SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of August 8, 2014 by and among EAGLE BULK SHIPPING INC., a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code, as Borrower, the Guarantors from time to time party...

CONTENTS

CLAUSE

SECTION 1

INTERPRETATION

1

DEFINITIONS AND INTERPRETATION

2

SECTION 2

THE FACILITIES

2

THE FACILITIES

27

3

PURPOSE

28

4

CONDITIONS OF EFFECTIVENESS AND BORROWING

28

SECTION 3

BORROWING

5

BORROWING

34

SECTION 4

REDUCTION, REPAYMENT, PREPAYMENT AND CANCELLATION

6

REDUCTION AND REPAYMENT

36

7

PREPAYMENT AND CANCELLATION

36

SECTION 5

COSTS OF BORROWING

8

INTEREST

40

9

INTEREST PERIODS

41

10

CHANGES TO THE CALCULATION OF INTEREST

42

11

FEES

43

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

12

TAX GROSS UP AND INDEMNITIES

44

13

INCREASED COSTS

47

14

OTHER INDEMNITIES

49

15

MITIGATION BY THE DIP LENDERS

50

16

COSTS AND EXPENSES

51

SECTION 7

GUARANTEE

17

GUARANTEE AND INDEMNITY

53

SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

18

REPRESENTATIONS

59

19

INFORMATION UNDERTAKINGS

71

20

FINANCIAL COVENANTS

77

21

[RESERVED.]

78

22

GENERAL UNDERTAKINGS

78

23

INSURANCE

90

24

SHIP COVENANTS

95

25

APPLICATION OF EARNINGS

101

26

EVENTS OF DEFAULT

101

SECTION 9

CHANGES TO PARTIES

27

CHANGES TO THE DIP LENDERS

110

28

CHANGES TO THE OBLIGORS

115

29

[Reserved.]

116

SECTION 10

THE FINANCE PARTIES

30

ROLE OF THE SERVICING BANKS, THE ARRANGER AND THE BOOKRUNNER

117

31

CONDUCT OF BUSINESS BY THE FINANCE PARTIES

126

32

SHARING AMONG THE FINANCE PARTIES

127

SECTION 11

ADMINISTRATION

33

PAYMENT MECHANICS

129

34

SET-OFF

131

35

NOTICES

131

36

CALCULATIONS AND CERTIFICATES

133

37

PARTIAL INVALIDITY

133

38

REMEDIES AND WAIVERS

133

39

AMENDMENTS AND WAIVERS

134

40

COUNTERPARTS

135

41

ENTIRE AGREEMENT

135

SECTION 12

GOVERNING LAW AND ENFORCEMENT

42

GOVERNING LAW

136

43

ENFORCEMENT

136

(1)

EAGLE BULK SHIPPING INC., a corporation incorporated in the Republic of the ▇▇▇▇▇▇▇▇ Islands, a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code, as borrower (the “Borrower” or the “Debtor”);

(2)

THE SUBSIDIARIES of the Borrower and Eagle Shipping International (USA) LLC listed in Part II of Schedule 1 as guarantors;

(3)

THE FINANCIAL INSTITUTIONS listed in Part III of Schedule 1 as lenders;

(4)

Wilmington Trust (London) Limited as agent of the other Finance Parties (the “DIP Agent”).

(5)

Wilmington Trust (London) Limited as trustee for the other Finance Parties (the “Security Trustee”); and

(6)

▇▇▇▇▇▇▇ Sachs Lending Partners LLC as mandated lead arranger (the “Arranger”) and as bookrunner (the “Bookrunner”).

(A)

WHEREAS, on August 6, 2014 (the “Petition Date”), Borrower filed a voluntary petition with the Bankruptcy Court initiating its case under chapter 11 of the Bankruptcy Code and continues in the possession of its assets and in the management of its businesses as debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.

(B)

WHEREAS, the Borrower has requested that the DIP Lenders provide a senior secured debtor-in-possession term loan facility, and the DIP Lenders are willing to do so on the terms and conditions set forth herein.

1

DEFINITIONS AND INTERPRETATION

1.1

Definitions

(a)

the interest which a DIP Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan to the last day of the current Interest Period in respect of that Loan, had the principal amount of that Loan been paid on the last day of that Interest Period

(b)

the amount which that DIP Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

(a)

Financial Indebtedness of the debtor;

(b)

liability for any credit to the debtor from a supplier of goods or services or under any installment 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, but excluding any contingent liabilities in respect of Deferred Revenue and Fair Value Below Contract Value from charters of Ships;

(d)

deferred tax of the debtor; and

(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.

(a)

Each financial institution listed on the signature pages hereto as a DIP Lender; and

(b)

any person which has become a Party as a DIP Lender in accordance with Clause 27 (Changes to the DIP Lenders),

(a)

all freights, hire and any other moneys earned and to be earned, due or to become due, or paid or payable to, or for the account of, the Obligor that owns such Ship, of whatsoever nature, arising out of or as a result of the ownership and operation by such Obligor or its agents of such Ship,

(b)

all moneys and claims for moneys due and to become due to such Obligor, and all claims for damages, arising out of the breach of any and all present and future charter parties, bills of lading, contracts and other engagements of affreightment or for the carriage or transportation of cargo, mail and/or passengers, and operations of every kind whatsoever of such Ship and in and to any and all claims and causes of action for money, loss or damages that may accrue or belong to such Obligor arising out of or in any way connected with the present or future use, operation or management of such Ship or arising out of or in any way connected with any and all present and future requisitions, charter parties, bills of lading, contracts and other engagements of affreightment or for the carriage or transportation of cargo, mail and/or passengers, and other operations of such Ship, including, if and whenever such Ship is employed on terms whereby any or all of such moneys as aforesaid are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Ship,

(c)

all moneys and claims due and to become due to such Obligor, and all claims for damages, in respect of the actual or constructive total loss of or requisition of use of or title to such Ship, and

(d)

any proceeds of any of the foregoing, including, without limitation, any proceeds of the sale of shares of Korea Line Corporation received in settlement of claims under chartering contracts pursuant to any settlement agreement entered into or which may be entered into between the joint receivers of Korea Line Corporation and certain of the Obligors.

(a)

any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

(b)

any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident or which relates to any Environmental Law,

(a)

any release of Environmentally Sensitive Material from a Ship; or

(b)

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

(c)

any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action.

(a)

this Agreement;

(b)

the DIP Order(s);

(c)

the Intercreditor Agreement;

(d)

any Fee Letter;

(e)

any Note;

(f)

any Account Charge;

(g)

the Security Interest Deed;

(h)

any Mortgage;

(i)

any Assignment of Earnings;

(j)

any Assignment of Insurances;

(k)

any Pledge Agreement;

(l)

any Security Agreement;

(m)

any General Account Charge;

(n)

any Approved Manager’s Undertaking;

(o)

any Assignment of Shipbuilding Contract and Refund Guarantee;

(p)

any Resignation Letter;

(q)

any Letter Agreement; and

(r)

any other document designated as such by the DIP Agent and the Borrower.

