ULTRAPETROL (BAHAMAS) LTD.

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o


(1)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933.

(2)	No separate consideration will be received for the guarantees relating to the 9% First Preferred Ship Mortgage Notes due 2014.

The registrant hereby amends the registration statement on such date or dates as may be necessary to delay the effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.


	•	We will exchange all of our outstanding 9% First Preferred Ship Mortgage Notes due 2014 that were issued on November 24, 2004, which we refer to as the “outstanding notes” and which have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) that are validly tendered and not properly withdrawn for an equal principal amount of 9% First Preferred Ship Mortgage Notes due 2014, which we refer to as the “exchange notes” and which are registered under the Securities Act and are freely tradable. References we make in this prospectus to “notes” shall mean both outstanding notes and exchange notes.

	•	Any holder of outstanding notes electing to exchange its outstanding notes for exchange notes must surrender its exchange notes, together with the appropriate letter of transmittal, to Manufacturers and Traders Trust Company, as the Exchange Agent, or the Exchange Agent must receive an agent’s message if exchange of the outstanding notes is being made by book-entry delivery through the Depository Trust Company’s automated tender offer program.

	•	You are entitled to withdraw your election to tender the outstanding notes at any time prior to the expiration of the exchange offer.

	•	This exchange offer expires at 5:00 p.m., New York City time, on , 2005, unless we extend the expiration date.

	•	The exchange of the outstanding notes for the exchange notes in the exchange offer will not be a taxable event for U.S. Federal income tax purposes.

	•	We will not receive any proceeds from the exchange offer.


	•	The exchange notes are being offered in order to satisfy some of our obligations under the registration rights agreement entered into in connection with the private placement of the outstanding notes.

	•	The terms of the exchange notes are identical to the terms of the outstanding notes except that the exchange notes are registered under the Securities Act and will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with the registration rights agreement.

	•	Outstanding notes not tendered in the exchange offer will remain outstanding and continue to accrue interest but will not retain any rights under the registration rights agreement.


	•	The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of these methods.


	•	Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

SEE “RISK FACTORS” BEGINNING ON PAGE 19 FOR A DISCUSSION OF SOME OF THE RISKS THAT YOU SHOULD CONSIDER IN CONNECTION WITH PARTICIPATION IN THE EXCHANGE OFFER.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Ultrapetrol (Bahamas) Limited is a company incorporated under the laws of the Bahamas. Our registered office is located at H&J Corporate Services Ltd., Shirlaw House, 87 Shirley Street, P.O. Box SS-19084, Nassau, Bahamas, and our telephone number at that address is 1-242-322-8571.

In this prospectus, “Ultrapetrol (Bahamas) Limited,” the “Company,” “we,” “us” and “our” refers only to Ultrapetrol (Bahamas) Limited and its subsidiaries and joint ventures.

This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any jurisdiction or in any circumstances where the offer or sale is not permitted. Please refer to the letter of transmittal and the other documents relating to this prospectus for instructions as to your eligibility to tender outstanding notes in this exchange offer. You must not:


	•	use this prospectus for any other purpose;

	•	make copies of any part of this prospectus or give a copy of it to any other person; or

	•	disclose any information in this prospectus to any other person.

We have prepared this prospectus and we are solely responsible for its contents. You are responsible for making your own examination of us and your own assessment of the merits and risks of investing in the notes. You may contact us if you need any additional information.

We are not providing you with any legal, business, tax or other advice in this prospectus. You should consult with your own advisors as needed to assist you in making your investment decision and to advise you whether you are legally permitted to tender your outstanding notes for exchange notes.

You must comply with all laws that apply to you in any place in which you buy, offer or sell any notes or possess this prospectus. You must also obtain any consents or approvals that you need in order to tender outstanding notes. We are not responsible for your compliance with these legal requirements.

Neither the fact that a registration statement or an application for a license has been filed under RSA 421-B with the State of New Hampshire nor the fact that a security is effectively registered or a person is licensed in the State of New Hampshire constitutes a finding by the Secretary of State that any document filed under RSA 421-B is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the Secretary of State has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with the provisions of this paragraph.

We obtained the industry, market and competitive position data used throughout this prospectus from research, surveys or studies conducted by us and by third parties and industry or general publications produced by Doll Shipping Consultancy (“DSC”), among others. Industry and general publications generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. While we believe that these sources are reliable, neither we nor any of our affiliates have independently verified such data and neither we nor any of our affiliates make any representations as to the accuracy of such information. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources and neither we nor any of our affiliates make any representations as to the accuracy of such research.

DSC is an independent company based in the United Kingdom providing market analysis and strategic planning services to the shipping industry, and has provided us with statistical and other data regarding the industry and markets in which we operate. This data is set forth in this prospectus, among other locations, in the section entitled “Industry Overview.” DSC has advised us that this data is drawn from published and private industry sources. DSC has also advised us that:


	•	some industry data provided by DSC is based upon estimates or subjective judgments in circumstances where data for actual market transactions either does not exist or is not publicly available;

	•	the published information of other maritime data collection experts may differ from the data provided to us by DSC; and

	•	while DSC has taken reasonable care in the compilation of the data it has provided to us and believes such data to be accurate, data collection is subject to limited audit and validation procedures.

We believe that the data supplied to us by DSC is accurate in all material respects, although neither we nor any of our affiliates have independently verified this data and neither we nor any of our affiliates make any representations regarding its accuracy.

We are a Bahamas corporation. Each of the subsidiary guarantors and pledgors is incorporated in Argentina, the Bahamas, Chile, Liberia, Panama, Paraguay or Uruguay. Each of the vessels and barges that secure the notes and subsidiary guarantees is flagged in Argentina, Bolivia, Chile, Liberia, Panama or Paraguay. All of our and the subsidiary guarantors’ and pledgors’ offices, administrative activities and other assets, as well as those of the independent public accountants and the expert named herein, are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon us, any of the subsidiary guarantors and pledgors or such persons. In addition, some of our directors and officers and the directors and officers of the subsidiary guarantors and pledgors are residents of jurisdictions other than the United States, and all or a substantial portion of the assets of such persons are or may be located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon such persons.

The following special legal counsel have advised us and the subsidiary guarantors and pledgors: (i) Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz, Jr., regarding the laws of Argentina; (ii) Higgs & Johnson, regarding the laws of the Bahamas; (iii) Barros & Errázuriz Abogados Ltda., regarding the laws of Chile; (iv) Seward & Kissel LLP, regarding the laws of Liberia; (v) Palacios, Prono & Talavera, regarding the laws of Paraguay; (vi) Tapia, Linares y Alfaro, regarding the laws of Panama; and (vii) Ramela & Regules Rucker, Abogados, regarding the laws of Uruguay. Each such special counsel has advised us that courts of their respective jurisdictions may not (i) enforce judgments of United States courts obtained against us, the subsidiary guarantors and pledgors, our directors and officers, the directors and officers of the subsidiary guarantors, the independent public accountants and the expert named herein, as applicable, predicated upon the civil liability provisions of the Federal securities laws of the United States or (ii) entertain original actions brought against such parties, predicated upon the Federal securities laws of the United States. As a result, it may be difficult for you to enforce judgments obtained in United States courts against us, the subsidiary guarantors and pledgors, our directors and officers, the directors and officers of the subsidiary guarantors and pledgors, the independent public accountants or the expert named herein, or the assets of any such parties located outside the United States. Further, it may be difficult for you to entertain actions, including those predicated upon the civil liability provision of the Federal securities laws of the United States, against such parties in courts outside of the United States.

We and each subsidiary guarantor and pledgor have appointed CT Corporation System, 111 Eighth Avenue, New York, New York 10011, as agent for service of process in any action brought against us or any of them under the securities laws of the United States arising out of or based upon the indenture, the notes and the guarantees of the notes issued by the subsidiary guarantors, in any Federal or state court having subject matter jurisdiction in the Borough of Manhattan, the City of New York, New York. In connection therewith, we have irrevocably submitted to the jurisdiction of such courts in any such action or proceeding in the United States with respect to the indenture, the notes and the guarantees.

Our consolidated financial statements and those of UABL Limited as of and for the year ended December 31, 2001 included in this prospectus were audited by Pistrelli, Diaz y Asociados (a member of Andersen). Subsequent to its audit, Pistrelli, Diaz y Asociados (a member of Andersen) ceased operations. Pistrelli, Diaz y Asociados (a member of Andersen) has not reissued its reports with respect to such consolidated financial statements, and we were unable to obtain its written consent to the inclusion of such reports in the exchange offer registration statement that includes this prospectus. This may have important consequences to holders of the notes. See “Risk Factors — Risks Related to the Notes — Your ability to recover from our former independent public accountants for any potential financial misstatements is limited” and “Experts.”

This prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. We may also from time to time make forward-looking statements in our periodic reports that we will file with the SEC, in other information sent to our security holders and in other written materials. All statements other than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

These forward-looking statements are based on assumptions that we have made in light of our experience in the industry in which we operate, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and


	•	our future operating or financial results;

	•	statements about future, pending or recent acquisitions, business strategy, areas of possible expansion and expected capital spending or operating expenses, including bunker prices, drydocking and insurance costs;

	•	our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities;

	•	our expectations about the availability of vessels to purchase, the time which it may take to construct new vessels, or vessels’ useful lives;

	•	statements about general market conditions and trends, including charter rates, vessel values and factors affecting vessel supply and demand;

	•	potential liability from pending or future litigation;

	•	the strength of world economies and currencies and general domestic and international political conditions;

	•	changes in governmental rules and regulations or actions taken by regulatory authorities; and

	•	the other factors discussed under the heading “Risk Factors.”

Because of these factors, we caution that you should not place undue reliance on any of our forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we have no duty to, and do not intend to, update or revise the forward-looking statements in this prospectus after the date of this prospectus.

The following are definitions of certain terms that are commonly used in the shipping industry and in this prospectus.

Annual survey. The inspection of a vessel pursuant to international conventions, by a classification society surveyor or on behalf of the flag state, that takes place every year.

Bareboat charter. Charter of a vessel under which the shipowner is usually paid a fixed amount of charterhire for a certain period of time during which the charterer is responsible for the vessel’s operating expenses, and voyage expenses, as well as the management of the vessel, including crewing. A bareboat charter is also known as a “demise charter” or a “time charter by demise.”

Bhp or brake horsepower. The actual or useful horsepower of an engine, usually determined from the force exerted on a friction brake or dynamometer connected to the drive shaft.

Charter. The hire of a vessel for a specified period of time or to carry a cargo from a loading port to a discharging port.

Charterhire. A sum of money paid to the shipowner by a charterer under a charter for the use of a vessel.

Classification society. An independent society that certifies that a vessel has been built and maintained according to the society’s rules for that type of vessel and complies with the applicable rules and regulations of the country of the vessel and the international conventions of which that country is a member. A vessel that receives its certification is referred to as being “in-class.”

Clean petroleum products. Liquid products refined from crude oil whose color is less than or equal to 2.5 on the National Petroleum Association scale. Clean petroleum products include naphtha, jet fuel, gasoline and diesel/ gasoil.

Contract of affreightment or COA. A contract for the carriage of a specific type and quantity of cargo, with payment based on metric tons of cargo carried, which will be carried in one or more shipments. For a COA, the vessel owner or operator generally pays all voyage expenses and vessel operating expenses and has the right to substitute one vessel for another. The rate is generally expressed in dollars per metric ton of cargo. Revenues earned under COAs are referred to as “freight.” When used herein, COA also refers to a voyage charter.

Dirty petroleum products. Liquid products refined from crude oil whose color is greater than 2.5 on the National Petroleum Association scale. Dirty products will usually require heating during the voyage as their viscosity or waxiness makes discharge difficult at ambient temperatures. Dirty petroleum products include fuel oil, Low Sulfur Waxy Residue, or “LSWR” and Carbon Black Feedstock, or “CBFS.”

Double hull. Hull construction design in which a vessel has an inner and outer side and bottom separated by void space.

Drydocking. The removal of a vessel from the water for inspection and/or repair of those parts of a vessel which are below the water line. During drydockings, which are required to be carried out periodically, certain mandatory classification society inspections are carried out and relevant certifications issued.

Dwt or Deadweight ton. A unit of a vessel’s capacity for cargo, fuel oil, stores and crew measured in metric ton units which is equal to 1,000 kilograms.

Gross ton. A unit of measurement for the total enclosed space within a vessel equal to 100 cubic feet or 2.831 cubic meters.

Hidrovia region. A region of navigable waters in South America on the Parana, Paraguay and Uruguay Rivers and part of the River Plate, which flow through Brazil, Bolivia, Uruguay, Paraguay and Argentina. The region covers the entire length of the Parana River south of the Itaipu Dam, the entire length of the Paraguay River south of Corumba, the Uruguay River and the River Plate west of Buenos Aires. Our definition of the Hidrovia region is wider than the common usage of such term.

IMO. International Maritime Organization, a United Nations agency that issues international standards for shipping.

Lightering. To discharge the cargo of a larger vessel located offshore into a smaller vessel used to transport the cargo to the shore.

OBO or Oil/ Bulk/ Ore. A combination carrier capable of transporting oil products, ore or dry bulk commodities.

Off hire. The period a vessel is unable to perform the services for which it is immediately required under a time charter. Off hire periods include days spent on repairs, drydocking and surveys, whether or not scheduled.

Panamax. A vessel of approximately 50,000 to 79,999 dwt. The term is derived from the maximum length, breadth and draft of a vessel capable of passing through the Panama Canal.

Petroleum products. Refined crude oil products, such as fuel oils, gasoline and jet fuel.

Product tanker. A tanker designed to carry a variety of liquid products varying from crude oil to clean and dirty petroleum products, acids and other chemicals. The tanks are coated to prevent product contamination and hull corrosion. The ship may have equipment designed for the loading and unloading of cargoes with a high viscosity.

Protection and indemnity or P&I insurance. Insurance obtained through a mutual association formed by shipowners to provide liability insurance protection against large financial loss to one member by contribution to offset that loss by all members.

PSV or platform supply vessel. A vessel ranging in size from approximately 150 feet to 275 feet in length that serves oil drilling and production facilities by transporting supplies and equipment to offshore locations, utilizing a large clear deck and under deck tanks.

Special survey. The inspection of a vessel while in drydock by a classification society surveyor that takes place every four to five years.

Spot market. The market for immediate chartering of a vessel, usually for single voyages.

Suezmax. A tanker ranging in size from 120,000 dwt to 199,999 dwt. The term is derived from the maximum length, breadth and draft of a vessel capable of passing through the Suez Canal.

Tanker. A ship designed for the carriage of liquid cargoes in bulk with cargo space consisting of segregated tanks. Tankers carry a variety of products including crude oil, refined products, liquid chemicals and liquefied gas.

Time charter. Charter under which the shipowner is paid charterhire on a per day basis for a certain period of time. The shipowner is responsible for providing the crew and paying vessel operating expenses while

ULCC or Ultra large crude carrier. A tanker that is 320,000 dwt or greater in size.

Vessel operating expenses or running costs. The costs of operating a vessel that are incurred during a charter, primarily consisting of crew wages and associated costs, insurance premiums, lubricants and spare parts, and repair and maintenance costs. Vessel operating expenses or running costs exclude fuel costs and port fees, which are known as “voyage expenses.” For a time charter, the shipowner pays vessel operating expenses. For a bareboat charter, the charterer pays vessel operating expenses.

VLCC or Very large crude carrier. A tanker ranging in size from 200,000 to 319,999 dwt.

Voyage charter. Contract for hire of a ship under which a shipowner is paid freight on the basis of moving cargo from a loading port to a discharge port. The shipowner is responsible for paying both vessel operating expenses and voyage expenses. The charterer is typically responsible for any delay at the loading or discharging ports. A voyage charter is also known as a contract of affreightment or COA.

Voyage expenses. Expenses incurred due to a vessel traveling to a destination, such as fuel cost and port fees.

SUMMARY

This summary highlights selected information in this prospectus, including documents that are incorporated by reference. It may not contain all the information that may be important to you. As an investor or prospective investor, you should review carefully the risk factors and the more detailed information and financial statements, including the unaudited condensed consolidated pro forma financial information, contained elsewhere in this prospectus. In this prospectus, unless the context otherwise indicates, the terms “we,” “us” and “our” (and similar terms) refer to Ultrapetrol (Bahamas) Limited and our subsidiaries and joint ventures. We recently acquired from our former joint venture partner the remaining 50% equity interest in UABL Limited, which is the subsidiary through which we operate our River Business. Throughout this prospectus, we have included pro forma financial information which gives effect to the consolidation of the River Business into our financial statements. Certain pro forma information also gives effect to the deconsolidation of our Offshore Business from our financial statements and the refinancing of our outstanding notes and certain existing credit facilities with the proceeds of the offering of our outstanding notes.

Our Company

We are focused on growing with an efficient and flexible fleet, which allows us to provide an array of transportation services to customers in several different industries. We believe that the flexibility of our fleet and the diversity of industries that we service reduce our dependency on any particular sector of the transportation industry.

Some of our significant customers in the last three years include Petrobras, Cargill, ENAP, ADM-SAO, Continental Grain, Glencore, ExxonMobil, Repsol-YPF, Petropar, I.O.L., Multigranos, Panocean, RTZ, Swissmarine, PDVSA and Siderar.

Our Lines of Business

Ocean Business: In our Ocean Business, we own and operate five oceangoing vessels and two semi-integrated oceangoing tug barge units (one of which is currently used as a transfer station in our River Business) under the trade name Ultrapetrol. Our oceangoing ships transport dry and liquid bulk goods on major trade routes around the globe. Major products carried include liquid cargo such as petroleum and petroleum derivatives and dry cargo, iron ore, coal and other bulk cargoes. Over the course of the last six years, we have acquired an ocean fleet that operates on a global basis and currently has an aggregate cargo carrying capacity of approximately 785,000 dwt and an average age of 18 years. A table detailing our ocean fleet is presented below:

Vessel

Year Built

Vessel Type

DWT

Flag

Princess Katherine

1986

Suezmax/OBO

164,100

Panama

Princess Nadia

1987

Suezmax/OBO

152,328

Panama

Princess Susana

1986

Suezmax/OBO

152,295

Panama

Cape Pampas⁽¹⁾

1990

Capesize

151,380

Panama

Princess Marina

1986

Aframax

83,930

Chile

Alianza G2⁽²⁾/Alianza Rosario

1994

⁽³⁾

Semi-integrated tug/barge unit

37,532

⁽⁵⁾

Panama

Alianza G3/Alianza Campana

1993

⁽⁴⁾

Semi-integrated tug/barge unit

43,164

⁽⁵⁾

Panama

(1) Owned by Ultracape (Holdings) Ltd., of which we own 60%.

(2) Although Alianza G2 is considered part of our ocean fleet, it is currently engaged as a transfer station in the lower Parana River as part of our River Business.

(3) The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered in 1984. It was refurbished and converted to its current use in 1994. The separate but integrated tug, Alianza Rosario, was built in 1976.

(4) The barge, Alianza G3, was built in 1982 and refurbished and converted to its current use in 1993. The separate but integrated tug, Alianza Campana, was built in 1976.

(5) As the tug carries no cargo, it is not considered in the calculations of aggregate dwt or age.

Our Aframax and Suezmax vessels are versatile due to their ability to service virtually all major routes used for crude oil transportation. In addition, our Suezmax tankers, which are Oil/ Bulk/ Ore carriers, or OBOs, have the added versatility of being able to carry either oil products or dry bulk cargoes to take advantage of changing market conditions. Given the rise during 2003 and early 2004 in spot market prices for dry cargo, these vessels, together with our Capesize bulk carrier, Cape Pampas, are currently employed in the carriage of bulk dry cargoes on trade routes around the world, mostly loading coal and iron ore from South America, Australia and South Africa to Europe, China and other Far East countries. Over 86% of our revenues since September 2003 derived from charterers in Europe, the U.S. and Asia. Over the same period, approximately 74% of our revenues derived from longer term time charters with at least three months duration and 26% from shorter term time charters.

As a policy decision, since the beginning of 2003, we sold all of our older single hull Panamax and Aframax tankers that we used to service the regional trade of Argentina and Brazil. Over the next several years, we intend to rebuild the Panamax size fleet with modern double hull vessels that can service the needs of our customers safely and efficiently.

River Business: We operate our River Business through our trade name UABL. We own and operate 457 barges with approximately 750,000 dwt capacity and 21 push boats. In addition, we use one ocean barge from our ocean fleet, the Alianza G2, as a transfer station. Of the barges, 413 are dry barges and 44 are tanker barges. The dry barges transport agricultural and forestry products, iron ore and other cargoes, while the tanker barges carry petroleum products, vegetable oils and other liquids.

We operate our push boats and barges on the navigable waters of the Parana, Paraguay and Uruguay Rivers and part of the River Plate in South America, also known as the Hidrovia region. At over 3,700 km in length, the Hidrovia region is comparable in length to the Mississippi River in the United States.

Over the last six years, we have developed our River Business from one river convoy comprised of one push boat and four barges to the leading river transportation company in the Hidrovia region. In comparison, we believe our largest competitor has less than one-fourth of the number of barges we own and less than one-fifth of our fleet’s dwt capacity. UABL operates its own terminals at certain key locations to provide integral transportation services to its customers from origin to destination. We also have our own drydock and repair facility to carry out maintenance to the fleet and operate a floating transshipment facility to discharge the cargoes from barges onto oceangoing vessels in the lower section of the Parana River.

The Hidrovia region produces and trades a significant amount of agricultural products and has shown consistent growth over the last 10 years. For example, Argentina, Brazil, Paraguay, and Bolivia produced about 39.6 million tons of soybeans in 1993 and 92.6 million tons in 2003, a compound annual growth rate from 1993 of 8.9%. DSC estimates production for these countries for 2004 at 112.0 million tons, yielding a compounded annual growth rate from 1993 of 9.9%. These countries accounted for nearly 50% of world soybean production in 2003, growing from only 34% in 1993.

UABL, together with its assets in the Hidrovia region, including 50 barges and seven push boats and its share of the related receivables and liabilities of UABL, for a total of $26.1 million. As a result of this transaction, together with our prior financing arrangements, we currently own 96.4% of UABL while International Finance Corporation (“IFC”) owns the remaining 3.6%.

Offshore Business — Future Opportunity: We own a 27.78% interest in UP Offshore (Bahamas) Ltd. (“UP Offshore”), and we have warrants to increase our ownership up to approximately 47.78%. UP Offshore expects to take delivery of six platform supply vessels, or PSVs, commencing in the first quarter of 2005. UP Offshore plans to employ its PSVs to provide transportation services to the offshore petroleum exploration and production companies, with particular emphasis in the Brazilian market. PSVs are designed to transport supplies such as containerized equipment, drill casing, pipes and heavy loads on deck, along with fuel, water, drilling fluids and bulk cement in under deck tanks.

Our Competitive Strengths

We believe that the following strengths are critical to our success:

• We Are a Diversified Transportation Company. We operate in different sectors of the transportation industry, including the ocean and river industries and, beginning in 2005, the offshore oil support industry. While we believe that there are synergies between our Ocean and River transportation businesses, particularly in terms of the operational expertise and customer base, the factors that affect supply and demand, the cost structure, and the business risks are different. The offshore oil support segment is a different industry and should provide further diversity from the ocean and river segments. Accordingly, our diversification provides a hedge against potentially cyclical markets.

• We Have a Versatile Ocean Fleet. Over the past decade, we have focused on building a versatile ocean fleet to meet the demands of a changing marketplace. We believe that our three Suezmax/ OBO vessels are ideally suited to take advantage of the changing relative conditions of the dry cargo and liquid cargo tanker markets. Our vessels that carry dry cargo can be made ready to carry liquid cargo and vice versa within a matter of days. These vessels, together with our Capesize bulk carrier, Cape Pampas, of which we own 60%, generated 83% of our Ocean Business revenues for the 12 month period ended September 30, 2004. Further, our Aframax tanker has the unusual feature of being able, despite its large dwt, to transit the Panama Canal because of her narrow beam. This design is particularly attractive for customers who wish to employ an Aframax size vessel but who occasionally need to bring cargoes through the Panama Canal.

• Our Increased Scale Generates Efficiencies. Our combined ocean and river fleet has a capacity of approximately 1.5 million dwt and close to 500 units. Our relative size offers economies of scale and, in our River Business, negotiating power. For example, in our River Business, our size has allowed us to implement a different operational system than our competitors, called a trunk mode, that enables us to service our clients with a continuous stream of available barges.

• We Have Long Term, High Quality Customer Relationships. We have operated our vessels in South America and around the globe since our business began in 1992. We have long-standing relationships with large, stable customers, including affiliates of major international oil and agriculture companies, such as Petrobras, the government controlled oil and gas company of Brazil, Cargill, ADM-SAO, Continental Grain and ENAP. These are long term customer relationships that arise from our reputation for reliability and high-quality service. Our two largest customers, Petrobras and Cargill, accounted for approximately 26% and 12% of revenues in 2003, respectively, and our five largest customers in terms of revenue accounted for approximately 57% in 2003.

• We Possess Superior Technology. We have made significant investment in our technology systems. For example, in addition to having state of the art navigational, operational and safety technology in our Ocean Business, our River Business has developed a proprietary navigational system that allows its tows to operate 24 hours a day navigating through a river system that lacks signalization for night navigation. These systems enable our River Business to use its assets more efficiently than its


		competitors while providing a unique service to its customers. We have also developed a proprietary design for our new PSVs in conjunction with the renowned Norwegian ship designer, Vik Sandvik. This design can only be reproduced with the consent of UP Offshore.

	•	We Have a Reputation for High Standards of Performance and Safety. We pride ourselves on our operational excellence, our ability to provide high quality service and our commitments to safety, quality and the environment. The quality of our vessels as well as the expertise of our vessel crews and engineering resources help us maintain highly reliable and consistent performance. We maintain well documented and internationally certified safety and quality management systems, perform periodic audits and conduct training, each of which affects all areas of our activities, including operations, maintenance and crewing. In our Ocean Business, our ship management is certified under the International Safety Management “ISM” Code and is ISO 9001:2000 certified by the International Organization for Standardization (“ISO”).

	•	We Have an Established History and Experienced Management Team. Our management team is led by members of the Menendez family. The family collectively has been involved in the shipping industry for over 120 years. Our senior executive officers have on average 32 years of experience in the shipping industry. Our management team has significant expertise in various lines of business and has been instrumental in developing and maintaining our certified safety and quality management systems and our operational plans. Further, our management has helped us design and develop innovative and flexible vessel designs.

Our Business Strategy

Our business strategy is to continue to grow by leveraging our expertise and customer relationships through our investments in different sectors of the transportation industry. We are well recognized by our clients in the global transportation of petroleum and dry cargo and plan to selectively grow the Ocean Business. Our River Business is the leading barge transportation company in the Hidrovia region and is well positioned to grow. Finally, commencing in 2005, we plan on expanding into the Brazilian offshore oil platform supply services industry in order to capitalize on attractive trends in that market. We plan to implement our business strategy by doing the following:

• Growing our Ocean Fleet with Versatile Vessels. We intend to expand our ocean fleet by selectively adding versatile vessels through the acquisition of secondhand vessels and newbuildings. For example, we plan on adding Panamax tankers capable of carrying both crude oil and petroleum products as well as smaller petroleum product carriers to our fleet. We believe that by acquiring and building these vessels, we will be able to target different market sectors. In addition, the new Panamax tankers will fill a demand from our existing customers for vessels to service routes where both the point of origin and destination is in South America. These ships are intended to replace the older single hull vessels we sold since 2002.

• Redeploying Vessels to the Most Attractive Markets. Due to the flexibility of our oceangoing vessels, we have the ability, under appropriate market conditions, to alter the geographic and industry focus of our operations by redeploying vessels to the most profitable markets. For example, as a result of rising demand out of China during 2003, we switched our three Suezmax/ OBOs from liquid to dry cargo carriers. These redeployed vessels have for the past year earned average day rates that are approximately 50% higher than they could have earned by carrying petroleum products. In addition, we actively manage the deployment of our fleet between longer term time charters and shorter term time charters. Our vessel deployment strategy is designed to provide greater cash flow stability through the use of these longer term time charters, while maintaining the flexibility to benefit from improvements in market rates by deploying the balance of our vessels on shorter term time charters.

• Capitalizing on Attractive Fundamentals in our River Business. There are a number of attractive fundamentals in the Hidrovia region river transportation business. We plan to use our leading market position in this region to capitalize on the following fundamentals:

— Growing Agricultural Exports. During 2003, Brazil, Argentina, Paraguay and Bolivia produced over 90 million tons of soy, which represents approximately 50% of world production, as compared to the 66 million tons produced by the United States. Moreover, the region continues to have large amounts of unused arable land available for soy and other crops.

— Efficient Means of Transportation. River barges provide efficient and cost-effective transportation relative to railroads and trucks. One barge can transport as much as 15 jumbo hopper rail cars or 58 trucks. Additionally, the capacity of a 15 barge tow is equivalent to 870 trucks. As important, a 15 barge tow can be manned by only 8 crew members.

— Shortage of Infrastructure. There currently exists a shortage of adequate rail and highway infrastructure in South America to meet the growing demand of exporters. By contrast, the navigable portion of the Hidrovia region is over 3,700 km long, passes through the heart of the agricultural region and is ideally situated to suit the needs of the agricultural community. In addition, over the past several years, we have added through a joint venture a significant amount of infrastructure to the river systems, such as docks, ports and terminals, over which we essentially have an exclusive right of use. Our proprietary infrastructure allows us to better serve our customers by increasing the number of barges we can efficiently load on the river in our loading facilities.

• Expanding into the Offshore Industry and Growing through Strategic Investments. We own approximately 27.78% of a new venture, UP Offshore, which will provide services to petroleum exploration and production companies that operate mainly off the coast of Brazil. UP Offshore has contracted for the construction of six modern, large, technologically advanced PSVs whose deliveries are expected to commence in the first quarter of 2005, with an additional two vessels planned to be purchased by UP Offshore. We also have the option, but not the obligation, to purchase up to an additional two PSVs to supplement UP Offshore’s program, but these two vessels would be 100% owned by us. All six of UP Offshore’s PSVs will have Brazilian flag privileges, which gives us a competitive advantage over non-Brazilian flagged vessels because the Brazilian government generally requires that offshore platform supply services be provided by a Brazilian flagged vessel, if available. Currently, there are approximately 150 vessels in the Brazilian offshore fleet, of which we estimate only 40% are Brazilian flagged vessels. We intend to charter these six new PSVs on long term charters to Petrobras and other oil companies for use in Brazil. Brazil’s oil reserves are the second largest in South America, with over 90% of the reserves located offshore. Currently, Petrobras has a majority of the market share in the offshore drilling market, but recently the oil exploration and production market was opened in Brazil to private and foreign participation, which we believe will allow for growth and customer diversification. We have also recently made an investment of $2 million in a terminal in Mexico with a view towards expanding our transportation services to that area.

• Focusing on Generating Operational Efficiencies. In all the segments of the transportation business in which we operate, we have identified growth opportunities that should consolidate our position in each segment and should improve overall efficiency and profitability of our existing lines of business. For example, key initiatives include continued rationalization of ship schedules and maximizing yield in our Ocean Business. In our River Business, we focus on optimizing our barge and tug scheduling, maximizing loads and convoy size and minimizing empty back-hauls. Going forward, we expect to continue to find opportunities to rationalize costs and operate more efficiently.

Outsourced Vessel Technical Management and Crewing

For the day-to-day management and administration of our operations, we and our subsidiaries have entered into agreements whereby certain of our subsidiaries and affiliates provide specific services for our operations.

For administrative services, each of our ocean vessel owning/operating subsidiaries pays Oceanmarine S.A. (“Oceanmarine”), an affiliate of ours, a monthly fee of $10,000 per vessel. Oceanmarine provides all general administration and accounting services, including financial reporting, preparation of tax returns, invoicing and accounts payable, office premises, a computer network, secretarial assistance, payroll and other general duties.

Through our respective owning/operating subsidiaries, we have contracted with Ravenscroft Ship Management Ltd. (“Ravenscroft”), an affiliate of ours, to provide the operational management of our vessels used in the Ocean Business. We pay Ravenscroft a monthly ship management fee of $12,500 per oceangoing vessel for services, including technical management, crewing, provisioning, superintendence and related accounting functions. Ravenscroft also provides communication services for our vessels and serves as a contact with clients and shipping agencies. Ravenscroft is duly ISM and ISO 9001:2000 certified.

Ravenscroft also manages a number of vessels for third party owners not related to us. On a per vessel basis and in relation with the complexity of the vessel, the fees earned by Ravenscroft from such third party owners are substantially equivalent to the fees paid by us.

In the case of our River Business, our ship management occurs in-house.

Corporate Structure and Ownership

The following diagram is intended to illustrate our general corporate structure and the basic relationships of our businesses and subsidiaries to the restricted group of companies under the indenture and does not specifically identify all of the guarantors or pledgors under the indenture. Some of our restricted subsidiaries have issued other debt to finance their vessels, as described in this prospectus. Our actual corporate structure is more complex, including over 60 direct and indirect subsidiaries.

(ULTRAPETROL (BAHAMAS) LTD. FLOW CHARG)

Our shareholders are Solimar Holdings Ltd., Inversiones Los Avellanos S.A. and Avemar Holdings (Bahamas) Ltd. Solimar Holdings Ltd. is a wholly owned subsidiary of AIG-GE Capital Latin American Infrastructure Fund L.P. (“LAIF”), and owns 46.7% of our common shares. Inversiones Los Avellanos S.A. and Avemar Holdings (Bahamas) Ltd. collectively own the remaining 53.3% of our common shares. Inversiones Los Avellanos S.A. is controlled by members of the Menendez family, including Felipe Menendez R., our President and Chief Executive Officer and a director, and Ricardo Menendez R., a director. The sole shareholder of Inversiones Los Avellanos S.A. is SIPSA S.A. (as such entity is defined in

“Description of the Exchange Notes”). Avemar Holdings (Bahamas) Ltd. has granted an irrevocable proxy to Inversiones Los Avellanos S.A. in full for all of its voting powers and therefore Inversiones Los Avellanos S.A. currently holds 53.3% of the voting rights of our common shares. LAIF was established in 1996 to make equity investments in South America, Mexico, Central America and the Caribbean countries. LAIF has approximately $1.01 billion in total capital commitments.

Corporate History

We were formed on December 23, 1997 through the combination of Ultrapetrol S.A., an Argentinean corporation which was formed in 1992 by members of the Menendez family, Princely International Finance Corp., a Panamanian corporation, and their respective subsidiaries. At the time of our predecessor’s formation in 1992, our fleet consisted of one oceangoing vessel.

Over the past decade, our Ocean Business has developed primarily by employing our fleet to provide transportation services for our customers and using proceeds from the operation of our fleet along with other sources of capital to acquire additional vessels. In accordance with this strategy, in 1998, we issued $135.0 million of 10 1/2% First Preferred Ship Mortgage Notes due 2008 (the “Prior Notes”). The proceeds of the Prior Notes offering were used to refinance certain indebtedness, to acquire three additional oceangoing vessels and to buy barges, push boats and other equipment for our River Business. By 2001, our fleet reached 13 oceangoing vessels with a total capacity of 1.1 million dwt. During 2003, as a policy decision to remain ahead of changing regulations, we began to sell all of our single hull Panamax and Aframax tankers (5 vessels in total), a process which we completed in early 2004. Today’s oceangoing fleet of tankers and OBOs consists entirely of double hull vessels.

We began our River Business in 1993 through a 50% joint venture, which began with a fleet consisting of one push boat and four barges. We later purchased the interest of our joint venture partner and significantly increased the size of the barge fleet. In October 2000, we contributed part of these assets to UABL, a new joint venture with a new joint venture partner, ACBL, in which we, through our subsidiary, UP River, and ACBL each owned a 50% interest. From 2000 to 2004, we built UABL into the leading river barge company in the Hidrovia region. On April 23, 2004, we purchased the remaining 50% equity interest in UABL from ACBL, together with their other assets in the region, for $26.1 million. As a result of this transaction as well as our prior financing arrangements, we currently own 96.4% of UABL while IFC owns the remaining 3.6%.

Currently we own and operate five oceangoing vessels, 21 push boats, two semi-integrated oceangoing tug barge units (one of which we use as a transfer station) and 457 river barges. The aggregate cargo carrying capacity of our oceangoing fleet is approximately 785,000 dwt, while our river barge fleet has a capacity of almost 750,000 dwt.

Although we hold a 27.78% equity interest in UP Offshore, this entity was a restricted subsidiary under the indenture governing our Prior Notes because we had the right to control its Board of Directors. Accordingly, we have consolidated UP Offshore’s financial statements with our historical financial statements. In connection with the discharge of the indenture governing the Prior Notes, we relinquished control of the Board of Directors of UP Offshore and now account for our investment in UP Offshore under the equity method of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”).

Corporate Information

We are incorporated in the Bahamas under the name Ultrapetrol (Bahamas) Limited. Our registered office is situated at H&J Corporate Services Ltd., Shirlaw House, 87 Shirley Street, P.O. Box SS-19084, Nassau, Bahamas. Our telephone number there is 1-242-322-8571.

SUMMARY OF THE TERMS OF THE EXCHANGE OFFER

The following summary contains basic information about the exchange offer and is not intended to be complete. For a more complete understanding of the exchange offer, please refer to the section of this prospectus entitled “The Exchange Offer.”


Exchange Offer		We are offering to exchange up to $180,000,000 in aggregate principal amount of our 9% First Preferred Ship Mortgage Notes due 2014 that have been registered under the Securities Act, in exchange for any or all of our outstanding 9% First Preferred Ship Mortgage Notes due 2014. In this prospectus, we refer to the unregistered notes as the outstanding notes and the registered notes as the exchange notes. We refer to both the outstanding notes and the exchange notes collectively as the notes. The issuance of the exchange notes is intended to satisfy some of our obligations under the registration rights agreement entered into in connection with our private placement of the outstanding notes. For procedures for tendering your outstanding notes, please see the section of this prospectus entitled “The Exchange Offer.” The exchange notes will be issued in denominations of $1,000, and integral multiples of $1,000.

Expiration Date		The exchange offer expires at 5:00 p.m., New York City time, on , 2005, unless we extend the expiration date. Please read the section of this prospectus entitled “The Exchange Offer — Extensions, Delay in Acceptance, Termination or Amendment” for more information about the expiration date of the exchange offer.

Withdrawal of Tenders		You are entitled to withdraw your election to tender outstanding notes at any time prior to the expiration of the exchange offer. We will return to you, without charge, promptly after the expiration or termination of the exchange offer any outstanding notes that you tendered but that were not accepted for exchange.

Conditions to the Exchange Offer		We will not be required to accept outstanding notes for exchange:

		• if the exchange offer would be unlawful or would violate any interpretation of the staff of the SEC, or

		• if any legal action has been instituted or threatened that would impair our ability to proceed with the exchange offer.

		The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered. For more information about the conditions to the exchange offer please read the section of this prospectus entitled “The Exchange Offer — Conditions to the Exchange Offer.”

Procedures for Tendering Outstanding Notes		If your outstanding notes are held through The Depository Trust Company (“DTC”), and you wish to participate in the exchange offer, you may do so through DTC’s automated tender offer program. If you tender under this program, you will agree to be bound by the letter of transmittal that we are providing with this prospectus as though you had signed the letter of transmittal. By


		signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

		• any exchange notes that you receive will be acquired in the ordinary course of your business;

		• you have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes in violation of the Securities Act;

		• you are not an “affiliate” of ours or of any of our subsidiaries within the meaning of Rule 405 under the Securities Act; and

		• if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other trading activities, you will deliver a prospectus in connection with any resale of such exchange notes.

Special Procedures for Beneficial Owners		If you own a beneficial interest in outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the outstanding notes in the exchange offer, please contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf and to comply with our instructions described in this prospectus.

Guaranteed Delivery Procedures		You must tender your outstanding notes according to the guaranteed delivery procedures described in this prospectus under the heading “The Exchange Offer — Guaranteed Delivery Procedures” if any of the following apply:

		• you wish to tender your outstanding notes but they are not immediately available;

		• you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent, who is identified below, before the expiration date; or

		• you cannot comply with the applicable procedures under DTC’s automated tender offer program before the expiration date.

Resales		Except as indicated in this prospectus, we believe that the exchange notes may be offered for resale, resold and otherwise transferred without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

		• you are acquiring the exchange notes in the ordinary course of your business;

		• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes; and

		• you are not an affiliate of the Company or any subsidiary.

		Our belief is based on existing interpretations of the Securities Act by the SEC staff set forth in several no-action letters to third


		parties. We do not intend to seek our own no-action letter, and there is no assurance that the SEC staff would make a similar determination with respect to the exchange notes. If this interpretation is inapplicable, and you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from such requirements, you may incur liability under the Securities Act. We do not assume or indemnify holders of notes against such liability.

		Each broker-dealer that is issued exchange notes for its own account in exchange for outstanding notes that were acquired by that broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the exchange notes. Broker-dealers who acquired outstanding notes directly from us will not be eligible to receive exchange notes in return for those outstanding notes. A broker-dealer may use this prospectus for an offer to resell, resale or other transfer of the exchange notes. Please read the section of this prospectus entitled “Plan of Distribution” for more information regarding the resale of the exchange notes.

U.S. Federal Income Tax Considerations		The exchange of outstanding notes for exchange notes under the exchange offer will not be subject to U.S. Federal income tax. You will not recognize any taxable gain or loss or any interest income as a result of such exchange. For more information about tax considerations of the exchange offer please read the section of the prospectus entitled “Tax Considerations — United States Federal Income Tax Consequences.”

Use of Proceeds		We will not receive any proceeds from the issuance of the exchange notes pursuant to the exchange offer. We are making this exchange offer solely to satisfy our obligations under the registration rights agreement. We will pay all our expenses incident to the exchange offer.

Registration Rights		If we fail to complete the exchange offer as required by the registration rights agreement, we may be obligated to pay additional interest to holders of outstanding notes.

Exchange Agent		Manufacturers and Traders Trust Company is the exchange agent for this exchange offer. Please direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent. If you are not tendering under DTC’s automated tender offer program, you should send the letter of transmittal and any other required documents to the exchange agent as follows:

		Manufacturers and Traders Trust Company 25 South Charles Street, 16^th Floor Baltimore, MD 21201 Attention: Corporate Trust Administration Facsimile: (410) 244-4236 Telephone: (410) 949-3167

SUMMARY OF THE TERMS OF THE EXCHANGE NOTES

The summary below describes the principal terms of the exchange notes. Some of the terms and conditions described below are subject to important limitations and exceptions. A more detailed description of the terms and conditions of the exchange notes is contained in this prospectus in the section entitled “Description of the Exchange Notes.”


Issuer		Ultrapetrol (Bahamas) Limited.

Notes		$180,000,000 aggregate principal amount of 9% First Preferred Ship Mortgage Notes due 2014, which have been registered under the Securities Act. The terms of the exchange notes and the outstanding notes are identical in all material respects, except that the exchange notes will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with the registration rights agreement. The same indenture will govern the exchange notes as governs the outstanding notes.

Maturity Date		November 24, 2014.

Interest Payment Dates		May 24 and November 24 of each year, commencing May 24, 2005.

Guarantees		The notes are guaranteed, jointly and severally, on a senior basis, by certain of our existing and future subsidiaries that directly or indirectly own collateral. The notes are not guaranteed by the majority of our subsidiaries directly involved in our River Business or any of the entities involved in our Offshore Business. The notes are also not guaranteed by the Pledgors (as defined in “Description of the Exchange Notes”), although each has pledged assets owned by it as certain collateral.

Ranking		The notes and the subsidiary guarantees are our and the Subsidiary Guarantors’ (as defined in “Description of the Exchange Notes”) senior obligations. They rank equally in right of payment with all of our and the Subsidiary Guarantors’ existing and future senior indebtedness and senior in right of payment to all of our and the Subsidiary Guarantors’ existing and future subordinated indebtedness. In addition, the notes and subsidiary guarantees are structurally subordinated to all existing and future liabilities, including trade payables, of our subsidiaries (other than the Pledgors (as defined in “Description of the Exchange Notes”) to the extent of the collateral pledged by them) that are not providing guarantees. See “Description of the Exchange Notes — Ranking.”

Security and Collateral		The notes and subsidiary guarantees are secured by first preferred ship mortgages on 16 vessels, two oceangoing barges and 193 river barges owned, directly or indirectly, by the Subsidiary Guarantors and the Pledgors, as well as first priority liens on, among other things, the earnings and insurances on each such mortgaged vessel or barge. In addition, the Escrowed Proceeds (as defined in “Description of the Exchange Notes”), as well as any vessels acquired with the Escrowed Proceeds, also secure the notes and the subsidiary guarantees. As of September 2004, the appraised value of these vessels and barges was approximately $165.6 million, and the Escrowed Proceeds were approximately $30.0 million. The notes and subsidiary guarantees are not secured by vessels we


		acquire in the future other than vessels that are acquired with Escrowed Proceeds or that serve as substitute collateral, nor are they secured by any related liens on the earnings and insurances on any newly acquired vessel that is not acquired with Escrowed Proceeds or that does not constitute substitute collateral. The notes and subsidiary guarantees are not secured by any vessels owned by our subsidiaries that are not Subsidiary Guarantors or Pledgors, including the majority of our subsidiaries directly involved in our River Business and all of the entities involved in our Offshore Business. In addition, the notes and subsidiary guarantees are secured by first priority liens on the capital stock of each Subsidiary Guarantor (other than Ultrapetrol S.A., Parfina S.A. and Oceanpar S.A.) (but only to the extent that, as to any subsidiary, such a pledge of capital stock does not give rise to reporting requirements on the part of such subsidiary under the rules of the SEC or any other governmental authority). See “Description of the Exchange Notes — Limitations on Stock Collateral.”

Special Mandatory Redemption for Escrowed Funds		At the time of the offering of the outstanding notes, we entered into an escrow agreement (the “Escrow Agreement”) with Manufacturers and Traders Trust Company, as Escrow Agent, pursuant to which we initially deposited in an account (the “Escrow Account”) with the Escrow Agent an amount equal to approximately $30.0 million, which will be released in connection with the acquisition by us of additional vessels upon the satisfaction of certain conditions. To the extent that after December 31, 2005 amounts on deposit in the Escrow Account exceed $1.0 million, we will be required to redeem as much principal amount of notes as can be redeemed with such amounts on deposit at a redemption price equal to 101% of the principal amount of such notes together with accrued and unpaid interest thereon to the date of such redemption. See “Description of the Exchange Notes — Escrow of Proceeds; Special Mandatory Redemption.”

Optional Redemption		Prior to November 24, 2009, we may redeem all, but not less than all, the notes for cash at a redemption price equal to 100% of their principal amount plus the Applicable Premium (as defined in “Description of the Exchange Notes — Redemptions — Optional Redemption upon Make Whole Payment”) plus accrued and unpaid interest to the redemption date.

		We may redeem some or all of the notes at any time on or after November 24, 2009, in whole or in part, at the redemption prices listed under “Description of the Exchange Notes — Redemptions — Other Redemption,” plus accrued and unpaid interest and additional interest, if any, to the date of the redemption.

		In addition, prior to November 24, 2007, we may redeem up to 35% of the original principal amount of the notes with the proceeds of one or more equity offerings at a redemption price of 109% plus accrued interest to the redemption date, provided, that at least $115.0 million aggregate principal amount of the notes remain


		outstanding and be held, directly or indirectly, by persons other than us and our affiliates, after each such redemption. See “Description of the Exchange Notes — Redemptions — Redemption upon Public Equity Offering.”

Redemption upon a Change in Tax Law		We may redeem the notes, at any time as a whole but not in part, at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption, in the event that we or any of the Subsidiary Guarantors has become or would become obligated to pay certain amounts as a result of the imposition of withholding taxes on the notes as a result of a change in the laws of Argentina, the Bahamas, Bolivia, Chile, Liberia, Panama, Paraguay or Uruguay.

Redemption upon the Loss of a Mortgaged Vessel		Upon an Event of Loss (as defined in “Description of the Exchange Notes”) with respect to a Mortgaged Vessel (as defined in “Description of the Exchange Notes”), we must either (a) redeem notes, in whole or in part, in an aggregate principal amount equal to the Vessel Percentage (as defined in “Description of the Exchange Notes”) applicable to such lost Mortgaged Vessel multiplied by the principal amount of notes then outstanding, at a redemption price equal to 100% of the principal amount of such redeemed notes plus accrued interest to such redemption date or (b) if no Event of Default (as defined in “Description of the Exchange Notes”) shall have occurred and be continuing, substitute a Qualified Substitute Vessel (as defined in “Description of the Exchange Notes”) within twelve months after the receipt of the proceeds from such Event of Loss of such Mortgaged Vessel. See “Description of the Exchange Notes — Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel” and “Description of the Exchange Notes — Tender of Qualified Substitute Vessel.”

Redemption upon Sale of a Mortgaged Vessel		Upon the permitted sale of a Mortgaged Vessel (or the capital stock of a Subsidiary Guarantor or a Pledgor), we must either (a) redeem notes, in whole or in part, in an aggregate principal amount equal to the Vessel Percentage applicable to the Mortgaged Vessel (or the related capital stock) being sold multiplied by the principal amount of notes then outstanding, at a redemption price equal to the sum of (1) the greater of (i) 100% of such principal amount and (ii) (x) if such redemption date is on or after November 24, 2009, the redemption price then applicable as described under “Description of the Exchange Notes — Redemptions — Other Redemption,” or (y) if such redemption date is prior to November 24, 2009, the redemption price on November 24, 2009 (as described under “Description of the Exchange Notes — Redemptions — Optional Redemption upon Make Whole Payment”) as discounted to its present value to the redemption date and (2) accrued and unpaid interest to the redemption date (such price, the “Sale Redemption Price”) or (b) substitute a Qualified Substitute Vessel within twelve months


		after the receipt of the proceeds from such sale of such Mortgaged Vessel (or capital stock). See “Description of the Exchange Notes — Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel” and “Description of the Exchange Notes — Tender of Qualified Substitute Vessel.”

Redemption upon Permitted Bareboat Charter		If we, a Subsidiary Guarantor or any Pledgor enters into a Bareboat Charter (as defined in “Description of the Exchange Notes”) with respect to a Mortgaged Vessel, then after title to such Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, we must either (a) redeem notes using the Sale Equivalent Portion (as defined in “Description of the Exchange Notes”) of such Bareboat Charter Funds (as defined in “Description of the Exchange Notes”) in respect of such Mortgaged Vessel at the Sale Redemption Price or (b) tender to the Trustee as part of the collateral one or more vessels purchased using the Sale Equivalent Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel.

Change of Control		Upon a change in control, we will be required to make an offer to purchase each holder’s notes at a price of 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase. See “Description of the Exchange Notes — Change of Control.”

Additional Amounts		All payments by us or the Subsidiary Guarantors in respect of the notes, whether of principal or interest, will be made without withholding or deduction of any taxes imposed by or within Argentina, the Bahamas, Bolivia, Chile, Liberia, Panama, Paraguay or Uruguay or, in each case, any political subdivision or taxing authority thereof or therein, unless such withholding or deduction is required by law or the interpretation and administration thereof, in which case, subject to specified exceptions and limitations, we or the Subsidiary Guarantors, as the case may be, will pay such additional amounts as may be necessary so that the net amount received by the holders of the notes after such withholding or deduction will not be less than the amount that would have been received in the absence of such withholding or deduction. See “Description of the Exchange Notes — Withholding Taxes.”

Certain Covenants		The indenture contains covenants that limit our ability and certain of our subsidiaries to:

		• incur or guarantee additional indebtedness;

		• pay dividends on our capital stock or redeem, repurchase or retire our capital stock and subordinated indebtedness;

		• create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries;

		• transfer or sell assets, including the capital stock of our subsidiaries;

		• create liens;

SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated financial information set forth below may not contain all of the financial information that you should consider when making a decision whether to participate in the exchange offer. You should carefully read our financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Unaudited Pro Forma Condensed Consolidated Financial Information” included elsewhere in this prospectus for additional financial information about us. Our condensed financial data relating to the fiscal years ended December 31, 2001, 2002 and 2003 has been derived from our respective audited consolidated financial statements. Our condensed financial data as of and for the nine month periods ended September 30, 2003 and 2004 has been derived from our respective unaudited financial information statements included in this prospectus and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the information set forth in those financial statements on a basis consistent with our respective audited financial statements.

The summary pro forma financial data with respect to the statement of operations for the nine month period ended September 30, 2004 gives effect to the Transactions (as defined in “Unaudited Pro Forma Condensed Consolidated Financial Information”) as if they occurred as of January 1, 2003, and the summary pro forma financial data with respect to the balance sheet as of September 30, 2004 gives effect to the Transactions as if they occurred as of September 30, 2004.


																	Pro Forma
																	for the
											Nine Month Period						Nine Month
		Year Ended December 31,									Ended September 30,						Period Ended
																	September 30,
		2001			2002			2003			2003			2004⁽¹⁾			2004

																	(Unaudited)
											(Unaudited)

		(Dollars in thousands)
Statement of Operations Data:
Revenues:⁽²⁾
	Freight revenues	$	73,667		$	24,743		$	26,487		$			$			$
	Hire revenues		37,541			48,381			48,746

Total revenues			111,208			73,124			75,233			55,576			71,534	⁽³⁾		79,847	⁽⁴⁾
Operating expenses⁽⁵⁾			(60,504	)		(37,582	)		(41,303	)		(32,588	)		(28,915	)		(34,676	)
	Depreciation and amortization		(23,443	)		(24,807	)		(22,567	)		(17,637	)		(13,380	)		(14,200	)
	Management fees to related parties⁽⁶⁾		(3,250	)		(3,176	)		(2,863	)		(2,211	)		(1,174	)		(1,174	)
	Administrative expenses		(4,520	)		(3,642	)		(4,955	)		(2,952	)		(4,678	)		(4,830	)
	Loss on involuntary conversion Arg. Receivable⁽⁷⁾					(2,704	)

Net operating income			19,491			1,213			3,545			188			23,387			24,967
Financial expense			(17,698	)		(16,763	)		(14,425	)		(12,006	)		(10,996	)		(13,506	)
Financial income			296			326			201			182			232			232
Investment in subsidiaries			(692	)		(45	)		3,140			4,214			233			129
Other net income (expenses)			1,408			1,698			(2,461	)		1,361			112			105

Income (loss) before income tax and minority interest			2,805			(13,571	)		(10,000	)		(6,061	)		12,968			11,927
Minority interest			—			(132	)		(1,333	)		(672	)		(568	)		(814	)
Income tax expense			(390	)		(150	)		(185	)		(139	)		(178	)		(459	)

Net income (loss)		$	2,415		$	(13,853	)	$	(11,518	)	$	(6,872	)	$	12,222		$	10,654


																Pro Forma
																for the
										Nine Month Period						Nine Month
	Year Ended December 31,									Ended September 30,						Period Ended
																September 30,
	2001			2002			2003			2003			2004⁽¹⁾			2004

																(Unaudited)
										(Unaudited)

	(Dollars in thousands)
Balance Sheet Data (end of period):
Cash and cash equivalents	$	5,872		$	4,724		$	8,248					$	15,051		$	14,352
Escrowed Proceeds																	30,000
Working capital		18,920			21,013			15,416						17,754			19,599
Fixed assets		135,289			134,797			120,803						200,058			160,829
Total assets		225,576			213,546			208,161						273,650			272,338
Total debt		165,445			168,994			155,814						187,288			222,168
Shareholders’ equity		47,838			35,089			23,793						35,931			29,465
Other Financial Data:
Net cash provided by operating activities	$	24,814		$	14,395		$	20,471		$	14,413		$	27,222
Net cash provided by (used in) investing activities		(14,133	)		(21,428	)		(6,285	)		(2,758	)		(54,857	)
Net cash provided by (used in) financing activities		(9,034	)		5,885			(10,662	)		(1,290	)		(34,438	)
Ratios:
Ratio of earnings to fixed charges⁽⁸⁾		1.2			⁽⁹	⁾		⁽⁹	⁾					2.0			1.7
Dollar amount of the coverage deficiency				$	13,526		$	13,140
Wholly owned oceangoing vessels at end of period		13			14			9			10			7			7

(1) In a series of related transactions, on April 23, 2004, through two wholly owned subsidiaries, we acquired from ACBL the remaining 50% equity interest in UABL Limited that we did not previously own, along with a fleet of 50 river barges and seven river push boats. The results of UABL Limited’s operations have been included in our condensed consolidated financial statements since that date.

(2) Freight revenues arise from arrangements whereby we have agreed to transport cargoes between ports and bear all voyage and vessel operating expenses, whereas hire revenues arise from our vessel time or voyage chartering operations.

(3) Includes total revenue from our Ocean Business of $39,862 and from our River Business of $31,672.

(4) Includes total revenue from our Ocean Business of $39,835 and from our River Business of $40,012.

(5) Operating expenses include voyage expenses and running costs. Voyage expenses, which are incurred when a vessel is operating under a contract of affreightment (as well as any time when they are not operating under time or bareboat charter), comprise all costs relating to a given voyage, including port charges, canal dues and fuel (bunkers) costs, are paid by the vessel owner and are recorded as voyage expenses. Voyage expenses also include charterhire payments made by us to owners of vessels that we have chartered in. Running costs, or vessel operating expenses, include the cost of all ship management, crewing, repairs and maintenance, spares and stores, insurance premiums and lubricants and certain drydocking costs.

(6) Management fees to related parties include payments to our affiliates Ravenscroft and Oceanmarine.

(7) This relates to a loss resulting from the involuntary conversion of certain receivables from U.S. dollars to Argentine pesos. This conversion resulted pursuant to an emergency law passed by the Argentine government in January 2002. Under this law U.S. dollar obligations between private parties due after January 6, 2002 were to be liquidated in Argentine pesos at a negotiated rate of exchange which reflects a

An investment in the notes involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus. Any of the following risks, as well as other risks and uncertainties, could harm the value of the notes directly, or our business and financial results and thus indirectly cause the value of the notes to decline. The risks described below are not the only ones that could impact us or the value of the notes. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. As a result of any of these risks, known or unknown, you may lose all or part of your investment in the notes.

We have a significant amount of indebtedness. For the nine months ended September 30, 2004, on a pro forma basis, after giving effect to the Transactions, we would have had total debt of approximately $222.2 million and interest expense of $14.8 million.

Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of, our indebtedness. Our substantial debt could also have other significant consequences. For example, it could:


	•	increase our vulnerability to general economic downturns and adverse competitive and industry conditions;

	•	require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

	•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

	•	place us at a competitive disadvantage compared to competitors that have less debt or better access to capital;

	•	limit our ability to raise additional financing on satisfactory terms or at all; and

	•	adversely impact our ability to comply with the financial and other restrictive covenants in the indenture governing the notes and the credit agreements governing the debts of our subsidiaries, which could result in an event of default under such agreements.

Furthermore, our interest expense could increase if interest rates increase because some of the debt under the credit facilities of our subsidiaries is variable rate debt. See “Description of Credit Facilities and Other Indebtedness.” If we do not have sufficient earnings, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or sell more securities, none of which we can guarantee we will be able to do.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the indenture governing the notes and the credit agreements governing the debts of our subsidiaries contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and restrictions, and the indebtedness incurred in compliance with these restrictions could be substantial. Furthermore, the indenture for the notes specifically allows us to incur additional debt. See

Our ability to make payments on and to refinance our indebtedness, including the notes and any amounts borrowed under any of our subsidiaries’ credit facilities, and to fund our operations, will depend on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated business opportunities will be realized on schedule or at all or that future borrowings will be available to us in amounts sufficient to enable us to service our indebtedness, including the notes and any amounts borrowed under our subsidiaries’ credit facilities, or to fund our other liquidity needs.

If we cannot service our debt, we will have to take actions such as reducing or delaying capital investments, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We cannot assure you that any of these remedies could, if necessary, be effected on commercially reasonable terms, or at all. In addition, the indenture for the notes and the credit agreements governing our subsidiaries’ various credit facilities may restrict us from adopting any of these alternatives. Because of these and other factors beyond our control, we may be unable to pay the principal, premium, if any, interest or other amounts due on the notes.

The indenture governing the notes and our subsidiaries’ credit facilities currently impose significant operating and financial restrictions on us, including those that limit our ability to engage in actions that may be in our long term interests. These restrictions limit our ability to, among other things:


	•	incur additional debt;

	•	pay dividends or make other restricted payments;

	•	create or permit certain liens;

	•	make investments;

	•	engage in sale and leaseback transactions;

	•	sell vessels or other assets;

	•	create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;

	•	engage in transactions with affiliates; and

	•	consolidate or merge with or into other companies or sell all or substantially all of our assets.

See “Description of Credit Facilities and Other Indebtedness” and “Description of the Exchange Notes — Certain Covenants.” These restrictions could limit our ability to finance our future operations or capital needs, make acquisitions or pursue available business opportunities.

In addition, some of our credit facilities require us to maintain specified financial ratios and satisfy financial covenants. We may be required to take action to reduce our debt or to act in a manner contrary to our business objectives to meet these ratios and satisfy these covenants. Events beyond our control, including

changes in the economic and business conditions in the markets in which we operate, may affect our ability to comply with these covenants. We cannot assure you that we will meet these ratios or satisfy these covenants or that our lenders will waive any failure to do so. A breach of any of the covenants in, or our inability to maintain the required financial ratios under, our credit facilities would prevent us from borrowing additional money under the facilities and could result in a default under them. If a default occurs under our credit facilities, the lenders could elect to declare that debt, together with accrued interest and other fees, to be immediately due and payable and proceed against the collateral securing that debt. Moreover, if the lenders under a credit facility or other agreement in default were to accelerate the debt outstanding under that facility, it could result in a default under other debt. If all or any part of our debt were to be accelerated, we may not have or be able to obtain sufficient funds available to repay it or to repay the notes upon acceleration.

Ultrapetrol (Bahamas) Limited is a holding company, and as such has no significant assets other than the equity interests of our subsidiaries. Our subsidiaries conduct all of our operations and own all of our operating assets. As a result, our ability to make required payments on the notes depends on the performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, restrictions under our credit facilities and applicable laws of the jurisdictions of their incorporation or organization. For example, some of our existing credit agreements contain significant restrictions on the ability of our subsidiaries that borrow under such agreements or guarantee such debts to pay dividends or make other transfers of funds to us. See “Description of Credit Facilities and Other Indebtedness.” Furthermore, under the current laws of Argentina, the prior approval of the central bank of Argentina may be required for our subsidiaries incorporated in Argentina, including the subsidiary guarantor incorporated in Argentina, to transfer funds out of Argentina. In addition, under limited circumstances, the indenture governing the notes permits our subsidiaries to enter into additional agreements that can limit our ability to receive distributions from such subsidiaries. If we are unable to obtain funds from our subsidiaries, we will not be able to pay interest and principal on the notes when due, purchase the notes upon a change of control, or service our other debt, unless we obtain funds from other sources. We cannot assure you that we will be able to obtain the necessary funds from other sources.

Our subsidiaries who are not guarantors of the notes, such as the majority of our subsidiaries involved in the River Business, do not have any obligation to pay amounts due on the notes or to make funds available for that purpose. As a result of this structure, the notes are effectively subordinated to all indebtedness and other obligations (such as trade payables) of such non-guarantor subsidiaries. For further information regarding the liabilities of our non-guarantor subsidiaries, see note 20 to our audited consolidated financial statements. The effect of this subordination is that, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding involving a non-guarantor subsidiary, the assets of that subsidiary could not be used to pay the notes until after all other claims against that subsidiary, including trade payables, have been fully paid. In addition, holders of minority equity interests in non-guarantor subsidiaries may receive distributions pro rata with us depending on the terms of the equity interests.

The historical consolidated financial data and pro forma consolidated financial data included in this prospectus are presented on a consolidated basis, for our entire business and include our non-guarantor subsidiaries, such as certain of our subsidiaries directly involved in the River Business. For the nine months ended September 30, 2004, on a pro forma basis, after giving effect to the Transactions, the aggregate revenues of our non-guarantor subsidiaries were $44.9 million, representing approximately 56% of our total consolidated

We participate in the Offshore Business through a 27.78% equity interest in UP Offshore, and we have warrants to increase this interest up to approximately 47.78%. UP Offshore has not guaranteed the notes. Accordingly, as discussed in the preceding risk factors, it has no obligation to make payments on the notes or otherwise make funds available to us for that purpose. The notes are effectively subordinated to all liabilities of UP Offshore and are also effectively subordinated to any other indebtedness or obligations, including trade payables, assumed by it in the future. Further, UP Offshore is not a restricted subsidiary under the indenture governing the notes. Accordingly, it is not subject to many of the restrictions contained in the indenture, such as the covenant limiting the incurrence of indebtedness. See “Description of the Exchange Notes — Certain Covenants.”

As a result of our minority ownership interest in UP Offshore, we do not exercise control over operating and financial decisions involving the Offshore Business. Our partners in the business who have a majority interest control operating and financial decisions and may make decisions that are contrary to your interests. Further, whether UP Offshore will pay any dividends or make other transfers of funds to us in the future will depend on many factors beyond our control, including the restrictions and limitations contained in agreements governing the entity’s debt and the decisions of our business partners.

The notes and guarantees may effectively rank junior to all of our and the subsidiary guarantors’ future borrowings to the extent that collateral, such as new vessels that we acquire, is used to secure that debt. Therefore, in the event of a bankruptcy, liquidation or reorganization of our company or any of the subsidiary guarantors, any of our or such subsidiary guarantors’ assets that are used to secure other indebtedness will not be available to pay amounts due on the notes or subsidiary guarantees until that other secured indebtedness has been paid in full, and as a result, we or such subsidiary guarantor may not have sufficient assets remaining to pay amounts due on the notes or subsidiary guarantees. See “Description of the Exchange Notes — Ranking.”

The notes are secured by mortgages on certain of our existing vessels and barges owned by the subsidiary guarantors, as well as the pledgors, Maritima SIPSA S.A., UABL S.A. and Riverpar S.A. If we or the subsidiary guarantors default on our obligations to make payments on the notes, holders of the notes would be entitled to payments out of the proceeds from the sale of the vessels and barges that are subject to those mortgages, net of any costs of sale and any payments required to be made to maritime or other lienholders that have a superior legal right to the proceeds. The value of such vessels and barges securing the notes and the subsidiary guarantees and the amount to be received upon a sale of such vessels will depend upon many factors including, among others, the physical condition of the vessels, then current conditions in the industries in which we operate, the ability to sell the vessels and barges in an orderly sale, the condition of the international, national and local economies, the availability of buyers and other factors, many of which are beyond our control. The book value of the vessels and barges should not be relied on as a measure of realizable value for such vessels and barges. Further, by their nature, portions of the collateral, such as the barges in our River Business, may be illiquid and may have no readily ascertainable market value. In addition, a significant portion

Further, except as it relates to vessels acquired with Escrowed Proceeds, we are only required by the indenture under certain circumstances, such as upon the loss or sale of a mortgaged vessel, to pledge additional or new vessels or barges to secure the notes or subsidiary guarantees. If the value of the vessels or barges securing the notes and subsidiary guarantees declines, neither we nor the subsidiary guarantors have any general obligation to pledge additional vessels, barges or assets to secure the notes or guarantees. As of September 2004, the appraised value of the vessels and barges pledged to secure the notes and subsidiary guarantees was approximately $165.6 million. Further, the value of vessels and barges generally declines over time as the vessels and barges age. As a result, it is very likely that, as the value of the vessels and barges pledged to secure the notes and guarantees declines, the notes and guarantees will become under-secured. If this were to coincide with the time in which those vessels and barges were sold to satisfy payment obligations on the notes or subsidiary guarantees, there may be insufficient proceeds from such sales to satisfy all payment obligations due on the notes. If that were to occur, any remaining obligations due on the notes or subsidiary guarantees would be our or the applicable subsidiary guarantors’ senior unsecured obligations, and would rank equal in right of payment with all other senior obligations of such parties.

A significant amount of our assets that are not pledged as collateral to secure claims may be pledged to other creditors and thereby reduce the amount of our assets available to you in the event your claims become under-secured. For example, certain subsidiaries of UABL have entered into credit agreements with IFC and Kreditanstalt für Wiederaufbau (“KfW”) to provide $40.0 million in loans. These credit agreements require that $30.0 million of loans provided thereunder be secured by collateral with a fair market value equal to 175% of such loans while the other $10.0 million of loans may be secured at the option of IFC. As the fair market value of the collateral securing these loans declines over time, assets not currently pledged to secure the notes but currently available to satisfy your claims in the event your claims become under-secured may be pledged as collateral to secure these loans, thereby reducing the amount of our assets available to you in the event your claims become under-secured. Therefore, any assets used to secure these loans will not be available to pay amounts due on the notes until the secured indebtedness under these credit agreements has been paid in full, and as a result, we or such subsidiaries may not have sufficient assets remaining to pay amounts due on the notes. See “Description of the Exchange Notes — Ranking” and “Description of Credit Facilities and Other Indebtedness.”

We are a Bahamas corporation. Each of the subsidiary guarantors and pledgors is incorporated in Argentina, the Bahamas, Chile, Liberia, Panama, Paraguay or Uruguay. Each of the vessels and barges that secure the notes and subsidiary guarantees is flagged in Argentina, Bolivia, Chile, Liberia, Panama or Paraguay. All of our and the subsidiary guarantors’ offices, administrative activities and other assets, as well as those of the experts named herein and the independent public accountants, are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon us, any of the subsidiary guarantors or such persons. In addition, some of our directors and officers and the directors and officers of the subsidiary guarantors are residents of jurisdictions other than the United States, and all or a substantial portion of the assets of such persons are or may be located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon such persons.

Courts of the jurisdictions where we and our subsidiary guarantors are incorporated may not (i) enforce judgments of United States courts obtained against us, the subsidiary guarantors, our directors and officers, the directors and officers of the subsidiary guarantors and the experts named herein, as applicable, predicated

The mortgaged vessels and barges are registered under various flags and operate in international waters and various foreign jurisdictions. If we default under our notes or if a subsidiary guarantor defaults under its subsidiary guarantee, the holders of a majority of the aggregate principal amount of the notes may direct the trustee to bring a foreclosure action against such party. We cannot assure you that any vessel or barge that secures the notes or the subsidiary guarantees will be located in a jurisdiction having effective or favorable foreclosure procedures and lien priorities. Any foreclosure proceedings could be subject to lengthy delays resulting in increased custodial costs, deterioration in the condition of the vessel and substantial reduction in the value of the vessel or barge. Some jurisdictions may not provide a legal remedy for the enforcement of vessel mortgages.

All of our mortgaged vessels and barges are relatively easy to transport around the globe. This may make it difficult for the trustee to bring a successful foreclosure action against these vessels and barges because it may be difficult for the trustee or officials of the applicable government or agency to physically seize the vessels and barges and engage in a foreclosure sale. In addition, there are approximately 193 barges that secure the notes. These barges are similar to each other and have an average appraised value, as of September 2004, of approximately $214,000 per barge. Given the high number of barges that secure the notes and the relatively low appraised value per barge, it may be difficult or cost-inefficient for the trustee to engage in a successful foreclosure sale against all of these barges.

If we were to become the subject of a bankruptcy proceeding, the right of the trustee to lay-up, lease, charter, operate or otherwise use our vessels or barges or to sell any vessel or barge or other collateral securing the notes may be significantly impaired. Under applicable bankruptcy laws, the bankruptcy receiver may have the right, following the first stages of the bankruptcy, to sell our vessels or barges, or under certain circumstances, be allowed to continue the operation of our business. In addition, a secured creditor, such as the trustee, may need the approval of the bankruptcy receiver or the bankruptcy court to repossess and dispose of the collateral if bankruptcy proceedings have already been commenced by or against us.

It is impossible to predict how long payments under the notes could be delayed following commencement of a bankruptcy case, whether or when the trustee would repossess or dispose of the collateral or whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the collateral. There is also uncertainty as to whether the trustee’s claim for satisfaction from the proceeds of any sale of a vessel or barge would take priority over the rank of certain other liens on such vessel or barge, such as preferred maritime liens. Irrespective of whether any such sale has been instigated by the bankruptcy receiver or by the trustee, the priority of any liens on such vessel or barge may be determined by the laws of the country where such sale takes place, in conjunction with the laws of the country in which such vessel or barge is registered.

Upon the occurrence of any change of control, we will be required to make a change of control offer to repurchase the notes. Under certain circumstances, a change of control may also constitute a default under our senior credit facilities. Therefore, upon the occurrence of a change of control, the lenders under our senior credit facilities would have the right to accelerate their loans, and if so accelerated, we would be required to repay all of our outstanding obligations under our senior credit facilities. See “Description of Credit Facilities and Other Indebtedness.”

In addition, if a change of control occurs, there can be no assurance that we will have available funds sufficient to pay the change of control purchase price for any of the notes that might be delivered by holders of the notes seeking to accept the change of control offer and, accordingly, none of the holders of the notes may receive the change of control purchase price for their notes. Our failure to make the change of control offer or to pay the change of control purchase price when due would result in a default under the indenture governing the notes. See “Description of the Exchange Notes — Defaults.”

The collateral securing the notes includes certain vessels and barges and the stock of certain of our subsidiaries, whether now owned or acquired or arising in the future. Applicable law provides that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. The trustee for the notes will not monitor the future acquisition of vessels or barges or stock that constitute collateral, or take action to perfect the security interest in such acquired collateral. There can be no assurance that we will monitor, or that we will inform the trustee of, the future acquisition of vessels or barges or stock that constitute collateral, or that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. Such failure may result in the loss of the security interest therein or the priority of the security interest in favor of the noteholders against third parties.

The indenture governing the notes and the related security documents provide that, to the extent that any rule would require the filing with the SEC (or any other governmental agency) of separate financial statements of any of our subsidiaries due to the fact that such subsidiary’s capital stock or other securities secure the notes, then such capital stock or other securities will automatically be deemed not to be part of the collateral securing the notes to the extent necessary to not be subject to such requirement. In such event, the security documents may be amended, without the consent of any holder of the notes, to the extent necessary to release the liens on such capital stock or other securities. As a result, holders of the notes could lose their security interest in such portion of the collateral if and for so long as any such rule is in effect.

In addition, the release of capital stock of a subsidiary pursuant to this provision in certain circumstances could result in less than a majority of the capital stock of a subsidiary being pledged to secure the notes, which could impair the trustee’s ability to sell a controlling interest in such subsidiary or to otherwise realize value on its security interest in such subsidiary’s stock or assets.

The notes are secured by stock pledges and mortgages granted by, and guarantees made by, certain of our subsidiaries. Our issuance of the notes and the subsidiary guarantors’ making of the guarantees, the pledges of stock and the granting of the mortgages, and any payments made on the notes by us or the subsidiary guarantors, may be subject to review under relevant Federal, state or foreign fraudulent conveyance laws if a bankruptcy, reorganization or rehabilitation case or a lawsuit (including circumstances in which bankruptcy is

If a court were to find that the issuance of the notes, a subsidiary guarantee, a pledge of stock or the granting of a mortgage were a fraudulent conveyance, the court could void the payment obligations under the notes, such subsidiary guarantee or such grant of a security interest or subordinate the notes, such subsidiary guarantee or such grant of a security interest to presently existing and future indebtedness of us or the applicable subsidiary guarantor, or require the holders of the notes to repay any amounts received with respect to the notes or such subsidiary guarantee. In the event of a finding that a fraudulent conveyance occurred, you may not receive any payment on the notes or the subsidiary guarantees.

We believe that as a result of the issuance of the subsidiary guarantees, the stock pledges and mortgages, each of our subsidiary guarantors will not be considered insolvent or rendered insolvent under fraudulent conveyance standards, will not be engaged in a business or transaction for which its remaining assets would constitute unreasonably small capital, and will not have incurred debts beyond its ability to pay such debts as they mature. These beliefs are based in part on our operating history and our analysis of internal cash flow projections and estimated values of assets and liabilities. We cannot assure you, however, that a court passing on these issues would adopt or utilize the same methodology or assumptions, or arrive at the same conclusions. Further, each guarantee contains a provision intended to limit the subsidiary guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. However, this provision may not be effective to protect the guarantees from being voided under fraudulent transfer law.

The exchange notes will constitute a new issue of securities with no established trading market. We cannot assure you as to the liquidity of any trading market that may develop for the exchange notes. We do not intend to apply to list the exchange notes on any national securities exchange, although we do expect that they will be eligible for trading in the PORTAL market. If an active market does not develop or is not maintained, the market price and liquidity of the exchange notes may be adversely affected. We cannot assure you as to the liquidity of the market for the exchange notes or the prices at which you may be able to sell the exchange notes.

In addition, you may not be able to sell exchange notes at a particular time or at a price favorable to you. Future trading prices of the exchange notes will depend on many factors, including:


	•	our operating performance and financial condition;

	•	our prospects or the prospects for companies in our industry generally;

	•	changes in government regulation;

	•	the interest of securities dealers in making a market in the exchange notes;

	•	the market for similar securities;

	•	prevailing interest rates; and

	•	the other factors described in this prospectus under “Risk Factors.”

Historically, the market for non-investment grade debt has been subject to disruptions that have caused volatility in prices. It is possible that the market for the exchange notes will be subject to such disruptions. A disruption may have a negative effect on you as a holder of the exchange notes, regardless of our prospects or performance.

One of our oceangoing vessels that is pledged to secure the notes and subsidiary guarantees, the Princess Marina, is owned by Maritima SIPSA S.A., an entity over which we do not exercise voting control. The Princess Marina was sold to Maritima SIPSA S.A. when she was chartered by ENAP, the Chilean national petroleum company, under a time charter that required her to be flagged in Chile. Pursuant to the laws of Chile, for her to be flagged in Chile, she needed to be owned by a legal entity controlled by Chilean citizens. Maritima SIPSA S.A. is controlled by Chilean citizens.

Although we have entered into a contract with Maritima SIPSA S.A. whereby such entity will sell the Princess Marina back to us in 2006, we do not and will not exercise voting control over Maritima SIPSA S.A. Accordingly, we do not and will not exercise control over operating and financial decisions of this entity. Further, while the mortgage filed on the Princess Marina contains certain restrictions on the operations of Maritima SIPSA S.A., such entity is not a subsidiary guarantor nor a restricted subsidiary under the terms of the indenture governing the notes, and accordingly may be able to engage in actions that are detrimental to the interests of the holders of notes.

Our audited consolidated financial statements and those of UABL Limited as of and for the year ended December 31, 2001, which are included in this prospectus, have been audited by Pistrelli, Diaz y Asociados (a member of Andersen), our and UABL Limited’s former independent public accountants. Pistrelli, Diaz y Asociados (a member of Andersen) completed its audits of such financial statements and issued its reports relating thereto on April 30, 2002 and March 26, 2002, respectively. Subsequently, Pistrelli, Diaz y Asociados (a member of Andersen) ceased operations. As a result, Pistrelli, Diaz y Asociados (a member of Andersen) has not consented, and we were unable to obtain their consent, for the inclusion of their reports with respect to such financial statements in this prospectus or the exchange offer registration statement.

If Pistrelli, Diaz y Asociados (a member of Andersen) has no assets available for creditors, you may not be able to recover against such party for any claims you may have under securities or other laws as a result of Pistrelli, Diaz y Asociados’ (a member of Andersen) previous role as our independent public accountants and as author of the audit reports for our and UABL Limited’s financial statements as of and for the year ended December 31, 2001. Further, in connection with the exchange offer registration statement, your rights to sue Pistrelli, Diaz y Asociados (a member of Andersen) under Section 11(a) of the Securities Act will be limited as a result such firm’s lack of consent to include its audit report in the exchange offer registration statement.

We derive a significant part of our revenues from a small number of customers. In 2003, Petrobras and its subsidiaries accounted for 26% of our total revenues, Cargill accounted for 12% of our total revenues and our five largest customers in terms of revenues, in aggregate, accounted for 57% of our total revenues. The loss of any one or a number of these customers, whether to our competitors or otherwise, could adversely affect our revenues.

We seek to deploy our vessels on spot voyages, which are typically single voyages for a period of less than 60 days, or on time charters and contracts of affreightment, which are longer term contracts for periods of typically three months to three years. As of September 30, 2004, six of our seven oceangoing vessels were

Although time charters and contracts of affreightment provide steady streams of revenue, vessels committed to such contracts are unavailable for spot voyages or for entry into new longer term time charters or contracts of affreightment. If such periods of unavailability coincide with a time when market prices have risen, such vessels will be unable to capitalize on that increase in market prices. For example, while at the end of 2003 and the beginning of 2004 we fixed our Suezmax/ OBOs and Capesize vessels at progressively increased charter rates for periods of up to one year, this did not permit us to take full advantage of the rise in market prices experienced over the entire year in 2004. Conversely, if our vessels are available for spot charter or entry into new time charters or contracts of affreightment, they are subject to market prices, which may vary greatly. If such periods of availability coincide with a time when market prices have fallen, we may have to deploy our vessels on spot voyages or under long term time charters or contracts of affreightment at depressed market prices, which would lead to reduced or volatile earnings.

Our success depends to a significant extent upon the abilities and efforts of our management team and our ability to retain them. Although we intend to negotiate employment agreements, we do not currently have employment contracts with any of our senior executives, including Felipe Menendez R., Ricardo Menendez R. and Leonard J. Hoskinson. The loss of any of these individuals could adversely affect our business prospects and results of operations. We do not maintain “key man” life insurance on any of our officers. Further, the efficient and safe operation of our vessels requires skilled and experienced crew members. Difficulty in hiring and retaining such crew could adversely affect the operation of our vessels, and in turn adversely affect our results of operations.

As of September 30, 2004, we employed 80 land-based employees and approximately 378 seafarers as crew on our vessels. These seafarers are covered by industry-wide collective bargaining agreements that set basic standards applicable to all companies who hire such individuals as crew. Because most of our employees are covered by these industry-wide collective bargaining agreements, failure of industry groups to renew these agreements may disrupt our operations and adversely affect our earnings. In addition, we cannot assure you that these agreements will prevent labor interruptions. Any labor interruptions could disrupt our operations and harm our financial performance.

Through their normal operation, our vessels are inherently subject to risks of accidents, damage and total loss. These risks include, but are not limited to:


	•	oil spills and other environmental damage and pollution;

	•	collisions with other vessels and property of third parties;

	•	grounding as a result of shifting navigational channels or otherwise;

	•	unexpected part or vessel breakage;

	•	death or injury to crew and third parties;

	•	adverse weather conditions;

	•	cargo damage or other loss;

	•	cargo or vessel theft;


	•	fire;

	•	mechanical and/or electronic failure;

	•	political instability in the various countries in which our vessels operate;

	•	acts of piracy, war, vandalism or terrorism; and

	•	other marine related disasters.

While we take measures that we consider standard in the shipping industry to minimize the possibility of the occurrence of the above risks, and to minimize the damage that any of the above risks may have on our business if they were to occur, most such risks are beyond our control, and any losses that we suffer as a result of any of the foregoing, particularly losses involving oil spills or other damage to the environment, could be substantial.

Further, if our vessels suffer damage, they may need to be repaired at a drydocking or other type of ship repair facility. The costs of drydock and repairs and the length of time needed to complete such drydock and repairs are unpredictable and can be substantial. While a vessel is in drydock, it cannot be used to generate revenue. We may have to pay drydocking and repair costs that our insurance does not cover. This would decrease earnings and may impact our financial condition.

The occurrence of any of the above risks, such as an oil spill where we are deemed to be at fault, could also adversely impact our reputation as a safe and reliable vessel owner and operator. Any damage to our reputation could make it more difficult for us to retain our existing customers or to attract new customers in the future, which could, in turn, have an adverse affect on our results of operations.

The shipping industry is cyclical and volatile, and this may lead to reductions and volatility in our charter rates and results of operations.

The shipping industry is both cyclical and volatile. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the supply and demand for the major commodities carried by water internationally. The factors affecting the supply and demand for vessels and supply and demand for commodities are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.


	•	the volume of world oil and dry bulk commodity production and demand;

	•	the volume of oil production and demand in the Western Hemisphere;

	•	freight rates;

	•	global and regional economic conditions;

	•	the distance that oil and dry bulk commodities must be transported; and

	•	changes in seaborne and other transportation patterns.


	•	the number of newbuilding deliveries;

	•	the scrapping rate of older vessels;

	•	the number of vessels that are out of service; and

	•	national or international regulations that may effectively cause reductions in the carrying capacity of vessels or early obsolescence of vessels.

Further, tanker markets are typically stronger in the winter months in the northern hemisphere due to increased oil consumption. In addition, unpredictable weather patterns in the winter months tend to disrupt vessel scheduling, leading to increased oil trading activities.

Our ability to recharter our vessels on the expiration or termination of their current spot and time charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, the current state of the vessel market. If the vessel market is in a period of depression when our vessels’ charters expire, we may be forced to re-charter our vessels at reduced rates or even possibly a rate whereby we incur a loss, which may reduce our earnings or make our earnings volatile.

Because the fair market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels.

The fair market value of vessels may increase and decrease depending on the following factors, all of which are beyond our control:


	•	general economic and market conditions affecting the shipping industry;

	•	competition from other shipping companies;

	•	types and sizes of vessels currently on the market for sale;

	•	the viability of other modes of transportation that compete with our vessels;

	•	cost of new buildings;

	•	governmental or other regulations;

	•	prevailing level of charter rates; and

	•	technological advances.

Vessel values have historically been very volatile. The market value of our vessels may fluctuate significantly in the future and we may incur losses when we sell vessels which may adversely affect our earnings.

Any drought or significant decline in production of soybeans or other agricultural products in the Hidrovia region, or any significant change affecting the navigability of certain rivers in the region, would have an adverse effect on our River Business.

A significant portion of our revenues in our River Business is derived from transportation of soybeans and other agricultural products produced in the Hidrovia region. Any drought or other adverse weather conditions, such as floods, could result in a decline in production of these products which would likely result in a reduction in demand for our services. This would, in turn, negatively impact our results of operations and financial condition. Further, most of the operations in our River Business occur on the Parana and Paraguay Rivers, and any changes adversely affecting navigability of either of these rivers, such as changes in the depth of the water or the width of the navigable channel, could, in the short term, reduce or limit our ability to effectively transport cargo on the rivers.

A prolonged drought or other turn of events that is perceived by the market to have an impact on the region, the navigability of the Parana or Paraguay Rivers or our River Business in general may, in the short term, result in a reduction in the market value of the barges and push boats that we operate in the region. These barges and push boats are designed to operate in wide and relatively calm rivers, of which there are only a few in the world. If it becomes difficult or impossible to operate profitably our barges and push boats in the Hidrovia region and we are forced to sell them to a third party located outside of the region, there is a limited market in which we would be able to sell these vessels, and accordingly we may be forced to sell them at a substantial loss.

We procure insurance for our fleet against those risks that we believe the shipping industry commonly insures against. These insurances include hull and machinery insurance, protection and indemnity insurance (which includes environmental damage and pollution insurance coverage) and war risk insurance. We do not procure loss of hire insurance in most instances. All insurance policies that we carry include deductibles (and some include limitations on partial loss) and each of them may not be sufficient to fully compensate us against losses that we incur, either from damage or loss of our vessels, or through liability to a third party or for harm to the environment. For example, our protection and indemnity insurance has a coverage limit of $1 billion regarding oil spills and related harm to the environment. Although this is a significant sum, it may be insufficient to fully compensate us, and any uninsured losses that we incur may be substantial and may have a very significant affect on our financial condition.

We cannot assure you that we will be able to renew our insurance policies on the same or commercially reasonable terms, or at all, in the future. Further, we cannot assure you that our insurance policies will cover all types of losses that we incur. Each of our policies is subject to limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless not cover all types of losses we incur.

Certain of our directors and officers hold similar positions with our affiliates. Felipe Menendez R., who is our President, Chief Executive Officer and a director, is a director of Oceanmarine and Ravenscroft, two related parties that provide services to us. See “Certain Related Transactions.” Ricardo Menendez R., who is one of our directors, is the President of Oceanmarine and Chairman of the Board of Directors of Ravenscroft, and is also the president of The Standard Steamship Owners’ Protection and Indemnity Association (Bermuda) Limited (the “Standard”), a P&I club with which certain of our ships are entered. Leonard J. Hoskinson, who is one of our directors, is General Manager and a director of Ravenscroft. Although these directors and officers attempt to perform their duties within each company independently, in light of their positions with such entities, these directors and officers may face conflicts of interest in selecting between our interests and those of Ravenscroft, Oceanmarine and the Standard. In addition, Ravenscroft, and Oceanmarine are indirectly controlled by the Menendez family, including Felipe Menendez R. and Ricardo Menendez R. These conflicts may limit our fleet’s earnings and adversely affect our operations.

All of our oceangoing vessels and substantially all of our other vessels were purchased secondhand from other owners, and our current business strategy includes growth through the acquisition of additional secondhand vessels. While we inspect secondhand vessels prior to purchase, we may not discover defects or other problems with such vessels prior to purchase. If this were to occur, such hidden defects or problems, when detected, may be expensive to repair, and if not detected, may result in accidents or other incidents for which we are liable to third parties.

The costs to operate and maintain a vessel in operation increases with the age of the vessel. The average age of vessels in our oceangoing fleet is 18 years, and most oceangoing vessels have an expected life of approximately 25 years. The average age of vessels in our River Business fleet is approximately 18 years for barges and 24 years for push boats, and most of these vessels have an expected life of approximately 35 years. In some instances charterers prefer newer vessels that are more fuel efficient than older vessels. Cargo insurance rates also increase with the age of a vessel, making older vessels less desirable to charterers as well. Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which these vessels may engage. We cannot assure you that as our vessels age, market conditions

We are an international company and conduct almost all of our operations outside of the United States, and we expect to continue doing so for the foreseeable future. Some of these operations occur in countries that are less developed and stable than the United States, such as Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay. Accordingly, our business operations and our revenues are subject to the following potential risks, among others:


	•	political and economic instability, changing economic policies and conditions, and war and civil disturbances;

	•	recessions in economies of countries in which we have business operations;

	•	foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls and currency repatriation limitations;

	•	imposition of or unexpected adverse changes in foreign laws or regulatory requirements;

	•	longer payment cycles in foreign countries and difficulties in collecting accounts receivable;

	•	difficulties and costs of staffing and managing our foreign operations; and

	•	acts of piracy or terrorism.

These risks may result in unforeseen harm to our business or financial condition. For example, in 2002, one of the banks used by our River Business in Paraguay declared bankruptcy. Although we recovered all of the funds that were held in this bank, our River Business was exposed to a maximum loss of approximately $400,000.

Also, some of our customers are headquartered in South America, and a general decline in the economies of South America, or the instability of certain South American countries and economies, could adversely affect that part of our business.

Our business in emerging markets requires us to respond to rapid changes in market conditions in these countries. Our overall success in international markets depends, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not continue to succeed in developing and implementing policies and strategies which will be effective in each location where we do business. Furthermore, the occurrence of any of the foregoing factors may have a material adverse effect on our business and results of operations.

We are an international company and, while our financial statements are reported in U.S. dollars, some of our operations are conducted in foreign currencies. Approximately 7% of our revenues in 2003 were denominated in non-U.S. currencies. These revenues could be materially affected by currency fluctuations or devaluations. Changes in currency exchange rates could adversely affect our reported revenues and could require us to reduce our prices to remain competitive in foreign markets, which could also have a material adverse effect on our results of operations. We have not historically hedged our exposure to changes in foreign currency exchange rates and, as a result, we could incur unanticipated losses.

During 2002, the Argentine peso declined in value against the U.S. dollar following the Argentine government’s decisions to abandon the country’s fixed dollar-to-peso exchange rate, to require private sector,

Our River Business is dependent, in part, upon being able to timely and effectively transit the rivers and load and discharge cargoes. Any accidents or operational disruptions to ports, terminals, bridges or the lock on the high Parana River could adversely affect our operations and our revenues in our River Business.

A principal focus of our strategy is to continue to grow by taking advantage of changing market conditions, which may include expanding our businesses, the primary geographic area and market where we operate or expanding into other regions, or by increasing the number of vessels in our fleet. Our future growth will depend upon a number of factors, some of which we can control and some of which we cannot. These factors include our ability to:


	•	identify businesses engaged in managing, operating or owning vessels for acquisitions or joint ventures;

	•	identify vessels for acquisitions;

	•	integrate any acquired businesses or vessels successfully with our existing operations;

	•	hire, train and retain qualified personnel to manage and operate our growing business and fleet;

	•	identify new markets;

	•	improve our operating and financial systems and controls; and

	•	obtain required financing for our existing and new operations.

The failure to effectively identify, purchase, develop and integrate any vessels or businesses could harm our business, financial condition and results of operations.

UP Offshore has contracted with shipyards in Brazil and China to build six new offshore PSVs. It expects to take delivery of these vessels between 2005 and 2007. These vessels are not currently subject to any charters and may not be subject to any charters as of their date of delivery. Although UP Offshore intends to charter these vessels to Petrobras on long term charters, we cannot assure you that it will be able to charter these vessels to Petrobras or any other charterer. Even if it does obtain charters for these vessels, we cannot predict what the state of the offshore supply market will be or at what prices it may be able to charter these vessels. Failure to obtain charters or entering into charters with low charter rates could have a material adverse effect on our results of operations and financial condition.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our operations and cash flow and may require us to pay very large sums of money to have the arrest lifted.

In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Thus, claimants could assert “sister ship” liability against one vessel in our fleet for claims relating to another of our ships.

Under the United States Internal Revenue Code of 1986, as amended (the “Code”), 50% of the gross shipping income of a vessel owning or chartering corporation, such as us and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. will be characterized as U.S. source shipping income and such income will be subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation is entitled to a special tax exemption under the Code which applies to the international shipping income derived by certain non-U.S. corporations. We intend to take the position for U.S. Federal income tax return reporting purposes that we and each of our subsidiaries qualify for this statutory tax exemption for the current year ended December 31, 2004. However, due to the factual nature of the issues involved, we can give no assurances on our tax-exempt status or that of any of our subsidiaries. If we or our subsidiaries are not entitled to this statutory tax exemption for any taxable year, we or our subsidiaries would be subject for such years to a 4% U.S. Federal income tax on our U.S. source shipping income. The imposition of this taxation would have an adverse effect on our earnings and cash flows.

The shipping industry is subject to numerous regulations in the form of international conventions, national, state and local laws and national and international regulations in force in the jurisdictions in which such vessels operate, as well as in the country or countries in which such vessels are registered. These regulations include the U.S. Oil Pollution Act of 1990, as amended (“OPA”), the International Convention on Civil Liability for Oil Pollution Damage of 1969, International Convention for the Prevention of Pollution from Ships, the IMO International Convention for the Safety of Life at Sea of 1974 (“SOLAS”), the International Convention on Load Lines of 1966, the U.S. Maritime Transportation Security Act of 2002 and the International Ship and Port Facility Security Code, among others. In addition, vessel classification societies also impose significant safety and other requirements on our vessels.

These requirements can affect the resale value or useful lives of our vessels, require a reduction in cargo-capacity or other operational or structural changes, lead to decreased availability of insurance coverage for environmental matters, or result in the denial of access to, or detention in, certain ports. We believe that regulation of the shipping industry will continue to become more stringent and more expensive for us and our competitors. More stringent maritime safety rules are also more likely to be imposed worldwide as a result of the oil spill in November 2002 relating to the loss of the M.T. Prestige, a 26-year old single-hull tanker owned by a company not affiliated with us. Local, national and foreign laws, as well as international treaties and conventions, can subject us to material liabilities in the event that there is a release of petroleum or other hazardous substances from our vessels. We could also become subject to personal injury or property damage claims relating to exposure to hazardous materials associated with our current or historic operations. In addition, environmental laws require us to satisfy insurance and financial responsibility requirements to address oil spills and other pollution incidents, and subject us to rigorous inspections by governmental authorities. Violations of such requirements can result in substantial penalties, and in certain instances, seizure or detention of our vessels. Additional laws and regulations may also be adopted that could limit our ability to do business or increase the cost of our doing business and that could have a material adverse effect on our operations. Government regulation of vessels, particularly in the areas of safety and environmental impact may change in the future and require us to incur significant capital expenditure on our vessels to keep them in compliance, or to even scrap or sell certain vessels altogether. For example, we recently sold all of our single hull oceangoing tanker vessels in response to regulatory requirements in Europe and the United States. Future changes in laws and regulations may require us to undertake similar measures, and any such actions may be costly.

OPA provides that owners, operators and bareboat charterers are strictly liable for the discharge of oil in U.S. waters, including the 200 nautical mile zone off the U.S. coasts. OPA provides for unlimited liability in some circumstances, such as a vessel operator’s gross negligence or willful misconduct. OPA also permits states to set their own penalty limits. Most states bordering navigable waterways impose unlimited liability for discharges of oil in their waters. The IMO has adopted a similar liability scheme that imposes strict liability for oil spills, subject to limits that do not apply if the release is caused by the vessel owner’s intentional or reckless conduct.

Under OPA, with certain limited exceptions, all newly built or converted tankers operating in U.S. waters must be built with double hulls conforming to particular specifications. Tankers that do not have double hulls are subject to structural and operational measures to reduce oil spills and will be precluded from operating in U.S. waters through 2015 according to size, age, hull configuration and place of discharge unless retrofitted with double hulls. In addition, OPA specifies annual inspections, vessel manning, equipment and other construction requirements that are in various stages of development by the U.S. Coast Guard (“USCG”), applicable to new and to existing vessels.

Under OPA and per USCG interpretations, our tanker and OBOs will be precluded from operation in US waters as follows:


*	As per the applicable Tank Vessel Examination Letter (“TVEL”)/ Certificate of Compliance (“COC”)


**	The USCG inspects vessels annually and determines when such vessels will be phased out under OPA, the dates of which are recorded in the TVEL or the COC. On April 30, 2001, the USCG replaced the TVEL with a newly generated document, the COC. The COC is issued for each tanker by the USCG, if/when the vessel calls at a U.S. port and is valid for a period of two years, with mid period examination.

There is no phase out date for Princess Katherine since its configuration meets the U.S. double hull standards. Although Princess Nadia, Princess Marina and Princess Susana are double hull vessels, due to configuration requirements under the U.S. double hull standards, the phase out dates indicated above are applicable.

Our protection and indemnity insurance, referred to as P&I, is provided by the Standard and the UK Club, each a mutual P&I club which is a member of the International Group Association of P&I Clubs. As a mutual club, each relies on member premiums, investment reserves and income, and reinsurance to manage liability risks on behalf of its members. Increased investment losses, underwriting losses, or reinsurance costs could cause international marine insurance clubs to substantially raise the cost of premiums, resulting not only in higher premium cost but also higher levels of deductibles and self-insurance retentions. In addition, we may be, and have been, subject to capital calls for losses suffered by other members, including losses suffered in prior years. Any such capital calls could have a negative impact on our results of operations or financial condition.

We employ our vessels in highly competitive markets. In particular, the oceangoing market is international in scope and we compete with many different companies, including other ship owners and major oil companies, such as Transpetro, a subsidiary of Petrobras. Some of these competitors are significantly larger

Many of our customers, including many of our most significant customers such as Petrobras and ADM, are also our competitors who operate vessels of their own. These customers may decide to cease using our services for any number of reasons, including in order to utilize their own vessels. If we lose any of these customers, it could adversely affect our business.

OBOs are versatile because they can transport both petroleum products and dry bulk cargoes. Unlike the more traditional type of tanker, an OBO has fewer tanks, but each tank is generally larger. Prior to the advent of computerized loading systems, extra caution had to be used when loading an OBO due to the amount of available free space and the possibility of cargo shifting and causing the vessel to become unstable. While this problem, like other problems originally linked to OBOs, have been solved with new technology, OBOs are still less desired by certain charterers who prefer to use the more traditional form of tanker to transport oil and other petroleum products. To the extent any charterers elect not to use our OBOs and instead use standard tankers, this could have a negative impact on our business and financial results.

Fuel is a significant, if not the largest, operating expense for many of our shipping operations, particularly in our River Business where most of our contracts are contracts of affreightment. Under a contract of affreightment, we are paid per ton of cargo shipped, and the cost of fuel is an expense that we incur that is not generally passed on to the customer. We try to predict future fuel costs, and when we think appropriate, hedge against future fuel costs, but we are not always successful.

