall be treated as current expenses;

	(c)
	any
items of income, gain, loss or deduction specially allocated pursuant to this Agreement, including pursuant to Section 9.2, shall be excluded from the determination of Net
Profit and Net Loss; and 

5

 

	(d)
	treating
as an item of gain (loss) the excess (deficit), if any, of the gross fair market value of property distributed in such Accounting Period over (under) the amount at which such
property was carried on the books of the Company. 

        "Nordhaus" has the meaning set forth in the recitals to this Agreement. 

        "Other Investor Members" has the meaning set forth in the recitals to this Agreement. 

        "Outside Investor Members" has the meaning set forth in the recitals to this Agreement. 

        "Partnership Minimum Gain" shall have the meaning set forth in sections 1.704-2(b)(2) and 1.704-2(d) of the
Treasury Regulations. 

        "Performance Factor" has the meaning set forth on Schedule D to this Agreement. 

        "Performance Percentage" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Performance Points" has the meaning set forth in Section 8.1(a) of this Agreement. 

        "Person" means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability
company, or other legal entity or organization. 

        "Points" has the meaning set forth in Section 8.1(a) of this Agreement. 

        "Post IPO Awarded Performance Points" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Post IPO Performance Percentage" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Post IPO Remaining Percentage" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Put Notice" has the meaning set forth in Section 13.5(a) of this Agreement. 

        "Put Rights" has the meaning set forth in Section 13.5(a) of this Agreement. 

        "Retainable Service Points" has the meaning set forth in Section 8.3(d) of this Agreement. 

        "Resignation for Good Reason" means a voluntary termination of a Member's employment with the Company or any Subsidiary of the Company
that employs such individual by such Member of his employment with the Company or any such Subsidiary as a result of either of the following: 

	(a)
	without
the Member's prior written consent, a significant reduction by the Company or any such Subsidiary of his or her current salary, other than any such reduction which is part of
a general salary reduction or other concessionary arrangement affecting all employees or affecting the group of employees of which the Member is a member (after receipt by the Company of written
notice from such Member and a 20-day cure period); or

	(b)
	the
taking of any action by the Company or any such Subsidiary that would substantially diminish the aggregate value of the benefits provided him or her under the Company's or such
Subsidiary's accident, disability, life insurance and any other employee benefit plans in which he or she was participating on the date of his or her execution of this Agreement, other than any such
reduction which is (i) required by law, (ii) implemented in connection with a general concessionary arrangement affecting all employees or affecting the group of employees of which the
Member is a member, (iii) generally applicable to all beneficiaries of such plans (after receipt by the Company of written notice and a 20-day cure period) or (iv) in
accordance with the terms of any such plan. 

6

 

or,
if such Member is a party to a services, severance or employment agreement with the Company or a Subsidiary of the Company, the meaning as set forth in such services or employment agreement. 

        "Restriction Period" means, with respect to any Management Member, a period commencing on the date hereof and ending on the later of
(i) the date on which a Management Member or any transferee thereof permitted under Section 13.2 hereof, directly or indirectly, no longer retains any equity interest in the Company and
(ii) the termination of any severance payable pursuant to any employment, termination or severance agreement, if any, entered into between such Management Member and the Company or any
Subsidiary of the Company. 

        "Retirement" means the termination of a Member's employment on or after the date the Member attains age 65. Notwithstanding the foregoing,
(i) with respect to any Member who is a party to a services or employment agreement with the Company or a Subsidiary of the Company, "Retirement" shall have the meaning, if any, specified in
such Member's services, severance or employment agreement and (ii) in the event a Member whose employment with the Company or a Subsidiary of the Company terminates due to Retirement continues
to serve as a Director of or a consultant to the Company or a Subsidiary of the Company, such participant's employment with the Company or a Subsidiary of the Company shall not be deemed to have
terminated for purposes of Sections 8.3 and 13.5, until the date as of which such Member's services as a Director of or consultant to the Company or a Subsidiary of the Company shall have also
terminated, at which time the Member shall be deemed to have terminated employment due to retirement. 

        "ROFO" has the meaning set forth in Section 13.12(a) of this Agreement. 

        "ROFO Notice" has the meaning set forth in Section 13.12(a) of this Agreement. 

        "Rule 144" has the meaning set forth in Section 6.1(b) of this Agreement. 

        "Securities Act" means the Securities Act of 1933 as amended from time to time. 

        "Service Percentage" has the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Service Points" has the meaning set forth in Section 8.1(a) of this Agreement. 

        "Ship Sale" has the meaning set forth in Section 13.12(a) of this Agreement. 

        "Special Interest Payment" has the meaning set forth in Section 10.8 of this Agreement. 

        "Special Membership Interest" means, with respect to any Member, the special debt membership interest in the Company issued to such Member
in the amount set forth on Schedule E, as such schedule may be amended from time to time (including to account for any reduction in the Special Membership Interest by virtue of
Section 10.8). 

        "Special Membership Interest Aggregate Funds" means, with respect to any Member, aggregate Special Membership Interest Funds advanced by
such Member in respect of all Special Membership Interests (whether or not currently outstanding) issued to such Member. 

        "Special Membership Interest Funds" means, with respect to any particular advance by a Member, cash funds advanced by a Member to the
Company in exchange for Special Membership Interests. 

        "Stub Performance Percentage Allocation" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Subject Members" means the Management Members, Outside Investor Members and any Additional Members. 

        "Subsidiary" means, with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person
(either alone or through or together with any other Subsidiary) (a) owns, directly or indirectly, fifty percent (50%) or more of the stock, partnership interests or other 

7

 

equity
interests which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, partnership, joint venture of other legal entity; or
(b) possesses, directly or indirectly, control over the direction of management or policies of such corporation, partnership, joint venture or other legal entity (whether through ownership of
voting securities, by agreement or otherwise). 

        "Subsidiary Board" has the meaning set forth in Section 5.11(a) of this Agreement. 

        "Tag-Along Rights" has the meaning set forth in Section 13.10(a) of this Agreement. 

        "Tax Matters Partner" has the meaning set forth in Section 11.2(b) of this Agreement. 

        "Termination for Cause" means a termination of a Member's employment by the Company or any Subsidiary of the Company that employs such
individual (or by the Company on behalf of any such Subsidiary), provided that any of the events described below that give rise to such termination shall not have been cured within 30 days
after a Member receives written notice of termination from the Company, due to such Member's (i) refusal or neglect to perform substantially his or her employment-related duties,
(ii) dishonesty, incompetence, willful misconduct or breach of fiduciary duty, (iii) indictment for, conviction of, or entering a plea of guilty or no lo
contedere to, a crime constituting a felony or his or her willful violation of any law, rule, or regulation (other than a traffic violation or other offense or violation
outside of the course of employment which in no way adversely affects the Company and its Subsidiaries or its reputation or the ability of the Member to perform his or her employment-related duties or
to represent the Company or any Subsidiary of the Company that employs such Management Member) or (iv) material breach of any written covenant or agreement with the Company or any of its
Subsidiaries not to disclose any information pertaining to the Company or such Subsidiary or not to compete or interfere with the Company or such Subsidiary,  provided that, in the case of any Member who,
 as of the date of determination, is party to an effective services, severance or employment agreement with
the Company or a Subsidiary of the Company, "Termination for Cause" shall have the meaning, if any, specified in such agreement. 

        "Third Party" shall mean, in respect of any Transfer, one or more Persons other than the Company, any Member or any of their respective
Affiliates. 

        "Thouret" has the meaning set forth in the recitals to this Agreement. 

        "Total Available Post IPO Remaining Performance Percentage" has the meaning set forth on  Schedule D to this Agreement. 

        "Total Performance Pool Points" has the meaning set forth in Section 10.1(a)(ii) of this Agreement. 

        "Total Service Percentage" shall have the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Total Service Pool Points" shall have the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Total Stub Performance Percentage" has the meaning set forth on Schedule D to this
Agreement. 

        "Total Vested IPO Percentage" has the meaning set forth in Section 10.1(a)(iii) of this Agreement. 

        "Transfer" means to directly or indirectly transfer, sell, pledge, hypothecate or otherwise dispose of. 

        "Transferor Member" has the meaning set forth in Section 13.10(d). 

        "Treasury Regulations" means the Regulations of the Treasury Department of the United States issued pursuant to the Code.wco 

8

 

        "Unallocated Points" has the meaning set forth in Section 8.1(a) of this Agreement. 

        "Units" has the meaning set forth in Section 4.2 of this Agreement. 

        "Unreturned Capital" means, with respect to any Member on any date of determination, an amount equal to the excess, if any, of
(x) the aggregate amount of Capital Contributions made by such Member on or after the date of this Agreement over (y) the aggregate amount of distributions made by the Company on or
after the date of this Agreement that constitute a return of the Capital Contributions of such Member pursuant to Section 10.2. For the avoidance of doubt, amounts advanced as Special
Membership Interest Funds shall not be included under clause (x) and amounts paid pursuant to Section 10.8 in respect of Special Membership Interests shall not be included under
clause (y). 

        "Vested IPO Percentage" has the meaning set forth in Section 10.1(a)(iii) of this Agreement. 

        "Vested Service Factor" shall have the meaning set forth in Section 10.1(a)(i) of this Agreement. 

        "Zoullas" has the meaning set forth in the recitals to this Agreement. 

9

  

 
 

ARTICLE II
  
    FORMATION OF THE COMPANY    
    

        Section 2.1    Formation.    The Company was formed upon the filing of the Certificate pursuant to the Marshall
Islands Act with the Republic of the Marshall Islands Registrar of Corporations on January 27, 2005. 

        Section 2.2    Company Name.    The name of the Company shall be Eagle Ventures LLC. The business of the
Company may be conducted under such other names as the Board may from time to time designate, provided that the Company complies with all relevant state
laws relating to the use of fictitious and assumed names. 

        Section 2.3    The Certificate, etc.    Derick W. Betts, Jr. is hereby designated as an authorized person
within the meaning of the Marshall Islands Act and shall be authorized to execute, deliver and file (or direct the execution, delivery and filing of) any necessary amendments to the Certificate with
the Republic of the Marshall Islands Registrar of Corporations. Each Director is hereby authorized to execute, deliver, file and record all such other certificates and documents, including amendments
to or restatements of the Certificate, and to do such other acts as may be appropriate to comply with all requirements for the formation, continuation and operation of a limited liability company, the
ownership of property, and the conduct of business under the laws of the Marshall Islands and any other jurisdiction in which the Company may own property or conduct business. 

        Section 2.4    Term of Company.    The term of the Company commenced on the date of the initial filing of the
Certificate with the Republic of the Marshall Islands Registrar of Corporations. The Company may be terminated in accordance with the terms and provisions hereof, and shall continue unless and until
dissolved as provided in Article XIV. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate as provided in the Marshall Islands Act. 

        Section 2.5    Registered Agent and Office.    The Company's registered agent in the Marshall Islands shall be
The Trust Company of the Marshall Islands, Inc., and office of such registered agent shall be Trust
Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands MH 96960. The Board may designate another registered agent and/or registered office from time to time in accordance with the
then applicable provisions of the Marshall Islands Act and any other applicable laws. 

        Section 2.6    Principal Place of Business.    The principal place of business of the Company shall be located
at 29 Broadway, New York, New York 10006. The location of the Company's principal place of business may be changed by the Board from time to time in accordance with the then applicable provisions of
the Marshall Islands Act and any other applicable laws. 

        Section 2.7    Qualification in Other Jurisdictions.    Any authorized Person of the Company shall execute,
deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct
business. 

        Section 2.8    Fiscal Year; Taxable Year.    The fiscal year of the Company for financial accounting purposes
shall end on December 31. The taxable year of the Company for federal, state and local income tax purposes shall end on December 31. 

 
 

ARTICLE III
  
    PURPOSE AND POWERS OF THE COMPANY    
    

        Section 3.1    Purpose.    The purposes of the Company are, and the nature of the business to be conducted and
promoted by the Company is, engaging in any lawful act or activity for which limited 

10

 

liability
companies may be formed under the Marshall Islands Act and engaging in all acts or activities as the Company deems necessary, advisable or incidental to the furtherance of the foregoing. 

        Section 3.2    Powers of the Company.    The Company shall have the power and authority to take any and all
actions that are necessary, appropriate, advisable, convenient or incidental to or for the furtherance of the purposes set forth in Section 3.1. 

        Section 3.3    Certain Tax Matters.    The Members agree that, pursuant to Treasury Regulation
Section 301.7701-3, the Company shall elect to be classified as a partnership for U.S. federal income tax purposes and under all corresponding provisions of state or local income
tax law and that Zoullas is hereby authorized, in the name of and on behalf of the Company and each of the Members, to sign and file with the U.S. Internal Revenue Service an Entity Classification
Election (IRS Form 8832) electing to have the Company classified as a partnership for U.S. federal income tax purposes retroactive to the date of formation of the Company, and any such action
heretofore taken by Zoullas is hereby ratified, confirmed and approved in all respects. The Company and the Board shall not permit the registration or listing of interests in the Company on an
"established securities market," as such term is used in Treasury Regulations section 1.7704-1. 

 
 

ARTICLE IV
  
    MEMBERS    
    

        Section 4.1    Powers of Members.    The Members shall have the power to exercise any and all rights or powers
granted to the Members pursuant to the express terms of this Agreement. The approval or consent of the Members shall not be required in order to authorize the taking of any action by the Company
unless and then only to the extent that (i) this Agreement shall expressly provide therefor, (ii) such approval or consent shall be required by non-waivable provisions of the
Marshall Islands Act or (iii) the Board shall determine that obtaining such approval or consent would be appropriate or desirable. The Members, as such, shall have no power to bind the Company. 

        Section 4.2    Units Generally.    The right of a Member to vote in its capacity as a member of the Company
shall be represented by membership units (the "Units"). Unless otherwise determined by the Board, each Member shall receive one Unit for each dollar of
such Member's Capital Contribution. The number of Units of each Member shall be set forth on Schedule A. Notwithstanding anything to the contrary, Special Membership Interests shall not have
voting rights. 

        Section 4.3    Meetings of Members.    

        (a)    Meetings; Notice of Meetings.    Meetings of the Members, including any special meeting, may be called by
(i) the Board from time to time, (ii) any Member, or Members, holding 25% or more of the Units or (iii) Zoullas so long as he is Chief Executive Officer of Eagle Shipping and a
Member of the Company. Notice of any such meeting shall be given to all Members not less than three nor more than 30 business days prior to the date of such meeting and shall state the location, date
and hour of the meeting and, in the case of a special meeting, the nature of the business to be transacted. Meetings shall be held at the location at the date and hour set forth in the notice of the
meeting. 

        (b)    Waiver of Notice.    No notice of any meeting of Members need be given to any Member who submits a signed
waiver of notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Members need be specified in a written waiver
of notice. The attendance of any Member at a meeting of Members shall constitute a waiver of notice of such meeting, except when the Member attends a meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. 

11

 

        (c)    Quorum.    Except as otherwise required by law or by the Certificate, the presence in person or by proxy of the
holders of record of a Majority in Interest shall constitute a quorum for the transaction of business at such meeting. 

        (d)    Voting.    If the Board has fixed a record date, every holder of record of Units entitled to vote at a meeting
of Members or to consent in writing in lieu of a meeting of Members shall be entitled to one vote for each such Unit outstanding in such Member's name at the close of business on such record date. If
no record date has been so fixed, then every holder of record of such Units entitled to vote at a meeting of Members shall be entitled to one vote for each Unit outstanding in his name on the close of
business on the day next preceding the day on which notice of the meeting is given or the first consent in respect of the applicable action is executed and delivered to the Company, or, if notice is
waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by applicable law, the Certificate or this Agreement, the vote of a
majority of the Units represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. 