(a)

for principal, interest or any other sum payable in respect of any moneys borrowed 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

(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 paragraphs (a) to (e) above if the references to the debtor referred to the other person.

(a)

all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, its Earnings or otherwise in relation to it; and

(b)

all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium.

(a)

the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on REUTERS Screen LIBOR 01 at or about the Specified Time on the Quotation Day for that Interest Period (and, for the purposes of this Agreement, “REUTERS Screen LIBOR 01” means the display designated as “REUTERS Screen LIBOR 01” on the Reuters Money News Service or such other page as may replace REUTERS Screen LIBOR 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the Intercontinental Exchange Benchmark Administration Ltd. as the information vendor for the purpose of displaying Intercontinental Exchange Benchmark Administration Ltd.’s Interest Settlement Rates for Dollars); or

(b)

if no rate is quoted on REUTERS Screen LIBOR 01, the rate per annum determined by the DIP Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one percent) of the rates per annum notified to the DIP Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the Relevant Interbank Market at that Reference Bank’s request at or about the Specified Time on the Quotation Day for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it.

(a)

the business, condition (financial or otherwise), operations, performance, properties, contingent liabilities, material agreements or prospects of the Borrower, the other Obligors and their respective subsidiaries, taken as a whole, except for the commencement of the Chapter 11 Case and the effects that may customarily result, directly or indirectly, from the commencement of chapter 11 cases;

(b)

the ability of any Obligor to perform any of its material obligations under any Finance Document; or

(c)

the rights and remedies of any Finance Party under any Finance Document or the perfection, validity or priority of the Finance Parties’ security interests in the Finance Documents on any of the Collateral with an aggregate value in excess of $500,000 since the date hereof;

(i)

the 43^rd day following the Petition Date, if, as of such date, the Bankruptcy Court shall not have entered the Final DIP Order;

(ii)

Nine (9) months from the Petition Date, provided that it may be extended for an additional three (3) months at the option of the Borrower (the “Extension Option”) so long as (x) no Default or Event of Default shall have occurred and be continuing at such time, (y) the Borrower shall have delivered to the DIP Agent in writing, by not more than one month and not fewer than five (5) Business Days prior to such Maturity Date, an irrevocable notice of election to exercise the Extension Option and (z) the Borrower shall have paid in immediately available funds an extension fee in an amount equal to 0.75% of the Commitments payable to the DIP Agent for distribution to each DIP Lender;

(iii)

the effective date of any chapter 11 plan for the Debtor filed in the Chapter 11 Case and confirmed pursuant to an order entered by the Bankruptcy Court;

(iv)

the date of consummation of a sale of all or substantially all of the Debtor’s assets or stock pursuant to Section 363 of the Bankruptcy Code; or

(v)

the acceleration of the Loans and the termination of the Commitments by the DIP Lenders pursuant to Clause 26.15(a).

(a)

if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; and

(b)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.

(a)

Security in favor of the DIP Agent for the benefit of the Finance Parties created by the Finance Documents;

(b)

Security existing on the Petition Date (including replacement Security granted under the DIP Order) in favor of the Prepetition Agent for the benefit of the Prepetition Finance Parties, so long as the applicable assets are also subject to Security in favor of the DIP Agent for the benefit of the Finance Parties, subject to the terms and conditions set forth in the DIP Order and the Intercreditor Agreement.

(c)

liens for current crew wages and salvage;

(d)

liens imposed by any governmental authority for taxes, assessments or charges not yet due (after giving effect to any applicable grace period) or which are being contested in good faith and by appropriate proceedings or, with respect to the Borrower, as to which payment and enforcement is stayed under the Bankruptcy Code or pursuant to orders of the Bankruptcy Court if adequate reserves with respect thereto are maintained on the books of the relevant Obligor in accordance with generally accepted accounting principles;

(e)

liens securing claims which are completely covered by insurance and the deductible applicable thereto, so long as there has not been any action by the lienholder to enforce such lien;

(f)

liens arising from the supply of goods and/or services to any Ship in the ordinary course of business, so long as such obligations are not overdue for more than sixty (60) days or are being contested in good faith by appropriate proceedings and there has not been any action by the lienholder to enforce such lien; and

(g)

liens arising under charters entered into in the ordinary course of business.

(a)

listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC or any similar list maintained by, or any public announcement of Sanctions designation made by, the United States Department of State or any other U.S. government entity, the United Nations, the European Union or any of its Member States including, without limitation, the United Kingdom and Her Majesty’s Treasury;

(b)

located in, incorporated under the laws of, or owned by, controlled by or acting on behalf of a person located in or organized under the laws of, any country or territory that is the target of country-or territory-wide Sanctions; or

(c)

otherwise a target of Sanctions (“target of Sanctions” signifying that a U.S. person or national from the sanctioning jurisdiction would be restricted from doing business with that person).

(a)

actual, constructive, compromised, agreed or arranged total loss of that Ship;

(b)

any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 90 days without any right to an extension) unless it is within 30 days redelivered to the full control of the Guarantor which owns that Ship; and

(c)

any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the Guarantor which owns that Ship.

(a)

in the case of an actual loss of that Ship, at noon Greenwich Mean Time on the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b)

in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:

(i)

at noon Greenwich Mean Time on the date on which a notice of abandonment is given to the insurers; and

(ii)

at noon Greenwich Mean Time on the date of any compromise, arrangement or agreement made by or on behalf of the Guarantor which owns that Ship with that Ship’s insurers in which the insurers agree to treat that Ship as a total loss; and

(c)

in the case of any other type of total loss, at noon Greenwich Mean Time on the date (or the most likely date) on which it appears to the DIP Agent, acting reasonably, that the event constituting the total loss occurred.

(a)

the proposed Transfer Date specified in the Transfer Certificate; and

(b)

the date on which the DIP Agent executes the Transfer Certificate.

(a)

all Security and other rights granted to, or held or exercisable by, the Security Trustee under or by virtue of the Finance Documents, except rights intended for the sole benefit or protection of the Security Trustee;

(b)

all moneys or other assets which are received or recovered by or on behalf of the Security Trustee under or by virtue of any Security or right covered by paragraph (a) above, including any moneys or other assets which are received or recovered by it as a result of the enforcement or exercise by it of such a Security or right; and

(c)

all moneys or other assets which may accrue in respect of, or be derived from, any moneys or other assets covered by paragraph (b) above,

1.2

Construction

(a)

Unless a contrary indication appears, any reference in this Agreement to:

(i)

any “Finance Party”, any “Obligor” or any other “person” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

(ii)

“assets” includes present and future properties, revenues and rights of every description;

(iii)

a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, restated, supplemented, extended or novated;

(iv)

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(v)

a “person” includes 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;

(vi)

a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organization;

(vii)

a provision of law is a reference to that provision as amended or re-enacted; and

(viii)

a time of day is a reference to London time.