The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. As a result, an increase in the price of fuel, such as has been experienced recently, may adversely affect our profitability.

We currently participate in five different joint ventures, including the entity that engages in the Offshore Business, UP Offshore. In two of these joint ventures, we do not exercise voting control over the joint venture entity, and accordingly, we do not, in all cases, exercise control over operating and financial decisions of these joint ventures. We may have disagreements with our joint venture partners and these joint ventures may fail. Further, we may undertake additional business operations through joint ventures in the future.

A government could requisition for title or seize our vessels. Requisition for title occurs when a government takes control of a vessel and becomes her owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels may halt our operations and negatively impact our revenues.

Some of our customers, particularly those in our River Business, do not promptly or, in some cases, at all pay their accounts. If they do not pay at all, we may have problems enforcing judgments against them because of the many different legal systems in which we operate. In addition, there is a risk that certain charterers with poor credit may purposely default under our charters with them when market prices decline in an effort to re-negotiate their charters. If we are not able to receive payment or enforce judgments we seek against past due accounts, or if charterers intentionally default under their charters with us, it would have a negative impact on our results of operations and financial condition.

If you do not exchange your outstanding notes for exchange notes in the exchange offer, then you will continue to be subject to the transfer restrictions on the outstanding notes described in the offering circular distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement that we entered into with the initial purchaser of the notes, we do not intend to register resales of the outstanding notes under the Securities Act. You should refer to the section of this prospectus entitled “The Exchange Offer” for information about how to tender your outstanding notes. The tender of outstanding notes pursuant to the exchange offer will reduce the outstanding principal amount of the outstanding notes, which may have an adverse effect on, and increase the volatility of, the market price of the outstanding notes due to a reduction in liquidity.

We are making the exchange offer to satisfy our obligations under the outstanding notes, the indenture and the registration rights agreement. We will not receive any cash proceeds from the exchange offer. In consideration of issuing the exchange notes in the exchange offer, we will receive an equal principal amount of outstanding notes. Any outstanding notes that are properly tendered in the exchange offer will be accepted, canceled and retired and cannot be reissued. Accordingly, issuance of the exchange notes will not result in a change in the capitalization of the Company.

We issued $180 million principal amount of the outstanding notes on November 24, 2004 to the initial purchaser. Our net proceeds from the offering of the outstanding notes, after deducting the initial purchaser’s discounts and commissions, and other expenses related to the offering were approximately $175 million.

We used the net proceeds to repay our Prior Notes, to repay certain other existing credit facilities, to fund the Escrow Account and for general corporate purposes. The following table sets forth the sources and uses of these funds:


(1)	Includes payment by us of (a) $123.2 million to purchase Prior Notes (including the tender premium of 3.75%) in connection with our tender offer and (b) $6.0 million to redeem Prior Notes (including interest accrued through the redemption date and the premium payable with respect thereto) that were not tendered to us. Our Prior Notes were issued on March 30, 1998 in an original principal amount of $135.0 million and had an interest rate of 10¹/2% per annum. At the time of the closing of the offering of our outstanding notes, there was $122.6 million of aggregate principal amount of Prior Notes outstanding and held by unaffiliated parties. This amount does not include $12.4 million of such Prior Notes repurchased by our subsidiaries in the secondary market. We canceled these repurchased Prior Notes prior to the completion of the offering of our outstanding notes in accordance with the indenture governing the Prior Notes.

(2)	At the closing of the offering of our outstanding notes, approximately $15.5 million was used to repay $11.4 million of bank debt on Princess Katherine and approximately $4.1 million of bank debt on Princess Marina. The credit facility with respect to Princess Katherine was entered into in May 2004 with Deutsche Schiffsbank Atkiengesellschaft (“DSB”). It was a four year loan that had an interest rate of LIBOR + 1.625%. The credit facility with respect to the Princess Marina was entered into in June 2000 with DVB (America) N.V. (“DVB”). It was a seven year loan that had an interest rate of LIBOR + 1.25%. As of September 30, 2004, there was approximately $16.3 million of such indebtedness outstanding, consisting of $12.0 million of bank debt on Princess Katherine and $4.3 million of bank debt on Princess Marina. As of September 30, 2004, our outstanding indebtedness under the Prior Notes and these two credit facilities had a weighted average interest rate of 9.62% and would have matured at certain dates between 2007 and 2008.

The following table sets forth (1) our actual consolidated capitalization as of September 30, 2004, (2) pro forma as of such date to give effect to the UP Offshore Deconsolidation, and (3) pro forma as adjusted to give effect to the offering of our outstanding notes and the application of the net proceeds. You should read this table in conjunction with the information in the sections entitled “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Selected Historical Consolidated Financial Data” and “Description of Credit Facilities and Other Indebtedness” and our historical consolidated financial statements, together with the respective notes thereto, included elsewhere in this prospectus.


(1)	As of September 30, 2004, approximately $16.3 million was outstanding, consisting of $12.0 million of bank debt on Princess Katherine and $4.3 million of bank debt on Princess Marina. The credit facility with respect to Princess Katherine was entered into in May 2004 with DSB. It was a four year loan that had an interest rate of LIBOR + 1.625%. The credit facility with respect to the Princess Marina was entered into in June 2000 with DVB. It was a seven year loan that had an interest rate of LIBOR + 1.25%.

(2)	Includes the current portion of capital lease obligations and capital lease obligations, net of current portion.

(3)	Our Prior Notes were issued on March 30, 1998 in an original principal amount of $135.0 million and had an interest rate of 10¹/2% per annum. As of September 30, 2004, there was $122.6 million of aggregate principal amount of these Prior Notes outstanding and held by unaffiliated third parties. This amount does not include $12.4 million of such Prior Notes repurchased by our subsidiaries in the secondary market. We canceled these repurchased Prior Notes prior to the completion of the offering of our outstanding notes in accordance with the indenture governing the Prior Notes.

(4)	The exchange offer will replace the outstanding notes with exchange notes of the same value.

(5)	The total debt amounts presented in this table do not include accrued interest, an item included in the calculation of total debt used elsewhere in this prospectus, amounting to $6.9 million in the Actual and Pro Forma columns presented above and $5.8 million in the Pro Forma As Adjusted column presented above.

(6)	As a result of the offering of our outstanding notes and the extinguishment of the Prior Notes in the fourth quarter, we realized a non-recurring loss of, and total shareholders’ equity was reduced by $6.5 million.

The following table sets forth our ratio of earnings to fixed charges for the fiscal years ending December 31, 1999, 2000, 2001, 2002 and 2003. We define the term “earnings” as the amount resulting from adding and subtracting the following items. Add the following: (a) Pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, (b) fixed charges, (c) amortization of capitalized interest, (d) distributed income of equity investees, and (e) our share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges. From the total of the added items, subtract the following: (a) interest capitalized, (b) preference security dividend requirements of consolidated subsidiaries, and (c) the minority interest in pre-tax income of subsidiaries that have not incurred fixed charges. We define the term “fixed charges” as the sum of the following: (a) interest expensed and capitalized, (b) amortized premiums, discounts and capitalized expenses related to indebtedness, (c) an estimate of the interest within rental expense, and (d) preference security dividend requirements of consolidated subsidiaries.

The following unaudited pro forma condensed consolidated financial information for the year ended December 31, 2003 is derived from our historical consolidated financial statements and the historical consolidated financial statements of UABL Limited for the year ended December 31, 2003 set forth elsewhere in this prospectus, and is qualified in its entirety by reference to, and should be read in conjunction with, such financial statements and the historical consolidated financial statements of UP Offshore (which are not set forth herein).

The unaudited pro forma condensed consolidated financial information as of September 30, 2004, and for the nine month period then ended is derived from (a) our unaudited condensed consolidated financial statements as of September 30, 2004 for the nine month period then ended and (b) unaudited financial information of UABL Limited and UP Offshore (Bahamas) Ltd. as of September 30, 2004 for the nine month period then ended.

The unaudited pro forma condensed consolidated income statements for the year ended December 31, 2003 and for the nine month period ended September 30, 2004 give effect to the following events (the “Transactions”) (each as defined below) as if they had occurred as of January 1, 2003:

The unaudited pro forma consolidated balance sheet gives effect to the UP Offshore Deconsolidation and the Refinancing as if they had occurred on September 30, 2004.

The acquisition of UABL Limited and UABL Terminals by us was accounted for by the purchase method and the results of operations for UABL Limited and UABL Terminals have been included in our historical financial statements from the date of the acquisition. To apply the purchase method in accordance with SFAS No. 141, Business Combinations, we determined the fair value of all assets acquired and all liabilities assumed. The excess of the fair value of the net assets acquired over the purchase price paid was allocated on a pro rata basis to the value of the property and equipment of the acquired 50% equity interest in UABL Limited and UABL Terminals (the “UABL Equity Acquisition”).

In addition, we also purchased from ACBL 50 river barges and seven push boats, which UABL Limited and its subsidiaries previously leased from ACBL (the “UABL Fleet Acquisition”). Prior to the acquisitions, Lonehort S.A., a subsidiary of UABL Limited, charged UABL Limited a management fee related to costs for crew, maintenance and operations of such barges and push boats.

UP Offshore was a restricted subsidiary under the indenture governing the Prior Notes because we had the right to control its Board of Directors. Accordingly, we have consolidated UP Offshore’s financial statements with our historical financial statements. In connection with the discharge of the indenture governing the Prior Notes, we relinquished control of the Board of Directors of UP Offshore and now account for our investment in UP Offshore under the equity method of accounting in accordance with U.S. GAAP (the “UP Offshore Deconsolidation”).

The unaudited pro forma condensed consolidated financial information for the periods presented take into account that we used the proceeds from the issuance of the outstanding notes to redeem or repurchase $122.6 million of the Prior Notes outstanding and held by unaffiliated third parties and the loans granted by DVB and DSB (the “Refinancing”). The $122.6 million of aggregate principal amount of Prior Notes outstanding and held by unaffiliated parties does not include $12.4 million of such notes repurchased by our subsidiaries in the secondary market. We canceled these notes prior to completion of the offering of the outstanding notes in accordance with the indenture governing the Prior Notes.

The footnotes to the unaudited pro forma condensed consolidated financial information contain a more detailed discussion of how adjustments to reflect the events described above are presented.

The unaudited pro forma condensed consolidated financial information is provided for information and comparative purposes only. Assumptions underlying the pro forma adjustments necessary to fairly present this pro forma information are described in the accompanying notes, which should be read in conjunction with this pro forma condensed consolidated financial information. The pro forma adjustments described in the accompanying notes have been made based on available information and, in the opinion of management, are reasonable. The pro forma adjustments do not purport to be and should not be considered indicative of what our actual financial position or results of operations would have been if the transactions had been completed as of the date or for the periods presented or for any future date or for any period.

We cannot assure you that the assumptions used in the preparation of the pro forma condensed consolidated financial information will prove to be correct. You should read the pro forma condensed consolidated financial statements together with “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated historical financial statements, and the consolidated historical financial statements of UABL Limited and the notes thereto, and the other financial information included elsewhere in this prospectus.


(1)	The unaudited pro forma condensed consolidated statements of operations do not include the loss of $6,466 on the early extinguishment of the Prior Notes, which is non-recurring. Therefore, no corresponding pro forma adjustments have been made for such non-recurring charge. Such loss was recorded in the period in which the “Refinancing” was consummated, which was the fourth quarter of 2004.

The accompanying introduction and the notes appearing after these unaudited pro forma condensed consolidated financial information are an integral part of the unaudited pro forma condensed consolidated income statement of Ultrapetrol (Bahamas) Limited.


(1)	The unaudited pro forma condensed consolidated statements of operations do not include the loss of $6,466 on the early extinguishment of the Prior Notes, which is non-recurring. Therefore, no corresponding pro forma adjustments have been made for such non-recurring charge. Such loss was recorded in the period in which the “Refinancing” was consummated, which was the fourth quarter of 2004.

(A): The amounts in this column represent our historical results for the applicable period, which includes the operations of UABL Limited and UABL Terminals on a consolidated basis from April 23, 2004, the date of the UABL Equity Acquisition, using the consolidation method. Prior to acquisition, the equity method was used.

(B): The amounts in this column represent the adjustments to reflect the acquisition of the River Business as if it had occurred on January 1, 2003 as detailed as follows.

(B.1): Represents the historical results for UABL Limited and UABL Terminals, respectively, for the period prior to April 23, 2004, the date of the UABL Equity Acquisition.

(B.2): Reflects the adjustment necessary to eliminate the management fee payments from ACBL to Lonehort Inc., a subsidiary of UABL Limited, for the operation of the 50 barges and seven push boats (the “Fleet”) acquired by us.

(B.3): Reflects the adjustments necessary to eliminate the operating lease payments from UABL Limited and its subsidiaries to ACBL. Prior to the UABL Equity Acquisition, UABL and its subsidiaries leased the Fleet from ACBL under a lease agreement, pursuant to which UABL Limited and its subsidiaries paid ACBL a daily lease amount for each barge or push boat.

(B.4): The estimated fair value of the assets acquired and liabilities assumed and allocations of purchase price at the date of acquisition are included in note six of our unaudited condensed consolidated financial statements as of September 30, 2004 and for the nine month period then ended. The excess of the fair value of the net assets acquired over the purchase price paid by us for the remaining 50% equity interest in UABL Limited reduced on a pro rata basis the property and equipment balance of UABL Limited.

These amounts represent (i) the increase in depreciation resulting from the UABL Fleet Acquisition and (ii) the lower depreciation resulting from the decrease in the book value of property and equipment balances of UABL Limited as a consequence of the allocation of the excess of the fair value over the cost.

(B.5): The amounts in this column represent the adjustments necessary to eliminate intercompany transactions for the consolidation of UABL Limited with us as detailed as follows:


	(1): Reflects the elimination of the administrative fees paid to us by UABL for the period prior to the date of UABL Equity Acquisition.

	(2): Reflects the elimination of the management fee paid to Lonehort by us for the period prior to the date of UABL Equity Acquisition.

	(3): Reflects the elimination of the lease payments made to us by UABL for the period prior to the date of UABL Equity Acquisition.

	(4): The combined effect of (2) and (3):


	(5): This adjustment is the elimination of our 50% interest in UABL Limited and UABL Terminals accounted under the equity method.

(C): Represents the adjustments necessary to give effect to the UP Offshore Deconsolidation and to account for our 27.78% equity interest in UP Offshore in accordance with the equity method of accounting.

(D): The amounts in this column represent the adjustments necessary to give effect to the Refinancing.

The following adjustments reflect pro forma interest expense resulting from the Refinancing as follows:


(1)	Reflects pro forma interest expense on the outstanding notes at the actual interest rate of 9% per year.

(2)	Reflects non-cash amortization of capitalized debt issuance costs over the term of the outstanding notes (10 years).

Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2004

(E): The amounts in this column represent the adjustments necessary to give effect to the UP Offshore Deconsolidation and to account for our 27.78% equity interest in UP Offshore in accordance with the equity method of accounting.

(F): The pro forma adjustment to cash is determined as follows (in thousands of U.S. dollars):

(G): The pro forma adjustment to other assets resulting from the refinancing of Prior Notes and the issuance of the outstanding notes is determined as follows (in thousands of U.S. dollars):

(H): These pro forma adjustments result from the repayment of the Prior Notes and certain debt and the issuance of the outstanding notes.

(I): This pro forma adjustment represents the loss on the early extinguishment of the Prior Notes. We paid $103.75 for every $100.00 in nominal value outstanding. At the date of extinguishment, the nominal value of the debt was $122,641 thousand. Consequently, we paid $127,241 thousand, resulting in a loss of $4,600 thousand. All figures below in thousands of U.S. dollars:

The unaudited pro forma condensed consolidated statements of operations do not include the loss of $6,466 thousand on the early extinguishment of the Prior Notes, which is non-recurring; therefore, no corresponding pro forma adjustments have been made for such non-recurring charge. Such loss was recorded in the period in which the “Refinancing” was consummated, which was the fourth quarter of 2004.

(J): This pro forma adjustment represents the deposit in the Escrow Account, which will be used to fund the acquisition of additional vessels.

The selected historical consolidated financial information set forth below may not contain all of the financial information that you should consider when making a decision to participate in the exchange offer. You should carefully read our financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus for additional financial information about us. Our condensed financial data relating to the fiscal years ended December 31, 1999, 2000, 2001, 2002 and 2003 has been derived from our respective audited consolidated financial statements. Our condensed financial data as of and for the nine month periods ended September 30, 2003 and 2004 has been derived from our respective unaudited financial information statements included in this prospectus and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the information set forth in those financial statements on a basis consistent with our respective audited financial statements.


(1)	In a series of related transactions, on April 23, 2004, through two wholly owned subsidiaries, we acquired from ACBL the remaining 50% equity interest in UABL Limited that we did not previously own, along with a fleet of 50 river barges and seven river push boats. The results of UABL Limited’s operations have been included in our condensed consolidated financial statements since that date.

(2)	Freight revenues arise from arrangements whereby we have agreed to transport cargoes between ports and bear all voyage and vessel operating expenses, whereas hire revenues arise from our vessel time or voyage chartering operations.


(3)	Includes total revenues from our Ocean Business of $39,862 and from our River Business of $31,672.

(4)	Operating expenses include voyage expenses and running costs. Voyage expenses, which are incurred when a vessel is operating under a contract of affreightment (as well as any time when they are not operating under time or bareboat charter), comprise all costs relating to a given voyage, including port charges, canal dues and fuel (bunkers) costs, are paid by the vessel owner and are recorded as voyage expenses. Voyage expenses also include charterhire payments made by us to owners of vessels that we have chartered in. Running costs, or vessel operating expenses, include the cost of all ship management, crewing, repairs and maintenance, spares and stores, insurance premiums and lubricants and certain drydocking costs.

(5)	Management fees to related parties include payments to our affiliates Ravenscroft and Oceanmarine.

(6)	This relates to a loss resulting from the involuntary conversion of certain receivables from U.S. dollars to Argentine pesos. This conversion resulted pursuant to an emergency law passed by the Argentine government in January 2002. Under this law U.S. dollar obligations between private parties due after January 6, 2002 were to be liquidated in Argentine pesos at a negotiated rate of exchange which reflects a sharing of the impact of the devaluation. Our settlement in Argentine pesos of the U.S. dollar denominated agreements was completed in 2002 and resulted in a loss of $2,704.

(7)	The ratio of earnings to fixed charges is computed by aggregating income (loss) before income taxes, minority interest and fixed charges and dividing the total by fixed charges. Fixed charges comprise interest on all indebtedness including capital leases and amortization of debt expense.

(8)	In these fiscal years the earnings are inadequate to cover fixed charges.

The following discussion of our financial condition and results of operations should be read together with the Selected Historical Consolidated Financial Data, Unaudited Pro Forma Condensed Consolidated Financial Information and our combined financial statements and the related notes included elsewhere in this prospectus. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ materially from the results referred to in the forward-looking statements, see “Forward-Looking Statements.”

We are a diversified ocean and river transportation company involved in the carriage of dry and liquid bulk cargoes. In our Ocean Business, we are an owner and operator of oceangoing vessels that transport petroleum products and dry cargo around the world. Our Ocean Business fleet has a capacity of approximately 785,000 dwt, and our three versatile Suezmax/ OBO vessels are capable of carrying either dry bulk or liquid cargoes. Our River Business is the largest owner and operator of river barges and push boats in the Hidrovia region of South America, a fertile agricultural region of navigable waters on the Parana, Paraguay and Uruguay Rivers and part of the River Plate, which flow through Brazil, Bolivia, Uruguay, Paraguay and Argentina. From 2000 to 2004, we operated our River Business as a joint venture in which our subsidiary, UP River, and ACBL, each owned a 50% interest. On April 23, 2004, we purchased ACBL’s 50% equity interest in UABL, together with its assets in the Hidrovia region, including 50 barges and seven push boats and its share of the related receivables and liabilities of UABL, for a total of $26.1 million. As a result of this transaction, together with our prior financing arrangements, we currently own 96.4% of UABL while IFC owns the remaining 3.6%.

In addition, in November, 2002, we entered into a joint venture to form UP Offshore, a company in which we own a 27.78% interest and which will provide transportation services to offshore petroleum exploration and production companies, with a particular emphasis on the Brazilian market. UP Offshore has contracted for the construction of six modern, large, technologically advanced PSVs, whose deliveries are expected to commence in the first quarter of 2005, with an additional two vessels planned to be purchased by UP Offshore. We also have the option, but not the obligation, to purchase up to an additional two PSVs to supplement UP Offshore’s program, but these two vessels would be 100% owned by us.

Our business strategy focuses on maintaining an efficient and flexible fleet, which allows us to provide an array of transportation services to customers in several different industries. We believe that the flexibility of our fleet and the diversity of industries that we service reduce our dependency on any particular sector of the transportation industry.

Some of our most significant customers include Petrobras, Cargill, ENAP, ADM-SAO, Continental Grain, Glencore, ExxonMobil, Repsol-YPF, Petropar, I.O.L., Multigranos, Panocean, RTZ, Swissmarine, PDVSA and Siderar.

Ocean revenues can be booked either on a time charter basis or on a COA basis. Under the terms of a time charter, the charterer pays the ship owner a daily rate for the use of the vessel and, in addition, the charterer pays directly for all voyage expenses (including fuel and port charges). In contrast, under the terms of a COA, the charterer pays the ship owner a rate based on tonnage shipped (expressed in dollars per metric ton of cargo), but the ship owner pays all voyage expenses. Accordingly, the charterer pays a higher overall sum under a COA than under a time charter to compensate the ship owner for having to pay the voyage expenses. Consequently, time charters result in lower revenues and lower expenses for the ship owner than COAs, while COAs result in higher revenues and higher expenses for the shipowner than time charters. Both time charters and COAs at comparable price levels


	•	Revenue is derived from a daily rate paid for the use of the vessel

	•	Charterer pays for all voyage expenses


	•	Revenue is derived from a rate based on tonnage shipped expressed in dollars per metric ton of cargo

	•	Vessel owner pays for all voyage expenses

We actively manage the deployment of our fleet between longer term time charters and shorter term charters. Our vessel deployment strategy is designed to provide greater cash flow stability through the use of these longer term time charters, while maintaining the flexibility to benefit from improvements in market rates by deploying the balance of our vessels on shorter term time charters.

While the tanker market experienced a modest increase in charter rates towards the end of 2003, the dry cargo market experienced a substantial rise in charter rates. We fixed our OBO vessels on time charters of up to one year in the dry cargo market as rates continued to get progressively higher. However, as charter rates increased further to even higher levels during 2004, we had already secured most of our income for 2004 and thus did not benefit from the full impact of these very high rates in the dry cargo market. The tanker market which initially lagged behind as dry cargo rates increased substantially, also reached very high levels during the second half of 2004.

Time charter revenues accounted for 59% of our total revenues for the nine months ended September 30, 2004 and for 65% of our total revenues for the year ended December 31, 2003. COA revenues accounted for 41% of our total revenues for the nine months ended September 30, 2004 and for 35% of our total revenues for the year ended December 31, 2003.

In our Ocean Business, demand for our services is driven by the global movements of liquid and dry bulk cargoes. Our primary liquid cargo is petroleum and our key dry bulk cargoes include various agricultural products, coal and iron ores.

In our River Business, demand for our services is driven by agricultural, mining and forestry activities in the Hidrovia region. Over the past decade, the region’s soy bean production has grown at a compound annual growth rate of approximately 9% and currently produces nearly 50% of the world’s soy bean supply. Mining and forestry activities have increased as well. These products move from the inland areas of the Hidrovia region out to the Atlantic Ocean via the Parana and Paraguay Rivers. Conversely, our tanker barges carry petroleum products from the Atlantic Ocean to inland regions of South America via the Parana and Paraguay Rivers.

A substantial portion of the revenues generated by the River Business during fiscal year 2003 related to the transportation of agricultural products which are concentrated during a seven month period from March to September each year. However, over the past several years, our largest customer, Cargill, has increased production of soy pellets and vegetable oils, which are shipped year-round and help offset some of the River Business’ concentration of cargoes.

Substantially all of the push boats and barges in our River Business are employed on a COA basis whereby we enter into contracts with our customers to carry set volumes of dry or liquid cargo, typically for periods of up to one year.

With respect to COAs entered into in connection with our Ocean Business and River Business, of the total revenues obtained from COAs during the first nine months of 2004, 88% were in respect of repetitive voyages for our regular customers and 12% in respect of single voyages for occasional customers. Of the total revenues obtained

In the Offshore Business, we expect that UP Offshore will seek to enter into long term contracts of two to eight years, with oil exploration and production companies in the Brazilian offshore market. We expect these contracts will be structured as time charters. As of October 2004, UP Offshore has not formally entered into any contracts to provide offshore transportation services, but we expect these contracts to be in place prior to the delivery of the first PSV in March of 2005.

In our Ocean Business, our vessel operating expenses, or running costs, are generally paid through Ravenscroft, a related party, which provides ship management services for our oceangoing vessels. Operating expenses include the cost of all ship management, crewing, spares and stores, insurance, lubricants, repairs and maintenance. The most significant of these expenses are maintenance and repairs, wages paid to marine personnel and marine insurance costs.

Our other primary operating expenses include general and administrative expenses as well as ship management and administration fees paid to Ravenscroft and Oceanmarine, another related party, which provides certain administrative services. We pay Oceanmarine a monthly fee of $10,000 per oceangoing vessel for administrative services including general administration and accounting (financial reporting, preparation of tax returns), use of office premises, a computer network, secretarial assistance and other general duties. We pay Ravenscroft a monthly ship management fee of $12,500 per oceangoing vessel for services including technical management, crewing, provisioning, superintendence and related accounting functions. We do not expect to pay fees to any related party other than those described here for management and administration functions.

In our River Business, prior to our acquisition of the remaining 50% equity interest in UABL, our subsidiaries that owned push boats and barges contracted with Lonehort, Inc., a subsidiary of UABL, for ship management services and generally paid our operating expenses through Lonehort. Our operating expenses include the cost of all ship management, crewing, spares and stores, insurance, lubricants, repairs and maintenance. Following the acquisition of the remaining 50% equity interest in UABL, all ship management services are performed, and all operating expenses are paid, in-house. UABL employs the services of Tecnical Services S.A. to provide crew recruitment services in Argentina and Paraguay. We pay Tecnical Services S.A. $140,000 per year, plus an additional $50 for each active crew member. We do not expect to pay fees to any related entity other than those described here for management and administration functions.

In the Offshore Business, we expect operating expenses to include the cost of all ship management, crewing, spares and stores, insurance, lubricants, repairs and maintenance.

Through UABL, we own a drydock and a repair facility for our river fleet at Pueblo Esther, Argentina and land for the construction of two terminals in Argentina and 50% joint venture participations in two grain loading terminals in Paraguay. UABL also rents offices in Asuncion, Paraguay and Buenos Aires, Argentina. We do not own any other buildings and do not pay any other rental expense other than as a portion of the administration fees paid to Oceanmarine.

Vessels are depreciated to an estimated scrap value on a straight-line basis over their estimated useful lives. We follow the deferral method of accounting for survey and drydock costs, whereby actual survey and drydock costs are capitalized and amortized over a period of two and one-half years until the date of the next drydock or special survey.

In our Ocean Business, when vessels are on time charter, fuel is supplied and paid for by the charterers. Currently our Ocean fleet is employed on time charters. However, in the future it may be employed under COAs in which case fuel would be supplied and paid for by us. In our River Business (where we generally carry cargoes for a freight per metric ton), fuel is our single largest variable expense.

Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003

Revenues. Total revenues from our ocean fleet, net of commissions, decreased from $48.1 million in the first nine months of 2003 to $39.9 million in 2004, or a decrease of 17%. This decrease is primarily attributable to the effect of reductions in the revenues due to the sale of our vessels Princess Veronica, Princess Pía, Princess Eva, Princess Laura and Princess Marisol as well as Alianza G1 during the last twelve months. In addition, our Princess Susana operated under a time charter during the first half of 2004 while she was employed on voyage charters during the equivalent period of 2003. These reductions were partially offset by the higher time charter rates of our Princess Nadia, Princess Susana, Princess Katherine and Cape Pampas during the first nine months of 2004.

Our revenues were also negatively affected by the Cape Pampas and the Alianza G3 being out of service for a total of 167 days due to major repairs and the fact that our Princess Marina being out of service for 52 days due to accidents during the first quarter. Part of this off hire time was compensated by our loss of hire insurance.

Total revenues from our river fleet, net of commissions, increased by 323% from $7.5 million to $31.7 million. This increase is primarily attributable to the consolidation of UABL revenues since the second quarter of 2004, while in the first nine months of 2003 river revenues only included the net proceeds for those of our vessels which were chartered by UABL.

Voyage expenses. In the first nine months of 2004, voyage expenses of our ocean fleet were $0.5 million, as compared to $10.3 million for the same period of 2003, a decrease of $9.8 million, or 95%. The decrease is primarily attributable to the combined effect of a large portion of the Panamax fleet under COA employment during the first nine months of 2003 being sold during last year and the Princess Susana operating under time charter employment instead of COA employment.

In the first nine months of 2004, voyage expenses of our river fleet were $9.5 million, as compared to $0 million for the same period of 2003, an increase of $9.5 million. The increase is attributable to the effect of the consolidation of UABL, as our subsidiary in the second quarter of 2004.

Running costs. Running costs of our ocean fleet decreased by about 45%, to $9.6 million in the first nine months of 2004 as compared to $17.3 million in the equivalent 2003 period. This decrease is mainly attributable to the sale of Princess Pía, Princess Verónica, Princess Eva, Princess Marisol, Princess Laura and Alianza G1 during the last twelve months.

In the first nine months of 2004, running expenses of our river fleet were $9.2 million, as compared to $4.9 million for the same period of 2003, an increase of $4.3 million. The increase is attributable to the effect of the consolidation of UABL, as our subsidiary.

Amortization of drydock expense. Amortization of dry docking and special survey costs decreased by $2.2 million, or 38%, to $3.6 million in 2004 as compared to $5.8 million in 2003. The decrease is primarily attributable to the vessels sold during the last year. The unamortized balance is included in the gain or loss resulting from the sales of the vessels.

Depreciation of property and equipment. Depreciation and amortization decreased by $2.1 million, or 18%, to $9.8 million in the first nine months of 2004 as compared to $11.9 million in 2003. This decrease is primarily due to the sale of the Princess Veronica, Princess Laura, Princess Pia, Princess Marisol and Alianza G1 which was partially offset by the purchase of the new tug and river barges and the depreciation of the UABL fleet.

Management fees and administrative expenses. Management fees and administrative expenses were $5.9 million in the first nine months of 2004 as compared to $5.2 million in the same period in 2003. This increase of

Operating profit. Operating profit for the first nine months of 2004 was $23.4 million, an increase of $23.2 million from the same period in 2003. In comparing these figures, the difference is mainly attributable to the higher results obtained from our vessels Princess Susana, Princess Nadia, Princess Katherine and Cape Pampas, as well as the consolidation of the results of UABL following the acquisition of the remaining 50% equity interest in that company.

Interest expense. Interest expense increased by about 3%, to $12.3 million in the first nine months of 2004 as compared to $12.0 million in the equivalent 2003 period. This variation is primarily attributable to the lower level of financial debt on our ocean vessels and consequential interest costs, offset by an increase of $1.1 million in interest expenses attributable to the effect of the consolidation of UABL, as our subsidiary.

Financial gain on extinguishments of debt. During the first nine months of 2004, through our subsidiaries, we repurchased $5.7 million nominal value of our Prior Notes. We recognized a gain of $1.3 million for the retirement of such debt (a gain of $1.4 million for the excess of the net carrying amount over the reacquisition price less $0.1 million for the unamortized deferred issuance expense associated with these Notes).

Revenues. Total revenues from freight net of commissions increased from $24.8 million in 2002 to $26.4 million in 2003, or an increase of 6%. This increase is primarily attributable to the Princess Susana and Princess Veronica COA’s employment instead of time charter operation of those vessels. Hire revenues net of commissions, increased by 1% from $48.4 million to $48.7 million. This increase is attributable to the time charter employment of the Princess Marisol and Cape Pampas, a new vessel we acquired in July 2002 partially offset by Princess Susana and Princess Veronica COA’s employment. The total of 103 days out of service experienced by the Princess Marina and the Princess Susana due to major repairs, and Princess Eva and Princess Pia, which were out of service due to accidents for 166 days during the first six months of 2003 negatively affected our revenues in this period. Part of this off hire time is compensated by our loss of hire insurance for which a total of $1.5 million has been included as other income (outside our operational results).

Voyage expenses. Voyage expenses for 2003 were $12.6 million, as compared to $10.2 million for 2002, an increase of $2.4 million, or 24%. The increase is primarily attributable to the Princess Susana and Princess Veronica COA’s employment instead of time charter employment and to a change in trading pattern of Princess Laura which was employed on shorter voyages between ports where the port costs are more significant.

Running costs. Running costs increased by $1.3 million, or 5%, to $28.7 million in 2003 as compared to $27.4 million in the equivalent 2002 period. This increase is mainly attributable to the Cape Pampas, a new vessel acquired in July 2002 and additional expenses incurred in our Panamax fleet.

Amortization of drydock expenses. Amortization of drydocking and special survey costs decreased by $1.6 million, or 18%, to $7.2 million in 2003 as compared to $8.8 million in 2002. The decrease is primarily attributable to the cease of amortization for the vessels sold during the year. The unamortized balance is included into the gain or loss disposal calculation.

Depreciation of property and equipment. Depreciation and amortization decreased by $0.7 million, or 4%, to $15.3 million in 2003 as compared to $16.0 million in 2002. This decrease is primarily due to the sale of the Princess Fatima, Princess Veronica, Princess Pia and Princess Marisol partially offset by an increase attributable to the purchase of the Cape Pampas.

Management fees and administrative expenses. Management fees and administrative expenses were $7.8 million in 2003 as compared to $6.8 million in 2002, an increase of $1.0 million, or 15%. This increase of $1.0 million is attributable mainly to an increase in administrative expenses.

Operating profit. Operating profit for 2003 was $3.5 million, an increase of $2.3 million from 2002. This difference is mainly attributable to the combined effect of: lower net earnings of our Panamax size vessels and

Interest expense. Interest expenses decreased by $0.6 million, or 4%, to $16.2 million in 2003 as compared to $16.8 million in 2002. The decrease is primarily attributable to the lower level of financial debt and associated interest costs.

Financial gain on extinguishment of debt. During the last quarter of 2003, through our subsidiaries, we repurchased $6.7 million nominal value of our Prior Notes. We recognized a gain of $1.8 million for the extinguishment of the debt (a gain of $2.0 million for the excess of the net carrying amount over the reacquistion price less $0.1 million for commissions and $0.1 million for the unamortized deferred issuance expense associated with these Notes).

Investment in subsidiaries. Investment in subsidiaries for 2003 was a gain of $3.1 million compared to a loss of $0.1 million in 2002. The difference is mainly due to our 50% interest in UABL, since whereas in 2003 UABL yielded net income of $4.3 million in 2002, it carried a loss of $2.5 million.

Other net (expense) income. This account disclosed an income of $1.7 million in 2002 and a loss of $2.5 million in 2003. The difference is explained by the combined effect of the following: an increase in the loss from the sale of property, plant and equipment of $2.1 million (a loss of $3.7 million in 2003, as compared to a loss of $1.6 million in 2002) and a decrease in income from claims against insurance companies of $1.7 million (income of $1.6 million in 2003, as compared to income of $3.3 million in 2002).

Revenues. Total revenues from freight net of commissions decreased from $73.7 million in 2001 to $24.8 million in 2002, or a decrease of 66%. This decrease is primarily attributable to the time charter operation of the Princess Katherine, Alianza G3, Princess Veronica and Princess Susana instead of COA’s employment, as well as a general decrease in freight rates. Another contributing factor was lower revenue obtained by our Alianza G3/Alianza Campana, which spent the entire first quarter in preparation and positioning for a long term contract. Also the lower utilization rates of our Panamax vessels coupled with the total of 129 days out of service experienced by Princess Pia and Princess Fatima due to drydock and special survey and Princess Marisol which was out of service due to an accident for 87 days during 2002, negatively affected our revenues in this period. Part of this off hire time is compensated by our loss of hire insurance for which a total of $1.8 million has been included as other income (outside our operational results). Hire revenues net of commissions, increased by 29% from $37.6 million to $48.4 million. This increase is attributable to the time charter employment of the Princess Katherine, Princess Susana, Princess Veronica, Alianza G3 and the addition of Cape Pampas purchased by Ultracape coupled with a significant reduction in the charter rates (because of market conditions) obtained for our ships after expiry of the time charter agreements that had been fixed in 2001.

Voyage expenses. The 2002 voyage expenses were $10.2 million, as compared to $26.9 million for 2001, a decrease of $16.7 million, or 62%. The decrease is primarily attributable to the combined effect of a large portion of the fleet operating on time charter contract instead of COA and the lower activity of our Panamax fleet.

Running costs. Running costs decreased by $6.2 million, or 18%, to $27.4 million in 2002 as compared to $33.6 million in the equivalent 2001 period. This decrease is mainly attributable to significant cost reductions achieved on some of our vessels in operation coupled with the general low level of activity for the fleet and extended periods of repairs by some of our vessels.

Amortization of drydock expense. Amortization of dry docking and special survey costs increased by $1.6 million, or 22%, to $8.8 million in 2002 as compared to $7.2 million in 2001. The increase was due to the amortized portion of drydocks carried out in 2001 on the Princess Katherine, Princess Susana and Princess Nadia.

Depreciation of property and equipment. Depreciation and amortization decreased by $0.2 million, or 1%, to $16.0 million in 2002 as compared to $16.2 million in 2001. This decrease is primarily due to the sale of the Princess Fatima partially compensated by an increase attributable to the purchase of the Cape Pampas.

Management fees and administrative expenses. Management fees and administrative expenses were $6.8 million in 2002 as compared to $7.8 million in 2001, a decrease of $1.0 million, or 13%, which is attributable mainly to a reduction in administrative expenses of $0.9 million.

Operating profit. Operating profit for 2002 was $1.2 million, a decrease of 94% or $18.3 million from the same period in 2001. The decrease is primarily attributable to the same factors that affected our revenues in this period detailed above and includes the full impact of a $2.7 million loss on involuntary conversion of Argentine receivables which resulted from the devaluation of the Argentine currency. During the first half of 2002, the receivables denominated in U.S. dollars but collected in Argentine pesos were exposed to the compulsory conversion to Argentine currency at a rate of exchange different from the market rate at the time of payment by virtue of Argentine Law 25.561 and the Decree 214/2002 and thereafter subject to negotiations between the parties as to the rate of exchange applicable to each transaction. The sale of Princess Fatima resulted in a loss of $1.6 million which has been accounted for under “other income.”

Interest expense. Interest expenses decreased by $0.9 million, or 5%, to $16.8 million in 2002 as compared to $17.7 million in 2001. The decrease is primarily attributable to the lower level of financial debt and consequential interest costs associated.

We operate in a capital-intensive industry requiring substantial ongoing investments in revenue producing assets. Our subsidiaries have historically funded their vessel acquisitions through a combination of bank indebtedness, shareholder loans, cash flow from operations and equity contributions.

As of September 30, 2004, we had total indebtedness of $187.3 million, consisting of: $122.6 million from our Prior Notes; $4.3 million in a senior loan facility with DVB for Kattegat Shipping Inc., a wholly owned subsidiary, for the purchase of the vessel Princess Marina; $12.0 million in a senior loan facility with DSB for Majestic Maritime Ltd., a wholly owned subsidiary, for refinancing the purchase of the vessel Princess Katherine; and $7.4 million in a senior loan facility with Calyon for Braddock Shipping Inc., a 60% owned subsidiary, for the purchase of the vessel Cape Pampas. Also as of September 30, 2004, UABL, as our subsidiary, had the following indebtedness: $15.0 million in a senior loan facility with IFC, $7.5 million with KfW, $1.6 million with Citibank NA, $1.0 million with Touax LPG SA and $3.9 million with Transamerica Leasing Inc. There was also accrued interest expenses for these loans of $6.9 million. On January 23, 2004 UP Offshore issued $3.0 million in preferred shares in favor of IFC and on September 9, 2004, received $2.1 million in a term loan with IFC.

At September 30, 2004, we had cash and cash equivalents on hand of $15.1 million. In addition, we had $2.5 million in restricted cash and $3.2 million in short term investments.

In the first nine months of 2004, we generated $27.2 million in cash flow from operations compared to $14.4 million for the same period in 2003. Net income for the first nine months of 2004 was $12.2 million which is $19.1 million more than the net loss in the same period of 2003.

In 2003, we generated $20.5 million in cash flow from operations compared to $14.4 million for in the same period in 2002. Net loss for 2003 was $11.5 million compared with a net loss of $13.8 million in the same period of 2002.

Net cash provided by operating activities consists of our net income increased by non-cash expenses, such as depreciation and amortization of deferred charges, and adjusted by changes in working capital.

During the first nine months of 2004, we disbursed $21.1 million in the purchase of push boats and river barges of which we paid with funds available in restricted cash. UP Offshore, in which we have a 27.78% ownership interest but which was included in our consolidated results for the period, disbursed $24.7 million in advances to the yards contracted to build our new offshore vessels. Of this total, we made equity contributions to UP Offshore of a total of $7.1 million. We also disbursed $2.0 million in special work upgrading Cape Pampas. Since the second quarter of 2004, as result of the consolidation of UABL, as our wholly owned subsidiary, we disbursed $1.3 million in the purchase of river assets and disbursed $1.7 million for the purchase of the remaining 50% equity interest in UABL and UABL Terminals, net of the cash acquired.

During 2003 UP Offshore disbursed $14.3 million in advances to the yards contracted to build the new offshore vessels. Of this total, we made an equity contribution to UP Offshore for a total of $4.4 million and we disbursed $2.8 million for the purchase of the new river barges compared to $17.7 million disbursed for the acquisition of vessels in the same period of 2002. We disbursed $3.6 million in drydock and major repair expenses, compared to $6.0 million in 2002. Also during 2003, we received net proceeds of vessel sales of $16.1 million.

Net cash provided by financing activities was $34.4 million during the first nine months of 2004, compared to a use of $1.3 million in financing activities during the comparable period in 2003. The increase in cash provided by financing activities in the first nine months of 2004 is mainly attributable to the issuance of preference shares in UP Offshore of $3.0 million, a senior loan facility of $2.1 million and the refinancing of the Princess Katherine mortgage indebtedness of $13.0 million, partially offset with $14.7 million of repayments of principal on its financial debt made during the first nine months of 2004. Also during the first nine months of 2004, through our subsidiaries, we repurchased $5.7 million nominal value of our Prior Notes at a net amount of $4.3 million and applied $17.7 million of our restricted funds in the purchase of new equipment for our River Business.

Net cash used in financing activities was $10.7 million during 2003. The use of cash in financing activities in 2003 is mainly attributable to capital payments made during 2003. During the last quarter of 2003, through our subsidiaries, we repurchased $6.7 million nominal value of our Prior Notes at a net amount of $4.8 million.

We intend to fund ongoing operations through cash generated by operations and borrowings under our subsidiaries’ senior credit facilities. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources and future refinancings of our debt.

On October 15, 2004, through Ultracape Delaware LLC, a new subsidiary of Ultracape (Holdings) Ltd., we entered into a transaction with a related party to acquire the land for expansion of a maritime oil products terminal in Mexico for $2 million with a view to expanding our transportation services to that area.

On October 27, 2004, we refinanced the existing senior secured credit facility of Braddock Shipping Inc., an indirect wholly owned Panamanian subsidiary of Ultracape, with a new senior secured credit facility of $10.0 million with DSB. This new credit facility has a five year maturity and contains a covenant that requires Braddock to provide a minimum level of collateral to secure the loans provided thereunder, as well as certain other restrictive covenants that, among other things, limit Braddock’s ability to incur additional indebtedness, pay dividends, repay indebtedness, make investments, merge or consolidate, change its lines of business, and amend the terms of subordinated debt. The agreement governing the facility also contains customary events of default, subject to grace periods, as appropriate. See “Description of Credit Facilities and Other Indebtedness.”

We expect to make capital expenditures of approximately $41.0 million in the fiscal year 2005 using the Escrowed Proceeds and certain other funds. These capital expenditures are expected to be primarily related to acquiring new vessels.

The following schedule summarizes our contractual obligations and commercial commitments as of September 30, 2004 on a pro forma basis after giving effect to the Refinancing and the UP Offshore Deconsolidation:

As a result of the offering of our outstanding notes and the extinguishment of the Prior Notes, we realized a loss of $6.5 million in the fourth quarter of 2004, which is non-recurring.

We believe, based upon current levels of operation, cash flow from operations, together with other sources of funds, including the Escrowed Proceeds, that we will have adequate liquidity to make required payments of principal and interest on our debt, including obligations under the notes, complete anticipated capital expenditures and fund working capital requirements.

Our ability to make scheduled payments of principal of, or to pay interest on, or to refinance, our indebtedness, including the new notes, or to fund planned capital expenditures will depend on our ability to generate cash in the future. Our ability to general cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, useful lives of vessels, deferred tax assets, and certain accrued liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue is generally recorded when services are rendered, we have a signed charter agreement or other evidence of an arrangement, pricing is fixed or determinable and collection is reasonably assured. Revenues are earned under time charters or COAs. Revenue from time charters is earned and recognized on a daily basis. Revenue for COAs is recognized based upon the percentage of voyage completion. The percentage of voyage completion is based on the number of voyage days worked at the balance sheet date divided by the total number of days expected on the voyage.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The estimate of uncollectible amounts is based on the results of ongoing credit evaluations and our historical experience. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

We record impairment losses on long-lived assets used in operations when indications of impairment are present and the estimated undiscounted cash flows to be generated by those assets are less than the assets’ carrying amounts. If the carrying value is not recoverable, the carrying value of the assets is reduced to estimate fair value. Undiscounted cash flows are estimated using expected average long term day rates and utilization based largely on historical industry and our experiences. If future market conditions do not meet expectations, we may be required to record impairment charges which could be material.

Management determines the useful lives of the vessels based upon regulatory requirements such as OPA, market conditions and operational considerations. We continue to evaluate the reasonableness of the useful lives of the vessels.

All of our vessels must be periodically drydocked and pass certain inspections to maintain their operating classification, as mandated by certain maritime regulations. Costs incurred to drydock the vessels are deferred and amortized on a straight line basis over the period to the next drydocking, generally 30 months. The alternative accounting policy for drydocking costs is to expense the expenditures as incurred. The Financial Accounting Standards Board and the American Institute of Certified Public Accountants have proposed that the deferral method of accounting for planned major maintenance activities such as drydocking expenditures should be eliminated. Under the proposal, we would expense drydocking expenditures as incurred. Our unamortized drydocking costs were approximately $9.8 million as of September 30, 2004 and $3.5 million as of December 31, 2003.

We do not believe that inflation has had a material impact on our operations, although certain of our operating expenses (e.g., crewing, insurance and drydocking costs) are subject to fluctuations as a result of market forces. Inflationary pressures on bunker costs are not expected to have a material effect on our future operations since freight rates for voyage charters are generally sensitive to the price of a ship’s fuel. A sharp rise in bunker prices may have a temporary negative effect on results since freights generally adjust after prices settle at a higher level.

We are exposed to market risk from changes in interest rates, which may adversely affect our results of operations and financial condition. Our policy is not to use financial instruments for trading or other speculative purposes, and we are not a party to any leveraged financial instruments.

Short term variable rate debt, comprised approximately $7.1 million of our total debt as of December 31, 2003, including accrued interest. Long term variable rate debt, comprised approximately $17.0 million of our total debt as of December 31, 2003. Our variable rate debt had an average interest rate of approximately 2.98% as of December 31, 2003. A hypothetical 1.0% increase in interest rates on $24.1 million of debt would cause our interest expense to increase on average approximately $0.24 million per year over the term of the loans, with a corresponding decrease in income before taxes.

Substantially all of our revenues are denominated in U.S. dollars. However, for the nine month period ended September 30, 2004, 9% of our total revenues were denominated in U.S. dollars but collected in Argentine Pesos and Paraguayan Guaranies at the equivalent amount of U.S. dollars at the payment date, and 10% of our total out of pocket operating expenses were paid in Argentine Pesos and Paraguayan Guaranies. Our operating results, which are reported in U.S. dollars, may be affected by fluctuations in the exchange rate between the U.S. dollar and the local currencies. For accounting purposes, revenue and expense accounts are translated into U.S. dollars at the exchange rate prevailing on the date of each transaction.

Historically, we have not used derivatives or other financial instruments to hedge the risk associated with the movement in foreign currencies. However, in November 2003, UP Offshore, in which we have a 27.78% ownership interest, entered into a series of hedging contracts with AIG International Inc. in order to assure the Euro payments due under the shipbuilding contracts for the construction of two PSVs. Under this contract, UP Offshore has a hedge for the portion of supplies of the vessel construction contract that is denominated in Euros for a total of Euros 1.4 million at approximately $1.14 per dollar.

Certain statistical and graphical information contained in this prospectus, including the information in this section “Industry Overview,” has been supplied by DSC, an independent U.K.-based company providing market analysis and strategic planning services to the shipping industry. See “Industry Expert.” DSC bases its analysis on information drawn from published and private industry sources. For purposes of this Industry Overview, Latin America includes Central America, South America, and the Caribbean Basin islands. Consistent with revised International Energy Agency definitions, North America includes the United States, Canada, and Mexico. DSC has advised us that (i) some industry data included in this discussion is based on estimates or subjective judgments in circumstances where data for actual market transactions either does not exist or is not publicly available, (ii) the published information of other maritime data collection experts may differ from this data, and (iii) while DSC has taken reasonable care in the compilation of the industry statistical data, graphs and tables and believe them to be correct, data collection is subject to limited audit and validation procedures.

The demand for tankers is a function of the volume of crude oil and petroleum products to be transported by sea and the distance between areas of oil consumption and oil production. The volume of crude oil and petroleum products transported is affected by overall demand for these products, which in turn is influenced by, among other things, general economic conditions, oil prices, weather, competition from alternative energy sources, and environmental concerns.

World oil demand increased from about 67.9 million barrels per day, or MBD, in 1993 to 79.6 MBD in 2003, a compounded annual growth rate, or CAGR, of approximately 1.6%. Oil demand increased in all regions except for the Former Soviet Union. In 2003, oil demand grew by about 1.7 MBD.

During this same period, world oil supply increased from about 67.5 MBD in 1993 to 79.6 MBD in 2003, a CAGR of about 1.7%. In 2003, oil production grew by 3.0 MBD. OPEC crude oil production increased from 24.7 MBD in 1993 to 26.8 MBD in 2003, a CAGR of about 0.8%. Non-OPEC production increased from about 40.5 MBD to about 48.9 MBD, a CAGR of about 1.9%.

Benchmark West Texas Intermediate (“WTI”) crude averaged $18.43 per barrel in 1993 and averaged between $14 and $23 through the rest of the 1990’s. WTI prices increased in 2003 to an average of $31.08 per barrel and reached historically high levels in 2004, with the August 2004 average at about $44.90 per barrel.

U.S. oil demand increased from about 17.5 MBD in 1993 to about 20.1 MBD in 2003, a CAGR of 1.4%. U.S. oil demand grew by about 0.3 MBD in 2003. U.S. crude oil production decreased from about 8.8 MBD in 1993 to about 7.8 MBD in 2003. U.S. crude oil production decreased by about 0.3 MBD in 2003. Arabian Gulf OPEC producers exported about 1.6 MBD of crude oil to the United States during 1993 and about 2.4 MBD of crude oil to the United States during 2003, an increase of 0.8 MBD. Short haul Mexican and Latin American crude oil exports to the United States increased from about 2.1 MBD in 1993 to about 3.3 MBD during 2003, an increase of nearly 1.2 MBD.

Latin American oil demand increased from about 3.8 MBD in 1993 to about 4.7 MBD in 2003, a CAGR of 2.1%. Latin American oil demand decreased by 0.1 MBD in 2003. Latin American oil production (excluding Venezuela) grew from about 2.6 MBD in 1993 to approximately 4.0 MBD in 2003. Brazilian oil production increased from approximately 0.9 MBD in 1993 to 1.8 MBD in 2003. Venezuelan conventional crude oil production decreased from about 2.3 MBD in 1993 to 2.0 MBD in 2003.

In 1993, the United States imported 6.8 MBD of crude oil, including 2.1 MBD (32% of crude oil imports) from Latin America and Mexico and 1.6 MBD from Arabian Gulf OPEC countries. In 2003, the United States imported 9.6 MBD of crude oil, including 3.3 MBD (34% of crude oil imports) from Latin America and Mexico and 2.4 MBD from Arabian Gulf OPEC countries. Crude imports from Latin America and Mexico have grown by about 1.2 MBD, or a CAGR of approximately 4.3%, from 1993 through 2003, while imports into the U.S. from the Middle East have increased by approximately 0.8 MBD, a CAGR of 3.9%.

As the table below demonstrates, the world oil tanker fleet is generally divided into six vessel sizes classified by dwt, which is an approximate measure of a vessel’s cargo carrying capacity. In general, VLCC’s/ ULCC’s primarily transport crude oil on long haul trade routes (where oil producers are located more than approximately 5,000 miles from the final importer), such as from the Arabian Gulf to the Far East, from the Arabian Gulf to Rotterdam via the Cape of Good Hope, from the Arabian Gulf to the Red Sea, and from the Arabian Gulf to the U.S. Gulf/ Carribean. Suezmax tankers trade on long haul and short haul routes as discussed below, while Aframax, Panamax, and Handy tankers serve routes typically in short haul, regional markets (e.g., Latin America, Mediterranean and Southeast Asia).

Suezmax vessels are active in dirty trades (i.e., the transport of crude oils and dirty petroleum products) from West Africa to the Americas, and in some Latin American dirty trades, including backhauls (return trips with a short ballast leg) to Europe and North America. Other major Suezmax trades include cross-Mediterranean and intra-European trades.

Aframax tankers are active in dirty Latin American trades. Since Aframax tankers are the largest vessels capable of entering many U.S. ports, these vessels are often utilized in Latin American to U.S. trade routes to take advantage of economies of scale. Other major dirty petroleum Aframax trades include intra-European and cross-Mediterranean trades. In clean Aframax trades, major routes include voyages from the Middle East to Japan, Southeast Asia and South Asia.

Panamax tankers are also active in dirty petroleum Latin American trades. As with Aframaxes, port constraints (e.g., shallow water depth, restrictions of vessel dimensions or tonnage) offer Panamaxes opportunities in Latin and North America not available to larger-sized vessels. The Latin America-North America trade route, dirty intra-European, dirty intra-Southeast Asian, clean Middle East to Asia, and clean Transatlantic trades are major Panamax trade routes.

The supply of tankers is determined by the size and technical suitability of the available fleet (i.e., size of a vessel versus port constraints, clean versus dirty cargo capabilities, charterer acceptability, etc.). Tanker owners include oil companies, government-owned shipping companies and independent ship owners. Independent owners are now the largest group, owning about 80% of the tanker fleet. There are also operators who do not own vessels but who charter their tonnage from independent shipowners. The existing fleet is increased by newbuilding deliveries and decreased by the number of tankers scrapped or otherwise removed from the fleet. Fleet size is also decreased when vessel tonnage becomes unavailable due to floating storage, layup, or repair. Newbuilding, scrapping, and vessel unavailability are affected by current and expected future vessel prices, charterhire rates, operating costs, age profile of the fleet, and government and industry regulation.

The International Maritime Organization adopted accelerated phaseout regulations for single hull tankers in December 2003, which are expected to enter into force in April 2005. The regulations are a complex set of requirements that accelerate the phaseout to 2005 of pre-MARPOL “Category 1” tankers without protectively

The European Union (“EU”) has regulations in effect since 2003 that require double hull vessels for certain heavy oils with no exceptions. These regulations apply to tankers of 5,000 dwt or more registered in EU countries or entering waters within the jurisdiction of EU countries.

Along with mandatory regulations, other factors encourage scrapping of single hull tankers, such as charterers requiring or preferring double hull vessels. This preference tends to reduce utilization of single hull vessels and to encourage scrapping.

In 2003, 1.8 million dwt, or Mdwt, of Suezmaxes were scrapped, while 3.7 Mdwt were delivered. In 2004, through August 1, 2004, 0.6 Mdwt have been scrapped, while 2.5 Mdwt have been delivered. The current orderbook is 13.1 Mdwt (83 vessels) with 2.0 Mdwt due for delivery this year, 4.3 Mdwt next year and 3.3 Mdwt in 2006. About 32.0 Mdwt of Suezmaxes have double hulls, 3.5 Mdwt have double bottoms or double sides, and 8.6 Mdwt have single hulls.

One-year time charter rate assessments for a standard ship type are shown below. Time charter rate assessments ignore the wide variation in time charter rates based on different vessel specifications and performance, and are only intended to demonstrate trends. Time charter rates tend to be less volatile than spot charter rates as they incorporate rate expectations, which change less quickly than the day to day spot freight market.

Note: The Suezmax standard ship changed from a 1970’s built vessel to a 1990’s build vessel in January, 1995, resulting in a one time change in charterhire of about $6,000 — $7,000 per day, primarily due to lower fuel consumption.

From November 2002 through March 2003, the concurrence of a number of positive factors resulted in high tanker earnings. Tanker demand increased while the industry fleet grew moderately. Winter seasonality further increased demand and resulted in weather delays in Baltic and Black Sea trades. Substitution of long haul oil for short haul Venezuelan oil and precautionary liftings in expectation of war in Iraq were also positive factors. The result was strong tanker earnings. Tanker earnings gradually decreased through the second and third quarters of 2003, but remained well above earnings prevailing in 2002. Oil demand was lower than first quarter demand, due to seasonality, but was higher than the corresponding quarter in 2002. Once again, earnings improved beginning in November 2003 and have remained at high levels through most of 2004 due to high oil demand and moderate fleet growth.

The international dry bulk cargo market is a global industry and is affected by many factors throughout the world. Important industry conditions for dry bulk shipping include world dry bulk commodity production and demand, the size of the international dry bulk and combination carrier fleet, the new production and scrapping of oceangoing dry bulk carriers and freight rates. Both Capesize bulk carriers and combination carriers ship dry bulk cargoes, such as iron ore and coal.

Seaborne iron ore trade grew from an estimated 354 million tons, or Mt, in 1993 to about 524 Mt in 2003, a CAGR of 4.0%. High demand for steel in China has led to growth in Chinese iron ore imports from about 33 Mt in 1993 to 148 Mt in 2003, a CAGR of 16.2%. This increase includes growth of about 37 Mt in 2003, a year on year increase of about 33%. During the first six months of 2004, Chinese iron ore imports were estimated at 97.7 Mt, an increase of about 35% compared with 2003.

Other Asian countries such as Japan and Korea have required increasing iron ore imports. The top iron ore exporters are Australia and Brazil, accounting for about 71% of estimated 2003 seaborne trade. Australian exports grew from 113 Mt in 1993 to 189 Mt in 2003, including 23 Mt of growth in 2003. Brazil’s iron ore exports increased from 109 Mt in 1993 to 184 Mt in 2003, which includes 14 Mt of growth in 2003.

Coal trade is made up of thermal coal (steam coal), burned for its heat value primarily in power generation, and metallurgical coal (coking coal, met coal), used in steelmaking. Estimated seaborne steam coal trade grew from about 206 Mt in 1993 to about 441 Mt in 2003, a CAGR of 7.9%, which includes 42 Mt of growth in 2003. Leading coal exporters are Australia, China, Indonesia, and South Africa.

Capesize dry bulk vessels and combination carriers have a cargo carrying capacity of 80,000 dwt or greater based on representative sizes of vessels too large to pass through the Panama Canal. However, most Capesize tonnage (about 95%) is comprised of vessels of 100,000 dwt or greater. Capesizes primarily transport iron ore and coal on trade routes where lack of port constraints (especially depth of water) and cargo parcel size limits allow realization of economies of scale.

As of August 1, 2004, there were 653 Capesize dry bulk vessels comprising about 103.6 Mdwt. In 2003, 1.0 Mdwt of Capesizes were scrapped, while 5.6 Mdwt were delivered. In 2004, through August 1, 2004, none have been scrapped, while 4.6 Mdwt have been delivered. The current orderbook is 21.2 Mdwt (142 vessels) with 3.5 Mdwt due for delivery this year, 7.4 Mdwt next year and 6.1 Mdwt in 2006. The remainder are scheduled to be delivered in 2007, 2008 and 2009. Total Capesize combination carrier dwt is 7.8 million, with an estimated 4.6 Mdwt (59%) currently employed in dry bulk trades. 0.2 Mdwt were delivered in 2003, while 0.4 Mdwt were scrapped. None were delivered this year or are currently on order. In 2004, 0.2 Mdwt have been scrapped through August 1, 2004. Improved trade in year 2000 resulted in average one-year time charter rates of about $17,100 per day. Slower trade growth and high fleet growth in 2001 and 2002 resulted in lower time charter rates, with average one-year time charter rates of $12,800 per day in 2001 and $12,300 per day in 2002. Throughout 2003, there were large increases in dry bulk trade and tonnage demand that offset fleet growth. In 2003, Capesize vessel earnings increased from January through September, with one-year time charter rates reaching an average of $27,000 per day in September. From October 2003 through February 2004, Capesize one-year time charter rates more than doubled from these already high levels reaching an average of $67,000 per day during February 2004, led by high Chinese steel demand and strong coal markets. Although time charter rates have retreated somewhat from the high levels of early 2004, they remain at high levels with one year time charter rates in the first half of September averaging about $44,000 per day.

Key industry conditions in the Hidrovia region are agricultural production and exports, particularly soybeans, from Argentina, Brazil, Paraguay and Bolivia (“the Region”), exports of Brazilian iron ore, regional demand and Paraguayan and Bolivian imports of petroleum products. Exports of Argentine forest products and other commodities are also significant. Practically all of the commodities/cargoes transported in the system are export or import related cargoes.

The Paraguay, the high Parana and the Uruguay rivers, consists of 3,762 km of a single natural interconnected navigable river system serving 5 countries, namely Brazil, Bolivia, Paraguay, Uruguay and Argentina. The size of this river system is comparable to the Mississippi river in the U.S. but its real economic importance has only started to develop since about 1997.

Soybeans: Argentina, Brazil, Paraguay and Bolivia produced about 39.6 million tons, or mt, of soybeans in 1993 and 92.6 mt in 2003, a CAGR of 8.9% from 1993. Production for these countries for 2004 is estimated at 112.0 mt. These countries accounted for about 49% of world soybean production in 2003, growing from only 34% in 1993.

The Region is one of the few areas left in the world where unused farmland is available. Within the four countries of the Region, acreage harvested in soybeans has increased from approximately 18.2 Mha (million hectares; 1 hectare = 2.47 acres) in 1993 to 37.9 Mha in 2003, a CAGR of 7.6%. In addition, with advances in technology, productivity of farmland has also improved.

The growth in soybean production has not occurred at the expense of other key cereal grains. Production of corn (maize) in the Region grew from 44.0 mt in 1993 to 55.6 mt in 2003, a CAGR of 2.4%. Production of wheat in the Region grew from 12.4 mt in 1993 to 19.8 mt in 2003, a CAGR of 4.8%.

The installation of crushing plants in Bolivia and Paraguay has generated a large volume of vegetable oils and soybean meal that are also shipped via the river for export. Soybean meal exports from Bolivia and Paraguay totalled about 1.7 mt in 2003, while soybean oil exports were about 0.4 mt.

Forest Products: Areas adjacent to the Hidrovia region in Northern Argentina comprise most of Argentina’s forest and forest product producing areas. Higher value added sectors of the forest products industry have been growing at high rates, while lower value added sectors (e.g. logs, fuel wood) have been allowed to remain stable or decline. Sawnwood, wood-based panels, paper, paperboard, and woodpulp sectors comprise about 99% of 2002 export revenues (total revenues $273 million).

Iron Ore: In the Corumba area in Brazil, two large iron ore mines owned by international mining companies, RTZ and CVRD, are located near the high Paraguay river. Their combined production of iron ore has doubled in

The Parana River/ Hidrovia is a key link in Argentina’s oil supply network. In 2002 Argentine oil demand was about 486,000 barrels per day, or bpd, while production for 2003 was estimated at about 830,000 bpd. Total refining capacity is estimated at about 639,000 bpd.

Paraguay has no indigenous sources of petroleum. Barges in the Hidrovia are the only way to supply the Paraguayan needs of crude and petroleum products totalling between 1.1 million cubic meters to 1.3 million cubic meters per year in the last 6 years.

All the petroleum products move northbound to destinations in North Argentina, Paraguay and Bolivia creating synergies with dry cargo volumes that move southwards mostly.

Brazil does not yet move any significant quantity of petroleum products via the Hidrovia mainly due to lack of discharge facilities. However, incentives exist to switch to barge transportation for petroleum product distribution to Brazilian cities near the river. Currently interior regions of Brazil near the Hidrovia are supplied overland by truck.

During the last 10 years the barge fleet in the river system has more than doubled maintaining a high level of utilization. This has occurred not only due to the growth of production in the area but also because cargo that in the past was transported by truck started to flow to the river as the infrastructure developed. Today’s available barge fleet in the area consists approximately of 1,000 dry and tank barges which compares with approximately 27,900 barges in the Mississippi river system in the U.S.

UABL owns and operates about 50% of total dry cargo tonnage barge capacity. There are approximately 10 different companies operating dry cargo barges in the river system.

The barge business in the Parana has a seasonal effect due to the agricultural aspect of the trade. The high season in 1993 was March through July and in 2003 the high season had extended from February through September. However, the October through January period is now much more active due to the building of large soybean crushing plants along the river that work most of the year.

Freight levels are much less cyclical than in ocean transportation and are based on local supply and demand factors that are generally not related to ocean freights.

Along with growth in production of commodities transported by barge in the Hidrovia, cost, safety and environmental incentives exist to shift commodity transport to barge.

Inland barge transportation is generally the most efficient and safest means of transporting bulk commodities compared with railroads and trucks. A standard 1,500 ton barge carries the same amount of cargo as fifteen 100-ton hopper rail cars and fifty-eight 26-ton tractor trailer trucks. Similarly, a 2,500 cubic meter capacity inland tank barge carries the equivalent of eighty 26-ton tank trucks. Each tow is typically made up of 16-30 barges, realizing even greater efficiencies.

In terms of unit transportation cost for most dry bulk cargoes, barge is cheapest, rail is second, and truck is third. There are clear and significant incentives to build port infrastructure and switch from truck to barge to reduce cost.

The market for offshore supply vessels (“OSVs”), both on a worldwide basis and within Brazil, is driven by a variety of factors. On the demand side, the primary driver is the growth in offshore oil development/production activity, which in the long term is driven by the price of oil and the cost of developing the particular offshore

Both demand for, and supply of, OSVs are heavily influenced by cabotage laws. Since most offshore supply activities occur within the jurisdiction of a country, they fall within that country’s cabotage laws. This distinguishes the OSV sector from most other types of shipping. Cabotage laws may restrict the supply of tonnage, e.g., where the country gives special preferences to locally flagged ships or requires that any vessel working in its waters be flagged, crewed, and in some cases constructed in that country.

Within the OSV sector, main vessel types include supply vessels, platform supply vessels (“PSVs”), anchor handling tugs, crew boats, and other vessel types.

Supply vessels generally support oil exploration, production, construction and maintenance activities on the continental shelf and have a high degree of cargo capacity and flexibility relative to other offshore vessel types. They utilize space above and below deck to transport dry and liquid cargo, including heavy equipment, pipe, drilling fluids, provisions, fuel, and dry bulk cement and drilling mud. The industry fleet has approximately 688 supply vessels with about 11 vessels on order. The average age is 19 years, with approximately two-thirds of the industry fleet being age 20 years or older.

PSVs are large and sophisticated supply vessels constructed to allow for economic operation in environments with some combination of deepwater operations, long distance support, economies of scale, and demanding operating conditions. PSVs serve drilling and production facilities and support offshore construction and maintenance work for clusters of offshore locations and/or relatively distant deepwater locations. They have larger deck space and larger and more varied cargo handling capabilities relative to other offshore support vessels to provide more economic service to distant installations or several locations. Some vessels may have dynamic positioning which allows close station keeping while underway. PSVs can be designed with certain characteristics required for specific offshore trades such as the North Sea or deepwater Brazilian service.

The industry fleet has about 302 PSVs with approximately 58 on order. The average age is approximately 10 years.

Offshore exploration, development, and production activities within Brazil have grown, driven by Brazil’s policy of becoming energy self-sufficient as well as by oil price/cost considerations. Since most Brazilian reserves are located far offshore in deep waters, large, technologically-sophisticated vessels are needed. Brazil is today a world leader in deep drilling technology.

The primary customer in Brazil is Petrobras, the Brazilian national oil company. The Brazilian government has also allowed foreign companies to participate in offshore oil and gas exploration and production since 1999. Other companies active offshore in Brazil include Total, Shell, BP and ChevronTexaco. The deep water Campos Basin, a deep water area located about 80 miles offshore, has been the leading area for offshore activity. Activities have been extended to the deep water Santos and Espirito Santo Basins as well with activities now taking place in areas of water depths of over 9,000 ft.

Deepwater service favors modern vessels that can provide a full range of flexible services while providing economies of scale to installations distant from shore. However, many of the Brazilian flag PSVs and supply vessels are old, with over half of the national fleet at 20 years of age or older. In addition, Brazilian cabotage laws favor employing Brazilian flag vessels, over employing non-Brazilian flag vessels, and temporary authority is often granted for foreign vessels to operate only if no Brazilian flag vessels are available.

Of a total of approximately 56 Brazilian flag offshore vessels, 33 are categorized as platform supply vessels and supply vessels.

In addition, we entered into a joint venture to form UP Offshore, a company which will provide transportation services to offshore petroleum exploration and production companies, with particular emphasis in the Brazilian market. UP Offshore has contracted for the construction of six modern, large, technologically advanced PSVs, whose deliveries are expected to commence in the first quarter of 2005.

We believe that significant investment opportunities exist for us in all of the segments of the transportation industry in which we participate. In the Ocean Business, we intend to build state of the art, double hull Panamax tankers, which we plan on employing in the same trades that, and with the same customers to whom, we employed our single hull Panamax tankers for the past 10 years. We also intend to invest in two new, double hull product tankers of modern design and operate these two new tankers as part of our oceangoing fleet. We also have an opportunity to increase the ocean transportation services provided by our River Business. In 2003, UABL carried approximately three million tons of cargoes which were subsequently transshipped to oceangoing vessels for carriage to their final destinations. We plan on participating in part of these ocean carriages of dry bulk commodities. In addition, we plan to invest further in the Offshore Business, ultimately growing this fleet from six PSVs to 10 PSVs.

Our Aframax and Suezmax vessels are versatile due to their ability to service virtually all major routes used for crude oil transportation. In addition, our Suezmax tankers, which are Oil/ Bulk/ Ore carriers, or OBOs, have the added versatility of being able to carry either oil products or dry bulk cargoes to take advantage of changing market conditions. Given the rise during 2003 and early 2004 in spot market prices for dry cargo, these vessels, together with our Capesize bulk carrier, Cape Pampas, of which we own 60%, are currently employed in the carriage of bulk dry cargoes trading on a worldwide basis mostly loading coal and iron ore from South America, Australia and South Africa to Europe, China and other Far East countries. Over 86% of our revenues since September 2003 derived from charterers in Europe, the U.S. and Asia. Over the same period, approximately 74% was earned from longer term time charters with at least three months duration and 26% from shorter term time charters.

Our largest ocean customers include Cargill, Petrobras, Pan Ocean and ENAP. We believe that the business is well-poised for growth due to the quality and flexibility of our vessels and the currently attractive market rates for ocean transportation.

A split of the revenues of our ocean fleet for the last 12 months indicates the following percentages by country of domicile of the charterers, which is not necessarily indicative of where our vessels operate. These splits are set forth in the table below:

Vessels operating on longer term time charters or COAs may be chartered for several months or years, whereas vessels operating or shorter term charters typically are chartered for a single voyage, which may last up to several weeks. Vessels operating on shorter term charters may generate increased profit margins during periods of improved freight rates, while vessels operating on longer term time charters generally provide more predictable cash flows. Accordingly, we actively monitor macroeconomic trends and governmental rules and regulations that may affect vessel rates in an attempt to optimize the deployment of our fleet. We believe that our fleet deployment strategy provides us with the ability to benefit from increases in freight rates while at the same time maintaining a measure of stability through cycles in the industry. As of September 30, 2004, we had six vessels on time charters expiring on dates ranging between four and 18 months.

We operate our push boats and barges on the navigable waters of the Hidrovia region. At over 3,700 km in length, the Hidrovia region is comparable in length to the Mississippi River in the United States.

Due to our size and scale, we are able to operate our river fleet in “trunk mode.” The trunk mode is based upon the principle that the push boat, which is the most expensive operational asset for a river transportation company, should never stop, and the barges should be treated as containers which, once loaded or discharged, will be picked up and taken to its next destination by the next available push boat. The trunk mode enables UABL to carry the maximum amount of barges in each segment of the Parana and Paraguay Rivers. In the lower Parana River, each push boat can push tows of up to 30 barges, which are delivered to a “hub” at the juncture of the Parana/ Paraguay River where they are picked up by shuttle push boats that haul tows of up to 16 barges up both segments of the River, thus maximizing the size of the tows for each section of the River. The trunk mode allows the push boat to operate continuously by dropping its tow at the hub, picking up a new tow of barges and running in the opposite direction.

The Hidrovia region produces and trades a significant amount of agricultural products and has shown consistent growth over the last 10 years. For example, Argentina, Brazil, Paraguay, and Bolivia produced about 39.6 million tons, or mt, of soybeans in 1993 and 92.6 mt in 2003, a compound annual growth rate from 1993 of 8.9%. DSC estimates production for these countries for 2004 at 112.0 mt, yielding a compounded annual growth rate from 1993 of 9.9%. These countries accounted for nearly 50% of world soybean production in 2003, growing from only 34% in 1993.

For the fiscal years ended December 31, 2001, 2002 and 2003, UABL generated revenues from unrelated third parties of $37.4 million, $32.3 million and $45.3 million, respectively. Prior to April 23, 2004, our subsidiary, UP River, owned a 50% interest in UABL with our joint venture partner, ACBL. On April 23, 2004, we purchased ACBL’s 50% equity interest in UABL, together with its assets in the Hidrovia region, including 50 barges and seven push boats and its share of the related receivables and liabilities of UABL, for a total of $26.1 million. As a result of this transaction, together with our prior financing arrangements, we currently own 96.4% of UABL while IFC owns the remaining 3.6%.

Our customers include Cargill, Multigranos, Petropar and ADM. We believe that our River Business is well-poised for growth due to the increasing agricultural exports from South America and the efficiency of barges versus other forms of inland transportation, primarily rail and truck.

Offshore Business — Future Opportunity: We own a 27.78% interest in UP Offshore, and we have warrants to increase our ownership up to approximately 47.78%. The remaining ownership interests in UP Offshore are owned by LAIF, and Comintra Enterprises, Ltd., which own 66.67% and 5.55%, respectively. UP Offshore expects to take delivery of six PSVs, commencing in the first quarter of 2005. UP Offshore plans to employ its PSVs to provide transportation services to the offshore petroleum exploration and production companies, with particular emphasis in the Brazilian market.

PSVs serve petroleum exploration and production facilities by transporting supplies and equipment to offshore locations, utilizing a large clear deck and under deck tanks. They are differentiated from other offshore support vessels by their cargo handling capabilities, particularly their large capacity and versatility. They are used to transport supplies such as containerized equipment, drill casing, pipes and heavy loads on deck, along with fuel, water, drilling fluids and bulk cement in under deck tanks. All six of our PSVs will have increased deck areas, significantly greater dry bulk and liquid capacity compared to many existing PSVs in this market. Our PSVs will also be equipped with dynamic positioning capabilities, which allows the ship to stay in its designated location even in severe weather and sea conditions.

We intend to charter our six new PSVs on long term charters for use in Brazil, the third largest offshore market in the world. Brazil’s oil reserves are the second largest in South America and over 90% of the reserves are offshore. Currently, Petrobras has the majority of the offshore drilling market share in the Brazilian market, but in 1999 the E&P market was opened to private and foreign participation. All six of our PSVs will have Brazilian flag privileges, which is important as Brazilian law provides that first preference be given to a national carrier, if available. If a Brazilian ship is not available, a foreign PSV can win a contract for up to two years at which point the job is rebid. Currently there are approximately 150 vessels in the Brazilian offshore fleet, of which we estimate only 40% are Brazilian flag vessels.

UP Offshore intends to build another two PSVs of the same particulars in an aim to own a fleet of eight ships. We have also entered into an agreement with UP Offshore through which we will have the option, but not the obligation, to construct two additional PSVs of similar particulars that will operate in the same markets as the eight UP Offshore PSVs. However, the revenues associated with these final two PSVs will belong 100% to us.

On June 25, 2003, we signed an administration agreement with UP Offshore, under which we provide management services required by UP Offshore in its start-up phase, including providing the services of the Chief Executive Officer and providing ongoing management and commercial advisory services thereafter. Our professional


	•	We Are a Diversified Transportation Company. We operate in different sectors of the transportation industry, including the ocean and river industries and, beginning in 2005, the offshore oil support industry. While we believe that there are synergies between our Ocean and River transportation businesses, particularly in terms of the operational expertise and customer base, the factors that affect supply and demand, the cost structure, and the business risks are different. The offshore oil support segment is a different industry and should provide further diversity from the ocean and river segments. Accordingly, our diversification provides a hedge against potentially cyclical markets.

	•	We Have a Versatile Ocean Fleet. Over the past decade, we have focused on building a versatile ocean fleet to meet the demands of a changing marketplace. We believe that our three Suezmax/ OBO vessels are ideally suited to take advantage of the changing relative conditions of the dry cargo and liquid cargo tanker markets. Our vessels that carry dry cargo can be made ready to carry liquid cargo and vice versa within a matter of days. These vessels, together with our Capesize bulk carrier, Cape Pampas, of which we own 60%, generated 83% of our Ocean Business revenues for the 12 month period ended September 30, 2004. Further, our Aframax tanker has the unusual feature of being able, despite its large dwt, to transit the Panama Canal because of her narrow beam. This design is particularly attractive for customers who wish to employ an Aframax size vessel but who occasionally need to bring cargoes through the Panama Canal.

	•	Our Increased Scale Generates Efficiencies. Our combined ocean and river fleet has a capacity of approximately 1.5 million dwt and close to 500 units. Our relative size offers economies of scale and, in our River Business, negotiating power. For example, in our River Business, our size has allowed us to implement a different operational system than our competitors, called a trunk mode, that enables us to service our clients with a continuous stream of available barges.

	•	We Have Long Term, High Quality Customer Relationships. We have operated our vessels in South America and around the globe since our business began in 1992. We have long-standing relationships with large, stable customers, including affiliates of major international oil and agriculture companies, such as Petrobras, the government controlled oil and gas company of Brazil, Cargill, ADM-SAO, Continental Grain and ENAP. These are long term customer relationships that arise from our reputation for reliability and high-quality service. Our two largest customers, Petrobras and Cargill, accounted for approximately 26% and 12% of revenues in 2003, respectively, and our five largest customers in 2003 in terms of revenue accounted for approximately 57%.

	•	We Possess Superior Technology. We have made significant investment in our technology systems. For example, in addition to having state of the art navigational, operational and safety technology in our Ocean Business, our River Business has developed proprietary navigational systems that allow its tows to operate 24 hours a day navigating through a river system that lacks signalization for night navigation. These systems enable our River Business to use its assets more efficiently than its competitors while providing a unique service to its customers. We have also developed a proprietary design for our new PSVs in conjunction with the renowned Norwegian ship designer, Vik Sandvik. This design can only be reproduced with the consent of UP Offshore.

	•	We Have a Reputation for High Standards of Performance and Safety. We pride ourselves on our operational excellence, our ability to provide high quality service and our commitments to safety, quality and the environment. The quality of our vessels as well as the expertise of our vessel crews and engineering resources help us maintain highly reliable and consistent performance. We maintain well documented and internationally certified safety and quality management systems, perform periodic audits and conduct training, each of which affects all areas of our activities, including operations, maintenance and crewing. In our Ocean Business, our ship management is ISM and ISO 9001:2000 certified.


	•	We Have an Established History and Experienced Management Team. Our management team is led by members of the Menendez family. The family collectively has been involved in the shipping industry for over 120 years. Our senior executive officers have on average 32 years of experience in the shipping industry. Our management team has significant expertise in various lines of business and has been instrumental in developing and maintaining our certified safety and quality management systems and our operational plans. Further, our management has helped us design and develop innovative and flexible vessel designs.

Our business strategy is to continue to grow by leveraging our expertise and customer relationships through our investments in different sectors of the transportation industry. We are well recognized by our clients in the global transportation of petroleum and dry cargo and plan to selectively grow the Ocean Business. Our River Business is the leading barge transportation company in South America and is well positioned to grow. Finally, commencing in 2005, we plan on expanding into the Brazilian offshore platform supply services industry in order to capitalize on attractive trends in that market. We plan to implement our business strategy by doing the following:


	•	Growing our Ocean Fleet with Versatile Vessels. We intend to expand our ocean fleet by selectively adding versatile vessels through the acquisition of secondhand vessels and newbuildings. For example, we plan on adding Panamax tankers capable of carrying both crude oil and petroleum products as well as smaller petroleum product carriers to our fleet. We believe that by acquiring and building these vessels, we will be able to target different market sectors. In addition, the new Panamax tankers will fill a demand from our existing customers for vessels to service routes where both the point of origin and destination is in South America. These ships are intended to replace the older single hull vessels we sold since 2002.

	•	Redeploying Vessels to the Most Attractive Markets. Due to the flexibility of our oceangoing vessels, we have the ability, under appropriate market conditions, to alter the geographic and industry focus of our operations by redeploying vessels to the most profitable markets. For example, as a result of rising demand out of China during 2003, we switched our three Suezmax/ OBOs from liquid to dry cargo carriers. These redeployed vessels have for the past year earned average day rates that are approximately 50% higher than they could have earned by carrying petroleum products. In addition, we actively manage the deployment of our fleet between longer term time charters and shorter term charters. Our vessel deployment strategy is designed to provide greater cash flow stability through the use of these longer term time charters, while maintaining the flexibility to benefit from improvements in market rates by deploying the balance of our vessels on shorter term time charters.

	•	Capitalizing on Attractive Fundamentals in our River Business. There are a number of attractive fundamentals in the Hidrovia region river transportation business. We plan to use our leading market position in this region to capitalize on the following fundamentals:


	—	Growing Agricultural Exports. During 2003, Brazil, Argentina, Paraguay and Bolivia produced over 90 million tons of soy, which represents approximately 50% of world production, as compared to the 66 million tons produced by the United States. Moreover, the region continues to have large amounts of unused arable land available for soy and other crops.

	—	Efficient Means of Transportation. River barges provide efficient and cost-effective transportation relative to railroads and trucks. One barge can transport as much as 15 jumbo hopper rail cars or 58 trucks. Additionally, the capacity of a 15 barge tow is equivalent to 870 trucks. As important, a 15 barge tow can be manned by only eight crew members.

	—	Shortage of Infrastructure. There currently exists a shortage of adequate rail and highway infrastructure in South America to meet the growing demand of exporters. By contrast, the navigable portion of the Hidrovia region is over 3,700 km long, passes through the heart of the agricultural region and is ideally situated to suit the needs of the agricultural community. In addition, over the past several years, we have added through a joint venture a significant amount of infrastructure to the river systems, such as docks, ports and terminals, over which we have an essentially exclusive right of use. Our proprietary infrastructure allows us to better serve our customers by increasing the number of barges we can efficiently load on the river in our loading facilities.


	•	Expanding into the Offshore Industry and Growing through Strategic Investments. We own approximately 27.78% of a new subsidiary, UP Offshore, which will provide services to petroleum exploration and production companies that operate mainly off the coast of Brazil. UP Offshore has contracted for the construction of six modern, large, technologically advanced PSVs whose deliveries are expected to commence in the first quarter of 2005, with an additional two vessels planned to be purchased by UP Offshore. We also have the option, but not the obligation, to purchase up to an additional two PSVs to supplement UP Offshore’s program, but these two vessels would be 100% owned by us. All six of UP Offshore’s PSVs will have Brazilian flag privileges, which gives us a competitive advantage over non-Brazilian flagged vessels because the Brazilian government generally requires that offshore platform supply services be provided by a Brazilian flagged vessel, if available. Currently, there are approximately 150 vessels in the Brazilian offshore fleet, of which we estimate only 40% are Brazilian flagged vessels. We intend to charter these six new PSVs on long term charters to Petrobras and other oil companies for use in Brazil. Brazil’s oil reserves are the second largest in South America, with over 90% of the reserves located offshore. Currently, Petrobras has a majority of the market share in the offshore drilling market, but recently the oil exploration and production market was opened in Brazil to private and foreign participation, which we believe will allow for growth and customer diversification. We have also recently made an investment of $2 million in a terminal in Mexico with a view towards expanding our transportation services to that area.

	•	Focusing on Generating Operational Efficiencies. In all the segments of the transportation business in which we operate, we have identified growth opportunities that should consolidate our position in each segment and should improve overall efficiency and profitability of our existing lines of business. For example, key initiatives include continued rationalization of ship schedules and maximizing yield in our Ocean Business. In our River Business, we focus on optimizing our barge and tug scheduling, maximizing loads and convoy size and minimizing empty back-hauls. Going forward, we expect to continue to find opportunities to rationalize costs and operate more efficiently.

The following table summarizes certain information with respect to our existing vessels in our Ocean Business:


(1)	Owned by Ultracape (Holdings) Ltd., of which we own 60%.

(2)	Although the Alianza G2 is considered part of our ocean fleet, it is currently engaged as a transfer station in the lower Parana River as part of our River Business.

(3)	The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered in 1984. It was refurbished and converted to its current use in 1994. The separate but integrated tug, Alianza Rosario, was built in 1976.

(4)	The barge, Alianza G3, was built in 1982 and was refurbished and converted to its current use in 1993. The separate but integrated tug, Alianza Campana, was built in 1976.

(5)	As the tug carries no cargo, it is not considered in the calculations of aggregate dwt or age.

The following table summarizes certain information with respect to our existing vessels in our River Business:

For administrative services, each of our ocean vessel owning/operating subsidiaries pays Oceanmarine, an affiliate of ours, a monthly fee of $10,000 per vessel. Oceanmarine provides all general administration and accounting services, including financial reporting, preparation of tax returns, invoicing and accounts payable, office premises, a computer network, secretarial assistance, payroll and other general duties.

Through our respective owning/operating subsidiaries, we have contracted with Ravenscroft, an affiliate of ours, to provide the operational management of our vessels used in the Ocean Business and pay most of our vessel operating expenses. We pay Ravenscroft a monthly ship management fee of $12,500 per oceangoing vessel for services including technical management, crewing, provisioning, superintendence and related accounting functions. Ravenscroft also provides communication services for our vessels and serves as a contact with clients and shipping agencies.


	•	Supervision of routine preventive maintenance and repair of the vessel required to keep each vessel in good and efficient condition, including the preparation of comprehensive drydocking specifications and the supervision of each drydocking;

	•	Management is ISM and ISO 9001:2000 certified;

	•	Oversight of compliance with applicable regulations, including licensing and certification requirements, and the required inspections of each vessel to ensure that it meets the standards set forth by classification societies and applicable legal jurisdictions as well as our internal corporate requirements and the standards required by our customers;

	•	Engagement and provision of qualified crews (masters, officers, cadets and ratings) and attendance to all matters regarding discipline, wages and labor relations;

	•	Arrangements to supply the necessary stores and equipment for each vessel; and

	•	Continual monitoring of fleet performance and the initiation of necessary remedial actions to ensure that financial and operating targets are met.

Ravenscroft also manages a number of vessels for third party owners not related to us. On a per vessel basis, the fees earned by Ravenscroft from such third party owners are substantially equivalent to the fees paid by us.

Our reputation for reliability and quality of service has enabled us to establish long term relationships with our customers. Our revenues and cash flow depend upon the charters, of our vessels to our customers. The charters through which we employ our vessels include longer term time charters, which provide income stability and reliability, and shorter term time charters, which provide flexibility and the opportunity to achieve higher revenues as market conditions permit. For 2003 service for Petrobras accounted for 26% of our total revenues and service for Cargill accounted for 12% of total revenues.

We face competition in the transportation of crude oil and petroleum products as well as other bulk commodities from other independent ship owners and from vessel operators who primarily charter-in vessels to meet their cargo carrying needs. The charter markets in which our vessels compete are highly competitive. Competition is primarily based on prevailing market charter rates, vessel location and vessel manager reputation. Our primary competitor in crude oil and petroleum products transportation within Argentina, and between Argentina and other South American countries, as well as in Chile, is Antares Naviera S.A. and its affiliated companies, including Ultragas, Lauderdale Tankers Corp., and Sonap S.A., an independent tanker owner and operator. The other major participant in the Argentina/ Brazil trade is Transpetro. Transpetro is a subsidiary of Petrobras, our primary customer in Brazil. In other South American trades our main competitors are Heidmar Inc., Naviera Sur Petrolera S.A., Naviera El Cano (through their various subsidiaries) and Sonacol S.A. These companies and other smaller entities are regular competitors of ours in our primary tanker trading areas. In our dry bulk trades, we operate our vessels internationally where we compete against the main fleets of Capesize ships, with companies such as The Offer Group, Frontline, Bocimar and others.

We maintain a leading market share in our River Business. We own the largest independent fleet of pushboats and barges in the Hidrovia region. We believe our largest competitor has less than one-fourth of the number of barges and less than one-fifth of our fleet’s total dwt capacity. We compete based on reliability, efficiency and price. Key competitors include Horamar, Cinco Bacia and Fluviomar. In addition, some of our customers, including ADM and RTZ, have some of their own dedicated barge capacity, which they can use to transport cargoes in lieu of hiring a third party. Our River Business also indirectly competes with other forms of land-based transportation such as truck and rail.

In our Offshore Business, our main competitors will be the Brazilian offshore companies that own and operate modern PSVs. The largest of these companies is CBO, which currently owns three UT-755 type vessels and is building additional PSVs in Brazil. Also, some of the international offshore owners, such as Tidewater, Inc. and Maersk, are presently building Brazilian-flagged PSVs.

As of September 30, 2004, we employed approximately 458 employees, consisting of 80 land-based employees and approximately 378 seafarers as crew on our vessels, of which 175 were in our Ocean Business and 203 were in our River Business. These employees were employed through various manning agents depending on the nationality as listed below:

Our crew is employed under the standard collective bargaining agreements with the seafarers’ union in their respective countries. The crew is employed on contractual terms valid for a fixed duration of service on board the vessels. We ensure that all the crew employed on board our vessels have the requisite experience, qualifications and certification to comply with all international regulations and shipping conventions. Our training requirements for the crew exceed the applicable statutory requirements. We always man our vessels above the safe manning requirements of the vessels’ flag state in order to ensure proper maintenance and safe operation of the vessels. We have in force

Through UABL, we own a drydock and a repair facility for our river fleet at Pueblo Esther, Argentina and land for the construction of two terminals in Argentina and 50% joint venture participations in two grain loading terminals in Paraguay. UABL also rents offices in Asuncion, Paraguay and Buenos Aires, Argentina. We do not own any other buildings and do not pay any rental expense other than as a portion of the administration fees paid to Oceanmarine.

The operation of any cargo vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade.

We believe that we maintain insurance coverage against various casualty and liability risks associated with our business that we consider to be adequate based on industry standards and the value of our fleet, including hull and machinery and war risk insurance, loss of hire insurance at certain times for certain vessels and protection and indemnity insurance against liabilities to employees and third parties for injury, damage or pollution and other customary insurance. While we believe that our present insurance coverage is adequate, we cannot guarantee that all risks will be insured, that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates or at all.

We maintain marine hull and machinery and war risk insurance, which includes the risk of actual or constructive total loss, for our wholly-owned vessels. At times, we also obtain for part of our fleet increased value coverage and additional freight insurance during periods of improved market rates, where applicable. This increased value coverage and additional freight coverage entitles us, in the event of total loss of a vessel, to some recovery for amounts not otherwise recoverable under the hull and machinery policy. When we obtain these additional insurances, our vessels will each be covered for at least their fair market value, subject to applicable deductibles (and some may include limitations on partial loss). We cannot assure you, however, that we will obtain these additional coverages on the same or commercially reasonable terms, or at all, in the future.

We maintain loss of hire insurance at certain times for certain vessels. Loss of hire insurance covers lost earnings resulting from unforeseen incidents or breakdowns that are covered by the vessel’s hull and machinery insurance and result in loss of time to the vessel. Although loss of hire insurance will cover up to ninety days of lost earnings, we must bear the applicable deductibles which generally range between the first 14 to 30 days of lost earnings. We intend to renew these insurance policies or replace them with other similar coverage if rates comparable to those on our present policies remain available. There can be no assurance that we will be able to renew these policies at comparable rates or at all. Future rates will depend upon, among other things, our claims history and prevailing market rates.

Protection and indemnity insurance covers our legal liability for our shipping activities. This includes the legal liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, fines and other penalties imposed by customs or other authorities, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and

This protection and indemnity insurance coverage is provided by protection and indemnity associations, or P&I Clubs, which are non-profit mutual assurance associations made up of members who must be either ship owners or ship managers. The members are both the insured parties and the providers of capital. The P&I Clubs in which our vessels are entered are currently members of the International Group of P&I Associations, or the International Group and are reinsured themselves and through the International Group in Lloyds of London and other first class reinsurance markets. We may be subject to calls based on each Club’s yearly results. Similarly, the same P&I Clubs provide freight demmurage and defense insurance which, subject to applicable deductibles, covers all legal expenses in case of disputes, arbitrations and other proceedings related to our vessels.

Inspection by a Classification Society and Drydocking of our Oceangoing Vessels

Each of our oceangoing vessels must be “classed” by a classification society that certifies that the vessel is in compliance with the classification rules. The classification society, if authorized by the country of registry, may also issue all of the vessel’s statutory certificates.

Each vessel is regularly inspected by a surveyor of the classification society. A vessel is also generally required to be drydocked every 30 months for inspection of the underwater parts of the vessel. Should any defect be found, the classification society surveyor will issue its report as to appropriate repairs that must be made by the vessel owner within the time limit prescribed. Insurance underwriters make it a condition of insurance coverage that an oceangoing vessel be “in class,” and all of our oceangoing vessels currently meet that condition.

Government regulation significantly affects the ownership and operation of our vessels. They are subject to international conventions, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered.

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations. Although we believe that we have been and will be able to obtain all permits, licenses and certificates material to the conduct of our operations, we cannot assure you that we will be successful in our attempts to do so in the future. Failure to maintain necessary permits, licenses or certificates could require us to incur substantial costs or temporarily suspend operations of one or more of our vessels.

We believe that the heightened environmental and quality concerns of insurance underwriters, regulators and charterers will impose greater inspection and safety requirements on all vessels in the shipping industry. Our vessels are subject to both scheduled and unscheduled inspections by a variety of governmental and private interests, each of whom may have a different perspective or standards from the others. These interests include the local port state authority (such as the United States Coast Guard or local equivalent), vessel classification society, underwriters, flag state administration (country or registry) and charterers, particularly major oil companies which conduct vetting inspections, and load and discharge terminal operators.

We believe that the operation of our vessels will be in substantial compliance with applicable environmental laws and regulations; however, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels.

In 1992, the International Maritime Organization, or IMO (the United Nations agency for maritime safety and the prevention of marine pollution by ships) adopted regulations that set forth pollution prevention requirements


	•	tankers between 25 and 30 years old must be of double hull construction or of a mid-deck design with double sided construction, unless (1) they have wing tanks or double-bottom spaces not used for the carriage of oil that cover at least 30% of the length of the cargo tank section of the hull or bottom; or (2) they are capable of hydrostatically balanced loading (loading less cargo into a tanker so that in the event of a breach of the hull, water flows into the tanker, displacing oil upwards instead of into the sea);

	•	tankers 30 years old or older must be of double hull construction or mid-deck design with double sided construction; and

	•	all tankers are subject to enhanced inspections.

Also, under IMO regulations, a tanker must be of double hull construction or a mid-deck design with double sided construction or be of another approved design ensuring the same level of protection against oil pollution if the tanker:


	•	is the subject of a contract for a major conversion or original construction on or after July 6, 1993;

	•	commences a major conversion or has its keel laid on or after January 6, 1994; or

	•	completes a major conversion or is a newbuilding delivered on or after July 6, 1996.

Effective September 2002, the IMO accelerated its existing timetable for the phase-out of single hull oil tankers. These regulations require the phase-out of most single hull oil tankers by 2015 or earlier, depending on the age of the tanker and whether it has segregated ballast tanks. After 2007, the maximum permissible age for single hull tankers will be 26 years. Under current regulations, retrofitting will enable a vessel to operate until the earlier of 25 years of age and the anniversary date of its delivery in 2017. However, as a result of the oil spill in November 2002 relating to the loss of the M.T. Prestige, which was owned by a company not affiliated with us, in December 2003, the Marine Environmental Protection Committee of the IMO adopted a proposed amendment to the International Convention for the Prevention of Pollution from Ships to accelerate the phase out of single hull tankers from 2015 to 2010 unless the relevant flag states extend the date to 2015. This proposed amendment will come into effect in April 2005 unless objected to by a sufficient number of member states. Moreover, the IMO may still adopt regulations in the future that could adversely affect the remaining useful lives of single hull tankers.

The IMO has also negotiated international conventions that impose liability for oil pollution in international waters and a signatory’s territorial waters. In September 1997, the IMO adopted Annex VI to the International Convention for the Prevention of Pollution from Ships to address air pollution from ships. Annex VI was ratified in May 2004 and will become effective 12 months after ratification. Annex VI, when it becomes effective, will set limits on sulfur oxide and nitrogen oxide emissions from ship exhausts and prohibit deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. Compliance with these regulations could require the installation of expensive emission control systems and could have an adverse financial impact on the operation of our vessels.

The requirements contained in the ISM Code, promulgated by the IMO, also affect our operations. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We intend to rely upon the safety management system developed by Ravenscroft. The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with code requirements for a safety management system. No vessel can obtain a certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. Ravenscroft, which manages our vessels, is certified as an approved ship manager under the ISM Code. As of September 30, 2004 all of our oceangoing vessels are ISM certified. This certification does not apply to the equipment used in the river business.

Noncompliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. For example, the U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and European Union ports.

Although the United States is not a party to these conventions, many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969. Under this convention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the International Convention on Civil Liability for Oil Pollution Damage, a vessel’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain complete defenses. Under an amendment to the Protocol that became effective on November 1, 2003, for vessels of 5,000 to 140,000 gross tons (a unit of measurement for the total enclosed spaces within a vessel), liability will be limited to approximately $6.6 million plus $926 for each additional gross ton over 5,000. For vessels of over 140,000 gross tons, liability will be limited to approximately $131 million. As the convention calculates liability in terms of a basket of currencies, these figures are based on currency exchange rates on August 2, 2004. The right to limit liability is forfeited under the International Convention on Civil Liability for Oil Pollution Damage where the spill is caused by the owner’s actual fault and under the 1992 Protocol where the spill is caused by the owner’s intentional or reckless conduct. Vessels trading to states that are parties to these conventions must provide evidence of insurance covering the liability of the owner. In jurisdictions where the International Convention on Civil Liability for Oil Pollution Damage has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or in a manner similar to that convention. We believe that our P&I insurance will cover the liability under the plan adopted by the IMO.

The United States regulates the tanker industry with an extensive regulatory and liability regime for environmental protection and cleanup of oil spills, consisting primarily of the U.S. Oil Pollution Act of 1990, or OPA, and the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA. OPA affects all owners and operators whose vessels trade with the United States or its territories or possessions, or whose vessels operate in the waters of the United States, which include the U.S. territorial sea and the 200 nautical mile exclusive economic zone around the United States. CERCLA applies to the discharge of hazardous substances (other than oil) whether on land or at sea. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” who are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from oil spills from their vessels. These other damages are defined broadly to include:


	•	natural resource damages and related assessment costs

	•	real and personal property damages;

	•	net loss of taxes, royalties, rents, profits or earnings capacity;

	•	net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and

	•	loss of subsistence use of natural resources.