        (e)    Proxies.    Each Member may authorize any Person to act for such Member by proxy on all matters in which a
Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or such Member's
attorney-in-fact. No proxy shall be valid after the expiration of three years from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Member executing it unless otherwise provided in such proxy, provided, that such right to revocation shall not invalidate or otherwise affect actions taken under such proxy prior
to such revocation. 

        (f)    Organization.    Each meeting of Members shall be conducted by such Person as the Board may designate. 

        (g)    Action Without a Meeting.    Unless otherwise provided in this Agreement, any action which may be taken at any
meeting of the Members may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by a Majority in Interest.
Prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be given to those Members who have not consented in writing. 

        Section 4.4    Business Transactions of a Member with the Company.    Subject to prior approval of the Board, a
Member may lend money to, borrow money from, act as surety or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, or transact any other business with the
Company, provided that any such transaction pursuant to any agreement entered into after the date hereof shall be approved by a majority of the non-interested Directors. 

        Section 4.5    No Cessation of Membership upon Bankruptcy.    A Person shall not cease to be a Member of the
Company upon the happening, with respect to such Person, of any of the events specified in Section 21 of the Marshall Islands Act. 

        Section 4.6    Confidentiality; Nonsolicitation; Non-Disparagement.    The covenants and
restrictions contained in this Section 4.6 shall be in addition to and not in lieu of any covenants or restrictions applying to any Member pursuant to any employment, severance or services
agreement between such Member and the Company or any of its Subsidiaries. 

        (a)    Confidentiality; Tax Information.    Without the prior written consent of a majority of the Board, except to
the extent required by law, rule, regulation or court order, each Subject Member shall not disclose any trade secrets, customer lists, drawings, designs, marketing plans, sales plans, management
organization information (including data and other information relating to members of the Board or management), operating policies or manuals, business plans, financial records or other financial,
commercial, business or technical information relating to the Company or any of its Subsidiaries or information designated as confidential or proprietary that the Company or any of its 

12

 

Subsidiaries
may receive belonging to suppliers, customers or others who do business with the Company or any of its Subsidiaries (collectively, "Confidential
Information") to any third person unless such Confidential Information has been previously disclosed to the public by the Company or is in the public domain (other than by
reason of such Subject Member's breach of this Section 4.6(a)). Notwithstanding anything to the contrary herein or contained in any other materials relating to an investment in the Company,
each Subject Member (and each employee, representative, or other agent of the foregoing) may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may
be relevant to the tax structure of the Company and its Subsidiaries, provided, however, that no Subject Member (and no employee, representative, or other agent thereof) shall disclose any other
information that is not relevant to understanding the tax treatment and tax structure of the Company and its Subsidiaries (including the identity of any Subject Member and any information that could
lead another to determine the identity of any Subject Member), or any other information to the extent that such disclosure could reasonably result in a violation of any applicable securities law. 

        (b)    Non-Solicitation of Employees.    Except as permitted under any employment, severance or services
agreement between such Subject Member and the Company or any of its Subsidiaries, during the Restriction Period, no Subject Member shall directly or indirectly induce any employee of the Company or
any of its Subsidiaries to terminate employment with such entity, and no Subject Member shall directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ,
offer employment to or otherwise interfere with the employment relationship of the Company or any of its Subsidiaries with any person who is or was employed by the Company or such Subsidiary unless,
at the time of such employment, offer or other interference, such person shall have ceased to be employed by such entity for a period of at least six months,  provided that, nothing in this
Section 4.6(b) shall preclude such Subject Member from placing advertisements during the Restriction Period in
periodicals of general circulation soliciting persons for employment or from employing any person who comes to such Subject Member solely in response to such advertisements. 

        (c)    Non-Solicitation of Clients.    Except as permitted under any employment, severance or services
agreement between such Subject Member and the Company or any of its Subsidiaries, during the Restriction Period, no Subject Member shall solicit or otherwise attempt to establish for himself or any
other person, firm or entity any business relationship with any person, firm or entity which is, or during the 12-month period preceding the date such Subject Member ceases to hold any
equity interest in the Company was, a customer, client or distributor of the Company or any of its Subsidiaries. 

13

  

        (d)    Non-Disparagement.    No Subject Member shall, directly or indirectly, either individually or as
owner, agent, employee, consultant or otherwise, make, participate in the making of, or encourage any other Person to make, any statement, whether written or oral, that criticizes, disparages or
defames the Company, any Subsidiary of the Company or the business conducted by the Company or any Subsidiary of the Company. 

        (e)    Injunctive Relief with Respect to Covenants.    Each Subject Member acknowledges and agrees that the covenants
and obligations of such Subject Member with respect to non-disparagement, nonsolicitation and confidentiality herein relate to special, unique and extraordinary matters and that a
violation or threatened violation of any of the terms of such covenants or obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, each
Subject Member agrees, to the fullest extent permitted by law, that the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post
bond) restraining such Subject Member from committing any violation of the covenants or obligations contained in this Section 4.6. These injunctive remedies are cumulative and are in addition
to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 4.6, each Subject Member represents that his economic
means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. 

        (f)    Unenforceable Restriction.    It is expressly understood and agreed that although each Subject Member and the
Company consider the restrictions contained in this Section 4.6 to be reasonable, if a final determination is made by an arbitrator to whom the parties have assigned the matter or a court of
competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against any Subject Member, the provisions of this Agreement shall not be rendered void but
shall be reformed to apply as to such maximum time and to such maximum extent as such arbitrator or court may determine or indicate to be enforceable. Alternatively, if such arbitrator or court finds
that any restriction contained in this Agreement is unenforceable, and such restriction cannot be reformed so as to make it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein. 

        (g)    Ex-Management Members.    The provisions of this Section 4.6 shall apply to both Management
Members and Ex-Management Members (as defined in Section 8.2). 

        Section 4.7    Other Business for Kelso Members and Certain Members.    

        (a)   Notwithstanding
anything to the contrary contained in Section 4.6, any Kelso Member or Affiliate thereof may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Company, and the Company, the Directors and the Members shall have no rights by virtue
of this Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not
be deemed wrongful or improper. No Kelso Member, Director (other than any Subject Member who serves as a Director) or Affiliate thereof shall be obligated to present any particular investment
opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and any Kelso Member, Director (other than any Subject Member
who serves as a Director) or Affiliate thereof shall have the right to take for such Person's own account (individually or as a partner or fiduciary) or to recommend to others any such particular
investment opportunity, provided that this Section 4.7(a) shall not apply to Subject Members or any other Members who are employees of the
Company or any of its Subsidiaries. 

        (b)   Notwithstanding
anything to the contrary contained in Section 4.6, any Outside Investor Member, Other Investor Member or Affiliate thereof (other than Zoullas)
may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or 

14

 

dissimilar
to the business of the Company, and the Company, the Directors and the Members shall have no rights by virtue of this Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not be deemed wrongful or improper. No Outside Investor Member, Other Investor
Member or any of its Affiliates (other than Zoullas) shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to
the Company, could be taken by the Company, and any Outside Investor Member, Other Investor Member or Affiliate thereof (other than Zoullas) shall have the right to take for such Person's own account
(individually or as a partner or fiduciary) or to recommend to others any such particular investment opportunity, provided that this
Section 4.7(b) shall not apply to Subject Members or any other Members who are employees of the Company or any of its Subsidiaries. 

        Section 4.8    Additional Members.    

        (a)    Admission.    Upon the approval of the Board, the Company may admit one or more additional Members (each an
"Additional Member"), including additional Management Members to the Company, to be treated as a "Member" or one of the "Members" for all purposes
hereunder. Each Person shall be admitted as an Additional Member at the time such Person (i) executes a joinder agreement to this Agreement substantially in the form of Exhibit A hereto
(subject, in the case of the admission of any Additional Member who is a Management Member, to the following sentence), (ii) complies with the applicable Board resolution, if any, with respect
to such admission and (iii) is named as a Member in Schedule A and Schedule B (as
described in Section 8.1) and Schedule E hereto, as applicable. Any Management Member admitted as an Additional Member after the date
hereof who is unable to make the representation contained in Section 6.1(e) may execute a joinder agreement which exclude such representation; provided such Additional Member also concurrently
delivers to the Company a
certificate, accompanied by an opinion of counsel, to the effect that the issuance of Units or Points to such Member shall be exempt from the registration requirements under the Securities Act. Kelso
is authorized to amend Schedule A, Schedule B and Schedule E, as applicable, to reflect any such admission and any actions pursuant
to Section 4.8(b) below. 

        (b)    Rights of Additional Members.    Upon, and as a condition precedent to, the admission of an Additional Member: 

        (i)    the
Board shall determine the Initial Capital Commitment and any additional capital commitment (if any) of such Additional Member; 

        (ii)   the
Board shall determine the rights (if any) of such Additional Members to appoint Directors to the Board; 

        (iii)  the
Board shall assign Units (if any) to such Additional Member; 

        (iv)  such
Additional Member shall make Capital Contributions and/or advance Special Membership Interest Funds to the Company in an amount to be determined by the Board; 

        (v)   if
such Additional Member is an employee of the Company or any of its Subsidiaries, such employee will be a "Management Member" and one of the "Management Members" for
all purposes hereunder, and, subject to the prior consultation with the Chief Executive Officer of Eagle Shipping and further subject to the terms of any employment or services agreement between the
Company or any Subsidiary of the Company, and any Management Member, the Board will have the right to grant such employee Points pursuant to Article VIII and amend  Schedule B accordingly;

        (vi)  if
such Additional Member will not be a Management Member hereunder then the Board may either designate such Member as a "Kelso Member," as an "Outside Investor Member"
or as 

15

 

an
"Other Investor Member" or as a member of such other class or designation as may be designated by the Board, having such rights and obligations as the Board may specify; and 

        (vii) the
Board will amend Schedule A and Schedule E, as applicable, to reflect the actions taken pursuant to
this Section 4.8. 

 
 

ARTICLE V
  
    MANAGEMENT    
    

        Section 5.1    Board.    

        (a)    Generally.    The business and affairs of the Company shall be managed by or under the direction of a committee
of the Company (the "Board") consisting of up to seven (7) natural Persons (each a "Director"),
which Persons shall be elected annually by the holders of Units unless otherwise appointed pursuant to Section 5.1(b)(ii). The initial Directors of the Company shall be as designated pursuant
to Section 5.1(b)(i). Subject to the rights granted pursuant to Section 5.1(b)(ii), the Board, in its sole discretion, may increase the authorized number of Directors at any time with
the vote of a majority of the Directors then in office. Directors need not be Members. Subject to the consultation rights of Zoullas set forth in his employment agreement with the Company or any
Subsidiary of the Company and except as otherwise set forth in this Agreement, the Board shall have full, exclusive and complete discretion to manage and control the business and affairs of the
Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as it deems necessary or appropriate to accomplish the purposes of the Company as set
forth herein, including, without limitation, to exercise all of the powers of the Company set forth in Section 3.2. 

        (b)    Election of Directors.    

        (i)    Initial Directors; Term.    The initial Board shall consist of four (4) Directors. The initial Directors
of the Company will be those individuals set forth on Schedule C. Each Director shall hold office until a successor is elected or appointed by a
Majority in Interest (unless otherwise appointed in accordance with Section 5.1(b)(ii)) or until such Director's earlier death, resignation or removal in accordance with the provisions hereof
in which event, a successor will be appointed in accordance with Section 5.1(b)(ii). Each Person named as a Director herein or subsequently appointed as a Director (including any Management
Member named or appointed as such) is hereby designated as a "manager" (within the meaning of the Marshall Islands Act) of the Company. Except as otherwise provided herein, no single Director may bind
the Company, and the Board shall have the power to act only collectively in the manner specified herein. 

        (ii)    Composition.    For so long as the Board consists of four (4) Directors, Kelso shall have the right to
appoint, in its sole discretion, three (3) Directors. In the event that the Board determines to expand the size of the Board following the date hereof in accordance with Section 5.1(a),
Kelso shall have the right to appoint in its sole discretion such number of additional Directors that are necessary for Kelso to retain the right to appoint a majority of the Directors on the Board
(as so expanded). For so long as
Zoullas is a Member of the Company, Zoullas shall have the right to appoint one (1) Director (which may be himself). For so long as Zoullas is the Chief Executive Officer of Eagle Shipping (and
a Member of the Company), Zoullas shall have the right to appoint, in his sole discretion, a number of additional Directors that, when taken together with the Directors referred to in the immediately
preceding sentence, constitutes one less than a majority of the Board. 

        Section 5.2    Meetings of the Board.    The Board shall meet from time to time to discuss the business of the
Company. Meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board. The Chairman of the Board or Zoullas so long as he is
Chief Executive Officer of Eagle Shipping and a Member of the Company or a 

16

 

majority
of the Board may call a meeting of the Board on three business days' notice to each Director, either personally, by telephone, by facsimile or by any other similarly timely means of
communication. Any Director may waive the notice requirement described in this Section 5.2 as it relates to such Director. 

        Section 5.3    Quorum and Acts of the Board.    At all meetings of the Board, four Directors shall constitute a
quorum for the transaction of business unless the number of Directors is increased pursuant to Section 5.1(a), in which case the presence of a majority of the then authorized number of
Directors shall constitute a quorum. Except as otherwise provided in this Agreement, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the
Board. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting,
until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if a majority of the members of
the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee; each Director not executing
such a written consent shall be given prompt notice after any such action is taken by the other Directors. 

        Section 5.4    Electronic Communications.    Members of the Board, or any committee designated by the Board,
may participate in a meeting of the Board, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in person at the meeting. 

        Section 5.5    Committees of Directors.    The Board (a) shall designate (i) a compensation
committee (the "Compensation Committee") and (ii) an Executive Committee and (b) may, by resolution passed by unanimous consent of the
Directors, designate one or more additional committees. Such resolution shall specify the duties and quorum requirements of such additional committees. Each committee of the Board shall be comprised
of at least three (3) Directors, two (2) of whom shall be Directors designated by Kelso and the other Director shall be the Chief Executive Officer of Eagle Shipping. The Board may
designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification
of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise
all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. 

        Section 5.6    Compensation of Directors.    The Board shall have the authority to fix the compensation (if
any) of Directors. The Directors may be paid their expenses (if any) of attendance at such meetings of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated
salary as a Director. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings. 

        Section 5.7    Resignation.    Any Director may resign at any time by giving written notice to the Company. The
resignation of any Director shall take effect upon receipt of such notice or at such later time as shall be specified in the notice; and, unless otherwise specified in the notice, the acceptance of
the resignation by the Company, the Members or the remaining Directors shall not be necessary to 

17

 

make
it effective. Upon the effectiveness of any such resignation, such Director shall cease to be a "manager" (within the meaning of the Marshall Islands Act). 

        Section 5.8    Removal of Directors.    The Members holding a Majority in Interest shall have the right to
remove any Director at any time with or without cause. In addition, a majority of the Directors then in office shall have the right to remove a Director for cause. Upon the taking of such action, the
Director shall cease to be a "manager" (within the meaning of the Marshall Islands Act). Notwithstanding anything in this Section 5.8 to the contrary, (i) the removal from the Board or a
Subsidiary Board (with or without cause) of any Director designated hereunder by Kelso shall be only at the written request of Kelso, and under no other circumstances, and (ii) the removal from
the Board or a Subsidiary Board (without cause) of any Director designated hereunder by Zoullas shall be only at the written request of Zoullas. Upon receipt of any such written removal request, the
Board will promptly take all such actions as shall be necessary or desirable to cause the removal of such Director. Any vacancy caused by any such removal shall be filled in accordance with
Section 5.9. 