(b)

Section, Clause, Schedule and Exhibit headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.

(c)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d)

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 “Section”, “Clause”, “Schedule” and “Exhibit” shall refer to Sections and Clauses 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.

(e)

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”.

(f)

All accounting terms not specifically defined herein shall be construed in accordance with GAAP.

(g)

A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been remedied or waived.

1.3

Third party rights

2

THE FACILITIES

2.1

The Facilities

(a)

On the Effective Date:

(i)

Subject to the terms of this Agreement and of the DIP Order, each DIP Lender severally agrees to make Loans to Borrower in an amount equal to such DIP Lender’s Commitment. Subject to the terms and conditions hereof and the Interim DIP Order, the Borrower may make, in a single draw, the first borrowing under the Commitments, in an amount of up to $25,000,000 (the “Initial Funding”) upon the entry of the Interim DIP Order, which shall occur no later than five Business Days following the Petition Date (the “Initial Maturity Date”) and upon the satisfaction (or waiver by DIP Agent, in its sole discretion) of the conditions precedent set forth in Section 4.2 (the “Initial Drawing Date”), which shall occur no later than five Business Days following the entry of the Interim DIP Order. The Total Commitment shall be reduced immediately and without further action on the earlier of the Initial Drawing Date (after the making of the Initial Funding) or the Initial Maturity Date.

(ii)

Borrower may make, in a single draw, on the Final Funding Date and upon satisfaction (or waiver by DIP Agent, in its sole discretion) of the conditions precedent set forth in Section 4.3, the final borrowing hereunder in an aggregate principal amount not to exceed the lesser of $25,000,000 and the remaining amount of the Commitments (the “Final Funding”). Each DIP Lender’s Commitment shall terminate immediately and without further action on the earlier to occur of (1) the Final Funding Date after giving effect to the funding (if any) of such DIP Lender’s Loan on such date and (2) the Maturity Date.

(iii)

any amount borrowed under this Section 2.1(b) and subsequently repaid or prepaid may not be reborrowed.

(a)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

(c)

No Finance Party may commence proceedings against any Obligor in connection with a Finance Document without the prior consent of the DIP Agent and the Required DIP Lenders.

3

PURPOSE

3.1

Purpose

(a)

The proceeds of the Loans shall be applied by Borrower for uses solely to the extent that any such application of proceeds shall be in compliance with the Budget Covenant, with Clause 22.17 hereof and otherwise in compliance with this Agreement.

(b)

Subject to clause (a) above, the proceeds of the Loans shall be used during the Chapter 11 Case for working capital and general corporate purposes, to pay restructuring costs, fees and expenses (including all professional fees) and other administration costs incurred in connection with the Chapter 11 Case, and to provide liquidity to the Borrower’s Subsidiaries. The proceeds of the Loans may not be loaned or advanced to, or invested in (in each case directly or indirectly) any entity that is not an Obligor.

3.2

Monitoring

4

CONDITIONS OF EFFECTIVENESS AND BORROWING

4.1

Conditions precedent to Effectiveness and post-Effective Date obligations

4.2

Conditions precedent to the Initial Funding

(a)

First Day Orders. The Chapter 11 Case shall have been commenced by the Borrower and the same shall be a debtor and a debtor-in-possession. All “first day” orders and pleadings of the Borrower shall (i) have been entered by the Bankruptcy Court, and all motions and documents in connection with such orders shall have been filed with, or submitted to, the Bankruptcy Court, in each case in form and substance (including the amounts of any monetary relief requested therein) reasonably satisfactory to the DIP Agent and the Required DIP Lenders and in each case providing the relief requested therein, (ii) the DIP Agent and the Required DIP Lenders shall have had reasonable opportunity to review all such “first day” orders and pleadings prior to their filing or submission and in any event no later than three Business Days prior to such filing or submission, and (iii) none of such orders shall have been appealed, stayed, reversed, vacated, amended or modified.

(b)

Interim DIP Order. The Interim DIP Order shall have been entered by the Bankruptcy Court, and such order shall not have been appealed, stayed, reversed, vacated, amended or modified.

(c)

Budget and Other Reporting. The DIP Agent shall have received (i) a DIP Monthly Budget; (ii) a Budget; (iii) Fleet Reports and (iv) Cash Flash Reports, in the case of each report commencing with the month during which the Petition Date occurs and in form and substance reasonably satisfactory to the DIP Agent and the Required DIP Lenders.

(d)

Fees and Expenses. The Borrower shall have paid all accrued and unpaid fees, expenses and premiums owed to the DIP Lenders (including reasonable fees, costs and expenses of counsel) under or relating to the Finance Documents and the Commitment Letter (without duplication) required to be paid on or prior to the Initial Drawing Date, including, without limitation, the Commitment Fee.

(e)

Financial Statements. The DIP Agent shall have received and be satisfied with (i) the audited annual consolidated financial statements of the Borrower’s for the year ended December 31, 2013, (ii) interim unaudited quarterly consolidated financial statements of the Borrower since the date of its last audited financial statements through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) monthly projections for the 12 months after the Initial Drawing Date, (iv) weekly cash flow forecasts for 13 weeks after the Initial Drawing Date and (v) a financial plan and forecast of the Borrower prepared by Borrower’s management which is filed with any disclosure statement related to any plan of reorganization of the Borrower filed in connection with the Chapter 11 Case.

(f)

No Conflict. The DIP Agent shall be satisfied in its reasonable judgment that (a) except as authorized by the Interim DIP Order, there shall not occur as a result of, and after giving effect to, the drawing on the Initial Drawing Date, a default (or any event which with the giving of notice or lapse of time or both would be a default) under the Borrower’s, any other Obligors’ or their respective subsidiaries’ material debt instruments and other material agreements which, (i) in the case of the Borrower’s or any other Obligors’ material debt instruments and other material agreements, would permit the counterparty thereto to exercise remedies thereunder on a postpetition basis or (ii) in the case of any other subsidiary, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect and (b) the making of the Loan on the Initial Drawing Date shall not violate any requirement of law and shall not be enjoined, temporarily, preliminarily or permanently.

(g)

Legal Opinions. The DIP Agent and DIP Lenders shall have received customary satisfactory opinions of counsel to the Loan Parties, addressing such matters as the DIP Agent and the Required DIP Lenders shall reasonably request.

(h)

No Material Adverse Change. Since March 31, 2014, the absence of a material adverse change, or any event or occurrence (other than the commencement of the Chapter 11 Case) which could reasonably be expected to result in a Material Adverse Effect.