OPA limits the liability of responsible parties to the greater of $1,200 per gross ton or $10 million per tanker that is over 3,000 gross tons (subject to possible adjustment for inflation). The act specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters. In some cases, states that have enacted this type of legislation have not yet issued implementing regulations defining tanker owners’ responsibilities under these laws. CERCLA, which applies to owners and operators of

These limits of liability do not apply, however, where the incident is caused by violation of applicable U.S. federal safety, construction or operating regulations, or by the responsible party’s gross negligence or willful misconduct. These limits do not apply if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the substance removal activities. OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. We believe that we are in substantial compliance with OPA, CERCLA and all applicable state regulations in the ports where our tankers call.

OPA also requires owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the limit of their potential strict liability under the act. The U.S. Coast Guard has enacted regulations requiring evidence of financial responsibility in the amount of $1,500 per gross ton for tankers, coupling the OPA limitation on liability of $1,200 per gross ton with the CERCLA liability limit of $300 per gross ton. Under the regulations, evidence of financial responsibility may be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA regulations, an owner or operator of more than one tanker is required to demonstrate evidence of financial responsibility for the entire fleet in an amount equal only to the financial responsibility requirement of the tanker having the greatest maximum strict liability under OPA and CERCLA. We have demonstrated our financial responsibility by purchasing evidence of insurance from special purpose insurers approved by the U.S. Coast Guard. We believe that our vessels that call within United States waters comply with these U.S. Coast Guard requirements.

We insure each of our tankers with pollution liability insurance in the maximum commercially available amount of $1.0 billion. A catastrophic spill could exceed the insurance coverage available, in which event there could be a material adverse effect on our business under OPA. With certain limited exceptions, all newly built or converted vessels operating in U.S. waters must be built with double-hulls, and existing vessels that do not comply with the double-hull requirement will be prohibited from trading in U.S. waters over a 20-year period (1995-2015) based on size, age and place of discharge, unless retrofitted with double hulls. Notwithstanding the prohibition to trade schedule, the act currently permits existing single-hull and double-sided tankers to operate until the year 2015 if their operations within U.S. waters are limited to discharging at the Louisiana Offshore Oil Port or off-loading by lightering within authorized lightering zones more than 60 miles off-shore. Lightering is the process by which vessels at sea off-load their cargo to smaller vessels for ultimate delivery to the discharge port.

Under OPA and per USCG interpretations, our tanker and OBOs will be precluded from operation in US waters as follows:


**	The USCG inspects vessels annually and determines when such vessels will be phased out under OPA, the dates of which are recorded in the TVEL or the COC. On April 30, 2001, the USCG replaced the TVEL with a newly generated document, the COC. The COC is issued for each tanker by the USCG, if/when the vessel calls at a U.S. port and is valid for a period of two years, with mid period examination.

There is no phase out date for Princess Katherine since its configuration meets the U.S. double hull standards. Although Princess Nadia, Princess Marina and Princess Susana are double hull vessels, due to configuration requirements under the U.S. double hull standards, the phase out dates indicated above are applicable.

OPA also amended the Federal Water Pollution Control Act to require owners or operators of tankers operating in the waters of the United States to file vessel response plans with the USCG, and their tankers are required to operate in compliance with their USCG approved plans. These response plans must, among other things:


	•	address a “worst case” scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”;

	•	describe crew training and drills; and

	•	identify a qualified individual with full authority to implement removal actions.

OPA does not prevent individual states from imposing their own liability regimes with respect to oil pollution incidents occurring within their boundaries. In fact, most U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

In July 2003, in response to the M.T. Prestige oil spill in November 2002, the European Union adopted legislation that prohibits all single hull tankers from entering into its ports or offshore terminals by 2010. The European Union has also banned all single hull tankers carrying heavy grades of oil from entering or leaving its ports or offshore terminals or anchoring in areas under its jurisdiction. Commencing in 2005, certain single hull tankers above 15 years of age will also be restricted from entering or leaving European Union ports or offshore terminals and anchoring in areas under European Union jurisdiction. The European Union is also considering legislation that would: (1) ban manifestly sub-standard vessels (defined as those over 15 years old that have been detained by port authorities at least twice in a six month period) from European waters and create an obligation of port states to inspect vessels posing a high risk to maritime safety or the marine environment; and (2) provide the European Union with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies. The sinking of the M.T. Prestige and resulting oil spill in November 2002 has lead to the adoption of other environmental regulations by certain European Union nations, which could adversely affect the remaining useful lives of all of our tankers and our ability to generate income from them. For example, Italy announced a ban of single hull crude oil tankers over 5,000 dwt from most Italian ports, effective April 2001. Spain has announced a similar prohibition. It is impossible to predict what legislation or additional regulations, if any, may be promulgated by the European Union or any other country or authority.

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002, or MTSA, came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of the convention dealing specifically with maritime security. The new chapter became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly created International Ship and Port Facilities Security Code, or ISPS Code. The ISPS Code is designed to protect ports and international shipping against terrorism. After July 1, 2004, to trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessels flag state. Among the various requirements are:


	•	on-board installation of automatic identification systems, or AIS, to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status;

	•	on-board installation of ship security alert systems, which do not sound on the vessel but only alerts the authorities on shore;

	•	the development of vessel security plans;


	•	ship identification number to be permanently marked on a vessel’s hull;

	•	a continuous synopsis record, or CSR, kept onboard showing a vessel’s history including, name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and

	•	compliance with flag state security certification requirements.

The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt non-U.S. tankers from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid ISSC that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. All of our vessels used in the Ocean Business maintain a valid ISSC and are in compliance with applicable vessel security regulations.

We are incorporated as an International Business Company, or IBC, in the Commonwealth of The Bahamas. Under the International Business Companies Act, (Chapter 309 of the Statute Laws of The Bahamas, 2000 Edition), or the IBC Act, provides that so long as our operations are conducted exclusively overseas, we are exempt from the Exchange Control Regulations Act, (Chapter 360 of the Statute Laws of The Bahamas, 2000 Edition) (the “ECR Act”), and any regulations made thereunder. Accordingly, the import or export of capital and the remittance of dividends, interest or other payments to non-resident holders of our securities will not require the prior approval of The Central Bank of the Bahamas, or the Central Bank, other than in respect of local Bahamian currency. However, the prior approval of the Central Bank must be obtained in respect of our operations that will not be exclusively overseas.

With regard to an IBC whose operations are exclusively overseas, the transfer of shares between non-resident persons and the issuance of shares to or by such persons may be effected without specific consent under the ECR Act, and any regulations made thereunder. Issues and transfers of shares involving any person regarded as resident in The Bahamas for Exchange Control purposes require specific prior approval under the ECR Act and any regulations made thereunder.

The IBC Act states that an IBC shall be exempt for a period of 20 years from its date of incorporation from any business licence fee, corporation tax, capital gains tax or any other tax on income or distributions accruing to such IBC provided that the IBC is not resident for Exchange Control purposes. There is a tax information exchange agreement between the United States and the Bahamas that came into effect in relation to criminal tax matters for the taxable period commencing in January 2004 and that comes into effect in relation to civil matters for the taxable period commencing in January 2006. That arrangement cannot be used by the United States in relation to persons that do not have U.S. tax liability. Further, there are anti-third party provisions, which means that the U.S. cannot share this information with any other country or its agents or employees.

Our subsidiary, Ultrapetrol S.A., is involved in a customs dispute with the Customs Authority of Bahía Blanca in Argentina over the alleged unauthorized operation of the Princess Pia in Argentina during 2001. As a result, the Customs Authority of Bahía Blanca issued a resolution claiming the sum of Argentine pesos 4,689,695 (approximately U.S. $1,610,000) as import taxes and the sum of Argentine pesos 4,689,695 (approximately U.S. $1,610,000) as fines. In response to said resolution, on March 16, 2004, Ultrapetrol S.A. submitted an appeal with the Argentine Tax Court arguing that it did not breach any applicable customs laws since the Princess Pia operated within Argentine territory only during the periods in which it was expressly authorized by the competent authorities. Said appeal is pending resolution by the Argentine Tax Court. Based upon the facts and circumstances of the case, the existing regulations and our insurance coverage, we do not believe that the outcome of this matter should have a material impact on our financial position or results of operations.

Our subsidiary, Ultrapetrol S.A., is involved in a customs dispute with the Brazilian Customs tax authorities over the alleged infringement of customs regulations by the Alianza G3 and Alianza Campana (collectively, the

“Vessel”) in Brazil during 2004. As a result, the Brazilian Customs tax authorities commenced an administrative proceeding and applied the penalty of apprehension of the Vessel which required the Vessel to remain in port or within a maximum of five nautical miles from the Brazilian maritime coast. The maximum customs penalty that could be imposed would be confiscation of the Vessel, which is estimated by the Brazilian Customs tax authorities to be valued at U.S. $4,560,000. On the same day that Ultrapetrol S.A. presented its defense to this administrative proceeding, a writ of injunction was filed on behalf of Ultrapetrol S.A. seeking a judicial authorization allowing the return of the Vessel to Bóias de Xáreu, which is located almost 20 nautical miles from the Brazilian maritime coast, so the Vessel could resume its prior services. The preliminary injunction was granted by the court in favor of Ultrapetrol S.A. on September 17, 2004, conditioned on the weekly presentation of shipping letters describing the location of the Vessel. However, the administrative proceeding is still pending. We note that in case we are not successful on the merits, under our insurance coverage, we could request from The Standard Club, the Vessel’s P&I insurer, an indemnity corresponding to the value of the Vessel. Based upon the facts and circumstances of the case, including the fact that the Vessel was operating under a specific written authorization officially granted by the Brazilian government, the existing regulations and our insurance coverage, we do not believe that the outcome of this matter should have a material impact on our financial position or results of operations.

Various other legal proceedings involving us may arise from time to time in the ordinary course of business. However, we are not presently involved in any legal proceedings that, if adversely determined, would have a material adverse effect on us.

Set forth below are the names and positions of our directors and executive officers.

The business address for each of our directors and officers is Ultrapetrol (Bahamas) Limited c/o H & J Corporate Services Ltd., Shirlaw House, 87 Shirley Street, P.O. Box SS-19084, Nassau, Bahamas. Our telephone number there is 1-242-322-8571.

Certain biographical information with respect to each director and executive officer is set forth below.

Felipe Menendez R. Mr. Menendez has been President, Chief Executive Officer and a Director since incorporation in December 1997 and is the brother of Ricardo Menendez. He is also President, and has been a Director, of Ultrapetrol S.A. since its incorporation in 1992. Mr. Menendez is also a Director of Oceanmarine, SIPSA S.A., or SIPSA, a Chilean publicly traded company controlled by the Menendez family, and Ravenscroft. Mr. Menendez has been, and continues to be, actively involved in other businesses associated with the Menendez family, as well as other companies affiliated with SIPSA. Mr. Menendez is also a Director, President and Chief Executive Officer of UABL and a Director of UP Offshore.

Ricardo Menendez R. Mr. Menendez has been a Director since incorporation in December 1997 and is the brother of Felipe Menendez. Mr. Menendez began his career in the shipping industry in 1970 with Compania Chilena de Navagacion Interoceania S.A., and has continuously been involved in the management of the Menendez family’s shipping interests. He is the President of Oceanmarine and Chairman of the Board of Directors of Ravenscroft, and has been a Director of Ultrapetrol S.A. since it was formed in 1992. Mr. Menendez is also a Director of SIPSA, and remains involved in the management of other Menendez family businesses. Mr. Menendez has been a member of the board of The Standard Steamship Owners’ Protection & Indemnity Association (Bermuda) Limited (a member of the International Group of Protection & Indemnity Associations) since 1993. Mr. Menendez is also a Director of UABL and Chief Executive Officer of UP Offshore.

James F. Martin. Mr. Martin has been a Director since 2000. He is a Managing Director with Emerging Markets Partnership, or EMP, principal adviser to the Bermuda-based AIG-GE Capital Latin America Infrastructure Fund L.P., where he heads a sector team focusing on transportation, environmental services, and oil and gas investments. Prior to joining EMP in 1997, Mr. Martin was head of a team responsible for investments in water and environmental infrastructure at the International Finance Corporation. Mr. Martin is also a Director of UABL and UP Offshore.

Katherine A. Downs. Ms. Downs has been a Director since 2000. Ms. Downs is a Director with EMP, where she focuses on transportation, environmental services, and oil and gas investments. Prior to joining EMP in 1997, Ms. Downs was a Managing Vice President in the private placement group of the Prudential Insurance Company of America. Ms. Downs is also a Director of UABL and UP Offshore.

Leonard J. Hoskinson. Mr. Hoskinson was appointed Director in March 2000 and assumed the position of Secretary six months later. He is the General Manager of Ravenscroft, the appointed manager of our oceangoing fleet with its base in Miami, Florida. Mr. Hoskinson has been employed by Ravenscroft for over 13 years and prior to that headed the ship finance group of Marine Midland Bank NA in New York.

The aggregate annual net cost to us for the compensation paid to members of the Board of Directors was zero for the fiscal year ended December 31, 1999, $0.9 million for the fiscal year ended December 31, 2000 ($0.4 million as monitoring fees and $0.5 million as a bonus to certain directors and officers), $1.1 million for the fiscal year ended December 31, 2001 ($0.4 million as monitoring fees and $0.7 million as a bonus to certain directors and officers), $1.1 million for the fiscal year ended December 31, 2002 ($0.4 million as monitoring fees and $0.7 million as a bonus to certain directors and officers), $1.1 million for the fiscal year ended December 31, 2003 ($0.4 million as monitoring fees and $0.7 million as a bonus to certain directors and officers) and $0.85 million for the nine months ended September 30, 2004 ($0.28 million as monitoring fees and $0.57 million as a bonus to certain directors and officers).

We have no funds set aside or accrued to provide pension, retirement or similar benefits for our directors or officers. Although we intend to negotiate employment contracts, we do not currently have employment contracts with any of our senior executives or directors.

For the day to day management of our operations, we and/or our subsidiaries have entered into administrative and management agreements to provide specific services for our operations. We refer you to “Certain Related Transactions.”

As provided in our organizational documents and the International Business Companies Act, 1986, each of our elected directors holds office until a successor is elected or until his earlier death, resignation or removal. Officers are elected from time to time by vote of the Board of Directors and hold office until a successor is elected. Our Board of Directors has not appointed an audit or a compensation committee. Our full board performs the functions of the audit and compensation committees.

The following table sets forth certain information regarding the current ownership of our outstanding voting securities as of September 30, 2004 by each person known by us to be the beneficial owner of more than 5% of such securities and all of our directors and senior management as a group.


(1)	Solimar Holdings Ltd. is a wholly-owned subsidiary of the AIG-GE Capital Latin American Infrastructure Fund L.P., a Bermuda limited partnership.

(2)	Inversiones Los Avellanos S.A. holds directly 601,299 of our shares. Avemar Holdings (Bahamas) Limited, a wholly owned subsidiary of Ultrapetrol (Bahamas) Limited, holds directly 537,144 of our shares, the full voting power of which has been granted to Inversiones Los Avellanos S.A. by irrevocable proxy. Inversiones Los Avellanos S.A. is controlled by members of the Menendez family, including Felipe Menendez R., our President, Chief Executive Officer and a director, and Ricardo Menendez R., a director. The sole shareholder of Inversiones Los Avellanos S.A. is SIPSA S.A.

(3)	Includes 25,212 of our shares that we have an option to repurchase from Inversiones Los Avellanos S.A. for a total price of $0.9 million. The option expires July 31, 2005.

A significant amount of our revenue is derived from transactions with related parties. For each of the years ended December 31, 2003, 2002 and 2001, the revenues derived from all related parties amounted to approximately $12.2 million, $10.0 million and $13.4 million, respectively. For each of the nine month periods ended September 30, 2004 and September 30, 2003, the revenues derived from all related parties amounted to approximately $4.6 million and $8.9 million, respectively. As of December 31, 2003 and 2002, the net balances of the accounts receivable and payables from all related parties were approximately $7.7 million and $13.0 million, respectively.

A significant part of this revenue from related parties is derived from the chartering activity of UABL (prior to the acquisition by us of the remaining 50% interest in UABL) and Maritima SIPSA S.A. Certain of our subsidiaries in the Ocean Business time charter their fleet of push boats and river barges to UABL. For the years ended December 31, 2003, 2002 and 2001, these charters represented revenues of approximately $10.2 million, 9.8 million and 10.7 million, respectively. On April 23, 2004, we acquired the remaining 50% interest in UABL, making UABL a consolidated subsidiary. Therefore all transactions with UABL and its subsidiaries after such date are not reported as transactions with related parties. In May 2003, the Princess Marina was chartered by a Chilean national petroleum company under a time charter that required her to be flagged in Chile. Pursuant to the laws of Chile, for her to be flagged in Chile, she needed to be owned by a legal entity controlled by Chilean citizens. Maritima SIPSA S.A. is controlled by Chilean citizens. We own 49% of Maritima SIPSA S.A., and the other shareholder of Maritima SIPSA S.A., SIPSA S.A., is a Chilean public company that is controlled by members of the Menendez family, which includes Felipe Menendez R., our President and Chief Executive Officer and a director, and Ricardo Menendez R., a director. In order to effect the re-flagging of the vessel, we sold the Princess Marina to Maritima SIPSA S.A. for a purchase price of approximately $15.1 million, and partially financed the sale by lending Maritima SIPSA S.A. $7.4 million. Under the terms of our agreement with Maritima SIPSA S.A., such entity pays us fees on a monthly basis that we record as charter revenue. For the year ended December 31, 2003, this charter revenue amounted to approximately $1.9 million, and for the nine month period ended September 30, 2004, this charter revenue amounted to approximately $1.8 million. We are obligated to repurchase the Princess Marina from Maritima SIPSA S.A. in June 2006 at a purchase price of $7.7 million, payable in $0.3 million in cash and the balance through the cancellation of indebtedness Maritima SIPSA S.A. owes to us.

We and our subsidiaries also contract with related parties for various services. Certain of our respective owning/operating subsidiaries have contracted with Oceanmarine for administrative services. Oceanmarine is indirectly controlled by the Menendez family, which includes Felipe Menendez R. and Ricardo Menendez R. We pay Oceanmarine a monthly fee of $10,000 per oceangoing vessel for these services. For the years ended December 31, 2003, 2002 and 2001, these payments to Oceanmarine amounted to approximately $1.2 million, $1.3 million and $1.5 million, respectively and for the nine month periods ended September 30, 2004 and September 30, 2003, approximately $0.5 million and $1.0 million, respectively. Certain of our owning/operating subsidiaries have contracted with Ravenscroft for ship management services for the vessels used in our Ocean Business. Ravenscroft is indirectly controlled by the Menendez family, which includes Felipe Menendez R. and Ricardo Menendez R. For these services, we pay Ravenscroft a monthly fee of $12,500 per oceangoing vessel, plus certain other expenses. For the years ended December 31, 2003, 2002 and 2001, these payments to Ravenscroft amounted to approximately $1.7 million, $1.9 million and $1.8 million, respectively and for the nine month periods ended September 30, 2004 and September 30, 2003, approximately $0.6 million and $1.2 million, respectively. Ship management responsibilities for our vessels used in the River Business, including the river barges and push boats chartered by certain of our subsidiaries in the Ocean Business to UABL, are performed by Lonehort Inc., a subsidiary of UABL. Prior to our acquisition of the remaining 50% interest in UABL on April 23, 2004, Lonehort Inc. was treated as a related party. For the years ended December 31, 2003, 2002 and 2001, ship management fees paid to and accrued for Lonehort S.A. amounted to $6.7 million, $6.6 million and $7.3 million, respectively. For each of the nine month periods ended September 30, 2004 and September 30, 2003, ship management fees paid and/or accrued to Lonehort for ship management services were $1.7 million and $4.9 million, respectively. Pursuant to an agency agreement with us, I. Shipping Services S.A. has agreed to perform the duties of port agent for us in Argentina. I. Shipping Services S.A. is indirectly controlled by the Menendez family, which includes Felipe Menendez R. and Ricardo Menendez R. For these services, we pay I. Shipping Services S.A. fees ranging from $800 to $1,875 per port call. For each of the years ended December 31, 2003, 2002 and 2001 the amounts paid

Ravenscroft occasionally performs ship brokering services on our behalf. We pay Ravenscroft industry standard rates for such services when used. For the years ended December 31, 2003, 2002 and 2001, ship broker fees paid to and accrued for Ravenscroft for such services amounted to $0.4 million, $0.2 million and $0.3 million, respectively. For each of the nine month periods ended September 30, 2004 and September 30, 2003, ship broker fees paid and/or accrued to Ravenscroft for such services amounted to $0.6 million and $0.3 million, respectively.

Certain of our directors and senior management hold similar positions with our related parties. Felipe Menendez R., who is our President, Chief Executive Officer and a director, is also a director of Oceanmarine, Maritima SIPSA S.A., Ravenscroft and I. Shipping Services S.A. Ricardo Menendez R., who is one of our directors, is also the President of Oceanmarine and I. Shipping Services S.A., a director of Maritima SIPSA S.A., and Chairman of the Board of Directors of Ravenscroft. Leonard J. Hoskinson, who is one of our directors, is also General Manager and a director of Ravenscroft. Although it is not their current intention to do so, in light of their positions with such entities, these officers and directors may experience conflicts of interest in selecting between our interests and those of Ravenscroft, Oceanmarine, Maritima SIPSA S.A. and I. Shipping Services Inc.

Certain of our subsidiaries repurchased approximately $12.4 million of our Prior Notes in the secondary market. We canceled these repurchased notes prior to the closing of the offering of our outstanding notes. See “Use of Proceeds of Our Outstanding Notes.”

Prior to the commencement of the offering of our outstanding notes, an affiliate of one of our shareholders, who also purchased notes in the offering, provided advice to the initial purchaser on the terms and structure of the proposed offering for which it was paid a fee of $500,000.

In connection with the registration of the exchange notes, we and the subsidiary guarantors have appointed Ravenscroft as an authorized representative in the United States for a fee plus reimbursement of expenses. We and the subsidiary guarantors will also indemnify Ravenscroft of its services as authorized representative.

The following is a summary of the material terms of our credit facilities and other indebtedness.

On October 27, 2004, Braddock Shipping Inc., a subsidiary 60% indirectly owned by us (“Braddock”), entered into a loan agreement with DSB pursuant to which DSB granted Braddock a loan in an aggregate principal amount of $10.0 million for the purpose of refinancing debt previously entered into in connection with the purchase of the vessel, Cape Pampas. The loan accrues interest at a rate of LIBOR plus 1.625% per annum. The term of the loan is five years and is scheduled to be repaid in 20 quarter-annual installments, including a balloon payment of $2.5 million at maturity. The loan is secured by a mortgage on the Cape Pampas and a pledge of 100% of the stock of Braddock and is guaranteed by both the direct and indirect parents of Braddock. The loan also contains customary covenants that limit, among other things, Braddock’s ability to incur additional indebtedness, grant liens over its assets, sell assets, pay dividends, repay indebtedness, make investments, merge or consolidate, change its lines of business, and amend the terms of subordinated debt. The agreement governing the facility also contains customary events of default. If an event of default occurs and is continuing, DSB may require the entire amount of the loan be immediately repaid in full. Further, the loan agreement requires at all times that the vessels pledged as security have a fair market value of at least 150% of the then outstanding loan amount. Neither Braddock nor its direct or indirect parent entities are subsidiary guarantors of our outstanding notes, nor is the Cape Pampas pledged as collateral to secure our outstanding notes.

On December 17, 2002, UABL Barges (Panama) Inc. (“UABL Barges”), a subsidiary indirectly owned 96.4% by us, entered into a loan agreement with IFC pursuant to which IFC granted UABL Barges a loan in an aggregate principal amount of $20.0 million (the “IFC Loan”). The IFC Loan is divided into two tranches:


	•	Tranche A, for $15.0 million, is payable in 14 semi-annual installments of $1.1 million each, beginning on June 15, 2005 and ending on December 15, 2011 and accrues interest at LIBOR plus 3.75% per annum; and

	•	Tranche B, for $5.0 million, is payable in 10 semi-annual installments of $0.5 million each, beginning on June 15, 2005 and ending on December 15, 2009 and accrues interest at LIBOR plus 3.50% per annum.

As of September 30, 2004, $15.0 million, had been borrowed under the IFC Loan and remained outstanding. UABL Barges pays a fee of 0.50% per annum on the unused portion of the loan on a semiannual basis.

In addition, on February 27, 2003, UABL Barges entered into a loan agreement with KfW pursuant to which KfW granted UABL Barges a loan in an aggregate principal amount $10.0 million (the “KfW Loan”). This loan is payable in 10 semi-annual installments of $1.0 million each, beginning on June 15, 2005 and ending on December 15, 2009 and accrues interest at LIBOR plus 3.50% per annum. As of September 30, 2004, $7.5 million had been borrowed under the KfW Loan and remained outstanding. UABL Barges pays a fee of 0.50% per annum on the unused portion of the loan on a semiannual basis.

Each of the IFC Loan and the KfW Loan is guaranteed by UABL Limited, the parent of UABL Barges. Each loan is also secured by mortgages on existing and future barges and push boats belonging to the subsidiaries of UABL Limited and by a stock pledge of 100% of the stock of UABL Barges. Each loan requires that at all times, the vessels pledged as security have a fair market value of at least 175% of the then outstanding loan amount. Each loan also contains certain restrictive covenants applicable to UABL Barges, including, among other customary covenants and restrictions: a minimum debt service coverage ratio not lower than 1.00; a limitation on the incurrence of additional debt; a limitation on making expenditures for assets; a prohibition on paying dividends or other distributions or repurchasing, redeeming or otherwise acquiring its stock without the consent of IFC or KfW, as applicable; a limitation on transactions with affiliates; and a limitation on selling, leasing, transferring, pledging or disposing of its assets. Each loan also contains customary events of default. If an event of default occurs and is continuing, IFC or KfW, as applicable, may require that the entire amount of the applicable loan be immediately repaid in full.

In addition, as guarantor of the loans, UABL Limited is subject to certain restrictive covenants, including, among other customary covenants and restrictions: a minimum consolidated debt service coverage ratio of 1.25 until June 15, 2005, and 1.5 thereafter; a maximum consolidated debt to equity ratio of 1.0; a limitation on its or its subsidiaries incurrence of indebtedness; a limitation on it or its subsidiaries making expenditures for assets; a prohibition on its payment of dividends or other distributions, or the purchase, redemption or other acquisition of its shares of stock, unless the proposed distribution or payment is out of retained earnings; a limitation on its and its subsidiaries ability to enter into transactions with affiliates; and a limitation on its or its subsidiaries selling, transferring, pledging or disposing of their respective assets. Each loan also contains a limitation on changes of control, including the sale or pledge by Ultrapetrol (Bahamas) Limited of the stock it holds in the parent entities of UABL Limited.

Neither UABL Barges nor UABL Limited, nor any subsidiaries of UABL Limited, are subsidiary guarantors of our outstanding notes. With IFC’s and KfW’s consent, approximately $15.0 million of barges owned by certain subsidiaries of UABL Limited were pledged as collateral to secure our outstanding notes.

During March 2003, UABL Paraguay S.A., a subsidiary of UABL Limited, entered into a fuel supply contract with Repsol-YPF that could be considered a “take or pay” contract. UABL Limited guaranteed the performance of this contract and UABL S.A., a subsidiary of UABL Limited, mortgaged its port tug, San Jose V, to secure such contract. This resulted in the non-compliance with certain sections of the guarantee agreement among UABL Limited and IFC and KfW. On February 12, 2004 and February 18, 2004, KfW and IFC, respectively, each signed a waiver to such non-compliance in order to allow UABL Paraguay S.A. to enter into the “take or pay” fuel supply contract with Repsol-YPF, to allow UABL S.A. to mortgage the San Jose V as a security for the fuel supply contract and to allow UABL Limited to guarantee the performance of this contract.

On March 27, 2003, UABL Paraguay S.A. (“UABL Paraguay”) entered into a loan agreement with IFC pursuant to which IFC granted to UABL Paraguay a loan in an aggregate principal amount of $10.0 million (the “IFC Second Loan”). This loan is divided into two tranches of $5.0 million each. Each tranche is payable semi-annually in installments of $0.5 million, beginning on June 15, 2005 and ending on December 15, 2009 and bears interest at LIBOR plus 5.00% per annum. As of September 30, 2004, this loan was undrawn. UABL Paraguay pays a fee of 0.50% per annum on the unused portion of the loan on a semi-annual basis.

The IFC Second Loan is guaranteed by UABL Limited and may be secured by second priority, and under certain circumstances, first priority, mortgages taken on existing and future barges and push boats belonging to UABL Limited and its subsidiaries at the option of IFC. It contains certain restrictive covenants applicable to UABL Paraguay, including, among customary covenants and restrictions: a minimum debt service coverage ratio of 1.0; a maximum debt to equity ratio of 1.5; a limitation on the incurrence of indebtedness; a limitation on making expenditures for assets; a limitation on selling, transferring, pledging or disposing of its assets; a prohibition on its payment of dividends or other distributions, or the purchase, redemption or other acquisition of its shares of stock, unless such distribution or payment is made out of cumulative net earnings; and a limitation on transactions with affiliates. In addition, as guarantor of the IFC Second Loan, UABL Limited is subject to certain restrictive covenants, similar to those in the IFC Loan and the KfW Loan. See “— IFC and KfW Loan Agreements with UABL Barges.” The loan also contains customary events of default. If an event of default occurs and is continuing, IFC may require that the entire amount of the loan be immediately repaid in full. The loan also contains a limitation on changes of control, including the sale or pledge by Ultrapetrol (Bahamas) Limited of the stock it holds in the parent entities of UABL Limited.

Neither UABL Paraguay nor UABL Limited, nor any subsidiaries of UABL Limited, are subsidiary guarantors of the notes. With IFC’s consent, approximately $15.0 million of barges owned by certain subsidiaries of UABL Limited were pledged as collateral to secure the notes.

In April 2002, UABL Paraguay entered into a loan agreement with Citibank N.A. (Paraguay), pursuant to which Citibank N.A. granted UABL Paraguay a loan in an aggregate principal amount of $2.1 million for the

In March 2002, UABL Paraguay entered into a Hire-Purchase Agreement with Touax LPG S.A. for one push boat and 16 hopper barges (collectively, the “Equipment”). The term of this Hire-Purchase is 4 years and UABL Paraguay agreed to pay $61,000 per month for 47 months beginning April 2002. UABL Paraguay has the option to purchase the Equipment on February 23, 2006 for a price of $61,000.

In September 2001, ACBL del Paraguay S.A. (which subsequently changed its name and is now known as Parabal S.A. (“Parabal”)) and UABL Limited entered into a Transfer and Assignment Agreement with Transamerica Leasing Inc. (“Transamerica”), pursuant to which Parabal acquired one push boat and 24 barges (collectively, the “Vessels”) for an acquisition price of $11.1 million. As part of the transaction, Transamerica granted UABL Limited a loan in an aggregate principal amount of $8.0 million, which UABL Limited made available to Parabal towards the acquisition price of the Vessels. Parabal unconditionally guaranteed the loan and pledged the Vessels as collateral. The term of the loan is five years, and principal and interest are amortized monthly in equal payments of $0.16 million. The loan bears interest at a variable interest rate of approximately 8.0%. As of September 30, 2004, approximately $3.8 million of this loan remained outstanding.

In connection with the sale of the outstanding notes, we and our subsidiary guarantors entered into a registration rights agreement with the initial purchaser of the outstanding notes, which has been filed as an exhibit to the registration statement of which this prospectus is a part. In the registration rights agreement, we agreed to use our reasonable best efforts to file with the SEC and cause to become effective a registration statement relating to an offer to exchange the outstanding notes for an issue of SEC registered notes with terms identical to the notes (except that the exchange notes are not subject to restrictions on transfer and, following the exchange offer, neither the exchange notes nor the outstanding notes are subject to any increase in annual interest rate). We are offering the exchange notes under this prospectus in exchange for the outstanding notes to satisfy our obligations under the registration rights agreement. We refer to our offer to exchange the exchange notes for the outstanding notes as the “exchange offer.” The exchange notes have been registered under the Securities Act and are being sold by us in the exchange offer in reliance on the SEC staff’s position as enunciated in Exxon Capital Holdings Corporation (available April 13, 1988) and subsequent no-action letters including Morgan Stanley & Co. Incorporated (available June 5, 1991), K-III Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993).

Based on interpretations of the SEC staff in no-action letters issued to third parties, we believe that the exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act if, among other things:


	•	you are acquiring the exchange notes in the ordinary course of your business;


	•	you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes; and

	•	you are not an affiliate of Ultrapetrol (Bahamas) Limited (within the meaning of Rule 405 of the Securities Act).

We have not sought, and do not intend to seek, a no-action letter from the SEC with respect to the effects of the exchange offer, and there can be no assurance that the SEC would make a similar determination with respect to the exchange notes as it has in such no-action letters cited above.

If you tender your outstanding notes in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes or you are an affiliate of Ultrapetrol (Bahamas) Limited, you:


	•	cannot rely on such interpretations by the SEC staff; and

	•	must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the exchange notes and such secondary resale transaction must be covered by an effective registration statement under the Securities Act containing the selling security holder’s information required by Item 507 or Item 508, as applicable, of Regulation S-K under the Securities Act.

This prospectus may be used for an offer to resell or otherwise transfer exchange notes only as specifically described in this prospectus. Only those broker-dealers that acquired outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where that broker-dealer acquired such outstanding notes as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes.

Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn before the expiration date of the exchange offer. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in integral multiples of $1,000.

The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

As of the date of this prospectus, there are $180.0 million principal amount of outstanding notes, all of which are subject to exchange pursuant to the exchange offer. This prospectus and the letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.

We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer:


	•	will remain outstanding;

	•	will continue to accrue interest; and

	•	will be subject to all terms and conditions specified in the indenture relating to the outstanding notes and will not have any rights under the registration rights agreement.

We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given written notice of the acceptance to the exchange agent and complied with the applicable provisions of the exchange offer and registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us.

If you tender outstanding notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section of this prospectus entitled “The Exchange Offer — Fees and Expenses” for more details about fees and expenses incurred in the exchange offer.

We will return any outstanding notes that we do not accept for exchange for any reason without expense to the tendering holder promptly after the expiration or termination of the exchange offer in accordance with Rule 14(e)-1(c) of the Exchange Act.

This exchange offer expires at 5:00 p.m., New York City time, on , 2005, unless we extend the expiration date.

We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. We may delay acceptance for exchange of any outstanding notes if we extend the exchange offer by giving written notice of the extension to their holders. During any such extensions, all outstanding notes you have previously tendered will remain subject to the exchange, and we may accept them for exchange. To extend the exchange offer, we will notify the exchange agent in writing of any extension. We also will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

If any of the conditions described below under “The Exchange Offer — Conditions to the Exchange Offer” have not been satisfied with respect to the exchange offer, we reserve the right, in our sole discretion:


	•	to delay accepting for exchange any outstanding notes;

	•	to extend the exchange offer; or

	•	to terminate the exchange offer.

We will give written notice of any delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.

Any such delay in acceptance, extension, termination or amendment will be followed promptly by written notice of the delay to the registered holders of outstanding notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose that amendment by means of a prospectus supplement. We will distribute the supplement to the registered holders of the outstanding notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during that period.

Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency.

We will not be required to accept for exchange, or exchange any exchange notes for any outstanding notes, and we may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange, if in our reasonable judgment:


	•	the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any publicly available, written interpretations of the staff of the SEC; or


	•	any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, could reasonably be expected to impair our ability to proceed with the exchange offer.

In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us the representations described below under “The Exchange Offer — Your Representations to Us.”

We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange in the exchange offer, upon the occurrence of any of the conditions to the exchange offer specified above. We will promptly give written notice of any extension, amendment, nonacceptance or termination to the registered holders of the outstanding notes.

These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. Our failure at any time to exercise any of these rights will not mean that we have waived our rights. Each right to assert a condition, other than a condition involving a governmental approval, will be deemed an ongoing right that we may assert at any time or at various times prior to the expiration of the exchange offer.

In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939, as amended.

We have appointed Manufacturers and Traders Trust Company as exchange agent for the exchange offer. Please direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent. If you are not tendering under the DTC’s automated tender offer program, you should send the letter of transmittal and any other required documents to the exchange agent as follows:


	Manufacturers and Traders Trust Company
	25 South Charles Street, 16th Floor
	Baltimore, MD 21201
	Attention: Corporate Trust Administration
	Facsimile: (410) 244-4236
	Telephone: 410-949-3167

Only a holder of outstanding notes may tender those outstanding notes in the exchange offer. To tender in the exchange offer, a holder must either (1) comply with the procedures for physical tender described below, or (2) comply with the automated tender offer program procedures of the DTC described below.

The tender by a holder that is not withdrawn before the expiration date and our acceptance of that tender will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK. RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR OUTSTANDING NOTES TO US. YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.

If you beneficially own outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those notes, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:


	•	make appropriate arrangements to register ownership of the outstanding notes in your name; or

	•	obtain a properly completed bond power from the registered holder of your outstanding notes.

The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.


	•	complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal;

	•	have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires;

	•	mail or deliver or send by facsimile the letter of transmittal to the exchange agent prior to the expiration date; and

	•	deliver the outstanding notes to the exchange agent before the expiration date or comply with the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided above in the section “The Exchange Offer — Exchange Agent” before the expiration date.

You must have signatures on a letter of transmittal or a notice of withdrawal described below under “The Exchange Offer — Withdrawal of Tenders” guaranteed by an eligible institution unless the outstanding notes are tendered:


	•	by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

	•	for the account of an eligible institution.

An eligible institution is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act, that is a member of one of the recognized signature guarantee programs identified in the letter of transmittal.

If a person other than the registered holder of any outstanding notes signs the letter of transmittal, the outstanding notes must be endorsed or accompanied by a properly completed bond power. The registered holder must sign the bond power as the registered holder’s name appears on the outstanding notes. An eligible institution must guarantee that signature.

If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this requirement, they also must submit evidence satisfactory to us of their authority to deliver the letter of transmittal.

The exchange agent and DTC have confirmed that any holder that is a participant in DTC’s system may use DTC’s automated tender offer program to tender. Accordingly, participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent’s message to the exchange agent.

An agent’s message is a message transmitted by DTC to and received by the exchange agent and forming part of the book-entry confirmation, stating that:


	•	DTC has received an express acknowledgment from a participant in DTC’s automated tender offer program that is tendering outstanding notes that are the subject of the book-entry confirmation;

	•	the participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agent’s message relating to guaranteed delivery, the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

	•	we may enforce the agreement against that participant.

To complete a tender through DTC’s automated tender offer program, the exchange agent must receive, before the expiration date, a timely confirmation of book-entry transfer of the outstanding notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agent’s message.

We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes our acceptance of which, in the opinion of our counsel, might be unlawful. We also reserve the right to waive any defects, irregularities or conditions of the exchange offer as to particular outstanding notes. Any waiver of a defect or irregularity of a note or of a term of the exchange offer will be applicable to all outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.

Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we determine. Neither we, the exchange agent nor any other person, will be under any duty to give notification of defects or irregularities with respect to tenders of outstanding notes, nor will we or those persons incur any liability for failure to give such notification. Tenders of outstanding notes will not be deemed made until such defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.

In all cases, we will issue exchange notes for outstanding notes that we have accepted for exchange in the exchange offer promptly after the completion of the exchange offer provided that the exchange agent has timely received:


	•	outstanding notes or a timely book-entry confirmation of transfer of those outstanding notes into the exchange agent’s account at DTC; and

	•	a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

If we do not accept any tendered outstanding notes for exchange for any reason described in the terms and conditions of the exchange offer or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, we will return the unaccepted or non-exchanged outstanding notes without expense to their tendering holder, unless otherwise provided in the letter of transmittal. In the case of outstanding notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described below, those non-exchanged outstanding notes will be credited to an account maintained with DTC. These actions will occur promptly after the expiration or termination of the exchange offer.

By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:


	•	any exchange notes you receive will be acquired in the ordinary course of your business;

	•	you have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the outstanding notes or the exchange notes in violation of the provisions of the Securities Act;

	•	you are not an affiliate (within the meaning of Rule 405 under the Securities Act) of ours or of any of our subsidiary guarantors;

	•	if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other trading activities, you will deliver a prospectus in connection with any resale of those exchange notes.

The exchange agent will use its existing account at DTC with respect to the outstanding notes for purposes of the exchange offer. Any holder participating in DTC’s system may make book-entry delivery of outstanding notes by causing DTC to transfer such outstanding notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. If you are unable to deliver confirmation of the book-entry tender of your outstanding notes into the exchange agent’s account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures described below.

If you wish to tender your outstanding notes but they are not immediately available or if you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTC’s automated tender offer program before the expiration date, you may tender if:


	•	the tender is made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution;

	•	before the expiration date, the exchange agent receives from the member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or eligible guarantor institution, either a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail or hand delivery or a properly transmitted agent’s message and notice of guaranteed delivery:

	•	stating your name and address, the registered number(s) of your outstanding notes and the principal amount of outstanding notes tendered;

	•	stating that the tender is being made thereby;


	•	guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal or facsimile thereof or agent’s message in lieu thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or by the eligible guarantor institution with the exchange agent; and

	•	the exchange agent receives such properly completed and executed letter of transmittal or facsimile or agent’s message, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, the exchange agent will send a notice of guaranteed delivery to you if you wish to tender your outstanding notes according to the guaranteed delivery procedures described above.

Except as otherwise provided in this prospectus, you may withdraw your tender at any time before 5:00 p.m., New York City time, on the expiration date.


	•	the exchange agent must receive a written notice of withdrawal at one of the addresses listed above under “The Exchange Offer — Exchange Agent”; or

	•	the withdrawing holder must comply with the appropriate procedures of DTC’s automated tender offer program.


	•	specify the name of the person who tendered the outstanding notes to be withdrawn;

	•	identify the outstanding notes to be withdrawn, including the registration number and the principal amount of the outstanding notes to be withdrawn;

	•	be signed by the person who tendered the outstanding notes in the same manner as the original signature on the letter of transmittal used to deposit those outstanding notes or be accompanied by documents of transfer sufficient to permit the trustee to register the transfer in the name of the person withdrawing the tender; and

	•	specify the name in which the outstanding notes to be withdrawn are to be registered, if different from that of the person who tendered the outstanding notes.

If outstanding notes have been tendered under the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of DTC.

We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal, and our determination will be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described above, those outstanding notes will be credited to an account maintained with DTC for the outstanding notes. This return or crediting will take place promptly after the withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn outstanding notes by following one of the procedures described under the section “The Exchange Offer — Procedures for Tendering Outstanding Notes” above at any time on or before 5:00 p.m., New York City time, on the expiration date.

We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by facsimile, email, telephone or in person by our officers and regular employees and those of our affiliates.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the outstanding notes and in handling or forwarding tenders for exchange.

We will pay the cash expenses to be incurred in connection with the exchange offer. These expenses include:


	•	SEC registration fees for the exchange notes;

	•	fees and expenses of the exchange agent and trustee;

	•	accounting and legal fees;

	•	printing costs; and

	•	related fees and expenses.

No service charge will be imposed by us or the exchange agent for any registration of transfer or exchange of notes, but under certain circumstances we may require you to pay a sum sufficient to cover any transfer tax or other similar governmental charge required by law or permitted by the indenture. We are not required to transfer or exchange any outstanding note selected for redemption. Also, we are not required to transfer or exchange any outstanding note for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem that outstanding note.

If you do not exchange your outstanding notes for exchange notes in the exchange offer, you will remain subject to the existing restrictions on transfer of the outstanding notes. In general, you may not offer or sell the outstanding notes unless either they are registered under the Securities Act or the offer or sale is exempt from or not subject to registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

The tender of outstanding notes in the exchange offer will reduce the outstanding principal amount of the outstanding notes. Due to the corresponding reduction in liquidity, this may have an adverse effect on, and increase the volatility of, the market price of any outstanding notes that you continue to hold.

Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your decision on what action, if any, to take. In the future, we may seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any outstanding notes that are not tendered in this exchange offer or to file a registration statement to permit resales of any untendered outstanding notes, except as required by the registration rights agreement.

The outstanding notes were issued, and the exchange notes will be issued under the Indenture, dated as of November 24, 2004 (the “Indenture”), among the Company, the Subsidiary Guarantors and Manufacturers and Traders Trust Company, as Trustee (the “Trustee”).

The notes will constitute a single series of debt securities under the Indenture. Any holders of outstanding notes who do not exchange their outstanding notes for exchange notes will vote together with all holders of the notes for all relevant purposes under the Indenture. Accordingly, in determining whether the required holders have given any notice, consent or waiver or taken any other action permitted under the Indenture, any outstanding notes that remain outstanding after the exchange offer will be aggregated with the exchange notes, and the holders of the outstanding notes and the exchange notes will vote together as a single series. All references in this prospectus to specified percentages in aggregate principal amount of the “Notes” mean, at any time after the exchange offer is consummated, the percentages in aggregate principal amount of the outstanding notes and the exchange notes. The outstanding notes and the exchange notes are sometimes referred to herein as the “Notes.”

The following summary of certain provisions of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended. Capitalized terms used herein and not otherwise defined have the meanings set forth in the section “— Certain Definitions.”

The Notes will be issued only in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000. No service charge shall be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith.

The Notes will be senior secured obligations of the Company, limited to $180.0 million aggregate principal amount, and will mature on November 24, 2014. Payment of the principal of, premium, if any, and interest on the Notes will be irrevocably and unconditionally guaranteed by each of the Subsidiary Guarantors. The Notes will bear interest at the rate per annum shown on the cover page hereof from November 24, 2004 or from the most recent date to which interest has been paid or provided for, payable semiannually to Holders of record at the close of business on the May 9 or November 9 immediately preceding the interest payment date on May 24 and November 24 of each year, commencing May 24, 2005. The Company will pay interest on overdue principal at 1% per annum in excess of such rate, and it will pay interest on overdue installments of interest at such higher rate to the extent lawful.

The interest rate on the Notes is subject to increase in certain circumstances if the Company does not file a registration statement relating to the Registered Exchange Offer or if the registration statement is not declared effective on a timely basis or if certain other conditions are not satisfied, all as further described under “— Registered Exchange Offer; Registration Rights.”

Concurrently with the closing of the offering of the outstanding notes, the Company entered into the Escrow Agreement with the Escrow Agent, pursuant to which the Company initially deposited in the Escrow Account with the Escrow Agent an amount, in cash or Treasury Securities (as defined in the Escrow Agreement) equal to approximately $30.0 million, which represents amounts to be used to purchase additional Vessels (such cash and Treasury Securities, together with the interest, dividends, and distributions thereof, the “Escrowed Proceeds”).

Escrowed Proceeds will be released to the Company from time to time by the Escrow Agent upon the satisfaction of the conditions set forth in the Indenture and the Escrow Agreement, including the receipt of a Release Certificate (as defined below), the filing on the day of such release of Mortgages (if applicable) and other collateral documents (if applicable), the delivery of appropriate legal opinions on the day of such release with

A “Release Certificate” shall be a written certificate of the Company, signed by two of its Officers, which:


	(1) shall state that it is a Release Certificate;

	(2) shall state that to the knowledge of the signers thereof, no Default or Event of Default under the Indenture shall have occurred and be continuing as of the date of such Release Certificate;

	(3) shall specify the dollar amount which the Company is thereby seeking to have released from the Escrow Account (the “Requested Amount”); and

	(4) shall set forth the circumstances that justify the release of the Requested Amount in accordance with one or more of the following:


	(a)(i) the Company has executed an Acquisition Contract to acquire a Vessel or Vessels, (ii) such Acquisition Contract has been signed by the applicable seller, is in full force and effect as of the date of the Release Certificate and the signers of the Release Certificate are not aware of any default thereunder by the Company or the applicable seller, (iii) the Requested Amount does not exceed 90.9% of the amount required to pay a deposit to the applicable seller, or to pay other pre-delivery expenses, in each case called for by the Acquisition Contract, and (iv) the balance of the cash needed to pay such deposit will come from one or more sources other than from the Incurrence of Indebtedness or the proceeds of an Asset Sale;

	(b)(i) the Company proposes to consummate simultaneously with the release of the Requested Amount, the acquisition of a Vessel or Vessels, pursuant to an Acquisition Contract, (ii) the Requested Amount pursuant to a Release Certificate under this clause (b)(i) together with any amounts previously released pursuant to a Release Certificate under clause (a)(i) with respect to the acquisition of such Vessel or Vessels does not exceed 90.9% of the sum of the amounts payable to the applicable seller pursuant to the Acquisition Contract plus the related transaction costs incurred by the Company, including the reasonable fees and expenses of counsel, (iii) the Vessel or Vessels proposed to be acquired pursuant to the Acquisition Contract will have an Appraised Value, as of a date not more than 30 days prior to the acquisition date of such Vessel or Vessels, of at least 110% of the aggregate amount of Escrowed Proceeds used (pursuant to any of clauses (a), (b) or (c) of this clause 4) to acquire or repair such Vessel or Vessels, and (iv) the balance of the cash needed to acquire and repair such Vessel or Vessels will come from one or more sources other than the Incurrence of Indebtedness or the proceeds of an Asset Sale;

	(c)(i) in connection with, or within six months after, the acquisition of a Vessel or Vessels by the Company with Escrowed Proceeds, the Company has undertaken or is undertaking necessary maintenance, repair (including structural modifications) or drydocking expenses, including survey expenses, relating to such Vessel, (ii) the Requested Amount does not exceed 90.9% of the amount of such expenses, and (iii) the balance of the cash needed to perform such maintenance and repair such Vessel or Vessels will come from one or more sources other than the Incurrence of Indebtedness or the proceeds of an Asset Sale.

Except for one or more of the purposes described in paragraphs (a)-(c) of the definition of “Release Certificate” above, and except as described in the next paragraph, the Company will not be entitled to withdraw Escrowed Proceeds for any purpose.

To the extent that, after the close of business on December 31, 2005, the amount of cash and the fair market value (as determined by the Board of Directors in good faith) of securities on deposit in the Escrow Account exceeds $1.0 million, the Company will be obligated to use all such remaining Escrowed Proceeds to redeem (the “Special Mandatory Redemption”) as much principal amount of Notes as can be redeemed with such Escrowed Proceeds at a redemption price equal to the sum of 101% of the principal amount of such Notes and the accrued interest thereon to the Special Mandatory Redemption Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) (such redemption price, the

If the Escrow Agent receives a notice of Special Mandatory Redemption pursuant to the terms of the Indenture and the Notes, the Escrow Agent will liquidate all Escrowed Proceeds then held by it not later than the third Business Day prior to the Special Mandatory Redemption Date and release all the Escrowed Proceeds to the Paying Agent (as defined in the Indenture) for the Notes for payment to holders on the Special Mandatory Redemption Date and, to the extent of any excess, thereafter for payment to the Company free of any lien of the Indenture or the Escrow Agreement, whereupon the Escrow Agreement will terminate.

Certain provisions relating to the Company’s obligations to redeem Notes in a Special Mandatory Redemption may not be waived or modified without the written consent of the holders of all the Notes.


	(1) a Mortgaged Vessel or the Capital Stock of a Subsidiary Guarantor or a Pledgor is sold (other than the sale by a Pledgor of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) (which term shall not include the transfer of the operation of a Mortgaged Vessel pursuant to a bareboat charter with a purchase option, which is covered under “— Redemptions — Redemption upon Permitted Bareboat Charter”) in compliance with the terms of the Indenture (the Mortgaged Vessel so sold or owned by the Subsidiary Guarantor or Pledgor whose Capital Stock is so sold being the “Sold Mortgaged Vessel”), or

	(2) an Event of Loss occurs at any time with respect to a Mortgaged Vessel (the Mortgaged Vessel suffering such Event of Loss being the “Lost Mortgaged Vessel”),

then within 25 days after the date title of the Mortgaged Vessel passes to the buyer (such date being the “Sale Date”), in the case of a sale, or within 25 days after the date such Event of Loss was deemed to have occurred (the “Loss Date”), the Company shall give written notice (such date of notice being the “Notification Date”) to the Trustee whether it elects to redeem Notes in connection with such sale or Event of Loss; provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the Company will be required to redeem Notes in accordance with the provisions of the Indenture described in the following paragraphs.

Upon the receipt by the Company, a Subsidiary Guarantor or a Pledgor of the Net Available Cash attributable to a Sold Mortgaged Vessel (other than the receipt by a Pledgor of Net Available Cash attributable to the sale of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) or of the Net Event of Loss Proceeds attributable to a Lost Mortgaged Vessel, such amounts shall be deposited with the Trustee in accordance with the Indenture and shall constitute Collateral pending application as hereinafter described.

If the Company elects to (or is required to) redeem Notes, the redemption date will occur not later than 60 days after the date (the “Proceeds Receipt Date”) of the receipt of such Net Available Cash or Net Event of Loss Proceeds, as the case may be.

In such event, the Company shall apply Net Available Cash or Net Event of Loss Proceeds, as the case may be, and any other cash in an amount (the “Redemption Amount”) at least equal to the Vessel Percentage applicable to the Sold Mortgaged Vessel as of the Sale Date or the Lost Mortgaged Vessel as of the Loss Date, as the case may be, multiplied by the principal amount of the Notes outstanding on the Sale Date or the Loss Date, as the case may be (provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the amount required to be applied by the Company to redeem Notes shall equal the greater of such Redemption Amount and such Net Available Cash or Net Event of Loss Proceeds, as the case may be), to redeem

The “Sale Redemption Price” means, per $1,000 principal amount of Note, the sum of (a) the greater of (i) 100% of such principal amount and (ii)(x) if such redemption date is on or after November 24, 2009, the redemption price then applicable as described under “— Redemptions — Other Redemption,” or (y) if such redemption date is prior to November 24, 2009, the redemption price on November 24, 2009 (as described under “— Redemptions — Other Redemption”) as discounted to its present value to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the Adjusted Treasury Rate (as defined below), and (b) accrued and unpaid interest on such Note to the redemption date.

The “Loss Redemption Price” means, per $1,000 principal amount of Note, the sum of (a) 100% of such principal amount and (b) accrued and unpaid interest on such Note to the redemption date.

On the redemption date attributable to a Sold Mortgaged Vessel or a Lost Mortgaged Vessel, the Trustee will apply the applicable Net Available Cash or the applicable Net Event of Loss Proceeds (together with any funds the Company delivers to the Trustee to the extent necessary to pay the Sale Redemption Price or the Loss Redemption Price for the Notes to be redeemed) to pay the Sale Redemption Price or the Loss Redemption Price to the Holders of Notes being redeemed. Upon the effectuation of any such redemption, all accrued and unpaid interest on the Notes so redeemed shall be deemed fully paid. To the extent that after the Sale Redemption Price or the Loss Redemption Price has been paid with respect to all Notes to be redeemed in respect of such Sold Mortgaged Vessel or Lost Mortgaged Vessel, as the case may be, any Net Available Cash or Net Event of Loss Proceeds remains on deposit with the Trustee, such Net Available Cash or Net Event of Loss Proceeds may be released to the Company upon its request, free of the lien of the Indenture; provided, however, that such funds may only be used by the Company for a Permitted Excess Cash Use or to make an Excess Proceeds Offer.

Redemption upon Permitted Bareboat Charter. If the Company, a Subsidiary Guarantor or a Pledgor enters into a Bareboat Charter with respect to a Mortgaged Vessel, then within 25 days after title to such Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, the Company shall give written notice to the Trustee whether it elects to redeem Notes in connection with such Bareboat Charter; provided, however, that if a Default shall have occurred and be continuing on such Notification Date, the Company will be required to redeem Notes in accordance with the provisions of the Indenture described in the following paragraphs.

Upon receipt by the Company, a Subsidiary Guarantor or a Pledgor of Bareboat Charter Funds, the Sale Equivalent Portion of such Bareboat Charter Funds shall be deposited with the Trustee in accordance with the Indenture and shall constitute Collateral pending application as hereinafter described.

If the Company elects to redeem Notes, the redemption date will occur not later than 60 days after the date title to the relevant Mortgaged Vessel passes to the charterer at the end of the bareboat charter period. In such event, the Company shall apply the Sale Equivalent Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel plus accrued interest thereon to redeem such principal amount of Notes as can be redeemed at the Sale Redemption Price (as defined above). On the redemption date attributable to such Bareboat Charter, the Trustee will apply the Sale Equivalent Portion of such Bareboat Charter Funds then on deposit with it (together with any funds the Company delivers to the Trustee to the extent necessary to pay the Sale Redemption Price for the Notes to be redeemed) to pay the Sale Redemption Price.

In the event the Company elects not to redeem Notes in respect of a Mortgaged Vessel subject to a Bareboat Charter, then by the date which is 12 months after the date title to such Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, the Company shall tender, or shall cause to be tendered, to the Trustee as part of the Collateral one or more Vessels purchased using the Sale Equivalent Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel and then on deposit with the Trustee; provided that if such funds are insufficient to purchase Vessels they shall remain on deposit with the Trustee for application in accordance with the terms and conditions of the Indenture. The Sale Equivalent Portion of Bareboat Charter Funds will be made available from time to time (including prior to the end of the Bareboat Charter period) to the Company pursuant to the terms of, and subject to the conditions of, the Indenture to make any deposits in respect of, or to consummate the purchase of, one or more Vessels.

On the date on which a Vessel is tendered to the Trustee as part of the Collateral with respect to a Mortgaged Vessel that is subject to a Bareboat Charter, the Company shall deliver to the Trustee, or shall cause the owner of such Vessel, which shall be a Restricted Subsidiary of the Company or, if the Princess Marina is subject to a Bareboat Charter, Maritima SIPSA S.A. at any time prior to the sale by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted Subsidiary, to deliver to the Trustee, as the case may be, the documents and certificates required by the Indenture, including, among other things:


	(i) a Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form required by the Indenture; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel that was subject to the Bareboat Charter and the owner of the replacement Vessel is not a Wholly Owned Subsidiary; and

	(ii) a Mortgage (or a preliminary registration thereof, pending delivery of a copy of the Mortgage) with respect to such Vessel dated the date such Vessel was tendered to the Trustee and substantially in the form required by the Indenture (such Mortgage having been duly received for recording in the appropriate registry office), together with appropriate legal opinions with respect to, among other things, the validity, perfection, enforceability and priority of such Mortgage.

Optional Redemption upon Make Whole Payment. Prior to November 24, 2009, we will be entitled at our option to redeem all, but not less than all, of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). Notice of such redemption must be mailed by first-class mail to each Holder’s registered address, not less than 30 nor more than 60 days prior to the redemption date.

“Applicable Premium” means with respect to a Note at any redemption date, the greater of (i) 1.00% of the principal amount of such Note and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on November 24, 2009 (such redemption price being described under “— Redemptions — Other Redemption” exclusive of any accrued interest), plus (2) all required remaining scheduled interest payments due on such Note through November 24, 2009 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such note on such redemption date.

“Adjusted Treasury Rate” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after November 24, 2009, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%.

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes from the redemption date to November 24, 2009, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to November 24, 2009.

“Comparable Treasury Price” means, with respect to any redemption date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.

“Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

“Reference Treasury Dealer” means Credit Suisse First Boston LLC and its successors and assigns and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

Redemption upon Public Equity Offering. At any time and from time to time prior to November 24, 2007, the Company may redeem in the aggregate up to 35% of the original principal amount of the Notes with the proceeds of one or more Public Equity Offerings following which there exists a Public Market, at a redemption price (expressed as a percentage of principal amount) of 109% plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least $115 million aggregate principal amount of the Notes must remain outstanding and be held, directly or indirectly, by Persons other than the Company and its Affiliates, after each such redemption.

Other Redemption. On or after November 24, 2009, the Notes will be redeemable, at the Company’s option, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address, at the following redemption prices (expressed in percentages of principal amount), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on November 24 of the years set forth below:

Selection of Notes for Redemption. In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee on a pro rata basis to the extent practicable, although no Note of $1,000 in original principal amount or less shall be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note.

Redemption for Changes in Withholding Taxes. The Notes may be redeemed, at the option of the Company, at any time as a whole but not in part, on not less than 30 nor more than 60 days’ notice, at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in the event the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the Notes, any Additional Amounts as a result of a change in or an amendment to the laws (including any regulations or rulings promulgated thereunder) of the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile (or any relevant jurisdiction, political subdivision or taxing authority thereof or therein), or any change in or amendment to any official position regarding the application or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), which change or amendment is announced or becomes effective on or after the date of this prospectus, and the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, cannot avoid such obligation by taking reasonable measures available to them; provided, however, that (a) no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company, the Subsidiary Guarantors or the

In the event that the Company elects, with respect to a Sold Mortgaged Vessel or a Lost Mortgaged Vessel, not to redeem Notes as described under “— Redemptions — Redemption upon Sale or Loss of Mortgaged Vessel,” then within 12 months after the Proceeds Receipt Date, the Company will be required to tender, or cause to be tendered, to the Trustee as part of the Collateral one or more Vessels constituting a Qualified Substitute Vessel; provided, however, that if at any time prior to the Vessel Tender Date (as defined below), an Event of Default shall occur, the Company shall thereupon become obligated to redeem Notes in accordance with the provisions described under “— Redemptions — Redemption upon Sale or Loss of Mortgaged Vessel.” Net Available Cash or Net Event of Loss Proceeds, as the case may be, attributable to such Sold Mortgaged Vessel or such Lost Mortgaged Vessel, as the case may be, will be made available to the Company pursuant to the terms, and subject to the conditions, of the Indenture to make any deposits in respect of, or to consummate the purchase of, or pay any Ready for Sea Cost in respect of, the Qualified Substitute Vessel. To the extent that any such Net Available Cash or Net Event of Loss Proceeds remain on deposit with the Trustee after the tender of the Qualified Substitute Vessel, such funds will be released to the Company, free of the Lien of the Indenture, to be used for any Permitted Excess Cash Use or to make an Excess Proceeds Offer.

On the date on which a Qualified Substitute Vessel is tendered to the Trustee as part of the Collateral (a “Vessel Tender Date”) following a sale of or an Event of Loss with respect to a Mortgaged Vessel, the Company shall deliver to the Trustee, or shall cause the owner of such Qualified Substitute Vessel, which shall be a Restricted Subsidiary of the Company or, if the Qualified Substitute Vessel is replacing the Princess Marina, Maritima SIPSA S.A. at any time prior to the sale by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted Subsidiary (the “Tendered Vessel Owner”), to deliver to the Trustee, as the case may be, the documents and certificates required by the Indenture, including, among other things:


	(i) a Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form required by the Indenture; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel and the owner of the Qualified Substitute Vessel is not a Wholly Owned Subsidiary;

	(ii) a Mortgage (or a preliminary registration thereof, pending delivery of a copy of the Mortgage) with respect to such Qualified Substitute Vessel dated the Vessel Tender Date and substantially in the form required by the Indenture (such Mortgage having been duly received for recording in the appropriate registry office), together with appropriate legal opinions with respect to, among other things, the validity, perfection, enforceability and priority of such Mortgage; and

	(iii) written appraisals by two independent Appraisers of the value of such Qualified Substitute Vessel as of a date within 90 days prior to the Vessel Tender Date.

If, as of the first day of each January, April, July or October, the aggregate amount of Excess Proceeds not theretofore subject to an Excess Proceeds Offer (as defined below), totals at least $12.5 million, the Company must, not later than the fifteenth Business Day of such month, make an offer (an “Excess Proceeds Offer”) to purchase from the holders pursuant to and subject to the conditions contained in the Indenture on a pro rata basis an aggregate principal amount of Notes equal to the Excess Proceeds available on such first day of the month, at a purchase price equal to 100% of their principal amount, plus, in each case, accrued interest (if any) to the date of purchase (an “Excess Proceeds Payment”).

The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions in the Indenture governing Excess Proceeds Offers, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this clause by virtue thereof.

All payments made on behalf of the Company, the Subsidiary Guarantors or the Pledgors under or with respect to the Notes, the Subsidiary Guarantees or a Mortgaged Vessel, as applicable, must be made free and clear of and without withholding or deduction for, or on account of, any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) imposed or levied by or on behalf of the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile or by any authority or agency therein or thereof having power to tax (or the jurisdiction of incorporation of any successor of the Company, the Subsidiary Guarantors or the Pledgors) (hereinafter “Taxes”), unless the Company, the Subsidiary Guarantors or the Pledgors, as applicable, are required to withhold or deduct Taxes by law or by the interpretation or administration thereof by the relevant government authority or agency. If the Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, are so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with respect to the Notes, the Subsidiary Guarantees or a Mortgaged Vessel, as applicable, the Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, will be required to pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by each Holder (including Additional Amounts) after such withholding or deduction will not be less than the amount the Holder would have received if such Taxes had not been withheld or deducted; provided, however, that no Additional Amounts will be payable with respect to payments made to a Holder (an “Excluded Holder”) in respect of a beneficial owner (i) which is subject to such Taxes by reason of its being connected with the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile otherwise than by the mere holding of Notes or the receipt of payments thereunder (or under the related Subsidiary Guarantee), (ii) which presents any Note for payment of principal more than 60 days after the later of (x) the date on which payment first became due and (y) if the full amount payable has not been received by the Trustee on or prior to such due date, the date on which, the full amount payable having been so received, notice to that effect shall have been given to the Holders by the Trustee, except to the extent that the Holder would have been entitled to such Additional Amounts on presenting such Note for payment on the last day of the applicable 60-day period, (iii) which failed duly and timely to comply with a reasonable, timely request of the Company to provide information, documents or other evidence concerning the Holder’s nationality, residence, entitlement to treaty benefits, identity or connection with the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile or any political subdivision or authority thereof, if and to the extent that due and timely compliance with such request would have reduced or eliminated any Taxes as to which Additional Amounts would have otherwise been payable to such Holder but for this clause (iii), (iv) on account of any estate, inheritance, gift, sale, transfer, personal property or other similar Tax, (v) which is a fiduciary, a partnership or not the beneficial owner of any payment on a Note, if and to the extent that any beneficiary or settlor of such fiduciary, any partner in such partnership or the beneficial owner of such payment (as the case may be) would not have been entitled to receive Additional Amounts with respect to such payment if such beneficiary, settlor, partner or beneficial owner had been the Holder of such Note or (vi) any combination of the foregoing numbered clauses of this proviso. The Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, will also make such withholding or deduction and remit the full amount deducted or withheld to the relevant authority as and when required in accordance with applicable law. The Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, will furnish to the Trustee, within 30 days after the date the payment of any Taxes is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by the Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, in such form as provided in the normal course by the taxing authority imposing such Taxes and as is reasonably available to the Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable. The Trustee shall make such evidence available to the Holders upon request. The Company, the Subsidiary Guarantors or the Pledgors (or any successor of any of them), as applicable, will upon written request of each Holder (other than an Excluded

Whenever in the Indenture there is mentioned, in any context, (a) the payment of principal, (b) purchase prices in connection with a purchase of Notes, (c) interest or (d) any other amount payable on or with respect to any of the Notes, or any payment pursuant to the Subsidiary Guarantees or in respect of a Mortgage Vessel, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

The foregoing obligations shall survive any termination, defeasance or discharge of the Indenture.

The Company, the Subsidiary Guarantors or the Pledgors will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of the Notes, the Subsidiary Guarantees or a Mortgage or any other document or instrument in relation thereto, or the receipt of any payments with respect to the Notes, the Subsidiary Guarantees or a Mortgage, excluding such taxes, charges or similar levies imposed by any jurisdiction outside of the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile, the jurisdiction of incorporation of any successor of the Company or any jurisdiction in which a paying agent is located, and has agreed to indemnify the Holders for any such taxes paid by such Holders.

For a discussion of the exemption from Bahamian withholding taxes applicable to payments under or with respect to the Notes, see “Tax Considerations — Bahamian Tax Considerations.”

The Company’s obligations for payment of the principal of, premium, if any, and interest on the Notes, the Subsidiary Guarantors’ obligations for payment of all sums of money payable under the Security Agreements and performance of all other provisions contained in the Indenture and the Security Agreements (collectively, the “Obligations”) will be irrevocably and unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors. The Subsidiary Guarantors as of the Issue Date are our Wholly Owned Subsidiaries that directly or indirectly own and operate the Vessels used in our ocean business (other than Dampierre Holdings Spain S.L., an intermediate holding company) as well as those that own in the aggregate ten pushboats and 193 barges used in our river business. Each Subsidiary Guarantee will be limited in amount to an amount not to exceed the maximum amount that can be guaranteed by the applicable Subsidiary Guarantor without rendering the applicable Subsidiary Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. If a Subsidiary Guarantee were to be rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable Subsidiary Guarantor, and, depending on the amount of such indebtedness, a Subsidiary Guarantor’s liability on its Subsidiary Guarantee could be reduced to zero. See “Risk Factors — Risks Relating to the Notes — Federal, state and foreign laws permit a court to void the notes and the subsidiary guarantees, and if that occurs, you may not receive any payment on the notes.”

Some of our Subsidiaries are not Guaranteeing the Notes. Our Subsidiaries that are not Guaranteeing the Notes are those that directly or indirectly own and operate the vessels used in our river business (other than those owned by Subsidiary Guarantors as described above). In addition, some or all of our future Subsidiaries may not be required to Guarantee the Notes. No payments are required to be made to Holders of the Notes from the assets of such non-guarantor Subsidiaries in respect of the Notes. Claims of creditors of any non-guarantor Subsidiaries, including trade creditors holding indebtedness or guarantees issued by such non-guarantor Subsidiaries, and claims of preferred stockholders of such non-guarantor Subsidiaries, generally will have priority with respect to the assets and earnings of such non-guarantor Subsidiaries over the claims of the Company’s creditors, including Holders of the Notes, even if such claims do not constitute Senior Indebtedness. Accordingly, the Notes will be effectively

Upon the sale or other disposition of all the Capital Stock of a Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor (in each case other than to the Company or an Affiliate of the Company) in compliance with the terms of the Indenture, such Subsidiary Guarantor will be released and relieved from all its obligations under its Subsidiary Guarantee.

The Company has pledged, in favor of the Trustee to secure the Obligations, all the issued and outstanding Capital Stock of each Subsidiary Guarantor owned, directly or indirectly, by the Company (other than Ultrapetrol S.A., Parfina S.A. and Oceanpar S.A.) (subject to the limitations described under “— Limitations on Stock Collateral”) and its interest in the Escrowed Proceeds and any other cash of the Company that is required by the terms of the Indenture to be deposited with the Trustee.

Each Subsidiary Guarantor has pledged and assigned substantially all its assets to the Trustee to secure on a first-priority basis (subject to Permitted Liens), among other things, the Notes, its Subsidiary Guarantee of the Notes and the other Obligations. The assets so pledged and assigned by each Subsidiary Guarantor that directly owns a Mortgaged Vessel includes, subject to Permitted Liens, all its right, title and interest in and to (i) its Mortgaged Vessel (or any additional Vessel purchased by the Subsidiary Guarantor which shall become a Mortgaged Vessel), pursuant to a Mortgage issued by such Subsidiary Guarantor in favor of the Trustee, which Mortgage contains covenants pursuant to which such Subsidiary Guarantor, among other things, is prohibited from selling, further mortgaging or transferring any of its interest in such vessel (other than as permitted under the Indenture); (ii) the Charters, if any, relating to its Mortgaged Vessel, including the collateral right to receive all moneys and claims for moneys due and to become due under such Charters or in respect of such Mortgaged Vessel and all claims for damages arising under such Charters or relating to such Mortgaged Vessel, including all moneys or other compensation payable by reason of requisition of title or for hire or other compulsory acquisition and all claims for damages in respect of the actual or constructive total loss of the Mortgaged Vessel; (iii) the freights, hires, passage moneys or payments in respect of indemnities relating to its Mortgaged Vessel; (iv) all its policies and contracts of insurance taken out from time to time in respect of and relating to its Mortgaged Vessel; and (v) all proceeds of the foregoing. See “— Certain Definitions — Mortgaged Vessels.”

In addition, the Collateral consists of (i) Escrowed Proceeds, (ii) Net Event of Loss Proceeds, (iii) Net Available Cash from the sale of a Mortgaged Vessel and (iv) any cash deposited from time to time by the Company with the Trustee. Any cash on deposit from time to time with the Trustee that constitutes Escrowed Proceeds, Net Event of Loss Proceeds, Net Available Cash from the sale of a Mortgaged Vessel and the Sale Equivalent Portion of Bareboat Charter Funds, will be released, subject to the terms and conditions of the Indenture, as described under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel,” “— Redemptions — Redemption upon Permitted Bareboat Charter,” “— Tender of Qualified Substitute Vessel” and “— Escrow of Proceeds; Special Mandatory Redemption.”

Upon performance and payment in full of all the Obligations, all such pledges and assignments in favor of the Trustee shall terminate.

A Subsidiary Guarantor may release any Mortgaged Vessel from the Collateral by tendering to the Trustee as part of the Collateral a Substitute Mortgaged Vessel in place of such Mortgaged Vessel. On the date on which a Substitute Mortgaged Vessel is tendered to the Trustee as part of the Collateral (a “Vessel Substitution Date”), the Company shall deliver, or cause the owner of such Substitute Mortgaged Vessel, which shall be a Restricted Subsidiary of the Company, to deliver to the Trustee, as the case may be, the documents and certificates required by the Indenture, including, among other things:


	(i) a Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form required by the Indenture; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel and the owner of the Substitute Mortgaged Vessel is not a Wholly Owned Subsidiary;


	(ii) a Mortgage (or a preliminary registration thereof, pending delivery of a copy of the Mortgage) with respect to such Substitute Mortgaged Vessel dated the Vessel Substitution Date and substantially in the form required by the Indenture (such Mortgage having been duly received for recording in the appropriate registry office), together with appropriate legal opinions with respect to, among other things, the validity, perfection, enforceability and priority of such Mortgage; and

	(iii) written appraisals by two independent Appraisers of the value of such Substitute Mortgaged Vessel as of a date within 90 days prior to the Vessel Substitution Date.

The provisions described under “— Collateral” which apply to a Subsidiary Guarantor that directly owns a Mortgaged Vessel shall apply mutatis mutandis to the Pledgors.

At the closing of the offering of the outstanding notes, the Company delivered appraisals by independent Appraisers of the values of the Mortgaged Vessels, which appraisals showed that the average of such appraisers’ aggregate appraised values of such vessels, in September, 2004, was $165.6 million.

The Capital Stock and other securities of any Subsidiary constitute Collateral only to the extent that such Capital Stock and other securities can secure the Notes or the Subsidiary Guarantees without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency). In the event that Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiary’s Capital Stock and other securities secure the Notes or the Subsidiary Guarantees, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed not to be part of the Collateral (but only to the extent necessary to not be subject to such requirement). In such event, the Indenture may be amended or modified, without the consent of any Holder of Notes, to the extent necessary to release the first-priority security interests on the shares of Capital Stock and other securities that are so deemed to no longer constitute part of the Collateral.

In the event that Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulations adopted, which would permit) such Subsidiary’s Capital Stock and other securities to secure the Notes or the Subsidiary Guarantees in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed to be a part of the Collateral (but only to the extent necessary to not be subject to any such financial statement requirement). In such event, the Indenture may be amended or modified, without the consent of any holder of Notes, to the extent necessary to subject such additional Capital Stock and other securities to the Liens under the Indenture.

In accordance with the limitations set forth in the two immediately preceding paragraphs, as of the Issue Date, the Collateral includes shares of Capital Stock of the Subsidiaries only to the extent that the applicable value of such Capital Stock (on a Subsidiary-by-Subsidiary basis) is less than 20% of the aggregate principal amount of the Notes outstanding. Following the Issue Date, however, the portion of the Capital Stock of Subsidiaries constituting Collateral may decrease or increase as described above.

Pursuant to the terms of the Indenture, the indebtedness evidenced by the Notes will be senior secured obligations of the Company and will be senior in right of payments to all future subordinated Indebtedness of the Company. Claims of Holders of the Notes will rank ahead of all other claims (other than claims represented by Permitted Liens that rank senior or pari passu in right of payment to the claims of Holders of the Notes) with respect to and to the extent of the value, priority and validity of the Company’s pledge of the Capital Stock of each Subsidiary Guarantor owned directly by the Company that secures the Obligations. Certain additional Indebted-

Pursuant to the terms of the Indenture, with respect to each Subsidiary Guarantor, claims of Holders of the Notes will rank ahead of all other claims (other than claims represented by Permitted Liens that rank senior or pari passu in right of payment to the claims of Holders of Notes) with respect to and to the extent of the value, priority and validity of the Collateral pledged by such Subsidiary Guarantor, including the Mortgage of its respective Mortgaged Vessel and the pledge of the Capital Stock of each Subsidiary Guarantor owned directly by such Subsidiary Guarantor, that secures the Obligations. Although the Holders of the Notes should be entitled to payment of their indebtedness out of the proceeds of their Collateral prior to the holders of any general unsecured obligations of the Subsidiary Guarantors, in the event that the value of any Subsidiary Guarantor’s Collateral is insufficient to discharge each Subsidiary Guarantor’s obligations under its Subsidiary Guarantee, any deficiency claims of the Noteholders against such Subsidiary Guarantor will rank pari passu with the claims of creditors (including trade creditors) of such Subsidiary Guarantor.

Pursuant to the terms of the Indenture, with respect to each Pledgor, claims of Holders of Notes against the Company will be effectively subordinated to the claims of creditors (including trade creditors) and holders of preferred stock of such Pledgors; provided, however, that claims of Holders of the Notes will rank ahead of all other claims (other than claims represented by Permitted Liens that rank senior or pari passu in right of payment to the claims of Holders of the Notes) with respect to and to the extent of the value, priority and validity of the Collateral pledged by such Pledgor, including the Mortgage of its respective Mortgaged Vessel.

With respect to each Subsidiary that is neither a Subsidiary Guarantor nor a Pledgor, claims of the Noteholders against the Company will be effectively subordinated to the claims of creditors (including trade creditors) and holders of preferred stock of such Subsidiaries. Although the Indenture limits the incurrence of Indebtedness and Preferred Stock of the Company’s Subsidiaries, such limitation is subject to a number of significant qualifications. Moreover, the Indenture does not impose any limitation on the incurrence by such Subsidiaries of liabilities that are not considered Indebtedness or Preferred Stock under the Indenture.

Our outstanding notes were offered and sold to qualified institutional buyers in reliance on Rule 144A (“Rule 144A Notes”) and in offshore transactions in reliance on Regulation S (“Regulation S Notes”). Following the initial distribution of Rule 144A Notes and Regulation S Notes, such Notes may be transferred to certain institutional “accredited investors” in the secondary market (“IAI Notes”). Except as set forth below, our outstanding notes were issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess of $1,000. Our outstanding notes were issued at the closing of the offering of our outstanding notes against payment in immediately available funds.

Rule 144A Notes were initially represented by one or more global notes in registered form without interest coupons (collectively, the “Rule 144A Global Notes”). Regulation S Notes were initially represented by one or more global notes in registered form without interest coupons (collectively, the “Regulation S Global Notes”). IAI Notes were initially represented by one or more global notes in registered form without interest coupons (collectively, the “IAI Global Notes”). Beneficial ownership interests in a Regulation S Global Note will be exchangeable for interests in a Rule 144A Global Note, an IAI Global Note or a definitive note in registered certificated form (a “Certificated Note”) only after the expiration of the period through and including the 40th day after the later of the commencement and the closing of the offering of our outstanding notes (the “Distribution Compliance Period”) and then only (i) in the case of an exchange for an IAI Global Note, upon certification that the interest in the Regulation S Global Note is being transferred to an “accredited investor” under the Securities Act that is an institutional “accredited investor” acquiring the securities for its own account or for the account of an institutional “accredited investor” and (ii) in the case of an exchange for a Certificated Note, in compliance with the requirements described under “— Exchange of Global Notes for Certificated Notes.” The Rule 144A Global Notes, the IAI Global Notes and the Regulation S Global Notes are collectively referred to herein as the “Global

Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See “— Exchange of Global Notes for Certificated Notes.” Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Notes in certificated form.

Rule 144A Notes (including beneficial interests in the Rule 144A Global Notes) are subject to certain restrictions on transfer and bear a restrictive legend as described under “Transfer Restrictions.” Regulation S Notes and IAI Notes are also subject to certain restrictions on transfer and also bear the legend as described under “Transfer Restrictions.” In addition, transfers of beneficial interests in the Global Notes are subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time.

The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.

DTC has advised us that DTC is a limited-purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.


	1. upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and

	2. ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).

Investors in the Global Notes who are Participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations which are Participants in such system. All interests in a Global Note may be subject to the procedures and requirements of DTC. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such

Except as described below, owners of an interest in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or “Holders” thereof under the Indenture for any purpose.

Payments in respect of the principal of, and interest and premium and additional interest, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners of the Notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:


	1. any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or

	2. any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Subject to the transfer restrictions set forth under “Transfer Restrictions,” transfers between Participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in same-day funds.

DTC has advised the Company that it will take any action permitted to be taken by a Holder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants, it is under no obligation to perform such procedures, and such procedures may be discontinued or changed at any time. Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.


	1. DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed;


	2. the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or

	3. there has occurred and is continuing a Default with respect to the Notes.

In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear the applicable restrictive legend referred to in “Transfer Restrictions,” unless that legend is not required by applicable law.

Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes. See “Transfer Restrictions.”

Beneficial interests in the Regulation S Global Note may be exchanged for beneficial interests in the Rule 144A Global Note or the IAI Global Note only after the expiration of the Distribution Compliance Period and then only upon certification in form reasonably satisfactory to the Trustee that, among other things, in the case of an exchange for an interest in an IAI Global Note, the interest in the Regulation S Global Note is being transferred to an “accredited investor” under the Securities Act that is an institutional “accredited investor” acquiring the securities for its own account or for the account of an institutional “accredited investor.”

Beneficial interest in a Rule 144A Global Note or an IAI Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144.

Beneficial interest in the Rule 144A Global Note may be exchanged for a beneficial interest in the IAI Global Note only upon certification in a form reasonably satisfactory to the Trustee that, among other things, (i) the beneficial interest in such Rule 144A Global Note is being transferred to an “accredited investor” under the Securities Act that is an institutional “accredited investor” acquiring the securities for its own account or for the account of an institutional “accredited investor” and (ii) such transfer is being made in accordance with all applicable securities laws of the States of the United States and other jurisdictions. Beneficial interest in the IAI Global Note may be exchanged for a beneficial interest in the Rule 144A Global Note only upon certification in a form reasonably satisfactory to the Trustee that, among other things, such interest is being transferred in a transaction in accordance with Rule 144A.

Transfers involving exchanges of beneficial interests between the Regulation S Global Notes, the IAI Global Notes and the Rule 144A Global Notes will be effected in DTC by means of an instruction originated by the Trustee through the DTC Deposit/ Withdraw at Custodian system. Accordingly, in connection with any such transfer, appropriate adjustments will be made to reflect the changes in the principal amounts of the Regulation S Global Note, the IAI Global Note and the Rule 144A Global Note, as applicable. Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in the other Global Note will, upon transfer, cease to be an interest in such Global Note and will become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in such other Global Note for so long as it remains such an interest.

The Company will make payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to

We have agreed pursuant to the Registration Rights Agreement that we will, subject to certain exceptions:


	1. within 60 days after the Issue Date, file a registration statement (the “Exchange Offer Registration Statement”) with the SEC with respect to a registered offer (the “Registered Exchange Offer”) to exchange the Notes for new notes of the Company (the “Exchange Notes”) having terms substantially identical in all material respects to the Notes (except that the Exchange Notes will not contain terms with respect to transfer restrictions);

	2. use our reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 150 days after the Issue Date;

	3. as soon as practicable after the effectiveness of the Exchange Offer Registration Statement (the “Effectiveness Date”), offer the Exchange Notes in exchange for surrender of the Notes; and

	4. keep the Registered Exchange Offer open for not less than 30 days (or longer if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the holders of the Notes.

For each Note validly tendered to us and not withdrawn pursuant to the Registered Exchange Offer, we will issue to the holder of such Note an Exchange Note having a principal amount equal to that of the surrendered Note. Interest on each Exchange Note will accrue from the last interest payment date on which interest was paid on the Note surrendered in exchange therefor, or, if no interest has been paid on such Note, from the date of its original issue.

Under existing SEC interpretations, the Exchange Notes will be freely transferable by holders other than our affiliates after the Registered Exchange Offer without further registration under the Securities Act if the holder of the Exchange Notes represents to us in the Registered Exchange Offer that it is acquiring the Exchange Notes in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes and that it is not an affiliate of the Company, as such terms are interpreted by the SEC; provided, however, that broker dealers (“Participating Broker Dealers”) receiving Exchange Notes in the Registered Exchange Offer will have a prospectus delivery requirement with respect to resales of such Exchange Notes. The SEC has taken the position that Participating Broker Dealers may fulfill their prospectus delivery requirements with respect to Exchange Notes (other than a resale of an unsold allotment from the original sale of the Notes) with the prospectus contained in the Exchange Offer Registration Statement.

Under the Registration Rights Agreement, the Company is required to allow Participating Broker Dealers and other persons, if any, with similar prospectus delivery requirements to use the prospectus contained in the Exchange Offer Registration Statement in connection with the resale of such Exchange Notes for 180 days following the effective date of such Exchange Offer Registration Statement (or such shorter period during which Participating Broker-Dealers are required by law to deliver such prospectus).

A Holder of Notes (other than certain specified holders) who wishes to exchange such Notes for Exchange Notes in the Registered Exchange Offer will be required to represent that any Exchange Notes to be received by it will be acquired in the ordinary course of its business and that at the time of the commencement of the Registered Exchange Offer it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes and that it is not an “affiliate” of the Company, as defined in


	1. applicable interpretations of the staff of the SEC do not permit us to effect such a Registered Exchange Offer; or

	2. for any other reason we do not consummate the Registered Exchange Offer within 180 days of the Issue Date; or

	3. the Initial Purchaser shall notify us following consummation of the Registered Exchange Offer that Notes held by it are not eligible to be exchanged for Exchange Notes in the Registered Exchange Offer; or

	4. certain holders are prohibited by law or SEC policy from participating in the Registered Exchange Offer or may not resell the Exchange Notes acquired by them in the Registered Exchange Offer to the public without delivering a prospectus,


	1. promptly file a shelf registration statement (the “Shelf Registration Statement”) with the SEC covering resales of the Notes or the Exchange Notes, as the case may be;

	2. (A) in the case of clause (1) above, use our reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 150th day after the Issue Date and (B) in the case of clause (2), (3) or (4) above, use our reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 60th day after the date on which the Shelf Registration Statement is required to be filed; and

	3. keep the Shelf Registration Statement effective until the earliest of (A) the time when the Notes covered by the Shelf Registration Statement can be sold pursuant to Rule 144 without any limitations under clauses (c), (e), (f) and (h) of Rule 144, (B) two years from the Issue Date and (C) the date on which all Notes registered thereunder are disposed of in accordance therewith.

We will, in the event a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Notes or the Exchange Notes, as the case may be. A holder selling such Notes or Exchange Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such holder (including certain indemnification obligations).

We may require each holder requesting to be named as a selling security holder to furnish to us such information regarding the holder and the distribution of the Notes or Exchange Notes by the holder as we may from time to time reasonably require for the inclusion of the holder in the Shelf Registration Statement, including requiring the holder to properly complete and execute such selling security holder notice and questionnaires, and any amendments or supplements thereto, as we may reasonably deem necessary or appropriate. We may refuse to name any holder as a selling security holder that fails to provide us with such information.

We will pay additional cash interest on the Notes and Exchange Notes, subject to certain exceptions,


	1. if the Company fails to file an Exchange Offer Registration Statement with the SEC on or prior to the 60th day after the Issue Date,

	2. if the Exchange Offer Registration Statement is not declared effective by the SEC on or prior to the 150th day after the Issue Date or, if obligated to file a Shelf Registration Statement pursuant to clause 2(A) above, a Shelf Registration Statement is not declared effective by the SEC on or prior to the 180th day after the Issue Date,


	3. if the Exchange Offer is not consummated on or before the 40th day after the Exchange Offer Registration Statement is declared effective,

	4. if obligated to file the Shelf Registration Statement pursuant to clause 2(B) above, the Company fails to file the Shelf Registration Statement with the SEC on or prior to the 30th day (the “Shelf Filing Date”) after the date on which the obligation to file a Shelf Registration Statement arises,

	5. if obligated to file a Shelf Registration Statement pursuant to clause 2(B) above, the Shelf Registration Statement is not declared effective on or prior to the 60th day after the Shelf Filing Date, or

	6. after the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is declared effective, such Registration Statement thereafter ceases to be effective or usable (subject to certain exceptions) (each such event referred to in the preceding clauses (1) through (6) a “Registration Default”);

from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured.

The rate of the additional interest will be 1.00% per annum from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured; provided, however, that if a Registration Default shall occur and be continuing on the date that is two years following the Issue Date, such additional interest at the rate of 1.00% per annum will accrue permanently on the Notes and the Exchange Notes. We will pay such additional interest on regular interest payment dates. Such additional interest will be in addition to any other interest payable from time to time with respect to the Notes and the Exchange Notes.

All references in the Indenture, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any additional interest pursuant to the Registration Rights Agreement.

If we effect the Registered Exchange Offer, we will be entitled to close the Registered Exchange Offer 30 days after the commencement thereof provided that we have accepted all Notes theretofore validly tendered in accordance with the terms of the Registered Exchange Offer.

Upon the occurrence of any of the following events (each a “Change of Control”), each Holder shall have the right to require the Company to repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date):


	(i) Prior to the earlier to occur of (A) the first public offering of common stock of Parent or (B) the first public offering of common stock of the Company, the Permitted Holders cease to be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the total voting power of the Voting Stock of the Company, whether as a result of issuance of securities of the Parent or the Company, any merger, consolidation, liquidation or dissolution of the Parent or the Company, any direct or indirect transfer of securities by Parent or otherwise (for purposes of this clause (i) and clause (ii) below, the Permitted Holders shall be deemed to beneficially own any Voting Stock of a corporation (the “specified corporation”) held by any other corporation (the “parent corporation”) so long as the Permitted Holders beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent corporation);

	(ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder, is or becomes the beneficial owner (as defined in clause (i) above, except that for purposes of this clause (ii) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company; provided, however, that the Permitted Holders beneficially own (as defined in clause (i) above), directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company than such other


	person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors (for the purposes of this clause (ii), such other person shall be deemed to beneficially own any Voting Stock of a specified corporation held by a parent corporation, if such other person is the beneficial owner (as defined in this clause (ii)), directly or indirectly, of more than 35% of the voting power of the Voting Stock of such parent corporation and the Permitted Holders beneficially own (as defined in clause (i) above), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Voting Stock of such parent corporation and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of such parent corporation);

	(iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of 66 2/3% of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; and

	(iv) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person other than (A) a transaction in which the survivor or transferee is a Person that is controlled by the Permitted Holders or (B) a transaction following which (1) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and (2) in the case of a sale of assets transaction, each transferee becomes an obligor in respect of the Notes and a Subsidiary of the transferor of such assets.

Within 30 days following any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); (2) the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control); (3) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (4) the instructions determined by the Company, consistent with the covenant described hereunder, that a Holder must follow in order to have its Notes purchased.

The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to the covenant described hereunder. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the covenant described hereunder by virtue thereof.

The Change of Control purchase feature is solely a result of negotiations between the Company and the Initial Purchasers. The Company has no present intention to engage in a transaction involving a Change of Control, although it is possible that the Company could decide to do so in the future. Subject to the limitations discussed below, the Company could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the Company’s capital structure or credit ratings. Restrictions on the ability of the Company to incur additional Indebtedness are contained in the covenants described under “— Certain Covenants — Limitation on Indebtedness,” “— Certain Covenants — Limitation on Liens” and “— Certain Covenants — Limitation on Sale/ Leaseback Transactions.” Such restrictions can only be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding. Except for

Future indebtedness of the Company may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require such indebtedness to be repurchased upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Company to repurchase the Notes could cause a default under such indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company’s ability to pay cash to the Holders of Notes following the occurrence of a Change of Control may also be limited by the Company’s then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases. The provisions under the Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.

The Indenture provides that the following covenants, among others, will be applicable to the Company and its Restricted Subsidiaries:

Limitation on Indebtedness. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness except that the Company and its Subsidiary Guarantors may Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto, the Consolidated Coverage Ratio exceeds 2.0 to 1.0.

(b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries may Incur, directly or indirectly, any or all of the following Indebtedness:


	(1) Indebtedness of the Company and the Subsidiary Guarantors Incurred pursuant to a working capital line of credit in an amount which, when added together with the amount of all other Indebtedness Incurred pursuant to this clause (1) and then outstanding, does not exceed $15.0 million;

	(2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or another Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the Company;

	(3) the Notes and the Exchange Notes;

	(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clause (1), (2), (3) or (10) of this covenant);

	(5) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4) or this clause (5) or clause (8) below;

	(6) Indebtedness (A) in respect of performance, surety, appeal or similar bonds provided in the ordinary course of business, and (B) arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business or assets of the Company or any of its Restricted Subsidiaries, including all or any interest in any Restricted Subsidiary, and not exceeding the gross proceeds therefrom, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business or assets of the Company or any of its Restricted Subsidiaries for the purpose of financing such acquisition;

	(7) Hedging Obligations consisting of Interest Rate Agreements or Currency Agreements directly related to Indebtedness permitted to be Incurred by the Company pursuant to the Indenture;


	(8) Purchase Money Indebtedness Incurred to finance the acquisition by the Company or a Restricted Subsidiary of additional Vessels or Shipping Business Assets; provided, however, that, at the date of such Incurrence, the amount of such Indebtedness shall not exceed 80% of the cost of acquiring such Vessel or such Shipping Business Assets, including the purchase price of such Vessel or such Shipping Business Assets under the Acquisition Contract in respect thereof plus any Ready for Sea Cost;

	(9) Indebtedness consisting of the Subsidiary Guarantee of a Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of Indebtedness Incurred pursuant to clause (3) or (4) or pursuant to clause (5) to the extent the Refinancing Indebtedness Incurred thereunder directly or indirectly Refinances Indebtedness Incurred pursuant to clause (3) or (4);

	(10) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to any IFC Loan Agreement in an aggregate principal amount which, when added together with the amount of all other Indebtedness Incurred pursuant to this clause (10) and then outstanding, does not exceed $40.0 million; and

	(11) Indebtedness of the Company, the Subsidiary Guarantors and other Restricted Subsidiaries in an aggregate principal amount which, together with all other Indebtedness of the Company outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1) through (10) above or paragraph (a)), does not exceed $15.0 million; provided that the aggregate principal amount of Indebtedness that may be Incurred pursuant to this clause (11) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $10.0 million at any time outstanding.

(c) Notwithstanding the foregoing, the Company shall not Incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations unless such Indebtedness shall be subordinated to the Notes to at least the same extent as such Subordinated Obligations.

(d) For purposes of determining compliance with the foregoing covenant, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item of Indebtedness in any manner that complies with this covenant and only be required to include the amount and type of such Indebtedness in one of the above clauses and (ii) an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness described above.

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, to, make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and be continuing (or would result therefrom); (2) the Company is not able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Certain Covenants — Limitation on Indebtedness”; or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of:


	(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter during which the Notes are originally issued to the end of the most recent fiscal quarter for which financial statements are publicly available prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit);

	(B) the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees to the extent such issuance or sale is financed with proceeds of debt provided by the Company or any Subsidiary of the Company);

	(C) the amount by which Indebtedness of the Company is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange);


	(D) an amount equal to the sum of (i) the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances or other transfers of assets, in each case to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, and (ii) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary; and

	(E) $7.5 million.


	(i) any Restricted Payment made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees); provided, however, that (A) the amount of such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;

	(ii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company which is permitted to be Incurred pursuant to the covenant described under “— Certain Covenants — Limitation on Indebtedness”; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;

	(iii) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that at the time of payment of such dividend, no other Default shall have occurred and be continuing (or result therefrom); provided further, however, that such dividend shall be included in the calculation of the amount of Restricted Payments; or

	(iv) the repurchase or other acquisition of shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases and other acquisitions shall not exceed $250,000 in any calendar year; provided further, however, that such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments.

Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (b) make any loans or advances to the Company or (c) transfer any of its property or assets to the Company, except:


	(i) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date;

	(ii) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness or Preferred Stock Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company (other than Indebtedness or Preferred Stock Incurred as consideration in, or to provide all or any portion of the funds


	or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and outstanding on such date;

	(iii) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness or Preferred Stock Incurred pursuant to an agreement referred to in clause (i) or (ii) of this covenant or this clause (iii) or contained in any amendment to an agreement referred to in clause (i) or (ii) of this covenant or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are in the aggregate no less favorable to the Noteholders than encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;

	(iv) any such encumbrance or restriction consisting of customary non-assignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder;

	(v) in the case of clause (c) above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages;

	(vi) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and

	(vii) any such restriction applicable to a Restricted Subsidiary contained in agreements evidencing or relating to Indebtedness of such Restricted Subsidiary permitted by paragraph (b)(8) of the covenant described under “— Certain Covenants — Limitation on Indebtedness.”

Limitation on Asset Sales. (a) The Company shall not, and shall not permit any Restricted Subsidiary to engage in Asset Sales of Collateral (other than an Incidental Asset and other than pledged Capital Stock of a Subsidiary that is not a Subsidiary Guarantor); provided, however, that (i) the Company or a Restricted Subsidiary may sell all the Capital Stock of a Subsidiary Guarantor and (ii) a Subsidiary Guarantor may sell a Mortgaged Vessel (together with the applicable charters, freights and hires and other related agreements) or transfer a Mortgaged Vessel pursuant to a Bareboat Charter (any such asset proposed to be sold or transferred pursuant to this clause (ii) is referred to herein as a “Mortgaged Vessel Asset”) if such sale or transfer of a Mortgaged Vessel Asset shall be made in compliance with each of the following conditions:


	(i) no Default shall have occurred and be continuing;

	(ii) the sale or transfer shall be effected in a commercially reasonable manner as determined by the Board of Directors and evidenced by a board resolution;

	(iii) the entire consideration for such sale, and all Bareboat Charter Funds in respect of a Bareboat Charter, shall be cash, which shall be not less than the Appraised Value of such Mortgaged Vessel Asset determined within 90 days prior to the date of such sale;

	(iv) funds in an amount equal to the Net Available Cash (or the Sale Equivalent Portion of Bareboat Charter Funds), shall be paid in full directly to the Trustee as Collateral and shall be received by the Trustee free of any Lien (other than the Lien of the Indenture and the Security Agreements); and

	(v) the Company shall have complied with the other provisions of the Indenture applicable to such sale;

provided further, however, that the Appraised Value of all Mortgaged Vessels subject to Bareboat Charters shall not exceed 10% of the aggregate of the Appraised Values (as of a date not more than 90 days prior to such Bareboat Charter) of all the Mortgaged Vessels.

The Company must apply the proceeds from such sale as described above under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel,” “— Redemptions — Redemption upon Permitted Bareboat Charter” or “— Tender of Qualified Substitute Vessel.”

The Mortgage entered into by each Pledgor with respect to its Mortgaged Vessel shall contain provisions substantially similar to those in the foregoing paragraph (a) as it relates to such Mortgaged Vessel; provided that each such Mortgage shall contain provisions that permit the applicable Pledgor to sell its Mortgaged Vessel to the Company or a Restricted Subsidiary.