        Section 5.9    Vacancies.    If any vacancies shall occur in the Board, by reason of death, resignation,
removal or otherwise, the Directors then in office shall continue to act, and actions that would otherwise be taken by a majority of the Directors may be taken by a majority of the Directors then in
office, even if less than a quorum. Any vacancy shall be filled at any time in accordance with Section 5.1(b)(ii). A Director elected to fill a vacancy in the Board shall hold office until his
or her successor has been elected and qualified or until his or her earlier death, resignation or removal. 

        Section 5.10    Directors as Agents.    The Directors, to the extent of their powers set forth in this
Agreement, are agents of the Company for the purpose of the Company's business, and the actions of the Directors taken in accordance with such powers shall bind the Company. Except as otherwise
provided in this Agreement, no single Director shall have the power to bind the Company and the Board shall have the power to act only collectively in the manner specified herein. 

18

  

        Section 5.11    Subsidiaries. 

        (a)   Subsidiary Boards.    The composition of the board of directors of each of the Company's Subsidiaries (a
"Subsidiary Board") shall be determined by a majority of the Directors; provided, that, the rights of Kelso and Zoullas to appoint directors thereof
shall be similar to their respective rights to appoint Directors to the Board described in Section 5.1(b)(ii). 

        (b)   Structure; Governance.    For so long as Zoullas is the Chief Executive Officer of Eagle Shipping (and a Member
of the Company), the Board shall consider recommendations of Zoullas before altering the structure or governance of any Subsidiary of the Company. Any change in the structure or governance of any
Subsidiary of the Company shall not adversely affect any Member or group of Members disproportionately relative to other Members without the prior written consent of the affected Member or Members, as
applicable. 

        (c)   Protections.    All Subsidiaries of the Company shall be governed in a manner consistent with the applicable
provisions of this Agreement (including with respect to Board composition, quorum and notice requirements). The Company shall take such actions, including causing its Subsidiaries to take such
actions, to ensure that the provisions of Subsidiaries' organizational documents applicable to Subsidiary Boards are not inconsistent with the provisions of this Agreement applicable to the Board or
any Subsidiary Board. 

 
 

ARTICLE VI
  
    INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS    
    

        Section 6.1    Representations, Warranties and Covenants of Members.

        (a)   Investment Intention and Restrictions on Disposition.    Each Member represents and warrants that such Member
is acquiring the Interests and/or Special Membership Interests, as applicable, solely for such Member's own account for investment and not with a view to resale in connection with, any distribution
thereof. Each Member agrees that such Member will not, directly or indirectly, Transfer any of the Interests or Special Membership Interests (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of any of the Interests) or any interest therein or any rights relating thereto or offer to Transfer, except in compliance with the Securities Act, all applicable state
securities or "blue sky" laws and this Agreement, as the same shall be amended from time to time. Any attempt by a Member, directly or indirectly, to Transfer, or offer to Transfer, any Interests or
Special Membership Interests, as applicable, or any interest therein or any rights relating thereto without complying with the provisions of this Agreement, shall be void and of no effect. 

        (b)   Securities Laws Matters.    Each Member acknowledges receipt of advice from the Company that (i) neither
the Interests nor the Special Membership Interests have been registered under the Securities Act or qualified under any state securities or "blue sky" laws, (ii) it is not anticipated that
there will be any public market for the Interests or the Special Membership Interests, (iii) the Interests and the Special Membership Interests must be held indefinitely and such Member must
continue to bear the economic risk of the investment in the Interests and the Special Membership Interests, as applicable, unless the Interests and/or Special Membership Interests are subsequently
registered under the Securities Act and such state laws or an exemption from registration is available, (iv) Rule 144 promulgated under the Securities Act
("Rule 144") is not presently available with respect to sales of any securities of the Company and the Company has made no covenant to make
Rule 144 available and Rule 144 is not anticipated to be available in the foreseeable future, (v) when and if the Interests and/or Special Membership Interests may be disposed of
without registration in reliance upon Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule and the provisions of this
Agreement, (vi) if the exemption afforded by Rule 144 is not available, public sale of the Interests or Special Membership Interests without registration will require the availability of
an exemption under the Securities Act, (vii) restrictive 

19

 

legends
shall be placed on any certificate representing the Interests and/or Special Membership Interests, as applicable, and (viii) a notation shall be made in the appropriate records of the
Company indicating that the Interests and the Special Membership Interests are subject to restrictions on transfer and, if the Company should in the future engage the services of a transfer agent,
appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Interests and the Special Membership Interests. 

        (c)   Ability to Bear Risk.    Each Member represents and warrants that (i) such Member's financial situation
is such that such Member can afford to bear the economic risk of holding the Interests and/or the Special Membership Interests, as applicable, for an indefinite period of time and (ii) such
Member can afford to suffer the complete loss of such Member's investment in the Interests and/or the Special Membership Interests, as applicable. 

        (d)   Access to Information; Sophistication; Lack of Reliance.    Each Member represents and warrants that
(i) such Member is familiar with the business and financial condition, properties, operations and prospects of the Company and that such Member has been granted the opportunity to ask questions
of, and receive answers from, representatives of the Company concerning the Company and the terms and conditions of the purchase of the Interests and/or the Special Membership Interests, as
applicable, and to obtain any additional information that such Member deems necessary, (ii) such Member's knowledge and experience in financial and business matters is such that such Member is
capable of evaluating the merits and risk of the investment in the Interests and/or the Special Membership Interests, as applicable, and (iii) such Member has carefully reviewed the terms and
provisions of this Agreement and has evaluated the restrictions and obligations contained therein. In furtherance of the foregoing, each Member represents and warrants that (x) no
representation or warranty, express or implied, whether written or oral, as to the financial condition, results of operations, prospects, properties or business of the Company or as to the
desirability or value of an investment in the Company has been made to such Member by or on behalf of the Company, (y) such Member has relied upon such Member's own independent appraisal and
investigation, and the advice of such Member's own counsel, tax advisors and other advisors, regarding the risks of an investment in the Company and (z) such Member will continue to bear sole
responsibility for making its own independent evaluation and monitoring of the risks of its investment in the Company. 

        (e)   Accredited Investor.    Each Member represents and warrants that such Member is an "accredited investor" as
such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and, in connection with the execution of this Agreement, agrees to deliver such certificates to
that effect as the Board may request. 

        Section 6.2    Additional Representations and Warranties of Management Members, Outside Investor Members and Other Investor
Members.    Each Management Member, Outside Investor Member and Other Investor Member represents and warrants as to itself that (a) such Management Member,
Outside Investor Member or Other Investor Member has duly executed and delivered this Agreement; (b) all actions required to be taken by or on behalf of the Management Member, Outside Investor
Member or Other Investor Member to authorize it to execute, deliver and perform its obligations under this Agreement have been taken and this Agreement constitutes such Management Member's, Outside
Investor Member's or Other Investor Member's legal, valid and binding obligation, enforceable against such Management Member, Outside Investor Member or Other Investor Member in accordance with the
terms hereof; (c) the execution and delivery of this Agreement and the consummation by the Management Member, Outside Investor Member or Other Investor Member of the transactions contemplated
hereby in the manner contemplated hereby do not and will not conflict with, or result in a breach of any terms of, or constitute a default under, any agreement or instrument or any statute, law, rule
or regulation, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or governmental authority which is applicable to such Management Member, Outside Investor Member or
Other Investor Member or by which such Management Member, Outside Investor Member 

20

 

or
Other Investor Member or any material portion of its properties is bound; (d) no consent, approval, authorization, order, filing, registration or qualification of or with any court,
governmental authority or third person is required to be obtained by such Management Member, Outside Investor Member or Other Investor Member in connection with the execution and delivery of this
Agreement or the performance of such Management Member's, Outside Investor Member's or Other Investor Member's obligations hereunder; (e) if such Management Member, Outside Investor Member or
Other Investor Member is an individual, such Management Member, Outside Investor Member or Other Investor Member is a resident of the state set forth below such Management Member's, Outside Investor
Member's or Other Investor Member's name on the signature page hereof; and (f) if such Management Member, Outside Investor Member or Other Investor Member is not an individual, such Management
Member's, Outside Investor Member's or Other Investor Member's principal place of business and mailing address is in the state or foreign jurisdiction set forth below the Management Member's signature
on the signature page. 

        Section 6.3    Additional Representations and Warranties of Kelso Members.

        (a)   Due Organization; Power and Authority, etc.    KIA VII represents and warrants that it is a limited partnership
duly formed, validly existing and in good standing under the laws of the State of Delaware. KEP VI represents and warrants that it is a limited liability company duly formed, validly existing and in
good standing under the laws of the State of Delaware. Each Kelso Member further represents and warrants that it has all necessary power and authority to enter into this Agreement to carry out the
transactions contemplated herein and therein. 

        (b)   Authorization; Enforceability.    Each Kelso Member represents and warrants that such Kelso Member has duly
executed and delivered this Agreement. All actions required to be taken by or on behalf of such Kelso Member to authorize it to execute, deliver and perform its obligations under this Agreement have
been taken, and this Agreement constitutes the valid and binding obligation of such Kelso Member, enforceable against such Kelso Member in accordance with its terms, except as the same may be affected
by bankruptcy, insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting the rights of contracting parties generally. No consent, approval, authorization,
order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by such Kelso Member in connection with the execution and delivery
of this Agreement or the performance of such Kelso Member's obligations hereunder 

        (c)   Compliance with Laws and Other Instruments.    The execution and delivery of this Agreement and the
consummation by such Kelso Member of the transactions contemplated hereby in the manner contemplated hereby do not and will not conflict with, or result in a breach of any terms of, or constitute a
default under, any agreement or instrument or any statute, law, rule or regulation, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or governmental authority which
is applicable to such Kelso Member or by which such Kelso Member or any material portion of its properties is bound, except for conflicts, breaches and defaults that, individually or in the aggregate,
will not have a material adverse effect upon the financial condition, business or operations of such Kelso Member or upon such Kelso Member's ability to enter into and carry out its obligations under
this Agreement. 

        (d)   Executing Parties.    The person executing this Agreement on behalf of each Kelso Member has full power and
authority to bind such Kelso Member to the terms hereof and thereof. 

        Section 6.4    Additional Representations and Warranties of Zoullas, the Management Members and the Outside Investor
Members.    Zoullas, each Management Member and each Outside Investor Member represents and warrants that such Member does not, directly or indirectly (i) own
any equity or other interest in Norland Shipping & Trading Company ("Norland") or (ii) have any ownership or other interest in any of the
vessels for which Norland currently acts, or at any time in the past has acted, as agent. 

21

 

        Section 6.5    Certain Members.    Notwithstanding anything to the contrary contained herein, the
representations and warranties under this Article VI shall be deemed not to be made to Members not executing this Agreement or a joinder agreement substantially in the form of Exhibit A
hereto. 

 
 

ARTICLE VII
  
    CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS    
    

        Section 7.1    Capital Accounts.    A separate capital account (a
"Capital Account") shall be established and maintained for each Member. The initial balance in each Member's Capital Account shall be zero. 

        Section 7.2    Adjustments.    

        (a)   Each
Member's Capital Accounts shall be credited with (i) the amount of Capital Contributions by such Member on the Initial Capital Contribution Date and
(ii) the amount of funds advanced as Special Membership Interest Funds, on the Initial Capital Contribution Date, as set forth on  Schedule A. 

        (b)   As
of the end of each Accounting Period, the balance in each Member's Capital Account shall be adjusted by (i) increasing such balance by such Member's
(A) allocable share of Net Profit (allocated in accordance with Section 9.1) and (B) the amount of cash and the Fair Market Value of any property (as of the date of the
contribution thereof and net of any liabilities encumbering such property) contributed (or advanced as Special Membership Funds) by such Member to the Company during such Accounting Period, if any,
and (ii) decreasing such balance by (A) the amount of cash and the Fair Market Value of any property (as of the date of the distribution thereof and net of any liabilities encumbering
such property) distributed to such Member during such Accounting Period (including payments in respect of Special Membership Interests held pursuant to Section 10.8) and (B) such
Member's allocable share of Net Loss (allocated in accordance with Section 9.1). Each Member's Capital Account shall be further adjusted with respect to any special allocations pursuant to
Section 9.2. The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations section 1.704-1(b) and
section 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations. 

        Section 7.3    Initial Capital Contributions; Initial SMI Funds Advance.    Each of the Members has made or is
concurrently making (i) an initial cash contribution to the capital of the Company and/or (ii) an initial advance of cash funds constituting Special Membership Interest Funds, in an
aggregate amount equal to its Initial Capital Commitment on or before the Initial Capital Contribution Date. Any contributions of property on or after the Initial Capital Contribution Date shall be
valued at their Fair Market Value. 

        Section 7.4    Additional Capital Contributions by Kelso.

        (a)   In
addition to its Initial Capital Contribution and its Initial SMI Funds Advance, Kelso, subject to receipt of its investment committee approval and satisfaction of
such other customary closing conditions for such additional investment, may make additional Capital Contributions and/or advance Special Membership Interest Funds to the Company at such times, if any,
as the Board shall determine such additional Capital Contributions or advances of Special Membership Interest Funds are advisable (x) to make acquisitions of assets, businesses or other
entities which the Board determines are desirable for the business of the Company and its Subsidiaries and (y) for other bona fide corporate or organizational purposes (each time a Capital
Contribution is made or Special Membership Interest Funds are advanced by Kelso, in either case following the date hereof, an "Additional Capital Contribution
Event"). 

        (b)   [intentionally
omitted] 

22

 

        Section 7.5    Additional Capital Contributions.    Except as required by Section 7.4(a), no Member
shall be required or permitted to make any additional Capital Contribution or advance Special Membership Interests Funds to the Company in respect of the Interests or Special Membership Interests, as
applicable, then owned by such Member. However, from and after the Kelso Threshold Date, the Initial Members (including Zoullas and the Outside Investor Members) shall have the right (but not the
obligation) to make additional Capital Contributions or advances of Special Membership Interest Funds, as applicable, to the Company in the following circumstances: 

        (a)   at
the time of any Additional Capital Contribution Event from and after the Kelso Threshold Date, in amounts up to such amounts as are necessary to maintain its relative
ownership interest (in respect of each of Interests and Special Membership Interests, as applicable) in the Company; provided, that the rights of the
Initial Members (including Zoullas and the Outside Investor Members) to make additional Capital Contributions or advances of Special Membership Interest Funds pursuant to this Section 7.5 shall
not apply (i) at any time prior to the Kelso Threshold Date and (ii) in connection with an Additional Capital Contribution Event from and after the Kelso Threshold Date involving a
Capital Contribution or advance of Special Membership Interest Funds by Kelso of less than $1.0 million; provided, that if, at any time following the Kelso Threshold Date, Kelso makes a
particular Capital Contribution or advance of Special Membership Interest Funds of less than $1.0 million (the "Threshold Contribution") which
together with Capital Contributions or advances of Special Membership Interest Funds made by Kelso over the prior 12-month period aggregates to an amount greater than $1 million,
then such Threshold Contribution shall be deemed to be not less than $1 million; provided, that the calculation of aggregate contributions or advances over the prior 12-month period
pursuant to the previous proviso shall exclude any contributions or advances made prior to the Kelso Threshold Date; and 

        (b)   upon
the written consent of the Board acting by majority vote. 