(i)

No Material Litigation. There shall exist no action, suit, investigation, litigation or proceeding pending or (to the knowledge of the Obligors) threatened in any court, tribunal, or similar entity, or before any arbitrator or governmental instrumentality, whether in the United States or otherwise (other than the Chapter 11 Case and any action, suit, investigation or proceeding arising from the commencement and continuation of the Chapter 11 Case or the consequences that would normally result from the commencement and continuation of the Chapter 11 Case) that is not stayed or could reasonably be expected to result in a Material Adverse Effect.

(j)

Consents. All necessary governmental and third-party consents and approvals necessary in connection with the DIP Facility and the transactions contemplated thereby shall have been obtained (without the imposition of any adverse conditions that are not acceptable to the DIP Agent) and shall remain in effect; and no law or regulation shall be applicable (in the DIP Agent’s judgment) that restrains, prevents or imposes materially adverse conditions upon the DIP Facility or the transactions contemplated thereby.

(k)

“Know Your Customer” Information. The DIP Agent shall have received all documentation and other information required by it or any DIP Lender that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

(l)

Security Interest. The DIP Agent, on behalf of the DIP Lenders, shall have a valid and perfected first priority lien on and security interest in the Collateral of the Obligors consistent with the Interim DIP Order; the DIP Account(s) shall have been established; the Obligors shall have delivered Uniform Commercial Code financing statements, an account control agreement for the DIP Account, in each case in suitable form for filing; and provisions reasonably satisfactory to the DIP Agent for the payment of all fees and taxes for such filings shall have been duly made. The DIP Agent, on behalf of the DIP Lenders, shall also have a valid and perfected first priority lien on and security interest in the equity interests of each Guarantor under the laws of the jurisdiction in which such Guarantor is organized.

(m)

Lien Searches. The DIP Agent shall have received the results of lien searches (including searches as to judgments, pending litigation, tax and intellectual property matters) for the jurisdiction of organization for each Obligor, the jurisdiction of the chief executive office of each Obligor and all jurisdictions in which assets of Obligor are located, or in the case of any entity organized outside of the United States, the applicable filing jurisdiction under the Uniform Commercial Code in effect in the State of New York, which search results shall be in form and substance reasonably satisfactory to the DIP Agent.

(n)

Notice of Borrowing. The DIP Agent shall have received a fully executed and delivered notice of borrowing.

(o)

Corporate Structure. The DIP Agent shall have completed its review of all corporate documentation and other legal, tax, accounting, business and other matters in scope and results reasonably satisfactory to the DIP Agent. The pro forma capital and ownership structure and the shareholding and cash management arrangements of the Debtor and its subsidiaries (and all agreements relating thereto) after giving effect to the DIP Facility and the transactions contemplated thereby shall be reasonably satisfactory to the DIP Agent and the Required DIP Lenders. The DIP Agent and the Required DIP Lenders shall be satisfied with the terms and amounts of any intercompany loans among the Obligors and their subsidiaries and affiliates and the flow of funds in connection with the Loans drawn on the Initial Drawing Date.

(p)

Representations and Warranties. The representations and warranties set forth in the Finance Documents shall be true and correct in all material respects (except such representations and warranties that by their terms are qualified by “materiality”, which representations and warranties shall be true and correct in all respects) on and as of the Initial Drawing Date.

(q)

No Default. As of the Initial Drawing Date, no Default or Event of Default shall have occurred and be continuing or would result from the making of the Loans on the Initial Drawing Date.

(r)

Guarantors. The DIP Agent, on behalf of the DIP Lenders, shall have received guarantees duly executed by each Guarantor (included in this Agreement) and shall have a valid and perfected first priority lien on and security interest in the equity interests of each Guarantor under the laws of the jurisdiction in which such Guarantor is organized, and valid and perfected first priority liens on and security interests in the assets of such Guarantor, including evidence of the recordation of each Preferred ▇▇▇▇▇▇▇▇ Islands Mortgage in respect of each Ship owned by an Obligor in accordance with the law of the ▇▇▇▇▇▇▇▇ Islands (including any Mortgages, Assignment of Earnings, Assignment of Insurances, Approved Managers Undertaking (except as set forth on Schedule 19) and Memoranda of Particulars for each vessel), together with satisfactory opinions of counsel to the Obligors, addressing such matters as the DIP Agent and the Required DIP Lenders shall request with respect to such guaranties, security documents and liens and security interests and other customary matters.

(s)

Other Security Documents. Evidence that all other actions necessary or, in the reasonable opinion of the DIP Agent, desirable to create, maintain, effect, perfect, preserve, maintain and protect the security interests purported to be created by the Finance Documents have been taken or arrangements with the DIP Agent have been made with respect thereto.

(t)

Closing Date Certificate. The Debtor shall have delivered to the DIP Agent an originally executed officer’s certificate certifying that all applicable conditions to the Initial Drawing Date have been satisfied as of such date and such other matters as the DIP Agent may request.

4.3

Conditions precedent to the Final Funding

(a)

Final DIP Order. The Final DIP Order shall have been entered by the Bankruptcy Court, and such order shall not have been appealed, stayed, reversed, vacated, amended or modified.

(b)

Liquidity Threshold Trigger. The cash balance levels of the Obligors (on a consolidated basis) shall be below $15,000,000 on such date.

(c)

Notice of Borrowing. The DIP Agent shall have received a fully executed and delivered notice of borrowing.

(d)

Fees and Expenses. The Debtor shall have paid all invoiced accrued and unpaid fees, expenses and premiums owed to the DIP Agent, and the DIP Lenders (including reasonable and documented fees, costs and expenses of counsel) under or relating to the Finance Documents and the Commitment Letter required to be paid on or prior to the Final Funding Date.

(e)

Representations and Warranties. The representations and warranties set forth in the Finance Documents shall be true and correct in all material respects (except such representations and warranties that by their terms are qualified by “materiality”, which representations and warranties shall be true and correct in all respects) on and as of the Final Funding Date.

(f)

No Default. As of the Final Funding Date, no Default or Event of Default shall have occurred and be continuing or would result from the making of the Loans on the Final Funding Date.

(g)

Consents. The making of the Loans on the Final Funding Date (a) shall not violate any requirement of law, or shall not be enjoined, temporarily, preliminarily, or permanently, and (b) all necessary consents shall have been obtained as of the Final Funding Date.