(b) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any Asset Sales (other than Asset Sales permitted by the paragraph (a) above) unless (x)(A) such Asset Sale is by a Restricted Subsidiary that is not a Subsidiary Guarantor or (B) such Asset Sale is the sale of an Incidental Asset or of the pledged Capital Stock of a Subsidiary that is not a Subsidiary Guarantor and (y) in the event and to the extent that the Net Available Cash received by the Company or any such Restricted Subsidiary from one or more of such Asset Sales occurring on or after the Issue Date in any period of 12 consecutive months exceeds $12.5 million, then the Company shall or shall cause such Restricted Subsidiary to, within 30 days after the date Net Available Cash so received exceeds $12.5 million in any period of 12 consecutive months, apply an amount equal to such Net Available Cash either (i) toward a Permitted Excess Cash Use or (ii) treat (no later than the end of such 30-day period) such excess Net Available Cash (to the extent not applied pursuant to clause (i) above) as Sale Excess Proceeds.

Limitation on Lines of Business. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than the Shipping Business.

Limitation on Affiliate Transactions. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless the terms thereof (1) are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate, (2) if such Affiliate Transaction involves an amount in excess of $500,000, (i) are set forth in writing and (ii) have been approved by a majority of the members of the Board of Directors having no personal stake in such Affiliate Transaction and (3) if such Affiliate Transaction (other than chartering contracts or contracts for the transportation of cargo not in excess of 13 months) involves an amount in excess of $2,000,000, have been determined by a reasonably appropriate independent qualified appraiser given the size and nature of the transaction to be fair, from a financial standpoint, to the Company and its Restricted Subsidiaries.

(b) The provisions of the foregoing paragraph (a) shall not prohibit (i) any Permitted Investment or Restricted Payment permitted to be paid pursuant to the covenant described under “— Certain Covenants — Limitation on Restricted Payments,” (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options, stock ownership and other employee benefit plans approved by the Board of Directors, (iii) the grant of stock options or similar rights to employees and directors of the Company pursuant to plans approved by the Board of Directors, (iv) loans or advances to employees in the ordinary course of business in accordance with the past practices of the Company or its Restricted Subsidiaries, but in any event not to exceed $500,000 in the aggregate outstanding at any one time, (v) the payment of reasonable fees to directors of the Company and its Restricted Subsidiaries who are not employees of the Company or its Restricted Subsidiaries, (vi) any Affiliate Transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries.

Limitation on Liens. The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature whatsoever on any of its properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, other than Permitted Liens, without effectively providing that the Notes shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured.

Limitation on Sale/Leaseback Transactions. The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale/ Leaseback Transaction with respect to any property unless (i) the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/ Leaseback Transaction pursuant to the covenant described under “— Certain Covenants — Limitation on Indebtedness” and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to the covenant described under “— Certain Covenants —

Merger and Consolidation. The Company shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all its assets to, any Person, unless:


	(i) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under the laws of a Permitted Flag Jurisdiction, and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes and the Indenture;

	(ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

	(iii) immediately after giving effect to such transaction, the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Certain Covenants — Limitation on Indebtedness”;

	(iv) immediately after giving effect to such transaction, the Successor Company shall have Consolidated Net Worth in an amount that is not less than the Consolidated Net Worth of the Company immediately prior to such transaction;

	(v) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture; and

	(vi) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such transaction and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such transaction had not occurred.

The Successor Company shall be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, but the predecessor Company in the case of a conveyance, transfer or lease shall not be released from the obligation to pay the principal of and interest on the Notes.

The Company shall not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease (other than any vessel charter, including a bareboat charter, entered into in the ordinary course of business), in one transaction or a series of transactions, all or substantially all its assets to any Person (other than the Company or another Subsidiary Guarantor) unless:

(i) except in the case of a (x) Subsidiary Guarantor that has been disposed of in its entirety to another Person (other than to the Company or any of its Affiliates), whether through a merger, consolidation or sale of Capital Stock or assets, if in connection therewith the Company provides an Officer’s Certificate to the Trustee to the effect that the Company will comply with its obligations under “— Certain Covenants — Limitation on Asset Sales” in respect of such disposition and (y) a Bareboat Charter, the resulting, surviving or transferee Person (if not such Subsidiary Guarantor) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of a Permitted Flag Jurisdiction (provided that such reorganization shall not result in any Mortgaged Vessel ceasing to be subject to a Mortgage and the related Security Agreements for any period of time except as permitted pursuant to the terms of the Indenture), and such Person shall expressly assume, by a Guarantee Agreement, in a form satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary Guarantee;


	(ii) immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and

	(iii) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee Agreement, if any, complies with the Indenture.

The Mortgage executed by each Pledgor with respect to its Mortgaged Vessel shall contain provisions substantially similar to those in the foregoing paragraph as if related to a merger, consolidation, conveyance, transfer or lease involving each Pledgor; provided that each such Mortgage shall contain provisions that permit the applicable Pledgor to sell its Mortgaged Vessel to the Company or a Restricted Subsidiary.

Reflagging of Vessels. Notwithstanding anything to the contrary herein, a Restricted Subsidiary or Maritima SIPSA S.A. may (i) reflag any of its Vessels under the laws of a Permitted Flag Jurisdiction or (ii) reconstitute itself in another jurisdiction or merge with or into another Restricted Subsidiary for the purpose of reflagging a Vessel that it owns or operates pursuant to a bareboat charter so long as at all times each Restricted Subsidiary or Maritima SIPSA S.A. remains a Person organized and existing under the laws of a Permitted Flag Jurisdiction; provided that the Trustee may release the Mortgaged Vessel from the Mortgage and related Security Agreements to which it is subject in connection with the reflagging of such Mortgaged Vessel in another Permitted Flag Jurisdiction only if (i) the owner of the Mortgaged Vessel has executed (A) a Mortgage and (B) the related Security Agreements with respect to such Mortgaged Vessel, dated the date such Mortgaged Vessel shall be released from the existing Mortgage and related Security Agreements to which it is subject, which Mortgage and related Security Agreements shall be in appropriate form for recording a registration in the appropriate governmental offices of the Permitted Flag Jurisdiction under which it is being reflagged if required by applicable law in order to perfect the security interest therein created, as to which the Trustee shall be entitled to rely on the Opinion of Counsel to the Company with respect thereto; and (ii) the released Mortgaged Vessel shall become subject to the Mortgage and the related Security Agreements referred to in clause (i) above within the amount of time required pursuant to the terms of the Indenture.

Future Subsidiary Guarantors. (a) To the extent that, after the Issue Date, the Company acquires additional Vessels with the Escrowed Proceeds, each such Vessel shall be acquired by a Restricted Subsidiary, the Company shall cause such Restricted Subsidiary to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the notes on the same terms and conditions as those set forth in the Indenture (unless such Restricted Subsidiary is already a Subsidiary Guarantor), to execute a Mortgage in favor of the Trustee pursuant to which such acquired Vessel shall thereafter be a Mortgaged Vessel for all purposes under the Indenture and to satisfy such other conditions set forth in the Escrow Agreement.

(b) To the extent that, after the Issue Date, any Restricted Subsidiary that is not a Subsidiary Guarantor acquires any Mortgaged Vessel, the Company shall cause such Restricted Subsidiary to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the notes on the same terms and conditions as those set forth in the Indenture.

Impairment of Security Interest. Other than in connection with the creation of Permitted Liens, the Company shall not, and shall not permit any Restricted Subsidiary or Maritima SIPSA S.A. to, take or knowingly or negligently omit to take, any action which action or omission might or would have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and the Holders of the Notes, and the Company shall not, and shall not permit any Restricted Subsidiary or Maritima SIPSA S.A. to, grant to any Person other than the Trustee, for the benefit of the Trustee and the holders of the Notes, any interest whatsoever in any of the Collateral.

SEC Reports. Notwithstanding that the Company may not be required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act applicable to a “foreign private issuer” (as such term is defined in Rule 3b-4 under the Exchange Act), the Company shall file with the SEC and furnish to the Trustee and Noteholders (i) within 120 days from the end of each fiscal year, an annual report on Form 20-F (or any successor

An Event of Default is defined in the Indenture as (i) a default in the payment of interest on the Notes when due, continued for 30 days, (ii) a default in the payment of principal of any Note when due at its Stated Maturity, upon optional redemption, required repurchase, declaration or otherwise, (iii) the failure by the Company to comply with its obligations under “— Certain Covenants — Merger and Consolidation” above, (iv) the failure by the Company to comply for 30 days after notice with any of its obligations in the covenants described above under “— Change of Control” (other than a failure to purchase Notes), “— Certain Covenants — Limitation on Indebtedness,” “— Certain Covenants — Limitation on Restricted Payments,” “— Certain Covenants — Limitation on Restrictions on Distributions from Restricted Subsidiaries,” “— Certain Covenants — Limitation on Asset Sales,” “— Certain Covenants — Limitation on Lines of Business,” “— Certain Covenants — Limitation on Affiliate Transactions,” “— Certain Covenants — Limitation on Liens,” “— Certain Covenants — Limitation on Sale/ Leaseback Transactions,” “— Certain Covenants — Reflagging of Vessels,” “— Certain Covenants — Impairment of Security Interest,” “— Certain Covenants — Future Subsidiary Guarantors” or “— Certain Covenants — SEC Reports,” (v) the failure by the Company to comply with its other agreements contained in the Indenture or in the Security Agreements, or the occurrence of an event of default under a Mortgage, and such failure or event of default continues for 60 days after notice, (vi) Indebtedness of the Company or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $5.0 million (the “cross acceleration provision”), (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the “bankruptcy provisions”), (viii) any judgment or decree (other than and to the extent such judgment or decree has been issued by a court which does not have any personal jurisdiction over the Company or such Significant Subsidiary or any of their respective assets, and in a proceeding in which the Company or such Significant Subsidiary has made no official appearance) for the payment of money in excess of $5.0 million (provided that the amount of such money judgment or decree shall be calculated net of any insurance coverage that the Company has determined in good faith is available in whole or in part with respect to such money judgment or decree) is entered against the Company or a Significant Subsidiary, remains outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed within 10 days after notice (the “judgment default provision”), (ix) a Subsidiary Guarantee ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee (the “guarantee default provision”), or (x) the security interest under the Security Agreements shall, at any time, cease to be in full force and effect for any reason (other than by operation of the provisions of the Indenture and the Security Agreements) other than the satisfaction in full of all obligations under the Indenture and discharge of the Indenture, or any security interest created thereunder shall be declared invalid or unenforceable or the Company or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable (the “security default provision”). However, a default under clauses (iv), (v), (vi) and (viii) will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the outstanding Notes notify th e Company of the default and the Company does not cure such default within the time specified after receipt of such notice.

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs and is continuing, the principal of and interest on all the Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the Notes. Under certain

circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of the Notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder of a Note or that would involve the Trustee in personal liability.

The Indenture provides that if a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder of the Notes notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of or interest on any Note, the Trustee may withhold notice if and so long as a committee of its trust officers determines that withholding notice is not opposed to the interest of the holders of the Notes. In addition, the Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Company also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Company is taking or proposes to take in respect thereof.

Subject to certain exceptions, the Indenture and the Security Agreements may be amended with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange for the Notes) and any past Default or Event of Default or compliance with any provisions may also be waived with the consent of the Holders of a majority in principal amount of the Notes then outstanding. However, without the consent of each Holder of an outstanding Note affected thereby, no amendment may, among other things, (i) reduce the amount of Notes whose Holders must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest on any Note, (iii) reduce the principal of or extend the Stated Maturity of any Note, (iv) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under “— Escrow of Proceeds; Special Mandatory Redemption” or “— Redemptions” above, (v) make any Note payable in money other than that stated in the Note, (vi) impair the right of any holder of the Notes to receive payment of principal of and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes, (vii) make any change in the amendment provisions which require each holder’s consent or in the waiver provisions, (viii) make any change in any Guarantee or Security Agreement that would adversely affect the Noteholders or terminate the Lien of the Indenture or any Security Agreement on any property at any time subject hereto or thereto or deprive the Holder of the security afforded by the Lien of the Indenture or the Security Agreements.

Without the consent of any Holder of the Notes, the Company, the Subsidiary Guarantors and Trustee may amend the Indenture and the Security Agreements to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor corporation of the obligations of the Company or a Subsidiary Guarantor under the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a

The consent of the Holders of the Notes is not necessary under the Indenture or the Security Agreements to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under the Indenture or the Security Agreements becomes effective, the Company is required to mail to holders of the Notes a notice briefly describing such amendment. However, the failure to give such notice to all Holders of the Notes, or any defect therein, will not impair or affect the validity of the amendment.

The Notes will be issued in registered form and will be transferable (subject to applicable federal and state securities laws) only upon the surrender of the Notes being transferred for registration of transfer. The Company may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection with certain transfers and exchanges.

The Company at any time may terminate all its obligations under the Notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. The Company at any time may terminate its obligations under “— Change of Control” and under the covenants described under “— Certain Covenants” (other than the covenant described under “— Merger and Consolidation”), the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries, the judgment default provision, the guarantee default provision and the security default provision described under “— Defaults” above and the limitations contained in clauses (iii) and (iv) of the first paragraph under, and the third paragraph under, “— Certain Covenants — Merger and Consolidation” above (“covenant defeasance”).

The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (iv), (vi), (vii) (with respect only to Significant Subsidiaries), (viii), (ix) or (x) under “— Defaults” above or because of the failure of the Company to comply with clause (iii) or (iv) of the first paragraph under, and the third paragraph under, “— Certain Covenants — Merger and Consolidation” above. If the Company exercises its legal defeasance option or its covenant defeasance option, the Company and each Subsidiary Guarantor will be released from all its obligations with respect to its Subsidiary Guarantee and the Security Agreements, as applicable.

In order to exercise either defeasance option, the Company must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law).

Manufacturers and Traders Trust Company, as Trustee, is the Trustee under the Indenture and has been appointed by the Company as Registrar and Paying Agent with regard to the Notes.

The Holders of a majority in principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that if an Event of Default occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense and then only to the extent required by the terms of the Indenture.

The Indenture provides that it, the Notes and each of the Security Agreements, other than the Mortgages and the pledge of stock related to our Subsidiary Guarantor incorporated in Chile and the pledge of membership interests related to our Subsidiary organized in Spain, will be governed by, and construed in accordance with, the laws of the State of New York.

Since most of the operating assets of the Company and the Subsidiary Guarantors are located outside the United States, any judgment obtained in the United States against the Company or a Restricted Subsidiary, including judgments with respect to the payment of principal of and interest on the Notes, may not be collectible within the United States. See “Enforceability of Civil Liabilities.”

The Indenture and the Security Agreements provide that the Company, each Subsidiary Guarantor and each Pledgor will appoint CT Corporation System, New York, New York as its agent for actions brought under Federal or state laws brought in any Federal or state court located in the Borough of Manhattan in The City of New York and will submit to such jurisdiction. See “Enforceability of Civil Liabilities.” The Company, each Subsidiary Guarantor and each Pledgor has made such appointment.

“Acquisition Contract” means a sale and purchase contract executed by the Company or a Restricted Subsidiary to acquire an additional Vessel or Vessels or any Shipping Business Assets.

“Additional Amounts” has the meaning as defined under “— Withholding Taxes.”

“Additional Assets” means (i) any property or assets (other than Indebtedness and Capital Stock) in a Shipping Business; (ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in clause (ii) or (iii) above is primarily engaged in a Shipping Business.

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. For purposes of the provisions described under “— Certain Covenants — Limitation on Restricted Payments,” “— Certain Covenants — Limitation on Affiliate Transactions” and “— Certain Covenants — Limitation on Asset Sales” only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 5% or more of the total voting power of the Voting Stock (on a

“Affiliate Transaction” has the meaning as defined under “— Certain Covenants — Limitation on Affiliate Transactions.”

“Appraisal Date” means each date as of which the Appraised Value of the Mortgaged Vessels has been determined.

“Appraised Value” is defined to mean the average of the fair market sale values as of a specified date of a specified asset that would be obtained in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined by two Appraisers selected by the Company and, in the event either of such Appraisers is not a Designated Appraiser (as defined in the definition of Appraiser), reasonably acceptable to the Trustee. If the Trustee does not accept an Appraiser (other than a Designated Appraiser) selected by the Company within 10 days of the first giving of notice by the Company to the Trustee requesting a determination of an Appraised Value (the “Appraisal Request Date”), such Appraised Value shall be determined by a panel of three Appraisers, one of whom shall be selected by the Company, another of whom shall be selected by the Trustee and the third of whom shall be selected by such other two Appraisers or, if such Appraisers shall be unable to agree upon a third Appraiser within 5 days of the selection date of the second of such two Appraisers, by an arbitrator mutually acceptable to the Company and the Trustee; provided, however, that, if either party shall not select its Appraiser within 20 days after the Appraisal Request Date, such Appraised Value shall be determined solely by the Appraiser selected by the other party. The Appraiser or Appraisers appointed pursuant to the foregoing procedure shall be instructed to determine such Appraised Value within 25 days after the final appointment of any Appraiser pursuant hereto, and such determination shall be final and binding upon the parties. If three Appraisers shall be appointed, (a) if the median of the determinations of the Appraisers shall equal the average of such determinations, such average shall constitute the determination of the Appraisers; otherwise (b) the determination of the Appraiser that shall differ most from the other two Appraisers shall be excluded, the remaining two determinations shall be averaged and such average shall constitute the determination of the Appraisers. For this purpose, the purchase price of any Mortgaged Vessel acquired after the most recent Appraisal Date shall constitute that Vessel’s Appraised Value.

“Appraiser” means each of Charles R. Weber Company, Inc.; Mallory, Jones, Lynch, Flynn & Associates; Poten & Partners; J.C. O’Keefe Shipbroking Limited; H. Clarkson & Company Limited; Galbraiths Limited; Arrow Valuations, a division of Arrow Research Ltd.; Associated Shipbroking S.A.M.; Barry Rogliano Salles; Braemar Seascope Valuations Limited; Cooper Brothers S.R.L.; Compass Maritime Services LLC; E.A. Gibson Shipbrokers Ltd.; Ernst Russ GmbH & Co. KG; Fearnleys A.S.; J.E. Hyde & Co. Ltd.; Howe Robinson Marine Evaluations, a division of Howe Robinson & Co. Ltd.; L&R Midland Inc.; Marint (Offshore Services) U.K. Ltd; Marcon International, Inc.; Offshore Shipbrokers Limited; P.F. Bassoe AS; R.S. Partners Inc.; R.S. Platou Shipbrokers AS; Samuel Stewart & Co.; Simpson Spence & Young Ltd.; and Atlantic Shipbrokers Limited D/ B/ A Southport Atlantic (each a “Designated Appraiser”) (and each successor thereto), together with any other Person not affiliated with the Company engaged in the business of appraising vessels.

“Asset Sale” means any sale, lease, transfer or other disposition (other than a vessel charter that is not a bareboat charter with a purchase option) (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”) in one transaction or a series of related transactions, of (i) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary), (ii) any Vessel, all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary or (iii) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above, (w) any modification or termination of a charter in the ordinary course of business, (x) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary, (y) for purposes of the covenant described under “— Certain Covenants — Limitation on Asset Sales” only, a

“Attributable Debt” in respect of a Sale/ Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/ Leaseback Transaction (including any period for which such lease has been extended).

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum of the products of numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (ii) the sum of all such payments.

“Bareboat Charter” means a bareboat charter of a Mortgaged Vessel pursuant to which the chartering-in party has the right to purchase the Mortgaged Vessel at the conclusion of the bareboat charter period for a less than fair market value purchase price.

“Bareboat Charter Funds” means the charterhire payments received by the Company, a Subsidiary Guarantor or a Pledgor pursuant to a Bareboat Charter of a Mortgaged Vessel.

“Board of Directors” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board.

“Business Day” means each day which is not a Saturday, Sunday or a day on which banking institutions are authorized or permitted to close in New York and Maryland.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

“Capital Stock” of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“Charters” is defined to mean each time charter party between a Subsidiary Guarantor and any third party with respect to such Subsidiary Guarantor’s Mortgaged Vessel, and as the same may be amended from time to time. For purposes of this definition, each Pledgor shall be deemed to be a Subsidiary Guarantor.

“Collateral” is defined to mean in each case as pledged and assigned to the Trustee pursuant to the Indenture or the Security Agreements, (1) all the issued and outstanding Capital Stock of each Subsidiary Guarantor owned, directly or indirectly, by the Company (subject to the limitations described under “— Limitations on Stock Collateral”), pledged from time to time in favor of the Trustee pursuant to the Indenture and the Security Agreements; (2) all cash held by the Trustee pursuant to the Indenture or the Security Agreements or in the Escrow Account pursuant to the Escrow Agreement; and (3) each Subsidiary Guarantor’s and each Pledgor’s right, title and interest in and to (i) its respective Mortgaged Vessel, pursuant to a Mortgage issued by such Subsidiary Guarantor or Pledgor, as the case may be, in favor of the Trustee; (ii) the Charters, if any, relating to its Mortgaged Vessel, including the collateral right to receive all monies and claims for monies due and to become due under such Charters or in respect of such Mortgaged Vessel and all claims for damages arising under such Charters or relating to such Mortgaged Vessel, including all moneys or other compensation payable by reason of requisition of title or for hire or other compulsory acquisition and all claims for damages in respect of the actual or constructive total loss of the Mortgaged Vessel; (iii) the freights, hires, passage moneys or payments in respect of indemnities relating to its

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (i) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements have been made publicly available to (ii) Consolidated Interest Expense for such four fiscal quarters; provided, however, that


	(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding on the date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period;

	(2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

	(3) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Sale, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Sale for such period, or increased by an amount equal to the EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Sale for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

	(4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and

	(5) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Sale, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Sale, Investment or acquisition occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets and the amount of income or earnings relating thereto or to an Asset Sale, any Investment or the amount of Consolidated Interest Expense associated with any Indebtedness Incurred, the pro forma calculations shall be determined in good faith by

a responsible financial or accounting Officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest of such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). For purposes of this definition, whenever pro forma effect is to be given to an acquisition of a Vessel or the financing thereof, the Company may (i) if the Vessel is to be subject to a time charter of at least one year’s duration by the Company, apply pro forma EBITDA for such Vessel based on such new time charter or (ii) if the Vessel is to be subject to hire on a voyage charter basis by the Company, apply EBITDA for such Vessel based upon historical earnings of the most comparable Vessel of the Company or any of its Subsidiaries (as determined in good faith by the Board of Directors) during such period, or if there is no such comparable Vessel, based upon industry average earnings for comparable vessels (as determined in good faith by the Board of Directors).

“Consolidated Current Liabilities” as of the date of determination means the aggregate amount of liabilities of the Company and its consolidated Restricted Subsidiaries which may properly be classified as current liabilities (including taxes accrued as estimated), on a consolidated basis, after eliminating (i) all intercompany items between the Company and any Restricted Subsidiary and (ii) all current maturities of long-term Indebtedness, all as determined in accordance with GAAP consistently applied.

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries, without duplication, (i) interest expense attributable to capital leases and the interest expense attributable to leases constituting part of a Sale/ Leaseback Transaction, (ii) amortization of debt discount and debt issuance cost, (iii) capitalized interest, (iv) noncash interest expense, (v) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, (vi) net costs associated with Hedging Obligations (including amortization of fees), (vii) Preferred Stock dividends in respect of all Preferred Stock held by Persons other than the Company or a Restricted Subsidiary to the extent paid in cash in such period, (viii) interest incurred in connection with Investments in discontinued operations, (ix) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary and (x) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust.

“Consolidated Net Income” means, for any period, the net income of the Company and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income:


	(i) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that (A) subject to the exclusion contained in clause (iv) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (iii) below) and (B) the Company’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income;

	(ii) any net income (or loss) of any Person acquired by the Company or a Subsidiary in a pooling of interests transaction for any period prior to the date of such acquisition;

	(iii) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that (A) subject to the exclusion contained in clause (iv) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income, but only to the extent that such Restricted Subsidiary was not prohibited from distributing such net income of such Restricted Subsidiary during such period as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the


	limitation contained in this clause) and (B) the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

	(iv) any gain (but not loss) realized upon the sale or other disposition of any assets of the Company or its consolidated Subsidiaries (including pursuant to sales of Vessels and to any sale-and-leaseback arrangement) and any gain (but not loss) realized upon the sale or other disposition of any Capital Stock of any Person, in each case which is not sold or otherwise disposed of in the ordinary course of business, as determined in good faith by the Board of Directors;

	(v) extraordinary gains or losses; and

	(vi) the cumulative effect of a change in accounting principles.

Notwithstanding the foregoing, for the purposes of the covenant described under “— Certain Covenants — Limitation on Restricted Payments” only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.

“Consolidated Net Tangible Assets” as of any date of determination, means the total amount of assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) which would appear on a balance sheet of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP (provided that any Vessel shall be valued for purposes of this definition at its Appraised Value as of the most recent Appraisal Date occurring not more than 30 days prior to the date of determination), and after giving effect to purchase accounting and after deducting therefrom Consolidated Current Liabilities and, to the extent otherwise included, the amounts of: (i) minority interests in consolidated Subsidiaries held by Persons other than the Company or a Restricted Subsidiary; (ii) excess of cost over fair value of assets of businesses acquired, as determined in good faith by the Board of Directors; (iii) any revaluation or other write-up in book value of assets subsequent to the Issue Date as a result of a change in the method of valuation in accordance with GAAP consistently applied; (iv) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items; (v) treasury stock; (vi) cash set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such obligation is not reflected in Consolidated Current Liabilities; and (vii) Investments in and assets of Unrestricted Subsidiaries.

“Consolidated Net Worth” means the total of the amounts shown on the balance sheet of the Company and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of the Company for which financial statements have been made publicly available prior to the taking of any action for the purpose of which the determination is being made, as (i) the par or stated value of all outstanding Capital Stock of the Company plus (ii) paid-in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock.

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement designed to protect such Person against fluctuations in currency values.

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

“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the first anniversary of the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the first anniversary of the Stated Maturity of the Notes

“EBITDA” for any period means the sum of Consolidated Net Income, plus Consolidated Interest Expense plus the following to the extent deducted in calculating such Consolidated Net Income: (a) all income tax expense of the Company and its consolidated Restricted Subsidiaries, (b) depreciation expense of the Company and its consolidated Restricted Subsidiaries, (c) amortization expense (including amortization of dry dock expense) of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid cash item that was paid in a prior period) and (d) all other noncash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such noncash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period), in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and noncash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders; provided, however, that, for purposes of the definition of Consolidated Coverage Ratio, EBITDA for a period attributable to a Mortgaged Vessel subject to a Bareboat Charter shall be limited to the product of the EBITDA Portion and the Bareboat Charter Funds received in respect of such Mortgaged Vessel during such period.

“EBITDA Portion” in respect of Bareboat Charter Funds received by the Company, its Subsidiary Guarantors or the Pledgors in respect of a Mortgaged Vessel subject to a Bareboat Charter means a fraction, expressed as a percentage, the numerator of which is the average annual amount of EBITDA attributable to such Mortgaged Vessel derived by the Company, its Subsidiary Guarantors and the Pledgors during the two-year period immediately preceding the commencement of such Bareboat Charter (or such shorter period during which such Mortgaged Vessel was owned by the Company, its Subsidiary Guarantors or the Pledgors, in which case such actual EBITDA shall be annualized), and the denominator of which is the annual amount of Bareboat Charter Funds to be received by the Company, its Subsidiary Guarantors or the Pledgors pursuant to such Bareboat Charter.

“Escrowed Proceeds” has the meaning assigned to it under “— Escrow of Proceeds; Special Mandatory Redemption.”

“Event of Loss” is defined to mean any of the following events: (a) the actual or constructive total loss of a Vessel or the agreed or compromised total loss of a Vessel, (b) the destruction of a Vessel, (c) damage to a Vessel to an extent, determined in good faith by the Board of Directors within 90 days after the occurrence of such damage (and evidenced by an Officers’ Certificate to such effect delivered to the Trustee, within such 90-day period), as shall make repair thereof uneconomical or shall render such Vessel permanently unfit for normal use (other than obsolescence) or (d) the condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to or use of a Vessel that shall not be revoked within six months. An Event of Loss shall be deemed to have occurred: (i) in the event of the destruction or other actual total loss of a Vessel, on the date of such loss; (ii) in the event of a constructive, agreed or compromised total loss of a Vessel, on the date of the determination of such total loss pursuant to the relevant insurance policy; (iii) in the case of any event referred to in clause (c) above, upon the delivery of the Company’s Officers’ Certificate to the Trustee; or (iv) in the case of any event referred to in clause (d) above, on the date six months after the occurrence of such event.

“Event of Loss Proceeds” means all compensation, damages and other payments (including insurance proceeds other than certain liability insurance proceeds) received by the Company, any Subsidiary Guarantor, any Pledgor or the Trustee, jointly or severally, from any Person, including any governmental authority, with respect to or in connection with an Event of Loss.

“Excess Proceeds” means the sum of (i) any cash released to the Company by the Trustee from Collateral following a redemption date as described under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel” or following a Vessel Tender Date, as described under “— Tender of Qualified Substitute Vessel,” to the

“Excess Proceeds Offer” has the meaning assigned to it under “— Excess Proceeds Offers.”

“Excess Proceeds Payment” has the meaning assigned to it under “— Excess Proceeds Offers.”

“Exchange Notes” has the meaning assigned to it under “— Registered Exchange Offer; Registration Rights.”

“Excluded Holder” has the meaning assigned to it under “— Withholding Taxes.”

“Fuel Hedging Agreements” means any spot, forward or option fuel price protection agreements and other types of fuel hedging agreements designed to protect against or manage exposure to fluctuations in fuel prices.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the relevant date of determination, including those set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board, (iii) such other statements by such other entity as approved by a significant segment of the accounting profession and (iv) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Sections 13 or 15(d) of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantor” shall mean any Person Guaranteeing any obligation.

“Guarantee Agreement” means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor becomes subject to the applicable terms and conditions of the Indenture.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Fuel Hedging Agreement.

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

“IFC Loan Agreement” means an agreement as in effect on the Issue Date between or among any of the Company, UABL Limited, UP Offshore (Bahamas) Ltd. or any of their respective Subsidiaries, as borrower, and International Finance Corporation or KfW, as lender or lenders, as the case may be, as it may be amended or Refinanced from time to time.

“Incidental Asset” is defined to mean any equipment, outfit, furniture, furnishings, appliances, spare or replacement parts or stores owned by the Company, a Subsidiary Guarantor or a Pledgor that have become obsolete or unfit for use or no longer useful, necessary or profitable in the conduct of the business of the Company, such Subsidiary Guarantor or Pledgor, as the case may be. In no event shall the term “Incidental Asset” include a Vessel or a Mortgaged Vessel.

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):


	(i) the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

	(ii) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/ Leaseback Transactions entered into by such Person;

	(iii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding any accounts payable arising in the ordinary course of business);

	(iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i) through (iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);

	(v) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with the Indenture (but excluding, in each case, any accrued dividends);

	(vi) all obligations of the type referred to in clauses (i) through (v) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, Guarantor or otherwise, including by means of any Guarantee;

	(vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the fair market value of such property or assets or the amount of the obligation so secured; and

	(viii) to the extent not otherwise included in this definition, Hedging Obligations of such Person.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. Notwithstanding the above, the following shall not constitute Indebtedness for purposes hereof: any commercial obligations assumed or undertaken by the Company in the ordinary course of business, including, purchasing or hedging purchases of bunkers or other consumables and obligations to suppliers.

“Interest Rate Agreement” means in respect of a Person any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement designed to protect such Person against fluctuations in interest rates.

“Inversiones Los Avellanos S.A.” means Inversiones Los Avellanos S.A., a company organized under the laws of Chile.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such

Person. For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and the covenant described under “— Certain Covenants — Limitation on Restricted Payments,” (i) “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (x) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors.

“KfW” means Kreditanstalt für Wiederaufbau, an institution incorporated under the public law of the Federal Republic of Germany.

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Loss Excess Proceeds” is defined to mean the amount by which the Net Event of Loss Proceeds received by the Company or any of its Restricted Subsidiaries from one or more Events of Loss with respect to Vessels other than Mortgaged Vessels occurring on or after the Issue Date in the most recent period of 12 consecutive months exceeds $12.5 million, less the amount of such excess Net Event of Loss Proceeds applied toward a Permitted Excess Cash Use.

“Lost Mortgaged Vessel” has the meaning assigned to it under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel.”

“Maritima SIPSA S.A.” means Maritima SIPSA S.A., a Chilean company 49% indirectly owned by the Company as of the Issue Date and its successors.

“Mortgage” means a mortgage and the related deed of a covenant, if any, on a Vessel substantially in the form required by the Indenture.

“Mortgaged Vessels” is defined to mean certain vessels and barges owned by Subsidiary Guarantors or by Pledgors from time to time, including, as of the Issue Date, the Vessels listed below and the 193 barges identified on a schedule attached to the Indenture:


(1)	The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered in 1984. It was refurbished and converted to its current use in 1994.

(2)	The barge, Alianza G3, was built in 1982 and was refurbished and converted to its current use in 1993.

If one of such vessels shall be sold pursuant to the terms of the Indenture, such vessel shall cease to be a Mortgaged Vessel from and after the Sale Date. A Qualified Substitute Vessel or a Substitute Mortgaged Vessel may be substituted for a Mortgaged Vessel in certain circumstances and such substituted vessel shall become a Mortgaged Vessel upon substitution in accordance with the terms of the Indenture.

“Mortgaged Vessel Asset” has the meaning assigned to it under “— Certain Covenants — Limitation on Asset Sales.”

“Net Available Cash” from an Asset Sale means cash payments received therefrom, in each case net of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Sale, (ii) all payments made on any Indebtedness which is secured by any assets subject to such Asset Sale, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must, by its terms, or in order to obtain a necessary consent to such Asset Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale, (iii) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale, (iv) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale and (v) all Ready for Sale Costs incurred in connection with such Asset Sale, but only to the extent that such Ready for Sale Costs directly result, in the good faith determination of the Board of Directors (which determination shall be evidenced in the form of a resolution of the Board of Directors and delivered to the Trustee), in the Company, a Restricted Subsidiary or a Pledgor, as the case may be, receiving greater cash proceeds in connection with such Asset Sale than the Company or such Restricted Subsidiary, as the case may be, would have received if such Ready for Sale Costs were not incurred.

“Net Cash Proceeds” means, with respect to any issuance or sale of Capital Stock, the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Net Event of Loss Proceeds” is defined to mean, with respect to any Event of Loss, the Event of Loss Proceeds from such Event of Loss net of related fees and expenses and payments made to repay Indebtedness or any other obligation outstanding at the time of such Event of Loss; provided, however, that such Indebtedness or other obligation is either (A) secured by a Lien on the property or assets that suffered the Event of Loss or (B) required to be paid as a result of such Event of Loss.

“Officer” means the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company or any duly appointed attorney-in-fact of the Company.

“Officers’ Certificate” means a certificate signed by one or more Officers.

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

“Parent” means any Person that owns directly or indirectly all the Voting Stock of the Company.

“Permitted Excess Cash Use” means (i) the repayment of unsubordinated Indebtedness of the Company or of a Subsidiary Guarantor (in each case other than Indebtedness owed to an Affiliate of the Company), (ii) the investment in Additional Assets or (iii) working capital of the Company and its Restricted Subsidiaries, to the extent reasonable (as determined by the Board of Directors in good faith) in light of the operations and prospects of the Company and its Restricted Subsidiaries.

“Permitted Flag Jurisdiction” means the Marshall Islands, the United States of America, any State of the United States or the District of Columbia, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, Singapore, the British Virgin Islands, the Cayman Islands, the Isle of Man, Cyprus, the Philippines, Norway, Greece, the United Kingdom, Argentina, Malta, Brazil, Chile, Paraguay, India, Bolivia, Spain, Uruguay and any other jurisdiction generally acceptable to institutional lenders in the shipping industry, as determined in good faith by the Board of Directors.

“Permitted Holders” means Solimar Holdings Ltd., Inversiones Los Avellanos S.A., SIPSA S.A., and their Affiliates as of the Issue Date. Except for a Permitted Holder specifically identified by name, in determining whether Voting Stock is owned by a Permitted Holder, only Voting Stock acquired and held by a Person while it is an Affiliate of one of the Permitted Holders specifically identified by name herein and as of the Issue Date will be treated as “beneficially owned” by such Permitted Holder.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in (i) the Company (including an Investment in the Notes), a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Shipping Business; (ii) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Shipping Business; (iii) Temporary Cash Investments; (iv) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances; (v) payroll, travel and similar advances, and advances to ship agents, ship managers and similar advances, in each case, to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (vi) office space and related equipment; (vii) loans or advances to employees made in the ordinary course of business in an aggregate amount not to exceed $250,000 outstanding at any one time; (viii) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments; (ix) agreements in respect of Hedging Obligations; (x) any partnership or joint venture that is not a Restricted Subsidiary in an aggregate amount not to exceed $15.0 million at any one time; provided, however, that such partnership’s or such joint venture’s primary business is a Shipping Business; and (xi) any other Investment not to exceed $2.0 million in the aggregate at any one time.


	(a) Liens securing obligations under the Indenture, the Notes and the Security Agreements;

	(b) Liens existing on the Issue Date;

	(c) Liens granted after the Issue Date in favor of the Holders;

	(d) Liens with respect to the assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the Company to secure Indebtedness owing to the Company by such Restricted Subsidiary;

	(e) Liens for crews’ wages (including the wages of a master and the wages of stevedores employed directly by a Vessel) and pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or


	appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

	(f) Liens imposed by law, for sums that are not yet due, are being contested in good faith by appropriate proceedings or are fully insured (other than for customary deductibles) or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

	(g) Liens for property taxes not yet subject to penalties for nonpayment or which are being contested in good faith and by appropriate proceedings;

	(h) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness;

	(i) Liens securing such Person’s reimbursement obligations in connection with letters of credit issued for the account of such Person in connection with the establishment of the financial responsibility thereof under Title 33 Code of Federal Regulations Part 138 or Title 46 Code of Federal Regulations Part 540;

	(j) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

	(k) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property of such Person, including Vessels; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Subsidiaries at the time the Lien is Incurred (except property already subject to a Lien in connection with financing by the same financing source pursuant to the same financing scheme); provided further that no such Liens shall extend to any property constituting Collateral or to any Capital Stock that at such time is not part of the Collateral as a result of the application of the provisions described under “— Limitations on Stock Collateral”;

	(1) Liens on receivables of the Company and its Restricted Subsidiaries or on receivables of Ultrapetrol International S.A. to secure Indebtedness permitted under the provisions described in paragraph (b)(1) of the covenant described under “— Certain Covenants — Limitation on Indebtedness”;

	(m) Liens on property or shares of Capital Stock of another Person (other than a Subsidiary Guarantor) at the time such other Person becomes a Subsidiary of such Person; provided, however, that such Liens are not created, incurred or assumed in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Lien may not extend to any other property owned by such Person or any of its Subsidiaries;

	(n) Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that such Liens may not extend to any other property owned by such Person or any of its Subsidiaries;

	(o) Liens securing Hedging Obligations so long as such Hedging Obligations relate to Indebtedness that is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such Hedging Obligations;

	(p) any Lien which arises in favor of an unpaid seller in respect of goods, plant or equipment sold and delivered to the Company in the ordinary course of business until payment of the purchase price for such goods or plant or equipment or any other goods, plant or equipment previously sold and delivered by that seller (except to the extent that such Lien secures Indebtedness or arises otherwise than due to deferment of payment of purchase price);


	(q) any Lien or pledge created or subsisting in the ordinary course of business over documents of title, insurance policies or sale contracts in relation to commercial goods to secure the purchase price thereof;

	(r) Liens to secure any Refinancing (or successive Refinancings) or replacement as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (a), (b), (k), (m) and (n); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements to or on such property), (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, the committed amount of the Indebtedness described under clause (a), (b), (k), (m) or (n) at the time the original Lien became a Permitted Lien and (B) an amount necessary to pay any fees and expenses, including premiums, related to such Refinancing and (z) such Lien need not be Incurred at the same time the original Lien is released;

	(s) charters, leases or subleases granted to others in the ordinary course of business that are subject to the relevant Mortgage and that do not materially interfere with the ordinary course of business of such Person and its Restricted Subsidiaries, taken as a whole;

	(t) (A) Liens in favor of the Company or any Subsidiary Guarantor, (B) Liens arising from the rendering of a final judgment or order against such Person that does not give rise to an Event of Default and (C) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and products and proceeds thereof;

	(u) Liens in favor of customers and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods;

	(v) Liens for salvage and general average;

	(w) Liens, including any existing or future Liens, to secure Indebtedness permitted under clause (b)(10) under “— Certain Covenants — Limitation on Indebtedness”; provided that no such Liens shall extend to any property constituting Collateral or to any Capital Stock that at such time is not part of the Collateral as a result of the application of the provisions described under “— Limitations on Stock Collateral”; and

	(x) Liens securing Indebtedness not in excess of $25.0 million in the aggregate at any time outstanding; provided that no such Liens shall extend to any property constituting Collateral or to any Capital Stock that at such time is not part of the Collateral as a result of the application of the provisions described under “— Limitations on Stock Collateral.”

Notwithstanding the foregoing, “Permitted Liens” will not include any Lien described in clause (k), (m) or (n) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly from Net Available Cash pursuant to the covenant described under “— Certain Covenants — Limitation on Asset Sales.” For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“Person” means any individual, corporation, partnership, limited liability issuer, joint venture, association, joint-stock issuer, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Pledgor” means any of Maritima SIPSA S.A., UABL S.A. and Riverpar S.A. for so long as such entity owns a Mortgaged Vessel.

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“principal” of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.

“Proceeds Receipt Date” has the meaning assigned to it under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel.”

“Public Equity Offering” means an underwritten primary public offering of common stock of the Company or Parent (i) pursuant to an effective registration statement under the Securities Act or (ii) in an offshore offering pursuant to Regulation S under the Securities Act, so long as such common stock shall be listed for trading on a Designated Offshore Securities Market (as such term is defined in the Securities Act).

“Public Market” means any time after (x) a Public Equity Offering has been consummated and (y) at least 15% of the total issued and outstanding common stock of the Company or Parent has been distributed by means of an effective registration statement under the Securities Act or is eligible for distribution pursuant to Rule 144(k) under the Securities Act or is listed for trading on any nationally recognized securities quotation or any Designated Offshore Securities Market (as such term is defined in the Securities Act).

“Purchase Money Indebtedness” means Indebtedness (including Capital Lease Obligations) (1) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds or similar Indebtedness, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and (2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements, in the ordinary course of business; provided, however, that any Lien arising in connection with any such Indebtedness shall be limited to the specific asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property on which such asset is attached.

“Qualified Substitute Vessel” is defined to mean, as of any date, one or more Vessels which (i) are not Mortgaged Vessels as of such date, (ii) will be, upon acquisition thereof, wholly owned by a Restricted Subsidiary of the Company or, if the Vessel is replacing the Princess Marina prior to the sale by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted Subsidiary, Maritima SIPSA S.A., (iii) are registered under the laws of a Permitted Flag Jurisdiction and (iv) have an Appraised Value (which for these purposes shall be deemed to include any credit (as certified in writing in the form of an Officers’ Certificate and delivered to the Trustee) (which has not previously been applied) to which the Company shall be entitled arising from the tender on a previous occasion of a Qualified Substitute Vessel having an Appraised Value in excess of the Appraised Value of the Sold Mortgaged Vessel or the Lost Mortgaged Vessel in substitution for which it was tendered) at the Vessel Tender Date applicable to the last Vessel being tendered in substitution for any Sold Mortgaged Vessel or Lost Mortgaged Vessel at least equal to the Vessel for which it is being substituted, assuming compliance by the applicable Subsidiary Guarantor with all the terms of the Indenture and the applicable Mortgage.

“Ready for Sale Cost” is defined to mean, with respect to a Vessel or Vessels (including any Mortgaged Vessel) to be sold or leased (under a Capital Lease Obligation) by the Company or any Subsidiary Guarantor, the aggregate amount of all expenditures incurred to bring such Vessel or Vessels to the condition and location necessary or desirable to market such Vessel or Vessels for sale or lease, or necessary for its intended use by the purchaser or lessor thereof, including any and all vessel preparation and transportation expenses (including crew wages and transit insurance), loading and discharge expenses, inspections, appraisals, repairs, modifications, additions, improvements, permits and licenses in connection with such sale or lease.

“Ready for Sea Cost” is defined to mean, with respect to a Vessel or Vessels (including any Qualified Substitute Vessel) to be acquired or leased (under a Capital Lease Obligation) by the Company or any Subsidiary Guarantor, the aggregate amount of all expenditures incurred to acquire or construct and bring such Vessel or Vessels to the condition and location necessary for its intended use, including any and all vessel preparation and transportation expenses, loading and discharge expenses, inspections, appraisals, repairs, modifications, additions, improvements, permits and licenses in connection with such acquisition or lease; provided that in each case such expenditures would be classified and accounted for as “property, plant and equipment” in accordance with GAAP.

“Receivables” means at any date of determination all receivables accounted for on the consolidated balance sheet of Ultrapetrol International S.A. as of the end of the most recent fiscal quarter for which financial statements are publicly available in accordance with GAAP plus an amount equal to the receivables reasonably expected to be established on such balance sheet upon completion of voyages in progress at such date by Ultrapetrol International S.A.’s chartered-in vessels.

“Redemption Amount” has the meaning assigned to it under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel.”

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with the Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that (i) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, (ii) such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced and (iii) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

“Registration Default” has the meaning as defined under “— Registered Exchange Offer; Registration Rights.”


	(i) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and dividends or distributions payable solely to the Company or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));

	(ii) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company held by any Person or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than a Restricted Subsidiary), including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock);

	(iii) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of acquisition); or

	(iv) the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Subsidiary” means the Subsidiary Guarantors and any other Subsidiary of the Company that is not an Unrestricted Subsidiary.

“Riverpar S.A.” means Riverpar S.A., an indirect subsidiary of Ultrapetrol (Bahamas) Limited incorporated under the laws of Paraguay and its successors.

“Sale Equivalent Portion” in respect of Bareboat Charter Funds received by the Company, its Subsidiary Guarantors or the Pledgors in respect of a Mortgaged Vessel subject to a Bareboat Charter means the excess of such Bareboat Charter Funds over the product of the EBITDA Portion and such Bareboat Charter Funds.

“Sale Excess Proceeds” is defined to mean the amount of excess Net Available Cash from Asset Sales not applied (or committed to be applied) as set forth in subclause (i) of paragraph (b) of the covenant described under “— Certain Covenants — Limitation on Asset Sales.”

“Sale/ Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person.

“Security Agreements” has the meaning specified in the Indenture and includes the Escrow Agreement, Mortgages, assignments of Charters, assignments of freights and hires and assignments of insurance.

“Senior Indebtedness” of any Person means (i) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred, and (ii) accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company to the extent post-filing interest is allowed in such proceeding) in respect of (A) indebtedness for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable unless, in the case of (i) and (ii), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are subordinate in right of payment to the Notes; provided, however, that Senior Indebtedness shall not include (1) any obligation of such Person to any subsidiary of such Person, (2) any liability for Federal, state, local or other taxes owed or owing by such Person, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness of such Person (and any accrued and unpaid interest in respect thereof) which is subordinate or junior in any respect to any other Indebtedness or other obligation of such Person or (5) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of the Indenture.

“Shipping Business” means the ownership or operation of Vessels and any activities within the ship owning and shipping industries and all businesses which are complementary, incidental, related or ancillary to any such activities, industries and businesses, including owning barges and all kind of floating vessels or crafts, floating storage production units, storage tanks and terminals, salvage, port facilities and services, pipelines and all kinds of loading and discharging facilities and equipment related thereto (including any investment in real estate in respect of the foregoing).

“Shipping Business Assets” means any assets used in the ordinary course of the Shipping Business.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Sold Mortgaged Vessel” has the meaning assigned to it under “— Redemptions — Redemption upon Sale or Loss of a Mortgaged Vessel.”

“Solimar Holdings Ltd.” means Solimar Holdings Ltd., a company organized under the laws of Bermuda.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subordinated Obligation” means any Indebtedness of the Company or any Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Notes pursuant to a written agreement to that effect.

“Subsidiary” means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person.

“Subsidiary Guarantor” means Princely International Finance Corp. and each Subsidiary of the Company, whether now owned or hereafter formed, that executes and delivers a Subsidiary Guarantee.

“Subsidiary Guarantee” means a Guarantee of the Company’s obligations with respect to the Notes issued by a Subsidiary of the Company.

“Substitute Mortgaged Vessel” is defined to mean, as of any date, one or more Vessels which (i) are not Mortgaged Vessels as of such date, (ii) will be owned by a Restricted Subsidiary of the Company, (iii) are registered under the laws of a Permitted Flag Jurisdiction and (iv) have an Appraised Value at the Vessel Substitution Date at least equal to the Appraised Value of the Mortgaged Vessel for which it is being substituted, assuming compliance by the applicable Subsidiary Guarantor with all the terms of the Indenture and the applicable Mortgage.

“Temporary Cash Investments” means any of the following: (i) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof; (ii) investments in time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by (A) any bank or trust company organized under the laws of Argentina or Brazil; provided that, with respect to the Company, the aggregate amount of such deposits shall not exceed $10.0 million at any time, and (B) a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor; (iii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) above entered into with a bank meeting the qualifications-described in clause (ii) above; (iv) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s Investors Service, Inc. or “A-1” (or higher) according to Standard and Poor’s Ratings Group; and (v) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by Standard & Poor’s Ratings Group or “A” by Moody’s Investors Service, Inc.

“Tendered Vessel Owner” has the meaning as defined under “— Tender of Qualified Substitute Vessel.”

“UABL S.A.” means UABL S.A., an indirect subsidiary of Ultrapetrol (Bahamas) Limited incorporated under the laws of Argentina and its successors.

“Unrestricted Subsidiary” means (i) any Subsidiary of the Company (other than a Subsidiary Guarantor) that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary (other than a Subsidiary Guarantor)) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described under “— Certain Covenants — Limitation on Restricted Payments.” The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (x) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “— Certain Covenants — Limitation on Indebtedness” and (y) no Default shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

“Vessel” means a tanker, bulk carrier, barge, liquid petroleum gas/liquid natural gas tanker, chemical carrier, bulk carrier, container vessel, reefer vessel, tug boat, push boat, off shore supply vessel, floating storage production unit, barge and in general any floating craft whose purpose may be partially or wholly to deploy, procure, process, transport, load, discharge, transfer or store lawful commodities or to transport crew, personnel or passengers, and all related spares, stores, equipment, additions and improvement equipment related to such work whether it is attached to such vessel or not. It will also include any participation in the described vessels by joint venture or other commercial forms of participation.

“Vessel Percentage” is defined to mean as of and after the Sale Date or the Loss Date, as the case may be, and prior to any subsequent adjustment as provided below, for each of the initial Mortgaged Vessels, the percentage set forth below opposite such Mortgaged Vessel:


*	Reflects the aggregate Vessel Percentage represented by the 193 barges that will be Mortgaged Vessels under the Indenture, with each barge having an individual Vessel Percentage of approximately 0.13%.

provided, however, that each Vessel Percentage shall be adjusted, in connection with any redemption of the Notes following a Sale or Loss of a Mortgaged Vessel, in each case to give effect to the occurrence of, and after giving effect to, (i) the delivery after the Issue Date of any Qualified Substitute Vessel as part of the Collateral pursuant to the terms of the Indenture, (ii) the delivery after the Issue Date of any other Vessel as part of the Collateral, (iii) an Event of Loss after the Issue Date with respect to any Mortgaged Vessel, or (iv) the sale after the Issue Date of any Mortgaged Vessel or (v) the acquisition of a Vessel with Escrowed Proceeds, in each case effected in accordance with the terms of the Indenture, to be, for each Mortgaged Vessel remaining after such an occurrence, the percentage that the Appraised Value of such Mortgaged Vessel at the time of and after giving effect to such

“Vessel Substitution Date” has the meaning as defined under “— Collateral.”

“Vessel Tender Date” has the meaning as defined under “— Tender of Qualified Substitute Vessel.”

“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or one or more Wholly Owned Subsidiaries.

The following discussion summarizes certain material provisions of the mortgages that were and that will be granted over the vessels securing the notes and the subsidiary guarantees. Each existing mortgage was filed on, or as soon as practicable after, the closing of the offering of the outstanding notes. Each mortgage is or will be governed according to the laws of the jurisdiction where the vessels it relates to are registered. These laws vary between jurisdictions and accordingly the terms of the mortgages may vary between jurisdictions. These variations may be material. In addition, the mortgage granted by Maritima SIPSA S.A. over the Princess Marina differs from the below description in that such mortgage contains additional covenants, restrictions and other terms similar to those that are contained in the indenture governing the notes. See “Description of the Exchange Notes — Certain Covenants.”

In order to secure the amounts owed by us to you under the notes, we granted to the trustee a mortgage on the vessels constituting collateral. The mortgages are held on your behalf by the trustee under the indenture. The mortgages have been recorded in accordance with the provisions of the laws where the vessels are registered. To avoid excessive mortgage recording fees in certain jurisdictions, certain of the mortgages have been limited in amount to twice the approximate fair market value of the related vessels, and the mortgages over vessels flagged in Paraguay have been limited to 110% of the approximate fair market value of these vessels. In such cases, the mortgages do not secure the full amount of the notes.


	1. We will not permit any mortgaged vessel to be operated in any manner contrary to law.

	2. We will not engage in unlawful trade or carry any cargo that would expose the mortgaged vessel to penalty, forfeiture or capture.

	3. We will not permit to be done anything that will or may injuriously affect the registration or enrollment of a mortgaged vessel under the laws and regulations of the jurisdiction in which such mortgaged vessel is registered.

	4. We will at all times keep each mortgaged vessel duly documented under the jurisdiction where it is registered, and/or any other Permitted Flag Jurisdiction (as defined in the indenture) in accordance with the indenture and, in the case of any change of registry permitted by the indenture or the mortgage, we will record the mortgage in any such permitted jurisdiction.


	1. We will not permit any lien, encumbrance or charge to be placed on any mortgaged vessel for longer than 90 days after the same becomes due and payable, except for its charters, the lien of the mortgage and certain other permitted liens (including liens relating to a covered insured incident).

	2. We will pay or cause to be discharged prior to delinquency or make adequate provision for the satisfaction or discharge of all claims on or demands in respect of a mortgaged vessel, and will cause a mortgaged vessel to be released or discharged from any lien, encumbrance or charge therefor.


	1. We will at all times and without cost or expense to the trustee maintain and preserve the mortgaged vessels in good running order and repair so that they shall be seaworthy.

	2. We will keep each oceangoing mortgaged vessel in such condition to ensure it maintains its current classification rating and we will annually furnish the trustee a certificate by such classification society


	confirming that such classification is maintained. However, no classification will be required for vessels or equipment in our River Business.


	1. We will not transfer or change the flag or port of documentation of any mortgaged vessel, except to a Permitted Flag Jurisdiction in accordance with the indenture.

	2. We will not sell, mortgage or transfer a mortgaged vessel, except as permitted by the terms of the indenture.


	1. We will at all times and at our own cost and expense maintain in respect of each mortgaged vessel insurance payable in U.S. dollars in amounts, against risks (including marine hull and machinery (including increased value, if any) insurance, marine protection and indemnity insurance, war risks insurance and liability arising out of pollution and the spillage or leakage of cargo and cargo liability insurance) and in a form that is substantially equivalent to the coverage carried by other responsible and experienced companies engaged in the operation of vessels similar to the mortgaged vessels. We will maintain such insurance with insurance companies, underwriters, funds, mutual insurance associations or clubs of reputable and recognized standing.

	2. No insurance will provide for a deductible amount in excess of specified amounts or that which is ordinary and customary in the industry.

	3. In the case of all marine and war risk hull and machinery policies, we will cause the trustee to be named as an additional insured. We will also use our best efforts (and cause our insurance broker to use its best efforts) to cause the insurers under such policies to waive any liability of the trustee for premiums or calls payable under such policies.

	4. With respect to each insurance policy in respect of the mortgaged vessels, we will use best efforts with our insurance brokers/underwriters to include a clause to the effect that no policy is to be cancelable or subject to lapse without at least seven business days’ prior notice to the trustee.

	5. For purposes of insurance against total loss, each mortgaged vessel will be insured for an amount not less than its fair market value.

	6. Any loss involving damage to a mortgaged vessel that is not in respect of a total loss may be paid directly for repair or salvage or to reimburse us for the same, unless an event of default shall be continuing.

	7. In the event of an actual, constructive or compromised total loss of a mortgaged vessel, all insurance or other payments for such loss will be applied as set forth in the indenture.

If we default under the indenture that constitutes a default under the mortgages. In such cases, depending on the law of the applicable jurisdiction, the trustee may have the right to:


	1. declare immediately due and payable all amounts due under the notes, and bring a lawsuit to recover a judgment against us for all such amounts;

	2. exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of applicable law;

	3. take possession of the mortgaged vessel without being responsible for loss or damage and hold, lay-up, lease, charter, operate or otherwise use such mortgaged vessel for such time and upon such terms as it may deem to be for its best advantage;

	4. demand, collect and retain all hire, freights, earnings, issues, revenues, income, profits, return premiums, salvage awards or recoveries in general average, and all other sums due or to become due in respect of such mortgaged vessel or in respect of any insurance thereon; and


	5. sell such mortgaged vessel at any place and at such time as the trustee may specify and in any such manner and such place (whether by public or private sale) as the trustee may deem advisable. Any such sale of a mortgaged vessel will divest us of our right, title and interest in such vessel and bar any claim by us.

All of the mortgaged vessels owned by us are currently registered under various flags. The mortgage on each of the mortgaged vessels is each a first preferred mortgage lien or has similar status under applicable law. The laws of all of such jurisdictions provide that such mortgages may be enforced by the mortgagee by suit in admiralty in a proceeding against the vessel covered by the mortgage.

The priority that such a mortgage would have against the claims of other lien creditors in an enforcement proceeding is generally determined by, and will vary in accordance with, the law of the country where the proceeding is brought.

All of the mortgages may be enforced against a vessel physically present in the United States, but the claim under the mortgage would rank behind certain preferred maritime liens, including those for supplies and other necessaries provided in the United States. There is no assurance, however, that if enforcement proceedings must be commenced against a mortgaged vessel, the mortgaged vessel will be located in a jurisdiction having the same procedures and lien priorities as the United States. Other jurisdictions may provide no legal remedy for the enforcement of the mortgages, or a remedy dependent on court proceedings so expensive and time consuming as to be impractical. Furthermore, certain jurisdictions, unlike the United States, may not permit the mortgaged vessel to be sold prior to entry of a judgment or may not permit the trustee to operate the vessel during the pendency of a proceeding, entailing a long waiting time that could result in increased custodial costs, deterioration in the condition of the mortgaged vessel and substantial reduction in her value.

As additional security for the amounts due to you under the notes, we have assigned to the trustee, among other things, the earnings and insurances carried on each mortgaged vessel. The assignment of earnings provides, among other things, for the grant of a security interest in favor of the trustee in the earnings of the mortgaged vessels from any source, including, without limitation, earnings from charters, and during the continuance of an event of default under the indenture, the trustee is entitled to receive directly all payments in respect of such earnings. The assignment of insurances provides, among other things, for the grant of a security interest in favor of the trustee in all policies and contracts of insurance which are from time to time taken out by us in respect of the mortgaged vessels. We are required pursuant to the terms of such assignment of insurances to notify, or cause to be notified, all insurers, underwriters, clubs and associations providing insurance in connection with the mortgaged vessels, of such assignment and procure that such notice is endorsed on all policies and entries of insurance in respect of such vessels. Additionally, the assignment of insurances require each insurance policy relating to each mortgaged vessel to contain a loss payable clause providing for:


	1. payment to the trustee of insurance proceeds in respect of an actual total loss or agreed, compromised or constructive total loss of such vessel;

	2. unless otherwise directed by the trustee during the continuance of an event of default under the indenture, direct payment for the repair, salvage, liability or other charges involved, with respect to such vessel, except that if we have fully repaired the damage and paid the cost thereof, or discharged the liability or paid all of the salvage or other charges, then payment may be made directly to us; provided however, that if such damage involves a total loss or a loss of $1,000,000 or more or its equivalent, the payment shall not be made without first obtaining the written consent of the trustee; and

	3. notice to the trustee of a cancellation or non-renewal of the policy or non-payment of premiums or of any act or omission or any other event that the insurer has knowledge which might invalidate such policy or render such policy unenforceable in whole or in part.

The following is a discussion of the principal United States Federal income tax consequences of the exchange of outstanding notes for exchange notes and the beneficial ownership and disposition of the exchange notes. For purposes of this discussion, (1) the United States Internal Revenue Code of 1986, as amended, is referred to as “the Code,” and (2) the Internal Revenue Service is referred to as “the IRS.” The Company believes this section contains a discussion of the material tax considerations applicable to most investors deciding to exchange outstanding notes for exchange notes or that may arise from the ownership of exchange notes. However, investors should consult with their own tax advisors.


	•	does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to exchange the notes;

	•	is based on the tax laws of the United States, including the Code, Treasury regulations (final, temporary and proposed), administrative rulings and practice, and judicial decisions in effect as of the date of this prospectus, all of which are subject to change, possibly with retroactive effect;

	•	deals only with holders who hold the notes as “capital assets” within the meaning of Section 1221 of the Code;

	•	discusses only the tax considerations applicable to holders who purchased the notes at initial issuance for an amount equal to their “issue price” within the meaning of Section 1273 of the Code; and

	•	does not address tax considerations applicable to investors that are subject to special tax rules, such as banks, insurance companies, tax-exempt organizations, regulated investment companies, real estate investment trusts, grantor trusts, dealers in securities or currencies, traders in securities that elect the mark-to-market method of accounting for their securities holdings, persons that will hold the notes as part of a hedging transaction, “straddle” or “conversion transaction” for tax purposes, persons deemed to sell notes under the constructive sale provisions of the Code, persons liable for alternative minimum tax or U.S. Holders of the notes whose “functional currency” is not the U.S. dollar.

Except as indicated under “Tax Treatment of Non-U.S. Holders” below, this summary applies only to beneficial owners of notes that for United States Federal income tax purposes are (1) individual citizens or residents of the United States, (2) corporations or other entities that are taxable as corporations, created or organized under the laws of the United States or any state or political subdivision thereof (including the District of Columbia), (3) estates, the income of which is subject to United States Federal income taxation regardless of its source, and (4) trusts, if a United States court can exercise primary supervision over the administration of such trust and one or more United States persons has the authority to control all substantial decisions of the trust (each, a “U.S. Holder”). A “Non-U.S. Holder” is a beneficial owner of notes that is not a U.S. Holder.

If a partnership holds the notes, the United States Federal income tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of partnerships holding the notes should consult their own tax advisors.

We have not sought any ruling from the IRS with respect to the statements made or the conclusions reached in the following discussion, and the IRS may not agree with such statements and conclusions. In addition, the IRS is not precluded from adopting a contrary position. This discussion does not consider the effect of any gift or estate taxes, or any applicable foreign, state, local or other tax laws.

HOLDERS OF THE OUTSTANDING NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES TO THEM OF THE EXCHANGE OF THE OUTSTANDING NOTES FOR THE EXCHANGE NOTES AND THE OWNERSHIP AND DISPOSITION OF THE EXCHANGE NOTES.

The exchange of the outstanding notes for exchange notes pursuant to the exchange offer will not be a taxable exchange to a U.S. Holder for United States Federal income tax purposes. For United States Federal income tax purposes, the exchange notes will be treated as a continuation of the outstanding notes in the hands of the U.S. Holder. Accordingly, a U.S. Holder’s tax basis in the exchange notes immediately after the exchange will be the same as such holder’s tax basis in the outstanding notes immediately before the exchange, and the U.S. Holder’s holding period for the exchange notes will include its holding period for the outstanding notes.

Although we will be required to pay additional interest to holders of notes if certain circumstances relating to the exchange offer are not satisfied (we refer you to “Description of the Exchange Notes — Registered Exchange Offer; Registration Rights”), Treasury regulations relating to the determination of whether “original issue discount” exists with respect to a particular debt instrument provide that the possibility that amounts such as additional interest may be paid on a debt instrument will not affect the instrument’s yield to maturity if the likelihood of such payment is remote. We intend to treat the possibility of our payment of additional interest as remote and as not affecting the yield to maturity of the notes. Thus, although the matter is not free from doubt, we intend to take the position that a U.S. Holder should be required to report any such additional interest as ordinary income for United States Federal income tax purposes at the time it accrues or is received in accordance with such holder’s regular method of accounting. It is possible, however, that the IRS may take a different position if it were to audit the United States Federal income tax return of a U.S. Holder, in which case the timing and amount of interest income recognized by the U.S. Holder may differ from that reported by the U.S. Holder.

Interest on a note generally will be includable in the income of a U.S. Holder as ordinary income at the time such interest is received or accrued in accordance with such holder’s regular method of accounting for United States Federal income tax purposes.

Additional amounts received by a U.S. Holder of a note will be subject to tax in the same manner as stated interest. In the event that amounts are withheld or deducted from payments made to a U.S. Holder with respect to the notes, the amount withheld and the gross amount of any additional amounts paid to a U.S. Holder will be included in such holder’s income in accordance with such holder’s method of accounting for United States Federal income tax purposes.

In general, a U.S. Holder of the notes will have a tax basis in such notes equal to the cost of such notes reduced by payments of principal on such notes. Upon a sale, exchange, or retirement of the notes, a U.S. Holder will generally recognize gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (less any accrued and unpaid interest, which will be taxable as ordinary income) and the U.S. Holder’s tax basis in such notes. Such gain or loss will be long term capital gain or loss if the U.S. Holder held the notes for more than one year at the time of disposition. In certain circumstances, the net long term capital gains derived by U.S. Holders that are individuals may be entitled to a preferential tax rate; however, the ability of U.S. Holders to offset capital losses against ordinary income is limited.

Gain or loss recognized by a U.S. Holder on the sale, exchange or retirement of the notes generally will be treated as U.S.-source gain or loss for foreign tax credit purposes.

Interest on the notes (including any additional amounts or payments in respect of interest under the guaranty) will be treated as foreign source income for United States Federal income tax purposes, which may be relevant to a U.S. Holder in calculating such U.S. Holder’s annual United States foreign tax credit limitation. A U.S. Holder

A Non-U.S. Holder will not be subject to United States federal income taxation upon the exchange of outstanding notes for exchange notes pursuant to the exchange offer. In general, payments on the notes to a Non-U.S. Holder and gain realized by a Non-U.S. Holder on the sale, exchange or retirement of the notes will not be subject to United States Federal income or withholding tax, unless:


	(1) such income is effectively connected with a trade or business conducted by such Non-U.S. Holder in the United States (or, in the case of an applicable tax treaty, is attributable to the Non-U.S. Holder’s permanent establishment in the United States),

	(2) in the case of gain, such Non-U.S. Holder is a nonresident alien individual who is present in the United States for more than 182 days in the taxable year of the sale of the notes and certain other requirements are met, or

	(3) the certification described below (See “— Information Reporting and Backup Withholding”) has not been fulfilled with respect to such Non-U.S. Holder.

Except as may otherwise be provided in an applicable income tax treaty between the United States and a foreign country, a Non-U.S. Holder will generally be subject to tax in the same manner as a U.S. Holder with respect to payments of interest if such payments are effectively connected with the conduct of a trade or business by the Non-U.S. Holder in the United States. Such a Non-U.S. Holder will be required to provide the withholding agent with a properly executed IRS Form W-8ECI in order to claim an exemption from withholding tax. In addition, if the Non-U.S. Holder is a corporation, such holder may be subject to a branch profits tax at a 30% rate (or such lower rate provided by an applicable tax treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments. A Non-U.S. Holder will not be considered to be engaged in a trade or business within the United States for United States Federal income tax purposes solely by reason of holding the exchange notes or solely by reason of exchanging outstanding notes to exchange notes pursuant to the exchange offer.

Under certain circumstances, the Code requires “information reporting” annually to the IRS and to each U.S. Holder and Non-U.S. Holder (collectively, a “Holder”), and “backup withholding” with respect to certain payments made on or with respect to the notes. Certain Holders are exempt from backup withholding, including corporations, tax-exempt organizations, qualified pension and profit sharing trusts, and individual retirement accounts that provide a properly completed IRS Form W-9. Backup withholding will apply to a non-exempt U.S. Holder if such U.S. Holder (1) fails to furnish its Taxpayer Identification Number, or TIN, which, for an individual would be his or her Social Security Number, (2) furnishes an incorrect TIN, (3) is notified by the IRS that it has failed to properly report payments of interest and dividends, or (4) under certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding for failure to report interest and dividend payments.

If a Non-U.S. Holder receives payments made on or with respect to the notes through the U.S. office of a broker, such Non-U.S. Holder will be required to provide to the withholding agent either IRS Form W-8BEN or W-8IMY, as applicable, together with all appropriate attachments, signed under penalties of perjury, identifying the

The payment of the proceeds on the disposition of the notes to or through the United States office of a broker generally will be subject to information reporting and backup withholding unless the Holder provides the certification described above or otherwise establishes an exemption from such reporting and withholding requirements.

Backup withholding is not an additional tax. Rather, the United States Federal income tax liability of persons subject to backup withholding will be offset by the amount of tax withheld. If backup withholding results in an overpayment of United States Federal income tax, a refund or credit may be obtained from the IRS, provided that certain required information is furnished. Copies of the information returns reporting such interest and withholding may be made available to the tax authorities in the country in which a Non-U.S. Holder is a resident under the provisions of an applicable income tax treaty or agreement.

We have been advised by our Bahamian Counsel, Higgs & Johnson, that, provided that the Company and the holders of our notes are not resident within the meaning of the Exchange Control Regulation Act and the regulations made thereunder (1) the Company and such holders would not be subject to any tax or withholding provisions of the Commonwealth of The Bahamas (“The Bahamas”), and (2) no tax or withholding provisions of The Bahamas would apply by reason or as a result of the exchange of the outstanding notes for exchange notes or any payments made to holders of the exchange notes. Further, the Exchange Control Regulation Act and the regulations do not apply to a company which conducts its operations exclusively outside of The Bahamas. The foregoing exemptions are to remain in force for a period of twenty years from the date of incorporation of the Company.

We have been advised by our Panamanian counsel, Tapia, Linares y Alfaro, that because we conduct all of our operations outside of Panama: (1) no taxes or withholding will be imposed by any Panamanian authority on payments made to holders of the notes by the subsidiary guarantors incorporated in Panama or the other subsidiary guarantors and pledgors that own vessels flagged in Panama that are used to secure the notes; (2) no taxes or withholding will be imposed by any Panamanian authority by reason, or as a result of, the exchange of outstanding notes for exchange notes; and (3) no taxes or withholding will be imposed by any Panamanian authority on payments made to holders of the exchange notes.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS PRIOR TO INVESTING TO DETERMINE THE TAX CONSEQUENCES OF SUCH EXCHANGE AND INVESTMENT IN LIGHT OF EACH SUCH INVESTOR’S PARTICULAR CIRCUMSTANCES.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where those exchange notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

We will not receive any proceeds from any sale of the exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and will indemnify certain holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

Based on interpretations by the Staff of the SEC as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-III Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993)), we believe that the exchange notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by any holder of such exchange notes, other than a holder that is a broker-dealer or an “affiliate” of us within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:


	•	The exchange notes are acquired in the ordinary course of business;

	•	At the time of the commencement of the exchange offer the holder has no arrangement or understanding with any person to participate in a distribution of the exchange notes; and

	•	The holder is not engaged in, and does not intend to engage in, a distribution of the exchange notes.

We have not sought, and do not intend to seek, a no-action letter from the SEC with respect to the effects of the exchange offer, and there can be no assurance that the Staff would make a similar determination with respect to the exchange notes as it has in such no-action letters.

Certain legal matters in connection with the sale and exchange of the outstanding notes are being passed upon for us by Seward & Kissel LLP, New York, New York. We have also been advised by the following special counsel in connection with the exchange offer: (i) Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz, Jr., regarding the laws of Argentina; (ii) Higgs & Johnson, regarding the laws of the Bahamas; (iii) Barros & Errázuriz Abogados Ltda., regarding the laws of Chile; (iv) Seward & Kissel LLP, regarding the laws of Liberia; (v) Palacios, Prono & Talavera, regarding the laws of Paraguay; (vi) Tapia, Linares y Alfaro, regarding the laws of Panama; and (vii) Ramela & Regules Rucker, Abogados, regarding the laws of Uruguay.

The consolidated financial statements of Ultrapetrol (Bahamas) Limited as of and for the years ended December 31, 2003 and 2002 included in this registration statement have been audited by Pistrelli, Henry Martin y Asociados S.R.L., an independent registered public accounting firm and a member of Ernst & Young Global, as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in auditing and accounting. The consolidated financial statements for the year ended December 31, 2001 included in this registration statement have been audited by Pistrelli, Diaz y Asociados, (a member of Andersen), as stated in their report appearing herein, who has ceased operations.

The financial statements of UABL Limited as of and for the years ended December 31, 2003 and 2002 included in this registration statement have been audited by Pistrelli, Henry Martin y Asociados S.R.L., an independent registered public accounting firm and a member of Ernst & Young Global, as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in auditing and accounting. The financial statements for the year ended December 31, 2001 included in this registration statement have been audited by Pistrelli, Diaz y Asociados, (a member of Andersen), as stated in their report appearing herein, who has ceased operations.

The section of this prospectus entitled “Industry Overview” has been reviewed by DSC, an independent U.K.-based company providing market analysis and strategic planning services to the shipping industry. DSC has confirmed to us that such section accurately describes the industries that it purports to describe, subject to the availability and reliability of the data supporting the statistical and graphical information presented in such section, and DSC’s consent to use such information herein is filed as an exhibit to the registration statement on Form F-4 under the Securities Act of which this prospectus is a part.

We have filed with the SEC a registration statement including exhibits and schedules thereto on Form F-4 under the Securities Act with respect to the exchange notes offered hereby. This prospectus, which forms a part of the registration statement, does not contain all of the information in the registration statement, as permitted by SEC rules and regulations. For further information with respect to the Company and the exchange notes offered hereby, reference is made to the registration statement. In addition, following the effectiveness of the registration statement, we will become subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act and will file such reports and other information with the SEC. You can read and copy any materials we file with the SEC at its Public Reference Room at 450 Fifth Street, NW, Washington, D.C. 20549. You can obtain information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site that contains information we file electronically, which you can access over the internet at http://www.sec.gov.

You may request a copy of our filings at no cost, by writing or telephoning us at the following address:

You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with any other information. If anyone provides you with different or inconsistent information, you should not rely on it.

You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.

We have audited the consolidated balance sheets of Ultrapetrol (Bahamas) Limited and its subsidiaries, as of December 31, 2003 and 2002, and the related consolidated statements of operations, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Ultrapetrol (Bahamas) Limited and its subsidiaries as of December 31, 2001 and for the year then ended were audited by other auditors who have ceased operations as a foreign associated firm of the Securities and Exchange Commission Practice Section of the American Institute of Certified Public Accountants and whose reported dated April 30, 2002, and who expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ultrapetrol (Bahamas) Limited and its subsidiaries as of December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.


	PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.
	Member of Ernst and Young Global

	/s/ ENRIQUE C. GROTZ

	ENRIQUE C. GROTZ
	Partner

The following is a copy of the audit report previously issued by PISTRELLI, DIAZ Y ASOCIADOS (member of Andersen) in connection with Ultrapetrol (Bahamas) Limited’s December 31, 2001 and 2000 financial statements. This audit report has not been reissued by PISTRELLI, DIAZ Y ASOCIADOS in connection with this prospectus.

We have audited the accompanying consolidated balance sheets of Ultrapetrol (Bahamas) Limited and its subsidiaries, a company incorporated under Bahamas legislation (the Company), as of December 31, 2001 and 2000, and the related consolidated statements of income (loss), changes in stockholders’ equity and cash flows for the years ended December 31, 2001, 2000 and 1999. These statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years ended December 31, 2001, 2000 and 1999, in accordance with generally accepted accounting principles in the United States of America.


	PISTRELLI, DIAZ Y ASOCIADOS
	Member of Andersen

	/s/ MARIANA FILAS

	MARIANA FILAS
	Partner


(1)	In addition to management fees to related parties, operating expenses included 6,833, 7,669 and 7,778 in 2003, 2002, and 2001, respectively, related principally to ship management fees due to related parties.

Ultrapetrol (Bahamas) Limited (“Ultrapetrol Bahamas” or “the Company”) is a company organized and registered as a Bahamas Corporation since December 1997.

The Company’s operations consist of international and inland transportation of petroleum and dry-cargo products by vessels and barges owned by its subsidiaries. Revenues are generated through time and freight charters with related and unrelated clients.

On March 7, 2000 the Company signed an agreement to issue and sell newly issued voting common shares representing a total of up to 49.9% of its issued and outstanding capital stock to Solimar Holdings LDC “Solimar”, a newly formed company owned jointly by WSUP investors LDC, an affiliate of WestSphere Capital, and AIG-GE Capital Latin American Infraestructure Fund L.P. (collectively the “investors”) for up to 50,000.

On March 17, 2000 Solimar acquired the first tranche of 498,004 shares representing 50% of the total newly issued voting common shares to be sold under the stock sale agreement for a purchase price of 25,000, with net proceeds after issuance costs of 22,836.

The second tranche was acquired on June 16, 2000, through the issuance of 298,803 shares, under the mentioned agreement, for a price of 15,000, with act proceeds after issuance costs of 14,180.

On July 24, 2000, the last tranche was acquired for 10,000 consisting of 199,201 shares with net proceeds to the Company of 9,411.

On June 28, 2001, the Company issued 138,443 new shares for 5,295 which were totally subscribed by Los Avellanos, one of the Company’s original shareholders and was paid 3,297 in 2001 and 1,104 in 2002 and the balance are payable in July 2004. As of December 31, 2003 and 2002 the outstanding payment was 894 and was shown as a reduction of shareholders’ equity. The Company has an option to repurchases 25,212 of its shares for a total price of 894 from Inversiones Los Avellanos S.A. until July 31, 2004.

As of December 31, 2003 the shareholders of Ultrapetrol Bahamas are Solimar Holdings LDC, Inversiones Los Avellanos S.A. and Avemar Holdings (Bahamas), a wholly owned subsidiary of the Company (See Note 16), in the proportion of 46.66%, 28.17% and 25.17%, respectively. Since Avemar Holdings (Bahamas) granted an irrevocable proxy to Inversiones Los Avellanos S.A. in full for all of its voting powers related to its interest in the Company, as of December 31, 2003, Inversiones Los Avellanos S.A. held 53.30% of the Company’s voting rights.

As of December 31, 2003, 2002 and 2001 the consolidated financial statements include the accounts of the Company and its subsidiaries described as follows:

Beginning in 1991, the Argentine peso (“peso”) was tied to the US dollar at a rate of one peso to one US dollar. As a result of economic instability and substantial withdrawals from the banking system, in early December 2001, the Argentine government instituted restrictions that prohibit foreign money transfers without Central Bank approval and only allow cash withdrawals from bank accounts for personal transactions in small amounts with certain limited exceptions. While the legal exchange rate remained at one peso to one US dollar, financial institutions were allowed to conduct only limited activity due to these controls, and currency exchange activity was effectively halted except for personal transactions in small amounts.

On January 6, 2002, the Argentine government abolished the one peso to one US dollar legal exchange rate. On January 9, 2002, Decree 71 created a dual exchange market whereby foreign trade transactions were conducted at an official exchange rate of 1.4 peso to one US dollar and other transactions were conducted in a free floating exchange market. On February 8, 2002, Decree 260 unified the dual exchange market and allowed the peso to float freely with the US dollar.

On February 3, 2002, Decree 214 required all contracts that were previously payable in US dollars to be payable in pesos. Pursuant to an emergency law passed on January 10, 2002, US dollar obligations between private parties due after January 6, 2002, were to be liquidated in pesos at a negotiated rate of exchange which reflects a sharing of the impact of the devaluation. The Company’s settlements in pesos of the existing US dollar-denominated agreements were completed by June 30, 2002.

Absent the emergency law that was enacted on January 10, 2002, the devaluation of the peso would have had no effect on the Company’s US dollar-denominated receivables at December 31, 2001. However, a 2,704 loss resulting from the involuntary conversion of certain receivables from U.S. dollars to pesos was recorded in 2002 and is reflected in “Loss on involuntary conversion of Argentine receivables” in the accompanying statement of operations.

The majority of the previously mentioned Argentine subsidiary’s revenues are denominated and collected in U.S. dollars. In addition, this subsidiary does not have financial loans denominated in pesos in Argentina. Accordingly, the above economic changes in Argentina did not significantly adversely affect the Company. The most significant impact related to the reduction of the US dollar equivalent value of the subsidiary’s peso denominated operating expenses.

The total consolidated revenues in Argentina classified by port of charge was 7,023 for the year ended December 31, 2003.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The consolidated financial statements include all entities for which the Company has control. Significant intercompany accounts and transactions have been eliminated in consolidation.

As discussed in Note 6 on March 30, 1998, Ultrapetrol Bahamas successfully completed its offering of 135,000 principal amount of its 10.5% First Preferred Ship Mortgage Notes due 2008 (“the Notes”). The balance sheet balances reflecting reciprocal receivables and payables between Ultrapetrol Bahamas and its subsidiary guarantors of the Notes originating from the allocation of the proceeds of the issuance have been eliminated. Furthermore, the income (loss) originating in transactions reflecting interest expense between Ultrapetrol Bahamas and its subsidiary guarantors have been eliminated. As only certain of the Company’s subsidiaries guarantee the Notes summary financial information of the guarantor subsidiaries is presented. See Note 18.

The Company uses the U.S. dollar as its functional currency. The majority of the Company’s sales are billed and collected in U.S. dollars and all financing is in U.S. dollars.

All monetary assets and liabilities not denominated in U.S. dollars have been remeasured into U.S. dollars using the exchange rates in effect at the balance sheet date. Operations statement amounts have been translated using the average exchange rate for each month. Gains or losses resulting from foreign currency measurements are included in the operations statement for the same year.

These accounts are recorded and carried at nominal value. Receivables and payables include the portion of the respective financial income, expense accrued as of year-end.

Receivables are recorded and carried at face value less allowances for uncollectible accounts estimated by the Company, in order to write them down to estimated realizable values.

Changes in the allowance for doubtful accounts for the years ended December 31, 2003, 2002 and 2001 are as follows:

This account represents fuel and lubricants which were accounted for at the lower of cost or market.

This account includes prepaid insurance, administrative vessel fees paid in advance and advances to suppliers.

The Company is required, under various shipping regulations, to perform periodic overhaul activities, generally every 30 months. The Company capitalizes such costs and amortizes the asset through the next expected dry dock date, which reflects the investment nature of this cost. This account is classified as noncurrent based on the aforementioned useful life estimate.

Property and equipment, which is principally comprised of ocean-going vessels and river barges, is stated at cost less accumulated depreciation. This cost includes the purchase price and all directly attributable costs for the asset to be in working condition. Maintenance and repair costs, other than dry dock costs discussed above, are expensed as incurred. The ocean-going vessels are considered to have useful lives of 24 years from the date on which they were built. The depreciation amount is calculated net from the estimated scrap value and is recorded by the straight-line method over the estimated useful lives of the related assets.

The river barges are considered to have useful lives of 35 years from the date on which they were built. The depreciation amount is calculated net from the scrap value of the barge convoy.

The furniture is considered to have useful lives of 10 years and the software 3 years. The depreciation amount is recorded by the straight-line method over the estimated useful lives of the related assets.

Long-lived assets are reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying value of the asset.

This account includes the Company’s 50% interest in UABL Limited (“UABL”), net of the deferred gain explained in note 3.a), 50% interest in UABL Terminals as discussed in Note 3 and 49% interest in Sipsa Marítima S.A. These investments are accounted for by the equity method.

This account includes notes-issuance expenses net of amortization costs and is being amortized over the note’s term (10 years).

This account mainly includes salaries, social security payables, taxes payables and advances from customers.

Revenues are recognized daily as earned from freight and hire charters over the period of the respective agreements.

The preparation of the consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimated.

Cash and cash equivalents include highly-liquid, temporary cash investments with original maturities of three months or less when purchased.

In accordance with Statement of Financial Accounting Standards (SFAS) N 107 “Disclosures about Fair Value of Financial Instruments”, the fair value of the Company’s assets and liabilities considered to be financial instruments have been valued at the discounted amount of future cash flows at market interest rates current available to the Company for credits/loans with similar terms.

The fair value of EURO hedging contract is the amount at which they could be settled, based on quoted market prices.

The book value and estimated fair values of the Company’s financial instruments are as follows:

The fair value of the Company’s other financial instruments, including its cash and cash equivalents, approximates carrying value because of the short maturity of those instruments.

According to SFAS No. 130, the Company is required to disclose separately the changes in shareholders’ equity, other than net income (loss) and transactions with shareholders, defined as other comprehensive income. Comprehensive (loss) income for the years ended December 31, 2003, 2002 and 2001 consists of net (loss) income and changes in value of derivates. Comprehensive (loss) income is reflected in the consolidated statements of changes in shareholders’ equity.

In January 2003, the FASB issued FASB Interpretation N 46, consolidation of variable interest entities, an interpretation of ARB N 51 (“FIN 46”) requires certain variable interest entities to be consolidated by the primary beneficiary of the variable interest entity. The primary beneficiary is defined as the party which, as a result of holding its variable interest, absorbs a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, FIN 46 is effective for all new variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period ending after March 15, 2004. The company has determined that the adoption of FIN 46 will not have a significant impact on its financial position, results of operations or cash flows.

The Company sometimes uses EURO forward foreign exchange contracts to reduce its exposure to foreign currency risk from its purchases in EUROS. A EURO forward foreign exchange contract obligates the Company to exchange predetermined amounts of EUROS at specified exchange rates on specified dates or to make an equivalent U.S. dollar payment equal to the value of such exchange.

Financial Accounting Standards Board Statement N 133, Accounting for Derivate Instruments and Hedging Activities (Statement 133), requires companies to recognize all of its derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains

or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship.

For derivate instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivate instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associate with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in other income/expense in current earnings during the period of change.

On October 18, 2000 UP River Holdings Ltd., a subsidiary of the company, signed an agreement with ACBL Hidrovias Ltd. (ACBLH), a subsidiary of American Commercial Lines LLC (“ACL”) to form a new company, UABL Ltd. (“UABL”), to serve commodity shippers in Argentina, Bolivia, Brazil, Paraguay and Uruguay. The transaction consummated pursuant to the agreement, which closed on October 24, 2000, included, among other things, the contribution of the stock of UP River and its subsidiaries equipment which included many of the Company’s barges and push boats, and cash contributions of 1,712. Additionally, certain time charter contracts involving some vessels not contributed by the Company’s subsidiaries were ceded to UABL.

The book value of the contributions made by the Company and the ones made by ACL’s subsidiaries differed by 12,202. This amount represents a deferred gain and was recorded by the Company as an offset against the investment in affiliates account. The amount is being amortized over 120 months, which represents the remaining average useful life of the barges and push boats contributed by the Company. As of December 31, 2003 and 2002 the unamortized deferred gain totaled 8,338 and 9,550, respectively.

UABL shall not be obligated or become liable for any obligation or liability, known or unknown, fixed, contingent or otherwise of ACBLH or ACBLH SA (at present called UABL SA) a company contributed by ACBLH or arising prior to October 24, 2000 in connection with any ACBLH vessel, or any vessel chartered to UABL pursuant to an ACBLH charter in connection with or arising out of or resulting from events occurring prior to that date, without limitation, any liability arising in connection with any ACBLH environmental liabilities, ACBLH legal violations, ACBLH litigation, ACBLH employee claims, ACBLH loan agreements or other indebtedness, any tax, or any other liabilities, obligations, or exception to any representation or warranty. UABL shall not assume and ACBLH shall fully indemnify UABL against such liabilities.

During 2000, the tax authority served a notice to ACBLH S.A. (at present called UABL SA) with the purpose of verifying the latter’s compliance with the transfer pricing regulations for transactions with related companies for the period prior to the formation of UABL SA, i.e. during 1996, 1997, 1998 and 1999, among other things.

In light of the above, during 2001 UABL SA amended its income tax returns for the above-mentioned years charging a loss of 3,292 to the consolidated statement of operation of UABL SA (consisting of a tax loss of 2,270, interest expense for 1,487 and a gain on the sale of government bonds of 465). In compliance with the contract provision described above, ACBLH compensated UABL SA in the amount of 3,119 causing a net decrease of 173, in the shareholders net worth.

In addition, pursuant to the mentioned consolidation agreement, all claims, severance benefits, costs, and other expenses, social security taxes, charges and contributions and other costs incurred by ACBLH SA (at present called UABL SA) or UP River, or subsidiary of UP River, in connection with an employee employed by UABL SA and subsequently terminated by UABL SA shall be paid by UABL SA to, or on behalf of ACBLH or UP, as the case may be provided, that the maximum amount that UABL SA shall be required to pay to or behalf of the parent companies in respect of any of the mentioned costs, in the aggregate, shall be 1,800. ACBLH and UP agreed to fully indemnify UABL SA against such liabilities over the mentioned amount.

During 2002 UP River Terminal and ACBLH, the shareholders of UABL, decided to spin-off UABL’S equity interest in OTS S.A. and Puertos del Sur S.A. to UABL Terminals which is owned by UP River Terminal and ACBLH. Accordingly, since the transaction was between entities under common ownership, the transaction was accounted for at historical cost and no gain or loss was recognized.

On April 18, 2002, the Company entered into agreements with AIG/ GE Capital Latin Infrastructure Fund LP, a Bermuda Limited Partnership, (“LAIF”) relating to the creation of two new companies in which both Ultrapetrol and LAIF will be shareholders.

On June 11, 2003 UP Offshore (Panama), a wholly owned subsidiary of UP Offshore (Bahamas), signed a shipbuilding contract with the Foreign Economic & Technical Cooperation Co. of Changjang National Shipping Group — a non-related party — for construction of two Platform Supply Vessels (“PSVs”).


	—	The purchase price of the vessels is EURO 6,439,599 plus USD7,870,621 per each one.

	—	The contract price shall be paid in five installments. The first one on July 21, 2003 and the last one with the delivery of the vessels.

	—	The first vessel shall be delivery safety afloat by the seller to UP Offshore (Panama) at Nanjing, China on February 28th, 2005 and the second one on March 31st, 2005.

On June 9, 2003 UP Offshore Apoio Maritimo Ltda., a wholly owned subsidiary of UP Offshore (Bahamas), signed shipbuilding contracts for construction of four PSVs with EISA Estaleiro Ilha S/ A — a non-related party and a Brazilian corporation-.


	—	The purchase price of the vessels is 15,830 per each one.

	—	The contract price shall be paid monthly, according to the percentage reached by the seller on the progress of the ship construction for the referred month.

	—	The PSVs will be delivered to the Company at a safe berth always afloat at the shipyard within 22 (twenty-two), 28 (twenty-eight), 34 (thirty-four) and 48 (forty-eight) months after the date of signature of the contract, respectively.

In 2003 the Company contributed 4,375 and has a 27.78% interest in UP Offshore (Bahamas).

On June 25, 2003 the Company signed an administration agreement with UP Offshore (Bahamas) Ltd.

Under this agreement Ultrapetrol (Bahamas) Ltd agrees to assist the UP Offshore (Bahamas) Ltd by providing management services required by the UP Offshore (Bahamas) Ltd in its star-up phase, including providing the services of the Chief Executive Officer and to provide ongoing management and commercial advisory services thereafter.

The parties agree that Ultrapetrol (Bahamas) Ltd’s professional fees under this agreement shall be the 2% of the UP Offshore (Bahamas) Ltd.’s annual EBITDA.

Ultrapetrol’s services in connection with the agreement shall begin on June 25, 2003 and unless earlier terminated end on December 31, 2013.

Ultracape (Holdings) Ltd., has the objective of purchasing second hand modern capsize bulkcarriers to operate in the international market.

As of December 31, 2003 the Company contributed 4,950 and has a 60% stake in Ultracape.

On April 19, 2002 Ultracape entered into a Memorandum of Agreement to purchase the vessel Vasco Da Gama (renamed Cape Pampas). On July 1, 2002 we completed the purchase of the Cape Pampas.

On June 10, 2003, the Company sold to the International Finance Corporation (IFC) 357 common shares of UP River (Holdings) Ltd., which constitute 7,14% of the issued and outstanding common shares of UP River (Holdings) Ltd.

Also, the Company agreed to pay to the IFC, promptly after receipt of charter party payments for amounts accruing after the closing of the transaction pursuant to the Charter Party Agreements dated October 18 and 24, 2000 between Ultrapetrol and UABL and any replacements or renewals thereof (such payment, the “Charter Party Payments”), an amount equal of the 7,14% of the amount of the respective Charter Party Payments.

In full consideration for (a) the sale of the shares, and (b) the right to receive a portion of the Charter Party Payments, the IFC paid to the Company 5 million U.S. dollars.

During the period beginning on December 31, 2009 and ending on December 31, 2010 the IFC will be exercise its option to put all of the shares of UP River (Holdings) Ltd. then owned by it to UP River (Holdings) Ltd. for an amount in cash equal to 5 million U.S. dollars minus the amount of any cash received by IFC in respect of ownership of such shares (whether by dividend, proceeds from Charter Party Payments or otherwise) plus interest thereon, compounded annually calculated as a rate equal to LIBOR plus 200 basic points.

Also, Ultrapetrol shall have the right, exercisable from time to time to purchase from the IFC all of the shares of UP River (Holdings) Ltd then owned by IFC. The purchase price for the shares to be purchased, which shall be an amount sufficient to result in a realized IRR to the IFC on such shares equal to 18% per annum.

As of December 31, 2003, the Company recorded 4,821 as a “Minority interest subject to put rights”, which is the initial proceeds received by the IFC plus accrued interest less Charter Party Payments made to the IFC.

The capitalized amounts in dry dock as of December 31, 2003 and 2002 are as follows:

In June, 2000, the Company completed the purchase of the Princess Katherine, a Suezmax tanker, and the Princess Marina, an Aframax tanker, by Majestic and Kattegat, respectively, two wholly owned subsidiaries. The total amount of the acquisitions, totaling 36,379, were financed partially by two mortgage loans with Allfirst Bank and Nedship Bank.

As of December 31, 2003 this debt totaled 12,505 (including the current portion of 2,205) and is due in the following years succeeding December 31, 2003: 2,205 in 2004, 2,200 in 2005 and 2006 and 5,900 in 2007. As of December 31, 2003 the net book value of these assets was 27,323 (including dry dock costs).

On July, 2002, the Company purchased the Cape Pampas, a second hand capsize bulk carrier through its subsidiary, Braddock. The amount of the acquisition was financed partially by a mortgage loan agreement with Credit Agricole Indosuez.

As of December 31, 2003 this debt totaled 9,351 (including the current portion of 2,640) and is due in the following years succeeding December 31, 2003: 2,640 in 2004, 2,574 in 2005, and 4,137 in 2006. As of December 31, 2003 the net book value of this asset was 15,748 (including dry dock costs).

On August 26, 2002, the Company entered into a Memorandum of Agreement (“MOA”) through which it committed to sell its vessel Princess Fatima, to an unrelated company for 1,867, net of associated expenses. On September 19, 2002 the Company delivered the Princess Fatima pursuant to the MOA and received the purchase price. The Company recognized a loss of 1,549 in the statements of operations for the year ended December 31, 2002 for this disposal.

The proceeds from the sale of the Princess Fatima Vessel were deposited in a restricted cash account and can only be used to buy another vessel to guarantee the Notes. Subsequently, the Princess Sofia was bought with part of these proceeds.

On March 11, 2003 the Company entered into a MOA to sell the Princess Sofia for a total price of 2,300. The vessel was delivered to its new owners on April 25, 2003. The Company recognized a gain of 18 in the statements of operations for the year ended December 31, 2003 for this disposal.

On May 22, 2003 the Company entered into a MOA to sell the Princess Veronica for a total price of 1,965. The vessel was delivered to its new owners on June 5, 2003. The Company recognized a loss of 147 in the statements of operations for the year ended December 31, 2003 for this disposal.

On August 11, 2003 the Company entered into a MOA to sell the Alianza G1 for a total price of 2.558. The vessel was delivered to its new owner on September 17, 2003. The Company recognized a gain of 122 in the statements of operations for the year ended December 31, 2003 for this disposal.

Subsequently, from September to October 2003 a wholly owned subsidiary of Ultrapetrol, purchased 20 barges, which were renamed Iguazú Barges. The amount of the acquisition was 2,775, 974 of this amount was financed with the funds included in the restricted cash account disclosed in noncurrent assets.

On September 23, 2003 the Company entered into a MOA to sell the Princess Pía for a total price of 2,918. The vessel was delivered to its new owner on October 24, 2003. The Company recognized a loss of 1,470 in the statements of operations for the year ended December 31, 2003 for this disposal.

On December 1, 2003 the Company entered into a MOA to sell the Princess Marisol for a total price of 4,950. The vessel was delivered to its new owner on December 9, 2003. The Company recognized a loss of 499 in the statements of operations for the year ended December 31, 2003 for this disposal.

On December 12, 2003, the Company entered into a MOA to sell the Princess Laura. The vessel was delivered to its new owners on January 9, 2004. This decision was based on management’s assessment of the projected cost associated with the vessel’s next drydocking which were scheduled to occur during 2004 and the estimated operating revenue for the vessel over its remaining operating live. A charge of 1,710 was recorded during the year ended December 31, 2003 that represents the difference between the vessel’s book value and the estimated proceeds from their anticipated sale.

As of December 31, 2003, 16,461 corresponding to the proceeds from the sale of the vessels mentioned above has disclosed in noncurrent assets is related to cash which, under the terms and conditions of the Notes, should only be used to acquire another vessels to guarantee the Notes.

The capitalized cost of all vessels and the related accumulated depreciation as of December 31, 2003 and 2002 is as follows:

As of December 31, 2003 the net book value of the assets pledged as a guarantee to the Notes was 57,519 (including dry dock costs).

On March 30, 1998, the Company successfully completed its offering of 135,000 in principal amount of its 10.5% First Preferred Ship Mortgage Notes due in full in 2008. In accordance with the terms provided in such Offering, the Notes are fully and unconditionally guaranteed on a joint and several basis by certain subsidiaries of the Company, and are secured by first ship mortgages on vessels already owned by the guarantors and on additional vessels that the Company purchased with the proceeds obtained from the Offering.

The Company is required to meet certain restrictions and enforce such restrictions on its subsidiaries guarantying the Notes (“restricted subsidiaries”), during the life of the Notes under the contract:


	—	Limitation on indebtedness, unless the consolidated debt service coverage ratio exceeds 2.0 to 1.0, and certain conditions included in the indenture are met.

	—	Limitation on indebtedness and preferred stock of restricted subsidiaries, except for certain clauses specified in the indenture.

	—	Limitation on the restricted payment of any dividends or any other distribution of any sort in respect of the Company’s or any of its restricted subsidiaries’ capital stock, if at the time of the distribution the Company has incurred any event of default, unless certain clauses stated in the indenture are met.

	—	Limitation on restrictions on distributions by restricted subsidiaries, on the ability of any restricted subsidiary to pay dividends or make any other distributions of capital stock to the Company or to any of its restricted subsidiaries, unless certain clauses specified in the indenture are met.

	—	Limitation on asset sales, provided certain conditions stated in the indenture are met.

	—	Limitation to engage in lines of business other than the shipping business.

	—	Limitation on affiliate transactions unless the terms on which the Notes were issued are complied with.

	—	Limitation on encumbrances of any nature whatsoever on any of the Company’s properties.

	—	Limitation on sale or leaseback transactions with any Company property, unless certain conditions required in the indenture are met.

	—	Limitation on merger and consolidation of all or substantially all its assets, provided certain conditions stated in the indenture are met.

	—	Limitation on the occurrence of any of the events defined in the indenture as a change of control of the Company’s common stock.

As of December 31, 2003 the Company was not in default in its compliance with any of the obligations defined in the indenture pursuant to which the Notes were issued.

Although Ultrapetrol Bahamas Limited, parent company, subscribed the Notes issue, the principal amount and related expense will be paid through funds obtained from the operations of the Company’s subsidiaries.