For
the avoidance of doubt, except upon the written consent of the Board, no Member shall have the right to make additional Capital Contributions or advance Special Membership Interest Funds to the
Company in connection with (i) issuances of Points (as defined in Section 8.1) made to executives for compensatory or incentive purposes, and (ii) issuances made as additional
yield or consideration in connection with the incurrence of indebtedness by the Company. The provisions of this Section 7.5 are intended solely to benefit the Members and, to the fullest extent
permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third party beneficiary of this Agreement), and no
Member shall have any duty or obligation to any creditor of the Company to make any additional Capital Contributions or advances of Special Membership Interest Funds or to cause the Board to consent
to the making of additional Capital Contributions or advances of Special Membership Interest Funds. Members shall be deemed to have contributed or advanced, as applicable, such additional capital upon
issuance of additional Interests or Special Membership Interests, as applicable, equal to the cash purchase price for such Interests or Special Membership Interests, as applicable, or, if no cash is
paid or there is non-cash consideration, in the amount of the Fair Market Value of such non-cash consideration as determined by the Board in good faith at or prior to issuance
of such Interests or Special Membership Interests, as applicable. No Member shall be permitted to finance its additional Capital Contributions or advances of Special Membership Interest Funds pursuant
to this Section 7.5 by or through third party financing or any relationship or arrangement with third parties (other than third party debt financing not secured by Interests or Special
Membership Interests (or otherwise by Units or Economic Interests in the Company)). In connection with any additional Capital Contributions to be made following the IPO of Eagle Bulk
Shipping Inc. (including any Capital Contributions made by third parties), the Board may in its discretion make appropriate adjustments to Section 10.2(c) of this Agreement (including to
provide that distributions are made for purposes of Section 10.2(c) on the basis of Units held) to account for any such Capital Contributions made at a higher valuation than earlier Capital
Contributions; provided that any such adjustments affect all then current Members holding Units in the same manner. 

23

 

        Section 7.6    Negative Capital Accounts.    Except as required by law, no Member shall be required to make up
a negative balance in its Capital Account. 

 
 

ARTICLE VIII
  
    POINTS    
    

        Section 8.1    Points.

        (a)   General.    There shall be established two pools of points. One pool shall consist of points called
"Service Points;" and one pool shall consist of points called "Performance Points." There shall be 1000
Service Points and 1000 Performance Points. Service Points and Performance Points shall be referred to collectively as "Points." The Compensation
Committee shall have the discretionary authority to allocate Points from time to time to any Management Member subject to the terms of any employment or services agreement between the Company or any
Subsidiary of the Company and any Management Member; provided, that (i) the Compensation Committee shall take into consideration the recommendation of Zoullas (for so long as Zoullas is a
Member and the Chief Executive Officer of Eagle Shipping) in making its allocation and (ii) the Compensation Committee may, pursuant to an employment or services agreement between the Company
or any Subsidiary of the Company and a Management Member, delegate authority to award or allocate Points to the Chief Executive Officer of Eagle Shipping. On the Initial Capital Contribution Date,
Zoullas and the other Management Members listed on Schedule B hereto shall be allocated the number and type of Points set forth opposite their
respective names. Schedule B will be maintained confidentially and accurately in the books and records of the Company by the chairman of the
Compensation Committee and each Management Member will receive a copy of Schedule B reflecting only his or her own Point allocation. The
Compensation Committee shall have the discretion to allocate, after taking into consideration the recommendation of Zoullas (for so long as Zoullas is a Member and the Chief Executive Officer of Eagle
Shipping) any or all of the remaining Points (the "Unallocated Points"), to any Management Member (as determined at the time of such allocation). Unless
otherwise determined by the Board, or as otherwise provided in an employment or services agreement between the Company or any Subsidiary of the Company and such Management Member, all Service Points,
whether allocated or unallocated, shall expire on the tenth anniversary of the initial date of issuance of Points hereunder and, upon such expiration, the provisions of this Article VIII shall
be of no further force and effect. 

        (b)   Additional Management Members.    The Compensation Committee may decide at any time to award Points to an
employee of the Company who is not yet a party to this Agreement by admitting such employee as a Management Member hereunder pursuant to Section 4.8. 

        (c)   Economics.    The economic rights of Points are set forth in Article X. 

        Section 8.2    Ex-Management Members.    In the event that the employment with the Company (or any
Subsidiary of the Company that employs such individual) of any Management Member terminates for any reason, such Management Member shall, as of the earlier of the date of such termination or the
repurchase by the Company of such Management Members' Interests or Special Membership Interests pursuant to Section 13.5, cease to be a Member of the Company for all purposes and shall be
thereafter referred to herein as a "Ex-Management Member" with only the rights of a Ex-Management Member specified herein unless
such Ex-Management Member continues to own Units in the Company by virtue of such Ex-Management Member having made a Capital Contribution to the Company. Notwithstanding the
foregoing, such Ex-Management Member shall continue to be treated, for U.S. federal, state and local income tax purposes, as a Member to the extent such Ex-Management Member
retains any Points following such termination, and any allocations or distributions made to such Ex-Management Member shall be deemed for tax purposes to be made to such
Ex-Management Member in its capacity as a Member. 

24

  

        Section 8.3    Allocation of Points to Management Members upon Termination of Employment.    

        (a)    Termination for Cause.    Unless otherwise determined by the Compensation Committee in a manner more favorable
to such Management Member or Ex-Management Member, or as otherwise provided in an employment or services agreement between the Company or any Subsidiary of the Company and such Management
Member, if a Management Member's employment with the Company or any Subsidiary of the Company that employs such individual is terminated for Cause, the number of Service Points and Performance Points
allocated to such Ex-Management Member shall be reduced to zero. 

        (b)    Other Termination of Employment.    Unless otherwise determined by the Compensation Committee in a manner more
favorable to such Ex-Management Member, or as otherwise provided in an employment or services agreement between the Company or any Subsidiary of the Company and such Management Member, if
the Management Member's employment with the Company or any Subsidiary of the Company that employs such individual terminates for any reason other than for Cause, then the number of Performance Points
allocated to such Ex-Management Member shall be reduced to zero (unless at the time such Ex-Management Member's employment is terminated the Kelso Investment Multiple is at
least four (4) and the Kelso IRR is at least ten percent (10%), in which case all of the Performance Points allocated to such Ex-Management Member shall be retained and not
forfeited) and the number of Service Points allocated to such Ex-Management Member shall be adjusted according to the following schedule: 

	If the termination occurs
 
	 	The Ex-Management

Member's Service Points

shall be reduced by
	 
	Before the first quarterly anniversary of the grant of such Ex-Management Member's Service Points	 	100	%
	

On or after the first quarterly anniversary, but before the second quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

93.75	
%
	

On or after the second quarterly anniversary, but before the third quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

87.5	
%
	

On or after the third quarterly anniversary, but before the fourth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

81.25	
%
	

On or after the fourth quarterly anniversary, but before the fifth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

75.00	
%
	

On or after the fifth quarterly anniversary, but before the sixth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

68.75	
%
	

On or after the sixth quarterly anniversary, but before the seventh quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

62.50	
%
	

On or after the seventh quarterly anniversary, but before the eighth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

56.25	
%
	

On or after the eighth quarterly anniversary, but before the ninth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

50.00	
%
	

On or after the ninth quarterly anniversary, but before the tenth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

43.75	
%
	

On or after the tenth quarterly anniversary, but before the eleventh quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

37.50	
%
	

On or after the eleventh quarterly anniversary, but before the twelfth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

31.25	
%
	

On or after the twelfth quarterly anniversary, but before the thirteenth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

25.00	
%
	 	 	 	 

25

 

	

On or after the thirteenth quarterly anniversary, but before the fourteenth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

18.75	
%
	

On or after the fourteenth quarterly anniversary, but before the fifteenth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

12.50	
%
	

On or after the fifteenth quarterly anniversary, but before the sixteenth quarterly anniversary, of the grant of such Ex-Management Member's Service Points	
 	

6.25	
%
	

On or after the sixteenth quarterly anniversary of the grant of such Ex-Management Member's Service Points	
 	

0.0	
%

        (c)    Forfeiture of Points.    Any Points forfeited by such Member pursuant to this
Section 8.3 shall, following such forfeiture, be considered Unallocated Points for purposes of Section 8.1 hereof, except as otherwise provided therein. 

        (d)    Service Points Vesting.    For purposes of this Agreement, (A) "Retainable
Service Points," with respect to any Management Member at any particular date of determination, shall mean such number of Service Points that would be retained and not
forfeited by such Management Member pursuant to the schedule set forth in Section 8.3(b) hereof (subject to the last sentence of this Section 8.3(d)) if the employment of such Management
Member with the Company or the Subsidiary of the Company that employs such Management Member was terminated at such time (other than a termination for Cause) and
(B) "Aggregate Retainable Service Points" shall mean the sum of (a) the aggregate Retainable Service Points of all Management Members and
(b) the aggregate retained Service Points of Ex-Management Members. Notwithstanding the provisions of Section 8.3(b), in the event that any Person other than Kelso or
Affiliates thereof shall acquire a Majority in Interests of the Company or the right to appoint a majority of the Directors on the Board, all Service Points then allocated to any Member shall no
longer be subject to forfeiture or adjustment, other than as provided in Section 8.3(a). 

        Section 8.4    Nontransferability of Awards.    No Points (or Economic Interests by virtue of such Management
Member's or Ex-Management Member's, as applicable, Vested IPO Percentages) allocated hereby may be Transferred, other than by will or by the laws of descent and distribution or, on such
terms and conditions as the Compensation Committee shall establish, to a transferee permitted under Section 13.2. All rights with respect to Points (or Economic Interests by virtue of such
Management Member's or Ex-Management Member's, as applicable, Vested IPO Percentages) allocated to a Management Member or Ex-Management Member hereunder shall be distributed
during his or her lifetime only to such Management Member or Ex-Management Member or, if applicable, a transferee permitted under Section 13.2. 

        Section 8.5    Amendment to the Points Plan.    The Compensation Committee will administer the allocation of
Points and will have the authority to amend the terms of the Points at any time, however, no amendment shall adversely affect in a material way any of the rights of a Management Member without such
Member's consent with respect to awards of Points previously granted. For so long as Zoullas remains Chief Executive Officer of Eagle Shipping and a Member, any such amendment shall be subject to the
consent of Zoullas, which such consent shall not be unreasonably withheld. Notwithstanding anything in this Article VIII to the contrary, until such time as the Company shall have received
Capital Contributions and Special Membership Interest Aggregate Funds of at least $125 million in the aggregate, the Compensation Committee and the Board shall not be permitted to increase the
number of Performance Points (above 1000) available for allocation hereunder. Notwithstanding the foregoing, the Compensation Committee shall have the right to make the adjustments contemplated by the
last paragraph of Schedule D attached hereto. 

26

 
 
 

ARTICLE IX    
    
    ALLOCATIONS    
    

        Section 9.1    Book Allocations of Net Profit and Net Loss.    Except as provided in Section 9.2, Net
Profit or Net Loss, as the case may be, with respect to any Accounting Period, including each item of income, gain, loss and deduction of the Company, shall be allocated among the Capital Accounts as
of the end of such Accounting Period in a manner that as closely as possible gives effect to the provisions of Article X and the other relevant provisions of this Agreement. 

        Section 9.2    Special Book Allocations.    

        (a)    Qualified Income Offset.    If any Member unexpectedly receives any adjustment, allocation or distribution
described in Treasury Regulations section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) and such adjustment, allocation or distribution causes or increases a deficit in such
Member's Capital Account in excess of its obligation to make additional Capital Contributions (a "Deficit"), items of gross income and gain for such
Accounting Period and each subsequent Accounting Period shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations,
the Deficit of such Member as quickly as possible; provided that an allocation pursuant to this Section 9.2(a) shall be made only if and to the
extent that such Member would have a
Deficit after all other allocations provided for in this Article IX have been tentatively made as if this Section 9.2(a) were not in this Agreement. This Section 9.2(a) is
intended to comply with the qualified income offset provision of Treasury Regulations section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith. 

        (b)    Partnership Minimum Gain.    Except as otherwise provided in Treasury Regulations
section 1.704-2(f), if there is a net decrease in Partnership Minimum Gain during any Accounting Period, each Member shall be specially allocated items of Company income and gain
for such Accounting Period in proportion to, and to the extent of, an amount equal to the portion of such Member's share of the net decrease in Partnership Minimum Gain, determined in accordance with
Treasury Regulations section 1.704-2(g). This Section 9.2(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulations
section 1.704-2(f) and shall be interpreted consistently therewith. 

        (c)    Restorative Allocations.    Any special allocations of items of income or gain pursuant to this
Section 9.2 shall be taken into account in computing subsequent allocations pursuant to this Agreement, so that the net amount for any item so allocated and all other items allocated to each
Member pursuant to this Agreement shall be equal, to the extent possible, to the net amount that would have been allocated to each Member pursuant to the provisions of this Agreement if such special
allocations had not occurred. 

        (d)    Bulk Advances.    Notwithstanding anything to the contrary, interest income derived from Bulk Advances shall be
allocated only to the Capital Accounts of Members holding Special Membership Interests (on a basis pro rata for Special Membership Interests held). 

        Section 9.3    Tax Allocations.    The income, gains, losses, credits and deductions recognized by the Company
shall be allocated among the Members, for U.S. federal, state and local income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the same manner that each such item
is allocated to the Members' Capital Accounts. Notwithstanding the foregoing, the Board shall have the power to make such allocations for U.S. federal, state and local income tax purposes as may be
necessary to maintain substantial economic effect, or to ensure that such allocations are in accordance with the Members' interests in the Company, in each case within the meaning of the Code and the
Treasury Regulations, it being anticipated that no Management Member or Additional Management Member shall be allocated taxable income in excess of the amount of cash to be received by such Member or
Additional Member. In accordance with section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for U.S. federal
income tax purposes and its fair market value at the time of contribution. 

27

  

 
 

ARTICLE X
  
    DISTRIBUTIONS    
    

        Section 10.1    Explanation of Terms.    

        (a)   Carry Percentage. For purposes of computing the amount to be distributed to each Member, certain Members will have a
"Carry Percentage," which shall be based upon the following two elements: a Service Percentage and a Performance Percentage. The Carry Percentage shall
be, for each Management Member, the quotient obtained by dividing (i) the sum of such Member's Service Percentage and such Member's Performance Percentage by (ii) the sum of
(w) 100% plus (x) the Adjusted Total Vested Service Percentage plus (y) the
Adjusted Aggregate Post IPO Performance Percentage plus (z) the Adjusted Total Vested IPO Percentage. 

        (i)    Service Percentage. The "Service Percentage" for each Management Member
(or Ex-Management Member, as applicable) shall be the Total Service Percentage multiplied by the quotient obtained by dividing (x) the number of Retainable Service Points allocated
to such Management Member (or, in the case of any Ex-Management Member, the allocated and retained Service Points of such Ex-Management Member as determined in accordance with
the schedule set forth in Section 8.3(b) hereof) by (y) 1000 (or, if the pool of allocated Service Points has been increased above 1000 (such increased number, the
"Total Service Pool Points"), the Total Service Pool Points). For purposes of this Agreement, (A) the "Total Service
Percentage" means five percent (5%), (B) the "Adjusted Total Service Percentage" means the product of (x) the
Total Service Percentage and (y) the Carry Adjustment Factor, (C) the "Adjusted Total Vested Service Percentage" means the product of
(x) the Adjusted Total Service Percentage and (y) the Vested Service Factor, and (D) the "Vested Service Factor" means the quotient
obtained by dividing (x) the Aggregate Retainable Service Points by (y) 1000 (or if the pool of allocated Service Points has been increased above 1000, the Total Service Pool Points). 