(h)

Material Adverse Change. Since the Petition Date, the absence of a material adverse change, or any event or occurrence which could reasonably be expected to result in a Material Adverse Effect

(i)

No Conflict. The DIP Agent and the Required DIP Lenders shall be satisfied in their reasonable judgment that except as authorized by the Final DIP Order, there shall not occur as a result of, and after giving effect to, the drawing on the Final Funding Date, a default (or any event which with the giving of notice or lapse of time or both would be a default) under the Debtor’s, any other Obligors’ or their respective subsidiaries’ debt instruments and other material agreements which, (i) in the case of the Debtor’s or any other Obligors’ material debt instruments and other material agreements, would permit the counterparty thereto to exercise remedies thereunder on a postpetition basis or (ii) in the case of any other subsidiary, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(j)

Closing Date Certificate. The Debtor shall have delivered to the DIP Agent an originally executed officer’s certificate certifying that all applicable conditions to the Final Funding Date have been satisfied as of such date and such other matters as the DIP Agent may request.

5

BORROWING

5.1

Delivery of a Notice of Borrowing

5.2

Completion of a Notice of Borrowing

(a)

Each notice of borrowing is irrevocable and will not be regarded as having been duly completed unless:

(i)

the proposed borrowing date is a Business Day;

(ii)

the currency and amount of the borrowing comply with Clause 5.3 (Currency and amount);

(iii)

the proposed Interest Period complies with Clause 9 (Interest Periods); and

(iv)

it specifies the purpose of the proposed Loan.

(b)

Only one (1) Loan may be requested in each notice of borrowing.

5.3

Currency and amount

(a)

The currency specified in a notice of borrowing must be Dollars.

(b)

The amount of the proposed borrowing shall not exceed the amount of the Initial Funding on the Initial Funding Date and the amount of the Final Funding on the Final Funding Date.

5.4

DIP Lenders’ participation

(a)

If the conditions set out in this Agreement have been met, each DIP Lender shall make its participation in each Loan available by the borrowing date through its Facility Office.

(b)

The DIP Agent shall notify each DIP Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time.

5.5

Notes

(a)

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

(b)

Each Note shall (i) be executed by the Borrower, (ii) be payable to the order of such DIP Lender and be dated the Effective Date (or, in the case of Notes issued after the Effective Date, be dated the date of issuance thereof), (iii) be in a stated principal amount (together with the principal amount of any other Note held by such DIP Lender) equal to the Commitment of such DIP Lender on the date of issuance thereof, (iv) mature on the Maturity Date, (v) bear interest as provided in Clause 8 (Costs of Borrowing), (vi) be subject to voluntary prepayment and mandatory repayment as provided in Section 4 (Reduction, Repayment, Prepayment and Cancellation) and (vii) be entitled to the benefits of this Agreement and the other Finance Documents.

(c)

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

(d)

Notwithstanding anything to the contrary contained above in this Clause 5.5 or elsewhere in this Agreement, a Note shall be delivered only to DIP Lenders that at any time specifically request the delivery of such Notes. No failure of any DIP Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related obligations) incurred by the Borrower that would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the Finance Documents. Any DIP Lender that does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise described in preceding paragraph (c). At any time (including, without limitation, to replace any Note that has been destroyed or lost) when any DIP Lender requests the delivery of a Note to evidence its Loans, the Borrower shall promptly execute and deliver to such DIP Lender the requested Note in the appropriate amount provided that, in the case of a substitute or replacement Note, the Borrower shall have received from such requesting DIP Lender (i) an affidavit of loss or destruction and (ii) a customary lost/destroyed Note indemnity, in each case in form and substance reasonably acceptable to the Borrower and such requesting DIP Lender, and duly executed by such requesting DIP Lender.

6

REDUCTION AND REPAYMENT

6.1

Cancellation of Total Commitments

6.2

Repayment of Loans

6.3

Maturity Date

7

PREPAYMENT AND CANCELLATION

7.1

Illegality

(a)

that DIP Lender shall promptly notify the DIP Agent upon becoming aware of that event;

(b)

upon the DIP Agent notifying the Borrower, the Commitment of that DIP Lender will be immediately cancelled; and

(c)

the Borrower shall repay that DIP Lender’s participation in the Loans on the last day of the Interest Period for each Loan occurring after the DIP Agent has notified the Borrower or, if earlier, the date specified by the DIP Lender in the notice delivered to the DIP Agent (being no earlier than the day following the date on which the notice was given by the DIP Lender to the DIP Agent or, if later, the last day of any applicable grace period permitted by law).

7.2

[Reserved.]

7.3

[Reserved.]

7.4

Voluntary prepayment of Loans

7.5

Mandatory prepayment

(a)

The Borrower shall prepay the Loans in an amount equal to 100% of the net cash proceeds of the sale, transfer, disposition or loss of any asset, including the Total Loss or sale of a Ship. Such repayment shall be made:

(i)

in the case of a sale of a Ship, on or before the date on which the sale is completed;

(ii)

in the case of a Total Loss of a Ship, on the earlier of the date falling 150 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance or other compensation relating to such Total Loss; and

(iii)

in any other case, on the date of receipt of such proceeds.

(b)

On the date of receipt thereof, the Borrower shall repay the Loans in an amount equal to 100% of the net proceeds from the issuance of any Financial Indebtedness of any Obligor other than Financial Indebtedness that is permitted under Clause 22.9.

(c)

On the date of receipt thereof, the Borrower shall repay the Loans in an amount equal to one hundred percent (100%) of the aggregate amount of any Equity received by the Borrower.

(d)

[Reserved.]

(e)

All amounts prepaid under paragraphs (a), (b) or (c) shall be applied first towards payment pro rata of any Loans then outstanding, until the Loans have been repaid in full, and, second, to reduce pro rata any Commitments then outstanding.

7.6

Right of repayment and cancellation in relation to a single DIP Lender

(a)

If:

(i)

any sum payable to any DIP Lender by an Obligor is required to be increased under Clause 12.1 (Gross-up for Taxes); or

(ii)

any DIP Lender claims indemnification from the Borrower under Clause 12.2 (Tax Indemnity) or Clause 13.1 (Increased costs);

(b)

On receipt of a notice referred to in paragraph (a) above, the Commitment of that DIP Lender shall immediately be reduced to zero.

(c)

On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that DIP Lender’s participation in that Loan.

7.7

Restrictions

(a)

Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

(b)

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and all other sums payable under the terms of this Agreement (including any sums pursuant to Clause 14.2 (Other Indemnities)) but otherwise without premium or penalty.

(c)

The Borrower may not reborrow any part of the Term Facility which is prepaid.

(d)

[Reserved.]

(e)

The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

(f)

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

(g)

If the DIP Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected DIP Lender, as appropriate.