During the last quarter of 2003, the Company through its subsidiaries, repurchase 6,659 nominal value of its 10,5% First Preferred Ship Mortgage Notes due 2008.

As of December 31, 2003 the aggregating outstanding amount related with the Notes was 128,341 and is due in full in 2008.

The Company recognized a gain of 1,782 (a gain of 1,975 for the excess of the net carrying amount over the reacquisition price less 70 for commissions and 123 for the unamortized deferred issuance expenses associated with these Notes) in the statement of operations for the year ended December 31, 2003 for the extinguishment of the debt and derecognized a liability for 6,659.

On July 1, 2002 Braddock (the “Borrower”) entered into a loan agreement with: (i) Credit Agricole Indosuez (“the Lender”), (ii) Credit Agricole Indosuez (“the Agent”) as agent for and on behalf of the Lenders, itself and the Security Trustee (together the “Creditor Parties”) and (iii) Credit Agricole Indosuez (the named “Security

Trustee”) for and on behalf of the Creditor Parties pursuant to which the Lenders available a loan (the “Loan”) for a total amount of 11,032 for the purpose of financing part of the acquisition cost of the vessel “Vasco da Gama”, that was renamed “Cape Pampas” a second hand capesize bulk carriers.

The loan is payable in 14 consecutive equal quarterly installments commencing 9 months after delivery down to a balloon amount which is repayable on the final fourteenth repayment date falling due 4 years from drawdown. This loan accrues interest at LIBOR plus a margin of 1.5% per year, payable quarterly.

On November 15, 2002, UP Offshore (Panama) SA entered into a loan agreement with International Finance Corporation (“IFC”) pursuant to which IFC will make available a loan in the aggregate principal amount of up to 18,400, consisting of two loans: one of up to 13,100 and the other of up to 5,300 for the purpose of financing the building of two new platform supply vessels (“PSV”) (“the Project”).

The first loan is payable in 15 equal semiannually installments from June 2005 through June 2012. This loan accrues interest at LIBOR plus a margin of 2.75% per year, payable semiannually.

The second loan is payable in 13 equal semiannually installments from June 2005 through June 2011. This loan shall accrue interest at LIBOR plus a margin of 2.50% per year, payable semiannually.


	—	a first priority Panamanian naval mortgage over the Project PSV in favor of IFC to secure payment of amounts due to IFC;

	—	a corporate guarantee issued by UP Offshore (Bahamas) Ltd. to guarantee repayment of the loan and all amounts due by the borrower to IFC;

	—	a corporate guarantee issued by a wholly-owned subsidiary of the borrower that owns a Project PSV in favor of IFC to secure the obligations of the borrower;

	—	an account pledge creating security interest in the “earnings account” and the “debt service reserve account” for the benefit of IFC; and

	—	a pledge of all shares of the borrower owned and to be owned by UP Offshore (Bahamas) Ltd. during the life of the loan.

UP Offshore (Panama) SA has agreed not to pay dividend or make any distribution on its capital stock, incur expenditures for fixed or other noncurrent assets, except those included in the building of the PSV, sell, transfer, lease or somehow dispose of all or a substantial part of its assets, change the nature or scope of the project or change the nature of its business.

Also UP Offshore (Panama) SA has agreed to maintain after Project completion occurs a long-term debt to equity ratio of no more than 2 and a debt service coverage ratio of at least 1.2 and to keep the fair market value of the PSV and of any additional security at 125% of the aggregate outstanding amount of the respective tranches.

On December 3, 2002, UP Offshore Apoio Maritimo Ltda. entered into a loan agreement with IFC pursuant to which IFC will make available a loan in the aggregate principal amount of up to 41,600, consisting of two loans: one of up to 11,600 and the other of up to 30,000 for the purpose of financing the building of four new platform supply vessels (“PSV”) (“the Project”).

The first loan of 11,600 is divided into five tranches each, the first one to the fourth one are in the amount of 2,595 and the fifth tranche is in the amount of 1,220. The loan is payable in 100 monthly installments from January 2005 through April 2013, commencing on January 15, 2005 with an amount of 26, increasing to 35 on July 15, 2005, to 83 on January 15, 2006 and to 130 on July 15, 2006; the final installment is due on April 15, 2013 in the amount of 129. This loan shall accrue interest at LIBOR plus a margin of 4.75% per year, payable semiannually.

The second loan of 30,000 is divided into five tranches each, the first one to the fourth one are in the amount of 6,710 and the fifth tranche is in the amount of 3,160. The loan is payable in 88 monthly installments from January 2005 through April 2012, commencing on January 15, 2005 with an amount of 76, increasing to 158 on July 15, 2005, to 247 on January 15, 2006 and to 388 on July 15, 2006; the final installment is due on April 15, 2012 in the amount of 333. This loan shall accrue interest at LIBOR plus a margin of 4.50% per year, payable semiannually.


	—	a first-ranking preferred Brazilian naval mortgage over the relevant SPV for the benefit of IFC;

	—	a corporate guarantee issued by UP Offshore (Bahamas) Ltd. to guarantee payment of all amounts due to IFC in respect of the loan;

	—	an account pledge creating security interest in the “earnings account” for the benefit of IFC; and

	—	a pledge of all quotas of the borrower owned and to be owned by UP Offshore (Bahamas) Ltd. during the life of the loan.

UP Offshore Apoio Maritimo Ltd. has agreed not to pay dividends or make any distribution on its capital stock, incur expenditures for fixed or other noncurrent assets, except those included in the building of the PSV, sell, transfer, lease or somehow dispose of all or a substantial part of its assets, change the nature or scope of the project or change the nature of its business.

Also UP Offshore Apoio Maritimo Ltd. has agreed to maintain after project completion occurs a long-term debt to equity ratio of no more than 1.8 and a debt service coverage ratio of al least 1.2 and to keep the fair market value of the PSV and of any additional security at 125% of the aggregate outstanding amount of the respective tranches.

As of December 31, 2003 financial debt listed above, excluding the noncurrent portion of the Notes, totaled 27,473 (including the current portion of 10,462) and is due in the following years succeeding December 31, 2003: 10,462 in 2004, 4,774 in 2005, 6,337 in 2006 and 5,900 in 2007.

The Company is subject to legal proceedings, claims and contingencies arising in the ordinary course of business. When such amounts can be estimated and are probable, management accrues the corresponding liability. While the ultimate outcome of lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not believe the costs of such actions will have a material effect on the Company’s consolidated financial position or results of operations.

Princess Susana (the “Vessel”) was detained by the United States Coast Guard prior to her arrival in Paulsboro when, during a routine Coast Guard tank vessel examination, a small amount of cargo was found to have leaked from one of the cargo tanks into one of the void spaces aboard the Vessel. The Vessel was discharged after a delay of approximately eight days. On or about February 25, 2003, Valero Marketing and Supply Co. (“Valero”) commenced an action against Noble Shipping Ltd. The Valero and Ursa complaints seek damages in excess of 9,000. Noble took the position that the claims are overstated and they have since been reduced to approximately 7,600.

In connection with the above complaints, the Vessel was detained. Security was posted by the Vessel owners’ protection and indemnity insurers in the amount of 11,200 and the Vessel was released from arrest (insurance coverage is in place). Both the Ursa and the Valero complaints have been answered, defenses have been raised, and a counterclaim has been raised in the Ursa action seeking, inter alia, unpaid freight and demurrage. Subsequently, Valero impleaded the seller of the cargo, Taurus Petroleum Ltd. (“Taurus”), into the action by way of an amended complaint. Noble has answered the amended complaint, raised defenses, and brought a cross claim against Taurus for indemnity.

The company’s management and its legal counsel believe this claim is covered by insurance. The insurer is actively conducting the defense through its designated counsel and has not asserted any objections, defenses or reserved its rights with respect to Noble’s insurance claim. The Company would expect any damages arising from this action to be covered by the proceeds of such insurance.

On November 25, 1995, Ultrapetrol S.A. registered with the Customs Authority of Bahía Blanca the temporary importation of “Princess Pía” vessel.

According to Decree No. 1493/92, such temporary importation was authorized for three years.

Besides, in compliance with CIC No. 98 003 IT 01 300083-4 also registered with the Customs Authority of Bahía Blanca, the above mentioned term was extended, as confirmed by the Transport Secretariat (Subsecretaría de Transporte”) which authorized the navigation, communication and commerce of Princess Pía as a vessel of Argentine flag up to November 21, 2001.

On October 23, 2001 Ultrapetrol S.A.’s customs agent registered the re-exportation of Princess Pia with the Customs Authority of Bahía Blanca.

Subsequently, as for November 22, 2001 the Transport Secretariat authorized the navigation of Princess Pia as a vessel of Panamanian flag, allowing the rendering of supplying services within the country.

On November 16, 2001, Ultrapetrol S.A.’s customs agent requested the cancellation of the vessel’s temporary importation, stating that due to operative reasons such vessel was not able to enter the jurisdiction of the Custom Authority of Campana.

In accordance with the aforementioned scenario, the Customs Authority of Bahía Blanca consider that Ultrapetrol S.A. was comprised under the provisions of Section 970 of the Customs Code and, consequently, issued a resolution claiming the sum of Argentine pesos $4,689,695 (approximately US dollar 1,610,000) as import taxes and the sum of Argentine pesos $4,689,695 (approximately US dollar 1,610,000) as fines.

Such resolution was based in the fact that as Ultrapetrol S.A. requested the cancellation of the regime without making the vessel available to the Custom Authority, such authority was not able to exercise its control and verifying functions as set forth in Section 268 of the Customs Code.

In response to said resolution, on March 16, 2004 Ultrapetrol S.A. submitted an appeal with the Argentine Tax Court (“Tribunal Fiscal de la Nación”).

The main important arguments introduced by Ultrapetrol S.A. were, among others, that it has not caused any breach to the Customs Code since the Princess Pia has operated within argentine territory only during the periods in which it was expressly authorized by the competent authorities and that the issuance of the appealed resolution was based on an undue interpretation of the customs legislation. The value of the vessel considered by the Custom Authority in order to establish the tax and fines claimed has also been objected by Ultrapetrol S.A.

The management of the Company and its legal counsel do not believe the outcome of this matter will have a material impact on its financial position or results of operations.

As of December 31, 2003, most of the Company and managers Company employees are covered by industry-wide collective bargaining agreements that set basic standards.

On November, 2003 UP Offshore (Bahamas) Limited, a subsidiary of the Company, has entered into a series of hedging contracts with AIG International Inc. in order to assure the EURO payments due under the shipbuilding contract with the Foreign Economic & Technical Cooperation Co. for construction of two PSVs. Through this forward contract, the Company effectively converted its payments in EUROs to US dollars at a specific exchange rates.

The earnings from shipping operations were derived from sources outside Panama, such earnings were not subject to Panamanian taxes.

Two of the Company’s subsidiaries, Parfina and Oceanpar, are subject to Paraguayan corporate income taxes. However, Oceanpar obtained an exemption which includes ninety-five percent of their taxable income earned from their fuel and dry-cargo shipping operations for the years 2001 and 2002. In addition, another subsidiary is subject to Chilean corporate income taxes and Ultrapetrol Argentina is subject to Argentine corporate income taxes.

In Argentina, the tax on minimum presumed income (“TOMPI”), supplements income tax since it applies a minimum tax on the potential income from certain income generating-assets at a 1% tax rate. The Company’s tax obligation in any given year will be the higher of these two tax amounts. However, if in any given tax year tax on minimum presumed income exceeds income tax, such excess may be computed as payment on account of any excess of income tax over TOMPI that may arise in any of the ten following years.

Certain entities, defined as “Qualified Foreign Corporations”, are exempt from United States of America (“U.S.”) corporate income tax on U.S. source income from their international shipping operations, pursuant to Section 883 of the US tax code. A foreign corporation will be considered a Qualified Foreign Corporation if (i) its country of incorporation exempts shipping operations of U.S. persons from income tax (the “Incorporation Test”), (ii) it meets the “Ultimate Owner Test”, and (iii) it files a US Federal income tax return (Form 1120F) to claim the Section 883 exemption. A foreign corporation meets the Ultimate Owner Test if (a) more than 50% of the value of its stocks is ultimately owned by individuals who are tax residents of one or more foreign countries that exempt U.S. persons from tax on shipping earnings (“Qualified Foreign Countries”) and, (b) the scope of the exemption provided by such Qualified Foreign Countries is broad enough to cover the type of shipping income (e.g. freight income, time charter hire or bareboat charter hire) earned by the foreign corporation. For the years 2003, 2002 and 2001 Princely and Ultracape (Holdings) Ltd. satisfied the Incorporation Test because they are incorporated in Panama and Bahamas, respectively, which provide the required exemption to U.S. persons involved in shipping operations as confirmed by Revenue Ruling 2001-48. Each of Princely and Ultracape (Holdings) Ltd. also satisfied the Ultimate Owner Test, having obtained sufficient back-up documentation to evidence support its respective position that for the years 2003, 2002 and 2001 more than 50% of the value of its outstanding shares were ultimately owned by individuals who were residents of Qualified Foreign Countries in respect to the types of shipping income earned by Princely and Ultracape (Holdings) Ltd. for which exemption is being claimed. Consistent with prior years, Princely and Ultracape will filed IRS Form 1120F for the year 2003 to claim the Section 883 exemption.

Based on the foregoing, the Company expects all of its income to be exempt from U.S. income taxes for 2003, 2002 and 2001.

Ultrapetrol Bahamas accounts for income taxes under the liability method in accordance with SFAS No. 109 “Accounting for Income Taxes”.

Under this method, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at each year end. Deferred tax assets are recognized for all temporary items and an offsetting valuation allowance is recorded to the extent that it is not more likely than not that the asset will be realized.

Reconciliation of tax provision to taxes calculated based on the statutory tax rates is as follows:

As of December 31, 2003, Ultrapetrol Argentina had a credit related to TOMPI of 274 which expires 58 in 2010, 93 in 2011 and 123 in 2012.

As of December 31, 2003 and 2002, the balances of due from affiliates and certain prepayments made to related vendors such as Ravenscroft Shipping Inc., were as follows:

As of December 31, 2003 and 2002 the balance of due to affiliates was as follows:

For the years ended December 31, 2003, 2002 and 2001, the revenues derived from related parties were as follows:

The Company through certain of its subsidiaries has contracted with Oceanmarine, a related party, for certain administrative services. This agreement stipulates a fee of 9 per month and per vessel. Pursuant to the individual ship management agreement between Ravenscroft Ship Management Ltd., a Bahamas Corporation (“Ravenscroft Bahamas”), and the Company’s relevant vessel-owning subsidiaries, Ravenscroft Bahamas has agreed to provide certain ship management services for all of the Company’s vessels. Ravenscroft Bahamas has subcontracted the provision of these services to Ravenscroft Shipping Inc., a Miami-based related party of the Company. This agreement stipulates a fee of 12.5 per month and per vessel.

Under these contracts, these related parties are to provide all that is necessary for such companies to operate, including but not limited to crewing, insurance, accounting and other required services. Additionally, commissions and agency fees are paid to those related parties.

For each of the years ended December 31, 2003, 2002 and 2001, management fees paid and/or accrued to related parties for such services amounted to 2,863, 3,176 and 3,250 respectively.

Additionally, during December 2003 the Company paid in advance some administrative fees for the year 2004 of about 453. As of December 31, 2003, such amount was recorded in Prepaid expenses.

Compensation paid to directors totaled 1,135, 1,135 and 1,100 during the years ended December 31, 2003, 2002 and 2001.

Under agreements by the Company and ACBL Hidrovias Limited (Bermuda), wholly owned subsidiary of ACL, both companies lease certain vessels not contributed to UABL, to be operated together with the UABL fleet. Additionally, Lonehort S.A., a shipping agent wholly owned by UABL, bills ship management fees for the

administration of the mentioned vessels. For the years ended December 31, 2003, 2002 and 2001, ship management fees paid to and accrued for Lonehort S.A. for such services amounted to 6,691, 6,599 and 7,346, respectively.

The Company sold Venecia, a wholly owned subsidiary, to a related party, Windsor Financial Services Inc., at its book value with a remaining receivable balance of 1,234.

As of December 31, 2003 the Company had a loan of 950 to UABL that was recorded in Due from affiliates. During the years ended December 31, 2003 and 2002 the Company outsourced freight from UABL for 42 and 835, respectively. Besides the expense recovery from UABL totaled 906 and 543 for the years ended December 31, 2003 and 2002 and the administrative services fees to UABL totaled 348 and 348 during the years ended December 31, 2003 and 2002, respectively.

Pursuant to an agency agreement with Ultrapetrol S.A., I. Shipping Services S.A. has agreed to perform the duties of port agent for the Company in Argentina. For each of the years ended December 31, 2003, 2002 and 2001 the amounts paid and/or accrued for such services amounted to 100, 235 and 432, respectively.

As of December 31, 2003 revenues from three customers of the Company represented 19,777, 10,248 and 9,136, respectively, of the Company’s consolidated revenues.

As of December 31, 2002 revenues from four customers of the Company represented 29,631, 13,242, 9,972 and 5,943, respectively, of the Company’s consolidated revenues.

As of December 31, 2001 revenues from four customers of the Company represented 25,053, 15,301, 13,894 and 11,343, respectively, of the Company’s consolidated revenues.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, investment, accounts receivable, due from affiliates and other receivables.

The financial institutions are located in Argentina, France and the United States and the Company’s cash management policy is designed to limit exposure to any one institution. As of December 31, 2003 the Company’s investment in HSBC was 101. Also the Company has restricted cash in Credit Agricole Indosuez for 1,147 and in All First Bank for 16,469.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base and their credit rating. As of December 31, 2003 the Company’s accounts receivables from four customers totaled 6,159 (including UABL and its subsidiaries for 2,551).

As of December 31, 2003 the Company’s receivables from Windsor Financial Service Inc. amounted to 1,234.

The Company’s operations include only one business segment. For such reason, as of December 31, 2003, 2002 and 2001, no additional business segment information is disclosed.

Ultrapetrol’s vessels and river barges operate on a worldwide basis and are not restricted to specific locations. Accordingly, it is not possible to allocate the assets of these operations to specific countries. In addition, the Company does not manage its operating profit on a geographic basis.

Segment information, for the years ended December 31, 2003, 2002 and 2001, is as follows:

Interest and income taxes paid for the years ended December 31, 2003, 2002 and 2001 are as follows:

As of December 31, 2003 and 2002, the “Other receivables” account includes 8,784 and 7,618, respectively, related to claims against insurance companies. Claims for 6,500 have been made by the Company against the insurance companies regarding the repair expenses incurred to date for damage to some vessels in 2003.

On April 18, 2003, the Alianza G1 suffered an accident in her main engine while the vessel was in transit from Argentina to Chile. The vessel arrived in Talcahuano (Chile) and following the engine manufacturer recommendations proceeded to repair the engine. The vessel’s crankshaft had been damaged and cracked but Sulzer considered that if cracks were only superficial the crankshaft could be repaired by grinding and polishing. Unfortunately, by May 30, 2003 the maximum allowance grinding of 7 mm had been completed and the crack continued. Further tests were carried out and it was determined that in one location the crack had a further depth of 12 mm. The engine manufacturers condemned the crankshaft and recommended that the vessel should replace the crankshaft by a new one in order to operate normally. This case resulted in total loss and the Company settled with its hull and machinery insurers for a total compensation of 1,900. As of December 31, 2003 the Company collected this amount.

The “Other net (expense) income” account for the year ended December 31, 2003, includes 1,562 related to claims for loss of income (business interruption) corresponding to the Alianza G-1, Princess Eva and Princess Pia.

The “Other net (expense) income” account for the year ended December 31, 2002, includes 1,760 related to claims for loss of income (business interruption) corresponding to the Alianza G-3, Princess Marisol, Princess Katherine and Princess Pia.

The “Other net (expense) income” account for the year ended December 31, 2001 includes 1,145 related to claims for loss of income (business interruption) corresponding to the Alianza Campana and Princess Veronica.

On October 12, 2000 the Company through a wholly owned subsidiary, Avemar Holdings (Bahamas) Limited (“Avemar”), purchased 537,144 shares of the Company previously owned by Société Internationale D’Investissement S.A. (Bahamas) (“SII”). The nominal purchase price of said shares was 20,000, 8,000 of which was paid as of December 31, 2000 and the balance of which is payable 6,400 in 2001, 4,400 in 2002 and 1,200 in 2003. As of December 31, 2002 and 2001 the balance of 1,348 and 5,606 was disclosed in the “Other financial debt” account.

As of December 31, 2003 and 2002, the Company recorded 20,332 in the “Treasury stock” account, 20,000 of which relates to the amount payable to SII and 332 relates to direct cost of acquisition.

As described in Note 3, the Company owns 50% of UABL Limited, which is accounted for by the equity method.

Summarized financial information of UABL Limited is presented below. This information is prepared in accordance with the Company’s accounting policies set out in Note 2. This summarized financial disclosure should be read in conjunction with the consolidated financial statements.

As described in Note 6, the Notes are fully and unconditionally guaranteed by certain subsidiaries of the Company.

The subsidiaries which offered their assets in collateral of the above mentioned indebtedness are: Ultrapetrol Argentina, Parfina, Imperial, Cavalier, Regal, Baldwin, Tipton, Kingsway, Plate Princess, Panpetrol, Oceanview, Kingly, Sovereign, Monarch, Noble and Oceanpar (“Guarantor Subsidiaries”).

In addition, a restricted subsidiary is a nonguarantor subsidiary which owns a qualified substitute vessel. In the terms of the indenture, the term qualified substitute vessel is only used in connection with the tender of replacement

vessel upon the sale or loss of a mortgaged vessel, it has to be registered under the laws of a jurisdiction acceptable to institutional lenders and has an apprised value at least equal to the vessel for which it is being substituted.

Supplemental condensed combining financial information for the Guarantor Subsidiaries is presented below. This information is prepared in accordance with the Company’s accounting policies set out in Note 2. This supplemental financial disclosure should be read in conjunction with the consolidated financial statements.

Certain eliminations were made to conform the financial information to the financial statement presentation of Ultrapetrol Bahamas and its subsidiaries. The principal elimination entries relate to the financial current account balances among the Company, the Guarantor Subsidiaries and the Non- Guarantor Subsidiaries, and to the balances originated in bareboat charter transactions between the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries.

Investments in the subsidiaries are accounted for by their parent company under the equity method of accounting only for the purpose of the supplemental combining presentation. Under the equity method, the value and earnings of subsidiaries’ undertakings are reflected in the parent company’s noncurrent assets and other income/ expenses accounts.

Separate full financial statements of the Guarantor Subsidiaries are not included herein because the Company has determined that such financial statements do not provide any additional or relevant information to the investors.

On April 23, 2004 the Company acquired in a series of related transactions, through two wholly owned subsidiaries, from ACBL Hidrovias Ltd. the remaining 50% equity interest in UABL Limited that it did not own along with the fleet of 50 river barges and 7 river tug boats. The total purchase price paid in these transactions was 26.100, 17.700 of which were derived from the proceeds of previous vessels sales by the Company. The barges enter the Company’s fleet as a guarantee to the Notes (Note 6.a).

On November 10, 2004, the Company offered $180 million 9% First Preferred Ship Mortgage Notes due 2014 (the “New Notes”). The net proceeds of the offering will be used to redeem all its outstanding Prior Notes

amounting to $122.6 million and the loans granted by DVB (America) N.V. and Deutsche Schiffsbank Atkiengesellschaft amounting to $17.6 million.

The New Notes will be fully and unconditionally guaranteed on a joint and several senior basis by the following wholly owned subsidiaries of the Company, which offered their assets in collateral of the above mentioned indebtedness: Bayham Investments S.A., Baldwin Maritime Inc., Cavalier Shipping Inc., Corporacion de Navegacion Mundial S.A., Danube Maritime Inc., General Ventures Inc., Imperial Maritime Ltd. (Bahamas) Inc., Kattegat Shipping Inc., Kingly Shipping Ltd., Majestic Maritime Ltd., Massena Port S.A., Monarch Shipping Ltd., Noble Shipping Ltd., Oceanpar S.A., Oceanview Maritime Inc., Parfina S.A., Parkwood Commercial Corp., Princely International Finance Corp., Regal International Investments S.A., Riverview Commercial Corp., Sovereign Maritime Ltd., Stanmore Shipping Inc., Tipton Marine Inc., Ultrapetrol International S.A., Ultrapetrol S.A. and UP Offshore (Holdings) Ltd. (“Subsidiary Guarantors”).

The Indenture provides that the New Notes and each of the Security Agreements, other than the Mortgages, are governed by, and construed in accordance with, the laws of the state of New York.

Each of the mortgaged vessels is registered under either the Panamanian flag, or another jurisdiction with similar procedures. Although all of the Subsidiary Guarantors are outside of the United States.

Supplemental condensed combining financial information for the Subsidiary Guarantors for the New Notes is presented below. This information is prepared in accordance with the Company’s accounting policies. This supplemental financial disclosure has been prepared on the same basis described in note 18, and should be read in conjunction with the consolidated financial statements.

We have audited the consolidated balance sheets of UABL LIMITED as of December 31, 2003 and 2002, and the related consolidated statements of operations, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated financial statements of UABL LIMITED as of December 31, 2001, and for the year then ended were audited by other auditors who have ceased operations as a foreign associated firm of the Securities and Exchange Commission Practice Section of the American Institute of Certified Public Accountants and whose reported dated March 26, 2002, expressed an unqualified opinion on those statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of UABL LIMITED as of December 31, 2003 and 2002, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.


	PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.
	Member of Ernst & Young Global

	/s/ ENRIQUE C. GROTZ

	ENRIQUE C. GROTZ
	Partner

The following is a copy of the audit report previously issued by PISTRELLI, DIAZ Y ASOCIADOS (member of Andersen) in connection with UABL LIMITED’s December 31, 2001 and 2000 financial statements. This audit report has not been reissued by PISTRELLI, DIAZ Y ASOCIADOS in connection with this prospectus.

We have audited the accompanying consolidated balance sheets of UABL LIMITED and its subsidiaries, a company incorporated under Bahamas legislation (the Company), as of December 31, 2001 and 2000, and the related consolidated statements of income (loss), changes in stockholders’ equity and cash flows for the year ended December 31, 2001 and for the period of October 24 (Inception date) to December 31, 2000. These statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing generally accepted standards in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of UABL LIMITED as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the year ended December 31, 2001 and for the period of October 24 (Inception date) to December 31, 2000, in accordance with generally accepted accounting principles in the United States.


	PISTRELLI, DIAZ Y ASOCIADOS
	Member of Andersen

	/s/ MARIANA FILAS

	MARIANA FILAS
	Partner


(1)	In addition to charter hires from related parties, operating expenses included 1,049, 1,206 and 3,226 in 2003, 2002 and 2001, respectively, related to charges from related parties.

ACBL Hidrovías Ltd. (“ACBLH”), a subsidiary of American Commercial Lines LLC (“ACL”), and UP River (Holdings) Ltd. (“UP River”), a Bahamian corporation and a subsidiary of Ultrapetrol (Bahamas) Limited (“Ultrapetrol”), individually and through their subsidiaries, owned certain vessels, land-based assets, permits and contracts of affreightment, which they used to operate a river transportation business on the Parana, Paraguay and Uruguay Rivers in Argentina, Bolivia, Brazil, Paraguay and Uruguay.

The respective Boards of Directors of ACBLH and UP (collectively, the “Parties”) decided to combine the businesses of ACBLH and UP River into a new business entity, UABL Limited (“the Company” or “UABL Limited”), and for that purpose executed a Consolidation Agreement (“the Consolidation Agreement”) on October 18, 2000 (the “Closing Date”). As a result of the business combination, the Company was organized and registered as a Bahamian corporation on October 18, 2000. The Company has an authorized capital stock of 10,000 shares, with a par value of $1 per share and is owned equally by UP and ACBLH and its affiliates. These contributions were recorded at the historical cost basis of the related entities or assets.

On the Closing Date and in accordance with the Consolidation Agreement, UABL S.A. (“UABL SA”; formerly ACBL Hidrovias S.A.), under Argentinean legislation and UP River, under Bahamian legislation, were contributed to the Company by ACBLH and UP River, respectively. Additionally, the parties contributed equipment, cash and certain time charter contracts involving certain vessels to the Company on the Closing Date.

Lonehort S.A. (“Lonehort”) a ship management company serving the boats, barges and other marine equipment of the Company was created in October 2000. UABL Limited is its sole shareholder (100% interest).

As of December 31, 2003, 2002 and 2001 the consolidated financial statements include the accounts of the Company and its subsidiaries described as follows:

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

Approximately 14% of the Company’s revenues are generated from its Argentine subsidiaries which also hold approximately 41% of the consolidated assets of the Company. Argentina has undergone major economic, political and social changes in the last several years, including significant economic changes in December 2001 and throughout 2002. Most importantly, in January 2002 the government eliminated the prior convertibility law which had been in place since 1991 through which the Argentine peso was traded at one peso per U.S. dollar. Beginning in February 2002 the government established a single market for all foreign exchange transactions at a single free-floating exchange rate. Subsequent to this change the Argentine peso devalued significantly.

However, since the end of the third quarter 2002 Argentine’s economy has shown signs of stabilization.

In 2003, the Argentine economy grew at a rate of approximately 8 percent and as of December 31, 2003 the peso was trading on one U.S. dollar per 2.91 pesos.

In addition to the above changes the government also converted all debts denominated in U.S. dollars or other foreign currencies in the financial system to pesos at the exchange rate of one peso per US$1.00. There were also various other banking and foreign payment restrictions which were substantially lifted in 2002.

The majority of the Argentine subsidiary’s revenues are denominated and collected in U.S. dollars. In addition, the Company does not have financial loans denominated in pesos in Argentina. Accordingly, the above economic changes in Argentina did not significantly adversely affect the Company. The most significant impact related to the reduction of the U.S. dollar equivalent value of the Company’s peso denominated operating expenses.

Notwithstanding the above, the Argentine government continues to make changes in the country which could affect the Company’s Argentine operations.

Approximately 28% of the Company’s revenues are generated from its Paraguayan subsidiaries which also hold approximately 26% of the consolidated assets of the Company. Paraguay has undergone certain economic, political and social changes in the last several years.

The majority of the Paraguayan subsidiaries’ revenues are denominated and collected in U.S. dollars. In addition, the Company does not have financial loans denominated in guaraní in Paraguay. Accordingly, the above economic changes in Paraguay did not significantly adversely affect the Company. The most significant impact related to the reduction of the U.S. dollar equivalent value of the Company’s guarani denominated operating expenses.

Notwithstanding the above, future economic changes in Paraguay could affect the Company’s subsidiaries and operations in this country.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The consolidated financial statements include the accounts of the Company and its subsidiaries all of which are wholly-owned. Significant intercompany accounts and transactions have been eliminated in consolidation.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

The Company uses the US dollar as its functional currency. The majority of the Company’s sales are billed and collected in U.S. dollars and all financing is in U.S. dollars.

All monetary assets and liabilities not denominated in US dollars have been remeasured into US dollars using the exchange rates in effect at the balance sheet date. Operations statement amounts have been translated using the average exchange rate for each month. Gains or losses resulting from foreign currency measurements are included in the operations statement for the same year.

As of December 31, 2003 and 2002, this account includes a certificate of deposit in Citibank N.A., Paraguay.

This account mainly includes claims receivables, tax credits for VAT and income tax withholdings as of December 31, 2003 and 2002.

This account includes fuel and spare parts, which were accounted for at the lower of cost or market. The amounts for each item were as follows:

This account includes prepaid insurance, charter expenses and advances to suppliers.

Property and equipment, which is principally comprised of river barges, tug boats and river equipment is stated on the basis of cost. This cost includes the purchase price and all directly attributable costs for the asset to be in working condition. Maintenance and repair costs are expensed as incurred.

The barges and tug boats are considered to have useful lives of 35 years from the date on which they were built. The depreciation amount is calculated net of the estimated scrap value of the barges and tug boats at the date they were built. River equipment is considered to have a useful life of 15 years. Depreciation for all property and equipment is recorded by the straight-line method over the estimated useful lives of the related assets.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

This account mainly includes salaries, social security payables, taxes payable and accruals.

Barge transportation revenues are recognized daily as earned from charters over the period of the respective agreements.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

The Company has no items of other comprehensive income to report. The comprehensive income only includes the net income (loss) for the year.

In accordance with Statement of Financial Accounting Standards (SFAS) No 107 “Disclosures about fair value of financial instruments”, the fair value of the Company’s assets and liabilities considered to be financial instruments have been valued at the discounted amount of future cash flows at market interest rates current available to the Company for credits/loans with similar terms. The fair value of the Company’s financial instruments approximates carrying value.

Cash and cash equivalents include highly-liquid, temporary cash investments with original maturities of three months or less when purchased.

Changes in allowance for doubtful accounts for the years ended December 31, 2003, 2002 and 2001 are as follows:

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

The capitalized cost of property and equipment and the related accumulated depreciation as of December 31, 2003 and 2002 is as follows:

In 2002 the shareholders of UABL Limited decided to spin-off their equity interest in OTS SA and Puertos del Sur SA to UABL Terminals. UABL Terminals is owned by the same ultimate shareholders as UABL Limited. Accordingly, since the transaction was between entities under common ownership, the transaction was accounted for at historical cost and no gain or loss was recognized.

According to the provisions of the Consolidation Agreement, UABL Limited shall not be obligated or become liable for any obligation or liability, known or unknown, fixed, contingent or otherwise of UP, UP River or the Subsidiaries of UP and ACBLH, UABL SA, arising prior to October 24, 2000 in connection with any vessel, or any vessel chartered to UABL Limited, in connection with or arising out of or resulting events occurring prior to that date, without limitation, any liability arising in connection with any environmental liabilities, legal violations, litigation, employee claims, loan agreements or other indebtedness, any tax, or any other liabilities, obligations, or exception to any representation or warranty. UABL Limited shall not assume, and UP and ACBLH shall severally indemnify UABL Limited against such liabilities.

In addition, pursuant to the mentioned Consolidation Agreement, all claims, severance benefits, costs, and other expenses, social security taxes, charges and contributions and other costs incurred by UABL SA or UP River, or subsidiary of UP River, in connection with an employee employed by the Company and subsequently terminated by the Company shall be paid by the Company to, or on behalf of ACBLH or UP, as the case may be; provided, that the maximum amount that the Company shall be required to pay to or on behalf of parent companies in respect of

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

any of the mentioned costs in the aggregate, shall be 1,800. ACBLH and UP agreed to fully indemnify the Company against such liabilities over the mentioned amount.

During 2000 the Argentine tax authority served a notice to UABL SA with the purpose of verifying the latter’s compliance with transfer pricing regulations for transactions with related companies for the period prior to the organization of UABL Limited, i.e. during 1996, 1997, 1998 and 1999, among other things.

In light of the above, during 2001 the Company amended its income tax returns for the above-mentioned years charging a loss of 3,292 to UABL SA’s income statement (consisting of a tax loss of 2,270, interest expense for 1,487 and a gain on the sale of government bonds of 465). In compliance with the contract provision described above, ACBLH compensated UABL Limited in the amount of 3,119 causing a net decrease of 173, in the shareholders equity.

According to US GAAP, this compensation was accounted for as additional paid-in capital and was not offset against the loss generated by the tax liability.

Property and equipment includes the following amounts for leases that have been capitalized at December 31, 2003 and 2002:

The Company recorded depreciation expense in the amount of 223 and 168 on assets recorded under capital leases for the year ended December 31, 2003 and 2002.

Under the charter agreements entered into by the parties, both UP and ACBLH lease certain vessels which were not contributed to the Company through the Consolidation Agreement. These operating leases expire in 2008.

The Company recorded charter hire expenses to related parties of 20,308, 19,755 and 22,399 for the years ended December 31, 2003, 2002 and 2001, respectively.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

Future minimum payments under capital leases and noncancelable operating leases with initial terms of one year or more consisted of the following as of December 31, 2003:

10% of the Company’s employees are covered by a collective bargaining agreement.

As the earnings from shipping operations of UABL International and Thurston are derived from sources outside of Panama, such earnings are not subject to Panamanian taxes.

UABL Paraguay, ACBL del Paraguay, Yataiti and Riverpar are subject to Paraguayan corporate income taxes. UABL SA and Sernova are subject to Argentine corporate income taxes.

In Argentina the tax on minimum presumed income (“TOMPI”) supplements income tax since it applies a minimum tax on the potential income from certain income generating-assets at a 1% tax rate. The Company’s tax obligation in any given year will be the higher of these two tax amounts. However, if in any given tax year tax on minimum presumed income exceeds income tax, such excess may be computed as payment on account of any excess of income tax over TOMPI that may arise in any of the ten following years.

The Company accounts for income taxes under the liability method in accordance with SFAS No. 109 “Accounting for Income Taxes”.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

UABL Limited’s pre-tax income for the years ended December 31, 2003, 2002 and 2001 was taxed in foreign jurisdictions (Argentina and Paraguay).

The provision (benefit) for income taxes (which includes TOMPI) is comprised of:

Reconciliation of the tax (benefit) provision to taxes calculated based on the statutory tax rates is a follows:

As of December 31, 2003 UABL SA had accumulated net operating loss carryforwards (“NOLs”) totaling 363 that expire 346 in 2005 and 17 in 2006. The use of the NOLs will depend upon future taxable income in UABL SA in Argentina.

As of December 31, 2003, UABL SA had a credit related to TOMPI of 704 which expires 163 in 2010, 154 in 2011, 212 in 2012 and 175 in 2013.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

As of December 31, 2003 and 2002 the balances from related parties were as follows:


(1)	This entity is a subsidiary of ACL who is a 50% shareholder of the Company. See note 14 related to significant events at ACL.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)


(1)	These loans accrue no interest and have no maturity date.

(2)	This entity is a subsidiary of ACL who is a 50% shareholder of the Company. See note 14 related to significant events at ACL.

(3)	This loan accrues interest at a nominal interest rate of 7% per year, payable semiannually. The principal will be repaid in 8 equal semiannual installments, beginning on June 30, 2006.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

For the years ended December 31, 2003, 2002 and 2001, the transactions with related parties were as follows:


(1)	These entities are subsidiaries of ACL who is a 50% shareholder of the Company. See note 14 related to significant events at ACL.

(2)	Includes 20,308, 19,755 and 22,399 as of December 31, 2003, 2002 and 2001, respectively, related to the hire of certain vessels according to the Charter Party Agreement dated as of October 24, 2000 and 1,049, 1,206 and 3,226 related to expense recovery and administrative services fees.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

Management fee relates to compensation for crew, maintenance and operation of certain vessels related to Ship Management Agreements dated as of October 24, 2000, between Lonehort S.A., ACBLH and Ultrapetrol Bahamas Ltd.

These agreements have a period of three years since October 24, 2000 and can be extended at the option of ACBLH and Ultrapetrol Bahamas Ltd. for an additional three years and afterwards, an additional two years. The management fees are stipulated in the related contracts for each specific vessel.

The Company and its subsidiaries entered into Charter Party Agreements with ACBLH and Ultrapetrol Bahamas Ltd. and its subsidiaries. These agreements have a period of three years since October 24, 2000, which is renewable at the owners’ option for all or part of the vessels included in the agreements for a further three years after which the owner has a further option to renew for two more years.

Under these agreements the Company and its subsidiaries pay a daily rate which is specific to stated vessels.

The Company’s shareholders charged the Company certain expenses in 2003, 2002 and 2001 related to cost-sharing functions for legal, insurance and administrative areas. There is no formal written agreement related to these charges.

As of December 31, 2003, 416 has disclosed in current assets related to interest to be paid by the Company to IFC and KfW on June 15, 2004, which, under the terms and conditions of the loan, should be deposited with the trustee account open therefor.

As of December 31, 2003, 1,281 has disclosed in noncurrent assets is related to disbursements by the IFC and the KfW, which, under the terms and conditions of the loan agreement, should only be used to acquired property and equipment.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

The Company’s operations include only one business segment river transportation services in South America. For such reason, as of December 31, 2003, 2002 and 2001, no additional business or geographic segment information is disclosed.

In November 2001, ACBL del Paraguay acquired from Transamerica Leasing Inc. twenty-four dry-cargo barges under a Paraguayan flag with a gross tonnage of 1,500 tons each. The barges were built in 1998 and 1999. Together with the barges the Company also acquired a tug boat. The tug boat has a Paraguayan flag and was built in 1999.

The transaction was closed in the total amount of 11,100 payable as follows: a down payment of 3,100 and a 8,000 Transamerica Ltd loan repayable in 60 monthly installments of 161, which include interest at a 7,94% annual rate. As of December 31, 2003 this debt totaled 4,885 (including the current portion of 1,601) and is due in the following years succeeding December 31, 2003: 1,601 in 2004, 1,733 in 2005 and 1,552 in 2006.

The transaction was secured with a mortgage in favor of Transamerica Leasing Inc. covering the full value of the assets acquired. As of December 31, 2003 and 2002 the net book value of these assets was 10,414 and 10,739.

ACBL del Paraguay and UABL Limited committed, among other things, to preserve its corporate existence, to respect all the laws and applicable regulations, to maintain and preserve all its properties, not to enter into any merger transaction, consolidation or liquidation, not to change the terms and conditions of vessels management, not to dispose of a significant part of its assets or business, not to assume any debt, excluding those related with the ordinary course of business, to be responsible for the management and operation of vessels and to limit the distribution of dividends in the event of default.

In December 2001, UABL Paraguay acquired from Citibank N.A. Paraguay seven dry-cargo barges with Paraguayan flag with a gross tonnage of 1,500 tons each. The barges were built in 1997 and 1998.

The transaction was closed in the total amount of 2,100 payable in 17 semiannual installments. The first installment was paid in December 2002. Interest accrues at LIBOR (London interbank offered rate) plus 275 bp. As of December 31, 2003 the debt totaled 1,729 (including the current portion of 247) and the maturities for the years subsequent to December 31, 2003 are 247 in each year for the years 2004 through 2008 and 494 thereafter.

This transaction was secured with a mortgage in favor of Citibank N.A. Paraguay on the assets acquired and on other barges owned by UABL Paraguay as a credit enhancement. As of December 31, 2003 the net book value of these assets is 2,009.

For the year ended December 31, 2003 revenues from four Company customers represented 13,442, 7,344, 6,691 and 5,640, of UABL’s consolidated revenues.

For the year ended December 31, 2002 revenues from four Company customers represented 9,807, 7,494, 6,599, and 4,101 of UABL’s consolidated revenues.

For the year ended December 31, 2001 revenues from three Company customers represented approximately 6,433, 7,709 and 10,304 of UABL’s consolidated revenues.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, investment, accounts receivable and other receivables.

The financial institutions are located in Argentina, Paraguay and the United States and the Company’s cash management policy is designed to limit exposure to any one institution. As of December 31, 2003 and 2002 the Company’s investment in certificates of deposit was 100 and 186.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base and their credit rating.

As of December 31, 2003 the company’s receivables from OTS SA and Puerto del Sur SA totaled 187 and 2,363 (including a current portion of 83).

As of December 31, 2002 the Company’s receivables from OTS SA and Puerto del Sur SA amounted to 2,229. The Company does not require collateral for these receivables.

As of December 31, 2003 and 2002, the “Other receivables” account includes 396 and 814 in claims against insurance companies.

The “Other revenues” account for the year ended December 31, 2003 includes 264 in compensation received from insurers.

The “Other revenues” account for the year ended December 31, 2002, includes 500 in compensation received from insurers in connection with an accident including the Pueblo Esther tug boat during the year. As December 31, 2002 this amount was fully collected.

In addition, the “Other revenues” account for the year ended December 31, 2001 includes 687 related to claims for loss of income (business interruption) corresponding to the Alianza Rosario and San Pedro tug boats.

On December 17, 2002, UABL Barges signed a loan agreement with the International Financial Corporation (IFC) amounting to 20,000.


	—	Tranche A, amounting to 15,000, is payable in 14 semiannual installments of 1,071 each, beginning on June 15, 2005 and ending on December 15, 2011. This loan shall accrue interest at LIBOR plus 3.75% per year.

	—	Tranche B, amounting to 5,000, is payable in 10 semiannual installments of 500 each, beginning on June 15, 2005 and ending on December 15, 2009. This loan shall accrue interest at LIBOR plus 3.50% per year.

As of December 31, 2003 the Company has received disbursements for 11,200. The funds must be disbursed before May 31, 2005. The Company must pay a fee of 0.50% per annum on the unused portion of the loan on a semiannually basis.

In addition, on February 27, 2003, the Company signed a loan agreement with Kreditanstalt für Wiederaufbau (KfW) amounting to 10,000.

This loan shall be payable in 10 semiannual installments of 1,000 each, beginning on June 15, 2005 and ending on December 15, 2009. This loan shall accrue interest at LIBOR plus 3.50% per year.

(Stated in thousands of U.S. dollars, except where indicated) — (Continued)

As of December 31, 2003 the Company has received disbursements for 5,600. The funds must be disbursed before May 31, 2005. The Company must pay a fee of 0.50% per annum on the unused portion of the loan on a semiannually basis.

These loans are guaranteed by UABL Limited and UABL S.A., Sernova S.A. and UABL International and secured by a mortgage taken on existing on to be acquired barges and tug boats belonging to UABL Limited and its subsidiaries. The Company’s obligations under these loans are secured by barges and tug boats with a net book value of 24,986 at December 31, 2003.

UABL Barges has agreed to keep a debt coverage ratio not lower than 1, and not to take other loans, change its business nature, pay dividends and sell, transfer or somehow dispose of a significant portion of its assets, among others.

In addition, UABL Limited has agreed to keep a debt coverage ratio not lower than 1.25 until June 15, 2005, not lower than 1.50 from such date onwards and a consolidated debt ratio lower than 1. If further agreed to keep the market value of mortgaged assets at 130% of the remaining loan debt, and not to pay dividends under certain circumstances, change its business nature, take other loans and sell, transfer or somehow dispose of a significant portion of its assets, among others.

During March 2003, UABL Paraguay S.A., a wholly-owned subsidiary of the Company, entered into a fuel supply contract with Repsol-YPF that could be considered a “take or pay” contract. The Company guaranteed the compliance with this contract and UABL S.A., a wholly-owned subsidiary of the Company, mortgaged its port tug “San Jose V” to secure such contract. These facts resulted in the noncompliance with sections 16(g) and (h) of the Guarantee Agreement by UABL Limited in favor of IFC and KfW. On February 18, 2004, the IFC signed a waiver to sections 16(g) and (h) of the Guarantee Agreement in order to allow UABL Paraguay S.A. to enter into the “take or pay” fuel supply contract with Repsol-YPF, allow UABL S.A. to mortgage its port tug “San Jose V” as a security for the fuel supply contract and the Company to guarantee the compliance with this contract. On February 12, 2004, the KfW signed a waiver to sections 16(g) and (h) Guarantee Agreement.

On January 31, 2003 ACL announced that it had filed a petition with the U.S. Bankruptcy Court for the Southern District of Indiana, New Albany Division, to reorganize under Chapter 11 of the U.S. Bankruptcy Code. ACL said that it filed to reorganize its capital and debt structure in an orderly fashion while continuing normal business operations. Included in the filing are ACL, ACL’s parent American Commercial Lines Holdings LLC, American Commercial Barge Line LLC, Jeffboat LLC, Louisiana Dock Company LLC and ten other U.S. subsidiaries of ACL.

The ACL Bankruptcy petition has not affected the Company’s operations or its financial needs. As noted in Note 7, the Company’s primary transaction with ACL and its subsidiaries include the hire of certain vessels according to the Charter Party Agreement dated as of October 24, 2000 and the management fee received by Lonehort S.A. related to the management compensation for crew, maintenance and operations of such vessels.

Ultrapetrol (Bahamas) Limited (“Ultrapetrol Bahamas” or “the Company”) is a company organized and registered as a Bahamas Corporation since December 1997.

The Company’s operations consist of international and inland transportation of petroleum and dry-cargo products by vessels and barges owned by its subsidiaries. One of the Company’s subsidiaries, UABL Limited, operates through its subsidiaries a river transportation business on the Paraná, Paraguay and Uruguay Rivers and part of the River Plate in Argentina, Bolivia, Brazil, Paraguay and Uruguay.

On June 28, 2001, the Company issued 138,443 new shares for $5,295 which were totally subscribed by Inversiones Los Avellanos S.A., one of the Company’s original shareholders and was paid $3,297 in 2001 and $1,104 in 2002 and the balance will be payable in July 2005. As of September 30, 2004 the outstanding payment was $894 and was shown as a reduction of shareholders’ equity. The Company has an option to repurchase 25,212 of its shares for a total price of $894 from Inversiones Los Avellanos S.A. until July 31, 2005.

As of September 30, 2004, the shareholders of Ultrapetrol Bahamas are Solimar Holdings Ltd., Inversiones Los Avellanos S.A. and Avemar Holdings (Bahamas) Ltd., a wholly owned subsidiary of the Company, in the proportion of 46.7%, 28.2% and 25.1%, respectively. Since Avemar Holdings (Bahamas) Ltd. granted an irrevocable proxy to Inversiones Los Avellanos S.A. in full for all of its voting powers related to its interest in the Company, as of September 30, 2004, Inversiones Los Avellanos S.A. held 53.3% of the Company’s voting rights.

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries described as follows:

The Company’s financial statements include the figures of UABL Limited’s consolidated financial statements and its subsidiaries: UABL Paraguay S.A. (Paraguay) (“UABL Paraguay”), UABL S.A. (Argentina), UABL International S.A. (Panama), Yataity S.A. (Paraguay) (“Yataity”), Sernova S.A. (Argentina), Riverpar S.A. (Paraguay) (“Riverpar”), Parabal S.A. (Paraguay), Marnave S.R.L. (Paraguay), UABL Barges (Panama) Inc. (Panama) (UABL Barges), Lonehort S.A. (Uruguay), Blueroad Finance Inc. (Panama), Arlene Investment Inc. (Panama), Cedarino S.L. (Spain), Corydon International S.A. (Uruguay) and Thurston Shipping Inc. (Panama).

The Company’s financial statements include the figures of UABL Terminals consolidated financial statements with its subsidiary UABL Terminals (Paraguay) S.A. (Panama).

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The consolidated balance sheet at December 31, 2003 has been derived from the audited financial statement at that date. The unaudited condensed consolidated financial statements and the consolidated balance sheet do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal, recurring nature and have been reflected in the unaudited condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period.

The unaudited condensed consolidated financial statements include all entities for which the Company has control. Significant intercompany accounts and transactions have been eliminated in consolidation.

On April 23, 2004, the Company entered into a Memorandum of Agreement to sell the Princess Eva for a total price of $4,198. The vessel was delivered to its new owners on June 2, 2004. The Company recognized a gain of $412 for this sale in the statement of operations for the nine-month period ended September 30, 2004.

The capitalized cost of the property and equipment, and the related accumulated depreciation as of September 30, 2004 and December 31, 2003 is as follows:

As of September 30, 2004, the net book value of the assets pledged was $151,912.

The Company is subject to legal proceedings, claims and contingencies arising in the ordinary course of business. When such amounts can be estimated and the contingency is probable, management accrues the corresponding liability. While the ultimate outcome of lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not believe the costs of such actions will have a material effect on the Company’s consolidated financial position or results of operations.

On February 21, 2003, Ursa Shipping Ltd. (“Ursa”) brought suit in the United States District Court for the District of New Jersey against M/ T Princess Susana and Noble Shipping Ltd., “Noble”, (a wholly owned subsidiary of the Company) seeking damages arising out of the delay in delivery of a cargo of Kirkuk crude oil to the Valero terminal in Paulsboro, New Jersey. Also in February, 2003, Valero Marketing and Supply Co. (“Valero”) commenced an action against Noble (Valero Marketing and Supply Co. v. Noble Shipping Ltd., Civil Action No. 03-CV-843 (FLW). The Valero and Ursa complaints sought damages in excess of $9,000.

On May 26, 2004 the parties reached a global settlement of all the issues in the litigation and full releases were exchanged. In connection with the settlement, among other things, Noble’s protection and indemnity insurers paid $2,250 in full settlement of Valero’s claims and Noble’s freight and demurrage counterclaim was paid in the amount of $275. The matter is now fully concluded.

Ultrapetrol S.A., one of the Company’s subsidiaries, is involved in a customs dispute with the Customs Authority of Bahía Blanca in Argentina over the alleged unauthorized operation of the Princess Pia in Argentina during 2001. As a result, the Customs Authority of Bahía Blanca issued a resolution claiming the sum of Argentine pesos 4,689,695 (approximately $1,610) as import taxes and the sum of Argentine pesos 4,689,695 (approximately $1,610) as fines. In response to said resolution, on March 16, 2004, Ultrapetrol S.A. submitted an appeal with the Argentine Tax Court arguing that it did not breach the any applicable customs laws since the Princess Pia operated within Argentine territory only during the periods in which it was expressly authorized by the competent authorities. Said appeal is pending resolution by the Argentine Tax Court. Based upon the facts and circumstances of the case,

the existing regulations and applicable insurance coverage, the Company does not believe that the outcome of this matter should have a material impact on its financial position or results of operations.

Ultrapetrol S.A. is involved in a customs dispute with the Brazilian Customs tax authorities over the alleged infringement of customs regulations by the Alianza G3 and Alianza Campana (collectively, the “Vessel”) in Brazil during 2004. As a result, the Brazilian Customs tax authorities commenced an administrative proceeding and applied the penalty of apprehension of the Vessel which required the Vessel to remain in port or within a maximum of five nautical miles from the Brazilian maritime coast. The maximum custom penalty that could be imposed would be confiscation of the Vessel, which is estimated by the Brazilian Customs tax authorities to be valued at $4,560. On the same day that Ultrapetrol S.A. presented its defense to this administrative proceeding, a writ of injunction was filed on behalf of Ultrapetrol S.A. seeking a judicial authorization allowing the return of the Vessel to Bóias de Xáreu, which is located almost 20 nautical miles from the Brazilian maritime coast, so the Vessel could resume its prior services. The preliminary injunction was granted by the court in favor of Ultrapetrol S.A. on September 17, 2004, conditioned on the weekly presentation of shipping letters describing the location of the Vessel. However, the administrative proceeding is still pending. In case the Company is not successful on the merits, under applicable insurance coverage, it could request from The Standard Club, the Vessel’s P&I insurer, an indemnity corresponding to the value of the Vessel. Based upon the facts and circumstances of the case, including the fact that the Vessel was operating under a specific written authorization officially granted by the Brazilian government, the existing regulations and applicable insurance coverage, the Company does not believe that the outcome of this matter should have a material impact on its financial position or results of operations.

On April 23, 2004, the Company acquired in a series of related transactions, through two wholly owned subsidiaries from ACBL Hidrovías Ltd. (“ACBL”), the remaining 50% equity interest in UABL Limited and UABL Terminals that it did not own (together “UABL”) (The acquisition, the “UABL Equity Acquisition”). In addition, it acquired from the same vendor a fleet of 50 river barges and 7 push boats, which UABL Limited and its subsidiaries previously leased from ACBL, certain receivables and liabilities. (The “UABL Fleet Acquisition”).

The results of UABL’s operations have been consolidated in the condensed consolidated financial statements since that date. UABL operates a river transportation business on the Paraná, Paraguay and Uruguay rivers in Argentina, Bolivia, Brazil, Paraguay and Uruguay. As a result of the acquisition, the Company is the leading barge transportation company in south America and well-positioned to grow.

The aggregate purchase price was $26,100, including $24,100 in cash and 2,000 shares of ACBL acquired by the Company for $2,000 shortly before this transaction.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed and allocation of purchase price at the date of acquisition.

If the transaction had been consummated on January 1, 2003 the Company’s unaudited pro forma revenues and net income (loss) for the nine-months periods ended September 30, 2004 and 2003, would have been as shown below. However, such pro forma information is not necessarily indicative of what actually would have occurred had the transaction occurred on such date.

The Company operates through its subsidiaries, which are subject to several tax jurisdictions, as follows:


	The earnings from shipping operations were derived from sources outside Panama and such earnings were not subject to Panamanian taxes.


	Two of the Company’s subsidiaries, Parfina and Oceanpar are subject to Paraguayan corporate income taxes. In addition, since acquisition of UABL, four subsidiaries of UABL Limited, UABL Paraguay, Parabal S.A., Yataiti and Riverpar are subject to Paraguayan corporate income taxes.


	Ultrapetrol S.A. is subject to Argentine corporate income taxes. Since the UABL acquisition, in addition to this subsidiary, two subsidiaries, UABL S.A. and Sernova are subject to Argentine corporate income taxes.

	In Argentina, the tax on minimum presumed income (“TOMPI”), supplements income tax since it applies a minimum tax on the potential income from certain income generating-assets at a 1% tax rate. The Company’s tax obligation in any given year will be the higher of these two tax amounts. However, if in any given tax year tax on minimum presumed income exceeds income tax, such excess may be computed as payment on account of any excess of income tax over TOMPI that may arise in any of the ten following years.


	Certain entities, defined as “Qualified Foreign Corporations”, are exempt from United States of America (“U.S.”) corporate income tax on U.S. source income from their international shipping operations, pursuant to Section 883 of the US tax code. A foreign corporation will be considered a Qualified Foreign Corporation if (i) its country of incorporation exempts shipping operations of U.S. persons from income tax (the “Incorporation Test”), (ii) it meets the “Ultimate Owner Test”, and (iii) it files a US Federal income tax return (Form 1120F) to claim the Section 883 exemption. A foreign corporation meets the Ultimate Owner Test if (a) more than 50% of the value of its stocks is ultimately owned by individuals who are tax residents of one or more foreign countries that exempt U.S. persons from tax on shipping earnings (“Qualified Foreign Countries”) and, (b) the scope of the exemption provided by such Qualified Foreign Countries is broad enough to cover the type of shipping income (e.g. freight income, time charter hire or bareboat charter hire) earned by the foreign corporation. For the nine months period ended September 30, 2004 and 2003 Princely and Ultracape (Holdings) Ltd. satisfied the Incorporation Test because they are incorporated in Panama and Bahamas, respectively, which provide the required exemption to U.S. persons involved in shipping operations as confirmed by Revenue Ruling 2001-48. Each of Princely and Ultracape (Holdings) Ltd. also satisfied the Ultimate Owner Test, having obtained sufficient back-up documentation as evidence to support its respective position that for the nine-month period ended September 30, 2004 and 2003 more than 50% of the value of its outstanding shares were ultimately owned by individuals who were residents of Qualified Foreign Countries in respect to the types of shipping income earned by Princely and Ultracape (Holdings) Ltd. for which exemption is being claimed. Consistent with prior years, Princely and Ultracape will file IRS Form 1120F for the year 2004 to claim the Section 883 exemption.

	Based on the foregoing, the Company expects all of its income to be exempt from U.S. income taxes for the year ended December 31, 2004.

	Ultrapetrol Bahamas accounts for income taxes under the liability method in accordance with SFAS No. 109 Accounting for Income Taxes.

	Under this method, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at each period end. Deferred tax assets are recognized for all temporary items and an offsetting valuation allowance is recorded to the extent that it is not more likely than not that the asset will be realized.

As of September 30, 2004 and December 31, 2003, the balances due from related parties and certain prepayments made to related vendors such as Ravenscroft Shipping Inc. and Oceanmarine, were as follows:


(1)	This loan accrues no interest and has no maturity date.

(2)	This loan accrues interest at a nominal interest rate of 7% per year, payable semiannually. The principal will be repaid in 8 equal semiannual installments, beginning on September 30, 2006. As of September 30, 2004, “Interest income” account included interest amounting to $80 for the nine-month period then ended.

As of September 30, 2004 and December 31, 2003 the balance due to related parties was as follows:

For the nine months period ended September 30, 2004 and 2003, the revenues derived from related parties were as follows:

The Company through certain of its subsidiaries has contracted with Oceanmarine, a related party, for certain administrative services. This agreement stipulates a fee of $9 as of September 30, 2003 and $10 as of September 30, 2004 per month, per vessel. Pursuant to the individual ship management agreement between Ravenscroft Ship Management Ltd., a Bahamas Corporation (“Ravenscroft Bahamas”), and the Company’s relevant vessel-owning subsidiaries, Ravenscroft Bahamas has agreed to provide certain ship management services for all of the Company’s vessels. Ravenscroft Bahamas has subcontracted the provision of these services to Ravenscroft Shipping Inc., a Miami-based related party of the Company. This agreement stipulates a fee of $12.5 per month, per oceangoing vessel.

Under these contracts, these related parties are to provide all services necessary for such companies to operate, including, but not limited, to crewing, insurance, accounting and other required services. Additionally, commissions and agency fees are paid to those related parties.

For each of the nine-month periods ended September 30, 2004 and 2003, management fees paid and/or accrued to related parties for such services amounted to $1,174 and $2,211 respectively.

Additionally, during 2003 and 2004 the Company paid in advance some administrative fees for the year 2004 of approximately $202. As of September 30, 2004, such amount was recorded in Prepaid expenses.

For the nine-month period ended September 30, 2004 and 2003, Ravenscroft has provided certain services to the Company in the amount of $534 and $314.

For the nine months periods ended September 30, 2004 and 2003, ship management fees paid and/or accrued to Lonehort amounted to $1,736 and $4,944, respectively.

Compensation paid to directors totaled $851 during the nine-month period ended September 30, 2004 and 2003.

On October, 2001; the Company sold Venecia, a wholly owned subsidiary, to a related party, Windsor Financial Services Inc., at its book value of $3,509 with a remaining receivable balance of $1,034.

Pursuant to an agency agreement with Ultrapetrol S.A., I. Shipping Services S.A. has agreed to perform the duties of port agent for the Company in Argentina. For the nine-month periods ended September 30, 2004 and 2003, the amounts paid and/or accrued for such services amounted to $19 and $100 respectively.

Since the UABL Equity Acquisition, the Company organizes its business and started to evaluate performance by its new three operating segments, ocean, river and offshore business. Prior to such acquisition the Company

operated with no segments. The Company does not have significant intersegment transactions. These segments and their respective operations are as follows:

Ocean business: consists of international and inland transportation of petroleum and dry-cargo products by oceangoing vessels owned by its subsidiaries.

River business: consists of river transportation of refined petroleum and dry-cargo products by barges owned by its subsidiaries.

Offshore business: consists of platform supply vessels to provide transportation services to the offshore petroleum exploration and production companies. Such vessels are currently under construction and expected to operate in 2005.

Ultrapetrol’s oceangoing vessels operate on a worldwide basis and are not restricted to specific locations. Also, Ultrapetrol’s river barges operate a river transportation business on the Parana, Paraguay and Uruguay rivers and part of River Plate in Argentina, Bolivia, Brazil, Paraguay and Uruguay. Accordingly, it is not possible to allocate the assets of these operations to specific countries. In addition, the Company does not manage its operating profit on a geographic basis.

The following schedule presents segment information about the Company’s operations for the nine-month period ended September 30, 2004:

The 10.5% Notes due 2008 (the “Existing Notes”) are fully and unconditionally guaranteed on a joint and several senior basis by the following wholly owned subsidiaries of the Company. The subsidiaries which offered their assets in collateral of the above mentioned indebtedness are: Ultrapetrol Argentina, Parfina, Imperial, Cavalier, Regal, Baldwin, Tipton, Panpetrol, Oceanview, Kingly, Sovereign, Monarch, Noble, Oceanpar, General Venture Inc. and Riverview Comercial Corp. (“Guarantor Subsidiaries”).

The Indenture provides that the Notes and each of the Security Agreement, other than the Mortgage, are governed by, and construed in accordance with, the laws of the state of New York.

Each of the mortgaged vessels is registered under either the Panamanian flag, or another jurisdiction with similar procedures, although all of the guarantors subsidiaries are out of the United States.

Ultrapetrol (Bahamas) Limited is a holding company and its subsidiaries conduct all of its operations and own all of its operating assets. It has no significant assets other than the equity interest of its subsidiaries. As a result, its ability to make required payments on its Notes depends on the performance of its subsidiaries.

Pursuant to the terms of the Indenture, the term Qualified Substitute Vessel is used in connection with the tender of a replacement vessel upon the sale or loss of Mortgage Vessel, it has to be registered under the laws of a jurisdiction acceptable to institutional lenders and has an appraised value at least equal to the vessel for which it is being substituted.

Supplemental condensed combining financial information for the Guarantor Subsidiaries is presented below. This information is prepared in accordance with the Company’s accounting policies. This supplemental financial disclosure should be read in conjunction with the consolidated financial statements.

Certain eliminations were made to conform the financial information to the condensed financial statement presentation of Ultrapetrol (Bahamas) Limited and its subsidiaries. The principal elimination entries relate to the financial current account balances among the Company, the Subsidiary Guarantors and the Non- Subsidiary Guarantors, and to the balances originated in bareboat charter transactions between the Subsidiary Guarantors and the Non-Subsidiary Guarantors.

Separate full financial statements of the Subsidiary Guarantors are not included herein because the Company has determined that such financial statements do not provide any additional or relevant information to the investors.

On November 24, 2004, the Company issued $180 million 9% First Preferred Ship Mortgage Notes due 2014 (the “New Notes”). The net proceeds of the offering were used to redeem all its outstanding Existing Notes amounting to 122.6 million and the loans granted by the Nedship Bank and the Deutsche Schiffsbank amounting to 16.3 million.

The Indenture provides that the New Notes and each of the Security Agreement, other than the Mortgage, are governed by, and construed in accordance with, the laws of the state of New York.

Each of the mortgaged vessels is registered under either the Panamanian flag, or another jurisdiction with similar procedures. All of the Subsidiary Guarantors are outside of the United States.

Supplemental condensed combining financial information for the Guarantor Subsidiaries for the New Notes is presented below. This information is prepared in accordance with the Company’s accounting policies. This supplemental financial disclosure has been prepared on the same basis described in note 10, and should be read in conjunction with the consolidated financial statements.

On October 27, 2004, the Company refinanced the existing senior secured credit facility of Braddock Shipping Inc., an indirect wholly owned Panamanian subsidiary of Ultracape, with a new senior secured credit facility of $10,000 with Deutsche Schiffsbank Aktiengesellschaft. This new credit facility has a five year maturity and contains a covenant that requires Braddock to provide a minimum level of collateral to secure the loans provided thereunder, as well as, certain other restrictive covenants that, among other things, limit Braddock’s ability to incur additional indebtedness, pay dividends, prepay subordinated indebtedness, make investments, merger or consolidate, change its

line of business, amend the terms of subordinated debt and engage in certain other activities customarily restricted in such agreements.

On October 15, 2004 the Company through Ultracape Delaware LLC, a new wholly owned subsidiary of Ultracape (Holdings) Ltd. entered into a transaction with a related party to acquire the land for expansion of a maritime oil products terminal in Mexico for $2,000 with a view to expanding the Company transportation services to that area.

Section 58 of the International Business Companies Act, Chapter 309, Statute Laws of the Bahamas, 2000 Edition, (“the Act”) provides that subject to any limitations in its Memorandum or Articles of Association or in any unanimous shareholder agreement, a company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal or administrative proceedings any person who (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil or administrative by reason of the fact that the person is or was a director or an officer of a company; or (b) is or was, at the request of the company, serving as a director or officer, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, provided in either case that such person acted honestly and in good faith with a view to the best interests of the company.

With regard to third party actions, Section 5.1 of Article V of the Articles of Association (the “Articles”) of Ultrapetrol (Bahamas) Limited (the “Company”) (“the Articles”) provides that the Company (a) shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was a director or an officer of the Company and (b) except as otherwise required by Section 5.3 of Article V of the Articles, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was serving at the request of the Company as a director or officer, in another entity, against expenses (including attorneys’ fees), judgments, fines and amounts actually and reasonably incurred by such person in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

In the case of actions by or in the right of the Company, Section 5.2. of Article V of the Articles provides that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer in another entity against expenses (including attorney’s fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 5.3 of Article V of the Articles provides that to the extent that a person who is or was a director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 5.1 or in Section 5.2 of Article V, or in defense of any claim, issue or matter therein, such person shall be indemnified through the use of Company funds against expenses (including attorneys’ fees) actually or reasonably incurred by him in connection therewith.

Section 5.4 of Article V of the Articles provides that any indemnification by the Company (unless ordered by a court) shall be made by the Company only as authorised in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable

The Articles of Association of Kingly Shipping Ltd., Majestic Maritime Ltd., Monarch Shipping Ltd., Noble Shipping Ltd. and Sovereign Maritime Ltd. contain the same indemnity provisions which are set forth in Article 68 thereof. Article 68 provides, inter alia, that any director, secretary and other officer of the company for the time being acting in relation to any of the affairs of the company and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively.

Article 95 of the Articles of Association of UP Offshore (Holdings) Ltd. provides that the company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal or administrative proceedings any person who (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil or administrative, by reason of the fact that the person is or was a director or an officer of the company; or (b) is or was, at the request of the company, serving as a director or officer of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, provided such person acted honestly and in good faith with a view to the best interests of the company.

Section 59 of the Act provides that the Company may purchase and maintain insurance in relation to any person who is or was a director or an officer of the Company, or who at the request of the Company is or was serving as a director or an officer of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability under Section 58 of the Act.

Section 5.7 of Article V of the Articles provides that Company may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer in another entity against any liability asserted against him and incurred by him in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of Article V of the Articles.

There are no insurance provisions contained in the Articles of Association of Kingly Shipping Ltd., Majestic Maritime Ltd., Monarch Shipping Ltd., Noble Shipping Ltd. and Sovereign Maritime Ltd. and accordingly, the provisions of the Act would apply.

Article 97 of the Articles of Association of UP Offshore (Holdings) Ltd. provides that the company may purchase and maintain insurance in relation to any person who is or was a director or an officer of the company, or who at the request of the company is or was serving as a director or an officer of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the company has or would have had the power to indemnify the person against the liability as provided in the Articles of Association of the company.

Under Argentine law, directors and officers have a duty of loyalty towards the corporation, and they must act with the care of a reasonable business person. Likewise, directors and officers of a company are jointly and severally liable for any damage caused to the company and its shareholders arising from willful misconduct or negligence. Any provision of the company’s by-laws or shareholder resolution providing any release or limitation of such liability of directors and officers to the company and its shareholders is null and void.

Chilean law provides that directors and officers acting in such capacity must use the care that a reasonably prudent and careful person would use under similar circumstances, guided by those ordinary considerations which ordinarily regulate human affairs. Likewise, directors and officers of a company are jointly and severally liable for any damage occasioned to the company and its shareholders arising from willful misconduct or negligence. Any provision of the company’s by-laws or shareholder resolution providing any release or limitation of such liability of directors and officers to the company and its shareholders is null and void.

Under the Liberian Business Corporations Act, a Liberian corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, or its equivalent, will not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe his conduct was unlawful. However, no indemnification will be permitted in cases where it is determined that the director or officer was liable for negligence or misconduct in the performance of his duty to the corporation, unless and only to the extent that the court in which such action or suit was brought determines that the person is fairly and reasonably entitled to indemnity, and then only for the expenses that the court deems proper. A corporation is permitted to advance payment for expenses occurred in defense of an action if its board of directors decides to do so upon receipt of an undertaking by or on behalf of the director to repay if it is determined that he or she is not entitled to indemnification. In addition, Liberian corporations may purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against him and incurred by him in such capacity whether or not the corporation would have the power to indemnify him against such liability under the provisions of the Business Corporations Act. The by-laws of General Ventures Inc., our Liberian entity, provide that we will indemnify our directors and officers to the fullest extent permitted under the Business Corporation Act. The by-laws further provide that the corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer against any liability asserted against such person and incurred by such person in such, whether or not the corporation would have the power to indemnify such person against such liability by law or under the corporation’s by-laws.

Panamanian law does not specifically addresses the issue of indemnification of directors and officers. However, since it is not prohibited, a Panamanian company may indemnify any officer or director who is made a party to any suit or proceeding on account of being a director, officer or employee of the company against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement reasonably incurred by him/her in connection with the action, through, among other things, a majority vote of a quorum consisting of directors who were not parties to

Paraguayan law provides that the officers (directors) of a stock company (sociedad anonima) are jointly and severally liable for any damages caused to the company, its shareholders and third parties for the non compliance of their obligations under the law and/or the company’s by-laws, unless the officer in question proves he/she has not taken part in the respective resolution. Directors are also fully responsible for any damages caused to the company, its shareholders and third parties due to willful misconduct, abuse of powers or gross negligence. Any provision contained in a charter, by-laws, contract or other arrangements under which any controlling persons limits or waives these responsibilities would be null and void under Paraguayan law.

Under Uruguayan law, indemnification of directors for any liability or damages suffered by a company, any of its shareholders or any third party as a consequence of the breach of any fiduciary duty imposed on directors, or damages, caused with intent or negligence, or caused by the breach of the by-laws of the company, is null and void. Any provision of the company’s by-laws or shareholders resolutions providing any release or limitation of such liability of directors and officers to the company and its shareholders is null and void.

1. The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission under Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

2. The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

4. The undersigned registrant hereby undertakes, as a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by 17 C.F.R. § 210.3-19 at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or 17 C.F.R. § 210.3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Form F-3.

5. The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reoffering by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form.

6. The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (5) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

7. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act), that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

8. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant under the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

9. The undersigned registrant hereby undertakes (i) to respond to requests for information that are incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form F-4, within one business

10. The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Argentina, on the 24th day of January, 2005.

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Felipe Menendez R., Ricardo Menendez R., Leonard J. Hoskinson, Lawrence Rutkowski and Robert E. Lustrin, or any of them, with full power to act alone, his or her true lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing necessary to be done, as fully for all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Tomas Alvarado Montenegro



	Name: Tomas Alvarado Montenegro
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	DANUBE MARITIME INC.

	By: /s/ Juan Arturo Montes Gomez

	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	GENERAL VENTURES INC.

	By: /s/ Juan Arturo Montes Gomez

	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	MASSENA PORT S.A.

	By: /s/ Ana María de Angelis Bazzano

	Name: Ana Maria de Angelís Bazzano
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	By:	/s/ Juan Arturo Montes Gomez



	Name: Juan Arturo Montes Gomez


	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	STANMORE SHIPPING INC.

	By: /s/ Juan Arturo Montes Gomez

	Name: Juan Arturo Montes Gomez
	Title: President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	TIPTON MARINE INC.

	By: /s/ Juan Arturo Montes Gomez

	Name: Juan Arturo Montes Gomez


	Title:	President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.


	ULTRAPETROL INTERNATIONAL S.A.

	By: /s/ Juan Arturo Montes Gomez

	Name: Juan Arturo Montes Gomez


	Title:	President

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 24, 2005 in the capacities indicated.