        (ii)   Performance Percentage. The "Performance Percentage" for each Management
Member (or Ex-Management Member, if applicable) on any date of determination shall be the sum of (a) such Management Member's (or Ex-Management Member's) Vested IPO
Percentage (as defined in Section 10.1(a)(iii)), if any, and (b) such Management Member's (or
Ex-Management Member's, if applicable) Post IPO Performance Percentage (as defined below). 

        1.     A
Management Member's (or Ex-Management Member's, if applicable) "Post IPO Performance Percentage" shall be
the sum of (a) such Management Member's (or Ex-Management Member's, if applicable) Post IPO Remaining Percentage (as defined below) and (b) such Management Member's (or
Ex-Management Member's, if applicable) Stub Performance Percentage Allocation (as defined below), if any. 

        2.     A
Management Member's (or Ex-Management Member's, if applicable) "Post IPO Remaining Percentage" shall be
calculated by dividing (x) the number of Performance Points allocated to such Management Member (or, in the case of any Ex-Management Member, the allocated and retained Performance
Points of such Ex-Management Member, if any) by (y) 1000 (or, if the pool of allocated Performance Points has been increased above 1000 (such increased number, the
"Total Performance Pool Points"), the Total Performance Pool Points); and then multiplying the resulting quotient by the Total Available Post IPO
Remaining Performance Percentage for such date of determination. 

        3.     A
Management Member's (or Ex-Management Member's, if applicable) "Stub Performance Percentage Allocation"
shall be calculated by dividing (x) the number of Post IPO Awarded Performance Points, if any, allocated to such Management Member (or, in the case of any Ex-Management Member, the
allocated and retained Post IPO Awarded Performance 

28

 

Points
of such Ex-Management Member, if any) by (y) 120 (or, if the total Post IPO Awarded Performance Points are greater than 120, then such greater number of total Post IPO
Awarded Performance Points); and then multiplying the resulting quotient by the Total Stub Performance Percentage for such date of determination. 

        4.     For
purposes of this Agreement, (A) the "Total Available Post IPO Remaining Performance Percentage" means, on any
date of determination, the percentage determined by reference to Schedule D of this Agreement, (B) the "Total Stub
Performance Percentage" means, on any date of determination, the percentage determined by reference to Schedule D of this
Agreement, (C) the "Aggregate Post IPO Performance Percentage" means the sum of (i) Total Available Post IPO Remaining Performance
Percentage plus (ii) Total Stub Performance Percentage, (D) the "Adjusted Aggregate Post IPO Performance Percentage" means the product of
(x) the Carry Adjustment Factor and (y) the Aggregate Post IPO Performance Percentage and (E) "Post IPO Awarded Performance Points"
mean Performance Points (including any previously forfeited Performance Points) that are newly awarded after the IPO of Eagle Bulk Shipping Inc. to Management Members (it being understood that
the 880 Performance Points set forth on Schedule B as of the date hereof shall be excluded unless any of such Performance Points are forfeited and reallocated to Management Members after the
IPO of Eagle Bulk Shipping Inc.). 

        (iii)  Vested IPO Percentage. The "Vested IPO Percentage," with respect to any
Management Member or Ex-Management Member, as applicable, is the percentage (if any) set forth on Schedule F with respect to such
Management Member or Ex-Management Member, as applicable; provided that if the applicable Ex-Management Member's employment with the Company or the Subsidiary of the Company
that employed such Ex-Management Member was terminated for Cause, then the "Vested IPO Percentage" of such Ex-Management Member shall be reduced to zero percent (0%). For
purposes of this Agreement, (A) the "Total Vested IPO Percentage" means the sum of all Vested IPO Percentages of Management Members and
Ex-Management Members set forth on Schedule F hereof, as indicated opposite "Total Vested IPO Percentage" thereon (reduced by any
forfeited amounts pursuant to the proviso of the preceding sentence) and (B) the "Adjusted Total Vested IPO Percentage" means the product of
(x) the Carry Adjustment Factor and (y) the Total Vested IPO Percentage. 

        (b)   Benchmark Amount. Management Members who receive Points after the Initial Contribution Date may be assigned a
"Benchmark Amount," which shall be an amount determined by the Compensation Committee (or the Board, as applicable) at the time the Compensation
Committee (or the Board, as applicable) assigned such Points. The Benchmark Amount may be used by the Compensation Committee to calculate an appropriate adjustment to a Management Member's Carry
Percentage to reflect the increase or decrease in the value of the Company between the Initial Contribution Date and the date of such award. The Benchmark Amounts (if any) for each Management Member
will be reflected on Schedule B. 

        Section 10.2    Distributions Generally.    This section provides for the distribution of certain amounts
("Distributable Amounts") to the Members. The term "Distributable Amounts" means (a) upon the occurrence of an Exit Event, all amounts held by
the Company immediately following such Exit Event, reduced by existing liabilities (including the pro rata payment of all amounts owed in respect of outstanding Special Membership Interests) and
expenses of the Company and a reasonable reserve for future liabilities and expenses; and (b) at any other time determined by the Board, any amounts designated by the Board in its sole
discretion (subject to Section 10.8 hereof). Immediately prior to the making of any distribution, a tentative distribution schedule shall be made
for the purpose of 

29

 

determining
each Member's Performance Percentage, if any. Distributable Amounts shall then be distributed in the following order and priority: 

        (a)   First, to the Members and Ex-Management Members, an amount equal to their aggregate Unreturned Capital (in
the proportion that each such Member's or Ex-Management Member's share of Unreturned Capital immediately prior to such distribution bears to the aggregate Unreturned Capital of all Members
and Ex-Management Members immediately prior to such distribution), until each Member and Ex-Management Member has received distributions in an amount equal to its Unreturned
Capital immediately prior to such distribution, and no distribution or portion thereof shall be made under any of Section 10.2(b) or (c) below until the entire amount of the Unreturned
Capital for all Members and Ex-Management Members has been paid in full; 

        (b)   Second, to the Management Members and Ex-Management Members, an amount equal to the product of (i) the
balance remaining to be distributed at such time, and (ii) the sum of the Adjusted Carry Percentages of all Management Members and Ex-Management Members (in the proportion that each
such Management Member's or Ex-Management Member's Adjusted Carry Percentage bears to the sum of the Adjusted Carry Percentages of all Management Members and Ex-Management
Members); and 

        (c)   Third, to the Members (and Ex-Management Members, if applicable), the remaining balance to be distributed (in
proportion to their respective Aggregate Investments). For purposes of this Agreement, the "Aggregate Investment," with respect to any Member or
Ex-Management Member, as applicable, shall mean the sum of such Member's (or Ex-Management Member's, as applicable) aggregate Capital Contributions and advances of Special
Membership Interest Aggregate Funds. 

        For
purposes of Sections 10.2(b) and 10.2(c), if any Management Member has a Benchmark Amount, then distributions to such Management Member pursuant to this Section 10.2 shall be
made as though the aggregate Unreturned Capital of all Members immediately prior to the time such Management Member became a Management Member had been equal to such Management Member's Benchmark
Amount (which has the effect of making less proceeds assumed to be available for distribution pursuant to Sections 10.2(b) and 10.2(c) since more amounts are assumed to be distributed pursuant to
Section 10.2(a)). An amount equal to the amount of any reduction in distributions to a Management Member resulting from the application of the foregoing sentence (i.e. the incremental amount
that such Management Member with a Benchmark Amount would have otherwise been distributed) shall be distributed, in accordance with Section 10.2(b) and (c), to all of the Members having Capital
Accounts. 

        In
the event that an Exit Event is structured as a sale of Interests by the Members, rather than a distribution of proceeds by the Company, the purchase agreement governing such Interest
sale will have provisions therein which replicate, to the greatest extent possible, the economic result which would have been attained under this Article X had the Exit Event been structured as
a distribution of proceeds. 

        Section 10.3    Distributions In Kind.    In the event of a distribution of Company property, such property
shall for all purposes of this Agreement be deemed to have been sold at its Fair Market Value and the proceeds of such sale shall be deemed to have been distributed to the Members. 

        Section 10.4    No Withdrawal of Capital.    Except as otherwise expressly provided in Article XIV, no
Member shall have the right to withdraw capital from the Company or to receive any distribution or return of such Member's Capital Contributions or advance of Special Membership Interest Funds, as
applicable. 

30

 

        Section 10.5    Withholding.    

        (a)   Each
Member shall, to the fullest extent permitted by applicable law, indemnify and hold harmless each Person who is or who is deemed to be the responsible withholding
agent for U.S. federal, state, local or foreign income tax purposes against all claims, liabilities and expenses of whatever nature (other than any claims, liabilities and expenses in the nature of
penalties and accrued interest thereon that result from such Person's fraud, willful misfeasance, bad faith or gross negligence) relating to such Person's obligation to withhold and to pay over, or
otherwise pay, any withholding or other taxes payable by the Company or as a result of such Member's participation in the Company, provided that such
liability of any Member shall not exceed the sum of the balance of such Member's Capital Account, after giving effect to all adjustments hereunder, and the aggregate amount of all prior distributions
made to such Member by the Company. 

        (b)   Notwithstanding
any other provision of this Article X, (i) each Member hereby authorizes the Company to withhold and to pay over, or otherwise pay, any
withholding or other taxes payable by the Company or any of its Affiliates with respect to such Member or as a result of such Member's participation in the Company and (ii) if and to the extent
that the Company shall be required to withhold or pay any such taxes (including any amounts withheld from amounts payable to the Company to the extent attributable, in the judgment of the Compensation
Committee, to the interest of such Member in the Company), such Member shall be deemed for all purposes of this Agreement to have received a payment from the Company as of the time such withholding or
tax is required to be paid, which payment shall be deemed to be a distribution with respect to such Member's interest in the Company to the extent that the Member (or any successor to such Member's
interest in the Company) is then entitled to receive a distribution. To the extent that the aggregate of such payments to a Member for any period exceeds the distributions to which such Member is
entitled for such period, such Member shall make a prompt payment to the Company of such amount. 

        (c)   If
the Company makes a distribution in kind and such distribution is subject to withholding or other taxes payable by the Company on behalf of any Member, such Member
shall make a prompt payment to the Company of the amount of such withholding or other taxes by wire transfer. 

        Section 10.6    Restricted Distributions.    Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make a distribution to any Member on account of its interest in the
Company if such distribution would violate Section 40 of the Marshall Islands Act or other applicable law. 

        Section 10.7    Tax Distributions.    In the event the Company allocates net taxable income to any of the
Company's Members for any accounting period, then, at the Compensation Committee's discretion (or the Board, if there shall be no Compensation Committee), the Company will make distributions of cash
to such members prior to any other distributions provided for in Article X in an amount determined by the Compensation Committee (or the Board, if there shall be no Compensation Committee) for
the purpose of allowing such members to satisfy their tax liability arising as a result of such allocation. Tax distributions made pursuant to the foregoing shall be treated as advances against
distributions payable to members pursuant to Section 10.2. 

        Section 10.8    Eagle Bulk Shipping Advances.    Notwithstanding anything to the contrary, all principal
payments paid to the Company in respect of any Bulk Advances (as defined below), and quarterly (or such other scheduled payment intervals that is on a basis consistent with the timing of payments in
respect of such Bulk Advances) cash payments at a fixed per annum rate of seven percent (7.0%) on the amount equal to the daily outstanding principal amount of any Bulk Advances (the
"Special Interest Payment"), shall be paid pro rata to (and only to) the holders of outstanding Special Membership Interests, until the Bulk Advances
are repaid to the Company in full; provided, however, that no such payments shall be made if, after giving effect to such payments, the Company would be insolvent. Any repayment of principal on the
Bulk Advances subsequently paid to any Member 

31

 

pursuant
to the foregoing shall reduce such Member's Special Membership Interest on a dollar for dollar basis (and, as result, only such reduced amount shall be considered outstanding as a Special
Membership Interest for purposes of this Agreement, and Schedule E shall be amended accordingly). For purposes of this Agreement, "Bulk Advances"
shall be loans made by the Company to Eagle Bulk Shipping Inc., a Marshall Islands corporation and a Subsidiary of the Company, as determined to be made by the Board in its discretion, of funds
advanced to the Company as Special Membership Interest Funds. 

 
 

ARTICLE XI
  
    BOOKS AND RECORDS    
    

        Section 11.1    Books, Records and Financial Statements.    At all times during the continuance of the Company,
the Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges
made, all credits made and received and all income derived in connection with the operation of the Company's business in accordance with generally accepted accounting principles consistently applied,
and, to the extent inconsistent therewith, in accordance with this Agreement. Such books of account, together with a copy of this Agreement and the Certificate, shall at all times be maintained at the
principal place of business of the Company and shall be open to inspection and examination at reasonable times by each Member owning Units and its duly authorized representative for any purpose
reasonably related to such Member's interest in the Company, provided that the Company may maintain the confidentiality of  Schedule B. The Company
shall provide to all Members owning Units, within 120 days of fiscal year end, annual audited financial statements
of the Company. The annual audited financial statements may be provided to all such Members, in the sole discretion of the Board, either electronically or via hard copy. 

32

  

        Section 11.2    Filings of Returns and Other Writings; Tax Matters Partner.    

        (a)   The
Company shall timely file all Company tax returns and shall timely file all other writings required by any governmental authority having jurisdiction to require such
filing. Within 90 days after the end of each taxable year (or as soon as reasonably practicable thereafter), the Company shall send to each Person that was a Member at any time during such year
such information as may be necessary for such Person to file his, her or its United States federal income tax returns. 

        (b)   KIA
VII shall be the tax matters partner of the Company, within the meaning of section 6231 of the Code (the "Tax Matters
Partner") unless a Majority in Interest votes otherwise. Each Member hereby consents to such designation and agrees that upon the request of the Tax Matters Partner, such
Member will execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. 

        (c)   Promptly
following the written request of the Tax Matters Partner, the Company shall, to the fullest extent permitted by law, reimburse and indemnify the Tax Matters
Partner for all reasonable expenses, including reasonable legal and accounting fees, claims, liabilities, losses and damages incurred by the Tax Matters Partner in connection with any administrative
or judicial proceeding with respect to the tax liability of the Members, except to the extent arising from the bad faith, gross negligence, willful violation of law, fraud or breach of this Agreement
by such Tax Matters Partner. 

        (d)   The
provisions of this Section 11.2 shall survive the termination of the Company or the termination of any Member's interest in the Company and shall remain
binding on the Members for as long a period of time as is necessary to resolve with the Internal Revenue Service any and all matters regarding the U.S. federal income taxation of the Company or the
Members. 

        Section 11.3    Accounting Method.    For both financial and tax reporting purposes, the books and records of
the Company shall be kept on the accrual method of accounting applied in a consistent manner and shall reflect all Company transactions and be appropriate and adequate for the Company's business. 