7.8

Replacement of DIP Lender

(a)

If any event described in paragraphs (i) or (ii) of Clause 7.6(a) (Right of repayment and cancellation in relation to a single DIP Lender) shall occur, the Borrower may, as an alternative to exercising its rights under Clause 7.6, on 15 Business Days’ prior written notice to the DIP Agent and the relevant DIP Lender, replace such DIP Lender by requiring such DIP Lender to (and such DIP Lender shall) transfer pursuant to Clause 27 (Changes to the DIP Lenders) all (and not part only) of its rights and obligations under this Agreement to another DIP Lender or other Prepetition Lender or affiliate thereof (a “Replacement Lender”) selected by the Borrower, and which is acceptable to the DIP Agent (acting reasonably), which confirms its willingness to assume and does assume all the obligations of the transferring DIP Lender’s participations on the same basis as the transferring DIP Lender, for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such DIP Lender’s participation in the outstanding Loans and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.

(b)

The replacement of a DIP Lender pursuant to this Clause 7.8 shall be subject to the following:

(i)

the Borrower shall have no rights to replace the DIP Agent or the Security Trustee;

(ii)

neither the DIP Agent nor any DIP Lender shall have any obligation to the Borrower to find a Replacement Lender; and

(iii)

in no event shall the DIP Lender replaced under this Clause 7.8 be required to pay or surrender to the Replacement Lender any of the fees received by such DIP Lender pursuant to the Finance Documents.

8

INTEREST

8.1

Calculation of interest

(a)

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of:

(i)

the Margin;

(ii)

LIBOR; and

(iii)

the Mandatory Cost, if any.

8.2

Payment of interest

8.3

Default interest

8.4

[Reserved.]

8.5

[Reserved.]

8.6

Notification of rates of interest

9

INTEREST PERIODS

9.1

Selection of Interest Periods

(a)

The Borrower may select an Interest Period for a Loan in the notice of borrowing for that Loan or (if that Loan has already been borrowed) in a Selection Notice.

(b)

Each Selection Notice for a Loan is irrevocable and must be delivered to the DIP Agent by the Borrower not later than the Specified Time.

(c)

If the Borrower fails to deliver a Selection Notice to the DIP Agent in accordance with paragraph (b) above, the relevant Interest Period will be 1 Month.

(d)

Subject to this Clause 9, the Borrower may select an Interest Period of 1 Month or any other period agreed between the Borrower and the DIP Agent; provided that such Interest Period may be shorter than 1 Month if such period ends on the Maturity Date.

(e)

The Borrower may not select any Interest Period for a Loan that ends after the Maturity Date.

(f)

Each Interest Period for a Loan shall start on the borrowing date or (if already made) on the last day of its preceding Interest Period.

9.2

Non-Business Days

9.3

Consolidation and division of Loans

(a)

Subject to paragraph (b) below, if two (2) or more Interest Periods:

(i)

relate to Loans; and

(ii)

end on the same date,

(b)

Subject to Clause 5.3 (Currency and amount), if the Borrower requests in a Selection Notice that a Loan be divided into two (2) or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in that Selection Notice, being an aggregate amount equal to the amount of the Loan immediately before its division.

10

CHANGES TO THE CALCULATION OF INTEREST

10.1

Absence of quotations

10.2

Market disruption

(a)

If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each DIP Lender’s share of that Loan for the Interest Period shall be the rate per annum which is the sum of:

(i)

the Margin;

(ii)

the rate notified to the DIP Agent by that DIP Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that DIP Lender of funding its participation in that Loan from whatever source it may reasonably select; and

(iii)

the Mandatory Cost, if any, applicable to that DIP Lender’s participation in the Loan.

(b)

In this Agreement “Market Disruption Event” means:

(i)

at or about noon Greenwich Mean Time on the Quotation Day for the relevant Interest Period, REUTERS Screen LIBOR 01 is not available and none or only one of the Reference Banks supplies a rate to the DIP Agent to determine LIBOR for the relevant Interest Period; or

(ii)

before close of business in London on the Quotation Day for the relevant Interest Period, the DIP Agent receives notifications from a DIP Lender or DIP Lenders (whose participations in a Loan exceed thirty five percent (35%) of that Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR.

10.3

Substitute basis of interest

(a)

If a Market Disruption Event occurs and the DIP Agent or the Borrower so requires, the DIP Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

(b)

Any substitute basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the DIP Lenders and the Borrower, be binding on all Parties.

10.4

Break Costs

(a)

The Borrower shall, within 3 Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan being paid by the Borrower on a day other than the last day of an Interest Period for that Loan.

(b)

Each DIP Lender shall, as soon as reasonably practicable after a demand by the DIP Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

11

FEES

11.1

Commitment Fee

11.2

Undrawn Commitment

11.3

Agency fee

12

TAX GROSS UP AND INDEMNITIES

12.1

Gross Up for Taxes

(a)

All payments made by the Borrower or any other Obligor (or, with respect to FATCA, the DIP Agent) hereunder and under any Note will be made without setoff, counterclaim or other defense. Except as provided in Clause 12.4 (▇▇▇▇▇▇▇▇ Islands Taxation), all such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in Clause 12.1(b), any tax imposed on or measured by the net income or net profits of a DIP Lender pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such DIP Lender is located or any subdivision of any such jurisdiction (such taxes being referred to collectively as “Excluded Taxes”)) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively, as “Non-Excluded Taxes”). If any Non-Excluded Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Non-Excluded Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Non-Excluded Taxes, will not be less than the amount provided for herein or in such Note.

(b)

If any amounts are payable by an Obligor (or, with respect to FATCA, the DIP Agent) in respect of Non-Excluded Taxes pursuant to Clause 12.1(a), the Borrower agrees to reimburse each DIP Lender, upon the written request of such DIP Lender, for taxes imposed on or measured by the net income or net profits of such DIP Lender pursuant to the laws of the jurisdiction in which such DIP Lender is organized or in which the principal office or applicable lending office of such DIP Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such DIP Lender is organized or in which the principal office or applicable lending office of such DIP Lender is located arising as a result of the payment of such Non-Excluded Taxes by the Borrower to such DIP Lender and for any withholding of taxes as such DIP Lender shall determine are payable by, or withheld from, such DIP Lender, in respect of such amounts so paid to or on behalf of such DIP Lender pursuant to Clause 12.1(a) and in respect of any amounts paid to or on behalf of such DIP Lender pursuant to this Clause 12.1(b).

(c)

The Borrower will furnish to the DIP Agent within 45 days after the date the payment of any Non-Excluded Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Borrower.

12.2

Tax Indemnity

12.3

Stamp Taxes

12.4

▇▇▇▇▇▇▇▇ Islands Taxation

12.5

Tax Benefit Reimbursement

12.6

FATCA Withholding

(a)

if an Obligor, the DIP Agent or any other Party is required to make a FATCA Withholding then that Obligor, DIP Agent or other Party may make such FATCA Withholding; and

(b)

the DIP Agent shall not be required to increase any payment made by it under or in connection with a Finance Document in the event the DIP Agent is required to make a FATCA Withholding in respect of such payment.