II-35 EX-3.1 2 y04808exv3w1.txt ARTICLES OF INCORPORATION & BY-LAWS OF ULTRAPETROL LTD. EXHIBIT 3.1 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) No. 69,832 B ULTRAPETROL (BAHAMAS) LIMITED I, JACINDA P. BUTLER ASST ....... Registrar General of the Commonwealth of The Bahamas Do Hereby Certify pursuant to the International Business Companies Act.(No.2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that ULTRAPETROL (BAHAMAS) LIMITED is incorporated in the Commonwealth of The Bahamas as an International Business Company this 23RD day of DECEMBER 1997 Given under my hand and seal at Nassau in the Common- wealth of The Bahamas /s/ J. P. Butler ----------------------- ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION OF ULTRAPETROL (BAHAMAS) LIMITED 1. The name of the company is ULTRAPETROL (BAHAMAS) LIMITED (the "COMPANY"). 2. The Registered Office of the Company shall be located at the Chambers of Harry B. Sands & Company in the Island of New Providence, one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company shall be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence, one of the Islands of the Commonwealth of The Bahamas. 4. The objectives or purposes of the Company are: (a) to engage in the following activities, in the Commonwealth of The Bahamas or abroad, on its own account or on the account of third parties (whether or not associated with the Company), namely: (i) to own, operate and manage vessels for its own account and on behalf of third parties, to act as a representative with respect to vessels and to engage in other related activities, inherent or complementary to said purposes; (ii) to engage and operate in the maritime, fluvial and lacustrine transportation, whether regular or irregular, domestic or international, of cargoes, correspondence and maritime works and services in general; (iii) to render sea navigation training services to personnel; (iv) with respect to the above-mentioned purposes and, in general, every activity developed in accordance with its powers or objectives, the Company may own, lease, charter and operate vessels designated for time charter, consecutive voyage charter, bareboat charter or any other charter related to the use of such vessels for the purpose of (A) engaging in activities of transportation, transshipment and unloading operations and cargo complement; (B) developing loading, discharge and stowing operations; (C) rendering towage services; (D) acting as ship brokers and/or freighters; (E) acting as maritime agents and representing its own and third party vessels; (F) building vessels and naval appliances; (G) exploiting public and private franchises of any kind; (H) participating in bids to construct ports and operate them; and (I) representing third parties in any manner in the maritime business; (v) to execute all necessary acts, representations, agencies, commissions, consignments, business activities, and management of properties, stocks and enterprises in general; and (b) to engage in any other act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law that is then currently in force in the Commonwealth of The Bahamas. 5. The Company shall have an authorized capital of U.S. $100,000.00 with an aggregate par value of U.S. $100,000.00. Shares of capital stock of the Company shall be issued in the currency of The United States of America. The number of shares into which the share capital is divided shall be issued as registered shares and registered shares shall not be exchanged for bearer shares. 6. The total number of shares which the Company shall have the authority to issue is Ten Million (10,000,000) shares of capital stock as follows; (a) Five Million (5,000,000) ordinary voting common shares at par value U.S. $0.01 per share; and (b) Five Million (5,000,000) ordinary non-voting common shares at par value U.S. $0.01 per share. 7. Subject to the foregoing, the Directors shall have the authority and power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of capital stock of the Company. 8. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum of Association or the Articles of Association of the Company. 9. The Memorandum of Association and the Articles of Association of the Company may only be restated, amended, supplemented or otherwise modified as provided in the Articles of Association of the Company. 10. The liability of the Shareholders of the Company is limited to the amount unpaid on the shares of capital stock of the Company held by them. ADOPTED as of this 16th day of March, A.D. 2000. COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ [ILLEGIBLE] ----------------------- Asst. Registrar General MAR 16 2000 -2- REGISTRATION No.: 69,832 B ULTRAPETROL (BAHAMAS) LIMITED CERTIFICATE I, Leon R. Potier, Assistant Secretary of Ultrapetrol (Bahamas) Limited, pursuant to Section 72 (1) of the International Business Companies Act, 2000, hereby certify the following to be a true and correct copy of Resolutions of all Members passed on the 30th day of April, A.D. 2001, to amend Sections 2.2, 2.4 and 2.14 (b) of the Third Amended and Restated Articles of Association of the Company:- Section 2.2 "That the Board of Directors shall consists of Five (5) members, which Five (5) members shall be comprised of Two (2) individuals (plus alternates) nominated by Solimar (the "Solimar Directors") and three (3) individuals (plus alternates) nominated by Los Avellanos (the "Los Avellanos Directors")". Section 2.4 "A Quorum for the transaction of business of the Board of Directors and the taking of any action and adoption of any resolution shall be present at any meeting of the Board of Directors if (i) at least three (3) directors are present and participating in such meeting, and (ii) at least one (1) of such directors present and participating is a Solimar Director." Section 2.14(b) "Until such time as each of the Shareholders Agreement and the Amended and Restated Articles of Association of the Company are (Thus) amended and restated, all actions of the Board of Directors set forth in Section 2.8 (b) of the Shareholders Agreement and Section 2.14(b) of the said Articles of Association of the Company shall require a vote of at least Four (4) directors (notwithstanding the provisions of such Section 2.8(b) of the Shareholders Agreement and such Section 2.14(b) of the Amended and Restated Articles of Association of the Company, which are hereby preempted until further agreement of the Shareholders)." DATED THE 30TH DAY OF APRIL, A.D. 2001 /s/ Leon R. Potier ----------------------------- LEON R. POTIER ASSISTANT SECRETARY ULTRAPETROL (BAHAMAS) LIMITED [SEAL] THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 THIRD AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF ULTRAPETROL (BAHAMAS) LIMITED These Articles of Association (the "ARTICLES") of Ultrapetrol (BAHAMAS) Limited (the "COMPANY") shall constitute the Regulations of the Company. Capitalized terms used in these Articles and not otherwise defined shall be used as defined in Article XII "Definitions and Rules of Construction." ARTICLE I SHAREHOLDERS SECTION 1.1 ANNUAL MEETING. The annual meeting of the Shareholders of the Company shall be held either within or without the Commonwealth of The Bahamas, at such place as the Board of Directors may designate in the call or in a waiver of notice thereof, on the first (1st) Thursday in September of each year (or if such day is not a Business Day, then on the next succeeding day that is a Business Day) for the purpose of electing Directors and for the transaction of such other business as may properly be brought before the meeting. SECTION 1.2 SPECIAL MEETINGS. Special Meetings of the Shareholders may be called by the Board of Directors or by the President, and shall be called by the President or by the Secretary upon the written request of the holders of record of at least twenty percent (20%) of the shares of Capital Stock of the Company, issued and outstanding and entitled to vote, at such times and at such place either within or without the Commonwealth of The Bahamas as may be stated in the call or in a waiver of notice thereof. SECTION 1.3 NOTICE OF MEETINGS. (a) Notice of the time, place and purpose of every meeting of the Shareholders shall be served personally or by airmail, telex, telegram, telefax, cable or other electronic means at the discretion of the Directors. Such notice shall be served not less than ten days nor more than sixty days before the date of the meeting to each Shareholder of record entitled to vote, at such Shareholder's post office address shown in the Share Register (or, in the case of joint holders of the same share or shares of Capital Stock of the Company, at the address of the holder first named in the Share Register, and notice so given shall be sufficient notice to all such joint holders) or at such other address as shall be furnished in writing by him to the Company for such purpose. Notice of a meeting shall be deemed to be waived by a Shareholder by his or its attendance at a relevant meeting unless the Shareholder is attending such meeting solely for the purpose of objecting to the failure to give notice thereof. Such further notice shall be given as may be required by law or by these Articles. (b) Any notice that is delivered by post shall be deemed to have been served within seven days of posting, and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. SECTION 1.4 QUORUM. No business shall be transacted nor shall any action be taken at any general meeting unless a quorum of the Shareholders is present. A quorum for the transaction of business and the taking of any action shall be present at any meeting of the Shareholders if the Shareholders owning 65% of the Common Stock or other voting Capital Stock of the Company are present at such meeting; provided that for the period beginning on the date of the Shareholders Agreement and ending on the last Installment Date, Solimar's presence at such meeting shall be required to establish a quorum at any meeting of the Shareholders. If at any meeting of the Shareholders there shall not be such a quorum present, the Shareholders present thereat shall adjourn the meeting until a quorum shall have been obtained; provided that if a quorum shall not be obtained as required by the immediately preceding sentence of this Section 1.4 within ten (10) days after the adjournment of any meeting, such first sentence shall be disregarded and a quorum for the transaction of business and the taking of any action shall require the presence of the Shareholders owning a majority of the Common Stock or other voting Capital Stock of the Company. SECTION 1.5 ORGANIZATION OF MEETINGS. (a) The President of the Company, or in his absence, any Vice-President, shall preside as Chairman ("CHAIRMAN") at meetings of the Shareholders. If both are absent, the Shareholders shall choose one of the Shareholders present at the meeting to be Chairman. The Secretary of the Company, or in such individual's absence, an Assistant Secretary, shall act as Secretary of the meeting, if present. (b) The Chairman, with the consent of the Shareholders in attendance in Person or by proxy at the meeting, may adjourn such meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. SECTION 1.6 PROXIES. A Shareholder may be represented at a meeting of the Shareholders by a proxy. The instrument appointing a proxy shall be in writing, signed by the Shareholder or by such Shareholder's duly authorized attorney and may be a private or public document. SECTION 1.7 VOTING. (a) At each meeting of the Shareholders, except as otherwise provided by Section 1.7(e)or by statute, every holder of record of shares of Capital Stock of the Company entitled to vote shall be entitled to one vote in Person or by proxy for each share of such Capital Stock standing in his name in the records of the Company; provided however, that the Chairman shall not have a second or casting vote. Where a Shareholder which is not an individual wishes to be present at a meeting, it must be represented by a proxy. Where there are joint registered holders of any shares of Capital Stock of the Company, the vote of the most senior Shareholder who tenders a vote, whether in Person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names are listed in the Share Register in respect of the joint holding. (b) Subject to Sections 1.7(c) and 1.7(e), any question presented to or action taken by the Shareholders shall be approved or disapproved at a meeting at which a quorum shall be present and acting throughout (as provided in Section 1.4) in accordance with the votes of the Shareholders holding a majority of the shares of Common Stock and other voting Capital Stock of the Company present at such meeting. (c) Subject to Section 1.8, the following matters shall require the affirmative vote of each Initial Shareholder that holds at the time of the making of any such decision at least 20% of the Common Stock and any other Capital Stock of the Company (and certain Transferees of an Initial Shareholder): (i) any amendment, restatement or other modification to the Memorandum and Articles of Association or any other modification of the legal structure or form of the Company and any Subsidiary, including, without limitation, changing the number of members of the Board of Directors or changing the name of the Company, but excluding the creation of new direct or indirect wholly-owned Subsidiaries; (ii) the issuance of Common Stock or any other Capital Stock of the Company or any Subsidiary (other than (A) the issuance of Capital Stock of a Subsidiary to the Company or any other direct or indirect wholly-owned Subsidiary, or (B) the issuance of Common Stock or any other Capital Stock of the Company pursuant to the provisions of Article II and Section 8.6 of the Stock Purchase Agreement) or any direct or indirect purchase, redemption, repurchase or other direct or indirect acquisition by the Company or any Subsidiary of the Common Stock or any other Capital Stock of the Company or any Subsidiary; provided that the issuance of Common Stock or any other Capital Stock -2- of the Company in connection with an Initial Public Offering or a subsequent public offering of the Common Stock or other Capital Stock of the Company shall not require the approval of the Initial Shareholder (or certain of their Transferees that were granted the rights of an Initial Shareholder in accordance with the terms of the Shareholders Agreement) unless such issuance (whether individually or in combination with prior issuances in connection with public offerings) is of a number of shares of Common Stock or any other Capital Stock of the Company in excess of 35% of the total number of shares of Capital Stock of the Company on a fully-diluted basis after giving effect to such issuance; (iii) the declaration, accrual or payment of any dividends or any other distributions of cash, securities or other property on or in respect of the Common Stock or any other Capital Stock of the Company or any Subsidiary; (iv) any merger, consolidation, spin-off, recapitalization or other reorganization of the Company or any Transfer by the Company or any Subsidiary of any shares of Capital Stock of any Subsidiary; (v) the liquidation, dissolution, or winding-up of the Company or any Subsidiary or the filing by the Company or any Subsidiary of a petition for protection under any reorganization or bankruptcy procedures or the making by the Company or any Subsidiary of any out-of-court arrangements with creditors generally or rescheduling of debt obligations; (vi) with respect to accounting practices of the Company and the Subsidiaries, unless required by law (A) any material departure from GAAP, (B) implementation of any standards or procedures recommended to the Company or any Subsidiary by their auditors with respect to the preparation and presentation of financial statements, or (C) any changes in the accounting principles used in the preparation of the financial statements of the Company or any Subsidiary whether or not such changes are consistent with GAAP; (vii) any grant by any holder of any shares of Common Stock or other Capital Stock of the Company or any Subsidiary of any Lien (other than pursuant to certain other shareholders agreements permitted under the Shareholders Agreement) over any such shares of Common Stock or other Capital Stock of the Company other than Liens granted by any holder of any shares of Common Stock or other Capital Stock of the Company over shares of Common Stock or other Capital Stock of the Company that were acquired pursuant to (a) an Initial Public Offering, (b) a subsequent public offering of the Common Stock or other Capital Stock of the Company, or (c) a subsequent brokered sale of Common Stock or other Capital Stock of the Company listed on a Relevant Stock Exchange that has not been privately negotiated; and (viii) any Transfer (whether in one transaction or a series of related transactions occurring within a twelve (12) month period) by the Company or any Subsidiary of more than 50% of the assets or properties of the Company and the Subsidiaries on a consolidated basis. (d) Notwithstanding any other provision in these Articles to the contrary, except as otherwise provided in the Shareholders Agreement, no Transferee of an Initial Shareholder shall be considered to be an Initial Shareholder for the purposes of Section 1.7(c). (e) Notwithstanding any other provision in these Articles to the contrary, so long as the clause (ii) of the definition of Change of Control in the Indenture is in effect, in the event the Founding Shareholders at any time own in the aggregate, less than 35% of the voting Capital Stock of the Company and any person (as the term "person" is defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 of the United States, as amended) holds more than 35% of the voting Capital Stock of the Company at such time, the Founding Shareholders shall be entitled to elect a majority of the Board of Directors. In such event, every holder of record of shares of Capital Stock of the Company entitled to vote other than the Founding Shareholders shall be entitled to one vote in Person or by proxy for each share of such Capital Stock standing -3- in his name in the records of the Company to elect the remaining members of the Board of Directors. (f) At all elections of directors, the voting shall be by ballot or in such other manner as may be determined by the Shareholders present in Person or by proxy entitled to vote at such election. With respect to any other matter presented to the Shareholders for their consideration at a meeting, any Shareholder entitled to vote may, on any question, demand a vote by ballot. If a ballot is demanded, it shall be taken in such manner as the Chairman directs and the result of such ballot shall be deemed to be the resolution of the Shareholders. (g) A complete list of the Shareholders entitled to vote at each such meeting, arranged in alphabetical order, with the address of each, and the number of shares of Capital Stock of the Company registered in the name of each Shareholder (the "SHARE REGISTER"), shall be prepared by the Secretary and shall be open to the examination of any Shareholder, for any purpose gennane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Shareholder who is present. (h) At any general meeting of the Shareholders, unless a ballot is demanded by a Shareholder present in Person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the Shareholders shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favor of or against such resolution. SECTION 1.8 EXCEPTIONS TO 20% SHAREHOLDING REQUIREMENT. (a) For the period beginning on the date of the Shareholders Agreement and ending on the last Installment Date, Solimar shall be deemed to hold at least 20% of the Capital Stock of the Company regardless of the number of shares of Capital Stock it actually holds at such time. (b) For purposes of determining whether an Initial Shareholder holds at least 20% of the shares of Capital Stock of the Company, shares of Capital Stock of the Company held by such Initial Shareholder shall be aggregated with those of certain of its Transferees under the circumstances described in the Shareholders Agreement. (c) Subject to the proviso in Section 1.8(d), if, solely as a result of the issuance of shares of Capital Stock of the Company to a Purchaser Indemnitee pursuant to Section 8.6 of the Stock Purchase Agreement, a Founding Shareholder holds less than 20% of the shares of Capital Stock of the Company, such Founding Shareholder shall be deemed to hold 20% of the shares of Capital Stock of the Company for purposes of these Articles so long as such Founding Shareholder holds at least 15% of the shares of Capital Stock of the Company. (d) If, solely as a result of the issuance of shares of Capital Stock of the Company in an Initial Public Offering or a subsequent primary public offering of Capital Stock of the Company, an Initial Shareholder holds less than 20% of the shares of Capital Stock of the Company, such Initial Shareholder shall be deemed to hold 20% of the shares of Capital Stock of the Company for purposes of these Articles so long as such Initial Shareholder holds at least 10% of the shares of Capital Stock of the Company; provided that if, solely as a result of the issuance of shares of Capital Stock of the Company to a Purchaser Indemnitee pursuant to Section 8.6 of the Stock Purchase Agreement, after the dilution described in the beginning of this Section 1.8(d), a Founding Shareholder holds at least 75% of the number of shares of Capital Stock it holds after giving effect to such Initial Public Offering or subsequent primary public offering (but no less than 7.5% of the shares of Capital Stock of the Company), such Founding Shareholder shall be deemed to hold 20% of the shares of Capital Stock of the Company for purposes of these Articles. SECTION 1.9 RESOLUTIONS OF MEETINGS. All resolutions passed at any meeting shall be recorded in the minutes of meeting, which minutes shall be made in English, and a copy thereof circulated to each Shareholder for approval and countersignature promptly after such meeting. -4- SECTION 1.10 INSPECTORS OF ELECTION. The Board of Directors in advance of any meeting of the Shareholders may appoint one or more Inspectors of Election to act at the meeting or any adjournment thereof. If Inspectors of Election are not so appointed, the Chairman of the meeting may, and on the request of any Shareholder entitled to vote shall, appoint one or more Inspectors of Election. Each Inspector of Election, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of Inspector of Election at such meeting with strict impartiality and according to the best of his ability. If appointed, Inspectors of Election shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. SECTION 1.11 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Shareholders may be taken without a meeting, without prior notice and without a vote, if, prior to such action, a written consent or consents thereto, setting forth such action, is signed either personally or by proxy by the holders of record of all shares of Capital Stock of the Company issued and outstanding and entitled to vote thereon. Such consent or consents shall constitute the minutes of the annual or general meeting, which shall be deemed to have been duly held, notwithstanding the fact that no Shareholder meeting was actually held or that there may have been technical defects in the proceedings, and a resolution in writing signed by all of the Shareholders aforesaid shall be as valid and effectual as if it had been passed at a meeting of the Shareholders duly called and constituted. SECTION 1.12 CONFERENCE TELEPHONE. A meeting of the Shareholders may, and shall at the request of any Initial Shareholder, be held by telephone or other electronic or conferencing means if all of the Shareholders present at such meeting are able to clearly hear each other and be heard. ARTICLE II DIRECTORS SECTION 2.1 MANAGEMENT OF THE COMPANY. The Company shall have a board of directors (the "BOARD OF DIRECTORS") which shall direct and oversee the management and affairs of the Company and which may exercise all the powers of the Company that are not expressly reserved to the Shareholders under the Articles, the Act or any other laws of the Commonwealth of The Bahamas. SECTION 2.2 NUMBER OF DIRECTORS. The Board of Directors of the Company at all times shall consist of nine (9) members. SECTION 2.3 ELECTION. Directors shall be elected by the Shareholders at the annual meeting of the Shareholders in accordance with the voting provisions contained in Section 1.7. SECTION 2.4 QUORUM. A quorum for the transaction of business and the taking of any action shall be present at any meeting of the Board of Directors if a majority of the Directors are present; provided that, so long as the Shareholders Agreement remains in effect and any of Los Avellanos, SII and Solimar remain party thereto, such majority includes at least two (2) Solimar Directors, one (1) Los Avellanos Director and one (1) SII Director. If at any meeting of the Board of Directors there shall not be such a quorum present, the members present thereat shall adjourn the meeting until a quorum shall have been obtained; provided that if a quorum shall not be obtained as required by the proviso in the first sentence of this Section 2.4 within ten (10) days after the adjournment of any meeting, such proviso shall be disregarded and a quorum for the transaction of business and the taking of any action shall require the presence of a majority of the Directors. SECTION 2.5 TERM. Unless otherwise removed in accordance with Section 2.7, the Directors Shall hold office until their successors shall have been duly appointed and shall have (qualified. Section 42(4) of the Act shall not apply. SECTION 2.6 VACANCIES. If a vacancy on the Board of Directors occurs for any reason (including death, resignation or removal) while the Shareholders Agreement remains in effect, if -5- any of Los Avellanos, SII and Solimar remain party thereto, they shall cause their respective Directors to elect a substitute Director, who shall be nominated by the Shareholder which nominated the Director who is being replaced, to serve until his successor is duly appointed and shall have qualified. SECTION 2.7 REMOVAL. Subject to the terms of the Shareholders Agreement, the Directors shall be subject to removal by the Shareholders. SECTION 2.8 QUALIFICATIONS. (a) A Director shall not be required to be a Shareholder of the Company in order to qualify as a Director. (b) Each Director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) of the Act, a Director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind or of such infirm health as to be incapable of managing his affairs. Section 42(3)(a) of the Act shall not apply. (c) A Director may hold concurrently with his office as Director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may hold an interest as Shareholder or otherwise for such remuneration and on such other terms and conditions as the Directors may determine and shall not be accountable to the Company for the same. SECTION 2.9 CHAIRMAN. The Board of Directors shall annually elect a Chairman from among the Directors. The Chairman shall have the functions and duties as set forth in these Articles. SECTION 2.10 POWERS OF THE DIRECTORS. (a) Subject to Sections 1.7(c) and 2.14(b), the Directors shall have full power to manage and dispose of the properties of the Company, including those which by law require a special power of attorney, and may, therefore, sell, mortgage, alienate and otherwise dispose of such properties without the consent of the Shareholders or a meeting of the Shareholders. Subject to Section 2.14(b), the Directors may (i) enter into all necessary legal proceedings on behalf of the Company for the performance of the purposes of the Company; (ii) enter into relationships with banking and other credit institutions, whether public or private, within or without the Commonwealth of The Bahamas; (iii) establish agencies, branches and other types of representations within or without the Commonwealth of The Bahamas; (iv) enter into purchase, sale, exchange, or lease agreements and all other types of contractual arrangements, including (A) time charters, consecutive voyage charters or bareboat charters, (B) contracts related to the leasing, renting or importing of all types of goods, (C) assignments of vessels, their spare parts, apparatus, accessories, and materials and supplies, and (D) insurance agreements necessary to cover the risks affecting services provided by the Company, the properties of the Company or of those hired by the Company to provide services, or the risks affecting third parties which may arise in connection with any of the properties of the Company or of those hired by the Company; (v) carry out all commercial activities normally engaged in by the Company in the ordinary course of business; (vi) mortgage vessels, facilities and other personal and real properties; (vii) abandon ships and other properties of the Company in favor of underwriters of any state, or of any other third party, if it is deemed to be in the best interests of the Company; (viii) carry out (A) all of the industrial operations, commercial transactions and contracts directly or indirectly related to the purposes of the Company and (B) the credit operations, with or without express warranty, aimed to facilitate the Company's normal operational development for the performance of activities related, accessory and complementary to those constituting its main purposes; (ix) enter into agreements of temporary association for commercial purposes without formal partnership, of "Union Transitoria de Empresas" and of "Agrupacion de Colaboracion Empresaria;" (x) grant to one or more persons special judicial powers of attorney (including those necessary for criminal complaint) and extra- judicial powers with such purpose and scope as the Board of Directors may deem convenient; and (xi) engage in any other act of disposition, investment, management or exploitation. (b) Subject to Section 2.14(b), the Directors may, on behalf of the Company, (i) raise, borrow or secure money; (ii) mortgage, pledge or otherwise charge the Company's assets for such purposes; and (iii) issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the Directors. Subject to -6- Section 2.14(b), the Directors may, by resolution, guarantee the repayment or performance of any liability, debt or obligation of any Person and secure the same by mortgage, pledge or other charge on any of the Company's assets. SECTION 2.11 MEETINGS, NOTICE, VALIDITY, PROXIES. (a) Meetings of the Board of Directors shall be held at such place either within or without the Commonwealth of The Bahamas, as may from time to time be fixed by resolution of the Board of Directors, or as may be specified in the call or in a waiver of notice thereof. Subject to Section 2.11(b), meetings of the Board of Directors may be convened by the President or, in his absence, by any Vice-President or Director. The President or, in his absence, a Vice-President shall preside as Chairman at meetings of the Board of Directors and if both are not present within fifteen minutes from the time appointed by the meeting of the Board of Directors, the Directors present may vote one of their number to be the Chairman. The Chairman of the meeting shall not be entitled to a second or casting vote. (b) Until June 30, 2001, regular meetings of the Board of Directors shall be held at least once every two (2) months and at such additional times as may be fixed by a resolution of the Board of Directors. Thereafter, regular meetings of the Board of Directors shall be held at times and intervals as shall be decided by the Board of Directors; provided that such regular meetings shall be held at least once every calendar quarter. Special meetings of the Board of Directors may be held at any time upon the written request of any Shareholder holding at least 20% of the Common Stock and other voting Capital Stock of the Company, any Director or the Company. (c) At least ten (10) days prior written notice shall be given to each Director of any meeting of the Board of Directors, which notice shall state the date, time and place of the proposed meeting; provided that this requirement shall be waived by a Director by his attendance at a relevant meeting unless such Director is attending such meeting solely for the purpose of objecting to the failure to give notice thereof. (d) Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action taken, is signed by all of the Directors, and such consent shall have the same force and effect as a unanimous vote at a meeting. (e) A meeting of the Board of Directors may, and shall at the request of any Director, be held by telephone or other electronic or conferencing means if all of the Directors present at such meeting are able to clearly hear each other and be heard. (f) The Board of Directors shall ensure that all resolutions passed at any meeting of the Board of Directors shall be recorded in the minutes of meeting, which minutes shall be made in English and a copy thereof circulated to each Director for approval and countersignature promptly after such meeting. A resolution in lieu of a meeting of the Board of Directors provided in writing and signed by all of the Directors shall have the same validity and effect as a resolution that is passed at a meeting of the Board of Directors duly called and constituted. (g) Any Director may be represented by and vote by a proxy or proxies at a meeting. Such proxy or proxies need not be Directors, must be designated in writing and may or may not have power to delegate. SECTION 2.12 ALTERNATE DIRECTORS. (a) Any alternate Director appointed shall be deemed to be a Director and not an agent of the Director so appointing him. (b) A Director by an instrument in his own handwriting deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate. If a Director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. Any alternate Director shall be deemed to be the Director he represents. (c) Any alternate Director shall be designated by the Shareholder which nominated the Director for whom the alternate Director is being designated. In the case of a vacancy, an alternate Director will replace the resigning or removed Director and Section 42(4) of the Act shall not apply. -7- SECTION 2.13 CORPORATE DIRECTORS. A Director that is a corporate entity may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for the purposes of representing such Director at meetings of the Board of Directors or meetings of a committee of the Board of Directors and transacting the business of the Company. SECTION 2.14 VOTING. (a) Subject to Section 2.14(b), any question presented to or action taken by the Board of Directors shall be approved or disapproved at a meeting, at which a quorum shall be present and acting throughout (as provided in Section 2.3), by a decision of a simple majority of the Directors present at the relevant meeting and entitled to vote. (b) So long as the Shareholders Agreement remains in effect and Los Avellanos, SII and Solimar, respectively, remain parties thereto, the following matters shall require the affirmative vote of seven (7) Directors; provided that such supermajority shall include at least three (3) Solimar Directors and four (4) Founding Shareholders Directors: (i) approval of, and any amendments, restatements, supplements, updates or modifications to, each Annual Budget and the Business Plan, the termination of the Business Plan, or the adoption of a subsequent business plan for the Company, including the Subsidiaries; (ii) appointment or dismissal of the Chief Executive Officer and the approval of, and any amendments, restatements, supplements or modifications to, the employment agreement with such individual; provided that if the Solimar Directors determine in good faith that a reasonable basis exists for the termination of the Chief Executive Officer for Cause and request the dismissal of the Chief Executive Officer for Cause, the Founding Shareholders shall cause their designated Directors to vote in favor of such dismissal; (iii) acquisition or sale of assets (either tangible or intangible) by the Company or any Subsidiary having a value greater than U.S. $500,000.00 (or an amount equivalent thereto in any other currency), except (A) acquisitions and sales specifically approved in an Annual Budget, or (B) acquisitions and sales made in connection with the provisioning, repairing, or maintenance of any of the Vessels; provided that in the determination of the advisability of purchasing a Vessel as contemplated by Section 3 of the Shareholders Non-Competition Agreement, the Directors who are designated by a Shareholder which is the Principal Owner, an Affiliate of the Principal Owner or an Affiliate of the Principal Owner Affiliate that is considering the purchase of such Vessel for its own account, shall be deemed to have an interest in such transaction and shall abstain from voting in the determination of the Company's advisability of purchasing such Vessel and, in such case, the approval of a majority of the Directors that do not have an interest in such transaction shall be required to approve the purchase of such Vessel by the Company or any of the Subsidiaries; (iv) incurrence of any Indebtedness by the Company or any Subsidiary, other than (A) trade payables incurred in the ordinary course of business or Indebtedness provided for in an Annual Budget, or (B) entering into working capital facilities (in an aggregate amount no greater than U.S. $10,000,000.00 (or an amount equivalent thereto in any other currency)); (v) early redemption of the Notes or voluntary prepayment or early redemption of any other Indebtedness of the Company or any Subsidiary (other than (A) trade payables or working capital facilities incurred in the ordinary course of business, or (B) as provided for in an Annual Budget); (vi) creation of any Lien by the Company or any Subsidiary over any asset, interest or undertaking that is not provided for in an Annual Budget or that is not in the ordinary course of business, where the amount required to discharge such Lien exceeds U.S. $250,000.00 (or an amount equivalent thereto in any other currency); (vii) granting by the Company or any Subsidiary of loans, advances, guarantees or indemnities to third Persons not in the ordinary course of business; -8- (viii) making or committing to make capital expenditures by the Company or any Subsidiary in excess of those provided for in an Annual Budget; (ix) entering by the Company or any Subsidiary into joint ventures, partnership schemes, profit sharing arrangements or franchising agreements, having a duration of more than one (1) year; (x) entering by the Company or any Subsidiary into licensing, trademark, copyright or know-how agreements with third Persons in which the annual fees on royalties exceed U.S. $100,000.00 (or an amount equivalent thereto in any other currency) or where the intellectual property involved is material to or necessary for the operation of the business of the Company or any Subsidiary; (xi) entering by the Company or any Subsidiary into any Related Party Transaction which (A) is not in the ordinary course of business, (B) is not on an arm's-length basis, or (C) involves a potential conflict of interest between the Company and the relevant Person; provided that so long as the Indenture requires that a Related Party Transaction in excess of U.S. $250,000.00 (or an amount equivalent thereto in any other currency) be approved by a majority of the Directors that do not have an interest in such Related Party Transaction, Solimar shall cause the Solimar Directors to give their approval to such Related Party Transaction if Solimar is satisfied, in its sole discretion, that such Related Party Transaction is on an arm's-length basis; provided further that in the case of a Related Party Transaction in excess of U.S. $250,000.00 (or an amount equivalent thereto in any other currency) involving a Vessel Contract, an approval by the Los Avellanos Directors or the SII Directors, as the case may be, that do not have an interest in such Related Party Transaction shall for purposes hereof be deemed to be an approval by the Solimar Directors; provided further that if, upon Solimar's review of the facts and circumstances of any such Related Party Transaction that was deemed approved by the Solimar Directors or any Related Party Transaction that was less than U.S. $250,000.00 (or an amount equivalent thereto in any other currency), Solimar determines that such Related Party Transaction was not on an arm's-length basis, the approval of all subsequent Related Party Transactions shall require the majority of the Directors not interested in such Related Party Transactions and the second proviso of this Section 2.14(b)(xi) shall be disregarded; (xii) except as provided in the Shareholders Agreement, any expenditure or commitment for (A) the acquisition by the Company or any Subsidiary of any Capital Stock in any other Person, or (B) the acquisition by the Company or any Subsidiary of all or substantially all of the assets of any other Person or any line of business of such other Person regardless of whether such transaction takes the form of an asset purchase, a stock purchase, a merger, a sale and leaseback or any other form; (xiii) establishment by the Company or any Subsidiary of any new line of business or division, including, without limitation, any commitment to contract, purchase, manage or lease any terminal operations; any material change in or addition to the nature or scope of the business of the Company or any Subsidiary, including, without limitation, any geographical expansion outside that contemplated in the Business Plan and outside the expansion of routes and employment of the Vessels in the ordinary course of business; (xiv) approval of compensation to, benefits and incentive programs, including, without limitation, incentive stock option plans, for the employees of the Company and the Subsidiaries that earn more than U.S. $75,000.00 (or an amount equivalent thereto in any other currency) on an annual basis in salary, bonuses and other compensation; (xv) entering into, making any material modification to, amending or terminating any contract, agreement, or arrangement that the Company or any Subsidiary is a party to which requires payments in excess of U.S. $100,000.00 (or an amount equivalent thereto in any other currency) on an annual basis or is otherwise material to such Person, outside the ordinary course of business; -9- (xvi) appointment or removal of the auditors for the Company or any Subsidiary; (xvii) engagement or removal by the Company or any Subsidiary of any outside consultants or advisors (including, without limitation, lawyers, investment bankers, accountants) the fees of which are estimated to exceed U.S. $75,000.00 (or an amount equivalent thereto in any other currency) with respect to (A) any matter for which they are engaged, or (B) any series of matters or an ongoing engagement of at least twelve (12) months in duration; (xviii) commencement of any litigation, arbitration, or other legal proceeding by the Company or any Subsidiary relating to any claim or assessment where the amount at issue is in excess of U.S. $1,000,000.00 (or an amount equivalent thereto in any other currency), other than in the ordinary course of business, and settlement by the Company or any Subsidiary of any litigation, arbitration, or other legal proceeding relating to any claim or assessment where the amount at issue is in excess of U.S. $250,000.00 (or an amount equivalent thereto in any other currency); (xix) establishment or dissolution of any Subsidiary having, or anticipated to have, assets or liabilities of more than U.S. $100,000.00 (or an amount equivalent thereto in any other currency); and (xx) establishment or dissolution of any committees of the Board of Directors and the delegation of any functions and duties to any such committee, including the Executive Committee, the Audit Committee and the Compensation Committee. SECTION 2.15 COMPENSATION. The Company shall pay to each Director an annual fee equal to U.S. $75.000.00 which fee shall be payable in quarterly installments in advance on the first day of each of January, April, July and October or as otherwise determined by the Board of Directors. In addition, the Company shall reimburse the Directors for their reasonable travel, lodging and other related expenses incurred in connection with attendance at meetings of the Board of Directors and any committees thereof. ARTICLE III COMMITTEES SECTION 3.1 COMMITTEES. The Shareholders shall cause the Board of Directors to establish an Executive Committee (the "Executive Committee"), an Audit Committee (the "Audit Committee") and a Compensation Committee (the "Compensation Committee"), each of which shall report to the Board of Directors. Each such Committee shall only have authority to oversee, monitor and make recommendations, as more fully described in clauses (b) through (d) of this Article and shall not have any decision-making authority, except as may be delegated to it by the Board of Directors from time to time. SECTION 3.2 EXECUTIVE COMMITTEE. The Executive Committee shall monitor the activities and performance of the Chief Executive Officer in his management of the Company and fulfillment of the Business Plan and the relevant Annual Budget and perform such other functions on specific matters delegated to it from time to time by the Board of Directors. The Executive Committee shall consist of five (5) members, three (3) of whom shall be designated by the Board of Directors from the Founding Shareholders Directors and two (2) of whom shall be designated by the Board of Directors from the Solimar Directors. Meetings of the Executive Committee shall be held at least two (2) times every month or more frequently as may be determined by a majority of the members of the Executive Committee, and shall include the participation of the Chief executive Officer, unless otherwise determined by a majority of the members of the Executive Committee. The Executive Committee shall promptly and in writing report the results of each meeting of the Executive Committee to the Board of Directors. SECTION 3.3 AUDIT COMMITTEE. The Audit Committee shall (i) liaise among the Board of Directors, the external auditors and internal auditors of the Company, if any, (ii) recommend to the Board of Directors an independent auditing firm and approve the compensation payable to such auditing firm, (iii) review and assess the scope of the audit work performed by the external -10- auditor, and (iv) monitor the Company's accounting and auditing systems and recommend internal audit procedures, policies and controls. The Audit Committee shall review with the Company's management the following upon the completion of the annual audit examination: (A) the Company's audited consolidated annual financial statements and related footnotes, (B) the results of the external audit report, (C) any significant changes required in the external auditor's audit plan, (D) disputes with management encountered during the course of the audit, and (E) management letters issued by the external auditors regarding internal accounting controls and procedures. The Audit Committee may request either from the external or internal auditors, if applicable, special studies, investigations, or other services as it relates to matters of interest or concern to the Audit Committee. The Audit Committee shall consist of three (3) members, one (1) of whom shall be designated by the Board of Directors from the Founding Shareholders Directors and two (2) of whom shall be designated by the Board of Directors from the Solimar Directors. The members of the Audit Committee and all Persons acting on the behalf of the Audit Committee shall have full and free access to review the books and records of the Company in connection with their functions hereunder. Meetings of the Audit Committee shall be conducted at the times and in the manner as determined by the members of the Audit Committee. An executive officer or manager of the Company may be a member of the Audit Committee, provided that such Person shall be required to leave a meeting of the Audit Committee if so requested by the other members of the Audit Committee. The Audit Committee shall promptly and in writing report the results of each meeting of the Audit Committee to the Board of Directors. SECTION 3.4 COMPENSATION COMMITTEE. The Compensation Committee shall oversee and manage issues relating to the compensation of the Company's employees and executives, and manage issues relating to the Stock Option Plan. The Compensation Committee shall consist of three (3) members who are not employed by the Company as executive officers or managers, one (1) of whom shall be designated by the Board of Directors from the Founding Shareholders Directors and two (2) of whom shall be designated by the Board of Directors from the Solimar Directors. Meetings of the Compensation Committee shall be conducted at the times and in the manner as determined by the members of the Compensation Committee. The Compensation Committee shall promptly and in writing report the results of each meeting of the Compensation Committee to the Board of Directors. SECTION 3.5 VACANCIES. Any vacancy on any of the Executive Committee, the Audit Committee or the Compensation Committee and any removal of a member of any such committee shall be treated in a similar fashion as with a vacancy or removal of a Director as provided in Sections 2.6 and 2.7. ARTICLE IV OFFICERS SECTION 4.1 TITLES AND ELECTION. (a) The officers of the Company, who shall be chosen by the Board of Directors at its first meeting after each annual meeting of the Shareholders, shall be a Chief Executive Officer who shall also serve as President, a Treasurer and a Secretary. The Board of Directors from time to time may elect one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and such other officers and agents as it shall deem necessary, and may define their powers and duties. (b) Any number of offices may be held by the same Person. Any Person, including a Director, may be appointed by resolution of the Directors to be an officer or agent of the Company; and the Directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the Company, exercisable by the Directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations provided under the Act and any regulations prescribed by the enabling resolution. SECTION 4.2 REMOVAL. Except in the case of the Chief Executive Officer and subject to the provisions of any employment agreement between the Company and any officer, any officer may be removed, either with or without cause, at any time, by the affirmative vote of a majority of the Board of Directors. -11- SECTION 4.3 RESIGNATIONS. Any officer may resign at any time by giving written notice to the Board of Directors or to the Secretary. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein. the acceptance of such resignation shall not be necessary to make it effective. SECTION 4.4 VACANCIES. If the office of any officer or agent becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the Directors may choose a successor, who shall hold office for the unexpired term in respect of which such vacancy occurred. SECTION 4.5 CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chief Executive Officer (the "Chief Executive Officer") shall be the President of the Company and, in the absence of the Chairman, shall preside at all meetings of the Board of Directors, and of the Shareholders. Subject to the Memorandum and Articles of Association and his employment agreement with the Company, the Chief Executive Officer shall exercise the powers and perform the duties usual to the chief executive officer and, subject to the control of the Board of Directors, shall exercise general management and control of the day-to-day affairs and business of the Company, fulfill the Business Plan and the relevant Annual Budget and implement the orders and resolutions of the Board of Directors and orders and resolutions duly made by the Executive Committee in accordance with powers expressly delegated to it by the Board of Directors in accordance with Section 2.14(b)(xxi). The Chief Executive Officer shall attend all meetings of the Executive Committee, subject to the penultimate sentence of clause (b) of Article III. The Chief Executive Officer shall be subject to removal as provided in his employment agreement. The Chief Executive Officer shall appoint and discharge employees and agents of (the Company (other than officers elected by the Board of Directors) and fix their compensation. Subject to Sections 1.7(c) and 2.14(b), the Chief Executive Officer shall have the power to execute bonds, mortgages and other contracts, agreements and instruments of the Company, and shall do and perform such other duties as from time to time may be assigned to the Chief Executive Officer by the Board of Directors. SECTION 4.6 VICE PRESIDENTS. If chosen, the Vice Presidents, in the order of their seniority, shall, in the absence or disability of the Chief Executive Officer, exercise all of the powers and duties of the Chief Executive Officer and President, and otherwise perform such duties as are delegated to them by the Chief Executive Officer. Such Vice Presidents shall have the power to execute bonds, notes, mortgages and other contracts, agreements and instruments of the Company, and shall do and perform such other duties incident to the office of Vice President and as the Board of Directors or the Chief Executive Officer shall direct. SECTION 4.7 SECRETARY. The Secretary shall attend all sessions of the Board of Directors and all meetings of the Shareholders and record all votes and the minutes of proceedings in a book to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the Shareholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors. The Secretary shall affix the seal of the Company to any instrument requiring it, and when so affixed, it shall be attested by the signature of the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer who may affix the seal to any such instrument in the event of the absence or disability of the Secretary. The Secretary shall have and be the custodian of the stock records and all other books, records and papers of the Company (other than financial) and shall see that all books, reports, statements, certificates and other documents and records (other than financial records) required by law are properly kept and filed. SECTION 4.8 TREASURER. The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys, and other valuable effects in the name and to the credit of the Company, in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the directors whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. SECTION 4.9 DUTIES OF OFFICERS MAY BE DELEGATED. (a) in case of the absence or disability of any officer of the Company, or for any other reason that the Board of Directors may -12- deem sufficient, the Board of Directors may delegate, for the time being, the powers or duties, or any of them, of such officer to any other officer, or to any Director. (b) Any officer that is a corporate entity may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. SECTION 4.10 SALARIES. Subject to Section 2.14(b), the salaries of officers and agents shall be fixed by resolution of the Directors, subject to any resolution of the Shareholders. ARTICLE V INDEMNIFICATION SECTION 5.1 ACTIONS BY OTHERS. The Company (a) shall indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was a Director or an officer of the Company and (b) except as otherwise required by Section 5.3, may indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was an employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent of or participant in another Person, against expenses (including attorneys' fees), judgments, fines and amounts actually and reasonably incurred by such Person in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Person did not act in good faith and in a manner which such Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 5.2 ACTIONS BY OR IN THE RIGHT OF THE COMPANY. The Company shall indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent of or participant in another Person against expenses (including attorneys' fees) actually and reasonably incurred by such Person in connection with the defense or settlement of such action a suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and except that no indemnification shall be made in respect of any claim, issue or matter as to which such Person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. SECTION 5.3 SUCCESSFUL DEFENSE. To the extent that a Person who is or was a Director, officer, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 5.1 or Section 5.2, or in defense of any claim, issue or matter therein, such Person shall be indemnified through the use of Company funds against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. SECTION 5.4 SPECIFIC AUTHORIZATION. Any indemnification under Section 5.1 or Section 5.2 (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because such Person has met the applicable standard of -13- conduct set forth in said Sections 5.1 and 5.2. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of the Directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (c) by the Shareholders. SECTION 5.5 ADVANCE OF EXPENSES. Expenses incurred by any Person who may have a right of indemnification under this Article in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company pursuant to this Article 5. SECTION 5.6 RIGHT OF INDEMNITY NOT EXCLUSIVE. The indemnification provided by this Article V shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of Shareholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a Person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a Person. SECTION 5.7 INSURANCE. The Company may purchase and maintain insurance on behalf of any Person who is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of or participant in another Person against any liability asserted against him and incurred by him in any such capacity, or arising out of such Person's status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of this Article V. SECTION 5.8 INVALIDITY OF ANY PROVISIONS OF THIS ARTICLE. The invalidity or unenforceability of any provision of this Article V shall not affect the validity or enforceability of the remaining provisions of this Article V. ARTICLE VI CAPITAL STOCK SECTION 6.1 SHARES. (a) The Company shall issue ordinary, registered shares of its Capital Stock that may be endorsed or unendorsed. Shares of Capital Stock of the Company may be issued with such designations, powers, preferences, rights, limitations and/or restrictions with regard to dividend, voting, return of capital or otherwise as the Directors may determine by resolution, without prejudice to any rights attaching to any shares of Capital Stock of the Company and subject to the provisions of the Act. (b) Any new shares of Capital Stock issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the Directors shall determine by resolution and, except as otherwise provided by the terms of such issuance, such shares of Capital Stock shall be considered part of the original share capital for all purposes under the Act and these Articles. -14- SECTION 6.2 CERTIFICATES. (a) The interest of each Shareholder shall be evidenced by certificates for shares of Capital Stock of the Company in such form as the Board of Directors may from time to time prescribe. The signatures or common seal on the certificates of stock may be facsimiles. In case any director, directors, officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such director, directors, officer or officers of the Company, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Company, such certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the Person or Persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such director, directors, officer or officers of the Company. (b) Every Shareholder shall be entitled to one certificate for the shares of Capital Stock of the Company registered in his name or to several certificates, each for one or more of such shares of Capital Stock of the Company. In respect of shares of Capital Stock of the Company held jointly by two or more Persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares of Capital Stock of the Company to one of several joint holders shall constitute delivery to all. (c) The Company shall be entitled to treat the Shareholder designated in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares of Capital Stock of the Company on the part of any other Person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of the Commonwealth of The Bahamas. For the purposes of this Article, where any Person is unconditionally entitled to be registered as the holder of a share of Capital Stock of the Company, he, and not the registered holder of such share, shall be deemed to be a Shareholder of the Company in respect of that share of Capital Stock of the Company. SECTION 6.3 RECORD DATES. The Board of Directors may fix in advance a date, not less than ten nor more than sixty days preceding the date of any meeting of the Shareholders, or the date for the payment of any dividend, or the date for the distribution or allotment of any rights, or the date when any change, conversion or exchange of shares of Capital Stock of the Company shall go into effect, as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend, or to receive any distribution or allotment of such rights, or to exercise the rights in respect of any such change, conversion or exchange of shares of Capital Stock of the Company, and in such case only such Shareholders as shall be Shareholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of such dividend, or to receive such distribution or allotment or rights or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Company after any such record date fixed as aforesaid. SECTION 6.4 LOST CERTIFICATES. In the event that any certificate representing shares of Capital Stock of the Company is lost, stolen, destroyed or mutilated, the Board of Directors may authorize the issuance of a new certificate of the same tenor and for the same number and type of shares of Capital Stock of the Company in lieu thereof. The Board of Directors may in its discretion, before the issuance of such new certificate, require the owner of the lost, stolen, destroyed or mutilated certificate, or the legal representative of the owner to make an affidavit or affirmation setting forth such facts as to the loss, destruction or mutilation as it deems necessary, and to give the Company a bond in such reasonable sum as it directs to indemnify the Company against any loss or liability which the Company or its Directors may incur by reason of wrongful or fraudulent use or representation made by any Person by virtue of the possession of such certificate. ARTICLE VII SHARE TRANSFERS SECTION 7.1 GENERALLY. Shareholders who are parties to the Shareholders Agreement may not Transfer nor permit the Transfer of any of the Common Stock or any other Capital Stock of the Company currently held or hereafter acquired by any of them other than in accordance with the provisions thereof. -15- SECTION 7.2 DRAG-ALONG RIGHTS. (a) After March 16, 2003, in the event that any Initial Shareholder wishes to effect a Sale of the Company, such Initial Shareholder shall promptly give written notice (the "DRAG-ALONG NOTICE") to the other Shareholders (the "DRAG-ALONG SHAREHOLDERS") (with a copy to the Company) at least thirty (30) days prior to the closing of such proposed Sale of the Company. The Drag-Along Notice shall state (i) the name of the Person to which the Sale of the Company would be made, (ii) the nature of such Sale of the Company (acquisition of Capital Stock, assets, merger, etc.), (iii) the specifics of the consideration proposed to be paid by the acquirer in connection with such Sale of the Company, and (iv) all other material terms and conditions of the proposed transaction. (b) Subject to Section 7.2(c), at the request of the Initial Shareholder proposing the Sale of the Company, each Drag-Along Shareholder shall (and shall cause its designated Directors to, as applicable) (i) take all necessary or desirable action within such Drag-Along Shareholder's control such that any proposal or resolution requested by such Initial Shareholder in connection with such Sale of the Company is implemented by the Company, (ii) consent to and raise no objection against such Sale of the Company, and (iii) if such Sale of the Company is structured as a sale of all of the Capital Stock of the Company, each such Drag-Along Shareholder shall sell all of the Capital Stock of the Company held by it for the same consideration and otherwise on the same terms and conditions as are set forth in the Drag-Along Notice. (c) Notwithstanding any other provision in these Articles or the Shareholders Agreement to the contrary: (i) Neither Solimar nor any Transferee of Solimar shall be required (and shall not cause the Solimar Directors) to take all necessary or desirable action or consent to and raise no objection against a Sale of the Company proposed by either Founding Shareholder or to sell all of the shares of Common Stock and other Capital Stock of the Company held by it in connection with any Sale of the Company, as applicable, if the IRR to be received by Solimar in such Sale of the Company would not exceed 35%; and (ii) Solimar shall not have the right to request each Drag-Along Shareholder (and each Drag-Along Shareholder shall not have the obligation) to take all necessary or desirable action and to consent to and raise no objection against a Sale of the Company proposed by Solimar, and sell all of the shares of Common Stock and other Capital Stock of the Company held by such Drag-Along Shareholders in connection with such Sale of the Company, as applicable, if the IRR to be received by Solimar, in such Sale of the Company would not exceed 20%; provided that if, as a result of the operation of Section 8.6 of the Stock Purchase Agreement, and after giving effect to the maximum U.S. $15,000,000.00 capital contribution to be made by the Founding Shareholders, Solimar, holds more than 65% of the shares of Common Stock and other Capital Stock of the Company, the Drag-Along Shareholders shall take all necessary or desirable action, shall consent to and raise no objection against a Sale of the Company proposed by Solimar, and shall sell all of the shares of Common Stock and other Capital Stock of the Company held by such Drag-Along Shareholders in connection with such Sale of the Company, as applicable, without regard to the IRR requirements stated in this Section 7.2(c)(ii). (d) The provisions of this Section 7.2 shall not apply to any Sale of the Company in which an Initial Shareholder receives a control premium or any other consideration not offered to the Drag-Along Shareholders. SECTION 7.3 TAG-ALONG RIGHTS. (a) Except under certain circumstances as provided in the Shareholders Agreement, in the event that a Shareholder (the "SELLING SHAREHOLDER") proposes to effect a sale of any of the shares of Common Stock or other Capital Stock of the Company held by such Shareholder (the "TAG-ALONG STOCK") to any Person, such Selling Shareholder shall promptly give written notice (the "TAG-ALONG NOTICE") to the other Shareholders (the "TAG-ALONG SHAREHOLDERS") (with a copy to the Company) at least thirty (30) days prior to the closing of such proposed sale. The Tag-Along Notice shall state (i) the name of the Person to which the Selling Shareholder proposes to sell the Tag-Along Stock, (ii) the number and class of shares of Tag-Along Stock the Selling Shareholder proposes to sell, (iii) the -16- per share purchase price for the Tag-Along Stock and the total consideration to be delivered to the Selling Shareholder, and (iv) all other material terms and conditions of the proposed transaction. (b) Each Tag-Along Shareholder shall have the right to participate in such sale on the same terms and conditions as set forth in the Tag-Along Notice and to sell all or a portion of the Common Stock or other Capital Stock of the Company owned by it as determined in accordance with the calculation set forth in Section 7.3(c) (the "PARTICIPATING SHAREHOLDERS"), by delivering to the Selling Shareholder written notice within thirty (30) days after receipt of the Tag-Along Notice of its intent to participate in such sale, which notice shall indicate the maximum number of shares of Common Stock or other Capital Stock of the Company held by the Participating Shareholder which it desires to sell in such sale (which number may be in excess of the number of shares of the Tag-Along Stuck). (c) The Selling Shareholder shall use its reasonable best efforts to interest the proposed purchaser of the Tag-Along Stock in purchasing, in addition to the Tag-Along Stock, the shares of Common Stock and other Capital Stock of the Company which the Participating Shareholders wish to sell. If such proposed purchaser does not wish to purchase all of the shares of Common Stock and other Capital Stock of the Company made available by the Selling Shareholder and the Participating Shareholders, then each Participating Shareholder shall be entitled to sell a "pro rata portion" (as defined below) of the shares of Common Stock and other Capital Stock of the Company held by it and the number of shares of Tag-Along Stock that the Selling Shareholder may sell shall be correspondingly reduced. For purposes of this Section 7.3(c), "PRO RATA PORTION" shall mean for each Participating Shareholder a fraction the numerator of which is the number of shares of Tag-Along Stock proposed to be sold in the Tag-Along Notice and the denominator of which is the total number of shares of Common Stock and other Capital Stock of the Company owned by the Selling Shareholder immediately prior to the sale proposed in the Tag-Along Notice. (d) Any Participating Shareholder shall effect its participation in the sale described in the Tag-Along Notice by delivering on the date scheduled for such sale to the proposed purchaser one or more certificates, in proper form for transfer, which represent the shares of Common Stock and other Capital Stock of the Company which such Participating Shareholder is entitled to sell in accordance with this Section 7.3. The proposed purchaser shall concurrently therewith remit to each Participating Shareholder that portion of the sale proceeds to which such Participating Shareholder is entitled by reason of its participation in such sale. The sale of the shares of Common Stock and other Capital Stock of the Company in any sale proposed in the Tag-Along Notice shall be effected only on the terms and conditions set forth in the Tag-Along Notice. -17- ARTICLE VIII PREEMPTIVE RIGHTS (a) In the event the Company desires at any time and from time to time after the date of the Shareholders Agreement to issue any New Stock, the Shareholders shall have the preemptive right to purchase a portion of such New Stock as provided in this Article VIII. In the event of each proposed issuance of New Stock, the Company shall first deliver to each Shareholder a written notice (the "NOTICE OF PROPOSED ISSUANCE") stating (i) the number and class of shares of New Stock which the Company then desires to issue (the "OFFERED NEW STOCK"), (ii) the price per share at which such Offered New Stock is proposed to be issued, (iii) the expected timing of such issuance, (iv) all other material terms and conditions of the proposed issuance, and (v) that the Shareholders have the right to purchase the Offered New Stock on the terms set forth in such Notice of Proposed Issuance. (b) The offer constituted by the Notice of Proposed Issuance shall remain open for acceptance by the Shareholders for a thirty (30) day period, beginning on the date which is two (2) days after the Company sends the Notice of Proposed Issuance pursuant to clause (a) of this Article VIII and ending at midnight on the thirtieth (30th) day following the date such period begins. Each Shareholder electing to purchase a portion of the shares of Offered New Stock (a "SUBSCRIBER") must give written notice of its election to the Company no later than the last day of such thirty (30) day period and must state in such notice the number of shares of Offered New Stock that such Subscriber wishes to purchase. If a Shareholder shall for any reason fail or refuse to give such written notice to the Company within such thirty (30) day period, such Shareholder shall, for all purposes of this Article VIII, be deemed to have refused (in that particular instance only) to purchase any shares of such Offered New Stock and to have waived (in that particular instance only) all of its rights under this Article VIII to purchase any of such Offered New Stock. (c) Each Subscriber shall have the right to purchase that number of shares of Offered New Stock as shall be equal to the number of shares of Offered New Stock multiplied by a fraction, the numerator of which shall be the number of shares of Capital Stock of the Company then owned by such Shareholder on a fully-diluted basis and the denominator of which shall be the aggregate number of shares of Capital Stock of the Company issued and outstanding on a fully-diluted basis (excluding the Offered New Stock). (d) Each Subscriber shall have a right of over-subscription such that if any other Shareholder fails to elect to purchase its full proportionate share of the Offered New Stock or any Subscriber fails to purchase its proportionate share of the Offered New Stock, as the case may be, the other Subscriber(s) shall, among them, have the right to purchase up to the balance of such Offered New Stock not so purchased. The Subscribers may exercise such right of over- subscription by electing to purchase more than their proportionate share of the Offered New Stock by so indicating in their written notice to the Company. If, as a result thereof, such over-subscriptions exceed the total number of the Offered New Stock available in respect of such over-subscription privilege, the over-subscribing Subscribers shall be cut back with respect to over-subscriptions on a pro rata basis in accordance with their respective ownership in the Company or as they may otherwise agree among themselves. ARTICLE IX DIVIDENDS AND DISTRIBUTIONS SECTION 9.1 GENERALLY. (a) The Company shall pay dividends and distributions on its shares of Capital Stock to the extent such funds are in excess of the amount needed to meet the anticipated obligations of the Company. (b) Subject to the rights of holders of shares of Capital Stock of the Company who are entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to the Shareholders of record at the date of the declaration of the dividend, but no dividend shall be paid on those shares of Capital Stock of the Company which are held by the Company as treasury shares. If several persons are registered as joint holders of any shares of Capital Stock -18- of the Company, any of them may give effectual receipt for any dividend or other moneys payable in respect of the shares. (c) No dividend shall bear interest against the Company. SECTION 9.2 AMOUNT AND FORM OF DIVIDEND PAYMENTS. (a) Dividends shall only be paid out of the net profits of the Company and, except as provided in Section 9.3(b), shall only be paid in cash. No dividend will be declared or become payable if the same contravenes any of the provisions of any Financial Instrument to which the Company may be a party or is otherwise bound. (b) The Directors, at their discretion, may deduct from the dividends payable to any Shareholder all sums of money as may be owing by such Shareholder to the Company; and the Directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. SECTION 9.3 OTHER PERMISSIBLE USES OF SURPLUS AMOUNTS. (a) Subject to Section 2.14(b), the Directors may, (i) before recommending any dividend, set aside out of the profits of the Company such sum as they deem necessary as a reserve fund to meet contingencies, equalize dividends, for special dividends or bonuses, for repairing, improving, or maintaining any of the property of the Company, or for such other purpose as the Directors shall in their absolute discretion think conducive to the interests of the Company; (ii) invest the several sums so set aside upon such investments as they deem necessary; and from time to time vary such investments and dispose of all or any part thereof for the benefit of the Company; or (iii) divide the reserve fund into any special fund as they deem necessary and employ the reserve fund or any part thereof in the business of the Company without being bound to keep the same separate from the other assets. (b) Subject to Sections 1.7(c) and 2.14(b), the Directors may resolve to capitalize, in whole or in part, (i) the amount then available in any of the Company's reserve accounts or profit and loss accounts or (ii) profits otherwise available for distribution to the Shareholders, and distribute such amount amongst the Shareholders, not in cash, but rather in fully paid shares, debentures or other securities of the Company in the same proportion as such Shareholders would have been entitled to if the equivalent amount had been distributed as a cash dividend. (c) Subject to Sections 1.7(c) and 2.14(b), if the Directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and to take all actions necessary to effect the capitalization and consequent issuance of shares, debentures or other securities to the Shareholders according to their respective entitlement and to enter into such agreements with the Shareholders entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such Shareholders. SECTION 9.4 NOTICE OF DIVIDEND DECLARATIONS. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to the Shareholders. SECTION 9.5 RECORDS. The Directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate and in the case of an issuance of bonus shares, the Directors shall make the necessary entries in the Share Register in accordance with the requirements of these Articles and the Act. SECTION 9.6 CHECKS, NOTES. All checks and drafts on the Company's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, may be signed by the President, any Vice President or the Treasurer and may also be signed by such other officer or officers, agent or agents, as shall be thereunto authorized from time to time by the Board of Directors. ARTICLE X MISCELLANEOUS PROVISIONS SECTION 10.1 FISCAL YEAR. The fiscal year of the Company shall be determined by the Board of Directors. -19- SECTION 10.2 CORPORATE SEAL. The seal of the Company shall be circular in form and contain the name of the Company. Such seal may be altered from time to time at the discretion of the Board of Directors. The Directors shall provide for the safe custody of the seal which shall not be used except by the authority of a resolution of Directors. SECTION 10.3 BOOKS; FINANCIAL AND OTHER INFORMATION. (a) The Company shall maintain a system of internal accounting controls in accordance with GAAP and at all times keep proper books of record and account. Such books of record and account shall be kept at such office of the Company as the Board of Directors shall determine, within or without the Commonwealth of The Bahamas. In addition, there shall also be kept at the registered office of the Company, minutes of the proceedings of the Shareholders, Board of Directors and committees, and the Share Register, containing the names and addresses of the Shareholders, the number of shares of Capital Stock of the Company held by them, respectively, and the dates when they respectively became the owners of record thereof, and in which the transfer of stock shall be registered, and such other books and records as the Board of Directors may from time to time determine. (b) Subject to any other rights afforded to holders of shares of Capital Stock under Bahamian law, each Initial Shareholder and each other Shareholder holding at least 20% of the shares of Capital Stock of the Company at such time shall have the right, at such Shareholder's expense, to visit and inspect during regular business hours any of the premises where the business of the Company and the Subsidiaries is conducted, and to discuss the affairs, finances and accounts of the Company and the Subsidiaries with their respective officers, and to have access to and review the Company's and the Subsidiaries' books of account and records, including banking records and correspondence with present or past external auditors, and other information reasonably requested, all at such reasonable times and as often as may be reasonably requested; provided that neither the Company nor any Subsidiary shall be obligated under this Section 10.3 with respect to a Shareholder that is a competitor or with respect to information which the Board of Directors determines in good faith is confidential and should not, therefore, be disclosed. SECTION 10.4 LIQUIDATION OF THE COMPANY. Subject to the terms of the Indenture, in the event of any liquidation, dissolution or winding up of the Company, the net proceeds thereof will be distributed to all of the holders of the Capital Stock of the Company pro rata to their respective percentage ownership of such Capital Stock as of such liquidation, dissolution or winding up. ARTICLE XI AMENDMENTS These Articles may be amended in accordance with the provisions of Section 1.7(c)(i). Any proposal to amend or repeal these Articles or to adopt new Articles shall be staled in the notice of the meeting of the Shareholders, or in the waiver of notice thereof, as the case may be, unless all of the holders of record of all of the shares of stock of the Company, issued and outstanding and entitled to vote, are present at such meeting. -20- ARTICLE XII DEFINITIONS AND RULES OF CONSTRUCTION SECTION 12.1 DEFINITIONS. When used in these Articles of Association, the following terms shall have the respective meanings specified therefor below: "ACCESSION AGREEMENT" shall mean each Accession Agreement to be entered into by the Company and each Transferee, substantially in the form of Exhibit A to the Shareholders Agreement, which, when so entered into, shall be an integral part of such Agreement. "ACT" shall mean the International Business Companies Act, 1989. "AFFILIATE" shall mean, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person. "ANNUAL BUDGET" shall mean the operating and financial plan of the Company for each year. "APPRAISAL PROCEDURE" shall mean the following procedure to determine the fair market value for purposes of the definition of Fair Market Value (for purposes of this definition, the "VALUATION AMOUNT"): (a) the Shareholders shall endeavor in good faith to determine jointly the Valuation Amount within ten (10) Business Days of an event requiring the determination of Fair Market Value; (b) if the Shareholders are not able to agree on the Valuation Amount within the period stated in clause (a) above, the Valuation Amount shall be determined by an investment banking firm of international recognition with experience in the maritime sector, which firm the Shareholders shall endeavor in good faith to jointly select within five (5) Business Days after the end of the ten (10) Business Day period stated in clause (a) above; (c) if the Shareholders select an investment banking firm as provided in clause (b) above, such investment banking firm shall have thirty (30) Business Days from the date of its retention to determine the Valuation Amount, which determination shall be final and binding upon the Shareholders; (d) if the Shareholders fail to select an investment banking firm as provided in clause (b) above, each of Solimar and the other Shareholders shall separately retain an investment banking firm of international recognition with experience in the maritime sector within five (5) Business Days after the end of the five (5) Business Day period stated in clause (b) above and instruct such investment banking firm to determine the Valuation Amount within thirty (30) Business Days from the date of its retention; (e) if the Valuation Amounts determined by the two (2) investment banking firms retained by Solimar and the other Shareholders pursuant to clause (d) above are within a range of less than or equal to 15% of the higher Valuation Amount, the final Valuation Amount shall be the average of such two (2) Valuation Amounts, which average Valuation Amount shall be final and binding upon Solimar and the other Shareholders; (f) if the Valuation Amounts determined by the two (2) investment banking firms retained by Solimar and the other Shareholders pursuant to clause (d) above are not within the range described in clause (e) above, Solimar and the other Shareholders shall cause their respective investment banking firms to select a third investment banking firm of international recognition with experience in the maritime sector within five (5) Business Days of the date of the determination of the Valuation Amounts pursuant to clause (e) above, which third investment banking firm shall determine the Valuation Amount within thirty (30) Business Days of its retention; and -21- (g) if a third investment banking firm is required to be retained as provided in clause (f) above, the final Valuation Amount shall be the average of the two (2) Valuation Amounts which are closest to each other, which average Valuation Amount shall be final and binding upon the Shareholders unless the third Valuation Amount is within 5% of the average of the high and low Valuation Amounts, in which case such third Valuation Amount shall be final and binding upon the Shareholders. The fees and expenses of any investment banking firm retained in connection with the determination of the Valuation Amount as provided above shall be paid by the Shareholders pro rata to their ownership of shares of Capital Stock of the Company. "ARTICLES" shall mean these Amended and Restated Articles of Association of the Company, as they may be amended from time to time in accordance with the provisions hereof. "AUDIT COMMITTEE" shall have the meaning assigned to such term in Section 3.1(a). "BOARD OF DIRECTORS" shall have the meaning assigned to such term in Section 2.1. "BUSINESS DAY" shall mean any day, other than a Saturday, Sunday or a day on which banks located in New York City or Nassau, the Commonwealth of The Bahamas shall be authorized or required by law to close. "BUSINESS PLAN" shall mean the initial five (5) year business plan of the Company and the Subsidiaries for the fiscal year ending December 31, 2000 through the fiscal year ending December 31, 2004, as amended or supplemented from time to time. "CAPITAL STOCK" shall mean (a) as to any Person that is a corporation, the authorized capital stock of such Person, including all classes and series of common, preferred, voting and nonvoting capital stock, and (b) as to any Person that is not a corporation or an individual, the ownership interests in such Person, including, without limitation, the right to share in profits and losses, the right to receive distributions of cash and property, and the right to receive allocations of items of income, gain, loss, deduction and credit and similar items from such Person, whether or not such interests include voting or similar rights entitling the holder thereof to exercise control over such Person. "CAUSE" shall mean one or more of the following grounds for termination of the employment of the Chief Executive Officer: (a) the Chief Executive Officer shall have been convicted by a court of competent jurisdiction of, or pleaded guilty or nolo contendere to, or made a written admission of the commission of, a felony or equivalent crime in any jurisdiction, based on his or her commission of a criminal act; (b) any material breach by the Chief Executive Officer of any provision of his employment agreement with the Company, the Memorandum and Articles of Association or any similar document or instrument governing the Subsidiaries or any other agreement between the company and the Chief Executive Officer, which breach continues for a period of thirty (30) or more days following written notice thereof by any Shareholder or any Director to the Chief Executive Officer; (c) any act by the Chief Executive Officer involving moral turpitude, fraud or misrepresentation with respect to his duties for the Company or any of the Subsidiaries; (d) gross negligence or willful misconduct on the part of the Chief Executive Officer in the performance of his duties for the Company or any of the Subsidiaries; (e) use of alcohol or illegal drugs interfering with the performance of the Chief Executive Officer's duties for the Company or any of the Subsidiaries, which use continues for a period of thirty (30) or more days following written notice thereof by any Shareholder or any Director to the Chief Executive Officer; -22- (f) the budgeted revenues and earnings as set out in an Annual Budget have not been substantially met by the Company and the Subsidiaries on a consolidated basis during a period of two (2) consecutive years. "CHAIRMAN" shall have the meaning assigned to such term in Section 1.5(a). "CHIEF EXECUTIVE OFFICER" shall have the meaning assigned to such term in Section 4.5. "COMMON STOCK" shall mean the ordinary common shares of the Company, par value $.01 per share. "COMPANY" shall mean Ultrapetrol (Bahamas) Limited. "COMPENSATION COMMITTEE" shall have the meaning assigned to such term in Section 3.1(a) "CONTROL", "CONTROLLED" or "CONTROLLING" shall mean, with respect to any Person, any circumstances in which such Person is directly or indirectly controlled by another Person by virtue of the latter Person having the power to (a) elect, or cause the election of (whether by way of voting Capital Stock, by contract, or otherwise), the majority of the members of the board of directors or a similar corporate body of the former Person, or (b) direct (whether by way of voting Capital Stock, by contract or otherwise) the affairs and policies of such Person. "CONTINGENT OBLIGATION" shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefore, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonable anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "DIRECTOR" shall mean a member of the Board of Directors. "DOLLARS" OR "U.S.$" shall mean the lawful currency of the United States of America. "DRAG-ALONG NOTICE" shall have the meaning assigned to such term in Section 7.2(a). "DRAG-ALONG SHAREHOLDERS" shall have the meaning assigned to such term in Section 7.2(a). "EXECUTIVE COMMITTEE" shall have the meaning assigned to such term in Section 3.1(a). "FAIR MARKET VALUE" shall mean (a) as to Non-Cash Consideration consisting of property other than Liquid Securities, the "Fair Market Value" of such property, as determined in accordance with the Appraisal Procedure, using any appropriate valuation method, assuming an arms-length sale to an independent party, (b) as to (i) Non-Cash Consideration consisting of Liquid Securities (such Liquid Securities are referred to in this definition, collectively, as the "SECURITIES"), the Twenty Day Average of the average closing prices of such securities' sales on all securities exchanges on which such securities may at the time be listed, or, if there have been no sales on any such exchanges on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such securities are not so listed, the average of the representative bid and asked prices quoted in any market system as of -23- 4:00 p.m., New York City time, on such day, or, if on any day such securities are not quoted in any market system, the average of the highest bid and lowest asked prices on such day in any over-the-counter market (and in each such case excluding any trades that are not bona fide, arm's-length transactions). If at any time such securities are not listed on any securities exchange or quoted in any market system or any over-the-counter market, the "Fair Market Value" of such property shall be as determined in accordance with the Appraisal Procedure, using an appropriate or generally accepted valuation method, assuming an arms-length sale to an independent party. In determining the Fair Market Value of a share or unit of a security, as the case may be, a sale of all of the issued and outstanding shares or units of such security will be assumed, without (contractual or otherwise) applicable thereto or any discount for minority interests and assuming (A) that the ownership of the security is widely distributed and not closely held by a control Person or group, (B) the conversion or exchange of all securities then outstanding that are convertible into or exchangeable for such securities, and (C) the exercise of all rights and warrants then outstanding and exercisable to purchase such securities or securities convertible into or exchangeable for such securities; provided that such assumption will not include those securities, rights and warrants convertible into shares or units, as the case may be, of such securities where the conversion, exchange or exercise price per share or unit, as the case may be, is greater than the Fair Market Value; provided further that Fair Market Value shall be determined with regard to the relative priority of each class or series of such securities (if more than one class or series exists). "FINANCIAL INSTRUMENTS" shall mean a contractual arrangement establishing financial rights and obligations between contracting parties and shall include: (i) a "credit instrument," which is a financial instrument issued by a financial institution, (namely an organization whose primary business activities relate to monetary matters and financial services including, but without limitation to, a bank, trust company, insurance company, investment dealer and credit union) whereby the issuer, pursuant to stated conditions, undertakes to provide credit to, or meet the obligations of, the parties specified in the instrument; (ii) a "derivative instrument," which is a contract that transfers one or more of the financial risks inherent in a financial instrument, entered into as a hedging or income-generating activity; and (iii) a bond, bond indenture, trust deed or indenture, debenture, mortgage, note, or other certificate of indebtedness, loan agreement, or any document creating a liability represented by a contractual obligation to deliver cash or another financial asset. "FOUNDING SHAREHOLDERS" shall mean collectively SII and Los Avellanos. "FOUNDING SHAREHOLDERS DIRECTORS" shall mean the Los Avellanos Directors and the SII Directors. "FULLY-DILUTED BASIS" shall mean, with respect to the Common Stock or any other Capital Stock of the Company, at any date as of which the number of shares thereof is to be determined, all shares of Common Stock or any other Capital Stock of the Company, as the case may be, outstanding at such date and all shares of Common Stock or any other Capital Stock of the Company, as the case may be, issuable pursuant to vested and exercisable options, warrants or other rights to purchase or acquire, or securities convertible into, shares of Common Stock or any other Capital Stock of the Company, as the case may be, outstanding on such date. "GAAP" shall mean generally accepted accounting principles in the United States consistently applied. "GOVERNMENTAL AUTHORITY" shall mean any government (or any subdivision thereof, whether federal, central, provincial or local) of any country or jurisdiction, or any agency, authority, board, bureau, commission, department, judicial or administrative body, instrumentality, regulatory authority or similar body or instrumentality thereof, or any governmental court or tribunal. -24- "INDEBTEDNESS" shall mean, as to any Person, without duplication, (a) all indebtedness (including principal, interest, fees and charges) of such person for borrowed money or for the deferred purchase price of property or services other than trade payables and accrued expenses arising in the ordinary course of business in accordance with customary trade terms, (b) the maximum amount available to be drawn under all letters of credit issued for the account of such Person and all unpaid drawings in respect of such letters of credit, (c) all Indebtedness of the types described in this definition secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (d) all capitalized lease obligations of such Person, (e) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, (for example, take-or-pay and similar obligations), (f) all Contingent Obligations of such Person, (g) all obligations under any interest rate protection agreements, currency protection agreements, interest rate swaps, control disbursement accounts, repurchase agreements, reverse repurchase agreements, caps, collars, derivatives, currency hedge agreements or other similar types of agreements, and (h) any premiums and other amounts payable to any third party pursuant to any mandatory prepayment obligations under the terms of any Indebtedness as a result of the consummation of the transactions contemplated hereby. "INDENTURE" shall mean the indenture dated March 30, 1998 between the Company and Allfirst Bank (formerly known as The First National Bank of Maryland), as trustee, entered into in connection with the issuance of the Notes by the Company. "INITIAL PUBLIC OFFERING" shall mean the initial underwritten public offering by the Company of the Common Stock or any other Capital Stock of the Company pursuant to an effective registration statement under the Securities Act or a similar statute in any other jurisdiction. "INITIAL SHAREHOLDERS" shall collectively mean Los Avellanos, SII and Solimar; provided that the term Initial Shareholder shall not include any Transferee (other than the Investors or a Permitted Transferee) that has acquired any of such Initial Shareholder's Common Stock or any other Capital Stock of the Company and has thus become a party to the Shareholders Agreement as a Shareholder. "INSTALLMENT DATE" shall have the meaning assigned to such term in the Stock Purchase Agreement. "INVESTORS" shall mean WSUP Investors LDC, a limited duration company organized under the laws of Cayman Islands, and LA1F. "IRR" shall mean the annual rate (assuming annual compounding), determined in accordance with principles customarily used in the financial community in calculating internal rate of return on investment, which, if used to discount to present value the payments in cash or cash equivalents made or received by Solimar for or in respect of the Solimar Stock during the period from the date of receipt by Solimar of the Net Proceeds back to the date of the acquisition of such Solimar Stock (with all amounts, if any received in any currency other than Dollars converted into Dollars at the exchange rate in effect, as quoted by Bloomberg for similar financial transactions, as of the date of receipt of such amounts), would cause the net present value (on such date) of such investments to equal zero (0). In calculating the IRR: (a) the principal of first in, first out shall be used in determining which shares of Solimar Stock are deemed to have been Transferred in a Sale of the Company; (b) each payment received in cash or cash equivalents by Solimar for or in respect of such Solimar Stock (including any prior dividends actually received thereon) shall be treated as a cash inflow with a positive value, and each payment made by Solimar in respect of such Solimar Stock (including payments made or amounts withheld in respect of taxes, if any, solely with respect to taxes imposed on payments between the Commonwealth of the Bahamas, on the one hand, and Cayman Islands or Bermuda, on the other hand) shall be treated as a cash outflow with a negative value; (c) each such payment received or made described in clause (b) above shall be discounted from the date actually made or received to the date of Solimar's initial acquisition of such Solimar Stock, with the payments for subsequent acquisitions of Solimar Stock being treated as cash outflows as of the date of each such subsequent acquisition; and (d) payments in reimbursement of any out-of-pocket expenses incurred by any of the Investors, Solimar or the Solimar Directors with respect to the acquisition or holding of the Solimar Stock shall not be treated as a cash inflow and therefore shall be -25- disregarded. For the avoidance of doubt, any director or monitoring fees received by any Solimar Director or Solimar shall not be considered payments in respect of the Solimar Stock and shall be disregarded. "LAIF" shall mean AIG-GE Capital Latin American Infrastructure Fund L.P., a limited partnership organized under the laws of Bermuda. "LIEN" shall mean any lien, security interest, option, right of first refusal, easement, mortgage, charge, indenture, deed of trust, right of way, restriction on the use of real property, encroachment, license to third parties, lease to third parties, security agreement, or any other encumbrance and other restriction or limitation on use of real or personal property or irregularities in title thereto. "LIQUID SECURITIES" shall mean any equity or debt securities of any Person for which there is an available market and the realizable fair market value of which is easily determinable. "LOS AVELLANOS" shall mean Inversiones Los Avellanos S.A., a company organized under the laws of Chile. "LOS AVELLANOS DIRECTORS" shall mean the three (3) individuals (plus alternates) nominated to the Board of Directors by Los Avellanos in accordance with the Shareholders Agreement. "MEMORANDUM AND ARTICLES OF ASSOCIATION" shall mean the Memorandum and Articles of Association of the Company, as each may be amended from time to time in accordance with the provisions hereof and thereof. "NET PROCEEDS" shall mean the cash, cash equivalents or Non-Cash Consideration received by Solimar or its Transferees as a result of a Sale of the Company minus: (a) the commissions, fees, legal expenses and other transaction costs and expenses payable by Solimar or its Transferees in connection with such Sale of the Company; (b) the aggregate amount of any accrued but unpaid dividends or other distributions on the Solimar Stock at such time, and (c) the portion of the fees and expenses payable by Solimar or its Transferees in connection with determining the Fair Market Value of the Non-Cash Consideration. "NEW STOCK" shall mean (a) any shares of Common Stock or any other Capital Stock of the Company not issued on the date of the Shareholders Agreement, (b) any rights, options, or warrants to purchase such Common Stock or other Capital Stock of the Company, and (c) any Capital Stock of the Company that is, or may become, convertible into, exercisable, exchangeable, or carrying rights to subscribe for Common Stock or other Capital Stock of the Company; provided that New Stock shall not include (i) the Common Stock issued pursuant to Article II and Section 8.6 of the Stock Purchase Agreement, (ii) the Capital Stock of the Company issued pursuant to the Stock Option Plan, (iii) the Capital Stock of the Company issued in an Initial Public Offering or any subsequent primary public offering, (iv) the Capital Stock of the Company issued pursuant to the Warrant Agreement and (v) the Capital Stock of the Company issued in connection with a Sale of the Company. "NON-CASH CONSIDERATION" shall mean all consideration, other than cash or cash equivalents, including, without limitation, Liquid Securities, received by Solimar or its Transferees in a Sale of the Company. "NOTES" shall mean the U.S. $135,000,000.00 aggregate principal amount of 10 1/2% First Preferred Ship Mortgage Notes due 2008 issued pursuant to the Indenture. "NOTICE OF PROPOSED ISSUANCE" shall have the meaning assigned to such term in Article VIII. "OFFERED NEW STOCK" shall have the meaning assigned to such term in Article VIII. "OFFERED STOCK" shall have the meaning assigned to such term in Section 7.3(a). "PARTICIPATING SHAREHOLDERS" shall have the meaning assigned to such term in Section 7.3(b). -26- "PERMITTED TRANSFEREE" shall mean a Transferee of LAIF which (a) at the time of such Transfer is a wholly-owned subsidiary of LAIF and (b) executes and delivers an Accession Agreement. "PERSON" shall mean any individual, limited public company, limited private company, partnership, corporation, limited liability company, business trust, joint stock company, unincorporated association, joint venture, investment fund, other entity of whatever nature or Governmental Authority. "PRINCIPAL OWNER AFFILIATE" shall mean a Person that is directly or indirectly Controlled by one or several Principals Owners and, for the avoidance of doubt, shall not include any Person in which one or several Principal Owners collectively own a minority of the Capital Stock and do not in any way have Control of such Person as a result of such minority ownership. "PRINCIPAL OWNERS" shall mean, collectively, SIPSA S.A., a publicly traded company organized under the laws of Chile, Solfina S.A., a company organized under the laws of Argentina Mero N.V., a company organized under the laws of the Commonwealth of The Bahamas, Interpetrol S.A., a company organized under the laws of Argentina, and Trafigura Beheer B.V., a company organized under the laws of the Netherlands. "PURCHASER INDEMNITEE" shall mean Solimar, the Investors, the other direct and indirect shareholders of Solimar and permitted Transferees. "REGULAR TRADE" shall mean any waterborne transportation business carried on frequently or actively through contracts of affreightment or consecutive voyages or similar successive cargo arrangements. "RELATED PARTY TRANSACTION" shall mean any contract, agreement arrangement, or other transaction (whether written or oral), or any series of Related Party Transactions, between the Company or any of the Subsidiaries, on the one hand, and (a) any Affiliate of the Company, (b) any holder of Common Stock or any other Capital Stock of the Company, (c) any Affiliate of any holder of Common Stock or any other Capital Stock of the Company, (d) any officer, Director or employee of the Company or any officer, director or employee of any of the Subsidiaries, or (e) any Person holding, directly or indirectly, a substantial economic interest in any of the foregoing Persons (other than individuals), on the other hand. "RELEVANT STOCK EXCHANGE" shall mean any stock exchange in the United States or in any other jurisdiction, whose listing requirements are no more burdensome or restrictive than those of any stock exchange located in the United States, on which the Common Stock or any other Capital Stock of the Company may be listed from time to time. "SALE OF THE COMPANY" shall mean a single transaction or series of related transactions pursuant to which a Person (other than an Affiliate of the Initial Shareholders) will acquire (a) all of the issued and outstanding Common Stock and any other Capital Stock of the Company (whether by a Transfer of such Stock, or by merger, consolidation, amalgamation or reorganization), or (b) all or substantially all of the assets of the Company and the Subsidiaries on a consolidated basis; provided that (i) any such Sale of the Company is achieved pursuant to an arm's length transaction, (ii) the consideration payable in connection with such Sale of the Company is either cash or Liquid Securities, and (iii) the consideration payable in connection with such Sale of the Company is required to be distributed pro rata to all of the holders of the Common Stock and any other Capital Stock of the Company pursuant to their percentage ownership of such Capital Stock of the Company. "SECURITIES ACT" shall mean the Securities Act of 1933 of the United States, as amended, or any similar federal statute and the rules and regulations of the Securities and Exchange Commission of the United States thereunder, as amended from time to time. "SELLING SHAREHOLDER" shall have the meaning assigned to such term in Section 7.3(a). "SHAREHOLDERS" shall mean, collectively, holders of shares of Capital Stock of the Company. -27- "SHAREHOLDERS AGREEMENT" shall mean that certain Shareholders Agreement, dated as of March 16, 2000, by and among the Company, Los Avellanos. SII and Solimar, as amended, restated, modified or supplemented from time to time. "SHAREHOLDERS NON-COMPETITION AGREEMENT" shall mean the Shareholders Non-Competition Agreement, dated as of March 16,2000, by and among the initial Shareholders, the Principal Owners (other than Solfina S.A.) and the Investors. "SHARE REGISTER" shall have the meaning assigned to such term in Section 1.7(g). "SII" shall mean Societe Internationale D'Investissements S.A. a company organized under the laws of the Commonwealth of the Bahamas "SII DIRECTORS" shall mean the two (2) individuals (plus alternates) nominated to the Board of Directors by SII in accordance with the Shareholders Agreement. "SOLIMAR" shall mean Solimar Holdings LDC, a limited duration company organized under the laws of Cayman Islands; provided that upon a Transfer of all or a portion of the Solimar Stock to the Investors or a Permitted Transferee, the term Solimar shall mean Solimar and/or the Investors and/or such Permitted Transferee, as the case may be. "SOLIMAR DIRECTORS" shall mean the four (4) individuals (plus alternates) nominated to the Board of Directors by Solimar in accordance with Shareholders Agreement. "SOLIMAR STOCK" shall mean the Common Stock and any other Capital Stock of the Company (a) purchased by Solimar on each Installment Dare, and (b) if any, purchased by Solimar pursuant to the terms of the Shareholders Agreement. "STOCK OPTION PLAN" shall mean an incentive stock option plan for the Directors and the management of the Company to be adopted by the Company, as amended from time to time. "STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase Agreement, dated as of March 7, 2000, by and among the Company, Solimar, Los Avellanos and SII. "SUBSCRIBER" shall have the meaning assigned to such term in Article VIII. "SUBSIDIARIES" shall mean (a) any Person at least 50% of whose Capital Stock having by the terms thereof ordinary voting power to elect a majority of the directors of such Person (whether or not at the time such Capital Stock of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time owned by the Company and/or one or more of the Subsidiaries, (b) any Person in which the Company and/or one or more of the Subsidiaries holds at least 50% of the Capital Stock at the time, and (c) any Person in which the Company and/or one or more of the Subsidiaries possesses, directly or indirectly, the power to direct or cause the direction of the affairs or management of such Person. "TAG-ALONG NOTICE" shall have the meaning assigned to such term in Section 7.3(a). "TAG-ALONG SHAREHOLDERS" shall have the meaning assigned to such term in Section 7.3(a). "TAG-ALONG STOCK" shall have the meaning assigned to such term in Section 7.3(a). "TRANSFER" shall mean the sale, transfer, exchange, gift, mortgage, alienation, pledge, assignment, hypothecation, encumbering or other disposition, voluntarily or involuntarily, by operation of law or otherwise (or an agreement to do any of the foregoing). "TRANSFEREE" shall mean a Person that has acquired any shares of Common Stock or other Capital Stock of the Company from a Shareholder; provided that the term Transferee shall not include a Person that acquired such Common Stock or other Capital Stock of the Company pursuant to (a) an Initial Public Offering, (b) a subsequent public offering by the Company or a Shareholder of the Common Stock or any other Capital Stock of the Company, or (c) a subsequent brokered sale of Common Stock or other Capital Stock of the Company listed on a Relevant Stock Exchange that has not been privately negotiated. -28- "TWENTY DAY AVERAGE" shall mean, with respect to any prices used in connection with the calculation of Fair Market Value, the average of such prices over the twenty (20) Business Days ending on the Business Day immediately prior to the day as of which "Fair Market Value" is being determined. "VESSEL CONTRACTS" shall mean agreements, contracts or commitments with respect to the spot chartering of the Vessels entered into in the ordinary course of business of the Company or any of the Subsidiaries. "VESSELS" shall mean all of the ocean-going and river vessels that are owned, leased, time chartered to, consecutive voyage chartered to, bareboat chartered to or operated by the Company or any of its Subsidiaries. "WARRANT AGREEMENT" shall mean the Warrant Agreement to be entered into between the Company and WS Capital Holdings LLC. SECTION 12.2 RULES OF CONSTRUCTION. In these Articles, unless the context otherwise requires: (a) any reference in these Articles to "writing" or cognate expressions includes a reference to facsimile transmission or comparable means of communication; (b) words importing the singular number shall include the plural and vice versa, words importing the masculine shall include the feminine and neuter gender and vice versa; (c) references to Sections are references to sections of these Articles, unless otherwise stated; (d) references to "day" or "days" are to calendar days; and (e) references to any agreement or document shall he construed as a reference to such agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented. ADOPTED AS OF 25TH DAY OF MAY, A.D. 2000. COMMONWEALTH OF THE BAHAMAS REGISTRATION GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document /s/ [ILLEGIBLE] -------------------------------- Registrar General MAY 25 2000 -29- EX-3.2 3 y04808exv3w2.txt ARTICLES OF INCORPORATION & BY-LAWS OF BALDWIN MARITIME INC. EXHIBIT 3.2 PUBLIC DOCUMENT NUMBER FIVE THOUSAND THREE HUNDRED AND SIXTY (5360) WHEREBY the Corporation known as "BALDWIN MARITINE INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, May 24, 1995. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the -twenty four (24) - day of the month of May, in the year one thousand nine hundred and ninety five (1995), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama Circuit, holder of personal identity card number eight-sixty four-four hundred and eighty two (8-64-482), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); and MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and they requested that I issue this Public Instrument to make of record that they are incorporting a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "BALDWIN MARITINE INC." SECOND: The objects and purposes of the corporation are: a) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either in Panama or in any part of the world; b) The operation of maritime agencies and the territory of the Republic of Panama or any foreign country; c) The purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending to the corporate purpose, as well as participation in-other corporations, either Panamanian or foreign; d) The purchase of and dealing with stock or shares of capital stock in general any other commercial, maritime or financial, movable or unmovable operations, permitted by the Laws of the Republic of Panama or which may be permitted in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall essentially constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A, de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and MARIO E. CORREA, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor (ILLEGIBLE) Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305), The Resident Agent of the corporation is duly empowered to act as resident agent, represent, register, apply for flag registration, obtain Patents of Navigation and Radio Licenses, as well as to file applications, objections, protests, claims and affidavits, appeals and challenges, to pay taxes, to obtain evidences, to serve notices, rename vessels, accept their transfer, to cancel, their registry and to make any other necessary acts before the authorities of the Republic of Panama in connection with the vessels owned by the Q corporation registered or to be registered in the Republic of Panama, including without limitation the acceptance on its behalf of the sales of vessels made thereto, for which purpose a power of attorney is hereby granted; C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), of Via General Nicanor A. de Obarrio - - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO ,(Elsa Ma. Sousa), of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number FIVE THOUSAND THREE HUNDRED AND SIXTY (5360) (sgd.) ELOY ALFARO. MARIO E. CORREA. Aura I. S. de Castillero Ma. I. Gonzalez RUBEN AROSEMENA GUARDIA, Third Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty four (24) day of the month of May, in the year one thousand nine hundred and ninety five (1995). (sgd.) RUBEN AROSEMENA GUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 02:58:09:8 P.M., on the 25 day of May of 1995, as per Volume 238 and Entry 5703 of the Journal, by Jorge Sierra.- Duties Paid B/.60.00; Liquidation No. 895037755.- (sgd.) Mayra de Williams Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. the Section. This document has been recorded at Microjacket 302487, Roll 46122, Frame 0036, of the Microfilm (Mercantile) Section of the Public Registry Office, on May 29, 1995.- (sgd.) Ivonne Arjona, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, July 20, 1995. /s/ Bertilda R. De Torres ---------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 BY-LAWS OF BALDWIN MARITIME INC. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the, Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board or Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board or Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock or the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry: and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only it fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares: but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary all address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4. Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of "BALDWIN MARITIME INC.", a company duly organized and existing in accordance with the laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama, Republic of Panama, on the 30 day of May, 1995. Panama, May 30, 1995. /s/ Elsa Ma Sousa ------------------------- Elsa Ma. Sousa PUBLIC DOCUMENT NUMBER FIVE THOUSAND THREE HUNDRED AND SIXTY (5360) WHEREBY the Corporation known as "BALDWIN MARITINE INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, May 24, 1995. In the City of Panama, capital of the Republic and seat or the notarial circuit of the same name, on the -twenty four (24) - day of the month of May, in the year one thousand nine hundred and ninety five (1995) , before me, RUBEN AROSEMENA GUARDIA. Third Notary Public of the Panama Circuit, holder of personal identity card number eight-sixty four-four hundred and eighty two (8-64-482), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro) , male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); and MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and they requested that [ issue this Public Instrument to make of record that they are incorporting a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "BALDWIN MARITINE INC." SECOND: The objects and purposes of the corporation are: a) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either in Panama or in any part of the world; b) The operation of maritime agencies and the -2- execution of maritime operations in general, either in the territory of the Republic of Panama or any foreign country; c) The purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending to the corporate purpose, as well as participation in other corporations, either Panamanian or foreign; d) The purchase of and dealing with stock or shares of capital stock in general any other commercial, maritime or financial, movable or unmovable operations, permitted by the Laws of the Republic of Panama or which may be permitted in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10.000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any -3- other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers or the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall essentially constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary. -4- specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and MARIO E. CORREA, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor -5- A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). The Resident Agent of the corporation is duly empowered to act as resident agent, represent, register, apply for flag registration, obtain Patents of Navigation and Radio Licenses, as well as to file applications, objections, protests, claims and affidavits, appeals and challenges, to pay taxes, to obtain evidences, to serve notices, rename vessels, accept their transfer, to cancel their registry and to make any other necessary acts before the authorities of the Republic of Panama in connection with the vessels owned by the corporation registered or to be registered in the Republic of Panama, including without limitation the acceptance on its behalf of the sales of vessels made thereto, for which purpose a power of attorney is hereby granted: C) The Directors of the Corporation shall be: JUAN [ILLEGIBLE] MONTES GOMEZ (Juan A. Montes G.), of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA BE AGUIRRE (Clarissa P. de Aguirre), of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama. Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: JUAN [ILLEGIBLE] MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA -6- DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer: and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149) , of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number FIVE THOUSAND THREE HUNDRED AND SIXTY (5360) (sgd.) ELOY ALFARO. MARIO E. CORREA. Aura I. S. de Castillero Ma. I. Gonzalez RUBEN AROSEMENA GUARDIA, Third Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty four (24) day of the month of May, in the year one thousand nine hundred and ninety five (1995). (sgd.) RUBEN AROSEMENA GUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 02:58:09:8 P.M., on the 25 day of May of 1995, as per Volume 238 and Entry 5703 of the Journal, by Jorge Sierra.- Duties Paid B/.60,00; Liquidation No. 895037755.- (sgd.) Mayra de Williams Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Rosa Elvira H. de Dutari, Chief of the Section. This document has been recorded at Microjacket 302487. Roll 46122, Frame 0036, of the Microfilm (Mercantile) Section of the Public Registry Office, on May 29, 1995.- (sgd.) Ivonne Arjona, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, July 20, 1995. /s/ Bertilda R. De Torres ------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 EX-3.3 4 y04808exv3w3.txt ARTICLES OF INCORPORATION & BY-LAWS OF BAYHAM INVESTMENTS S.A. EXHIBIT 3.3 PUBLIC DOCUMENT NUMBER FOUR THOUSAND BIGHT HUNDRED AND SEVENTY SEVEN (487.7) WHEREBY the corporation known as "BAYHAM INVESTMENTS S. A.", with domicile in the City of Panama, Republic Of Panama, is incorporated. Panama, April 21, 1994. In the city of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the -twenty first (2lst) - day of the month of April, in the year one thousand nine hundred and ninety four (1994), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama circuit, holder of personal identity card number eight-sixty four-four hundred and eighty two (8-64-482), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); and MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and they requested that I issue this public instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "BAYHAM INVESTMENTS S. A.". SECOND; The objects and purposes of the corporation are: a) The purchase and sale in general of all kinds of real estates, movables, livestocks, or of any nature; B) The management in general of personal property or immovables, whether as owner, or for the account of third parties; c) -2- The investments in general and the financing and in general operations in personal or real property, as well as the participation in industrial, commercial, real estate or financial corporations; d) The purchase or acquisition of patents, trademarks, copyrights, licenses and formulas and the commercial exploitation of the same; e) The undertaking of loans, whether with Banks, whether with private or public institutions, to increase or to apply to the businesses of the corporation, being able to guarantee the liabilities that in this sense may be incurred through the issuance of bonds, notes, promissory notes, pledge or mortgages upon all or any of the properties of the corporation; f) The purchase and sale in general of shares, bonds or other valuable securities of other corporations, whether on its own account, whether for the account of third parties, including the management of said securities, as well as for the corporation as in favour and for the account of third parties; g) The financing in general of other corporations or the participation in the same, through the payment of contributions in the integration of the capital stock of the same; h) The exploitation of mines, of any nature, as well as the exploitation of any industry; i) The exploitation, whether in whole, whether in part, of any other businesses, whether of maritime nature, whether in relation to fluvial, maritime, air or land transportation; j) Any other lawful business permitted by the laws of the Republic of Panama or which these may allow in the future; all of which purposes the Corporation may carry out within or outside of the Republic of Panama. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United states of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, of a nominal value of ONE -3- HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the city of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one -4- percent (51%) of the outstanding stock of the corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of -5- Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and MARIO E. CORREA, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) street, Eancomer plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066): Fax: five zero seven (507) two six three - five three zero five (263-5305). C) The Directors of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), domiciled at Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), domiciled at Via General Nicanor A. de Obarrio - Fiftieth (50th) street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. sousa) domiciled at Via General Nicanor A. de -6- Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The officers of the Corporation Shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), Presidents; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred and twenty eight-one hundred and forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number FOUR THOUSAND EIGHT HUNDRED AND SEVENTY SEVEN (4877) (sgd.) ELOY ALFARO MARIO E. CORREA Aura I. S. De Castillero Ma. I. Gonzalez RUBEN AROSEMENA GUARDIA, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty first (21st) day of the month of April, in the year one thousand nine hundred and ninety four (1994), agrees with its original. (sgd.) RUBEN AROSEMENA GUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 02:70:30 p.m., on the 22 day of April of 1994, as per Volume 229 and Entry 4245 of the Journal, by Pier Pirro.- Duties -7- Paid B/,60.00; Liquidation No. 894028020.- (sgd.) Auriestela de Rodrigues, Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Hanorina R. de Portillo, Chief of the Section. This document has been recorded at Microjacket 286459, Roll 42070, Frame 0080, of the Microfilm (Mercantile) Section of the Public Registry office, on April 25, 1994.-(sgd.) Ivonne Arjona, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, September 6, 1995. /s/ Bertilda R. De Torres ------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 BAYHAM INVESTMENTS S.A. BY-LAWS CHAPTER ONE Office Article One.- Main Offices. The main offices of this corporation shall be at Plaza 2000, 4th Floor, Via General Nicanor A. de Obarrio (50th Street), City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting, at such hour and on such business date as may be determined by the Board and designated in the notice of the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. 2 If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each owner of stocks of the company, with voting rights, shall have the right to one vote for each share at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is with 51% of the votes, unless the Articles of Incorporation or the Law provides to the contrary Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall 3 specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine. - Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. Chair and Secretary of the meetings. The President, or in his/her absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until 4 the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four. - Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - The Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of 5 the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight. - Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He 6 shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of 7 Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. 8 All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two. - Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five. - Canceled and Lost Certificates. All stock certificates waived shall be canceled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six. - Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the 9 Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight. - Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One. - Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums 10 that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. 11 EX-3.4 5 y04808exv3w4.txt ARTICLES OF INCORPORATION & BY-LAWS OF CAVALIER SHIPPING INC. EXHIBIT 3.4 PUBLIC DOCUMENT NUMBER THREE THOUSAND FIVE HUNDRED AND SEVENTY NINE (3579) WHEREBY the Corporation known as "CAVALIER SHIPPING INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, March 22, 1994 In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the twenty second (22nd) day of the month of March, in the year one thousand nine hundred and ninety four (1994), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama Circuit, holder of personal identity card number eight-sixty four-four hundred eighty two (8-64-482), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal Identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "CAVALIER SHIPPING INC.". SECOND: The objects and purposes of the corporation are: a) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either In Panama or in any part of the world; b) The operation of maritime agencies and the execution of maritime operations in general, either in the territory of the Republic of Panama or any foreign country; c) The purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending to the corporate purpose, as well as participation in other corporations, either Panamanian or foreign; d) The purchase of and dealing with stock or shares of capital stock in general any other commercial, maritime or financial, movable or unmovable operations, permitted by the Laws of the Republic of Panama or which may be permitted in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be, three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vice-President. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall essentially constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying tile number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de, Obarrlo (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama 3 ONE (1) SHARE; and. B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) six three - six zero six six (63-6066); Fax: five zero seven (507) six three - five three zero five (63-5305); C) The Directors of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; D) The Officers of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vice-president and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary; I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number. Eight-one hundred eighty three-mile hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number THREE THOUSAND FIVE HUNDRED AND SEVENTY NINE (3579) (sgd.) Mario E. Correa - Julio E. Linares F. - Aura I. S. de Castillero - Ma. I. Gonzalez -- RUBEN AROSEMENA GUARDIA, Third Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty second (22nd) day of the month of March, in the year one thousand nine hundred and ninety four (1994).- (sgd.) RUBEN AROSEMENA GUARDIA, Third Notary Public.- PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 10:31:30 A.M. on the 5th day of April of 1994 as per Volume 228 and Entry 11048 of the Journal, by Pier Pirro; Duties Paid B/.60.00; Liquidation No. 894023182.- (sgd.) Aristela Rodriguez, Chief of the Section.-- There is a stamped seal of the Public Registry Office of Panama.- BE IT REGISTERED (Sgd.) Rosa Elvira H. de Dutary, Chief of the Section.--- This document has been recorded at Microjacket 285662, Roll 41886, Frame 0047, of the Microfilm (Mercantile) Section of the Public Registry Office. Duties Paid B/. 60.00, on April 6, 1994.- (sgd.) Arelis Odila E. de Poveda, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, November 23, 2004. /s/ Bertilda R. De Torres ------------------------- BERTILDA R. DE TORRES RESOLUCION No. 112 de 1993 CED 9-81-142 INTERPRETE PUBLICO BY-LAWS OF CAVALIER SHIPPING INC. CHAPTER ONE OFFICES Article One.- Main Offices. The main offices of this corporation shall be at Plaza 2000, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of Holding Meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vice-President, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vice-President of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two.- Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three.- Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five.- Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six.- Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven.- Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article-One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Article Three. Vice-President. The Vice-President shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** EX-3.5 6 y04808exv3w5.txt ARTICLES OF INCORPORATION & BY-LAWS OF DE NAVEGACION MUNDIAL INC. EXHIBIT 3.5 INCORPORATION NAVEGACION MUNDIAL S.A. CORPORATION In Santiago, Chile, on the twenty-fifth of August, nineteen hundred and ninety-five, before me, MARTIN VASQUEZ CORDERO, Lawyer, Notary substituting for Mr. Andres Rubio Flores, Notary of the Eighth Notary of Santiago, in accordance with Judicial Decree number eighty-six of August of the current year, both with addresses at three hundred fifty-four Moranda street, appeared: ALFREDO VIDAURRE VALDES, Chilean, married, commercial engineer, National ID number three million six hundred thirty-nine thousand eight hundred twenty-eight - zero, with residence in this city, El Bosque Norte Avenue zero four hundred forty, office number one thousand one hundred and one, Las Condes, representing PRINCELY INTERNATIONAL FINANCE CORPORATION, a Panamanian-based company; and ALVARO RENCORET SILVA, Chilean, married, lawyer, National ID number three million four hundred one thousand nine hundred two, residing in this city, one hundred seventy-nine Paseo Ahumada, tenth floor, representing REGAL INTERNATIONAL INVESTMENTS S.A., a Panamanian-based company; the persons appearing, adults, who have proven their identities with the above-mentioned ID cards, state: FIRST: that they have come to form a privately held corporation that will be governed by the following statutes: FIRST TITLE.-NAME, RESIDENCE, DURATION AND OBJECTIVE.- First Article: a corporation is established whose name will be "CORPORACION DE NAVEGACION MUNDIAL S.A.," which, for advertising purposes, will go by the acronym "Cornamu S.A.," which will be governed by the present statutes and, in their absence, by governing legal and regulatory provisions. Second Article: The duration of the corporation will be indefinite.- Third Article: The address of the corporation will be Las Condes in Santiago, but it can expand its operations and establish offices, affiliates, branches and agencies in other locations in the Republic or abroad.- Fourth Article: The objective of the corporation will be land, sea, air, river and lake transport; the purchase, sale, lease and operation, either by it or by a third party, of ships, airplanes and land vehicles, both in the country and abroad; services linked to said activities, including brokering, crating, shipping, loading and unloading, which can be carried out directly or through other companies; investment in all types of shares and securities in general and/or in real estate, and its utilization in any form.;- SECOND TITLE.- CAPITAL AND STOCKS.- Fifth Article: The corporation's capital is four million pesos divided into a thousand shares without nominal value.- Sixth Article.- Subscription to the shares must be in writing. When a shareholder does not pay for the shares subscribed to in a timely manner, the Corporation can sell on a Securities and Exchange Commission, at the expense and risk of the debtor, the unpaid balances and transfer fees, reducing ownership of the total number of remaining shares.- THIRD TITLE.- ADMINISTRATION. - Seventh Article: The corporation will be managed by a Board made up of three members who can be reelected. The Board will last for three years, at the end of which it must be renewed in its entirety. The position of Director is compatible with that of Manager, but Manager cannot be the President of the Corporation.- Eighth Article: The Board will meet at least once a year. Extraordinary sessions will be held when called by the President either himself or a duly named person, with the prior stipulation that the President demonstrate a need for the meeting, except when it is requested by the absolute majority of the board, in which case it must be held regardless. During extraordinary sessions, only those matters mentioned in the request for a meeting can be addressed. Sessions will be held at the corporation's headquarters, unless by unanimous agreement it is decided otherwise. At the first meeting of the Board after its formation, a President will be appointed, and he will also be the president of the corporation, and a vice President, who will carry out the president's duties in his absence. The manager or specially appointed person will carry out the duties of Secretary of the Board.- Nineth Article: The quorum for the Board to meet will be two directors at least. Resolutions will be passed by a vote of at least two directors in favor.- Tenth Article: The directors will not receive payment.- Eleventh Article.- The Board will have the judicial and extrajudicial representation of the corporation and, in fulfilling the social objective, it has all administrative authority that the law or this statute do not establish as exclusive to General Shareholder Boards.- Twelth Article: The Board can issue mandates and delegate part of its duties to the General Manager, Managers, Assistent Managers and lawyers of the corporation, to a director or Board Committee and, for special purposes, other persons.- Thirteenth Article: The Board, through the personal responsibility of the directors who agree with the respective agreement, is authorized to distribute provisional dividends during the fiscal period based on the earnings of that period, as long as no losses have accumulated.- Fourteenth Article: The corporation will have a General Manager who will be appointed by the Board and will be imbued with all authority inherent in a trade factor and all those expressly granted by the Board.- FOURTH TITLE.- COMMITTEES.- Fifteenth Article: Shareholders will meet in Ordinary Committees within the four-quarter period following the Summary.- Sixteenth Article: The Shareholder Committees will be appointed during the first quorum session by an absolute majority of shareholders with voting rights, and in the second session, with the shares present and represented, regardless of the number. Both in the Ordinary Committees as well as in the Extraordinary Shareholder Meetings, agreements will be adopted by absolute majority vote for which the shares that are present or represented in the Committee have a right, except where the law or these statutes require different majorities. Shareholders will have the right to one vote per share in their possession or represented by them, and they can accumulate them or distribute them in votings however they deem convenient.- Seventeenth Article: Agreement on the following matters can only be adopted by an Extraordinary Shareholder Committee: one) dissolution of the corporation; two) transformation, merger or division of the corporation and reform of its statutes; three) emission of bonds or convertible debentures in shares; four) transfer of fixed assets or liabilities of the corporation or of the total of its assets; five) the granting of real or personal guarantees to ensure obligations of third parties, except in the case of affiliate corporations, in which case approval by the Board will be sufficient; six) Other matters that by law or statute correspond to the knowledge or authority of the Shareholder Committees. The agreement on matters pointed out in numbers one, two, three and four can only be reached at a meeting held in the presence of a Notary, who must certify that the act is a faithful expression of the events and agreement in the meeting.-FIFTH TITLE.- SUMMARY AND EARNINGS.- Eighteenth Article: On December 31 of this year, a General Summary of the operations of the Corporation will be conducted. The destination of the earnings will be determined annually by the Shareholder Committee.- SIXTH TITLE.- EXTERNAL AUDITORS AND ACCOUNT INSPECTORS.- Nineteenth Article: The Ordinary Shareholder Committee will annually name External Auditors and two Propietary Account Inspectors and two Replacements to examine accounts, inventory and corporation statements, monitor operations and report, in writing, to the next meeting concerning compliance with the mandate. The duties of the Inspectors will be reinbursed and it will be the responsibility of the Ordinary Committee to determine the amount of said remuneration.- SEVENTH TITLE.- DISSOLUTION AND LIQUIDATION. Twentieth Article: The corporation will dissolve if any of the causes set forth by law or in these statutes occur.- Twenty-First Article: Once the Corporation has dissolved, it will continue to exist as a Legal Entity for purposes of its liquidation, in which case it should add to its name the words "in liquidation." During the liquidation, the statutes will apply to anything compatible with the state of the liquidation.- Twenty-Second Article: Once the Corporation has dissolved, liquidation will be carried out by a Liquidation Committee made up of three people appointed by the Shareholder Committee.-EIGHTH TITLE.- GENERAL PROVISIONS.- Twenty-Third Article. The differencies that can develop among shareholders, and between them and the corporation and its administrators, whether during their existence or during liquidation, will be resolved by referees appointed for each party and a neutral third appointed by agreement of both parties or by a civil judge in Santiago, with the three acting as a court. The shareholders must reside in Santiago. TRANSITORY PROVISIONS.- First Transitory Provision. Four million pesos of the corporation's capital without nominal value will be provided by and paid in the following fashion: 1) Alfredo Vidaurre Valdes, representing Princely International Corp, subscribes in this act to nine hundred ninety-nine shares, at four thousand pesos per share, that is, with a total price of three million nine hundred ninety-six thousand pesos, to be paid in cash in this act. B) Don Alvaro Rencoret Silva, representing Regal International Investments S.A., subscribes in this act to one share, at four thousand pesos per share, that is, with a total price of four thousand pesos, to be paid in cash in this act. -Second Transitory Article: The first Board of the corporation will be comprised of Mr. Patricio Guzman Mira, Mr. Ignacio Larrain Arroyo and Mr. Ricardo Menendez Ross.- The Board will function until the First Ordinary Shareholder Committee is held at which time a final appointment will be made.- Third Transitory Article: The board is authorized to appoint an independent external audit company for the one thousand nine hundred ninety-five period, choosing the most convenient among the firms Grant Thornton-Chile, Price Waterhouse and Langton Clarke.- SECOND: The holder of an abstract of this document is authorized to proceed with legalization of the Corporation.- The person of Alfredo Vidaurre Valdes to act as representative of PRINCELY INTERNATIONAL FINANCE CORPORATION, has the special power granted in Panama dated August fifteenth, one thousand nine hundred and ninety-five, which is formalized at the end of these documents under number one hundred seventy-two. The person of Alvaro Rencoret Silva to act in representation of REGAL INTERNATIONAL INVESTMENTS S.A., has the special power granted in Panama dated August fifteenth, one thousand nine hundred ninety-five, which is formalized at the end of these documents under number one hundred seventy-three.- Upon reading this document, those present sign. - A copy is provided. - I Attest - Alfredo Vidaurre Valdes.- Alvaro Rencouret Silva.- Martin Vasquez Cordero.-Substitute Notary.- This is a true copy of the original that I authorize as substitute and seal it with the Notary seal. - Santiago, August 29, 1995.- EX-3.6 7 y04808exv3w6.txt ARTICLES OF INCORPORATION & BY-LAWS OF DANUBE MARITIME INC. EXHIBIT 3.6 PUBLIC DOCUMENT NUMBER THIRTEEN THOUSAND NINE HUNDRED AND NINETY FOUR (13,994) WHEREBY the Corporation known as "DANUBE MARITIME INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, December 20, 1991 In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the - twentieth (20th) - day of the month of December, in the year one thousand, nine hundred and ninety one (1991), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama Circuit, holder of personal identification card number eight-sixty four-four hundred eighty two (8-64-482), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, single, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred thirty one-seven hundred thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred thirty-one thousand six hundred sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation subject to the following Articles of Incorporation: FIRST: The name of the Company is: "DANUBE MARITIME INC." SECOND: The objects and purposes of the corporation are: a) The purchase and sale in general of all kinds of real estates, movables, livestocks or of any nature; b) The management in general of personal property or immovables, whether as owner, or for -2- the account of third parties; c) The investments in general and the financing and in general operations in personal or real property, as well as the participation in industrial, commercial, real estate or financial corporations; d) The purchase or acquisition of patents, trademarks, copyrights, licenses and formulas and the commercial exploitation of the same; e) The undertaking of loans, whether with Banks, whether with private or public institutions, to increase or to apply to the businesses of the corporation, being able to guarantee the liabilities that in this sense may be incurred through the issuance of bonds, notes, promissory notes, pledge or mortgages upon all or any of the properties of the corporation; f) The purchase and sale in general of shares, bonds or other valuable securities of other corporations, whether on its own account, whether for the account of third parties, including the management of said securities, as well as for the corporation as in favour and for the account of third parties; g) The financing in general of other corporations or the participation in the same, through the payment of contributions in the integration of the capital stock of the same; h) The exploitation of mines, of any nature, as well as the exploitation of any industry; i) The exploitation, whether in whole, whether in part, of any other businesses, whether of maritime nature, whether in relation to fluvial, maritime, air or land transportation; j) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either in Panama or in any part of the world; k) The operation of maritime agencies and the execution of maritime operations in general, either in the territory of the Republic of Panama or any foreign country; l) The -3- purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending to the corporate purpose, as well as participation in other corporations, either Panamanian or foreign; m) The purchase of and dealing with stock or shares of capital stock in general any other commercial, maritime or financial, movable or unmovable operations, permitted by the Laws of the Republic of Panama or which may be permitted in the future; all of which purposes may be, carried out by the Corporation within or without of the Republic of Panama. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and -4- offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates -5- presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) -6- SHARE. B) The Resident Agent shall be the Law Firm "TAPIA & ASOCIADOS" whose address is as follows: Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama. C) The Directors of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), with domicile at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), with domicile at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identification card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identification card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me -7- known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number THIRTEEN THOUSAND NINE HUNDRED AND NINETY FOUR (13,994) (sgd.) Mario E. Correa Julio E. Linares F. Aura I. S. de Castillero Ma. I. Gonzalez RUBEN AROSEMENA GUARDIA, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, on the twentieth (20th) day of the month of December, in the year one thousand nine hundred and ninety one (1991), agrees with its original. (sgd.) Dr. RUBEN AROSEMENA GUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - - PANAMA - This document was filed at 02:46:02.7 p.m., on the 26th day of December of 1991, as per Volume 212 and Entry 4585 of the Journal, by Juan Montes.- Duties Paid B/.60.00; Liquidation No. 891072058.-(sgd.) Enith Cedeno Garcia, Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Rosa Elvira H. de Dutari, Chief of the Section. This document has been recorded at Microjacket 254849, Roll 34166, Frame 0128, of the Microfilm (Mercantile) Section of the Public Registry Office, on December 30, 1991.- (sgd.) Ivonne Arjona, Chief of the Section. I, LAURA DE HERAZO, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, February 3, 1993. LAURA W. DE HERAZO INTERPRETE PUBLICO CED. 8-162-1499 RESOLUCION No. 162 DE [ILLEGIBLE] BY-LAWS OF DANUBE MARITIME INC. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. -2- Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote -3- at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from -4- time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery or by mail, telex or fax. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. -5- Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Artic1e Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. -6- All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of -7- such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of -8- Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. -9- The undersigned, Secretary of "DANUBE MARITIME INC.", a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama, on the 30th day of December, 1991. Panama, December 30th, 1991. ___________________________ Elsa Maria Sousa Quintero (Elsa Ma. Sousa) EX-3.7 8 y04808exv3w7.txt ARTICLES OF INCORPORATION & BY-LAWS OF GENERAL VENTURE INC. EXHIBIT 3.7 ******************************************************************************** ARTICLES OF INCORPORATION OF GENERAL VENTURES INC. PURSUANT TO THE LIBERIAN BUSINESS CORPORATION ACT ******************************************************************************** ARTICLES OF INCORPORATION PURSUANT TO THE LIBERIAN BUSINESS CORPORATION ACT The undersigned, for the purpose of forming a corporation pursuant to the provisions of the Liberian Business Corporation Act, does hereby make, subscribe, acknowledge and file in the Office of the Minister of Foreign Affairs this instrument for that purpose, as follows: A. The name of the Corporation shall be: GENERAL VENTURES INC. B. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Liberian Business Corporation Act and without in any way limiting the generality of the foregoing, the corporation shall have the power: (1) To purchase or otherwise acquire, own, use, operate, pledge, hypothecate, mortgage, lease, charter, sub-charter, sell, build, and repair steamships, motorships, tankers, whaling vessels, sailing vessels, tugs, lighters, barges, and all other vessels and craft of any and all means of conveyance and transportation by land, water or air, together with engines, boilers, machinery, equipment and appurtenances of all kinds, including ***sts, sails, boats, anchors, cables, tackle, furniture and all other necessities thereunto appertaining and belonging, together with ail materials, articles, tools, equipment and appliances necessary, suitable or convenient for the construction, use and operation thereof; and to equip, furnish, and outfit such vessels and ships. (2) To engage in ocean, coastwise and inland commerce, and generally in the carriage of freight, goods, cargo in bulk, passengers, mail and personal effects by water between the various ports of the world and to engage generally in waterborne commerce. (3) To purchase or otherwise acquire, own, use, operate, lease, build, repair, sell or in any manner dispose of docks, piers, quays, wharves, dry docks, warehouses and storage facilities of all kinds, and any property, real, personal and mixed, in connection therewith. (4) To act as ship's husband, ship brokers, custom house brokers, ship's agents, manager of shipping property, freight contractors, forwarding agents, warehousemen, wharfingers, ship chandlers, and general traders. C. The registered address of the Corporation in Liberia shall be 80 Broad Street, Monrovia, Liberia. The name of the Corporation's registered agent at such address shall be The LISCR Trust Company. The aggregate number of shares of stock that the Corporation is authorized to issue Five Hundred (500) registered and/or bearer shares without par value. The Corporation shall mail notices and information to holders of bearer shares to the address provided to the Corporation by the shareholder for that purpose. The holder of a stock certificate issued to bearer may cause such certificate to be exchanged for another certificate in his name for a like number of shares, and the holder of shares issued in the name of the owner may cause his certificate to be exchanged for another certificate to bearer for a like number of shares. E. The Corporation shall have every power which a corporation now or hereafter organized under the Liberian Business Corporation Act may have. F. The name and mailing address of each incorporator and subscriber of these Articles of Incorporation and the number of shares of stock subscribed by each incorporator is:

The number of directors constituting the initial board of directors is three (3). H. The Board of Directors as well as the Shareholders of the Corporation shall have the. authority to adopt, amend or repeal the by-laws of the Corporation. I. Corporate existence shall begin upon filing these Articles of Incorporation with the Minister of Foreign Affairs as of the filing date stated on these Articles. IN WITNESS WHEREOF, I have executed this instrument on SEPTEMBER 3, 2003. /s/ A. Abedje ------------------------------------ A. Abedje $12.00 REVENUE STAMPS ON ORIGINAL On SEPTEMBER 3, 2003 before me personally came A. ABEDJE to me known and known to me to be the individual described in and who executed the foregoing instrument and he duly acknowledged to me that the execution thereof was his act and deed. [SEAL] /s/ [ILLEGIBLE] THE LISCR TRUST COMPANY The LISCR Trust Company hereby accepts its appointment as Registered Agent for GENERAL VENTURES INC. and hereby certifies that the office of The LISCR Trust Company is located at 80 Broad Street, City of Monrovia, County of Montserrado, Republic of Liberia. THE LISCR TRUST COMPANY BY: /s/ [ILLEGIBLE] ---------------------------------------- AUTHORIZED SIGNATURE Dated SEPTEMBER 3, 2003 TRANSFER OF SUBSCRIPTION FOR VALUE RECEIVED, I, A. ABEDJE have sold, assigned and transferred, and by these presents do sell, assign and transfer unto JUAN A. MONTES G. all my rights, title and interest as individual subscriber to or resulting from my respective subscription to the capital stock of GENERAL VENTURES INC. a corporation incorporated on SEPTEMBER 3,2003 under the laws of the Republic of Liberia, to the extent of One (1) share of the Common Stock of said corporation, and I request said corporation to issue the certificate for said share of stock to and in the name of said or his nominee, and I do hereby authorize, empower and direct the Treasurer or Secretary of said corporation to register this transfer on the books of said corporation effective as of SEPTEMBER 3, 2003. WITNESS my hand on SEPTEMBER 3, 2003. /s/ A. Abedje L.S. -------------------------------------- A. Abedje Signed in the presence of: /s/ [ILLEGIBLE] GENERAL VENTURES INC. By-Laws ARTICLE I Address and Offices Section 1.1 Registered Address. The registered address of the Corporation shall be at 80 Broad Street, Monrovia, Liberia. Section 1.2 Offices. The Corporation may have offices at such places within or without the Republic of Liberia as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II Shareholders Section 2.1 Annual Meetings. An annual meeting of shareholders shall be held for the election of directors at such date, time and place either within or without the Republic of Liberia as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. Section 2.2 Special Meetings. Special meetings of shareholders may be called at any time by the Board of Directors, to be held at such date, time and place either within or without the Republic of Liberia as may be designated by the Board If no date for an annual meeting has been designated by the Board of Directors for a period of thirteen (13) months after the last annual meeting, holders of not less than, ten percent (10%) of the shares entitled to vote in an election of directors may, in writing, demand the call of a special meeting specifying the time thereof, which shall not be less than two (2) nor more than three (3) months from the date of such call. The Secretary of the Corporation upon receiving the written demand shall promptly give notice of such meeting, or if he fails to do so within five (5) business days thereafter, any shareholder signing such demand may give such notice. Section 2.3 Notice of Meetings. Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, the purpose or purposes for which the meeting is called and, in the case of a special meeting, that it is being issued by or at the direction of the person or persons calling the meeting. Unless otherwise provided by law, the written notice of any meeting shall be given personally or sent by mail, telegraph, cablegram, telex or telecopier, not less than fifteen (15) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the mail, postage prepaid, directed to the shareholder at such shareholder's address as it appears in the Corporation's register of shareholders. In the case of shares issued to bearer, the Corporation shall send notices to each such shareholder to the address provided to the Corporation by such shareholder for such purpose. Section 2.4 Adjournments. Any meeting of shareholders, annual or special, may be adjourned from time to time to reconvene at the same or some other place, and, unless a meeting is adjourned for lack of a quorum, notice need not be given of any such adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted on the original date of the meeting. If after an adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to vote at the meeting. Section 2.5 Waiver_of Notice. Notice of meeting need not be given to any shareholder who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by such shareholder. Neither the business to be transacted at, nor the purpose of any meeting of the shareholders, need be specified in any written waiver of notice. Section 2.6 Quorum. At each meeting of shareholders, except where otherwise provided by law or the Articles of Incorporation or these By-laws, the holders of a majority of the outstanding shares of each class of shares entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. In the absence of a quorum the shareholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided by Section 2.4 of these By-laws until a quorum shall attend. Shares of the Corporation held on the record date for the meeting by the Corporation or a subsidiary of the Corporation shall neither be entitled to vote nor be counted in determining the total number of outstanding shares; provided, however, that the foregoing shall not limit the right of the Corporation to vote shares, including but not limited to its own shares, held by it in a fiduciary capacity. Section 2.7 Conduct of Meetings. Meetings of shareholders shall be presided over by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.8 Voting: Proxies. Unless otherwise provided in the Articles of Incorporation, each registered shareholder as of the relevant record date shall be entitled at every meeting of shareholders to one vote for each share standing in the name of such shareholder which has voting power upon the matter in question. Each shareholder entitled to vote at a meeting of shareholders, or to express consent or dissent without a meeting, may authorize another person or persons to act for such shareholder by proxy, but no such proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy must be signed by the shareholder or its attorney-in-fact. A duly executed proxy shall be irrevocable if it is entitled "irrevocable proxy" and states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duty executed proxy bearing a later date with the Secretary of the Corporation. Voting at meetings of shareholders need not be by written ballot and need not be conducted by inspectors unless the holders of a majority of the outstanding shares of all classes of shares entitled to vote thereon present in person or by proxy at such meeting shall so determine. Each director shall be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election of such director. Unless otherwise provided by law or by the Articles of Incorporation or these By-laws, any corporate action other than the election of directors requiring the vote of shareholders shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon. 2 In the case of shares issued to bearer, the bearer of a certificate or certificates representing such shares entitled to vote, shall be entitled to one vote at any meeting of the shareholders for each share entitled to vote at such meeting, represented by such certificate, upon presentation of such certificate or certificates, or upon presentation of such other evidence of ownership as may be prescribed by the board of directors. Section 2.9 Notice of Nomination. Nominations for the election of any director may be made by the Board of Directors or by any shareholder entitled to vote for the election of such director. Such nominations shall be made by notice in writing, delivered or mailed by first class mail, postage prepaid, to the Secretary of the Corporation not less than fifteen(15) days nor more than sixty (60) days prior to any meeting of the shareholders called for the election of such director; provided, however, that if less than twenty-one(21) days' notice of the meeting is given to shareholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the seventh(7th) day following the day on which notice of the meeting was given to shareholders Notice of nominations which are proposed by the Board of Directors shall be given by the Chairman of the Board. Each such notice of nomination shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee and (iii) the number of shares of the Corporation which are beneficially owned by each such nominee. The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Section 2.10 Determination of Shareholders of Record. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholderes or any adjournment thereof, or to express consent or dissent from any proposal without a meeting, or to receive payment of any dividend or the allotment of any rights, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a date as the record date for any such determination of shareholders Such date shall not be more than sixty(60) nor less than fifteen(15) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is so fixed: (i) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. Section 2.11 List of Shareholders at Meetings. A list of shareholders as of the record date certified by the Secretary or by a transfer agent, shall be produced at any meeting of shareholders upon request of any shareholder at the meeting or prior thereto. If the right to vote at any meeting is challenged, the inspector of election if any, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting. Section 2.12 Action Without a Meeting. Any action required to be taken or which may be taken at any meeting of shareholders of the Corporation may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same effect as a unanimous vote of shareholders 3 ARTICLE III Board of Directors Section 3.1 Powers. All corporate power shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed by, the Board of Directors, except as may be otherwise provided by law or in the Articles of Incorporation. Directors need not be shareholders. Section 3.2 Number. The number of directors constituting the entire Board of Directors shall be four (4) unless the shares of the Corporation are owned beneficially and of record by less than four(4) shareholders in which case the number of directors shall be equal to the number of shareholders. Cumulative voting for directors shall not be permitted. Section 3.3 Vacancy. Any vacancies occurring in the Board of Directors for any reason, may be filled by the vote of a majority of the directors then in office, although less than a quorum exists, or by the vote of the shareholders. Any directors so chosen shall hold office until their respective successors shall be elected and qualified. Section 3.4 Removal Any director of the Corporation may at any time be removed with or without cause by the vote of the shareholders. Section 3.5 Resignation. A director may resign at any time by giving written notice to the President or Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by such officer, and the acceptance of the resignation shall not be necessary to make it effective. Section 3.6 Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the Republic of Liberia and at such times as the Board may from time to time determine by resolution, and if so determined notice thereof need not be given. Section 3.7 Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the Republic of Liberia whenever called by the President or by any two (2) directors. Five (5) days' notice of the time and place of any special meeting shall be given by the person or persons calling the meeting to each other director either personally or by mail, telegraph, cablegram, telex or telecopier. It shall not be necessary to specify the purpose of any special meeting in any notice thereof. Notice of meeting need not be given to any director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting the lack of notice. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in any written waiver of notice. Section 3.8 Quorum; Vote Required for Action. At all meetings of the Board of Directors the presence of a majority of the entire Board shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board except as otherwise provided in the Articles of Incorporation and in these By-laws. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.9 Conduct of Meetings. Meetings of the Board of Directors shall be presided over by the President, or in the absence of the President, by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in 4 the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 3.10 Action by Directors Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or of such 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 of Directors or such committee. Section 3.11 Participation in Meetings by Conference Telephone Permitted. Members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.11 shall constitute presence in person at such meeting. Section 3.12 Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity. Section 3.13 Interested Director, Quorum. No contract or transaction between the Corporation and one or more of its directors, or between the Corporation and any other corporation, firm, association or other entity in which one or more of its directors are directors or officers, or have a substantial financial interest, shall be either void or voidable for this reason alone or by reason alone that such director or directors are present at the meeting of the Board of Directors or committee thereof which approves such contract or transaction, or that his or her or their votes are counted for such purpose, if: (i) the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the Board or committee, and the Board or committee approves such contract or transaction by a vote sufficient for such purpose without counting the vote of such interested director or, if the votes of the disinterested directors are insufficient to constitute an act of the Board under the Articles of Incorporation or these By-laws, by unanimous vote of disinterested directors; or (ii) the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the shareholders entitled to vote thereon, and such contract or transaction is approved by vote of such shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which approves such contract or transaction. ARTICLE IV Officers Section 4.1 Officers; Election. As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a President, a Secretary and a Treasurer. The Board may also elect one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as the Board may determine are desirable or necessary to carry on the business of the Corporation and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person. Officers may but need not be directors or shareholders of the Corporation. The salaries of all officers of the Corporation shall be fixed from time to time by the Board of Directors. 5 Section 4.2 Term of Office; Resignation; Removal; Vacancies. Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board following the next annual meeting of shareholders succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. the Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board. Section 4.3 President. The President shall be the chief executive officer and shall have general charge and supervision of the business of the Corporation and, in general, shall perform all duties incident to the office of president of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or as may be provided by law. Section 4.4 Vice Presidents. Any Vice President, at the request or in the absence or disability of the President, shall perform the duties of the President, and shall perform such other duties as may, from time to time, be assigned to him or her or them by the Board or the President or as may be provided by law. If there shall be more than one Vice President, the Board of Directors may determine which one or more of the Vice Presidents shall perform any of such duties or, if such determination is not made by the Board, the President may make such determination; otherwise any of the Vice Presidents may perform any of such duties. Section 4.5 Secretary. The Secretary shall record the proceedings of the shareholders, the Board of Directors and any committees in a book or books to be kept for that purpose, shall see that notices are given and records and reports are properly kept and filed by the Corporation in accordance with the provisions of these By-laws or as required by law, shall be custodian of the seal of the Corporation and affix the corporate seal to any document the execution of which, on behalf of the Corporation, is duly authorized; and, in general, shall perform all duties incident to the office of secretary of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or the President or as may be provided by law. Section 4.6 Treasurer. The Treasurer shall be the chief financial officer and shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation and shall deposit or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Board of Directors. If required by the Board, the Treasurer shall give a bond for the faithful discharge of his or her duties, with such surety or sureties as the Board may determine. The Treasurer shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Corporation, shall render to the President and to the Board, whenever requested, an account of the financial condition of the Corporation, and, in general, shall perform all the duties incident to the office of treasurer of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or the President or as may be provided by law. Section 4.7 Other Officers. The other officers, if any, of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in a resolution of the Board of Directors which is not inconsistent with these By-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties. 6 ARTICLE V Indemnification of Directors and Others Section 5.1 Third Party Proceedings. The Corporation shall indemnify to the full extent authorized by law any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful. Section 5.2 Corporate Proceedings. The Corporation shall indemnify to the full extent authorized by law any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person or in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person's duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 5.3 Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer against any liability asserted against such person and incurred by such person in such capacity whether or not the Corporation would have the power to indemnify such person against such liability by law or under the provisions of these By-laws. ARTICLE VI Certificates for Shares Section 6.1 Form. Except as otherwise provided in the Articles of Incorporation or these By-laws, every holder of shares in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, of the Corporation. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or 7 registered by a registrar other than the Corporation itself or its employees. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer at the date of issue. Each certificate representing shares of the Corporation shall when issued state upon the face thereof: (i) that the Corporation is formed under the laws of the Republic of Liberia, (ii) the name of the person or persons to whom issued, (iii) the number of shares which such certificate represents; and (iv) the par value of each share represented by such certificate. Any restrictions on transfer of shares represented by a certificate shall be noted on the face or back of each certificate for shares issued by the Corporation. The Corporation shall keep a register continuing the names and addresses of all shareholders, the number and class and series, if any, of shares held by each shareholder, and the date(s) when each shareholder became the owner of record of shares. Except as otherwise provided in the Articles of Incorporation and these By-laws, upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon the Corporation's register of shareholders. Section 6.2 Lost, Stolen or Destroyed Share Certificates; Issuance of New Certificates. The Corporation may issue a new certificate or new certificates in the place of any certificate or certificates theretofore issued by it, alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the share certificate or certificates to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate, the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it with respect to the certificate alleged to have been lost, stolen or destroyed. ARTICLE VII Miscellaneous Section 7.1 fiscal Year. The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board of Directors. Section 7.2 Dividends. Dividends on the shares of the Corporation outstanding from time to time may be declared by the Board of Directors as permitted by law. Section 7.3 Seal. The Corporation may have a corporate seal which shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Republic of Liberia", and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. Section 7.4 Form of Records. Any records maintained by the Corporation in the regular course of its business, including its register of shareholders, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 7.5 Annual Report. Upon the written request of any person who shall have been a shareholder of record for at least six (6) months immediately preceding his request, or of any person 8 holding, or thereunto authorized in writing by the holders of, at least five percent (5%) of any class of the outstanding shares of the Corporation, the Corporation shall give or mail to such shareholder an annual balance sheet and profit and loss statement for the preceding fiscal year, and, if any interim balance sheet or profit and loss statement has been distributed to its shareholders or otherwise made available to the public, the most recent such interim balance sheet or profit and loss statement. Section 7.6 Corporate Records. Each shareholder shall have a right to inspect, in person or by agent or attorney, during the usual hours of business, for a purpose reasonably related to such shareholder's interests as a shareholder, the Corporation's share register, books of account, and minutes of all proceedings, and to make copies or extracts therefrom. Section 7.7 Amendment of By-Laws. These By-laws may be amended or repealed, and new By-laws may be adopted, by the vote of the shareholders or of the Board of Directors, but any By-Laws adopted by the Board of Directors may be amended or repealed by the vote of the shareholders. The undersigned, Secretary of GENERAL VENTURES INC., a company duly organized and existing in accordance with the laws of the Republic of Liberia, does hereby C E R T I F Y: That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held on the 3th day of September, 2003. /s/ Elsa Ma Sousa -------------------------- Elsa Ma Sousa 9 EX-3.8 9 y04808exv3w8.txt ARTICLES OF INCORPORATION & BY-LAWS OF IMPERIAL MARITIME LTD. EXHIBIT 3.8 TRANSLATION.- PUBLIC DOCUMENT NUMBER NINE THOUSAND SIX HUNDRED AND SEVENTY SIX (9676) WHEREBY it was notarized minutes of a special meeting of the Shareholders of "ELLESMERE SHIPPING INC.", by means of which the article First of the Articles of incorporation are amended. Panama, December 21, 1999. In the City of Panama, capital of the Republic and seat of the Notarial circuit of the same name, on the twenty first (21st) day of the month of December, in the year one thousand nine hundred and ninety nine (1999), before me, Licentitate CLAUDIO JOSE LACAYO ALVAREZ, Third Notary Public of the Panama Circuit, holder of personal identity card number four-one hundred and one-two thousand three hundred and forty four (4-101-2344), personally appeared Licentiate Mario Eduardo Correa Esquivel (Mario E. Correa), in his capacity of member of the law TAPIA, LINARES Y ALFARO, Resident Agent of ELLESMERE SHIPPING INC., recorded as per Microjacket three six five eight eight six (365886), Document one two nine two six (12926), of the Mercantile Section of the Public Registry Office, to me known, and he requested that I notarize, as I in effect notarized, minutes of a special meeting of the Shareholders of "ELLESMERE SHIPPING INC.", by means of which the article First of the Articles of Incorporation are amended. -- I made known to the appearing party before me that a copy of this public instrument must be registered; and having been read to him in the presence of the attesting witnesses, Vielka Mireya Diaz de Caftizales, with personal identity card number eight-one hundred and eight-four hundred and twenty one-six hundred and seventy three (8-421-673); and Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred and twenty eight-one hundred and forty nine (8-128-149), of legal age and residents of this city, to me known and qualified to discharge the duty, he found it to be correct, he approved it and they all sign it, as a matter of record, before me, the Notary Public, whereunto I attest. This Document bears number NINE THOUSAND SIX HUNDRED AND SEVENTY SIX - (9676) (sgd) Mario E. -- Correa Vielka D. de Canizales -- Ma. I. Gonzalez Claudio -- Lacayo, Third Notary Public. ELLESMERE SHIPPING INC. - Minutes of a special meeting of Shareholders.- A special meeting of the Shareholders of "ELLESMERE SHIPPING INC.", was held at Via General Nicanor A. de Obarrio (50 Street), Bancomer Plaza, 4th Floor, City of Panama, Republic of Panama, at ten o'clock in the forenoon on the 17 day of December, 1999.-The President of the corporation, Mr. Juan A. Montes G., called the meeting to order and presided the same; and the Secretary of the corporation, Mrs, Elsa Ma. Sousa, acted as Secretary of the meeting.- The Secretary stated that there were present or represented the holders of all of the outstanding and issued shares of the corporation, who waived notice of the meeting. The President, therefore, declared the meeting duly installed and ready for the transaction of business.- The Presidents then informed that he deemed it convenient to the best interests of the corporation to change its present name to "IMPERIAL MARITIME LTD (BAHAMAS) INC.", and submitted said proposal to the consideration of the meeting.- Upon motion duly made, seconded and carried, the following resolutions were approved: IT IS RESOLVED; To change, as it is hereby changed, the present corporate name of this corporation to the new name " IMPERIAL MARITIME LTD (BAHAMAS) INC." and to amend, as it is hereby amended, Article First of the Articles of Incorporation of this corporation, as follows: "FIRST: The name of the corporation is " IMPERIAL MARITIME LTD (BAHAMAS) INC.",- AND IT IS FURTHER RESOLVED: To authorize, as they are hereby authorized, the President and Secretary of the corporation, acting individually, to issue a Document of Amendment to the Articles of Incorporation.- There being no further business to come before the meeting, it was adjourned.- The Presidente of the meeting, (sgd.) Juan A. Montes G. -- The Secretary of the meeting, (sgd.) Elsa Ma. Sousa.-- The undersigned, President and Secretary of "ELLESMERE SHIPPING INC.", do hereby CERTIFY: a) That they have been authorized to execute this Document of Amendment of the Articles of Incorporation, by resolution adopted by the holders of all the issued and outstanding shares of the Corporation; b) That the resolution whereby the Articles of Incorporation of the Corporation were amended was adopted at a meeting of the shareholders held in the City of Panama, Republic of Panama, on December 17, 1999; and c) That the foregoing is a true copy of the original minutes of said meeting. -- Panama, December 17, 1999. -- Signed: Juan A. Montes G., President -- Elsa Ma. Sousa, Secretary. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty first (21st) day of the month of December, in the year one thousand nine hundred and ninety nine (1999).- (sgd.) Claudio Lacayo Alvarez, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 11:27:49.7 a.m., on the 22 day of December of 1999, as per Volume 279 and Entry 74891 of the Journal, by Tatiana Tapia.- Duties Paid B/.50.00; Liquidation No. 9908025649.- (sgd.) Olivia G: de Nieto.- There is a stamped seal of the Public Registry Office of Panama. This document has been recorded at Microjacket 365886, Document 57536, of the (Mercantile) Section of the Public Registry Office, on December 22, 1999.- (sgd.) M. Portillo. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. PUBLIC DOCUMENT NUMBER NINE THOUSAND SEVEN HUNDRED AND EIGHTY TWO - (9782) WHEREBY The Corporation known as "ELLESMERE SHIPPING INC.", with domicile in the City of Panama. Republic of Panama, is incorporated. Panama, August 10th, 1999. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the tenth (10th) day of the month of August, in the year one thousand nine hundred and ninety nine (1999), before me, DR. MARIO VELASQUEZ CHIZMAR. Fifth Notary Public of the Panama Circuit, holder of personal identity card number eight-one hundred and seventy six-four hundred and twenty two (8-176-422), personally appeared the following persons to me known: Licentiate JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.) male, of legal age, married, lawyer. Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and ADOLFO ENRIQUE LINARES FRANCO (Adolfo E. Linares), male, of legal age, married, lawyer. Panamanian and resident of this city, holder of personal identification card number eight-two hundred and forty two-four hundred and two (8-242-402); and they requested that I issue this Public instrument to make of record that they are incorporating a corporation, according to Panamanian law subject to the following Articles of incorporation: FIRST: The name of The Company is: "ELLESMERE SHIPPING INC." SECOND: The purposes and objectives which the corporation shall mainly undertake, develop and carry on within or outside the Republic of Panama are the following: (a) to acquire, possess, administrate, encumber, lease, alienate and dispose of in any form, all types of goods, such as chattel, real estate, livestock or of any other nature, including rights, obligations and quotas of participation, whether as owner [ILLEGIBLE] for the account of third parties; (b) to issue, administer, buy, sell and negotiate all types of shares, quotas, documents, bonds, [ILLEGIBLE] or securities, whether on its own account or on the account of third parties;(c) to buy acquire, sell, or grant patents, marks, copyrights, licenses and formulas. and to exploit them commercially; (d) to buy, sell, charter and administrate all types of ships; as well as to operate maritime agencies and carry on maritime operations in general; (e) to invest in companies, businesses or projects, and the financing, negotiation, exploitation or participation in mining, industrial, commercial, real estate, financial, maritime or any another class of companies; (f) to open, operate and administer accounts in banks or other lending or financial institutions; and to give and take loans; to remit, accept, endorse, discount and grant notes, drafts and other negotiable documents and to offer all kinds of guarantees in favor of third parties upon all or any of the assets of the company; and (g) to engage in any another lawful business permitted by the Laws of the Republic of Panama or which these may allow in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world, and may likewise re-domicile or change its domicile of incorporation in order to continue existing under the laws of another country or jurisdiction, subject to the authorization of the Board of Directors or the Assembly of Shareholders of the corporation. SIXTH: The number of the for directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate; them. The Board of Directors shall have the duties and exercise the powers specifically set forth in The by-laws of the Corporation, If shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of The corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the by-laws of the Corporation. The same person may perform two (2) Or more offices. NINTH: This President of the corporation is the Legal Representative In his absence or inability, shall be the Vice-president. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it The Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the by-laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable). with or without power of substitution. FOURTEENTH The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: (A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe are as follows: JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor. City of Panama. Republic of Panama, ONE (1) SHARE; and ADOLFO E. LINARES, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street. Bancomer Plaza. Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE: (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412). Panama Five (5). Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305); (C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre). and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa). all domiciled at Via General Nicanor A de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama: and. (D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), vice-president and Treasurer: and ELSA MARIA SOUSA QUINTERO (Elsa Ma, Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses. Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred and twenty eight-one hundred and forty nine (8-128- 149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number NINE THOUSAND SEVEN HUNDRED AND EIGHTY TWO (9782) (sgd.) Julio E. Linares, -- Adolfo E. Linares, -- Aura I. S. de Castillero -- Ma. I. Gonzalez -- MARIO VELASQUEZ CHIZMAR. Fifth Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the Tenth (10th) day of the month of August, in the year one thousand nine hundred and ninety nine (1999). -- (sgd.) MARIO VELASQUEZ CHIZMAR, Fifth Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 09:43:17.8 a.m., on the 13 day of August of 1999. as per Volume 279 and Entry 26288 of the Journal, by Tatiana Tapia.- Duties Paid B/,60.00: Liquidation No. 89993366463.-(sgd.) Catalina E. Cano.- There is a stamped seal of the Public Registry Office of Panama. This document has been recorded at Microjacket 365886, Document 12926, of the (Mercantile) Section of the Public Registry Office, on August 17, 1999,- (sgd.) M. Portillo. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama. August 27, 1999. /s/ Bertilda R. De Torres -------------------------- [SEAL] IMPERIAL MARITIME LTD (BAHAMA) INC. BY-LAWS CHAPTER ONE Office Article One.- Main Offices. The main offices of this corporation shall be at Plaza 2000, 4th Floor, Via General Nicanor A. de Obarrio (50th Street), City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting, at such hour and on such business date as may be determined by the Board and designated in the notice of the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. 2 If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each owner of stocks of the company, with voting rights, shall have the right to one vote for each share at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is with 51% of the votes, unless the Articles of Incorporation or the Law provides to the contrary Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall 3 specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. Chair and Secretary of the meetings. The President, or in his/her absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until 4 the election and qualification of their successors. In the event of a vacancy in the board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - The Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of 5 the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He 6 shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of 7 Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. 8 All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Canceled and Lost Certificates. All stock certificates waived shall be canceled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the 9 Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums 10 that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. 11 EX-3.9 10 y04808exv3w9.txt ARTICLES OF INCORPORATION & BY-LAWS OF KATTEGAT SHIPPING INC. EXHIBIT 3.9 TRANSLATION PUBLIC DOCUMENT NUMBER NINE THOUSAND SEVEN HUNDRED AND EIGHTY THREE (9783) WHEREBY the Corporation known as "KATTEGAT SHIPPING INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, August 10th, 1999. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the tenth (10th ) day of the month of August, in the year one thousand nine hundred and ninety nine (1999), before me, DR. MARIO VELASQUEZ CHIZMAR, Fifth Notary Public of the Panama Circuit, holder of personal identity card number eight-one hundred and seventy six-four hundred and twenty two (8-176-422), personally appeared the following persons, to me known: JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and ADOLFO ENRIQUE LINARES FRANCO (Adolfo E. Linares), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and forty two-four hundred and two (8-242-402); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "KATTEGAT SHIPPING INC." SECOND: The purposes and objectives which the corporation shall mainly undertake, develop and carry on within or outside the Republic of Panama are the following: (a) to acquire, possess, administrate, encumber, lease, alienate and dispose of in any form, all types of goods, such as chattel, real estate, livestock or of any other nature, including rights, obligations and quotas of participation, whether as owner or for the account of third parties; (b) to issue, administer, buy, sell and negotiate all types of shares, quotas, documents, bonds, titles or securities, whether on its own account or on the account of third parties; (c) to buy, acquire, sell, or grant patents, marks, copyrights, licenses and formulas, and to exploit them commercially; (d) to buy, sell, charter and administrate all types of ships; as well as to operate maritime agencies and carry on maritime operations in general; (e) to invest in companies, businesses or projects, and to financing, negotiation, exploitation or participation in mining, industrial, commercial, real state, financial, maritime or any another class of companies; (D to open, operate and administer accounts in banks or other lending or financial institutions; and to give and take loans; to remit, accept, endorse, discount and grant notes, drafts and other negotiable documents, and to offer all kinds of guarantees in favor of third parties upon all or any of the assets of the company; and (g) to engage in any another lawful business permitted by the Laws of the Republic of Panama or which these may allow in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world, and may likewise re-domicile or change its domicile of incorporation in order to continue existing under the laws of another country or jurisdiction, subject to the authorization of the Board of Directors or the Assembly of Shareholders of the corporation. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the by-laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the by-laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vice-president. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the by-laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation FINAL PROVISIONS: (A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and ADOLFO E. LINARES, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305); (C)The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), all domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and (D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A.Montes G.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vice-president and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred and twenty eight-one hundred and forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number NINE THOUSAND SEVEN HUNDRED AND EIGHTY THREE (9783) (sgd.) Julio E. Linares. -- Adolfo E. Linares. -- Aura I. S. de Castillero -- Ma. I. Gonzalez - MARIO VELASQUEZ CHIZMAR, Fifth Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the seventh (7th) day of the month of June, in the year two thousand (2000). (sgd.) Blanca Vanegas de Jacome, Fifth Notary Public. There is a stamped seal of the PUBLIC REGISTER OFFICE.- Public Registry Office.- A copy of this document was registered at the Mercantile Section since the seventh day of August one thousand nine hundred and ninety nine.- Microjacket 365877, Document 12908.- Duties Paid B/.10.00.- Panama, June 8, 2000.- (sgd.) Honorina de Portillo, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, June 9, 2000 /s/ Bertilda R. De Torres -------------------------- [SEAL] BY-LAWS OF KATTEGAT SHIPPING INC. CHAPTER ONE OFFICES Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vice-President of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** EX-3.10 11 y04808exv3w10.txt MEMO OF ASSOCIATION & ARTICLES OF ASSOCIATION OF KINGLY SHIPPING LTD. EXHIBIT 3.10 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) No. 71,248 B KINGLY SHIPPING LTD. I, JACINDA P. BUTLER, ASST. Registrar General of the Commonwealth of The Bahamas Do Hereby Certify pursuant to the International Business Companies Act (No. 2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that KINGLY SHIPPING LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 21ST day of JANUARY 1998 Given under my hand and seal at Nassau in the Common- wealth of The Bahamas /s/ J. P. Butler --------------------------- ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 MEMORANDUM OF ASSOCIATION OF KINGLY SHIPPING LTD. 1. The name of the Company is KINGLY SHIPPING LTD. 2. The Registered Office of the Company will be situate at the Chambers of Harry B. Sands & Company in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company will be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 4. The objects or purposes of the Company are:- (1) To own, construct, hire, purchase, bareboat charter, charter, lease otherwise acquire and work ships and vessels of any class, and to establish and maintain lines or regular services of ships or other vessels, and generally to carry on the business of shipowners; (2) To engage in any act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law for the time being in force in the Commonwealth of The Bahamas. 5. Shares in the Company shall be issued in the currency of The United States of America. 6. The Company shall have an authorized capital of U.S. $5,000.00 with an aggregate par value of U.S.$5,000.00. 7. The Company shall have one class of shares of one series comprising 5,000 ordinary common shares with a par value of U.S.$1.00 each, but the Company is hereby authorized to issue other classes and series of shares as the directors may by resolution determine. 8. The directors shall have the authority and the power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of shares. 9. The number of shares into which the share capital is divided may be issued as registered shares or as shares issued to bearer as the directors may by resolution determine. 10. Registered shares may be exchanged and converted into shares issued to bearer and shares issued to bearer may be exchanged and converted into registered shares. 11. Any notice or other information required by the International Business Companies Act, 1989 to be given to the holder of shares issued to bearer shall be given in accordance with the Articles of Association of the Company. 12. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum or the Articles of Association of the Company. 13. The Memorandum or Articles of Association of the Company may be amended by a resolution of members or of the directors. 14. The liability of the members of the Company is limited to the amount unpaid on the shares respectively held by them. -2- WE, the several persons, whose names and addresses are subscribed herein are desirous of incorporating an International Business Company under the laws of the Commonwealth of The Bahamas in pursuance of this Memorandum of Association. NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS 1. AEGIS LIMITED By: /s/ [ILLEGIBLE] ------------------- Assistant Secretary Nassau, Bahamas 2. RAPPEL LIMITED By: /s/ [ILLEGIBLE] ------------------- Assistant Secretary Nassau, Bahamas Dated this 21st day of January, A.D. 1998. WITNESS TO THE ABOVE SIGNATURES: /s/ [ILLEGIBLE] - --------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. Butler ----------------------- Asst. Registrar General January 21st, 1998 THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 ARTICLES OF ASSOCIATION OF KINGLY SHIPPING LTD. 1. These Articles shall constitute the Regulations of the Company and reference therein to "the Act" shall mean the International Business Companies Act, 1989. 2. In these Regulations, words and expressions defined in the Act shall have the same meaning; and unless there be something in the subject or context inconsistent therewith references to directors shall mean the Board of Directors despite the fact that the Board may consist of one director only, and references to persons shall include corporations and all entities capable of having a legal existence. SHARE CAPITAL 3. The shares shall be under the control of the directors who may offer, allot, grant options or otherwise dispose of them to such persons or redeem them at such times for such consideration and upon such terms and conditions as they may determine by resolution. 4. Shares in the Company may be issued with such designations, powers, preferences and rights, qualifications, limitations and restrictions with regard to dividend, voting, return of capital or otherwise as the directors may determine by resolution without prejudice to any rights attaching to any existing shares and subject to the provisions of the Act. 5. Redeemable shares shall be redeemed on such terms and conditions and in such manner as the directors may determine by resolution before or at the time of the issue of such shares; and such shares may be redeemed at a premium. SHARE CERTIFICATES 6. Certificates of title to shares shall be issued and the signatures or common seal thereon may be facsimiles. 7. Every member shall be entitled to one certificate for the shares registered in his name or to several certificates, each for one or more of such shares. In respect of shares held jointly by two or more persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares to one of several joint holders shall be delivery to all. 8. If a certificate is worn or lost, the directors may issue a new certificate on satisfactory proof of its loss or the production of the worn-out certificate and upon such indemnity, as is reasonable, against any loss or liability which the Company or its directors may incur by reason of wrongful or fraudulent use or representation made by any person by virtue of the possession of such certificate. 9. The Company shall be entitled to treat the member specified in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of The Bahamas. 10. The Company may issue share certificates, otherwise known as warrants, to bearer in respect of any fully paid-up shares of the Company, stating that the bearer of the warrant is entitled to the shares therein specified. Such warrants shall be issued upon such terms and subject to such conditions as may be resolved upon by the directors. -2- TRANSFER AND TRANSMISSION 11. Upon the request of a holder of registered shares that such shares be exchanged for bearer shares, the directors may cancel the share certificate in respect thereof and the entry in the Share Register and in such event shall issue in substitution therefor a certificate evidencing shares issued to bearer subject to such indemnity and upon such terms and subject to such conditions as the directors may reasonably require. 12. Upon the request of a holder of a certificate in respect of shares issued to bearer that such shares be exchanged for registered shares, the directors may, subject to the terms and conditions on which the same were issued, cancel such certificate and issue, in substitution, a certificate evidencing registered shares and enter the name and address of the holder thereof in the Share Register, subject to such indemnity as the directors may reasonably require. 13. Any person who becomes entitled by operation of law or otherwise to a share or shares in the Company in consequence of the death, incompetence or bankruptcy of any member, shall be the only person recognized by the Company as having any title to the shares; and may execute a valid transfer; or upon application to the Company, may be registered as a member upon such evidence as may reasonably be required by the directors. An application by any such person to be registered as a member shall be deemed to be a transfer of shares for all purposes. ALTERATION OF SHARE CAPITAL 14. Any new shares issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the directors by resolution shall determine; and except so far as otherwise provided by the terms of issue shall be considered part of the original capital for all purposes under the Act and these Articles. PROXIES AND REPRESENTATIVES AT MEETINGS OF MEMBERS 15. A member who is an individual or corporation may be represented at a meeting of members by a proxy. The instrument appointing a proxy shall be in writing or in such a form as the Chairman of the meeting shall deem acceptable. VOTING AT MEETING OF MEMBERS 16. Every member holding voting shares shall either in person or by proxy have one vote on a show of hands and on a poll shall have one vote for every voting share held. Where a corporation, being a member, wishes to be present, it must be represented by a proxy; such proxy shall be entitled to vote for such corporation on a show of hands and also on a poll. If there be joint registered holders of any shares, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 17. A Committee appointed for a member of unsound mind may vote on his behalf at any meeting of members which such member is entitled to attend and vote. PROCEEDINGS AT MEETINGS OF MEMBERS 18. The President of the Company, or in his absence, any Vice-President, shall preside as Chairman of meetings of members; if both are absent, the members shall choose one of their numbers present at the meeting to be the Chairman. 19. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in the case of an equality of votes the Chairman shall, both on a show of hands and at the poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member. -3- 20. At any general meeting of the members unless a poll is demanded by a member present in person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the members shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. 21. If a poll is demanded it shall be taken in such manner as the Chairman directs and the result of such poll shall be deemed to be the resolution of the members. 22. When all members entitled to be present and vote sign either personally or by proxy the minutes of an annual general or an extraordinary general meeting, the same shall be deemed to have been duly held notwithstanding that the members have not actually come together or that there may have been technical defects in the proceedings and a resolution in writing signed by all the members aforesaid shall be as valid and effectual as if it had been passed at a meeting of the members duly called and constituted. 23. The Chairman, with the consent of the meeting, may adjourn any meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 24. A meeting of members may be held by telephone or other electronic means, without prior notice, if all members entitled to vote participate and are able to hear each other at the same time and recognize each other's voice; and a resolution approved by simple majority vote, in writing or by telex, telegram, telephone, cable, telefax or other written electronic communication from a duly authenticated source, shall be effectual at the date thereof as a resolution of members. SERVICE OF NOTICE ON MEMBERS 25. In the case of members holding registered shares, notice of meetings of members and other information or written statement required to be given to members, shall be given by personal service, or sent by airmail, or by telex, telegram, telefax, cable or other electronic means at the discretion of the directors, to each member at the address shown in the Share Register, or in the case of joint holders of the same share or shares, at the address of the holder first named in the Share Register and notice so given shall be sufficient notice to all such joint holders. 26. In the case of members holding shares issued to bearer, notice of meetings of members or other information or written statement required to be given to members, shall be given by airmail addressed to the agent or attorney whose name and address has been given, to the Company in writing, for service of notice by the bearer of the share, identified for this purpose by the number on the share certificate; or in the absence of such address or if the notice, information or written statement cannot be served for any other reason, by publishing the notice information or written statement in a newspaper circulated in The Bahamas and in a newspaper circulated in the place where the Company has its principal office. 27. Seven days notice of any meeting shall be given to members holding both registered shares and shares issued to bearer. Any notice if served by post, shall be deemed to have been served within seven days of posting; and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. The non-receipt of notice by any member shall not invalidate the proceedings of any meeting. DIRECTORS 28. Subject as hereinafter provided the Company shall have at least one director but not more than seven. The Company or the Directors may, by resolution, amend the Articles from time to time to increase the minimum number or vary the maximum number of directors. 29. The first directors of the Company shall be elected by the subscribers to the Memorandum of Association and thereafter the directors shall be elected by resolution of members or resolution of directors for such terms as may be specified by the enabling resolution. -4- 30. A director need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a director. 31. Each director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) and (3) of the Act, a director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind, or of such infirm health as to be incapable of managing his affairs. A director may be removed by resolution of members. 32. The directors by resolution may fix the emoluments of directors in respect of services rendered or to be rendered in any capacity to the Company, subject to any resolution of members; and such emoluments shall be paid out of the funds of the Company. Directors shall also be paid out of funds of the Company all expenses, including travelling and hotel expenses, properly incurred by them in connection with the business of the Company, as may be approved by resolution of directors and subject to any resolution of members. 33. A director may hold concurrently with his office as director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may be interested as shareholder or otherwise for such remuneration and on such other terms and conditions as the directors of the Company may determine and shall not be accountable to the Company for the same. POWERS OF DIRECTORS 34. The business and affairs of the Company shall be managed by the directors who may exercise all the powers of the Company that are not expressly reserved to the members under the Act or any other laws of the Bahamas. 35. If the Board comprises only one, such sole director shall full power to represent the Company and to manage the affairs and business of the Company. If there be any vacancy in the Board, the continuing director or directors may act notwithstanding any vacancy in their body, save that if the number of directors has been fixed at two or more persons, and by reason of vacancies having occurred among the directors there shall be only one continuing director, he shall be authorized to act alone only for the purpose of appointing another director. MEETINGS OF DIRECTORS 36. The directors may meet upon not less than two clear days' notice at such place within or outside The Bahamas as and whenever they think necessary for the dispatch of business and may adjourn, and otherwise regulate their meetings and proceedings as they think fit. A meeting of directors may be convened by the President or failing him any Vice President or any other director. 37. A majority of the Board of Directors may waive notice of any meeting. 38. A properly constituted meeting of directors shall be competent to exercise all or any of the powers, duties, authorities and discretions for the time being vested in, or exercisable by, them as a body under authority of the Act, the Memorandum and these Articles. Where the Board comprises more than one director a quorum shall constitute fifty percent of the membership of the Board. 39. The President, or in his absence, a Vice-President shall preside at meetings of directors and if both are not present within fifteen minutes from the time appointed by the meeting the directors present may choose one of their number to be the Chairman. 40. Questions arising at any meeting of directors, or committee of directors shall be decided by simple majority of votes; and in the case of an equality of votes, the Chairman shall have a second or casting vote. 41. All acts done at any meeting of directors, or committee of directors, shall be valid notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such director or person acting as a director or in any director's entitlement to vote or in the proceedings at such meeting. -5- 42. When all the directors in person or by their alternates sign the minutes of a meeting of directors, the meeting shall be deemed to have been duly held notwithstanding any defects in the proceedings. 43. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. ALTERNATE DIRECTOR 44. Any alternate director appointed shall be deemed to be a director of the Company and not an agent of the director so appointing him. 45. A director by written instrument under his hand deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate; and if a director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. CORPORATE DIRECTOR 46. A director who is a body corporate may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for purposes of representing such director at board meetings or meetings of a committee of directors and transacting the business of the Company. COMMITTEE OF DIRECTORS 47. A committee of directors duly appointed by powers conferred by the Act or these Articles, may meet and adjourn as they think fit and may elect a Chairman to preside at its meetings. If no such Chairman is elected, or if at any meeting the Chairman is not present within fifteen minutes from the time appointed for the meeting, the directors present may choose one of their number to be the Chairman. OFFICERS AND AGENTS 48. Any person, including a director, may be appointed by resolution of directors to be an officer or agent of the Company; and the directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the company, exercisable by directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations under the Act and any regulations prescribed by the enabling resolution. 49. Officers appointed may consist of a President, one or more Vice-Presidents, a Secretary, a Treasurer and such other officers as the directors may deem desirable from time to time. In the absence of any specific allocation of powers and authorities, it shall be the responsibility of the President to manage the day-to-day affairs of the Company, the Vice-Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as are delegated to them by the President, the Secretary to maintain the registers, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 50. The emoluments of officers and agents shall be fixed by resolution of directors, subject to any resolution of members. CORPORATE OFFICER 51. Any officer who is a corporation may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. -6- BORROWING POWERS 52. The directors on behalf of the Company may raise, borrow or secure money, may mortgage, pledge or otherwise charge the Company's assets for such purposes, and may issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the directors. GUARANTEES 53. The directors may by resolution guarantee the repayment or performance of any liability, debt or obligation of any person and secure the same by mortgage, pledge or other charge on any of the Company's assets. DIVIDENDS 54. Subject to the rights of holders of shares entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to shareholders of record at the date of the declaration of the dividend; but no dividend shall be paid on those shares which are held by the Company as Treasury shares. If several persons are registered as joint holders of any share, any of them may give effectual receipt for any dividend or other moneys payable in respect of the share. 55. In the case of shares issued to bearer, the directors may provide for the payment of dividends by reference to counterfoils or warrants issued with the certificate for such shares, and the production of such share counterfoil or warrant shall evidence entitlement to receipt of such dividend in the same way and to such extent as the production of the certificate itself. At the time of presentation of such counterfoils or warrants as may be required to permit receipt, the directors may issue such further counterfoils or warrants as may be required to permit receipt by the holder thereof of subsequent dividends. 56. No dividend shall bear interest against the Company. 57. The directors at their discretion may deduct from the dividends payable to any member all sums of money as may be owing by him to the Company; and the directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. 58. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to members. RESERVES 59. The directors may, before recommending any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for special dividends or bonuses, or for repairing, improving, maintaining any of the property of the Company, and for such other purpose as the directors shall in their absolute discretion think conducive to the interests of the Company. 60. The directors may invest the several sums so set aside upon such investments as they may think fit; and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Company; and may divide the reserve fund into any special fund as they think fit and employ the reserve fund or any part thereof in the business of the Company, without being bound to keep the same separate from the other assets. CAPITALIZATION OF PROFITS 61. The directors may resolve to capitalize in whole or part the amount for the time being standing to the credit of any of the Company's reserve accounts, or to the credit of the profit and loss account, or profits otherwise available for distribution to members, and distribute such amount amongst members, not in cash, but in fully paid shares, debentures or other -7- securities of the Company in the same proportion as such members would have been entitled to if the equivalent amount had been distributed as a cash dividend. 62. If the directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and do all acts necessary to effect the capitalization and consequent issue of shares, debentures or other securities to members according to their respective entitlement; and to enter into such agreements with members entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such members. 63. The directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate; and in the case of an issue of bonus shares, the directors shall make the necessary entries in the Share Register in accordance with requirements in these Articles and the Act. CREATION OF TRUST 64. Subject to the provisions of the Act, the directors by resolution may transfer assets of the Company to any corporation or other legal entity other than an individual upon trust for the benefit of the Company, its members, creditors or other persons having a direct or indirect interest in the Company. SEAL 65. The directors shall provide for the safe custody of the Seal which shall not be used except by the authority of a resolution of directors. ACCOUNTS 66. The Company shall keep such accounts and financial records as the directors deem necessary and desirable to reflect the financial position of the Company; and if such accounts are prepared, the directors may by resolution call for such accounts to be examined by an auditor or accountant appointed by them at such remuneration as may from time to time be agreed; and such books of accounts shall be kept at the Registered Office of the Company. AMENDMENTS OF ARTICLES 67. The Company may alter or modify the conditions contained in these Articles as originally prepared or as amended by resolution of directors or members from time to time but where the Articles expressly provide that resolutions of directors shall be subject to any resolution of members, such provision shall not be altered except by resolution of members. INDEMNITY 68. Notwithstanding any of the provisions of the Act, the directors, secretary and other officers and the Registered agent for the time being of the Company and the trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively. -8- IN WITNESS WHEREOF We, the Subscribers to the Memorandum of Association have hereunto subscribed our names this 21st day of January, A.D. 1998. AEGIS LIMITED By: /s/ [ILLEGIBLE] -------------------------------- Assistant Secretary RAPPEL LIMITED By: /s/ [ILLEGIBLE] -------------------------------- Assistant Secretary Signed by the Subscribers to the Memorandum of Association in the presence of: /s/ [ILLEGIBLE] -------------------------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER ------------------------------ Asst. Registrar General January 21st, 1998 EX-3.11 12 y04808exv3w11.txt MEMO OF ASSOCIATION & ARTICLES OF ASSOCIATION OF MAJESTIC MARITIME LTD. EXHIBIT 3.11 Commonwealth of the Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) No. 71,247 B MAJESTIC MARITIME LTD. I, JACINDA P. BUTLER , ASST.....Registrar General of the Commonwealth of The Bahamas Dohereby Certify pursuant to the International Business Companies Act (No. 2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that MAJESTIC MARITIME LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 21ST day of JANUARY 1998 Given under my hand and seal at Nassau in the Common- wealth of The Bahamas /s/ J. P. BUTLER -------------------------- ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 MEMORANDUM OF ASSOCIATION OF MAJESTIC MARITIME LTD. 1. The name of the Company is MAJESTIC MARITIME LTD. 2. The Registered Office of the Company will be situate at the Chambers of Harry B. Sands & Company in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company will be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 4. The objects or purposes of the Company are:- (1) To own, construct, hire, purchase, bareboat charter, charter, lease otherwise acquire and work ships and vessels of any class, and to establish and maintain lines or regular services of ships or other vessels, and generally to carry on the business of shipowners; (2) To engage, in any act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law for the time being in force in the Commonwealth of The Bahamas. 5. Shares in the Company shall be issued in the currency of The United States of America. 6. The Company shall have an authorized capital of U.S. $5,000.00 with an aggregate par value of U.S.$5,000.00. 7. The Company shall have one class of shares of one series comprising 5,000 ordinary common shares with a par value of U.S.$1.00 each, but the Company is hereby authorized to issue other classes and series of shares as the directors may by resolution determine. 8. The directors shall have the authority and the power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of shares. 9. The number of shares into which the share capital is divided may be issued as registered shares or as shares issued to bearer as the directors may by resolution determine. 10. Registered shares may be exchanged and converted into shares issued to bearer and shares issued to bearer may be exchanged and converted into registered shares. 11. Any notice or other information required by the International Business Companies Act, 1989 to be given to the holder of shares issued to bearer shall be given in accordance with the Articles of Association of the Company. 12. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum or the Articles of Association of the Company. 13. The Memorandum or Articles of Association of the Company may be amended by a resolution of members or of the directors. 14. The liability of the members of the Company is limited to the amount unpaid on the shares respectively held by them. - 2 - WE, the several persons, whose names and addresses are subscribed herein are desirous of incorporating an International Business Company under the laws of the Commonwealth of The Bahamas in pursuance of this Memorandum of Association. NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS 1. AEGIS LIMITED By: /s/ [ILLEGIBLE] --------------------------- Assistant Secretary Nassau, Bahamas 2. RAPPEL LIMITED By: /s/ [ILLEGIBLE] --------------------------- Assistant Secretary Nassau, Bahamas Dated this 21st day of January, A.D. 1998. WITNESS TO THE ABOVE SIGNATURES: /s/ [ILLEGIBLE] - --------------------------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ [ILLEGIBLE] ------------------------------- Asst. Registrar General January 21st, 1998 THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 ARTICLES OF ASSOCIATION OF MAJESTIC MARITIME LTD. 1. These Articles shall constitute the Regulations of the Company and reference therein to "the Act" shall mean the International Business Companies Act, 1989. 2. In these Regulations, words and expressions defined in the Act shall have the same meaning; and unless there be something in the subject or context inconsistent therewith references to directors shall mean the Board of Directors despite the fact that the Board may consist of one director only, and references to persons shall include corporations and all entities capable of having a legal existence. SHARE CAPITAL 3. The shares shall be under the control of the directors who may offer, allot, grant options or otherwise dispose of them to such persons or redeem them at such times for such consideration and upon such terms and conditions as they may determine by resolution. 4. Shares in the Company may be issued with such designations, powers, preferences and rights, qualifications, limitations and restrictions with regard to dividend, voting, return of capital or otherwise as the directors may determine by resolution without prejudice to any rights attaching to any existing shares and subject to the provisions of the Act. 5. Redeemable shares shall be redeemed on such terms and conditions and in such manner as the directors may determine by resolution before or at the time of the issue of such shares; and such shares may be redeemed at a premium. SHARE CERTIFICATES 6. Certificates of title to shares shall be issued and the signatures or common seal thereon may be facsimiles. 7. Every member shall be entitled to one certificate for the shares registered in his name or to several certificates, each for one or more of such shares. In respect of shares held jointly by two or more persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares to one of several joint holders shall be delivery to all. 8. If a certificate is worn or lost, the directors may issue a new certificate on satisfactory proof of its loss or the production of the worn-out certificate and upon such indemnity, as is reasonable, against any loss or liability which the Company or its directors may incur by reason of wrongful or fraudulent use or representation made by any person by virtue of the possession of such certificate. 9. The Company shall be entitled to treat the member specified in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of The Bahamas. 10. The Company may issue share certificates, otherwise known as warrants, to bearer in respect of any fully paid-up shares of the Company, stating that the bearer of the warrant is entitled to -2- the shares therein specified. Such warrants shall be issued upon such terms and subject to such conditions as may be resolved upon by the directors. TRANSFER AND TRANSMISSION 11. Upon the request of a holder of registered shares that such shares be exchanged for bearer shares, the directors may cancel the share certificate in respect thereof and the entry in the Share Register and in such event shall issue in substitution therefor a certificate evidencing shares issued to bearer subject to such indemnity and upon such terms and subject to such conditions as the directors may reasonably require. 12. Upon the request of a holder of a certificate in respect of shares issued to bearer that such shares be exchanged for registered shares, the directors may, subject to the terms and conditions on which the same were issued, cancel such certificate and issue, in substitution, a certificate evidencing registered shares and enter the name and address of the holder thereof in the Share Register, subject to such indemnity as the directors may reasonably require. 13. Any person who becomes entitled by operation of law or otherwise to a share or shares in the Company in consequence of the death, incompetence or bankruptcy of any member, shall be the only person recognized by the Company as having any title to the shares; and may execute a valid transfer; or upon application to the Company, may be registered as a member upon such evidence as may reasonably be required by the directors. An application by any such person to be registered as a member shall be deemed to be a transfer of shares for all purposes. ALTERATION OF SHARE CAPITAL 14. Any new shares issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the directors by resolution shall determine; and except so far as otherwise provided by the terms of issue shall be considered part of the original capital for all purposes under the Act and these Articles. PROXIES AND REPRESENTATIVES AT MEETINGS OF MEMBERS 15. A member who is an individual or corporation may be represented at a meeting of members by a proxy. The instrument appointing a proxy shall be in writing or in such a form as the Chairman of the meeting shall deem acceptable. VOTING AT MEETING OF MEMBERS 16. Every member holding voting shares shall either in person or by proxy have one vote on a show of hands and on a poll shall have one vote for every voting share held. Where a corporation, being a member, wishes to be present, it must be represented by a proxy; such proxy shall be entitled to vote for such corporation on a show of hands and also on a poll. If there be joint registered holders of any shares, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 17. A Committee appointed for a member of unsound mind may vote on his behalf at any meeting of members which such member is entitled to attend and vote. PROCEEDINGS AT MEETINGS OF MEMBERS 18. The President of the Company, or in his absence, any Vice-President, shall preside as Chairman of meetings of members; if both are absent, the members shall choose one of their numbers present at the meeting to be the Chairman. 19. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in the case of an equality of votes the Chairman shall, both on a show of hands and -3- at the poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member. 20. At any general meeting of the members unless a poll is demanded by a member present in person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the members shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. 21. If a poll is demanded it shall be taken in such manner as the Chairman directs and the result of such poll shall be deemed to be the resolution of the members. 22. When all members entitled to be present and vote sign either personally or by proxy the minutes of an annual general or an extraordinary general meeting, the same shall be deemed to have been duly held notwithstanding that the members have not actually come together or that there may have been technical defects in the proceedings and a resolution in writing signed by all the members aforesaid shall be as valid and effectual as if it had been passed at a meeting of the members duly called and constituted. 23. The Chairman, with the consent of the meeting, may adjourn any meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 24. A meeting of members may be held by telephone or other electronic means, without prior notice, if all members entitled to vote participate and are able to hear each other at the same time and recognize each other's voice; and a resolution approved by simple majority vote, in writing or by telex, telegram, telephone, cable, telefax or other written electronic communication from a duly authenticated source, shall be effectual at the date thereof as a resolution of members. SERVICE OF NOTICE ON MEMBERS 25. In the case of members holding registered shares, notice of meetings of members and other information or written statement required to be given to members, shall be given by personal service, or sent by airmail, or by telex, telegram, telefax, cable or other electronic means at the discretion of the directors, to each member at the address shown in the Share Register, or in the case of joint holders of the same share or shares, at the address of the holder first named in the Share Register and notice so given shall be sufficient notice to all such joint holders. 26. In the case of members holding shares issued to bearer, notice of meetings of members or other information or written statement required to be given to members, shall be given by airmail addressed to the agent or attorney whose name and address has been given, to the Company in writing, for service of notice by the bearer of the share, identified for this purpose by the number on the share certificate; or in the absence of such address or if the notice, information or written statement cannot be served for any other reason, by publishing the notice information or written statement in a newspaper circulated in The Bahamas and in a newspaper circulated in the place where the Company has its principal office. 27. Seven days notice of any meeting shall be given to members holding both registered shares and shares issued to bearer. Any notice if served by post, shall be deemed to have been served within seven days of posting; and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. The non-receipt of notice by any member shall not invalidate the proceedings of any meeting. DIRECTORS 28. Subject as hereinafter provided the Company shall have at least one director but not more than seven. The Company or the Directors may, by resolution, amend the Articles from time to time to increase the minimum number or vary the maximum number of directors. 29. The first directors of the Company shall be elected by the subscribers to the Memorandum of Association and thereafter the directors shall be elected by resolution of members or resolution of directors for such terms as may be specified by the enabling resolution. -4- 30. A director need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a director. 31. Each director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) and (3) of the Act, a director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind, or of such infirm health as to be incapable of managing his affairs. A director may be removed by resolution of members. 32. The directors by resolution may fix the emoluments of directors in respect of services rendered or to be rendered in any capacity to the Company, subject to any resolution of members; and such emoluments shall be paid out of the funds of the Company. Directors shall also be paid out of funds of the Company all expenses, including travelling and hotel expenses, properly incurred by them in connection with the business of the Company, as may be approved by resolution of directors and subject to any resolution of members. 33. A director may hold concurrently with his office as director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may be interested as shareholder or otherwise for such remuneration and on such other terms and conditions as the directors of the Company may determine and shall not be accountable to the Company for the same. POWERS OF DIRECTORS 34. The business and affairs of the Company shall be managed by the directors who may exercise all the powers of the Company that are not expressly reserved to the members under the Act or any other laws of the Bahamas. 35. If the Board comprises only one, such sole director shall full power to represent the Company and to manage the affairs and business of the Company. If there be any vacancy in the Board, the continuing director or directors may act notwithstanding any vacancy in their body, save that if the number of directors has been fixed at two or more persons, and by reason of vacancies having occurred among the directors there shall be only one continuing director, he shall be authorized to act alone only for the purpose of appointing another director. MEETINGS OF DIRECTORS 36. The directors may meet upon not less than two clear days' notice at such place within or outside The Bahamas as and whenever they think necessary for the dispatch of business and may adjourn, and otherwise regulate their meetings and proceedings as they think fit. A meeting of directors may be convened by the President or failing him any Vice President or any other director. 37. A majority of the Board of Directors may waive notice of any meeting. 38. A properly constituted meeting of directors shall be competent to exercise all or any of the powers, duties, authorities and discretions for the time being vested in, or exercisable by, them as a body under authority of the Act, the Memorandum and these Articles. Where the Board comprises more than one director a quorum shall constitute fifty percent of the membership of the Board. 39. The President, or in his absence, a Vice-President shall preside at meetings of directors and if both are not present within fifteen minutes from the time appointed by the meeting the directors present may choose one of their number to be the Chairman. 40. Questions arising at any meeting of directors, or committee of directors shall be decided by simple majority of votes; and in the case of an equality of votes, the Chairman shall have a second or casting vote. 41. All acts done at any meeting of directors, or committee of directors, shall be valid notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such director or person acting as a director or in any director's entitlement to vote or in the proceedings at such meeting. -5- 42. When all the directors in person or by their alternates sign the minutes of a meeting of directors, the meeting shall be deemed to have been duly held notwithstanding any defects in the proceedings. 43. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. ALTERNATE DIRECTOR 44. Any alternate director appointed shall be deemed to be a director of the Company and not an agent of the director so appointing him. 45. A director by written instrument under his hand deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate; and if a director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. CORPORATE DIRECTOR 46. A director who is a body corporate may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for purposes of representing such director at board meetings or meetings of a committee of directors and transacting the business of the Company. COMMITTEE OF DIRECTORS 47. A committee of directors duly appointed by powers conferred by the Act or these Articles, may meet and adjourn as they think fit and may elect a Chairman to preside at its meetings. If no such Chairman is elected, or if at any meeting the Chairman is not present within fifteen minutes from the time appointed for the meeting, the directors present may choose one of their number to be the Chairman. OFFICERS AND AGENTS 48. Any person, including a director, may be appointed by resolution of directors to be an officer or agent of the Company; and the directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the company, exercisable by directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations under the Act and any regulations prescribed by the enabling resolution. 49. Officers appointed may consist of a President, one or more Vice-Presidents, a Secretary, a Treasurer and such other officers as the directors may deem desirable from time to time. In the absence of any specific allocation of powers and authorities, it shall be the responsibility of the President to manage the day-to-day affairs of the Company, the Vice-Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as are delegated to them by the President, the Secretary to maintain the registers, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 50. The emoluments of officers and agents shall be fixed by resolution of directors, subject to any resolution of members. CORPORATE OFFICER 51. Any officer who is a corporation may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. -6- BORROWING POWERS 52. The directors on behalf of the Company may raise, borrow or secure money, may mortgage, pledge or otherwise charge the Company's assets for such purposes, and may issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the directors. GUARANTEES 53. The directors may by resolution guarantee the repayment or performance of any liability, debt or obligation of any person and secure the same by mortgage, pledge or other charge on any of the Company's assets. DIVIDENDS 54. Subject to the rights of holders of shares entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to shareholders of record at the date of the declaration of the dividend; but no dividend shall be paid on those shares which are held by the Company as Treasury shares. If several persons are registered as joint holders of any share, any of them may give effectual receipt for any dividend or other moneys payable in respect of the share. 55. In the case of shares issued to bearer, the directors may provide for the payment of dividends by reference to counterfoils or warrants issued with the certificate for such shares, and the production of such share counterfoil or warrant shall evidence entitlement to receipt of such dividend in the same way and to such extent as the production of the certificate itself. At the time of presentation of such counterfoils or warrants as may be required to permit receipt, the directors may issue such further counterfoils or warrants as may be required to permit receipt by the holder thereof of subsequent dividends. 56. No dividend shall bear interest against the Company. 57. The directors at their discretion may deduct from the dividends payable to any member all sums of money as may be owing by him to the Company; and the directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. 58. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to members. RESERVES 59. The directors may, before recommending any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for special dividends or bonuses, or for repairing, improving, maintaining any of the property of the Company, and for such other purpose as the directors shall in their absolute discretion think conducive to the interests of the Company. 60. The directors may invest the several sums so set aside upon such investments as they may think fit; and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Company; and may divide the reserve fund into any special fund as they think fit and employ the reserve fund or any part thereof in the business of the Company, without being bound to keep the same separate from the other assets. CAPITALIZATION OF PROFITS 61. The directors may resolve to capitalize in whole or part the amount for the time being standing to the credit of any of the Company's reserve accounts, or to the credit of the profit and loss account, or profits otherwise available for distribution to members, and distribute such amount amongst members, not in cash, but in fully paid shares, debentures or other -7- securities of the Company in the same proportion as such members would have been entitled to if the equivalent amount had been distributed as a cash dividend. 62. If the directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and do all acts necessary to effect the capitalization and consequent issue of shares, debentures or other securities to members according to their respective entitlement; and to enter into such agreements with members entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such members. 63. The directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate; and in the case of an issue of bonus shares, the directors shall make the necessary entries in the Share Register in accordance with requirements in these Articles and the Act. CREATION OF TRUST 64. Subject to the provisions of the Act, the directors by resolution may transfer assets of the Company to any corporation or other legal entity other than an individual upon trust for the benefit of the Company, its members, creditors or other persons having a direct or indirect interest in the Company. SEAL 65. The directors shall provide for the safe custody of the Seal which shall not be used except by the authority of a resolution of directors. ACCOUNTS 66. The Company shall keep such accounts and financial records as the directors deem necessary and desirable to reflect the financial position of the Company; and if such accounts are prepared, the directors may by resolution call for such accounts to be examined by an auditor or accountant appointed by them at such remuneration as may from time to time be agreed; and such books of accounts shall be kept at the Registered Office of the Company. AMENDMENTS OF ARTICLES 67. The Company may alter or modify the conditions contained in these Articles as originally prepared or as amended by resolution of directors or members from time to time but where the Articles expressly provide that resolutions of directors shall be subject to any resolution of members, such provision shall not be altered except by resolution of members. INDEMNITY 68. Notwithstanding any of the provisions of the Act, the directors, secretary and other officers and the Registered agent for the time being of the Company and the trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively. EX-3.12 13 y04808exv3w12.txt ARTICLES OF INCORPORATION & BY-LAWS OF MASSENA PORT S.A. EXHIBIT 3.12 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351421 ESC. MARIA NILDA ACHE PUNALES - 07653/4 TRADUCTORES PUBLICOS ASOCIADOS Rincon 487 - Piso 4 Tel.: 915 3170 - Fax: 915 3855 TRANSLATION No. 270/2004. FIRST AUTHORIZED COPY OF BY-LAWS AND ATTACHED DOCUMENTS. /Document issued on eight linked Notarial Stamped Paper Sheets Series Cb Number 563616 to 563622 and 251521, and an attached sheet. Pages one to eight bear a watermark of the Uruguayan Coat of Arms. On the top of each page there stand a hologram seal, the Uruguayan Coat of Arms and a round emblem bearing a Latin text. On the top of each page, it reads:/ NOTARIAL STAMPED PAPER SHEET GLORIA RAQUEL STRATTA MARINO, NOTARY PUBLIC - 06984/7. /Page One:/ /On the upper right hand corner, handwritten (photocopy):/ 1. /On the bottom left hand corner, there stand two illegible signatures (photocopy)./ AIN /Auditoria Interna de la Nacion/ - National Internal Auditing Office. -- B No. 015296. MINUTE: In the city of Montevideo, on the twenty-first day of July of the year two thousand and three, Mr. FERNANDO JUAN CASTAGNO SCHICKENDANTZ, Uruguayan citizen, of legal age, married in a first and only marriage to Rosina Bonifacio, holder of identity card number 1.562.158-8, and Ms. JANINE GOMEZ SUAREZ, Uruguayan citizen, of legal age, single, holder of identity card number 2.924.634-0, both domiciled to the purposes herein at Circunvalacion Durango 1429/2D, Montevideo, hereby resolve to approve the following By-laws. ARTICLE 1. NAME - TERM OF DURATION - DOMICILE. The above mentioned persons hereby incorporate a Corporation under Law 11,073, especially Section 7 thereof, which they call MASSENA PORT 1 S.A. Its term of duration shall be one hundred years as from today. Its domicile shall be in MONTEVIDEO and any special domiciles and branches may be established either in the country or abroad. ARTICLE 2. OBJECT. The corporation shall carry out the following activities abroad: A) Investments in certificates, bonds, shares, warrants, debentures, bills and similar documents. B) Importation, exportation, commission agencies, agencies, mandates, financial operations, agricultural activities, insurance and reinsurance. C) Exploitation of marks, patents, industrial privileges and similar incorporeal goods. D) Commercial and industrial operations in the fields and annexes thereto of: foodstuffs, automotive industry, communications, electronics, computer science, wood, machines, metallurgy, paper, fishing, chemistry, professional services, television, textiles, transportation, tourism and clothing. E) Participation in, incorporation or acquisition of, companies operating in the above mentioned items. F) All sorts of operations concerning real property. The corporation shall carry out in the country any activity allowed by the regime by which it is bound. /At the foot of the page, there appears reference to the printing office./ /Overleaf:/ ARTICLE 3. CAPITAL AND SHARES. The capital made up with certificates of one or more BEARER shares of US$ 1,00 each, shall be US$ 100,000 (one hundred thousand US dollars). The increase of the contractual capital (section 284 of Law No. 16,060 as amended by section 59 of Law 17,243 of June 29,2000) may be resolved at an Extraordinary Shareholders' Meeting, without any need to obtain the consent of the Public Administration. The Shareholders' Meeting may delegate on the Board of Directors or the Administrator, as the case may be, the time of issuance, the [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351422 ESC. MARIA NILDA ACHE PUNALES - 07653/4 manner and conditions of payment. ARTICLE 4. Shareholders shall have preference in the subscription and payment of shares in proportion to the shares they own. ARTICLE 5. SHAREHOLDERS' MEETINGS. Shareholders' Meetings shall consist of shareholders, who shall meet under the provisions established by law and the corporate agreement, at the Principal Office of the corporation or in any other place within the same district. Their resolutions regarding those matters that are assigned to them, shall bind all the shareholders, even the dissident or absent ones. They must be executed by the Administration Body. ARTICLE 6. Types. Meetings shall be Ordinary, Extraordinary or Special. ARTICLE 7. Competence of Ordinary Meetings. It shall be the duty of the Ordinary Shareholders' Meeting to take into consideration and resolve upon the following matters: 1) Balance Sheet (general accounting statement and income statement), earnings distribution project, Special Auditor's or Fiscal Committee's memorandum and report, and any other action concerning the management of the corporation which should be assigned to them in accordance with the law and with these By-laws, or all matters that the Administrator or the Board of Directors, and the Fiscal Committee or the Special Auditor may submit for their consideration. 2) Appointment or removal of the Administrator, the Directors, the Special Auditors or the members of the Fiscal Committee and determination of the remuneration thereof. 3) Responsibilities of the Administrator, or the Directors, the Special Auditor or the members of the Fiscal Committee. ARTICLE 8. Competence of Extraordinary Meetings. It shall be the duty of the Extraordinary Shareholders' Meeting to resolve upon any matters whatsoever not assigned to the Ordinary Shareholders' Meeting and 3 especially: 1) Any amendment of these By-laws. 2) Capital increase in the case provided for by section 284. 3) Repayment of capital. /Page two:/ /On the upper right hand corner, handwritten (photocopy):/2. /On the bottom left hand corner, there stand two illegible signatures (photocopy)./ 4) Redemption, reimbursement and repayment of shares. 5) Merger, transformation and corporate break-up. 6) Dissolution of the corporation, appointment, removal and remuneration of the liquidator or liquidators and other cases provided for by section 179. 7) Issue of debentures and bonds and their conversion into shares. 8) Limitations to, or suspensions of, the pre-emptive right in accordance with section 330. It shall also be the duty of the Extraordinary Shareholders' Meeting to resolve upon any matters whatsoever that, having been assigned to the Ordinary Shareholders' Meeting, should have to be urgently resolved. ARTICLE 9. CALL AND CONSTITUTION OF THE MEETING. OPPORTUNITY AND TERM. a) ORDINARY SHAREHOLDERS' MEETINGS shall be held within the period of one hundred and eighty days following the closing date of the fiscal year. EXTRAORDINARY SHAREHOLDERS' MEETINGS shall be held at any time deemed necessary or expedient. b) They shall be called by the Administration or Control Body. Shareholders representing at least 20% of the paid-up capital may request such bodies to call an Extraordinary Meeting. The request shall state the business to be taken into consideration. The Administration or Control Body shall call the Meeting to be held within a maximum term of 40 days as from the date on which the request is received. Should the aforementioned bodies fail to do so, the call may be made by any Director or by any member of the Fiscal Committee or 4 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351423 ESC. MARIA NILDA ACHE PUNALES - 07653/4 by the state control body or judicially. If the corporation is in liquidation the call shall be made by the Liquidation Body. If it fails to do so, it shall be called by the method described above. c) The notice for the Meeting shall be published during at least three days in the Official Gazette and in another newspaper, at least 10 working days, but not more than 30 consecutive days, before the date of the Meeting. The call shall include the nature, date, venue, time and agenda of the Meeting. In SECOND CALL, should the first one fail, meetings shall be held within 30 consecutive days following the first Meeting, and publications shall be made equal to those of the first call. Nonetheless, both calls may be made simultaneously and the Meeting in second call may be held the same day, one hour later. ARTICLE 10. Unanimous Meeting. Meetings may be held without any previous publication of the call, when shareholders representing the total paid-up capital attend the Meeting. ARTICLE 11. In order to attend the meetings, shareholders shall have to deposit with the corporation, either their shares or a certificate of deposit issued by /At the foot of the page, there appears reference to the printing office./ /Overleaf:/ a financial intermediation entity, by a stock broker, by a judicial receiver or by other persons, in which case the pertinent notarial certification shall be required. The corporation shall deliver the corresponding receipts to them, which shall be used for their admission to the Meeting. The register of shareholders shall be opened five working days before the Meeting and shall be closed at the beginning thereof. Each share entitles to one vote. ARTICLE 12. Shareholders may act by proxy at the meetings. The Administrators, Directors, Special Auditors, members of the Fiscal 5 Committee, managers and other employees of the corporation may not act as proxies. The instrument appointing a proxy may be a private document and the signature on it must be notarised. It may be granted by a mere letter of attorney without any signature certification, or telegram with acknowledgement of receipt, cable, telex or fax, when it is specifically granted for a particular meeting. ARTICLE 13. Chairmanship of the Meetings. At every Shareholders' Meeting, the Administrator, or the President of the Board of Directors, or his alternate, shall chair the Meeting. In case there is no Administrator, President of the Board of Directors, or an alternate, the Meeting shall choose one person to be Chairman thereof. The Chairman of the Meeting shall be assisted by a Secretary appointed by all shareholders present. When the Meeting is called by the Judge or by the State Control Body, the Judge or the State Control Body, whichever they are, shall appoint the Chairman of the Meeting. The corresponding minutes shall be signed within the following five days by the Chairman and the shareholders appointed for that purpose. ARTICLE 14. Quorum. In first call, ORDINARY SHAREHOLDERS' MEETINGS shall be held with the attendance of shareholders representing half plus one of the shares with a right to vote. In second call they shall be held regardless of the number of shareholders present. EXTRAORDINARY SHAREHOLDERS' MEETINGS shall be held in first call with the attendance of shareholders representing 60% of the shares with a right to vote. In second call the attendance of shareholders representing 40% of the shares with a right to vote shall be required. This quorum not being attained, a new Meeting shall be called to consider the same agenda, which shall be held regardless of the number of shareholders present. 6 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351424 ESC. MARIA NILDA ACHE PUNALES - 07653/4 ARTICLE 15. Resolutions. The resolutions of the meetings shall be adopted by an absolute majority of votes of the shareholders present, unless the law requires a larger number of votes. Those shareholders who cast a blank vote or who refrain from voting shall be deemed /Page Three:/ /On the upper right hand corner, handwritten (photocopy):/ 3. to have voted against the motion. ARTICLE 16. MANAGEMENT AND REPRESENTATION. AN ADMINISTRATOR OR A BOARD OF DIRECTORS, SHALL BE IN CHARGE OF THE MANAGEMENT OF THE CORPORATION. The Shareholders' Meeting shall decide upon either form of management and the number of members of the Board of Directors. ARTICLE 17. The Administrator or the Directors shall be appointed annually at the Shareholders' Meeting. ARTICLE 18. The Meetings of Directors shall be called by the President or by any two Directors; nonetheless, any Director may request the call of such meetings, and in such case the President or any two Directors must call the Meeting within the fifth working day after the request is received; should they fail to do so, any Director shall be able to call a meeting. Meetings shall be held with the attendance of half plus one of the members of the Board of Directors, the Directors being empowered, in the event of absence, to authorize other persons to vote on their behalf. Resolutions shall be adopted with the vote of the majority of the members present. ARTICLE 19. Natural persons or legal entities, shareholders or not, who are able to carry out actions of commerce and not prohibited or disqualified thereto, shall be appointed as Directors. Administrators or Directors may be re-elected; they shall hold their offices up to the date in which their successors enter into office and they shall be removed from their offices in 7 the event of disability, prohibition or disqualification. ARTICLE 20. If the Administrator or the members of the Board of Directors are natural persons, they shall personally perform their duties. If the Administrator or the members of the Board of Directors are legal entities, they shall act through the person appointed by them, and they shall be entitled to replace him/her whenever they deem it convenient. ARTICLE 21. By unanimous vote of its members, the Board of Directors may. a) Distribute or redistribute offices within the Board, b) Provide for any vacancies therein, in a temporary or permanent way. Nonetheless the Shareholders' Meeting may appoint up to three alternates per Director. The alternates shall replace the corresponding Director, in the proper order, in the case of temporary or permanent vacancy, for the period it may last. c) Reasses assets. ARTICLE 22. The Administrator, the president, or any vice-president, /At the foot of the page, there appears reference to the printing office./ /Overleaf:/ indistinctively, or any two Directors acting jointly, shall represent the corporation. ARTICLE 23. The Administrator or the Board of Directors, as the case may be, shall have unlimited powers for the management of the corporation and the disposal of its property. By way of example, they may: a) buy, sell, mortgage, give as a pledge, give in antichresis, lease, manage and exploit all kinds of personal or real property. b) grant or receive loans, in compliance with the legal provisions, with the power to receive securities from the Banco Hipotecario /State Mortgage Bank/. c) grant general or special powers of attorney. d) accept or grant personal or real guarantees. e) act in Court, even with the following powers: 1) abandon the action; 2) ask and 8 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351425 ESC. MARIA NILDA ACHE PUNALES - 07653/4 answer categorical questions under oath; 3) take and cause the other party to take decisory oath, in the sole event of not having any other evidence; 4) settle and transact; 5) submit the action to arbitration; 6) assign property or apply for debt reductions or extensions of time, and agree upon these; 7) expressively waive the legal recourses; 8) judicially receive the payment of debts; f) distribute interim dividends according to the provisions of Law 16,060, to be ratified by the first Shareholders' Meeting to be held. ARTICLE 24. SPECIAL AUDITOR'S OFFICE. Upon request of shareholders representing 20% of the paid-up capital, the Shareholders' Meeting may create the Special Auditor's Office and appoint the holders of such office and their corresponding or preferential alternates, even of this item is not included in the agenda. The audit shall continue until a new Meeting resolves to discontinue it. ARTICLE 25. The founding members acting indistinctively and until the first Board of Directors is appointed, shall have the powers thereof. Any of the founding members and Nancy Rodriguez, Claudia Bagoyhar, Evangelina Ortega and Maria Marsilli, are hereby indistinctively authorized to take the necessary steps to incorporate the corporation and make all the registrations before the corresponding offices. /Signed illegible (photocopy)./ FERNANDO CASTAGNO. /Signed illegible (photocopy)./ JANINE GOMEZ. /There stands a linking seal (photocopy), followed by an illegible signature (photocopy) which reads:/ There follows Notarial Stamped Paper Sheet Series /handwritten (photocopy):/ Ca Number /handwritten (photocopy):/ 981842. /Page Four:/ /On the left margin, there stands a linking seal (photocopy), followed by an 9 illegible signature (photocopy) which reads:/ This follows Notarial Stamped Paper Sheet Series /handwritten (photocopy):/ B Number /handwritten (photocopy):/ 015296. /There follows a seal (photocopy) which reads:/ Official Fee. Section /handwritten (photocopy):/ 7. Fees $ /handwritten (photocopy):/ 8,688. Notarial Stamp $ /handwritten (photocopy):/ 1,608. /There follows a paraph (photocopy)./ I HEREBY CERTIFY THAT: the signatures appearing on the foregoing document are authentic, and were placed in my presence by Mr. FERNANDO JUAN CASTAGNO SCHICKENDANTZ, Uruguayan citizen, married in a first and only marriage to Rosina Bonifacio Imaz, holder of identity card number 1.562.158-8, and Ms. JANINE GOMEZ SUAREZ, Uruguayan citizen, single, holder of identity card number 2.924.634-0, both able persons, of legal age, personally known to me, and domiciled to the purposes herein at Circunvalacion Durango 1429/2D, of the city of Montevideo. Upon my reading of the foregoing document, they thus executed and signed it before me. IN FAITH WHEREOF, upon request of the interested party, and for it to be furnished before whom it may concern, I hereby issue these presents, which I seal, mark and sign, in the city of Montevideo, on the twenty-first day of July of the year two thousand and three. /There stand a mark (photocopy) and an illegible signature (photocopy) followed by a seal (photocopy) which reads:/ RAQUEL STRATTA - NOTARY. /There follows a photocopy of the receipt of payment of the notarial stamp:/ Total Contribution (18.5%): 1,608. Union Fund: /Blank space./ Tax on Salaries/ Blank space./ Penalty - Contribution/ Blank space./ Penalty - Tax 10 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351426 ESC. MARIA NILDA ACHE PUNALES - 07653/4 on Salaries /Blank space./ TOTAL: 1,608. Number of proceedings included in the deposit: /Blank space/. Month: 07. Year: 03. Notary: STRATTA MARINO, Gloria Raquel. 6984. 7-1-059609. /There follows a code bar./ SNA6069847105960900000. Payment of the stated sums does not cancel prior debts. Copy 4. /There appears evidence of payment (photocopy)./ /Page Five:/ /On the top left hand corner, there appears a seal of the National Internal Auditing Office (photocopy)./ /On the top right hand corner, handwritten (photocopy):/1. I, MARCELO PEREIRA DARRIULAT, PUBLIC ACCOUNTANT, HEREBY CERTIFY THAT: I have had before me the sheet of the Libro Diario /Day Book/ of MASSENA PORT S.A. (being incorporated), which shall keep its accounting registers pursuant to Decree 540/91, wherein the entries corresponding to the corporation's incorporation are registered, which comply with the minimum pay-up and subscription requirements established in sections 3 and 4 of Law 2,230 dated June 2, 1893. The base documentation for the said accounting registrations is the Treasury Bond of the Republic of Uruguay, Series 2019 of Fixed Interest, of a nominal value of US$ 7,000, being quoted 74.53% at the Stock Exchange on the previous working day, which means a total of US$ 5,217, the sum of US$ 5,000 is paid up, thus contributing US$ 2,500 each of the founding members, the residue being credited to current account and the subscription certificates of the founding members for a value of US$ 10,000 each, dated July 21, 2003. This certificate is issued in order to be filed before the NATIONAL INTERNAL AUDITING OFFICE, on the twenty-first day of the month of July of the year two thousand and three. 11 /Signed illegible (photocopy)./ Marcelo Pereira Darriulat, Accountant. 42562. /Overleaf, there stands a linking seal (photocopy) of the National Internal Auditing Office./ /Page six:/ /On the top left hand corner, there stands a linking seal (photocopy) of the National Internal Auditing Office./ /On the top right hand corner, handwritten (photocopy):/ 2. AIN - National Internal Auditing Office. NATIONAL INTERNAL AUDITING OFFICE Montevideo, /Seal (photocopy):/ August 22, 2003. IN VIEW OF: the steps taken by MASSENA PORT S.A. for the approval of its By-laws, incorporated under the provisions of Section 7 of Law No. 11,073 dated June 24, 1948. WHEREAS: I) Upon examination of the corporate agreement by the Technical Services Division, there were no observations made. WHEREAS: I) The Corporation has legal objects and its By-laws do not contain clauses contrary to the legal provisions and regulations in force. II) This approval does not entail any statement whatsoever regarding the industrial property rights which may involve the corporate name (Section 12 of Law No. 16,060). IN VIEW OF: the provisions of Sections 252, 253, 409 and 516, sub-section 2 and related provisions of Law No. 16,060 dated September 4, 1989, and Section 3 of Law No. 2,230 dated June 2, 1893. THE NATIONAL INTERNAL AUDITING OFFICE HEREBY RESOLVES: 1(degrees)) LET the By-laws of MASSENA PORT S.A. BE APPROVED. 12 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351427 ESC. MARIA NILDA ACHE PUNALES - 07653/4 2(degrees)) LET IT BE DECLARED THAT the Corporation has complied with, and certified the minimum subscriptions and payments of capital required by Section 3 of Law No. 2,230. 3(degrees) Let these presents be notified, let the submitted By-laws be returned, let a certified copy of the corporate agreement be issued for its registration in the National Register of Commerce and let the corresponding notes be taken. Once the above has been complied with, let these presents be filed. /Signed illegible (photocopy)./ Jose Luis Corbo Cervieri, LL.D. Deputy Head of the National Internal Auditing Office. /Overleaf, there stands a linking seal (photocopy) of the National Internal Auditing Office./ /Page Six:/ /On the top left hand corner, there stands a linking seal (photocopy) of the National Internal Auditing Office./ /On the top right hand corner, handwritten (photocopy):/ 3. AIN - NATIONAL INTERNAL AUDITING OFFICE. /There stands the Uruguayan Coat of Arms./ SERIES A No. 72276. Montevideo,/Seal (photocopy):/ August 26, 2003. The foregoing Certified Copy faithfully agrees with the original document, mentioned in file /handwritten (photocopy):/ 4440/03 MASSENA PORT S.A., which I have had before me and with which I have compared it. These presents are issued in Montevideo, this /Seal (photocopy):/ August 26, 2003. /Signed illegible (photocopy).//Seal (photocopy):/ Araceli Clivio. 5th Clerk. /Page Seven:/ No. 394. MANDATORY NOTARIAL REGISTRATION OF BY-LAWS 13 AND OTHER. In the city of Montevideo, this ninth day of September of the year two thousand and three, in compliance with the provisions in force, I hereby enter in my Notarial Register of Transcriptions the By-laws of MASSENA PORT S.A. and a certified copy of the Resolution of the National Internal Auditing Office that approves said By-laws; all the above has been registered under number 394 from folio 3062 to 3069. This Notarial Registration follows the notarial registration of by-laws number 393, entered on the ninth of September, from folio 3054 to folio 3061. Raquel Stratta. THIS IS THE FIRST AUTHORIZED COPY of the Notarial Registration, entered in my Notarial Register of Transcriptions. IN FAITH WHEREOF, in compliance with the legal provisions in force, for the purposes of registering in the National Register of Commerce, I hereby issue these presents, which I seal, mark and sign in the place and on the date of their registration, in eight Notarial Stamped Paper Sheets Series Cb Numbers 563616-17-18-19-20-21-22 and 251521. /There stands a mark./ /Signed:/ Raquel Stratta. /There follows a seal, duly cancelled by a paraph, which reads:/ RAQUEL STRATTA - - NOTARY. /Overleaf:/ I HEREBY CERTIFY THAT: the above mentioned corporation is registered in the Tax Payer's Register under number 214849910016. /There stands a mark./ /Signed:/ Raquel Stratta. /There follows a seal, which reads:/ RS - RAQUEL STRATTA - NOTARY. /On an attached sheet, duly linked to the document by two seals of the 14 [SEAL] [SEAL] PAPEL NOTARIAL [SEAL] CF NO. 351440 ESC. MARIA NILDA ACHE PUNALES - 07653/4 National Register of Commerce:/ MINISTRY OF EDUCATION AND CULTURE. GENERAL BOARD OF REGISTRIES. 6556 The document described hereinbelow was ENTERED in the Register of LEGAL ENTITIES, COMMERCE DIVISION under the above mentioned number, on September 8, 2003, at 11:03:55 am. Notary/Issuer: STRATTA MARINO, GLORIA RAQUEL. Corporation: INCORPORATION - DEFINITIVE. Corporation: MASSENA PORT S.A. Protected under Priority Reserve /blank space/, of the Name /blank space/, under No. /blank space/, dated /blank space/. Conditional Act. Reserve No. /blank space/ was filed on /blank space/. Fiscal Control: /Blank space./ Affidavit - Transfer Tax. No. /blank space/ dated /blank space/. /Blank space./ Law 16,170 section 626, receipt No. /blank space/ dated /blank space/. SIGNATURE OF REGISTRAR: /Signed illegible./ /Seal:/ PABLO PEREZ SASSON. NOTARY. EXTENDED:/Blank space./ EXPIRED:/Blank space./ DEFINITIVE:/Blank space./ SIGNATURE OF REGISTRAR:/Blank space./ The undersigned Public Translator hereby declares the foregoing to be a true translation into English of the attached document (FIRST 15 AUTHORIZED COPY OF BY-LAWS AND ATTACHED DOCUMENTS) written in Spanish, and leaves a copy of this version in her private file under No. 270/2004. Montevideo, November 17, 2004. /s/ Ines Paysse Terra --------------------- INES PAYSSE TERRA TRADUCTORA PUBLICA La reproduccion fotostatica que antecede compuesta de ocho fojas CONCUERDA con la traduccion oficial al idioma Ingles del estatuto original de MASSENA PORT S.A de su mismo tenor que he tenido a la vista y con el cual he cotejado el pre- sente testimonio.-EN FE DE ELLO a solicitud de MASSENA PORT S.A. y a los efectos de su presentacion ante las Oficinas Publicas y/o privadas pertinentes, expido el presente que sello, signo y firmo en Montevideo a dieciocho de noviem bre de dos mil cuatro en ocho papeles notariales serie Cf numeros 351421 al 351 427 y de la misma serie 351440. /s/ [ILLEGIBLE] /s/ [ILLEGIBLE] ----------------- ----------------- MARIA NILDA ACHE MARIA NILDA ACHE ESCRIBANO ESCRIBANO [MONTEPIO NOTARIAL] $ 21,60 LEY 17.437 REPUBLICA O. DEL URUGUAY 115615(7) [MONTEPIO NOTARIAL] $ 21,60 LEY 17.437 REPUBLICA O. DEL URUGUAY 115615(8) 16 EX-3.13 14 y04808exv3w13.txt MEMO AND ARTICLE OF ASSOCIATION OF MONARCH SHIPPING LTD. EXHIBIT 3.13 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) MONARCH SHIPPING LTD. No. 71,250 B I, JACINDA P. BUTLER, ASST.................Registrar General of the Commonwealth of The Bahamas Do Hereby Certify pursuant to the International Business Companies Acts (No. 2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that MONARCH SHIPPING LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 21ST day of JANUARY 1998 Given under my hand and seal at Nassau in the Common- wealth of The Bahamas /s/ J. P. BUTLER ------------------------ ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 MEMORANDUM OF ASSOCIATION OF MONARCH SHIPPING LTD. 1. The name of the Company is MONARCH SHIPPING LTD. 2. The Registered Office of the Company will be situate at the Chambers of Harry B. Sands & Company in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company will be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 4. The objects or purposes of the Company are:- (1) To own, construct, hire, purchase, bareboat charter, charter, lease otherwise acquire and work ships and vessels of any class, and to establish and maintain lines or regular services of ships or other vessels, and generally to carry on the business of shipowners; (2) To engage in any act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law for the time being in force in the Commonwealth of The Bahamas. 5. Shares in the Company shall be issued in the currency of The United States of America. 6. The Company shall have an authorized capital of U.S.$5,000.00 with an aggregate par value of U.S.$5,000,00. 7. The Company shall have one class of shares of one series comprising 5,000 ordinary common shares with a par value of U.S.$1.00 each, but the Company is hereby authorized to issue other classes and series of shares as the directors may by resolution determine. 8. The directors shall have the authority and the power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of shares. 9. The number of shares into which the share capital is divided may be issued as registered shares or as shares issued to bearer as the directors may by resolution determine. 10. Registered shares may be exchanged and converted into shares issued to bearer and shares issued to bearer may be exchanged and converted into registered shares. 11. Any notice or other information required by the International Business Companies Act, 1989 to be given to the holder of shares issued to bearer shall be given in accordance with the Articles of Association of the Company. 12. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum or the Articles of Association of the Company. 13. The Memorandum or Articles of Association of the Company may be amended by a resolution of members or of the directors. 14. The liability of the members of the Company is limited to the amount unpaid on the shares respectively held by them. -2- WE, the several persons, whose names and addresses are subscribed herein are desirous of incorporating an International Business Company under the laws of the Commonwealth of The Bahamas in pursuance of this Memorandum of Association. NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS 1. AEGIS LIMITED By: /s/ [ILLEGIBLE] ------------------------ Assistant Secretary Nassau, Bahamas 2. RAPPEL LIMITED By: /s/ [ILLEGIBLE] ------------------------ Assistant Secretary Nassau, Bahamas Dated this 21st day of January, A.D. 1998. WITNESS TO THE ABOVE SIGNATURES: /s/ [ILLEGIBLE] - ----------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER --------------------------- Asst. Registrar General January 21st, 1998 THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 ARTICLES OF ASSOCIATION OF MONARCH SHIPPING LTD. 1. These Articles shall constitute the Regulations of the Company and reference therein to "the Act" shall mean the International Business Companies Act, 1989. 2. In these Regulations, words and expressions defined in the Act shall have the same meaning; and unless there be something in the subject or context inconsistent therewith references to directors shall mean the Board of Directors despite the fact that the Board may consist of one director only, and references to persons shall include corporations and all entities capable of having a legal existence. SHARE CAPITAL 3. The shares shall be under the control of the directors who may offer, allot, grant options or otherwise dispose of them to such persons or redeem them at such times for such consideration and upon such terms and conditions as they may determine by resolution. 4. Shares in the Company may be issued with such designations, powers, preferences and rights, qualifications, limitations and restrictions with regard to dividend, voting, return of capital or otherwise as the directors may determine by resolution without prejudice to any rights attaching to any existing shares and subject to the provisions of the Act. 5. Redeemable shares shall be redeemed on such terms and conditions and in such manner as the directors may determine by resolution before or at the time of the issue of such shares; and such shares may be redeemed at a premium. SHARE CERTIFICATES 6. Certificates of title to shares shall be issued and the signatures or common seal thereon may be facsimiles. 7. Every member shall be entitled to one certificate for the shares registered in his name or to several certificates, each for one or more of such shares. In respect of shares held jointly by two or more persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares to one of several joint holders shall be delivery to all. 8. If a certificate is worn or lost, the directors may issue a new certificate on satisfactory proof of its loss or the production of the worn-out certificate and upon such indemnity, as is reasonable, against any loss or liability which the Company or its directors may incur by reason of wrongful or fraudulent use or representation made by any person by virtue of the possession of such certificate. 9. The Company shall be entitled to treat the member specified in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of The Bahamas. 10. The Company may issue share certificates, otherwise known as warrants, to bearer in respect of any fully paid-up shares of the Company, stating that the bearer of the warrant is entitled to -2- the shares therein specified. Such warrants shall be issued upon such terms and subject to such conditions as may be resolved upon by the directors. TRANSFER AND TRANSMISSION 11. Upon the request of a holder of registered shares that such shares be exchanged for bearer shares, the directors may cancel the share certificate in respect thereof and the entry in the Share Register and in such event shall issue in substitution therefor a certificate evidencing shares issued to bearer subject to such indemnity and upon such terms and subject to such conditions as the directors may reasonably require. 12. Upon the request of a holder of a certificate in respect of shares issued to bearer that such shares be exchanged for registered shares, the directors may, subject to the terms and conditions on which the same were issued, cancel such certificate and issue, in substitution, a certificate evidencing registered shares and enter the name and address of the holder thereof in the Share Register, subject to such indemnity as the directors may reasonably require. 13. Any person who becomes entitled by operation of law or otherwise to a share or shares in the Company in consequence of the death, incompetence or bankruptcy of any member, shall be the only person recognized by the Company as having any title to the shares; and may execute a valid transfer; or upon application to the Company, may be registered as a member upon such evidence as may reasonably be required by the directors. An application by any such person to be registered as a member shall be deemed to be a transfer of shares for all purposes. ALTERATION OF SHARE CAPITAL 14. Any new shares issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the directors by resolution shall determine; and except so far as otherwise provided by the terms of issue shall be considered part of the original capital for all purposes under the Act and these Articles. PROXIES AND REPRESENTATIVES AT MEETINGS OF MEMBERS 15. A member who is an individual or corporation may be represented at a meeting of members by a proxy. The instrument appointing a proxy shall be in writing or in such a form as the Chairman of the meeting shall deem acceptable. VOTING AT MEETING OF MEMBERS 16. Every member holding voting shares shall either in person or by proxy have one vote on a show of hands and on a poll shall have one vote for every voting share held. Where a corporation, being a member, wishes to be present, it must be represented by a proxy; such proxy shall be entitled to vote for such corporation on a show of hands and also on a poll. If there be joint registered holders of any shares, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 17. A Committee appointed for a member of unsound mind may vote on his behalf at any meeting of members which such member is entitled to attend and vote. PROCEEDINGS AT MEETINGS OF MEMBERS 18. The President of the Company, or in his absence, any Vice-President, shall preside as Chairman of meetings of members; if both are absent, the members shall choose one of their numbers present at the meeting to be the Chairman. 19. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in the case of an equality of votes the Chairman shall, both on a show of hands and -3- at the poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member. 20. At any general meeting of the members unless a poll is demanded by a member present in person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the members shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. 21. If a poll is demanded it shall be taken in such manner as the Chairman directs and the result of such poll shall be deemed to be the resolution of the members. 22. When all members entitled to be present and vote sign either personally or by proxy the minutes of an annual general or an extraordinary general meeting, the same shall be deemed to have been duly held notwithstanding that the members have not actually come together or that there may have been technical defects in the proceedings and a resolution in writing signed by all the members aforesaid shall be as valid and effectual as if it had been passed at a meeting of the members duly called and constituted. 23. The Chairman, with the consent of the meeting, may adjourn any meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 24. A meeting of members may be held by telephone or other electronic means, without prior notice, if all members entitled to vote participate and are able to hear each other at the same time and recognize each other's voice; and a resolution approved by simple majority vote, in writing or by telex, telegram, telephone, cable, telefax or other written electronic communication from a duly authenticated source, shall be effectual at the date thereof as a resolution of members. SERVICE OF NOTICE ON MEMBERS 25. In the case of members holding registered shares, notice of meetings of members and other information or written statement required to be given to members, shall be given by personal service, or sent by airmail, or by telex, telegram, telefax, cable or other electronic means at the discretion of the directors, to each member at the address shown in the Share Register, or in the case of joint holders of the same share or shares, at the address of the holder first named in the Share Register and notice so given shall be sufficient notice to all such joint holders. 26. In the case of members holding shares issued to bearer, notice of meetings of members or other information or written statement required to be given to members, shall be given by airmail addressed to the agent or attorney whose name and address has been given, to the Company in writing, for service of notice by the bearer of the share, identified for this purpose by the number on the share certificate; or in the absence of such address or if the notice, information or written statement cannot be served for any other reason, by publishing the notice information or written statement in a newspaper circulated in The Bahamas and in a newspaper circulated in the place where the Company has its principal office. 27. Seven days notice of any meeting shall be given to members holding both registered shares and shares issued to bearer. Any notice if served by post, shall be deemed to have been served within seven days of posting; and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. The non-receipt of notice by any member shall not invalidate me proceedings of any meeting. DIRECTORS 28. Subject as hereinafter provided the Company shall have at least one director but not more than seven. The Company or the Directors may, by resolution, amend the Articles from time to time to increase the minimum number or vary the maximum number of directors. 29. The first directors of the Company shall be elected by the subscribers to the Memorandum of Association and thereafter the directors shall be elected by resolution of members or resolution of directors for such terms as may be specified by the enabling resolution. -4- 30. A director need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a director. 31. Each director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) and (3) of the Act, a director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind, or of such infirm health as to be incapable of managing his affairs. A director may be removed by resolution of members. 32. The directors by resolution may fix the emoluments of directors in respect of services rendered or to be rendered in any capacity to the Company, subject to any resolution of members; and such emoluments shall be paid out of the funds of the Company. Directors shall also be paid out of funds of the Company all expenses, including travelling and hotel expenses, properly incurred by them in connection with the business of the Company, as may be approved by resolution of directors and subject to any resolution of members. 33. A director may hold concurrently with his office as director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may be interested as shareholder or otherwise for such remuneration and on such other terms and conditions as the directors of the Company may determine and shall not be accountable to the Company for the same. POWERS OF DIRECTORS 34. The business and affairs of the Company shall be managed by the directors who may exercise all the powers of the Company that are not expressly reserved to the members under the Act or any other laws of the Bahamas. 35. If the Board comprises only one, such sole director shall full power to represent the Company and to manage the affairs and business of the Company. If there be any vacancy in the Board, the continuing director or directors may act notwithstanding any vacancy in their body, save that if the number of directors has been fixed at two or more persons, and by reason of vacancies having occurred among the directors there shall be only one continuing director, he shall be authorized to act alone only for the purpose of appointing another director. MEETINGS OF DIRECTORS 36. The directors may meet upon not less than two clear days' notice at such place within or outside The Bahamas as and whenever they think necessary for the dispatch of business and may adjourn, and otherwise regulate their meetings and proceedings as they think fit. A meeting of directors may be convened by the President or failing him any Vice President or any other director. 37. A majority of the Board of Directors may waive notice of any meeting. 38. A properly constituted meeting of directors shall be competent to exercise all or any of the powers, duties, authorities and discretions for the time being vested in, or exercisable by, them as a body under authority of the Act, the Memorandum and these Articles. Where the Board comprises more than one director a quorum shall constitute fifty percent of the membership of the Board. 