        Section 11.4    Appraisal.    The Company shall engage, from time to time, but not less often than within
90 days after every fiscal year, commencing with the fiscal year ending on December 31, 2005, a nationally recognized independent valuation consultant or appraiser of national standing
reasonably satisfactory to Kelso and the Chief Executive Officer of Eagle Shipping (which approval shall not be
unreasonably withheld) (the "Appraiser") to appraise the Fair Market Value of the Interests as of the last day of the fiscal year then most recently
ended or, at the request of the Company, as of any more recent date (the "Appraisal Date") and to prepare and deliver a report to the Company describing
the results of such appraisal (the "Appraisal"). The Company shall bear the fees and expenses of each Appraisal. 

 
 

ARTICLE XII
  
    LIABILITY, EXCULPATION AND INDEMNIFICATION    
    

        Section 12.1    Liability.    Except as otherwise provided by the Marshall Islands Act, the debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company solely by reason of being a Covered Person. 

        Section 12.2    Exculpation.    No Covered Person shall be liable to the Company or any other Covered Person
for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except that a 

33

 

Covered
Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person's gross negligence, willful misconduct or willful breach of this Agreement. 

        Section 12.3    Fiduciary Duty.    To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any
other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person. 

        Section 12.4    Indemnification.    To the fullest extent permitted by applicable law, a Covered Person shall
be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner believed to be within the scope of authority conferred on
such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such
Covered Person's gross negligence, willful misconduct or willful breach of this Agreement with respect to such acts or omissions; provided, that any
indemnity under this Section 12.4 shall be provided out of and to the extent of Company assets only, and no Covered Person shall have any personal liability on account thereof. 

        Section 12.5    Expenses.    To the fullest extent permitted by applicable law, expenses (including, without
limitation, reasonable attorneys' fees, disbursements, fines and amounts paid in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding relating to or
arising out of their performance of their duties on behalf of the Company shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that the
Covered Person is not entitled to be indemnified as authorized in Section 12.4. 

        Section 12.6    Severability.    To the fullest extent permitted by applicable law, if any portion of this
Article shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each Covered Person and may indemnify each employee or agent of the
Company as to costs, charges and expenses (including reasonable attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the right of the Company, to the fullest extent permitted by any applicable portion of this Article that shall not have been
invalidated. 

 
 

ARTICLE XIII
  
    TRANSFERS OF INTERESTS    
    

        Section 13.1    Restrictions on Transfers of Interests or Special Membership Interests by Management Members, Outside Investor Members and Other
Investor Members.    No Member (other than the Kelso Members) may Transfer any Interests or Special Membership Interests (including, without limitation to any other
Member, or by gift, or by operation of law or otherwise, provided that Interests and/or Special Membership Interests may be Transferred (a) pursuant to Section 13.2 ("Estate Planning
Transfers, Transfers Upon Death"), (b) in accordance with Section 13.5 ("Puts"), (c) in accordance with Section 13.6 ("Involuntary Transfers"), (d) pursuant to
Section 13.10(a) ("Tag-Along Rights") and (e) pursuant to Section 13.10(b) ("Drag-Along Rights"). Notwithstanding the foregoing, Zoullas may Transfer his
Interests and/or Special Membership Interests to any of his Affiliates or to any Outside Investor Member or its Affiliates, and any Outside Investor Member may transfer its Interests and/or 

34

 

Special
Membership Interests to its Affiliates or to Zoullas or any of his Affiliates, subject in each case to the requirements of applicable law. Each Other Investor Member may transfer its Interests
and/or Special Membership Interests to any of its Affiliates. The Kelso Members shall be free to Transfer their Interests and/or Special Membership Interests, in whole or in part, at any time, subject
to Section 13.10(a) and (b). 

        Section 13.2    Estate Planning Transfers; Transfers upon Death of a Management Member, Outside Investor Members or Other Investor
Members.    Interests and/or Special Membership Interests held by any Member may be transferred for estate-planning purposes of such Member, authorized by the prior
written approval of the Board which shall not be unreasonably withheld (excluding such Member and other members of the Board who are designees of such Member), to (A) a trust under which the
distribution of the Interests and/or Special Membership Interests may be made only to beneficiaries who are such Member, his or her spouse, his or her parents, members of his or her immediate family
or his or her lineal descendants, (B) a charitable remainder trust, the income from which will be paid to such Member during his or her life, (C) a corporation, the members or
shareholders of which are only such Member, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants or (D) a partnership or limited
liability company, the partners or members of which are only such Member, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants. Interests
and/or Special Membership Interests may be transferred as a result of the laws of descent, provided that any heirs, executors or other beneficiaries
shall remain subject to the terms of this Agreement as if such Member continued to hold the Interests and/or Special Membership Interests, as applicable, directly. 

        Section 13.3    Effect of Assignment.    The Company shall, from the effective date of any permitted assignment
or Transfer of an Interest and/or Special Membership Interest (or part thereof), as applicable, thereafter pay all further distributions or payments on account of such Interest and/or Special
Membership Interest (or part thereof), as applicable, to the assignee or transferee, as applicable, of such Interest and/or Special Membership Interests (or part thereof), as applicable. It is
understood that for purposes of Section 10.2(c) of this Agreement, any Member transferring Units (including a transfer of Units to the Company pursuant to Section 13.5 hereof) shall be
deemed to have made Aggregate Investments in an amount ratably reduced by the proportion of such Member's total Units (before giving effect to the applicable transfer) so transferred. 

        Section 13.4    Overriding Provisions.    

        (a)   Any
Transfer in violation of this Article XIII shall be null and void ab initio, and the provisions of
Section 13.3 shall not apply to any such Transfers. The approval of any Transfer in any one or more instances shall not limit or waive the requirement for such approval in any other or future
instance. 

        (b)   All
Transfers permitted under this Article XIII are subject to this Section 13.4, Section 13.5 and Section 13.10. 

        (c)   Any
proposed Transfer by a Member pursuant to the terms of this Article XIII shall, in addition to meeting all of the other requirements of this Agreement,
satisfy the following conditions: (i) the Transfer will not be effected on or through an "established securities market" or a "secondary market or the substantial equivalent thereof," as such
terms are used in Treasury Regulations section 1.7704-1, and, at the request of the Board, the transferor and the transferee will have each provided the Company a certificate to
such effect; and (ii) the proposed Transfer will not result in the Company having more than 99 Members, within the meaning of Treasury Regulations section 1.7704-1(h)(1)
(determined pursuant to the rules of Treasury Regulations section 1.7704-1(h)(3)). The Board may in its sole discretion waive the condition set forth in clause (ii) of this
Section 13.4(c). 

35

   
        (d)   The Company shall promptly amend Schedule A and/or  Schedule E, as applicable,
 to reflect any permitted Transfers of Interests or Special Membership Interests, as applicable, pursuant to this
Article XIII. 

        Section 13.5    Put Rights with respect to Interests and Special Membership Interests Owned by Zoullas and the Outside Investor
Members.    

        (a)    Sale to the Company ("Put Rights").    Subject to all provisions of this
Section 13.5(a) and to Section 13.5(b) ("Prohibited Purchases"), unless otherwise provided in an employment or services agreement between the Company or any Subsidiary of the Company and
Zoullas, Zoullas shall have the right to sell to the Company, and the Company shall have the obligation to purchase from Zoullas and the Outside Investor Members, all, but not less than all, of the
Interests and Special Membership Interests owned by Zoullas and the Outside Investor Members following the termination of employment of Zoullas, at their Fair Market Value (as of the date of the Put
Notice (as defined below)), if the employment of Zoullas with the Company or any Subsidiary that employs Zoullas (or by the Company on behalf of any such Subsidiary) (i) is terminated without
Cause or (ii) terminates as a result of (A) the death or Disability of Zoullas, (B) the Resignation of Zoullas for Good Reason or (C) upon the approval of such right by the
Compensation Committee, the Retirement of Zoullas. If Zoullas desires to sell Interests and Special Membership Interests pursuant to this Section 13.5(a), he (or his estate, as the case may be)
shall notify the Company (such notice, the "Put Notice") not more than 60 days after the qualifying termination of employment as described in
(i) and (ii) above (such 60 day period, the "Put Notice Period"). Failure to deliver the Put Notice within the Put Notice Period
pursuant to the preceding sentence shall constitute a waiver of the Put Right by Zoullas (or his estate). Subject to the provisions of paragraphs (b) and (c) of this Section 13.5,
the Company shall purchase and deliver payment for the Interests and Special Membership Interests of the Zoullas and the Outside Investor Members not later than 60 days after receipt of the Put
Notice. The Company shall be permitted to use the proceeds from any key man insurance policy on Zoullas to fulfill its obligations under this Section 13.5. 

        (b)    Prohibited Purchases.    Notwithstanding anything to the contrary herein, and unless otherwise provided in an
employment or services agreement between the Company or any Subsidiary of the Company, and Zoullas, the Company shall not be permitted or obligated to purchase any Interests and/or Special Membership
Interests from Zoullas or any Outside Investor Member hereunder to the extent (i) the Company is prohibited from purchasing such Interests and/or Special Membership Interests (or incurring debt
to finance the purchase of such Interests and/or Special Membership Interests), or a Subsidiary is restricted from distributing funds to the Company for such purchase, in any case by any debt
instruments or agreements, including any amendment, renewal, extension, substitution, refinancing, replacement or other modification thereof, which have been entered into or which may be entered into
by the Company or any of its Subsidiaries, including those to finance the acquisition of assets or businesses by the Company or any of its Subsidiaries and any future acquisitions or recapitalizations
(the "Financing Documents") or by applicable law, (ii) an event of default has occurred (or, with notice or the lapse of time or both, would
occur) under any Financing Document and is (or would be) continuing, or (iii) the purchase of such Interests and/or Special Membership Interests (including the incurrence of any indebtedness in
connection with the financing of such purchase) or the distribution of funds to the Company by a Subsidiary for such purchase (1) would, or in the opinion of the Board (excluding from such
determination Zoullas and other members of the Board who are designees of the Zoullas or the Outside Investor Members) might, result in the occurrence of an event of default under any Financing
Document or create a condition which would or might, with notice or lapse of time or both, result in such an event of default, or (2) would, in the reasonable opinion of the Board (excluding
Zoullas and other members of the Board who are designees of Zoullas or the Outside Investor Members), be imprudent in view of the financial condition (present or projected) of the Company or any of
its Subsidiaries or the anticipated impact of the 

36

 

purchase
of such Interests and/or Special Membership Interests on the Company's or any of its Subsidiaries' ability to meet their respective obligations under any Financing Document or otherwise, or
to satisfy and make their planned capital or other expenditures or satisfy any related obligations. If Interests and/or Special Membership Interests which the Company has the right or obligation to
purchase on any date exceed the total amount permitted to be purchased on such date pursuant to the preceding sentence (the "Maximum Amount"), the
Company shall purchase on such date only that number of Interests and/or Special Membership Interests up to the Maximum Amount (if any) (and shall not be required to purchase more than the Maximum
Amount) in such amounts as the Board shall in good faith determine. 

        (c)    Form of Payment.    Notwithstanding anything to the contrary contained in this Agreement, if the Company is
unable to make any payment when due to Zoullas or any Outside Investor Member under this Agreement by reason of paragraph (b) of this Section 13.5, the Company shall have the option to
pay all or a portion of the purchase price for such Interests and Special Membership Interests, as applicable, with a subordinated note accruing simple interest at 6% per annum which is fully
subordinated in right of payment and exercise of remedies to the lenders' rights under the Financing Documents and the maturity date of which is 30 days after the latest maturity date on any
debt of the Company which is outstanding (or reasonably expected to become outstanding) as of the date such subordinated note is issued; provided, that
if all or a portion of the purchase price will be paid by delivery of a subordinated note, at least 10 business days prior to the payment due date, the Company shall notify Zoullas (or his estate, as
the case may be) that it will pay all or a portion of the purchase price with a subordinated note, and Zoullas (or his estate, as the case may be) shall have 10 business days from receipt of such
notice to rescind his or her (or his or her estate's, as the case may be)
election to sell his Interests and Special Membership Interests, as applicable, and those of the Outside Investor Members to the Company. 

        (d)    Interests of Outside Investor Members.    Notwithstanding anything in this Agreement to the contrary, for
purposes of this Section 13.5, the exercise of the Put Right by Zoullas with respect to Interests and Special Membership Interests, as applicable, owned by him and the Outside Investor Members
shall be deemed to be binding on the Outside Investor Members with respect to the Interests and Special Membership Interests, as applicable, owned by the Outside Investor Members. Upon any exercise by
Zoullas, and subject to the provisions of paragraphs (b) and (c) of this Section 13.5, each Outside Investor Member shall have the obligation to sell, and the Company shall have
the obligation to purchase, all of each such Outside Investor Member's Interests and Special Membership Interests, as applicable, on the terms set forth in this Section 13.5 (it being
understood that any rescission by Zoullas shall also be deemed to be a rescission with respect to the Interests and Special Membership Interests, as applicable, owned by the Outside Investor Members).
The exercise of the Put Right by Zoullas may have such other consequences to Zoullas (including consequences with respect to the forfeiture of Points) as may be set forth in any employment or services
agreement between the Company or one of its Subsidiaries and Zoullas. 

        Section 13.6    Involuntary Transfers.    Any transfer of title or beneficial ownership of Interests or Special
Membership Interests, as applicable, upon default, foreclosure, forfeit, divorce, court order or otherwise than by a voluntary decision on the part of a Management Member, Outside Investor Member or
Other Investor Member (each, an "Involuntary Transfer") shall be void unless such Management Member, Outside Investor Member or Other Investor Member
complies with this Section 13.6 and enables the Company to exercise in full its rights hereunder. Upon any Involuntary Transfer, the Company shall have the right to purchase such Interests or
Special Membership Interests, as applicable, pursuant to this Section 13.6 and the person or entity to whom such Interests or Special Membership Interests, as applicable, have been Transferred
(the "Involuntary Transferee") shall have the obligation to sell such Interests or Special Membership Interests, as applicable, in accordance with this
Section 13.6. Upon the Involuntary Transfer of any Interest or Special Membership Interests, as 

37

 

applicable,
such Management Member, Outside Investor Member or Other Investor Member shall promptly (but in no event later than two days after such Involuntary Transfer) furnish written notice to the
Company indicating that the Involuntary Transfer has occurred, specifying the name of the Involuntary Transferee, giving a detailed description of the circumstances giving rise to, and stating the
legal basis for, the Involuntary Transfer. Upon the receipt of the notice described in the preceding sentence, and for 60 days thereafter, the Company shall have the right to purchase, and the
Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Interests and Special Membership Interests acquired by the Involuntary Transferee for a purchase price
equal to the lesser of (i) the Fair Market Value of such Interests or Special Membership Interests, as applicable, and (ii) the amount of the indebtedness or other liability that gave
rise to the Involuntary Transfer plus the excess, if any, of the Carrying Value of such Interests or Special Membership Interests, as applicable, over the amount of such indebtedness or other
liability that gave rise to the Involuntary Transfer. For purposes of this Agreement, "Carrying Value", with respect to any outstanding Special
Membership Interest, means the value equal to the Special Membership Interest Funds advanced by the applicable selling Management Member, Outside Investor Member or Other Investor Member in respect of
any such outstanding Special Membership Interest (plus any portion of accrued and unpaid interest on the applicable pro rata outstanding portion of the Bulk Advances that is allocable to the
applicable Member pursuant to Section 10.8), less principal amounts paid to such Member in respect of such Member's Special Membership Interest. 