12.7

FATCA Compliance and Information

(a)

If any Obligor or the DIP Agent reasonably believes that, in order to comply with FATCA or a FATCA Agreement or to determine whether it or an Obligor may be required to make a Tax payment which may be attributable (directly or indirectly) to a FATCA Withholding, it requires information as to the status under FATCA of any Finance Party then the Obligor or the DIP Agent may (acting reasonably) request that Finance Party to provide that information and that Finance Party must comply with that request or advise that it does not consider that it is a FATCA Exempt Party within 20 Business Days of receipt of that request, provided that compliance with the request would not involve that Finance Party in any unlawful activity or any activity that is contrary to any request, guidance or directive of any competent authority (whether or not having the force of law, but if not having the force of law being of a type with which that Finance Party is accustomed to comply) and would not breach any contractual confidentiality or data protection obligations it is subject to.

(b)

If the DIP Agent receives any information in accordance with paragraph (a) above it shall provide copies of that information to the relevant Obligor and the DIP Lenders hereby agree to such information being sent to the relevant Obligor.

(c)

If a DIP Lender reasonably believes that, in order to comply with FATCA or a FATCA Agreement, it requires information as to the status under FATCA of an Obligor then that DIP Lender may (acting reasonably) request that Obligor to provide that information and that Obligor must comply with that request within 20 Business Days of receipt of that request, provided that compliance with the request would not involve such Obligor in any unlawful activity or any activity that is contrary to any request, guidance or directive of any competent authority (whether or not having the force of law, but if not having the force of law being of a type with which such Obligor is accustomed to comply) and would not breach any contractual confidentiality or data protection obligations it is subject to.

13

INCREASED COSTS

13.1

Increased costs

(a)

Subject to Clause 13.3 (Exceptions), the Borrower shall, within 3 Business Days of a demand by the DIP Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation or application of) any law or regulation or (ii) compliance by that Finance Party with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) made after the date of this Agreement provided that, notwithstanding anything to the contrary herein, (A) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act, and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (B) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities of competent jurisdiction, in each case pursuant to Basel III, shall in each case be deemed to be a change in law for the purposes of this 13.1, regardless of the date enacted, adopted or issued.

(b)

In this Agreement, “Increased Costs” means:

(i)

a reduction in the rate of return from the Facilities or on a Finance Party’s (or its Affiliate’s) overall capital;

(ii)

an additional or increased cost; or

(iii)

a reduction of any amount receivable under any Finance Document,

13.2

Increased cost claims

(a)

A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the DIP Agent of the event giving rise to the claim, following which the DIP Agent shall promptly notify the Borrower.

(b)

Each Finance Party shall, as soon as practicable after a demand by the DIP Agent, provide a certificate confirming the amount of its Increased Costs.

13.3

Exceptions

(a)

attributable to a deduction or withholding required by law to be made by an Obligor for or on account of Tax from a payment under a Finance Document;

(b)

compensated for by Clause 12.2 (Tax Indemnity) (or would have been compensated for under Clause 12.2 (Tax Indemnity) but was not so compensated solely because of the exclusions in the definition of Excluded Tax);

(c)

compensated for by the payment of the Mandatory Cost; or

(d)

attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

14

OTHER INDEMNITIES

14.1

Currency indemnity

(a)

If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(i)

making or filing a claim or proof against that Obligor;

(ii)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

(b)

Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2

Other indemnities

(a)

the occurrence of any Event of Default;

(b)

a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties);

(c)

funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a notice of borrowing but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that DIP Lender alone); or

(d)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

14.3

Indemnity to the DIP Agent and the Security Trustee

(a)

investigating any event which it reasonably believes is a Default; or

(b)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized.

14.4

Environmental Indemnity

14.5

Additional Indemnity

15

MITIGATION BY THE DIP LENDERS

15.1

Mitigation

(a)

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax gross-up and indemnities), Clause 13 (Increased Costs) or paragraph 3 of Schedule 4 (Mandatory Cost Formula) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b)

Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

15.2

Limitation of liability

(a)

The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

(b)

A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16

COSTS AND EXPENSES

16.1

Transaction expenses

(a)

this Agreement and any other documents referred to in this Agreement; and

(b)

any other Finance Documents executed after the date of this Agreement.

16.2

Amendment costs

16.3

Enforcement costs

16.4

Authority to debit Collection Account

17

GUARANTEE AND INDEMNITY

17.1

Guarantee and indemnity

(a)

Each Guarantor irrevocably and unconditionally jointly and severally:

(i)

guarantees, as primary guarantor and not as surety merely, to each Finance Party punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, by each Obligor of all the Obligors’ obligations under the Finance Documents whether for principal, interest, fees, expenses, indemnity payments or obligations or otherwise (collectively, the “Guaranteed Obligations”);

(ii)

undertakes with each Finance Party that whenever an Obligor does not pay any amount when due under or in connection with any Finance Document, such Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

(iii)

indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party (i) if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, or (ii) by operation of law as a consequence of the transactions contemplated by the Finance Documents. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

17.2

Continuing guarantee

17.3

Reinstatement

(a)

the liability of each Obligor shall continue or be reinstated, as the case may be, as if the payment, discharge, avoidance or reduction had not occurred; and

(b)

each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred.

17.4

Waiver of defenses

(a)

The obligations of each Guarantor under this Clause 17 will not be affected by, and each Guarantor irrevocably waives any defense it might have by virtue of, any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 17 (without limitation and whether or not known to it or any Finance Party) including:

(i)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

(ii)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(iii)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any security;

(iv)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(v)

any amendment (however fundamental) or replacement of a Finance Document or any other document or security;

(vi)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;

(vii)

any bankruptcy, insolvency, liquidation, judicial management or similar proceedings; or

(viii)

any other circumstance whatsoever that might otherwise constitute a defense available to, or a legal or equitable discharge of, any Obligor.

(b)

Each Guarantor unconditionally and irrevocably waives:

(i)

diligence, presentment, demand for performance, notice of nonperformance, protest, notice of protest, notice of dishonor, notice of the creation or incurring of new or additional indebtedness of the Obligors to the Finance Parties, notice of acceptance of this Guarantee, and notices of any other kind whatsoever;

(ii)

the filing of any claim with any court in the event of a receivership, insolvency, bankruptcy, liquidation or judicial management;

(iii)

the benefit of any statute of limitations affecting any Obligor’s obligations under the Finance Documents or the Guarantor’s obligations under this Guarantee or the enforcement of this Guarantee; and

(iv)

any offset or counterclaim or other right, defense, or claim based on, or in the nature of, any obligation now or later owed to the Guarantor by the Obligors or any Finance Party.

17.5

Immediate recourse

17.6

Deferral of Guarantors’ rights

(a)

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the DIP Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

(i)

to be indemnified by an Obligor;

(ii)

to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents; and/or

(iii)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

(b)

Each Obligor acknowledges and agrees that:

(i)

until the Guaranteed Obligations have been indefeasibly paid in full, all obligations owing to it from any other Obligor whether contractually, under rights of subrogation, contribution, reimbursement or otherwise shall be junior and subordinate to any rights of any Finance Party against such Obligor;

(ii)

it shall not exercise such rights prior to the indefeasible payment in full of all obligations under the Finance Documents unless requested or consented to by the DIP Agent; and

(iii)

it shall hold in trust for and pay or transfer to the DIP Agent any payment or distribution received by it contrary to this Clause 17.

17.7

Additional security

17.8

Right of Contribution

17.9

Limitation of Liability

17.10

Information concerning the Obligors

17.11

Singapore financial assistance limitation

18

REPRESENTATIONS

18.1

Status

(a)

It is a corporation or a limited liability company, duly incorporated or formed and validly existing in good standing under the law of its jurisdiction of incorporation or formation.

(b)

It 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.

(c)

It and each of its Subsidiaries 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.

(d)

It is not, and shall not become, a “foreign financial institution” as that term is defined under FATCA.

18.2

Binding obligations

18.3

Non-conflict with other obligations

(a)

any law or regulation applicable to it;

(b)

its constitutional documents; or

(c)

any agreement or instrument binding upon it or any of its assets.

18.4

Power and authority

18.5

Validity and admissibility in evidence

(a)

to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;

(b)

for the grant by any Obligor of the Security granted by it pursuant to the Finance Documents, and the perfection or maintenance of such Security (including the first priority nature thereof), and

(c)

to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,

18.6

Governing law and enforcement

(a)

The choice of the Bankruptcy Code, ▇▇▇▇▇▇▇▇ Islands law, New York law, Singapore law or English law, as the case may be, as the governing law of the Finance Documents will be recognized and enforced in its jurisdiction of incorporation or formation.

(b)

Any judgment obtained in any court sitting in New York City or in England in relation to a Finance Document will be recognized and enforced in its jurisdiction of incorporation or formation.

18.7

Deduction of Tax

18.8

No filing or stamp taxes

18.9

No default

18.10

No misleading information

18.11

Financial statements

(a)

The financial statements delivered pursuant to Clause 4.2(f)(i) and (ii) were prepared in accordance with GAAP consistently applied.

(b)

The financial statements delivered pursuant to Clause 4.2(f)(i) and (ii) fairly present in all material respects the financial condition and operations of the Borrower and its Subsidiaries as at the date thereof.

18.12

[Reserved.]

18.13

No proceedings pending or threatened

18.14

Status of security

(a)

The provisions of each Finance Document do now or, as the case may be, will upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents), create in favor of the Security Trustee (i) in the case of the Mortgages, a valid first “preferred mortgage” within the meaning of Chapter 3 of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇, as amended (or, if applicable, a first priority ship mortgage under the laws of the relevant Alternative Approved Flag), on the respective Ships, subject to the recording or registration of the Mortgages as described in the following paragraph, (ii) in the case of the Assignments of Shipbuilding Contract and Refund Guarantee, the Assignments of Earnings, the Assignments of Insurances, the Pledge Agreement and the General Security Agreements a valid, binding and executed and enforceable security interest 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 Security Trustee in all right, title and interest in such collateral, subject to no other Security and subject in the case of (A) the Assignments of Shipbuilding Contract and Refund Guarantee and the Assignments of Earnings, to notice being given to account parties and to filing proper financing statements in the District of Columbia and the State of New York, and consent of such account parties being obtained, 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), and (iii) in the case of the Account Charges, the General Account Charges, and the Security Interest Deed, a valid, binding and executed and enforceable Security Interest over the assets to which such Finance Documents, by their terms, relate;

(b)

upon execution and delivery by the relevant Guarantor and recording in accordance with the laws of the Republic of The ▇▇▇▇▇▇▇▇ Islands (or, if applicable, registration in accordance with the law of the relevant Alternative Approved Flag), 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; and

(c)

no third party will have any Security (except for Permitted Security) over any asset to which such Security, by its terms, relates.

18.15

Compliance with Authorizations

18.16

Margin Stock

18.17

Compliance with ERISA

(a)

Schedule 12 sets forth each Plan as of the date of this Agreement.

(b)

Subject to Clause 18.17(d) below, each Plan (and each related trust, insurance contract or fund) is in substantial compliance with its terms and with all applicable laws, including, without limitation, ERISA and the Code; each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code covering all tax law changes prior to the Economic Growth and Tax Relief Reconciliation Act of 2001; no Reportable Event has occurred; no Plan which is a Multiemployer Plan is insolvent or in reorganization; no Plan has an Unfunded Current Liability which, when added to the aggregate amount of Unfunded Current Liabilities with respect to all other Plans, exceeds $100,000; no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an unpaid minimum required contribution, within the meaning of such sections of the Code or ERISA, or has applied for or received a waiver of an unpaid minimum required contribution or an extension of any amortization period, within the meaning of Section 412 or 430(d) of the Code or Section 304 of ERISA; all contributions required to be made with respect to a Plan have been timely made; none of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Code or expects to incur any such liability under any of the foregoing sections with respect to any Plan; no condition exists which presents a material risk to the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, expected or threatened; there has been no violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule of under Section 401(a) of the Code by any fiduciary or disqualified person with respect to any Plan for which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate may be directly or indirectly liable; none of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has filed, or is considering filing, an application under the IRS Employee Plans Compliance Resolution System or the Department of Labor’s Voluntary Fiduciary Correction Program with respect to any Plan; using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Plan ended prior to the date of the most recent credit event, would not exceed $100,000; each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Borrower, any Subsidiary of Borrower or any ERISA Affiliate has at all times been operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; each group health plan (as defined in 45 Code of Federal Regulations Section 160.103) which covers or has covered employees or former employees of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has at all times been operated in compliance with the provisions of the Health Insurance Portability and Accountability Act of 1996 and the regulations promulgated thereunder; no lien imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to arise on account of any Plan; and the Borrower and its Subsidiaries may cease contributions to or terminate any employee benefit plan maintained by any of them without incurring any material liability.

(c)

Subject to Clause 18.17(d) below, each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Foreign Pension Plan have been timely made. None of the Borrower or any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower’s most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

(d)

The foregoing representations in Clauses 18.17(b) and 18.17(c) are made only to the extent that the failure to be true, either individually or in the aggregate, could reasonably be expected to result in material liability to the Borrower and its Subsidiaries.

18.18

Not “Investment Company”

18.19

Not “National”

18.20

No Restriction

18.21

[Reserved.]

18.22

Use of Proceeds

18.23

Place of Business

18.24

Ownership of Obligors