        Section 13.7    Assignment by the Company.    The Company shall have the right to assign to Kelso all or any
portion of its rights and obligations under Sections 13.5(a) or 13.6, provided that any such assignment or assumption is accepted by Kelso. If the
Company has not exercised its right to purchase Interests or Special Membership Interests pursuant to any such section within 15 days of receipt by the Company of the letter, notice or other
occurrence giving rise to such right, then Kelso shall have the right to require the Company to assign such right. Kelso shall have the right to assign to one or more of the Kelso Members all or any
of its rights to purchase Interests or Special Membership Interests pursuant to this Section 13.7. 

        Section 13.8    Substitute Members.    In the event any Management Member, Outside Investor Member, Other
Investor Member or Kelso Member Transfers its Interest or Special Membership Interests in compliance with the other provisions of this Article XIII, the transferee thereof shall have the right
to
become a substitute Management Member, Outside Investor Member, Other Investor Member or substitute Kelso Member, as the case may be, but only upon satisfaction of the following: 

        (a)   execution
of such instruments as the Board deems reasonably necessary or desirable to effect such substitution; and 

        (b)   acceptance
and agreement in writing by the transferee of the Member's Interest or Special Membership Interest, as applicable, to be bound by all of the terms and
provisions of this Agreement and assumption of all obligations under this Agreement (including breaches hereof) applicable to the transferor. 

        Section 13.9    Release of Liability.    In the event any Member shall sell such Member's entire interest in
the Company (other than in connection with an Exit Event) in compliance with the provisions of this Agreement, including, without limitation, pursuant to the last sentence of Section 13.6,
without retaining any interest therein, directly or indirectly, then the selling Member shall, to the fullest extent permitted by law, be relieved of any further liability arising hereunder for events
occurring from and after the date of such Transfer; provided, however, that no such Transfer shall relieve any Management Member of his obligations pursuant to Section 4.6 hereof and such
obligations shall survive any termination of such Management Member's membership in the Company for the restriction period set forth in Section 4.6. 

38

 

        Section 13.10    Tag-Along and Drag-Along Rights; Initial Members Participation
Rights.    

        (a)    Tag-Along Rights.    In the event that at any time any Kelso Member proposes to Transfer Interests
or Special Membership Interests in the Company, other than any Transfer to an Affiliate of Kelso, and such Interests or Special Membership Interests would represent, together with all Interests and
Special Membership Interests previously Transferred by the Kelso Members, more than 10% of the aggregate Interests and Special Membership Interests, taken together, held by the Kelso Members, then at
least thirty (30) days prior to effecting such Transfer, Kelso shall give each Management Member written notice of such proposed Transfer. Each Management Member shall then have the right (the
"Tag-Along Right"), exercisable by written notice to Kelso, to participate pro rata in such sale by selling a pro rata portion of such
Management Member's Interests or Special Membership Interests, as applicable, on substantially the same terms (including with respect to representations, warranties and indemnification) as the selling
Kelso Members (including relative proportions of Interests and Special Membership Interests being sold), provided,  however, that any representations and
warranties relating specifically to any Member shall only be made by that Member and any indemnification provided
by the Members shall be based on the relative Interests and Special Membership Interests being sold by each Member in the proposed sale, either on a several, not joint,
basis or solely with recourse to an escrow established for the benefit of the proposed purchaser; provided,  further, however, that the form or forms of consideration to be received by Kelso or any Kelso Member in
connection with the proposed sale may be different from that received by the Management Members so long as the value of the consideration to be received by Kelso or any Kelso Member is the same or
less (with respect to each of the Interests and Special Membership Interests being sold) than what they would have received had they received the same form or forms of consideration as the Management
Members (as reasonably determined by the Board in good faith). In the event the Kelso Members sell less than 100% of their aggregate Interests and Special Membership Interests in the Company, and any
Management Member exercises its rights under this Section 13.10(a), participation "pro rata in such sale" shall be based on relative Capital Contributions unless the Compensation Committee
deems the provisions of Article X operative. 

        (b)    Drag-Along Rights.    (i) Subject to the provisions of Section 13.12 ("Right of First
Offer"), in the event that at any time any Kelso Member (A) proposes to Transfer Interests or Special Membership Interests in the Company, other than any Transfer to an Affiliate of Kelso, and
such Interests or Special Membership Interests would represent, together with all Interests and Special Membership Interests previously Transferred by the Kelso Members, more than 75% of the aggregate
Interests and Special Membership Interests, taken together, held by the Kelso Members or (B) desires to effect an Exit Event, the Kelso Members shall have the right (the
"Drag-Along Right"), upon written notice to the other Members, to require that each other Member join pro rata in such sale on substantially
the same terms (including with respect to representations, warranties and indemnification) as the selling Kelso Members, provided,  however, that any
representations and warranties relating specifically to any Member shall only be made by that Member and any indemnification provided
by the Members shall be based on the relative purchase price being received by each Member in the proposed sale, either on a several, not joint, basis or solely with recourse to an escrow established
for the benefit of the proposed purchaser; provided, further,  however, that the form or forms of
consideration to be received by Kelso or any Kelso Member in connection with the proposed sale may be different from
that received by the other Members so long as the value of the consideration to be received by Kelso or any Kelso Member is the same or less (with respect to each of the Interests and Special
Membership Interests being sold) than what they would have received had they received the same form or forms of consideration as the other Members (as reasonably determined by the Board in good
faith). Notwithstanding the foregoing, the Kelso Members shall not be permitted to exercise the Drag-Along Right for a period of 18 months following the date hereof (the
"Kelso Restriction Period") unless (x) the Company or any of its Subsidiaries is in default under any Financing Document or (y) for any
fiscal quarter, in the good faith reasonable judgment of the Board, the Company and its 

39

 

Subsidiaries
have failed to meet or exceed 75% of targeted EBITDA (as set forth in most recently business plan approved by the Board) for such period as set forth in the most recent business plan
approved by the Board for such period. For purposes of this Section 13.10, for each Member, "joining the Kelso Members in such sale" shall include voting its Interests consistently with the
Kelso Members, transferring its Interests or Special Membership Interests to a corporation organized in anticipation of such sale in exchange for capital stock or other securities of such corporation,
executing and delivering agreements and documents which are being executed and delivered by the Kelso Members and providing such other cooperation as the Kelso Members may reasonably request. 

         (ii)  Any
Exit Event may be structured as an auction and may be initiated by the delivery to the Company and the other Members of a written notice that Kelso has elected to
initiate an auction sale procedure. Kelso shall be entitled to take all steps reasonably necessary to carry out an auction of the Company, including, without limitation, selecting an investment bank,
providing confidential information (pursuant to confidentiality agreements), selecting the winning bidder and negotiating the requisite documentation. The Company and each Member shall provide
assistance with respect to these actions as reasonably requested. 

        (iii)  In
the event the Kelso Members sell less than 100% of their Interests and Special Membership Interests in the aggregate in the Company, joining "pro rata in such sale"
shall be based on relative Capital Contributions and Special Membership Interest Aggregate Funds unless the Compensation Committee deems the provisions of Article X operative. 

        (c)   Any
transaction costs, including transfer taxes and legal, accounting and investment banking fees incurred by the Company and Kelso in connection with an Exit Event
shall, unless the applicable purchaser refuses, be borne by the Company in the event of a merger, consolidation or sale of assets and shall otherwise be borne by the Members on a pro rata basis based
on the consideration received by each Member in such Exit Event. 

        (d)   Initial Members Participation Rights.    In addition, in the event the Board permits any Member (other than a
Kelso Member) to Transfer Interests or Special Membership Interests that would not otherwise be permitted by the terms of this Agreement (such transferring Member, the
"Transferor Member"), then at least thirty (30) days prior to effecting such Transfer, the Transferor Member shall give each Initial Member
written notice of such proposed Transfer. Each Initial Member shall then have the right exercisable by written notice to the Transferor Member to participate pro rata in such sale by selling a pro
rata portion of such Initial Member's Interests or Special Membership Interests, as applicable, on substantially the same terms (including with respect to representations, warranties and
indemnification) as the Transferor Member, provided, however, that any representations and warranties
relating specifically to any Initial Member shall only be made by that Initial Member and any indemnification provided by the Initial Members shall be based on the relative Interests or Special
Membership Interests, as applicable, being sold by each Initial Member in the proposed sale, either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of
the proposed purchaser; provided, further, however, that
the form or forms of consideration to be received by the Transferor Member in connection with the proposed sale may be different from that received by the Initial Members so long as the value of the
consideration to be received by the Transferor Member is the same or less (in respect of each of the Interests and Special Membership Interests, as applicable) than what they would have received had
they received the same form or forms of consideration as the Initial Members (as reasonably determined by the Board in good faith). 

        Section 13.11    Initial Public Offering. [intentionally left blank]  

        Section 13.12    Right of First Offer.    

        (a)   In
the event that the Board determines to sell any of the vessels owned by any of its Subsidiaries or the equity securities or other interests in any of its Subsidiaries
that own any such 

40

 

vessels
to a Third Party (any such sale, a "Ship Sale") and Zoullas objected to such Ship Sale (such objection to be evidenced by a negative vote or a
no vote by Zoullas (in the event Zoullas did not have the opportunity to vote) in the meeting of the Board in which the decision to proceed with a potential Ship Sale was ratified by the Board in
accordance with the terms of this Agreement), the Company shall promptly send to Zoullas a notice (the "ROFO Notice") setting forth its intentions with
respect to a Ship Sale and offering Zoullas the right (the "ROFO") to make an offer to purchase the vessel described in the ROFO Notice. Within seven
(7) days of receipt of a ROFO Notice, Zoullas shall notify the Board that he either (i) wishes to exercise his ROFO with respect to the Ship Sale described in the ROFO Notice or
(ii) does not intend to exercise such ROFO. The failure to notify the Board within such seven (7) day period shall be deemed to be a notice that Zoullas does not intend to exercise his
ROFO with respect to such Ship Sale. In the event Zoullas elects to exercise his ROFO with respect to the Ship Sale described in the ROFO Notice, Zoullas must, within fourteen (14) days of his
receipt of the ROFO Notice (i) execute a definitive agreement with respect to such Ship Sale that is at a price acceptable to the Company and on other terms and conditions reasonably
satisfactory to the Company; and (ii) make a customary deposit and provide credible evidence (as determined by the Board in its reasonable judgment) of having financing necessary to consummate
such Ship Sale. If Zoullas fails to comply with the requirements of the immediately preceding sentence (which failure shall include, for the avoidance of doubt, the price not being acceptable to the
Company or the Company not being reasonably satisfied with the other terms and conditions of the definitive agreement delivered by Zoullas with respect to such Ship Sale), the Company shall have no
further obligations to Zoullas with respect to such Ship Sale and the Company may consummate such Ship Sale with a Third Party. 

        (b)   Notwithstanding
anything to the contrary contained in paragraph (a) of this Section 13.12, the Company shall not be required to send a ROFO Notice and
grant Zoullas a ROFO with respect to any Ship Sale if (i) the Board determines in good faith that the Company in undergoing financial difficulties at the time of such proposed Ship Sale,
(ii) Zoullas is no longer a Member of the Company at the time of such proposed Ship Sale or (iii) Zoullas has previously successfully exercised a ROFO with respect to any other Ship Sale
(provided that in the event Zoullas exercises a ROFO but fails to consummate the Ship Sale that was contemplated by the ROFO Notice by reason of Zoullas' failure to obtain the financing necessary to
consummate such Ship Sale, the exercise of such ROFO shall be deemed to be a "successful exercise" for purposes of this clause (iii)). 

        (c)   Notwithstanding
anything to the contrary, the provisions of this Section 13.12 shall terminate, and no party shall have rights or obligations under this
Section 13.12, upon and following an IPO. 

41

  

 
 

ARTICLE XIV
  
    DISSOLUTION, LIQUIDATION AND TERMINATION    
    

        Section 14.1    Dissolving Events.    The Company shall be dissolved and its affairs wound up in the manner
hereinafter provided upon the happening of any of the following events: 

        (a)   the
Board and the Members shall vote or agree in writing to dissolve the Company pursuant to the required votes set forth in Sections 5.3 and 4.3(d), respectively; 

        (b)   any
event which under applicable law would cause the dissolution of the Company, provided that, unless required by law, the Company shall not be wound up as a result of
any such event and the business of the Company shall continue. 

        Notwithstanding
the foregoing, the death, retirement, resignation, expulsion, bankruptcy or dissolution of any Member or the occurrence of any other event that terminates the continued
membership of any Member in the Company under the Marshall Islands Act shall not, in and of itself, cause the dissolution of the Company. In such event, the remaining Member(s) shall continue the
business of the Company without dissolution. 

        Section 14.2    Dissolution and Winding-Up.    Upon the dissolution of the Company, the assets of
the Company shall be liquidated or distributed under the direction of and to the extent determined by the Board and the business of the Company shall be wound up. Within a reasonable time after the
effective date of dissolution of the Company, the Company's assets shall be distributed in the following manner and order: 

        First, to creditors in satisfaction of indebtedness (other than any loans or advances that may have been made by any of the Members to the
Company), whether by payment or the making of reasonable provision for payment, and the expenses of liquidation, whether by payment or the making of
reasonable provision for payment, including the establishment of reasonable reserves (which may be funded by a liquidating trust) determined by the Board or the liquidating trustee, as the case may
be, to be reasonably necessary for the payment of the Company's expenses, liabilities and other obligations (whether fixed, conditional, unmatured or contingent); 

        Second, to the payment of loans or advances that may have been made by any of the Members to the Company and amounts owed in respect of
outstanding Special Membership Interests pursuant to Section 10.8; and 

        Third, to the Members in accordance with Section 10.2, taking into account any amounts previously distributed under
Section 10.2, 

provided that no payment or distribution in any of the foregoing categories shall be made until all payments in each prior category shall have been made
in full, and provided, further, that if the payments due to be made in any of the foregoing categories
exceed the remaining assets available for such purpose, such payments shall be made to the Persons entitled to receive the same pro rata in accordance with the respective amounts due to them. 

To
the extent that the balances in the Capital Accounts, after adjusting the Capital Accounts for all allocations of Profits and Losses and all special book allocations and all distributions other
than liquidating distributions under this Section 14.2, do not equal the amounts to be distributed hereunder, then, any provision in this Agreement to the contrary notwithstanding, the Company
shall allocate gross income or gross deductions for its last Fiscal Year to the extent necessary in order that such Capital Accounts equal the distributions to be made to the Members pursuant to this
Section 14.2; and to the extent such gross income or gross deductions are not sufficient, shall allocate gross income and gross deductions for the next preceding Fiscal Year to the extent
necessary in order that such Capital Accounts equal such distributions; and to the extent such gross income or gross deductions are not 

42

 

sufficient,
shall allocate gross income or gross deductions for the second preceding Fiscal Year, and so forth, with respect to all Company taxable years for which an amended return can be timely
filed, to the extent necessary to cause such Capital Accounts to equal the amounts to be distributed hereunder. 

        Section 14.3    Distributions in Cash or in Kind.    Upon the dissolution of the Company, the Board shall use
all commercially reasonable efforts to liquidate all of the Company's assets in an orderly manner and apply the proceeds of such liquidation as set forth in Section 14.2, provided that if in
the good faith judgment of the Board, a Company asset should not be liquidated, the Board shall cause the Company to allocate, on the basis of the Fair Market Value of any Company assets not sold or
otherwise disposed of, any unrealized gain or loss based on such value to the Members' Capital Accounts as though the assets in question had been sold on the date of distribution and, after giving
effect to any such adjustment, distribute such assets in accordance with Section 14.2 as if such Fair Market Value had
been received in cash, subject to the priorities set forth in Section 14.2, and provided,  further, that the Board shall in good faith attempt to
liquidate sufficient Company assets to satisfy in cash (or make reasonable provision for) the
debts and liabilities referred to in Section 14.2. 

        Section 14.4    Termination.    The Company shall terminate when the winding up of the Company's affairs has
been completed, all of the assets of the Company have been distributed and the Certificate has been canceled, all in accordance with the Marshall Islands Act. 

        Section 14.5    Claims of the Members.    The Members and former Members shall look solely to the Company's
assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company or any other Member. 

 
 

ARTICLE XV MISCELLANEOUS    
    

        Section 15.1    Notices.    All notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with
postage prepaid, 

43

 

(c) sent
by next-day or overnight mail or delivery or (d) sent by fax, as follows (or to such other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof): 

	(a)    If to the Company:	 	 
	 	
 Eagle Ventures LLC

29 Broadway, Room 1610

New York, New York 10006	
 	

 
	 	
 With a copy to:	
 	

 
	 	
 Kelso & Company, L.P.

320 Park Avenue

24th Floor	
 	

 
	 	
 New York, New York 10022

Fax: 212-223-2379

Attention: James J. Connors, II	
 	

 
	 	
 and a copy to:	
 	

 
	 	
 Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Fax: 212-735-2000

Attention: Lou R. Kling	
 	

 

        (b)   If
to a Member, at the address set forth opposite such Member's name on Schedule A attached hereto, or at such other address as such Member may hereafter
designate by written notice to the Company. 

        All
such notices, requests, demands, waivers and other communications shall be deemed to have been received by (w) if by personal delivery, on the day delivered, (x) if by
certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax,
on the day delivered, provided that such delivery is confirmed. 

        Section 15.2    Securities Act Matters.    Each Member understands that in addition to the restrictions on
transfer contained in this Agreement, he or she must bear the economic risks of his or her investment for an indefinite period because neither the Interests nor the Special Membership Interests have
been registered under the Securities Act. 

        Section 15.3    Headings; Interpretation.    The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this Agreement. If any claim is made by a party relating to any conflict, omission or ambiguity in the provisions of this
Agreement, no presumption or any burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any party or its counsel. 

        Section 15.4    Entire Agreement.    This Agreement constitutes the entire agreement among the Members with
respect to the subject matter hereof, and supersedes any prior agreement or understanding among them with respect to such subject matter. 

        Section 15.5    Counterparts.    This Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same instrument. 

        Section 15.6    Governing Law; Attorneys' Fees; Forum; Jurisdiction; Service of Process.    This Agreement
shall be governed in all respects, including as to validity, construction, interpretation and 

44

 

effect,
by the substantive laws of the Marshall Islands, without giving effect to the conflict of laws rules thereof. The substantially prevailing party in any action or proceeding relating to this
Agreement shall be entitled to receive an award of, and to recover from the other party or parties, any fees or expenses incurred by him, her or it (including, without limitation, reasonable
attorneys' fees and disbursements) in connection with any such action or proceeding. Each party hereby irrevocably and unconditionally agrees that any legal action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby must be brought in the State of New York, City of New York and hereby expressly submits to the personal jurisdiction and venue of
such courts for the purposes thereof and expressly waives any claim of improper venue and any claim that such courts are an inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned court by notice in the manner specified in Section 15.1. 

        Section 15.7    Waiver of Jury Trial.    EACH MEMBER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

        Section 15.8    Waiver of Partition.    Except as may otherwise be provided by law in connection with the
winding-up, liquidation and dissolution of the Company, each Member hereby irrevocably waives any and all rights that it may have to maintain an action for partition of any of the
Company's property. 

        Section 15.9    Severability.    If any provision of this Agreement is inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever, so long as this Agreement, taken as a whole, still expresses the material intent of the parties hereto. The
invalidity of any one or more phrases, sentences, clauses, Sections or subsections of this Agreement shall not affect the remaining portions of this Agreement. 

        Section 15.10    Further Actions.    Each Member shall execute and deliver such other certificates, agreements
and documents, and take such other actions, as may reasonably be requested by the Company in connection with the continuation of the Company and the achievement of its purposes, including, without
limitation, (a) any documents that the Company deems necessary or appropriate to continue the Company as a limited liability company in all jurisdictions in which the Company or its
Subsidiaries conduct or plan to conduct business and (b) all such agreements, certificates, tax statements and other documents as may be required to be filed in respect of the Company. 

        Section 15.11    Amendments.    This Agreement (including this Section 15.11) may not be amended,
modified or supplemented except by a written instrument signed by a Majority in Interest; provided,  however, that the Board may (i) pursuant to
Section 4.8, make such modifications to this Agreement, including  Schedule A and Schedule B, as are necessary to admit additional Members
and
(ii) pursuant to Section 10.8, make modifications to Schedule E, and (iii) to the extent that any provision related to Units
is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, amend, modify or supplement such provision in order to cause it to either
not be subject to Section 409A of the Code or to comply with the applicable provisions of such section. Notwithstanding the foregoing, for so long as Zoullas is a Member of the Company, no
amendment, modification or supplement to this Agreement shall adversely affect Zoullas or the Outside Investor Members relative to the other Members unless such amendment, modification or supplement
is signed by Zoullas, other than any amendment, modification or supplement required to comply with Section 409A of the Code. The Company shall notify all Members after any such amendment,
modification or supplement, other than any amendments to Schedule A, Schedule B,  Schedule E
or any amendment required to comply with Section 409A of the Code, as permitted herein, has taken effect. 

45

 

Each
Member acknowledges and agrees that in the event that the Board determines that Special Membership Interests shall be exchanged for Interests in the Company (or another form of security), the
Board may effect such exchange and amend and make any modifications to this agreement and Schedule E which it considers necessary or appropriate
to reflect any such exchange. 

        Section 15.12    Outside Investor Members Representative; Power of Attorney.    Each of the Outside Investor
Members hereby irrevocably makes, constitutes and appoints Zoullas as its true and lawful agent, representative and attorney-in-fact for all purposes relating to this Agreement
and to the Outside Investor Members' ownership of Interests and/or Special Membership Interests in the Company, including with out limitation, the full power and authority on the Outside Investor
Member's behalf to (i) vote or direct the voting of such Outside Investor Member's Interests, including with respect to any amendments to this Agreement; (ii) sell, or direct the sale,
of any or all of
such Outside Investor Member's Interests and/or Special Membership Interests, including a sale to the Company pursuant to the exercise of any "Put Right" granted to Zoullas pursuant to
Section 13.5 of this Agreement; (iii) collect on behalf of such Outside Investor Member any amounts that the Company would otherwise pay to such Outside Investor Member in exchange of
Interests and/or Special Membership Interests held by such Outside Investor Member (whether in the form of cash or a promissory note) pursuant to Zoullas' decision to exercise the Put Right relating
to the Interests and/or Special Membership Interests held by Zoullas and the Outside Investor Members; and (iv) to execute and deliver on behalf of such Outside Investor Member any instruments
or other documents related to, and to take any actions deemed necessary or appropriate by Zoullas in his sole discretion to effectuate, any of the foregoing. Each of the Outside Investor Members
agrees that the Company shall be entitled to rely upon the power and authority of Zoullas, acting as a limited representative of such Outside Investor Member, to act on behalf of such Outside Investor
Member with respect to the Put Right described above. 

        Section 15.13    Power of Attorney.    Each Member hereby constitutes and appoints Kelso as his or her true and
lawful representative and attorney-in-fact in his or her name, place and stead to make, execute, acknowledge, record and file the following: 

        (a)   any
amendment to the Certificate which may be required by the laws of the Marshall Islands due to: 

        (i)    any
duly made amendment to this Agreement, or 

        (ii)   any
change in the information contained in such Certificate, or any amendment thereto; 

        (b)   any
other certificate or instrument which may be required to be filed by the Company under the laws of the Marshall Islands or under the applicable laws of any other
jurisdiction in which counsel to the Company determines that it is advisable to file; 

        (c)   any
certificate or other instrument which Kelso or the Board deems necessary or desirable to effect a termination and dissolution of the Company which is authorized
under this Agreement; 

        (d)   any
amendments to this Agreement, duly adopted in accordance with the terms of this Agreement; and 

        (e)   any
other instruments that Kelso or the Board may deem necessary or desirable to carry out fully the provisions of this Agreement;  provided, however, that any
action taken pursuant to this power shall not, in any way, increase the
liability of the Members beyond the liability expressly set forth in this Agreement, and provided further that where action by a majority of the Board
is required, such action shall have been taken. 

        Such
attorney-in-fact is not by the provisions of this Section 15.12 granted any authority on behalf of the undersigned to amend this Agreement, except as
provided for in this Agreement. Such power of 

46

 

attorney
is coupled with an interest and shall continue in full force and effect notwithstanding the subsequent death or incapacity of the Member granting such power of attorney. 

        Section 15.14    Fees and Expenses    

        .
The Company shall assume (as applicable) and pay all legal, formation, transaction and related expenses incurred by the Company and its Subsidiaries (including all such expenses
incurred by any Member on behalf of the Company and its Subsidiaries). Except (i) as provided in this Agreement, (ii) as provided in any other agreement between the Company and such
Member or its Affiliates (including the letter agreement dated February 1, 2005, between Kelso & Company, L.P., the Company and Eagle Holdings LLC), or (iii) for the reasonable
documented expenses incurred by Zoullas in respect of the transactions contemplated by this Agreement (including in connection with Zoullas' negotiation of this Agreement and the employment agreement
between Zoullas and the Company or any Subsidiary of the Company), all other fees and expenses incurred by any Member in connection with its investment in the Company (including in connection with
such Member's negotiation of this Agreement) shall be borne by the respective Member incurring such expenses. 

47

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

	 	 	KELSO MEMBERS:
	

 	
 	

KELSO INVESTMENT ASSOCIATES VII, L.P.
	

 	
 	

By:    Kelso GP VII, L.P., its general partner
	

 	
 	

By:    Kelso GP VII, LLC, its general partner
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	

KEP VI, LLC
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	
MANAGEMENT MEMBERS:
	

 	
 	

 Sophocles Zoullas
	

 	
 	

 Alan Ginsberg
	

 	
 	

 Edward H. James
	

 	
 	

 Claude Thouret
	

 	
 	
OUTSIDE INVESTOR MEMBERS:
	

 	
 	

INTERCONTINENTAL SHIPPING AND

TRADING CORP.
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	

 Maria Zoullas

 

	

 	
 	

 George S. Kaufman
	

 	
 	

 Jeffrey S. Nordhaus
	

 	
 	
OTHER INVESTOR MEMBERS:
	

 	
 	

 David Hiley
	

 	
 	

MAGNETITE ASSET INVESTORS III L.L.C.
	

 	
 	

By:    BLACKROCK FINANCIAL MANAGEMENT, INC. As Managing Member
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

2

Schedule B  

 
  Points    
    

	Name
 
	 	Performance Points
	 	Service Points
	 	Benchmark

Amount

(if any)

	Sophocles N. Zoullas	 	750	 	750	 	 
	Alan S. Ginsberg	 	50	 	50	 	 
	Claude Thouret	 	40	 	40	 	 
	Edward H. James	 	40	 	40	 	 
	 	TOTAL	 	880	 	880	 	 

Schedule C  

Initial Directors  

Michael Goldberg

Philip Berney

Frank J. Loverro

Sophocles Zoullas 

Schedule D  

 
  Post IPO Performance Percentages—Definitions    
    

        The "Total Available Post IPO Remaining Performance Percentage" available to all Management Members allocated
Performance Points (and Ex-Management Members that retain Performance Points pursuant to this Agreement, if any) on any date of determination shall equal the product of (x) seven
and one half percent (7.5%) and (y) the Performance Factor (as defined below). 

        The
"Total Stub Performance Percentage" available to all Management Members allocated Post IPO Awarded Performance Points (and
Ex-Management Members that retain Post IPO Awarded Performance Points pursuant to this Agreement, if any) on any date of determination shall equal the product of
(x) nine-tenths of one percent (.9%) and (y) the Performance Factor. 

 For purposes of this Schedule D: 

        The
"Kelso Investment Multiple" is computed by dividing (x) (i) the total Fair Market Value of all distributions (determined pro
forma for any distributions to be made to the Kelso Members at the time which the Kelso Investment Multiple is calculated) received by the Kelso Members from the Company in respect of their aggregate
investment in the Company (which shall include, if applicable, the Fair Market Value of any Units distributed by the Kelso Members to any Affiliate of the Kelso Members that is not a party to this
Agreement) plus (ii) all principal payments on Bulk Advances and all Special Interest Payments in each case paid to the Kelso Members in respect of advances of Special Membership Interest Funds
by the Kelso Members by (y) the aggregate Capital Contributions of the Kelso Members plus the Special Membership Interest Aggregate Funds advanced by the Kelso Members. 

        The
"Kelso IRR" means the internal rate of return, compounded annually, received by the Kelso Members on their aggregate Capital
Contributions and advances of Special Membership Interest Aggregate Funds, calculated after giving full effect to any reduction in the Kelso IRR caused by an increase in the Total Available
Performance Percentage. 

        The
"Performance Factor" is a number (between zero and one) equal to the quotient obtained by dividing (x) the excess, if positive,
of the Kelso Investment Multiple over two (2) by (y) two (2); provided however that if such quotient is greater than one (1), the Performance Factor shall equal one (1); provided further
that, if in any date of determination of Total Available Post IPO Performance Percentage, the Kelso IRR calculated as of such date is less than 10%, the Performance Factor computed pursuant to the
foregoing shall be reduced to such amount as would cause the Kelso IRR to equal 10% or, if there is no such amount, to zero (0). 

Compensation Committee Adjustments  

        Notwithstanding anything in the Agreement to the contrary, as contemplated by the last sentence of Section 8.5 of the Agreement, the Compensation Committee
shall make such adjustments to the Kelso Investment Multiple and the Kelso IRR or otherwise as it deems necessary in its good faith discretion to take into account any increase in interest, fees or
other expenses incurred by the Company as a result of a refinancing or extraordinary dividends, with the general intention that no such increase in interest, fees or expenses resulting from the
refinancing or extraordinary dividends (as applicable) would have a material adverse effect on the achievement of a particular Carry Percentage by any Management Member when measured in terms of
dollars to be received (in any distributions pursuant to Section 10.2) by any such Management Member. 

Schedule F  

Vested IPO Percentages

	Member
 
	 	Vested IPO Percentage
	 
	Sophocles Zoullas	 	5.625	%
	Edward James	 	0.3	%
	Claude Thouret	 	0.3	%
	Alan Ginsberg	 	0.375	%
	TOTAL VESTED IPO PERCENTAGE	 	6.6	%

QuickLinks

Table of Contents

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

ARTICLE I DEFINED TERMS

ARTICLE II FORMATION OF THE COMPANY

ARTICLE III PURPOSE AND POWERS OF THE COMPANY

ARTICLE IV MEMBERS

ARTICLE V MANAGEMENT

ARTICLE VI INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS

ARTICLE VII CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS

ARTICLE VIII POINTS

ARTICLE IX ALLOCATIONS

ARTICLE X DISTRIBUTIONS

ARTICLE XI BOOKS AND RECORDS

ARTICLE XII LIABILITY, EXCULPATION AND INDEMNIFICATION

ARTICLE XIII TRANSFERS OF INTERESTS

ARTICLE XIV DISSOLUTION, LIQUIDATION AND TERMINATION

ARTICLE XV MISCELLANEOUS

Points

Post IPO Performance Percentages—Definitions

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