39. The President, or in his absence, a Vice-President shall preside at meetings of directors and if both are not present within fifteen minutes from the time appointed by the meeting the directors present may choose one of their number to be the Chairman. 40. Questions arising at any meeting of directors, or committee of directors shall be decided by simple majority of votes; and in the case of an equality of votes, the Chairman shall have a second or casting vote. 41. All acts done at any meeting of directors, or committee of directors, shall be valid notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such director or person acting as a director or in any director's entitlement to vote or in the proceedings at such meeting. -5- 42. When all the directors in person or by their alternates sign the minutes of a meeting of directors, the meeting shall be deemed to have been duly held notwithstanding any defects in the proceedings. 43. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. ALTERNATE DIRECTOR 44. Any alternate director appointed shall be deemed to be a director of the Company and not an agent of the director so appointing him. 45. A director by written instrument under his hand deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate; and if a director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. CORPORATE DIRECTOR 46. A director who is a body corporate may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for purposes of representing such director at board meetings or meetings of a committee of directors and transacting the business of the Company. COMMITTEE OF DIRECTORS 47. A committee of directors duly appointed by powers conferred by the Act or these Articles, may meet and adjourn as they think fit and may elect a Chairman to preside at its meetings. If no such Chairman is elected, or if at any meeting the Chairman is not present within fifteen minutes from the time appointed for the meeting, the directors present may choose one of their number to be the Chairman. OFFICERS AND AGENTS 48. Any person, including a director, may be appointed by resolution of directors to be an officer or agent of the Company; and the directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the company, exercisable by directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations under the Act and any regulations prescribed by the enabling resolution. 49. Officers appointed may consist of a President, one or more Vice-Presidents, a Secretary, a Treasurer and such other officers as the directors may deem desirable from time to time. In the absence of any specific allocation of powers and authorities, it shall be the responsibility of the President to manage the day-to-day affairs of the Company, the Vice-Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as are delegated to them by the President, the Secretary to maintain the registers, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 50. The emoluments of officers and agents shall be fixed by resolution of directors, subject to any resolution of members. CORPORATE OFFICER 51. Any officer who is a corporation may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. -6- BORROWING POWERS 52. The directors on behalf of the Company may raise, borrow or secure money, may mortgage, pledge or otherwise charge the Company's assets for such purposes, and may issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the directors. GUARANTEES 53. The directors may by resolution guarantee the repayment or performance of any liability, debt or obligation of any person and secure the same by mortgage, pledge or other charge on any of the Company's assets. DIVIDENDS 54. Subject to the rights of holders of shares entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to shareholders of record at the date of the declaration of the dividend; but no dividend shall be paid on those shares which are held by the Company as Treasury shares. If several persons are registered as joint holders of any share, any of them may give effectual receipt for any dividend or other moneys payable in respect of the share. 55. In the case of shares issued to bearer, the directors may provide for the payment of dividends by reference to counterfoils or warrants issued with the certificate for such shares, and the production of such share counterfoil or warrant shall evidence entitlement to receipt of such dividend in the same way and to such extent as the production of the certificate itself. At the time of presentation of such counterfoils or warrants as may be required to permit receipt, the directors may issue such further counterfoils or warrants as may be required to permit receipt by the holder thereof of subsequent dividends. 56. No dividend shall bear interest against the Company. 57. The directors at their discretion may deduct from the dividends payable to any member all sums of money as may be owing by him to the Company; and the directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. 58. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to members. RESERVES 59. The directors may, before recommending any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for special dividends or bonuses, or for repairing, improving, maintaining any of the property of the Company, and for such other purpose as the directors shall in their absolute discretion think conducive to the interests of the Company. 60. The directors may invest the several sums so set aside upon such investments as they may think fit; and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Company; and may divide the reserve fund into any special fund as they think fit and employ the reserve fund or any part thereof in the business of the Company, without being bound to keep the same separate from the other assets. CAPITALIZATION OF PROFITS 61. The directors may resolve to capitalize in whole or part the amount for the time being standing to the credit of any of the Company's reserve accounts, or to the credit of the profit and loss account, or profits otherwise available for distribution to members, and distribute such amount amongst members, not in cash, but in fully paid shares, debentures or other -7- securities of the Company in the same proportion as such members would have been entitled to if the equivalent amount had been distributed as a cash dividend. 62. If the directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and do all acts necessary to effect the capitalization and consequent issue of shares, debentures or other securities to members according to their respective entitlement; and to enter into such agreements with members entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such members. 63. The directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate; and in the case of an issue of bonus shares, the directors shall make the necessary entries in the Share Register in accordance with requirements in these Articles and the Act. CREATION OF TRUST 64. Subject to the provisions of the Act, the directors by resolution may transfer assets of the Company to any corporation or other legal entity other than an individual upon trust for the benefit of the Company, its members, creditors or other persons having a direct or indirect interest in the Company. SEAL 65. The directors shall provide for the safe custody of the Seal which shall not be used except by the authority of a resolution of directors. ACCOUNTS 66. The Company shall keep such accounts and financial records as the directors deem necessary and desirable to reflect the financial position of the Company; and if such accounts are prepared, the directors may by resolution call for such accounts to be examined by an auditor or accountant appointed by them at such remuneration as may from time to time be agreed; and such books of accounts shall be kept at the Registered Office of the Company. AMENDMENTS OF ARTICLES 67. The Company may alter or modify the conditions contained in these Articles as originally prepared or as amended by resolution of directors or members from time to time but where the Articles expressly provide that resolutions of directors shall be subject to any resolution of members, such provision shall not be altered except by resolution of members. INDEMNITY 68. Notwithstanding any of the provisions of the Act, the directors, secretary and other officers and the Registered agent for the time being of the Company and the trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively. -8- IN WITNESS WHEREOF We, the Subscribers to the Memorandum of Association have hereunto subscribed our names this 21st day of January, A.D. 1998. AEGIS LIMITED By: /s/ [ILLEGIBLE] ----------------- Assistant Secretary RAPPEL LIMITED By: /s/ [ILLEGIBLE] ----------------- Assistant Secretary Signed by the Subscribers to the Memorandum of Association in the presence of: /s/ [ILLEGIBLE] --------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER ---------------------------- Asst. Registrar General January 21st, 1998 EX-3.14 15 y04808exv3w14.txt MEMO AND ARTICLE OF ASSOCIATION OF NOBLE SHIPPING LTD. EXHIBIT 3.14 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) No. 71,246 B NOBLE SHIPPING LTD. I, JACINDA P. BUTLER, ASST...............Registrar General of the Commonwealth of The Bahamas Do Hereby Certify pursuant to the International Business Companies Act (No. 2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that NOBLE SHIPPING LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 21ST day of JANUARY 1998 Given under my hand and seal at Nassau in the Commonwealth of The Bahamas /s/ J.P. BUTLER ------------------------ ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 MEMORANDUM OF ASSOCIATION OF NOBLE SHIPPING LTD. 1. The name of the Company is NOBLE SHIPPING LTD. 2. The Registered Office of the Company will be situate at the Chambers of Harry B. Sands & Company in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company will be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 4. The objects or purposes of the Company are:- (1) To own, construct, hire, purchase, bareboat charter, charter, lease otherwise acquire and work ships and vessels of any class, and to establish and maintain lines or regular services of ships or other vessels, and generally to carry on the business of shipowners; (2) To engage in any act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law for the time being in force in the Commonwealth of The Bahamas. 5. Shares in the Company shall be issued in the currency of The United States of America. 6. The Company shall have an authorized capital of U.S.$5,000.00 with an aggregate par value of U.S.$5,000.00. 7. The Company shall have one class of shares of one series comprising 5,000 ordinary common shares with a par value of U.S.$1.00 each, but the Company is hereby authorized to issue other classes and series of shares as the directors may by resolution determine. 8. The directors shall have the authority and the power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of shares. 9. The number of shares into which the share capital is divided may be issued as registered shares or as shares issued to bearer as the directors may by resolution determine. 10. Registered shares may be exchanged and converted into shares issued to bearer and shares issued to bearer may be exchanged and converted into registered shares. 11. Any notice or other information required by the International Business Companies Act, 1989 to be given to the holder of shares issued to bearer shall be given in accordance with the Articles of Association of the Company. 12. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum or the Articles of Association of the Company. 13. The Memorandum or Articles of Association of the Company may be amended by a resolution of members or of the directors. 14. The liability of the members of the Company is limited to the amount unpaid on the shares respectively held by them. -2- WE, the several persons, whose names and addresses are subscribed herein are desirous of incorporating an International Business Company under the laws of the Commonwealth of The Bahamas in pursuance of this Memorandum of Association. NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS 1. AEGIS LIMITED By: /s/ [ILLEGIBLE] ------------------- Assistant Secretary Nassau, Bahamas 2. RAPPEL LIMITED By: /s/ [ILLEGIBLE] ----------------- Assistant Secretary Nassau, Bahamas Dated this 21st day of January, A.D. 1998. WITNESS TO THE ABOVE SIGNATURES: /s/ [ILLEGIBLE] - --------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER -------------------------- Asst. Registrar General January 21st, 1998 THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 ARTICLES OF ASSOCIATION OF NOBLE SHIPPING LTD. 1. These Articles shall constitute the Regulations of the Company and reference therein to "the Act" shall mean the International Business Companies Act, 1989. 2. In these Regulations, words and expressions defined in the Act shall have the same meaning; and unless there be something in the subject or context inconsistent therewith references to directors shall mean the Board of Directors despite the fact that the Board may consist of one director only, and references to persons shall include corporations and all entities capable of having a legal existence. SHARE CAPITAL 3. The shares shall be under the control of the directors who may offer, allot, grant options or otherwise dispose of them to such persons or redeem them at such times for such consideration and upon such terms and conditions as they may determine by resolution. 4. Shares in the Company may be issued with such designations, powers, preferences and rights, qualifications, limitations and restrictions with regard to dividend, voting, return of capital or otherwise as the directors may determine by resolution without prejudice to any rights attaching to any existing shares and subject to the provisions of the Act. 5. Redeemable shares shall be redeemed on such terms and conditions and in such manner as the directors may determine by resolution before or at the time of the issue of such shares; and such shares may be redeemed at a premium. SHARE CERTIFICATES 6. Certificates of title to shares shall be issued and the signatures or common seal thereon may be facsimiles. 7. Every member shall be entitled to one certificate for the shares registered in his name or to several certificates, each for one or more of such shares. In respect of shares held jointly by two or more persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares to one of several joint holders shall be delivery to all. 8. If a certificate is worn or lost, the directors may issue a new certificate on satisfactory proof of its loss or the production of the worn-out certificate and upon such indemnity, as is reasonable, against any loss or liability which the Company or its directors may incur by reason of wrongful or fraudulent use or representation made by any person by virtue of the possession of such certificate. 9. The Company shall be entitled to treat the member specified in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of The Bahamas. 10. The Company may issue share certificates, otherwise known as warrants, to bearer in respect of any fully paid-up shares of the Company, stating that the bearer of the warrant is entitled to -2- the shares therein specified. Such warrants shall be issued upon such terms and subject to such conditions as may be resolved upon by the directors. TRANSFER AND TRANSMISSION 11. Upon the request of a holder of registered shares that such shares be exchanged for bearer shares, the directors may cancel the share certificate in respect thereof and the entry in the Share Register and in such event shall issue in substitution there for a certificate evidencing shares issued to bearer subject to such indemnity and upon such terms and subject to such conditions as the directors may reasonably require. 12. Upon the request of a holder of a certificate in respect of shares issued to bearer that such shares be exchanged for registered shares, the directors may, subject to the terms and conditions on which the same were issued, cancel such certificate and issue, in substitution, a certificate evidencing registered shares and enter the name and address of the holder thereof in the Share Register, subject to such indemnity as the directors may reasonably require. 13. Any person who becomes entitled by operation of law or otherwise to a share or shares in the Company in consequence of the death, incompetence or bankruptcy of any member, shall be the only person recognized by the Company as having any title to the shares; and may execute a valid transfer; or upon application to the Company, may be registered as a member upon such evidence as may reasonably be required by the directors. An application by any such person to be registered as a member shall be deemed to be a transfer of shares for all purposes. ALTERATION OF SHARE CAPITAL 14. Any new shares issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the directors by resolution shall determine; and except so far as otherwise provided by the terms of issue shall be considered part of the original capital for all purposes under the Act and these Articles. PROXIES AND REPRESENTATIVES AT MEETINGS OF MEMBERS 15. A member who is an individual or corporation may be represented at a meeting of members by a proxy. The instrument appointing a proxy shall be in writing or in such a form as the Chairman of the meeting shall deem acceptable. VOTING AT MEETING OF MEMBERS 16. Every member holding voting shares shall either in person or by proxy have one vote on a show of hands and on a poll shall have one vote for every voting share held. Where a corporation, being a member, wishes to be present, it must be represented by a proxy; such proxy shall be entitled to vote for such corporation on a show of hands and also on a poll. If there be joint registered holders of any shares, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 17. A Committee appointed for a member of unsound mind may vote on his behalf at any meeting of members which such member is entitled to attend and vote. PROCEEDINGS AT MEETINGS OF MEMBERS 18. The President of the Company, or in his absence, any Vice-President, shall preside as Chairman of meetings of members; if both are absent, the members shall choose one of their numbers present at the meeting to be the Chairman. 19. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in the case of an equality of votes the Chairman shall, both on a show of hands and -3- at the poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member. 20. At any general meeting of the members unless a poll is demanded by a member present in person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the members shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. 21. If a poll is demanded it shall be taken in such manner as the Chairman directs and the result of such poll shall be deemed to be the resolution of the members. 22. When all members entitled to be present and vote sign either personally or by proxy the minutes of an annual general or an extraordinary general meeting, the same shall be deemed to have been duly held notwithstanding that the members have not actually come together or that there may have been technical defects in the proceedings and a resolution in writing signed by all the members aforesaid shall be as valid and effectual as if it had been passed at a meeting of the members duly called and constituted. 23. The Chairman, with the consent of the meeting, may adjourn any meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 24. A meeting of members may be held by telephone or other electronic means, without prior notice, if all members entitled to vote participate and are able to hear each other at the same time and recognize each other's voice; and a resolution approved by simple majority vote, in writing or by telex, telegram, telephone, cable, telefax or other written electronic communication from a duly authenticated source, shall be effectual at the date thereof as a resolution of members. SERVICE OF NOTICE ON MEMBERS 25. In the case of members holding registered shares, notice of meetings of members and other information or written statement required to be given to members, shall be given by personal service, or sent by airmail, or by telex, telegram, telefax, cable or other electronic means at the discretion of the directors, to each member at the address shown in the Share Register, or in the case of joint holders of the same share or shares, at the address of the holder first named in the Share Register and notice so given shall be sufficient notice to all such joint holders. 26. In the case of members holding shares issued to bearer, notice of meetings of members or other information or written statement required to be given to members, shall be given by airmail addressed to the agent or attorney whose name and address has been given, to the Company in writing, for service of notice by the bearer of the share, identified for this purpose by the number on the share certificate; or in the absence of such address or if the notice, information or written statement cannot be served for any other reason, by publishing the notice information or written statement in a newspaper circulated in The Bahamas and in a newspaper circulated in the place where the Company has its principal office. 27. Seven days notice of any meeting shall be given to members holding both registered shares and shares issued to bearer. Any notice if served by post, shall be deemed to have been served within seven days of posting; and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. The non-receipt of notice by any member shall not invalidate the proceedings of any meeting. DIRECTORS 28. Subject as hereinafter provided the Company shall have at least one director but not more than seven. The Company or the Directors may, by resolution, amend the Articles from time to time to increase the minimum number or vary the maximum number of directors. 29. The first directors of the Company shall be elected by the subscribers to the Memorandum of Association and thereafter the directors shall be elected by resolution of members or resolution of directors for such terms as may be specified by the enabling resolution. -4- 30. A director need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a director. 31. Each director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) and (3) of the Act, a director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind, or of such infirm health as to be incapable of managing his affairs. A director may be removed by resolution of members. 32. The directors by resolution may fix the emoluments of directors in respect of services rendered or to be rendered in any capacity to the Company, subject to any resolution of members; and such emoluments shall be paid out of the funds of the Company. Directors shall also be paid out of funds of the Company all expenses, including travelling and hotel expenses, properly incurred by them in connection with the business of the Company, as may be approved by resolution of directors and subject to any resolution of members. 33. A director may hold concurrently with his office as director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may be interested as shareholder or otherwise for such remuneration and on such other terms and conditions as the directors of the Company may determine and shall not be accountable to the Company for the same. POWERS OF DIRECTORS 34. The business and affairs of the Company shall be managed by the directors who may exercise all the powers of the Company that are not expressly reserved to the members under the Act or any other laws of the Bahamas. 35. If the Board comprises only one, such sole director shall full power to represent the Company and to manage the affairs and business of the Company. If there be any vacancy in the Board, the continuing director or directors may act notwithstanding any vacancy in their body, save that if the number of directors has been fixed at two or more persons, and by reason of vacancies having occurred among the directors there shall be only one continuing director, he shall be authorized to act alone only for the purpose of appointing another director. MEETINGS OF DIRECTORS 36. The directors may meet upon not less than two clear days' notice at such place within or outside The Bahamas as and whenever they think necessary for the dispatch of business and may adjourn, and otherwise regulate their meetings and proceedings as they think fit. A meeting of directors may be convened by the President or failing him any Vice President or any other director. 37. A majority of the Board of Directors may waive notice of any meeting. 38. A properly constituted meeting of directors shall be competent to exercise all or any of the powers, duties, authorities and discretions for the time being vested in, or exercisable by, them as a body under authority of the Act, the Memorandum and these Articles. Where the Board comprises more than one director a quorum shall constitute fifty percent of the membership of the Board. 39. The President, or in his absence, a Vice-President shall preside at meetings of directors and if both are not present within fifteen minutes from the time appointed by the meeting the directors present may choose one of their number to be the Chairman. 40. Questions arising at any meeting of directors, or committee of directors shall be decided by simple majority of votes; and in the case of an equality of votes, the Chairman shall have a second or casting vote. 41. All acts done at any meeting of directors, or committee of directors, shall be valid notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such director or person acting as a director or in any director's entitlement to vote or in the proceedings at such meeting. -5- 42. When all the directors in person or by their alternates sign the minutes of a meeting of directors, the meeting shall be deemed to have been duly held notwithstanding any defects in the proceedings. 43. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. ALTERNATE DIRECTOR 44. Any alternate director appointed shall be deemed to be a director of the Company and not an agent of the director so appointing him. 45. A director by written instrument under his hand deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate; and if a director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. CORPORATE DIRECTOR 46. A director who is a body corporate may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for purposes of representing such director at board meetings or meetings of a committee of directors and transacting the business of the Company. COMMITTEE OF DIRECTORS 47. A committee of directors duly appointed by powers conferred by the Act or these Articles, may meet and adjourn as they think fit and may elect a Chairman to preside at its meetings. If no such Chairman is elected, or if at any meeting the Chairman is not present within fifteen minutes from the time appointed for the meeting, the directors present may choose one of their number to be the Chairman. OFFICERS AND AGENTS 48. Any person, including a director, may be appointed by resolution of directors to be an officer or agent of the Company; and the directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the company, exercisable by directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations under the Act and any regulations prescribed by the enabling resolution. 49. Officers appointed may consist of a President, one or more Vice-Presidents, a Secretary, a Treasurer and such other officers as the directors may deem desirable from time to time. In he absence of any specific allocation of powers and authorities, it shall be the responsibility of the President to manage the day-to-day affairs of the Company, the Vice-Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as are delegated to them by the President, the Secretary to maintain the registers, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 50. The emoluments of officers and agents shall be fixed by resolution of directors, subject to any resolution of members. CORPORATE OFFICER 51. Any officer who is a corporation may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. -6- BORROWING POWERS 52. The directors on behalf of the Company may raise, borrow or secure money, may mortgage, pledge or otherwise charge the Company's assets for such purposes, and may issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the directors. GUARANTEES 53. The directors may by resolution guarantee the repayment or performance of any liability, debt or obligation of any person and secure the same by mortgage, pledge or other charge on any of the Company's assets. DIVIDENDS 54. Subject to the rights of holders of shares entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to shareholders of record at the date of the declaration of the dividend; but no dividend shall be paid on those shares which are held by the Company as Treasury shares. If several persons are registered as joint holders of any share, any of them may give effectual receipt for any dividend or other moneys payable in respect of the share. 55. In the case of shares issued to bearer, the directors may provide for the payment of dividends by reference to counterfoils or warrants issued with the certificate for such shares, and the production of such share counterfoil or warrant shall evidence entitlement to receipt of such dividend in the same way and to such extent as the production of the certificate itself. At the time of presentation of such counterfoils or warrants as may be required to permit receipt, the directors may issue such further counterfoils or warrants as may be required to permit receipt by the holder thereof of subsequent dividends. 56. No dividend shall bear interest against the Company. 57. The directors at their discretion may deduct from the dividends payable to any member all sums of money as may be owing by him to the Company; and the directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. 58. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to members. RESERVES 59. The directors may, before recommending any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for special dividends or bonuses, or for repairing, improving, maintaining any of the property of the Company, and for such other purpose as the directors shall in their absolute discretion think conducive to the interests of the Company. 60. The directors may invest the several sums so set aside upon such investments as they may think fit; and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Company; and may divide the reserve fund into any special fund as they think fit and employ the reserve fund or any part thereof in the business of the Company, without being bound to keep the same separate from the other assets. CAPITALIZATION OF PROFITS 61. The directors may resolve to capitalize in whole or part the amount for the time being standing to the credit of any of the Company's reserve accounts, or to the credit of the profit and loss account, or profits otherwise available for distribution to members, and distribute such amount amongst members, not in cash, but in fully paid shares, debentures or other -7- securities of the Company in the same proportion as such members would have been entitled to if the equivalent amount had been distributed as a cash dividend. 62. If the directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and do all acts necessary to effect the capitalization and consequent issue of shares, debentures or other securities to members according to their respective entitlement; and to enter into such agreements with members entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such members. 63. The directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate; and in the case of an issue of bonus shares, the directors shall make the necessary entries in the Share Register in accordance with requirements in these Articles and the Act. CREATION OF TRUST 64. Subject to the provisions of the Act, the directors by resolution may transfer assets of the Company to any corporation or other legal entity other than an individual upon trust for the benefit of the Company, its members, creditors or other persons having a direct or indirect interest in the Company. SEAL 65. The directors shall provide for the safe custody of the Seal which shall not be used except by the authority of a resolution of directors. ACCOUNTS 66. The Company shall keep such accounts and financial records as the directors deem necessary and desirable to reflect the financial position of the Company; and if such accounts are prepared, the directors may by resolution call for such accounts to be examined by an auditor or accountant appointed by them at such remuneration as may from time to time be agreed; and such books of accounts shall be kept at the Registered Office of the Company. AMENDMENTS OF ARTICLES 67. The Company may alter or modify the conditions contained in these Articles as originally prepared or as amended by resolution of directors or members from time to time but where the Articles expressly provide that resolutions of directors shall be subject to any resolution of members, such provision shall not be altered except by resolution of members. INDEMNITY 68. Notwithstanding any of the provisions of the Act, the directors, secretary and other officers and the Registered agent for the time being of the Company and the trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively. -8- IN WITNESS WHEREOF We, the Subscribers to the Memorandum of Association have reunto subscribed our names this 21st day of January, A.D. 1998. AEGIS LIMITED By: /s/ [ILLEGIBLE] ---------------------- Assistant Secretary RAPPEL LIMITED By: /s/ [ILLEGIBLE] ---------------------- Assistant Secretary Signed by the Subscribers to the Memorandum of Association in the presence of: /s/ [ILLEGIBLE] ---------------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER ------------------------------ Asst. Registrar General January 21st, 1998 EX-3.15 16 y04808exv3w15.txt ARTICLES OF INC. & BY-LAWS OF OCEANPAR S.A. EXHIBIT 3.15 ENGLISH FRANK M. SAMSON GERMAN OFFICIAL SWORN TRANSLATOR FRENCH Ayelas 451, Otie 95 PORTUGUESE & Fax 595-21 449-589 ITALIAN Asuncion - Paraguay SPANISH TRANSLATION - -------------------------------------------------------------------------------- SOCIETY OF NOTARIES PUBLIC OF PARAGUAY Rosolution 106/90 Supreme Court of Justice SECURITY SHEET MOTARIAL ACT Series B-95 No. 373902 [NOTARY STAMP] TRULY CONSISTENT with the original Statement No. 473 Page 1508 & foll. of the Book of the Civil Division, Sec. "B" of the Notarial Registry No. 37, located in the District of Asuncion, and prepared by the Notary Public Ramon Zubizarreta Z. in his/her capacity of Notary Public of said Notarial Registry. I am issuing this first certified copy for PARFINA S.A., this first day of November, 1996.- (Sgd): Ramon Zubizarreta Z. Notary Public (Translator's Note: There is a stamp attesting to recordal with the Register of Legal Persons & Associations under No. 776, and a further stamp showing recordal with the Public Register of Commerce under No. 15, dated Jan. 9, 1996.) [NOTARY STAMP] - -------------------------------------------------------------------------------- I, the undersigned, DO HEREBY CERTIFY, that the foregoing is a true and accurate to English translation of the document in Spanish, attached hereto.- IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal, in the City of Asuncion, Capital of Paraguay, this 1st day of August, A.D. 1999.- [NOTARY STAMP] /s/ ------------- ENGLISH FRANK M. SAMSON GERMAN OFFICIAL SWORN TRANSLATOR FRENCH Ayelas 451, Otie 95 PORTUGUESE & Fax 595-21 449-589 ITALIAN Asuncion - Paraguay SPANISH TRANSLATION - -------------------------------------------------------------------------------- SOCIETY OF NOTARIES PUBLIC OF PARAGUAY [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ ---------- ------------- SERIES E FORMATION OF THE COMPANY "OCEANPAR SOCIEDAD ANONIMA" NUMBER SIXTEEN.- In the City of Asuncion, Capital of the Republic of Paraguay, this 2nd day of December one thousand nine hundred ninety-six, before me, NORMA CRISTINA LOPEZ BERNAL, a Notary Public, with Notarial Registry No. 502, in my offices, 1102 Ayelas, personally appear:- I. Mr. CARLOS EDUARDO BENITEZ BALMELLI, a Paraguayan citizen, an attorney at law, married and living in separation of marital assets, according to Court Decision No. 1460 dated 09.17.96, issued by the Court of First Instance in Civil & Commercial Matters, 5th Chamber, Clerk Daniel Colman M., recorded with Section 14, General Bureau of Public Registries under No. 780, on page 780, Series "A", Registry of Dissolution and Liquidation of Marital Societies, on Oct. 3, '96. This decision is in full force. The party complied with the law on obligatory military service; and II. Mr. JORGE JOSE ALVAREZ, an Argentine citizen, businessman, married, and his wife, Mrs. GRACIELA DELIA BLANCO (de) ALVAREZ, AN Argentine citizen. They prove their identity with the Paraguayan I.D. Cards No. 445,975, 3,759,146, and the Argentine National Document No. 5,761,808, respectively, domiciled, for the purposes hereof, at 646 25 de Mayo, 7th floor, in this city. The appearers are residents of this city, which I do hereby certify, And Messrs. Carlos Eduardo Benitez Balmelli and Jorge Jose Alvarez, both of age, state: That they have resolved establishing a stock company in accordance with the laws in force, and implementing this decision, they provide that the company be governed by the laws and following By-Laws: TITLE I - NAME, ADDRESS, TERM.- Article One: The Appearers hereby establish a company that will bear the name of "OCEANPAR SOCIEDAD ANONIMA", with registered offices in the City of Asuncion, Republic of Paraguay. The Board of Directors shall be empowered to establish branches, agencies, representative offices and other facilities at [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ ---------- ------------- any location within or without the country.- Article 2. The Company shall have a term of ninety (90) years counted from the date of recording thereof with the Registry of Legal Persons and Associations, term which may be extended or shortened by decision of an Extraordinary General Meeting of the Shareholders.- [NOTARY STAMP] TITLE II - PURPOSE - Article 3. The purpose of the Company shall be to conduct, by its own account or for the account of third parties, or associated with third parties, at any location of the Republic or abroad, following business transactions:- (a) To carry out, within or without the country, transportation services on a regular or non-regular basis, by sea, river and/or lake, of persons or cargo, mail, and/or perform maritime work and/or services in general; (b) To manage and/or operate vessels owned by the Company or by third parties, as well as to hold the representation of other shipowners; (c) To enter into carriage agreements; (d) To enter into ship operation agreements with other physical and/or legal persons, for attending to and carrying out carriage operations; (e) To act as Steamship Agents and to represent vessels owned by the Company and/or third parties; (f) To conduct any kind of import/export transactions and rendering of services; (g) To give personal guaranties and property liens for liabilities of third parties; (h) To render services of personnel training in connection with waterborne operations; (i) To operate port terminals, to carry out carriage, transshipments in operations of on-shipment by barge or completion of cargoes; (j) To carry out loading, discharging and stowage operations; (k) To conduct towing operations; (l) To act as brokers for vessels and/or cargoes; (m) To build and/or repair vessels and/or naval artifacts; (n) To exploit public and private concessions of any kind [***] [***] To represent third parties in any of the forms used in the [***] of maritime business; (o) To intervene in any setps related to the establishment, operation, management and distribution of [***] that may arise under the policies set by the proper authorities; (p) For the above-mentioned purposes and, in general, [***] any activity related to the Company's purpose, the Company may become the owner, give vessels or take same in lease, time charter, per voyage, on a barebottom basis, or under any other agreement on use of vessels; (q) To buy, sell, build, manage and operate city and/or rural real estate, including all operations provided for under the laws and regulations concerning sale by - 3 - [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ /s/ - ------------------- ------------------- -------------- apartment ("horizontal property"); (r) To perform any kind of mandates, representations, agencies, commissions, consignations, business factoring and management of property, capital and companies in general; (s) To carry out any operation or activity that may be related to, subsidiary, incidental, supplementary to or required for the main purposes; the Company shall have, for such end, full legal ability for acquiring rights, incur liabilities and to perform those acts which are not prohibited under the laws or these By-Laws. [NOTARY STAMP] TITLE III- CAPITAL - SHARES - OBLIGATIONS Article 4. The Company's capital shall be established in the amount of Forty Million Guaranis (Gs. 40,000,000) fully issued and represented by forty (40) ordinary bearer shares, with an at par value of One Million Guaranis (Gs. 1,000,000) each share, numbered from 1 through 40. Any share certificates shall contain the specifications provided for under Article 1069 of the Civil Code and those resolved by the Board of Directors, and all shall be signed by the President and one Regular Director. An increase of the Company's capital may be resolved by the Extraordinary General Meeting of the Shareholders. Article 5. At this act, there are issued all shares representing the Company's capital, and they shall be subscribed to and paid up in the manner set forth in Article 21 hereof. The subscription and holding of shares in the Company shall imply the knowledge and acceptance of these By-Laws, as well as the adherence of any shareholder to all firm resolutions adopted by the Meetings of the Shareholders. Article 6. The Company shall be entitled to borrow by means of public or private instruments, by the issue of negotiable securities or debentures, by certificates of even amount; any certificate may represent more than the obligation. All obligations or securities shall be registered. The issue, placement and other terms thereof shall be resolved by the Annual General Meeting of the Shareholders, and the timing thereof shall be resolved by the Board of Directors, abiding by all provisions applicable thereto, as established by the Civil Code in its Third Book, Title II, Section V. [NOTARY STAMP] TITLE IV - CONDUCTION AND MANAGEMENT - Article 7. The management of the Company shall be the responsibility of a Board of Directors consisting of 2 - 5 regular members, if required, 1-3 alternate members, from among which there shall be elected a President and a Vice-President. All members shall hold their office for one year - 4 - [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ /s/ - ------------------- ------------------- ------------- [NOTARY STAMP] [NOTARY STAMP] and may be reelected, Their remuneration shall be fixed by the Meeting of the Shareholders. The Annual Meetings of the Shareholders shall determine the number of regular and alternate members for each fiscal year. In the event of occurring vacancies in such number that the Board of Directors may not be formed, the remaining Directors shall, with the Controller's intervention fill such vacant offices or call a General Meeting of the Shareholders for such purpose. Article 8. The Board of Directors shall elect its officers at its first meeting after the appointment. The Board of Directors shall hold meetings whenever it is called by the President or any two Directors or by the Controller. It shall validly adopt its resolutions with the presence of half of its Regular Members or those Members acting as Regular Members. Any resolutions shall be adopted by simple majority of votes. In the event of a tied vote, the Director-President shall have a deciding vote. The outturn of its resolutions shall be set forth in a Book of Minutes, and all Minutes shall be signed by all individuals present thereat. Article 9. The duties and powers of the Board of Directors are: (1) To conduct and manage the Company with ample powers and all rights that, according to the laws and these By-Laws, are not reserved for the General Meetings of the Shareholders; (2) To appoint Managers, Factors and other officers, to establish their powers, station and salaries, to grant them special or general powers of attorney for the purposes the Board may deem appropriate, entrusting to them the use of the Company's name and the power to engage, [***] actively and passively, the Company; (3) To call the Annual General Meetings of the Shareholders; (4) To acquire the control, joint ownership, possession, location and any kind of rights on real estate, title, shares and securities outstanding in the trade, either by purchase, sale, exchange, lease, commodate, as signment, dation in payment or by any other title, and to alienate or lease such assets, to establish liens on said assets, either real or personal, and for the terms, modes and other conditions which may be agreed upon, entering into, for such purpose, any agreements, and issuing any instruments, certificates and engagements that may be required; (5) To acquire the assets and liabilities of companies already established or to be established, engaged in business operations similar to those of the Company, to acquire their property or shares in full or in part; to enter into lawful agreements of any type; to take out insur- - 5 - [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ /s/ - ------------------- ------------------- -------------- [NOTARY STAMP] [NOTARY STAMP] once against all risks, to deposit funds in saving accounts or in public or private securities; (6) To issue, draw, accept, endorse, underwrite, intervene in, protest, pay and execute any type of trade and credit instruments, bills of exchange, promissory notes, payment orders, paper, letters of credit; to open checking accounts with or without supply of funds; to draw checks against such accounts and to overdraw with authorization; to discount, collect, cash and endorse any kind of certificates, securities, obligations and guaranties; to cash and endorse any type special checks; to carry out any kind of steps in connection with the aforesaid transactions, which may be required for preserving the credit status, its force or validity; to conduct transaction, with ample powers, in respect of certificates and securities of any kind, including debentures; (7) To collect and cash, to grant rebates, remissions, set-offs, to award respites in connection with any debts in favor of the Company; to effect all kinds of trade payments and settlements, even those which do not pertain to simple management; to borrow, with any kind of real or personal appropriate guaranties; to receive any kind of deposits, to give all security, guaranties or bonds required for the transaction of the Company's business; to perform any kind of bank transactions, such as deposits, checking accounts, discounts, import/export transactions, for the conduction of the Company's activity; (8) To accept or give mandates and representations or steps of any kind, to give special or general powers of attorney for management or other specific purposes, as well as for instituting criminal action or filing criminal complaints or offenses committed against the interests of the Company, to revoke expand or restrict such instruments; to request rendering [***] accounts and render same; to accept creditor meeting resolutions, rebates or respites and adjudgment of property; to request, [***] or appear at bankrupticies or call of creditors, to submit cases to arbitrators, arbitral courts or amicable "compositeurs"; to waive appeals, instances and other remedies, and to acquired rights under the statute of limitations; to compromise and settle to any extent it may be lawfully possible with respect to the debts or claims of the Company, to appear in any kind of proceedings on behalf of the Company, as plaintiff or defendant, granting, for such purpose, powers of attorney to attorneys at law; (9) To record the Company with any kind of registries; to apply for concessions, trademarks, patents, privileges, and to enter - 6 - [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ - -------------------------- ------------------------------- [NOTARY STAMP] into any kind of agreements and arrangements with the Government; (10) To submit at any proper Meetings of the Shareholders any kind of documents, proposals concerning dividends or investment thereof, and payment of final dividends; (11) To carry out any act and to enter into any agreement, without any restriction whatsoever, which may be, at their sole criteria, appropriate or necessary for achieving the Company's purposes; to sign any kind of papers, letters or advises in connection with the Company's business; (12) To solve all cases not provided for herein, rendering account thereof at the next General Meeting of the Shareholders.- The preceding listing is not restrictive, and the Board of Directors shall be entitled to carry out any and all acts of management or disposal that may be conducive to the achievement of the Company's purposes, even those acts which require a special power of attorney, such as those mentioned in Article 884 of the Civil Code.- The Board shall establish the internal Regulations of its operation and the higher staff. Article 10. The Members of the Board of Directors shall hold their office as long as the newly elected officers - as appointed by the General Meeting of the Shareholders - are not qualified therefore. Article 11 - Use of the Company Name - To engage the Company, the joint signature of the President and a Regular Director will be necessary. In the event of resignation, impediment and/or absence of the President, the joint signature of the Vice-President and one Regular Director will be required. In this manner, the Company shall be represented and engaged and bound in all acts, transactions and agreements, thus committing it both actively and passively. The representation of the Company in acts other than sale, credits of any type and/or amount, liens or conveyance of items of the fixed assets, shall be exercised by the President with his single signature.- [NOTARY STAMP] TITLE V - GENERAL MEETINGS OF THE SHAREHOLDERS. Article 12.- The General Annual Meeting of the Shareholders shall be held each year at the place indicated by the Board, within four months following the closing of the fiscal year. It shall be called in first and second call 10 days in advance at least, by means of announcements published 5 times in a large circulation newspaper of the capital city. There shall be a quorum at first call with the presence of Shareholders representing half plus one of all shares entitled to vote. At second call, the Meeting may be held - 7 - [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ /s/ - --------------------------- ------------------ ------------------------------- [NOTARY STAMP] on a valid basis one hour after the first call, with any number of attendants and shares represented thereat.- Article 13. Following matters, as provided for under Article 1079 of the Civil Code, shall be submitted for approval to the General Annual Meeting of the Shareholders; (1) The Report of the Board, the Inventory, the Balance Sheet, the Statement of Loss & Profit, items that shall be submitted each year by the Board, together with the Controller's Opinion; (2) Establishment of the number, and appointment of Members of the Board and the Controller, if required; (3) Distribution of profits and establishment of remunerations; (4) Any other matters contained in the Agenda.- Article 14. The Extraordinary Meeting of the Shareholders shall be convened at first call with the attendance of Shareholders representing 60% of all shares entitled to vote.- For second [***], the attendance of Shareholders representing at least 30% of all shares entitled to vote shall be required. It shall be the responsibility of the General Extraordinary Meeting of the Shareholders to debate upon, and adopt resolutions concerning, all matters which are not the responsibility of the Annual Meeting of the Shareholders, as well as on amendments of these By-laws, the increase, decrease and repayment of the Company's capital, and any other items mentioned in Article 1080 of the Civil Code.- Article 15. Any Meetings shall be chaired by the President or the individual substituting for him, or, in failure thereof, by either of the Directors present at the Meeting. Any Shareholders may be represented by third parties by means of a simple power of attorney letter, addressed to the Board of Directors, [***] by any other appropriate means. The deposit of shares or of [***] bank certificate on the deposit of said shares shall be made [***] the Company's Treasury, up to three days prior to the date established by the Meeting.- Article 16. Each subscribed-to share [***] to its holder the right to ONE VOTE at the time of adopting resolutions of the Board. All decisions shall be adopted, on any of the matters under debate, by MAJORITY OF VOTES representing more than 50% of the shares present thereat and entitled to vote, with the exception of the matters mentioned in Article 1091 of the Civil Code, for which the affirmative vote of a majority of the Shareholders entitled to vote shall be required.- Article 17. Any decisions of the General Meetings of the Shareholders, adopted in conformity with these By-Laws, shall be binding for all Shareholders, be they dissidents or not, notwithstanding the right [NOTARY STAMP] - 8 - [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ - ---------------------------- ------------------------------- established in Article 1092 of the Civil Code. TITLE VI. Supervision - Article 18. The supervision of the Company shall be performed by a Regular Controller, appointed by the General Meeting of the Shareholders. He shall hold his office for one year. At the same act there shall be appointed an Alternate Controller for the same term, who shall substitute for the Regular' Controller during the latter's impediments. Both may be reelected indefinitely and their powers shall be those set forth in Article 1124 of the Civil Code. TITLE VII - INVENTORY - BALANCE SHEET - RESERVE FUND.- Article 19. All Balance Sheets and the Inventory shall abide by any legal end regulatory provision in force. Said documents shall prepared as of the closing of the fiscal year on December 31 of each year. All net and realized profits shall, after deducting a 5% allocated to the Legal Reserve Fund, receive the destination which, by its own initiative or after a proposal of the Board of Directors, may resolve the Meeting of the Shareholders. TITLE VII - DISSOLUTION OF THE COMPANY - Article 20. Upon expiration of the Company's term or in the event of earlier dissolution thereof, the liquidation shall be carried out by the Board of Directors, with the Controller's intervention, save that the Meeting of the Shareholders should resolve otherwise. [NOTARY STAMP] TITLE IX - SUBSCRIPTION AND PAYMENT OF SHARES - Article 21. The 40 (forty) shares are subscribed to and paid up at this act in following manner: (1) Mr. Jorge Jose Alvarez subscribes to 36 (thirty-six) ordinary shares of Gs 1,000,000 (one million guaranis) each, for an amount of Gs 36,000.000 (thirty-six million guaranis. and (2) Mr. Carlos Eduardo Benitez Balmelli subscribes to 4 (four) ordinary shares of Gs l.000.000 (one million guaranis) each, for the amount of Gs 4,000,000 (four million Guaranis).- At this act, the shareholders pay in cash 25% of the subscribed-to shares, representing an aggregate amount of Ten Million Guaranis. TITLE X - PRO TEMPORE PROVISIONS.- Article 22. The first Board of Directors of the Company, whose office shall be extended up to the next following General Annual Meeting of the Shareholders, shall keep performing its duties until their substitutes are duly qualified. The Board shall be composed as follows: (a) President: Jorge Jose Alvarez. Vice-President: Carlos - 9 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] /s/ - ---------------- Eduardo, Benitez Balmelli: (b) Controllers: Regular Controller: Ricardo Agustin Fabria.- Alternate Controller: Favio E. Rios. Article 23. Either of Messrs. Jorge Jose Alvarez and/or Carlos Eduardo Benitez Balmelli shall be fully empowered, Jointly or either or them, to accept and/or execute, by Notarial Statement, any amendment of the By-laws, suggested by the proper authorities, duly authorized for such purpose. They may further request the recordal of this instrument with the Bureau of Public Registries and entities of the Administration.- Article_24.- While the formalities of registration of the By-Laws are in processing, the Board of Directors appointed under Article 22 hereof shall he empowered, as provided for in Article 1.1 hereof, and in the name and on behalf of the company established hereby, and with the unlimited and Joint liability of the forming partners of "Oceanpar S.A.", to conduct any transactions and legal acts which represent the purpose of the Company, even the purchase of any kind of assets, be they vehicles, real and personal property and/or self-moving property, according to any terms and conditions that may be best for the Company, and with the assurance that their acts, lawfully performed, shall have the pertinent acceptance and confirmation.- [NOTARY STAMP] Under the above conditions the company OCEANPAR SOCIEDAD ANONIMA is established, and the parties hereby commit themselves to comply in full with its governing provisions according to the laws.- I advised the duty of recordation.- After being read by me and ratified by the parties, they affix their signature before me in their usual manner, all of which, of the contents of this Deed, and of the fact that. I have personally received the statement of will of the appearers, I do hereby certify.- CARLOS EDUARDO BENITEZ BALMELLI.- JORGE JOSE ALVAREZ.- GRACIELA DELIA BLANCO DE ALVAREZ.- Before me: NORMA CRISTINA LOPEZ BERNAL. - There follows my seal.- There follows the Notarial Security Sheet No - 583763, Series D, of the Society of Notaries Public of Paraguay (signature and stamp of the Notary Public on all pages) ...///.. FRANK M.SAMSON ENGLISH OFFICIAL SWORN TRANSLATOR GERMAN & Fax 595-21 449-589 FRENCH Asuncion - Paraguay PORTUGUESE TRANSLATION ITALIAN SPANISH - 10 - SOCIETY OF NOTARIES PUBLIC OF PARAGUAY Resolution 106/90 Supreme Court of Justice NOTARY PUBLIC'S ACT Series D LEGALIZATION [NOTARY STAMP] /s/ ----------------------------- [NOTARY STAMP] TRULY CONSISTENT with the original statement [***] 16, page 57 of the Notarial Book, Comm. Sec., Division "A", Notarial registry no 502, with seat in the district of Asuncion, and executed before the N.P. Norma C. Lopez Bernal, in her capacity of Holder of said Registry. I am issuing this first copy for OCEANPAR S.A., this 5th day of December, 1996. (Sgd): Norma Cristina Lopez Bernal Notary Public (Translator's Note: There is the stamps of the Notary Public, stamp attesting to recordation with the Registry of Legal Parsona a Associations, and a further one attesting to recordation with the Public Registry of Commerce under [***] 689.) I, the undersigned, DO HEREBY CERTIFY, that the foregoing is a true and accurate English translation of the document in Spanish, attached hereto.-- IN WITNESS WHEREOF, I have hereunto set my hand and seal, in the City of Asuncion Capital of Paraguay, this 4th day of August, A.D. 1998. [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ /s/ - ------------------------------ ------------------------------ FRANK M. SAMSON ENGLISH OFFICIAL SWORN TRANSLATOR GERMAN Aye Las 451, Otie 95 FRENCH & Fax 595-21 449-589 PORTUGUESE Asuncion - Paraguay TRANSLATION ITALIAN SPANISH SOCIETY OF NOTARIES PUBLIC OP PARAGOAY [NOTARY STAMP] /s/ ----------------------------- [NOTARY STAMP] /s/ ----------------------------- Series E No. 456063/64/65/66/ 67/68/80/70 FORMATION OF THE COMPANY "OCEANPAR SOCIEDAD ANONIMA" NUMBER SIXTEEN.- In the City of Asuncion, Capital of the Republic of Paraguay, this 2nd day of December one thousand nine hundred ninety-six, before me, NORMA CRISTINA LOPEZ BERNAL, a Notary Public, with Notarial Registry No 502, in my offices, 1102 Ayolas, personally appear: I. Mr. CARLOS EDUARDO BENITEZ BALMELLI, a Paraguayan citizen, an attorney at law, married and living in separation of marital as-sets, according to Court Decision No 1460 dated 09.17.96, issued by the Court of First Instance in Civil & Commercial Matters, 5th Chamber, Clerk Daniel Colman M., recorded with Section 14, General Bureau of Public Registries under No 780, on page 780, Series "A", Registry of Dissolution and Liquidation of Marital Societies, on Oct. [***] This decision is in full force. The party complied with the law on obligatory military service; and II. Mr. JORGE JOSE ALVAREZ, an Argentine citizen, businessman, married, and his wife, Mrs. GRACIELA DELIA BLANCO (de) ALVAREZ AN Argentine citizen. They prove their identity with the Paraguayan I.D. Cards No 445,975, 3,759,146, and the Argentine National Document No 5,761,808, respectively, domiciled, for the purposes hereof, at 646 25 de Mayo, 7th floor, in this city. The appearers are residents of this city, which I do hereby certify, And Messrs. Carlos Eduardo Benitez Balmelli and Jorge Jose Alvarez, both of age, state: That they have resolved establishing a stock company in accordance with the laws in force, and implementing this decision, they provide that the company be governed by the laws and following By-Laws: TITLE I - NAME, ADDRESS, TERM. Article One: The Appearers hereby establish a company that will bear the name of "OCEANPAR SOCIEDAD ANONIMA", with registered offices in the City of Asuncion, Republic of Paraguay, The Board of Directors shall be empowered to establish branches, agencies, representative offices and other facilities at [NOTARY STAMP] /s/ ---------------------------- any location within or without the country.- Article 2. The Company shall have a term of ninety (90) years counted from the date of recording thereof with the Registry of Legal Persons and Associations, term which may be extended or shortened by decision of an Extraordinary General Meeting of the Shareholders.- [NOTARY STAMP] TITLE II - PURPOSE - Article 3. The purpose of the Company shall be to conduct, by its own account or for the account of third parties, or associated with third parties, at any location of the Republic or abroad, following business transactions:- (a) To carry out, within or without the country, transportation services on a regular or non-regular basis, by sea, river and/or lake, of persona or cargo, mail, and/or perform maritime work and/or services in general; (b) To manage and/or operate vessels owned by the Company or by third parties, as well as to hold the representation of other shipowners; (c) To enter into carriage agreements; (d) To enter into ship operation agreements with other physical and/or legal persons, for attending to and carrying out carriage operations; (e) To act as Steamship Agents and to represent vessels owned by the Company and/or third parties; (f) TO conduct any kind of import/export transactions and rendering of services; (g) To give personal guaranties and property liens for liabilities of third parties; (h) To render services of personnel training in connection with waterborne operations; (i) To operate port terminals, to carry out carriage, transshipments in operations of on-shipment by barge or completion of cargoes; (j) To carry out loading, discharging and stowage operations; (k) To conduct towing operations; (l) To act as brokers for vessels and/or cargoes; (m) To build and/or repair vessels and/or naval artifacts; (n)To exploit public and private concessions of any kind; [***] To represent third parties in any of the forms used in the field of maritime business; (o) To intervene in any setups related to the establishment, operation, management and distribution of new lines that may arise under the policies set by the proper authorities; (p) For the above-mentioned purposes and, in general, for any activity related to the Company's purpose, the Company may become the owner, give vessels or take same in lease, time charter, per voyage, on a barebottom basis, or under any other agreement on use of vessels; (q) To buy, sell, build, manage and operate city and/or rural real estate, including all operations provided for under the laws and regulations concerning sale by [NOTARY STAMP] - 3 - [NOTARY STAMP] /s/ ---------------------------- apartment ("horizontal property"),(r) To perform any kind of mandates, representations, agencies, commissions, consignations, business factoring and management or property, capital and companies in general; (s) To carry out any operation or activity that may be related to, subsidiary, incidental, supplementary to or required for the main purposes; the Company shall have, for such end, full legal ability for acquiring rights, incur liabilities and to perform those acts which are not prohibited under the laws or these By-Laws. [NOTARY STAMP] TITLE III - CAPITAL - SHARES - OBLIGATIONS - Article 4. The Company's capital shall be established in the amount of Forty Million Guaranis (Gs. 40,000,000) fully issued and represented by forty (40) ordinary bearer shares, with, an at par value of One Million Guaranis (Gs. 1,000,000) each share, numbered from 1 through 40. Any share certificates shall contain the specifications provided or under Article 1069 of the Civil Code and those resolved by the Board of Directors, and all shall be signed by the President and one Regular Director. An increase of the Company's capital may be resolved by the Extraordinary General Meeting of the Shareholders. Article 5. At this act, there, are issued all shares representing the Company's capital, and they shall be subscribed to and paid up in the manner set forth in Article 21 hereof.-The subscription and holding of shares in the Company shall imply the knowledge and acceptance of these By-Laws, as well as the adherence of any shareholder to all firm resolutions adapted by the Meetings of the Shareholders. Article 6. The Company shall be entitled to borrow by means of public or private instruments, by the issue of negotiable securities or debentures, by certificates of even amount; any certificate may represent more than one obligation. All obligations or securities shall be registered, The issue, placement and other terms thereof shall be resolved by the Annual General Meeting of the Shareholders, and the timing thereof shall be resolved by the Board of Directors, abiding by all provisions applicable thereto, as established by the Civil Code in its Third Book, Title II, Section V. [NOTARY STAMP] TITLE IV - CONDUCTION AND MANAGEMENT - Article 7. The management of the Company shall be the responsibility of a Board of Directors consisting of 2 - 5 regular members, if required, 1-3 alternate members, from among which there shall be elected a President and a Vice-President. All members shall hold their office for one year - 4 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] and may be reelected. Their remuneration shall be fixed by the Meeting of the Shareholders. The Annual Meetings of the Shareholders shall determine the number of regular and alternate members for each fiscal year. In the event of occurring vacancies in such number that the Board of Directors may not be formed, the remaining Directors shall, with the Controller's intervention fill such vacant offices or call a General Meeting of the Shareholders for such purpose. Article 8. The Board of Directors shall elect its officers at its first meeting after the appointment. The Board of Directors shall hold meetings whenever it is called by the President or any two Directors or by the Controller. It shall validly adopt its resolutions with the presence of half of its Regular Members or those Members acting as Regular Members. Any resolutions shall be adopted by simple majority of votes. In the event of a tied vote, the Director-President shall have a deciding vote. The out turn of its resolutions shall be set forth in a Book of Minutes, and all Minutes shall be signed by all individuals present thereat. Article 9. The duties and powers of the Board of Directors are: (l) To conduct and manage the Company with ample powers and all rights that, according to the laws and these By-Laws, are not reserved for the General Meetings of the Shareholders; (2) To appoint Managers, Factors and other officers, to establish their powers, station and salaries, to grant them special or general powers of attorney for the purposes the Board may deem appropriate, entrusting to them the use of the Company's name and the power to engage, both actively and passively, the Company; (3) To cell the Annual General Meetings of the Shareholders; (4) To acquire the control, joint ownership, possession, location and any kind of rights on real estate, title, shares and securities outstanding in the trade, either by purchase, sale, exchange, lease, commodate, as sigment, dation in payment or by any other title, and to alienate or lease such assets, to establish liens on said assets, either real or personal, and for the terms, modes and other conditions which may be agreed upon, entering into, for such purpose, any agreements, and issuing any instruments, certificates and engagements that may be required; (5) To acquire the assets and liabilities of companies already established or to be established, engaged in business operations similar to those of the Company, to acquire their property or shares in full or in part; to enter into lawful agreements of any type; to take out insur- [NOTARY STAMP] - 5 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] ance against all risks, to deposit funds in saving accounts or in public or private securities; (6) To issue, draw, accept, endorse, underwrite, intervene in, protest, pay and execute any type of trade and credit instruments, bills of exchange, promissory notes, payment orders, paper, letters of credit; to open checking accounts with or without supply of funds; to draw checks against such accounts and to overdraw with authorization; to discount, collect, cash and endorse any kind of certificates, securities, obligations and guaranties; to cash and endorse any type of special checks; to carry out any kind of steps in connection with the aforesaid transactions, which may be required for preserving the credit status, its force or validity; to conduct transaction, with ample powers, in respect of certificates and securities of any kind, including debentures; (7) To collect and cash, to grant rebates, remissions, set-offs, to award respites in connection with any debts in favor of the Company; to effect all kinds of trade payments and settlements, even those which do not pertain to simple management; to borrow, with any kind of real or personal appropriate guaranties; to receive any kind of deposits, to give all security, guaranties or bonds required for the transaction of the Company's business; to perform any kind of bank transactions, such as deposits, checking accounts, discounts, import/export transactions, for the conduction of the Company's activity; (8) To accept or give mandates and representations or steps of any kind, to give special or general powers of attorney for management or other specific purposes, as well as for instituting criminal action or filing criminal complaints for offenses committed against the interests of the Company, to revoke, expand or restrict such instruments; to request rendering of accounts and render same; to accept creditor meeting resolutions, rebate's or respites and adjustment of property; to request, waive or appear at bankruptcies or call of creditors, to submit cases to arbitrators, arbitral courts or amicable "compositeurs"; to waive appeals, instances and other remedies, and to acquired rights under the statute of limitations; to compromise end settle to any extent it may be lawfully possible with respect to the debts or claims of the Company, to appear in any kind of proceedings on behalf of the Company, as plaintiff or defendant, granting, for such purpose, powers of attorney to attorneys at law; (9) To record the Company with any kind of registries; to apply for concessions, trademarks, patents, privileges, and to enter [NOTARY STAMP] - 6 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] into any kind of agreements and arrangements with the Government; (10) To submit at any proper Meetings of the Shareholders any kind of documents, proposals concerning dividends or investment thereof, and payment of final dividends; (11) To carry out any act and to enter into any agreement, without any restriction whatsoever, which may be, at their sole criteria, appropriate or necessary for achieving the Company's purposes; to sign any kind of papers, letters or advises in connection with the Company's business; (12) To solve all cases not provided for herein, rendering account thereof at the next General Meeting of the Shareholders.- The preceding listing is not restrictive, and the Board of Directors shall be entitled to carry out any and all acts of management or disposal that may be conducive to the achievement of the Company's proposes, even those acts which require a special power of attorney, such as those mentioned in Article 884 of the Civil Code.- The Board shall establish the internal Regulations of its operation and the higher staff.- Article 10. The Members of the Board of Directors shall hold their office as long as the newly elected officers - as appointed by the General Meeting of the Shareholders - are not qualified therefor. Article 11 - Use of the Company Name - To engage the Company, the joint signature of the President and a Regular Director will be necessary. In the event of resignation, impediment and/or absence of the President, the joint signature of the Vice-President and one Regular Director will be required. In this manner, the Company shall be represented and engaged and bound in all acts, transactions and agreements, thus committing it both actively and passively. The representation of the Company in acts other than sale, credits of any type and/or amount, liens or conveyance of items of the fixed assets, shall be exercised by the President with his single signature.- [NOTARY STAMP] TITLE V - GENERAL MEETINGS OF THE SHAREHOLDERS.- Article 12.-The General Annual Meeting of the Shareholders shall be held each year at the place indicated by the Board, within four months following the closing of the fiscal year. It shall be called in first and second call 10 days in advance at least, by means of announcements published 5 times in a large circulation newspaper of the capital city. There shall be a quorum at first call with the presence of Shareholders representing half plus one of all shares entitled to vote. At second call, the Meeting may be held - 7 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] on a valid basis one hour after the first call, with any number of attendants and shares represented thereat. Article 13. Following matters, as provided for under Article 1079 of the Civil Code, shall be submitted for approval to the General Annual Meeting of the Shareholders; (l) The Report of the Board, the Inventory, the Balance Sheet, the Statement of Loss & Profit, items that shall be submitted each year by the Board, together with the Controller's Opinion; (2) Establishment of the number, and appointment of Members of the Board and the Controller, if required; (3) Distribution of profits and establishment of remunerations; (4) Any other matters contained in the Agenda. Article 14. The Extraordinary Meeting of the Shareholders shall be convened at first call with the attendance of Shareholders representing 60% of all shares entitled to vote. For second [***], the attendance of Shareholders representing at least 30% of all shares entitled to vote shall be required. It shall be the responsibility of the General Extraordinary Meeting of the Shareholders to debate upon, and adopt resolutions concerning, all matters which are not the responsibility, of the Annual Meeting of the Shareholders, as well as on amendments of these By-Laws, the increase, decrease and repayment of the Company's capital, and any other items mentioned in Article 1080 of the Civil Code. Article 15. Any Meetings shall be chaired by the President or the individual substituting for him, or, in failure thereof, by either of the Directors present at the Meeting. Any Shareholders may be represented by third parties by means of a simple power of attorney letter, addressed to the Board of Directors, or by any other appropriate means. The deposit of shares or of a bank certificate on the deposit of said shares shall be made [***] the Company's Treasury, up to three days prior to the date established by the Meeting. Article 16. Each subscribed-to share awards to its holder the right to ONE VOTE at the time of adopting resolutions of the Board. All decisions shall be adopted, on any of the matters under debate, by MAJORITY OF VOTES representing more than 50% of the shares present thereat and entitled to vote, with the exception of the matters mentioned in Article 1091 of the Civil Code, for which the affirmative vote of a majority of the Shareholders entitled to vote shall be required. Article 17. Any decisions of the General Meetings of the Shareholders, adopted in conformity with these By-Laws, shall be binding for all Shareholders, bo they dissidents or not, notwithstanding the right [NOTARY STAMP] - 8 - [NOTARY STAMP] /s/ ---------------------------- established in Article 1092 of the Civil Code.- [NOTARY STAMP] TITLE VI.- Supervision - Article 18. The supervision of the Company shall be performed by a Regular Controller, appointed by the General Meeting of the Shareholders. He shall hold his office for one year. At the same act there shall be appointed an Alternate Controller for the same term, who shall substitute for the Regular Controller during the letter's impediments. Both may be reelected indefinitely and their powers shall be those set forth in Article 1124 of the Civil Code.- TITLE VII - INVENTORY - BALANCE SHEET - RESERVE FUND.- Article 19. All Balance Sheets end the Inventory shall abide by any legal and regulatory provisions in force. Said documents shall prepared as of the closing of the fiscal year on December 31 of each year. All net and realized profits shall, after deducting a 5% allocated to the Legal Reserve Fund, receive the destination which, by its own initiative or after a proposal of the Board of Directors, may resolve the Meeting of the Shareholders. TITLE VIII - DISSOLUTION OF THE COMPANY - Article 20. Upon expiration of the Company's term or in the event of earlier dissolution thereof, the liquidation shall be carried out by the Board of Directors, with the Controller's intervention, save that the Meeting of the Shareholders should resolve otherwise. [NOTARY STAMP] TITLE IX - SUBSCRIPTION AND PAYMENT OF SHARES - Article 21.- The 40 (forty) shares are subscribed to and paid up at this act in following manner; (1) Mr. Jorge Jose Alvarez subscribes to 36 (thirty-six) ordinary shares of Gs 1,000,000 (one million guaranis) each, for an amount of Gs 36,000,000 (thirty-six million guaranties), and (2) Mr. Carlos Eduardo Benitez Balmelli subscribes to 4 (four) ordinary shares of Gs 1,000,000 (one million guaranis) each, for the amount of Gs 4,000,000 (four million Guaranis).- At this act, the shareholders pay in cash 25% of the subscribed- to shares, representing an aggregate amount of Ten Million Guar anis.- TITLE X - PRO TEMPORE PROVISIONS.- Article 22. The first Board of Directors or the Company, whose office shall be extended up to the next following General Annual Meeting of the Shareholders, shall keep performing its duties until their substitutes are duly qualified. The Board shall be composed as follows:-(a) Presidents: Jorge Jose Alvarez.- Vice-Presidents Carlos - 9 - [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] Eduardo Benitez Balmelli; (b) Controllers: Regular Controller; Ricardo Agustin Fabria.- Alternate Controller; Favio E. Rios. Article 23. Either of Messrs. Jorge Jose Alvarez and/or Carlos Eduardo Benitez Balmelli shall be fully empowered, Jointly or either of them, to accept and/or execute, by Notarial Statement, any amendment of the By-Laws, suggested by the proper authorities, duly authorized for such purpose. They may further request the recordal of this instrument with the Bureau of Public Registries and entities of the Administration. Article 24. While the formalities of registration of the By-Laws are in processing, the Board of Directors appointed under Article 22 hereof shall be empowered, as provided for in Article 11 hereof, and in the name and on behalf of the company established hereby, and with the unlimited and joint liability of the forming partners of "Oceanpar S.A.", to conduct any transactions and legal acts which represent the purpose of the Company, even the purchase of any kind of assets, be they vehicles, real and personal property and/or self-moving property, according to any terms and conditions that may be best for the Company, and with the assurance' that their acts, lawfully performed, shall have the pertinent acceptance and confirmation. Under the above conditions the company OCEANPAR SOCIEDAD ANONIMA is established, and the parties hereby [***]commit themselves to comply in full with its governing provisions according to the" laws.- I advised the duty of recordation. After being read by me and ratified by the parties, they affix their signature before me in their usual manner, all of which, of the contents of this Deed, and of the fact that I have personally received the statement of will of the appearers, I do hereby certify.- CARLOS EDUARDO BENITEZ BALMELLI.- JORGE JOSE ALVAREZ,- GRACIELA DELIA BLANCO DE ALVAREZ.- Before me: NORMA CRISTINA LOPEZ BERNAL.- there follows my seal. [NOTARY STAMP] There follows the Notarial Security Sheet No - 583763, Series D, of the Society of Notaries Public of Paraguay (Signature and stamp of the Notary Public on all pages) ...///.. -10- ENGLISH GERMAN FRANK M. SAMSON FRENCH OFFICIAL SWORN TRANSLATOR PORTUGESE & Fax 595-21 449-589 ITALIAN Asuncion - Paraguay TRANSLATION SPANISH - -------------------------------------------------------------------------------- SOCIETY OF NOTARIES PUBLIC OF PARAGUAY Resolution 106/90 Supreme Court of Justice NOTARY PUBLIC'S ACT [NOTARY STAMP] /s/ -------------------------- Series D LEGALIZATION No. 583763 [NOTARY STAMP] TRULY CONSISTENT with the original statement No. 16, page 57 of the Notarial Book, Comm, Sec., Division "A", Notarial Registry No. 502, with seat in the district of Asuncion, and executed before the N.P. Norma C. Lopez Bernal, in her capacity of Holder of said Registry. I am issuing this first copy for OCEANPAR S.A., this 5th day of December, 1996.- (Sgd): Norma Cristina Lopez Bernal Notary Public (Translator's Note: There is the stamps of the Notary Public, a stamp attesting to recordation with the Registry of Legal Persons & Associations, and a further one attesting to recordation with the Public Registry of Commerce under No. 689.) - -------------------------------------------------------------------------------- I, the undersigned, DO HEREBY CERTIFY, that the foregoing is a true and accurate English translation of the document in Spanish, attached hereto.- IN WITNESS WHEREOF, I have hereunto set my hand and seal, in the City of Asuncion, Capital of Paraguay, this 4th day of August, A.D. 1998.- [NOTARY STAMP] [NOTARY STAMP] /s/ -------------------------- LA SECRETARIA GENERAL DE LA CORTE SUPREMA DE JUSTICIA, DA FE QUE LA FIRMA QUE ANTECEDE OBRANTE EN PAPEL SIMPLE CON ESTAMPILLA COMERCIAL No. Y TASA JUDICIAL No. 234728., ES AUTENTICA Y PERTENECE A FRANK M. SAMSON [***] [***] [***] [NOTARY STAMP] ASUNCION, 5 de [***] de 1998 /s/ ------------------- [NOTARY STAMP] /s/ ---------------------------- [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ [NOTARY STAMP] ---------------------------- [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] EX-3.16 17 y04808exv3w16.txt ARTICLES OF INC. & BY-LAWS OF OCEANVIEW MARITIME INC. EXHIBIT 3.16 PUBLIC DOCUMENT NUMBER FOUR THOUSAND NINE HUNDRED AND FIFTY FOUR (4954) WHEREBY the Corporation known as "OCEANVIEW MARITIME INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, June 18, 1996. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the eighteen (18) day of the month of June, in the year one thousand nine hundred and ninety six (1996), before me, RAQUEL TORRIJOS DE GOMEZ, Third Notary Public of the Panama Circuit, holder of personal identity card number eight-two hundred and forty three-seven hundred and thirty five (8-231-735), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identity card number eight-two hundred thirty one-seven thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F. ) , male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identity card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporting a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "OCEANVIEW MARITIME INC.". SECOND: The objects and purposes of the corporation are: a) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either in Panama or in any part of the world; b) The operation of maritime agencies and the execution of maritime operations in general, either in the territory of the Republic of Panama or any foreign country; c) The purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending on the corporate purpose, as well as participation in other corporations, either Panamanian or foreign; d) The purchase of and dealing with stock or shares of capital stock, and in general any other commercial, maritime, financial, movable or unmovable operations permitted by the laws of the Republic of Panama or which may be permitted in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, of a par value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be Panama City, Republic of Panama. The domicile of the corporation may be transferred to any other place within or without the Republic of Panama as determined by Board of Directors. The corporation may develop business and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation, and it shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute the quorum indispensable for the General Assembly of Shareholders to hold the meetings and take decisions. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama, or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of bearer shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meeting, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F. , of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) six three - two six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). C) The Directors of the Corporation shall be: Mr. JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; Mrs. CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and Mrs. ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vice-President and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number FOUR THOUSAND NINE HUNDRED AND FIFTY FOUR (4954) (sgd.) MARIO E. CORREA--JULIO E. LINARES F.--Aura I. S. de Castillero Ma. I. Gonzalez--RAQUEL T. DE GOMEZ, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the eighteen (18) day of the month of June, in the year one thousand nine hundred and ninety six (1996), conforms with its original. (sgd.) Raquel T. de Gomez, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 02:45:09:4 p.m. on the 19th day of June of 1996, as per Volume 247 and Entry 6509 of the Journal, by Balbino Ponce. Duties Paid B/.60.00; Liquidation No. 896045973. (sgd.) Jorge Luis Cordoba, Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Nereida de Espino, Chief of the Section. This document has been recorded at Microjacket 317326, Roll 50157, Frame 0045, of the Microfilm (Mercantile) Section of the Public Registry Office, on June 20, 1996. (sgd.) Arelis Odila E. de Poveda, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, August 21, 1996. /s/ Bertilda R. De Torres ------------------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 BY-LAWS OF OCEANVIEW MARITIME INC. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two.- Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three.- Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five.- Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six.- Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven.- Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of "OCEANVIEW MARITIME INC.", a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama Republic of Panama, on the 22 day of August, 1996. Panama, August 22, 1996. /s/ Elsa Ma. Sousa ------------------------------ Elsa Ma. Sousa EX-3.17 18 y04808exv3w17.txt ARTICLES OF INC. & BY-LAWS OF PARFINA S.A. EXHIBIT 3.17 ENGLISH FRANK M. SAMSON GERMAN OFFICIAL SWORN TRANSLATOR FRENCH Ayelas 451, Otie 95 PROTUGUESE & Fax 595-21 449-589 ITALIAN Asuncion - Paraguay TRANSLATION SPANISH [NOTARY STAMP] "PARFINA S.A." NOTARIZATION OF A STATEMENT OF EXTRAORDINARY MEETING OF THE SHAREHOLDERS No. 473.- In the City of Asuncion, Capital of the Republic of Paraguay, this 4th day of October, one thousand nine hundred ninety-five, before me, RAMON ZUBIZARRETA-ZAPUTOVICH, a Notary Public, holder of the Taxpayer Card No. ZUZR 511960F, personally appear: Dr. JORGE JOSE ALVAREZ, an Argentine citizen, married, holder of the D.N.I. No 5144.421, and Mr. CARLOS EDUARDO BENITEZ-BALMELLI, a Paraguayan citizen, married, holder of the Identity Card No 445,975, both with domicile, for the purposes hereof, at 640 25 de Mayo St. c/Antequera, Garantia Building, 7th fl., "A", in this city, of age, legally competent, personally known to me, which I do hereby certify.- Messrs. Dr. JORGE JOSE ALVAREZ and CARLOS BENITEZ-BALMELLI appear in the name and on behalf of the company doing business in this city with the name "PARFINA SOCIEDAD ANONIMA", holder of the Taxpayer Card No. PARA457210S, in their capacities of, respectively, President and Vice-President, with sufficient powers for this type of instrument, pursuant to Article 12 of the By-Laws. PARFINA S.A. was originally established under the name of PARFINA SOCIEDAD ANONIMA PARAGUAYA FINANCIERA, according to Notarial Statement No. 126, dated August 8, 1945, executed before the Notary Public Benito Fernandez.- This Company's By-Laws were approved, and its legal identity acknowledged, by the Decree No 9,961 of The Executive, in August 1945, being recorded with the Public Register of Commerce under No. 128, page 51 & following, on August 25, 1945.- After a number of amendments, by Notarial Deed No. 79, dated July 29, 1994, executed before the Notary Public Victor Hugo Santa Cruz Gonzalez, the term of the Company was extended, and the recordal was made with the Public Register of Commerce under No. 892, page 4749 & foll., Contracts Section, Series "D", on August 12, 1994.- Lastly, by Notarial Deed dated September 12, 1994, executed before the same Notary Public Victor Hugo Santa Cruz Gonzalez, the purpose of the Company was changed, and the recordal thereof was made with the General Bureau of Public Registries - Register of Legal Persons & Associations - pursuant to A.I. (Intermediate Decision) No. 1160 of October 14, 1994, with recordal under No. 23, page 315 & foll., Series C, on October 14, 1994, and with the Public Register of Commerce under No. 924, page - 2 - [NOTARY STAMP] /s/ ------------- [NOTARY STAMP] 7996 & foll., Contracts Section, Series "B", on October 19, 1994.- Duly certified photocopies of the By-Laws and their amendments remained attached to Notarial Deed No 584, executed before me, the undersigning Notary Public, on page 1953 & foll., of this Notarial Register in my charge.- And the Appearers, in the representation they are invoking, STATE: That they are requesting from me, the Notary Public, the transcription, notarization and recordal of the Minutes of the General Extraordinary Meeting of the Shareholders held on January 17 of the current year, at which it was resolved to repeal the current By-Laws, for not being in conformity with the new business activity and the legal requirements.- Consequently, the current By-Laws are repealed and the new By-Laws are adopted in accordance with the articles thereof, set forth below. Being lawful and in order such request. I am effecting said transcription as follows:- [NOTARY STAMP] MINUTES No. 62.- MINUTES OF THE EXTRAORDINARY MEETING OF THE SHAREHOLDERS DATED JANUARY 17, 1995.- In Asuncion, Capital of the Republic of Paraguay, this 17th day of January, 1995, at 1430 hours, there meet, at the registered offices of PARFINA S.A., Messrs. Alberto Gustavo Deyros, representative of the companies Bayham Investments S.A. and Draco Investments S.A., both shareholders of the Company, as shown by the powers of attorney produced, visaed by the proper authorities of the Ministry of Foreign Affairs, Mrs. Maria Liz Ortiz de Barreto, Mr. Gerard R. Benitez Gowan, on behalf of the Division of Registration and Supervision of Companies, Finance Ministry, and Mrs. Lic. Antolina de Casaccia, Legal Counselor of the Company.- Mrs, Casaccia states that compliance has been given to the provisions of the By-Laws, since the call was made in the newspaper "Informaciones" in due time and manner. Mr. Gustavo Deyros, being present 100% of the Company's capital stock, takes the chair and Lic. Casaccia the duties of Recording Secretary. Following items of the Agenda are put to debate: (1) Increase of Capital:- Mr. Alberto G. Deyros states that, in compliance with the Minutes of the Board No. 383 of October 15, 1994, he is submitting a request for increase of the Company's capital stock, to Gs 900,000,000 (Nine hundred million Guaranis). The motion is carried.- The 2nd item on the Agenda is now put to debate: Amendment of the By-Laws. Mr. Deyros states that the By-Laws, as being force to-date, are not adequate anymore for the new business activity and legal requirements. It is - 3 - [NOTARY STAMP] /s/ -------------- resolved, therefore, to repeal said By-Laws in all their articles, and the Secretary reads aloud the new proposal, which we are transcribing in full, and is approved as written verbatim, to-wit:- [NOTARY STAMP] "PARFINA S.A." - BY-LAWS TITLE I - Name, Purpose, Registered Offices and Term Article 1. Under the name of "PARFINA S.A." there is hereby established a Stock Company with registered offices in the City of Asuncion, Capital of the Republic of Paraguay. The Company may establish branches, agencies and representative offices, both within the Republic of Paraguay and abroad, with or without a certain capital, according to the Board of Director's decision. Article 2. The term of the Company shall be seventy-five years from August 22, 1945, date of approval by the Central Government of Paraguay. Article 3. The purpose of the Company is to perform, for its own account or for the account of third parties, or associated to third parties, at any location in the Republic or in foreign countries, following business: (a) To effect, within and without the country, transportation services of scheduled and/or non-scheduled waterborne nature, i.e. by sea, river and/or lake, of persons and cargo, mail, and to perform maritime work and/or services in general; (b) To conduct the management and/or operation of vessels owned by the Company or third parties, as well as to hold the representation of other shipowners and/or proprietors; (c) To enter into freight agreements; (d) To enter into ship operation agreements with other natural and/or legal persons, for purposes of care and exploitation of carriage services; (e) To act as Ship Agents and to represent vessels owned by the Company and/or third parties; (f) To perform any kind of import and export operations of goods and services; (g) To give personal guaranties and liens for third-party liabilities; (h) To render personnel training services related to waterborne navigation; (i) To perform transportation, or transshipment, lightering or supplementation of cargo operations; (j) To conduct loading, discharge and stowing operations; (k) To conduct towing operations; (l) To act as steamship and/or freight brokers; (m) To build and/or repair vessels and/or naval artifacts; (n) To exploit public and - 4 - [NOTARY STAMP] /s/ -------------- [NOTARY STAMP] private concession of any type; (h) To represent third parties in either of the manners in use in the maritime industry; (o) To intervene in any matters related to the establishment, exploitation, management and distribution of new lines which may arise in accordance with the policies adopted by the proper authorities; (p) The Company may, for the purposes mentioned hereinabove and generally, for any activity in connection with the Company's goals, become a shipowner, proprietor, deliver and take vessels as leasee or lessor, time charter, voyage charter, bareboat charter or under any other agreement concerning the use of vessels; (q) Purchase, sale, building, management and exploitation of urban and/or rural real estate, including all transactions provided for under any laws and regulations concerning horizontal property; (r) To perform any kind of mandates, representations, agencies, commissions, consignations, business brokerage and management of property, capital and companies in general; (s) To conduct any similar, subsidiary, supplementary or required transaction or activity in connection with its main purpose,- The Company has, for such goal, full legal capacity for acquiring rights, incurring liabilities and exercising all those acts that are not forbidden by the laws or by these By-Laws. TITLE II - Capital Stock Article 4. The Company's Capital Stock is hereby established in Gs, 900,000,000 (Nine hundred Million Guaranis), divided in ninety (90) shares of Gs 10,000,000 (Ten million Guaranis) each. Article 5. The first series of Capital Stock is established in ten shares for an aggregate value of Gs 100,000,000 (Hundred Million Guaranis). Until the time the Capital Stock is completed by the increases that may be authorized by the Board of Directors - in accordance with Article 4 above or the resolutions adopted by the General Meeting of the Shareholders - shares may be issued in the numbers and at the times that shall be determined by the Board of Directors, which shall establish the amount of each series to be issued, type of issue, term and manner of payment. Any stock certificates shall represent one or more shares, as may be determined by the Board of Directors. Any shareholders shall have preferred rights for subscribing to shares to be issued, on a pro-rata basis with their holdings. Excepted from such preferred rights shall be the subscription to shares, the issue of - 5 - [NOTARY STAMP] /s/ -------------- [NOTARY STAMP] which may he affected by a resolution of the General Meeting of the Shareholders or the Board of Directors to a special purpose, including those in relation with the full or part amount of the price of goods, services, acts, loans, borrowings, or any other obligations or liabilities. The preferred right of shareholders shall, for subscribing to new shares, be exercised within the term to be established, in each specific case, by the Board of Directors, which may not be less than fifteen days from the publication of the respective announcement. Once said term has expired, without any shareholder having exercised this option, such shareholder shall forfeit his/her right and the Board of Directors shall be free for allocating the shares on a direct basis. The General Meeting of Shareholders or the Board of Directors may order the full or part capitalization of free reserves and reappraisals, issuing, for such purpose, released shares. The General Meeting of the Shareholders or the Board of Directors may order the full or part capitalization of services, acts, loans, borrowings or other obligations or liabilities, issuing, for such purpose, released shares, provided that the aggregate value of any shares to be issued be - - in the General Meeting of the Shareholders or the Board of Director's opinion - - equivalent to the value of the services, acts, loans, borrowings or other obligations and liabilities to be capitalized.- [NOTARY STAMP] Article 6. Any shares shall be registered, and the respective certificates shall be delivered to the subscribers once they have paid up in full the amount thereof. Meanwhile, they shall be given provisional registered certificates, endorsing thereon the payments effected: said certificates may only be conveyed after approval from the Board of Directors. Any shares are individual, and whenever more than one person are owners of any share, the Company shall not acknowledge such persons as owners, unless they elect, from among them, a single individual who will represent said owners in the exercise of their rights, and service of notice to the Company of such appointment. The subscription to, or ownership of, any shares, implies the acknowledgment and acceptance of these By - -Laws.- Article 7. Any stock certificates and provisional certificates shall be signed by the President and two Directors of the Company. The President's signature may be handwritten or in facsimile and, - 6 - [NOTARY STAMP] /s/ -------------- in this latter case, the signature shall be directly printed or affixed by a stamp. The signature of the two Directors shall be handwritten. [NOTARY STAMP] Article 6. The Company shall be managed by a Board of Directors composed by three regular members, as a minimum, and seven as a maximum, as shall be determined by the General Meeting of the Shareholders, and elected by this Meeting for a term of two years. All Directors may be reelected and shall hold their office until new ones have been elected. The members of the Board of Directors may hold in the Company any paid position or employment, without prejudice of the performance of their duties, or may perform special tasks for the Company, after authorization and resolution of the Board of Directors in each specific case. The Board of Directors shall, at its first meeting after each Annual Ordinary Meeting of the Shareholders, appoint from among its members a President, being also entitled to appoint a Vice-President and a Secretary. To become a member of the Board it shall not be required to be a shareholder. [NOTARY STAMP] Article 9. The Board of Directors shall meet by call from the President, at the location the President may establish in each case, or whenever it is requested by two or more Directors. There will be a quorum with the presence of more than half of the total number of members of the Board, and any resolutions shall be adopted by a majority of votes present thereat. A statement of any debates and resolutions shall be transcribed in minutes in a special books, with the signature of the President and a Director. Any resolution signed by the majority of the Directors in incumbency and duly transcribed in the Book of Minutes, shall be as valid and binding as though said resolution had been adopted at a meeting of the Board of Directors, especially called for such purpose. Article 10. The powers of the Board of Directors, besides of those mentioned in these By-Laws, are: (a) To hold the legal representations of the Company through the President or his substitute; the signature of said substitute shall be countersigned by a further Director or by an attorney-in-fact; (b) To manage the Company's business with, ample powers; to acquire, alienate and manage real estate, concessions, manufacturing plants, certific- - 7 - [NOTARY STAMP] /s/ -------------- [NOTARY STAMP] ates and securities, trademarks, domestic and foreign invention patents, exploitation rights, chattels or of any other nature whatsoever, either cash or at term, with or without guaranty; to collect and receive any amount owed to the Company; to effect payments, even the ordinary administrative ones; to make novations, remissions and rebates; to compromise, submit cases to arbitration, accept court jurisdiction, waive the right to appeal or acquired time bars; to borrow or give loans, to conduct any kind of transactions with banks; to draw, accept, endorse and guarantee bills of exchange, payment orders or promissory notes; to draw checks against deposits or to overdraw, to open checking accounts with or without funding; to apply for credits or mortgages from "Banco del Paraguay" or any other domestic or foreign, state-owned, mixed or private credit establishment, either existing or to be established hereafter, expressly accepting any charters or internal regulations governing said establishments; to give or take letters of credit, to lease, as lessee or lessor, real estate, personal property or self-moving property, for terms exceeding even six years; to deliver or receive goods for storage or consignation; to accept and establish chattel mortgages, mortgages and any other liens, and to accept or give real estate in mortgage or antichrese; to give bonds and guaranties; to grant general or special powers of attorney; to accept any kind of mandate and to hold representations of third parties in a capacity of attorney in fact or trustee; to form companies; to acquire an interest in companies of any kind and to negotiate therewith in any manner appropriate for the Company's interests; to appoint, suspend and dismiss employees; to establish any rules and regulations that may be required for the best conduction of the Company's business; and, generally, to agree upon, enter into, perform and effect, for the account of the Company or third parties, all acts and transactions of commercial, industrial and financial nature it may deem necessary or appropriate for the goals of the Company, even those for which a special power of attorney is required pursuant to Article 884 of the Civil Code; (c) To call all Annual and Extraordinary General Meetings of the Shareholders, establishing the items of the Agenda thereof, to submit each, year - - within the four months after December 31, date of closing of the fiscal year - the Report of the Board, the balance sheet for the completed fiscal year, and the proposal to the Meeting [NOTARY STAMP] - 8 - [NOTARY STAMP] /s/ -------------- of the distribution of profits; (d) To solve any cases not provided for in the By-Laws, rendering account thereof at the first Meeting of the Shareholders held thereafter; (e) The Board of Directors may transfer the part of its activities it may deem appropriate to a Committee formed among its members, whose powers, duties and remuneration (to be entered in Overhead) shall be established in an Internal Regulation approved by the Board and subsequently notarized.- [NOTARY STAMP] Article 11. The Annual Ordinary General Meeting of the Shareholders shall appoint, each year, a Regular Controller and an Alternate Controller, who may be reelected, with the powers provided for under Article 1124 of the Civil Code. Their remuneration shall be established each year by the Meeting of the Shareholders.- Article 12. The Board of Directors is empowered to issue, within or without the Republic of Paraguay, bonds, debentures or other credit instruments, either in bearer or registered form, in conformity with the laws in force, determining amount of the issue, currency, price, terms of payment, interest, amortization and other conditions it may deem appropriate. Any certificates shall be signed by the President and two Directors, in the same manner as established in Article 7 above with respect to shares. The call to, and powers of, meetings of holders of bonds and other securities shall be governed by the provisions of these By-Laws, applicable thereto, and those of the Civil Code concerning Meetings of the Shareholders. The quorum shall be established, proportionally to the principal of the bonds, debentures and other credit instruments outstanding. In the event of intervention of a trustee, the General Meeting of the Shareholders, the Board of Directors and the Controller shall keep performing the remaining duties of their legal competence. [NOTARY STAMP] Article 13. The Ordinary Meeting of the Shareholders shall be annual; it shall be called by the Board of Directors and, in failure thereof, by the Controller. Any Extraordinary Meetings of the Shareholders shall be called by the Board of Directors, or the Controller, whenever it is deemed appropriate or necessary, or whenever it is requested by Shareholders representing, at least, five percent of the capital stock. The request shall mention the items to be discussed. The Board of Directors or the - 9 - [NOTARY STAMP] /s/ -------------- Controller, as the case may be, shall call any Extraordinary Meetings of the Shareholders whenever they deem it necessary, or when it is requested by shareholders representing, at least, five percent of the capital stock. This request shall mention the items to be discussed. The Board of Directors or the Controller shall call such Meeting, to be held within thirty days after receiving" the request therefor.- [NOTARY STAMP] Article 14. Any Meeting of the Shareholders shall be called by announcements published in a newspaper for five days, at least 10 days in advance and not more than 30, The call shall mention the type of Meeting, date, time and place, agenda and the special data required by the By-Laws for attendance of the shareholders. If any Meeting should not be held at first call, it may be held at second call, one hour after the time established for the first. Article 15. It shall pertain to the Annual Meeting of the Shareholders to discuss and resolve following matters: (a) The Annual Report of the Board, the Balance Sheet, the Statement of Profit and Loss, the distribution of profits, the Controller's Opinion, and any other measure related to the business of the Company, falling under the competence of the Meeting, as provided for in the laws and in these By-Laws, or those submitted for decision by the Board or the Controllers; (b) The appointment of Directors and Controllers, and fixing of their fees; (c) The liability of Directors and Controllers and their removal; and (d) The issue of shares.- The Meeting of the Shareholders shall, for discussing items "a" and "b" above, be called within four months of closing of the fiscal year.- Article 16. It shall pertain to the Extraordinary Meeting of the Shareholders to discuss any matters which are not the competence of the Annual Meeting, the amendment of By-Laws, and, in particular: (a) increase, lowering and repayment of capital; (b) redemption, reimbursement and amortization of shares; (c) merger, conversion and dissolution of the Company; appointment, removal and fees of the liquidators, discussion of the accounts and any other subjects related to the liquidators' performance; (d) issue of debentures and conversion into shares, and (e) issue of bonds. - Article 17. To hold convened the Meeting of the Annual Meeting - 10 - [NOTARY STAMP] /s/ ----------------------------- of the Shareholders at first call, the presence of shareholders representing a majority of the shares entitled to vote shall be required. The Meeting shall, at second call, be convened with the presence of whichever the capital represented thereat. All resolutions shall, in both cases, be adopted by the absolute majority of votes present at the Meeting. Article 18. Extraordinary Meetings of the Shareholders shall meet, both at first and second call, and convene, with the presence of shareholders representing, at least, sixty percent of all shares entitled to vote. [NOTARY STAMP] Article 19. Where transformation, merger or early dissolution of the Company, transfer of the registered offices to a foreign country, essential change of purpose, or full or part repayment of the capital is involved, any resolutions shall, both at first and second call, be adopted by the affirmative vote of a majority of shares entitled to vote, without applying plurality of votes. Article 20. Each share gives the right to one vote; the right of attending meetings may be exercised by any shareholder, personally or through a third party who is not a member of the Board of Directors, a Controller, a Manager, or any other employee of the Company, by means of a power of attorney or proxy issued in his/her favor, with the signature authenticated by, or registered with, the Company. [NOTARY STAMP] Article 21. All shareholders shall, for attending Meetings, deposit their shares or a bank custody certificate issued for such Purpose, with the Company, not less than three days prior to the date of the Meeting. Any deposit certificates shall specify the type of shares, their numbering and that of the certificates proper. Article 22. The Chairman of the Board of Directors is the President of the Company and, as such, shall chair all Meetings. In failure thereof, or in the case of his absence, the Meetings shall be chaired by the Director appointed by the Meeting, and in case no Director is present, by an attending shareholder, elected by majority of votes. Article 23. All Meetings of the Shareholders shall adopt their resolutions by a majority of votes present thereat, save in the - 11 - [NOTARY STAMP] /s/ ---------------------------- cases provided for hereunder. All castings of votes shall be by ay or nay, and any resolutions shall be stated in a Book of Minutes to be signed by the President, the shareholders appointed by the Meeting, and the Secretary.- Article 24. Any balance sheets shall be prepared upon closure of the fiscal year, as of December 31 of each year. The Board of Directors shall submit such balance sheets to the Annual Meeting of the Shareholders, together with a Report on the business transacted. [NOTARY STAMP] Article 25. Any net profits resulting from each annual balance sheet, after deduction of 5% (five percent) for the Legal Reserve Fund, until achieving this Fund 20% of the subscribed-to capital stock, shall be distributed in the manner resolved by the General Meeting of the Shareholders, which may also cause the establishment of any other back-up or reserve fund, whenever this is deemed appropriate, and may further, upon deciding the distribution of dividends, determine that this be in cash and/or in stock of the Company, and/or in stock of any other companies that may be in the Company's portfolio. Any dividends not collected after 3 years shall be forfeited in favor of the Company. The General Meeting of the Shareholders may determine the destination to be given to any reserve fund for amortization and/or reserves, provided this will not affect the Legal Reserve Fund. It may also resolve the distribution thereof among all subscribed-to shares, pro-rata of all payments effected. The Meeting of the Shareholders may further resolve the transfer of these funds to the Capital account. In full or in part, issuing, for such purpose, shares that will be delivered, on a pro-rata basis, to the shareholders. [NOTARY STAMP] Article 26. The liquidation of the Company, for any reason whatsoever, shall be made by the Board of Directors under the Controller's supervision, settling first all corporate liabilities, and the remainder shall be distributed among all subscribed-to shares, proportionally to the face value paid up, including any released shares. The liquidating Board of Directors shall be paid the fees determined by the Meeting of the Shareholders upon deciding the Liquidation. Article 27. For all cases not provided for in these By-Laws the provisions of the Civil Code shall govern. FRANK M. SAMSON ENGLISH OFFICIAL SWORN TRANSLATOR GERMAN AYELAS 451 OTIE 95 FRENCH &FAX 595-21 449-589 PORTUGUESE Asuncion-Paraguay TRANSLATION ITALIAN SPANISH SOCIETY OF NOTARIES PUBLIC OF PARAGUAY Resolution 106/90 Supreme Court of Justice SECURITY SHEET NOTARIAL ACT Series B-95 N: 373902 [NOTARY STAMP] TRULY CONSISTENT with the original Statement N: 473 page 1508 & foll. of the Book of the Civil Division, Sec. "B" of the Notarial Registry N: 37, located in the District of Asuncion, and prepared by the Notary Public Ramon. Zubizarreta Z. in his/her capacity of Notary Public of said Notarial Registry. I am issuing this first certified copy for PARFINA S.A., this first day of November, 1996. - (SGD): RAMON ZUBIZARRETA Z. NOTARY PUBLIC (TRANSLATOR'S NOTE: THERE IS A STAMP ATTESTING TO RECORDAL WITH THE REGISTER OF LEGAL PERSONS & ASSOCIATIONS UNDER N: 776, AND A FURTHER STAMP SHOWING RECORDAL WITH THE PUBLIC REGISTER OF COMMERCE UNDER N: 15, DATED JAN. 9, 1996.) [NOTARY STAMP] I, the undersigned, DO HEREBY CERTIFY, that the foregoing is a true and accurate English translation of the document in Spanish, attached hereto.- IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal, in the City of Asuncion, Capital of Paraguay, this 1st day of August, A.D. 1999.- [NOTARY STAMP] /s/ ------------------------ - 12 - [NOTARY STAMP] /s/ --------------------------- Article 28. Mr. Carlos Benitez-Balmelli is hereby specially empowered to appear before the country's court and administrative authorities for requesting the approval and recordal of the present By-Laws with the proper public registries. He shall further be empowered to insert any changes recommended by said authorities. Article 29. The first Board of Directors, the Regular and the Alternate Controller shall be elected by the shareholders in an Annual General Meeting of the Shareholders, at the first Meeting to be held after approval of the By-Laws, to be renewed, on a part basis, upon closing of the first fiscal year. For such purpose, at the first Meeting half of the members shall be appointed by drawing of lots. They shall hold office for only one year. [NOTARY STAMP] Thereupon, the 3rd item of the Agenda is discussed, namely the appointment of two shareholders for approving and signing the Minutes of the Meeting. Upon suggestion of the Inspectors, Mr. Alberto G. Deyros is appointed for each representation where he affixes his signature. There being no further item to discuss, the Meeting is adjourned. There are illegible signatures. - The copy is true, which I do hereby certify. Thus, the transcription and notarization is made as requested, with the amendments of the By-Laws of PARFINA S.A., for all legal purposes.- I stated the duty of recordal.- In witness where- of, after reading and ratifying, the appearers execute and affix their signatures. I have personally received front them the statement of will, all of which, and the contents of this deed I do hereby certify.- JORGE JOSE ALVAREZ.- CARLOS BENITEZ BALMELLI.- Before me: RAMON ZUBIZARRETA Z.- There is my seal. [NOTARY STAMP] (Notarial seal) LA SECRETARIA GENERAL DE LA CORTE SUPREMA DE JUSTICIA, DA FE QUE LA FIRMA QUE ANTECEDE OBRANTE EN PAPEL SIMPLE CON ESTAMPILLA COMERCIAL N:__________________ Y TASA JUDICIAL N:35955 ES AUTENTICA Y PERTENECE A FRANK M.SAMSON [NOTARY STAMP] [***] [***] /s/ ----------------------------- Asuncion,4 de [***] [***] [***] [NOTARY STAMP] /s/ ----------------------- [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] [NOTARY STAMP] /s/ ----------------------------- [NOTARY STAMP] /s/ ----------------------------- [NOTARY STAMP] EX-3.18 19 y04808exv3w18.txt ARTICLES OF INC. & BY-LAWS OF PARKWOOD COMMERCIAL CORP. EXHIBIT 3.18 TRANSLATION PUBLIC DOCUMENT NUMBER SIXTEEN THOUSAND EIGHT HUNDRED AND FIFTY NINE (16859) WHEREBY the Corporation known as "PARKWOOD COMMERCIAL CORP.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, October 26, 2000. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the twenty six (26) days of the month of October, in the year two thousand (2000), before me, Licentiate CLAUDIO JOSE LACAYO ALVAREZ, Third Notary Public of the Panama Circuit, holder of personal identification card number four-one hundred and one-two thousand three hundred and forty four (4-101-2344), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "PARKWOOD COMMERCIAL CORP." SECOND: The objects and purposes which the corporation shall mainly undertake, develop and carry on within or outside the Republic of Panama are the following: (a) to acquire, possess, administrate, encumber, lease, alienate and dispose of in any form, all types of goods, such as chattel, real estate, livestock or of any other nature, including rights, obligations and quotas of participation, whether as owner or for the account of third parties; (b) to issue, administer, buy, sell and negotiate all types of shares, quotas, -2- documents, bonds, titles or securities, whether on its own account or on the account of third parties; (c) to buy, acquire, sell, or grant patents, marks, copyrights, licenses and formulas, and to exploit them commercially; (d) to buy, sell, charter and administrate all types of ships; as well as to operate maritime agencies and carry on maritime operations in general; (e) to invest in companies, businesses or projects, and the financing, negotiation, exploitation or participation in mining, industrial, commercial, real estate, financial, maritime or any another class of companies; (f) to open, operate and administer accounts in banks or other lending or financial institutions; and to give and take loans; to remit, accept, endorse, discount and grant notes, drafts and other negotiable documents, and to offer all kinds of guarantees in favor of third parties upon all or any of the assets of the company; and (g) to engage in any another lawful business permitted by the Laws of the Republic of Panama or which these may allow in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world, and may likewise re-domicile or change its domicile of incorporation in order to continue existing under the laws of another country or jurisdiction, subject to the authorization of the Board of Directors or the Assembly of Shareholders of the corporation. -3- SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the by-laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the by-laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, the Legal Representative shall be the Vice-president. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the by-laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of -4- Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: (A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). (C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, CLARISSA PLATA DE AGUIRRE and ELSA MARIA SOUSA QUINTERO, all with domicile at Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, City of Panama, Republic of Panama. (D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, President; CLARISSA PLATA DE AGUIRRE, Vice-president and Treasurer; ELSA MARIA SOUSA QUINTERO, Secretary. -5- I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number SIXTEEN THOUSAND EIGHT HUNDRED AND FIFTY NINE (16859) (Sgd.) MARIO E. CORREA -- JULIO E. LINARES F.-- Aura I. S. de Castillero- Ma. I. Gonzalez -- CLAUDIO LACAYO ALVAREZ, Third Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty six (26) days of the month of October, in the year two thousand. (Sgd.) Lic. Claudio Lacayo Alvarez, Third Notary Public. -- There appears a seal of the Third Notary of the Circuit-Panama, Rep. de Panama. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at Province: Panama -- Date and Time: 2000/10/30 11:08:30:4 -- Volume: 2000 - Entry: 119668 -- Presenting: Katherine Knight -- Identification Card: 8-717-444 Liquidation No. 8010541 -- Duties Paid B/60.00. Entered by: DIGR (sgd.) Teresa S. Cordoba B. There is a stamped seal of the Public Registry Office of Panama. The previous document has been recorded at Mercantile Section of the Public Registry Office of Panama at Microjacket 389051, Document 167181 -- Rights: B/.60.00, Panama, October 31, 2000. (sgd.) - There appears a seal of the PANAMA PUBLIC REGISTRY - REPUBLIC OF PANAMA. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, January 31, 2001. /s/ Bertilda R. De Torres ----------------------------- [SEAL] BY-LAWS OF PARKWOOD COMMERCIAL CORP. CHAPTER ONE OFFICES Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vice-President, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vice-President of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two.- Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three.- Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five.- Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six.- Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven.- Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vice-President. The Vice-President shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of PARKWOOD COMMERCIAL CORP., a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y: That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the Republic of Panama, on November 1, 2000. /s/ Elsa Ma. Sousa -------------------------------- Elsa Ma. Sousa Secretary EX-3.19 20 y04808exv3w19.txt ARTICLES OF INC. & BY-LAWS OF PRINCELY INT'L. FINANCE CORP. EXHIBIT 3.19 ENGLISH TRANSLATION PUBLIC DEED NUMBER SEVEN THOUSAND THREE HUNDRED AND SEVENTY ONE (7371) WHEREBY the corporation known as "PRINCELY INTERNATIONAL FINANCE CORP.", with domicile in the City of Panama, Republic or Panama, is incorporated.- Panama, July 20, 1992. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the twentieth (20th) day of the month of July in the year one thousand nine hundred and ninety two (1992), before me, RUBEN AROSEMENA QUARDIA, Third Notary Public of the Panama Circuit, holder of personal identification card number eight-sixty four-four hundred and eighty two (8-64-482, personally appeared the following persons to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); JULIO ORNESTO LINARES FRANCO (Julio E. Linares F.), male, or legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested me to issue this Public Deed to make of record that they incorporate a corporation pursuant to the following Articles of Incorporation: ARTICLE FIRST: The name of the Corporation is "PRINCELY INTERNATIONAL FINANCE CORP. "and its legal domicile is in the City of Panama, Republic of Panama. ARTICLE SECOND: Its duration is perpetual. ARTICLE THIRD: The purposes of the Corporation shall be to engage in the following activities, in this country or abroad, on its own account, or on the account of third parties, independently or associated to third parties, namely: (a) To carry out the management and exploitation of vessels or its own and of third parties, as well as to act as representatives of other owners and shipowners or to engage in other related activities, inherent or complementary to said purposes. (b) Handle the maritime, fluvial and lacustrine transportation, regular and/or not regular, domestic and international, of persons and of cargoes; correspondence and maritime works and services in general. (c) To render training services to personnel relative to sea navigation. (d) For the above mentioned purposes and, in general, for every activity developed in accordance with its Articles of incorporation, the corporation may be constituted in owner, shipowner, to hire and lease vessels, in time charter, bareboat charter, or under any other charter to use vessels; to engage in the activities of transportation, transhipment and litherage operations and cargo complement; to develop loading, unloading and stowing operations; to render towage services; to act as shipbrokers and/or freighters, to act as maritime agents and to represent vessels of its own or of third parties; to build and repair vessels and navy apparatus, as well as to exploit public and private franchises of any kind, to construct ports and also to operate them and represent third parties in any of the manner used in the maritime business. (e) To mediate in every matter relative to the establishment, exploitation, management and distribution of new lines arisen from the policies fixed by competent authorities. (f) The purchase, sale, building, management and exploitation of real estates, urban or rural, including the operations contemplated within the laws and rules regulating the one-floor ownership. (g) To execute all kinds of acts, representations, agencies, commissions, consignments, business activities and management of properties, stocks and enterprises in general. For these purposes the corporation is legally empowered to acquire rights, enter into obligations and to perform all the acts which are not prohibited by law or by these articles. (h) The purchase and sale in general and the holding of shares, bonds and other commodities in other corporations, either on its own account or on the account of third parties, (i) The financing in general of other corporations or the participation therein, through the contribution of shares to furnish the capital stock thereof. (j) Any other lawful business allowed by the laws of the Republic of Panama or which may be allowed in the future; all which purposes may be developed by the Corporation within or without the Republic of Panama. ARTICLE FOURTH: The Capital Stock of the corporation is SIX MILLION DOLLARS (US$6,000,000), legal currency of the United States of America, divided into SIX HUNDRED THOUSAND (600,000) SHARES with a nominal value of TEN DOLLARS (US$10.00) each. The Capital Stock may be increased by decision of the Ordinary Assembly. ARTICLE FIFTH: The shares shall be registered shares, may be endorsed or not, ordinary and preferred. The latter shares shall be entitled to a preferential payment of dividend which may be cumulative or not, pursuant to the conditions at issue. An additional profit participation may also be fixed to them. There shall be five (5) Classes of Ordinary Shares, A, B, C, D and E. Each class shall represent twenty (20%) of the Capital Stock, except for the provisions of Article nine.one (9.1) (vi). ARTICLE SIXTH: Each ordinary share issued is entitled to one (1) to five (5) voting rights, as determined while the initial capital is subscribed and opportunely when it is so increased by the Assembly. The preferential shares may be issued with or without voting right. ARTICLE SEVENTH: The stock certificates and the provisional certificates issued shall contain the specifications and data required by Article Twenty Seven (27) of Law Thirty Two (32) of the year one thousand nine hundred and twenty seven (1927). Certificates representing more than one (1) share may be issued. ARTICLE EIGHTH: In case of arrearages to integrate the capital stock, the Board of Directors is empowered to proceed in accordance with any of the proceedings allowed by Article Twenty Six (26) of Law Thirty Two (32) of the year one thousand nine hundred and twenty seven (1927). ARTICLE NINTH: For the transfer of shares, the shareholders should meet with the following provisions: Nine one (9.1): The shareholders shall have the preferential right to acquire the shares of other shareholders and said requirement must be stated in the stock certificates issued by the Corporation, which shall read as follows: "In order to be transferred, the shares are to be Offered first to other shareholders, in the manner prescribed in the By-laws of the Corporation". In order to exercise this preferential right the shareholders must be guided by the following regulation: (i) For the purposes of this Article shares class A and B are considered as a single Class, Shares Class C and D are also considered as a single Class. (ii) There shall be no partial offer of sale of shares of one Class. Every offer must be made for all the shares representative of the Class owned by the seller shareholder.- (iii) If the seller were the shareholder of Class A shares, the shareholder of Class B shares must offer them for sale in the same conditions offered by the shareholder of Class A shares and said preferential right may only be exercised by the shareholders of Class C and D jointly. In case of the exercise of this preferential right by the shareholders of Class C and D jointly, they should acquire the total shares Class A and B offered jointly, being unable to acquire shares of only a single Class.- (iv) If the seller were the shareholder of a Class B shares, this preferential right shall be exercised by the shareholders of Class A shares. If the shareholders of Class A shares are not willing to exercise their preferential right, this right may be exercised by the shareholders of Class C and D, but the shareholder of Class A shares shall be entitled to offer for sale, jointly with Class B shareholders and in the same terms and conditions, their shareholdings to the Shareholders of Class C and D, who, in case of exercising their preferential right, must acquire jointly the Class A and B Shares offered for sale. If the sellers were the shareholders of Class C and D shares, the shareholder of Class E must also offer for sale his holding under the same conditions offered by the shareholders of Class C and D shares. The preferential purchase may only be exercised by the shareholders of Class A and B shares. In case of the exercise of this preferential right, the Shareholders of Class A and B jointly must acquire the shares offered by Class C, D and E jointly, being unable to acquire the shares of only a single Class. (vi) If the seller were a Class E shareholder, for reasons other than those set forth in paragraph (v), his holding shall be firstly offered for sale to Class C and D shareholders. The shareholders of Class C and D shall have a term of sixty (60) days' to accept said Offer. If they do not accept said offer, the Shareholder of Class E may offer his holding for sale in the same terms and conditions than those offered to the shareholders of Class C and D to the shareholders of Class A and B who shall then have sixty (60) days to exercise their right. If none of the groups accept the offer made by the Shareholder of Class E, he may offer his holding for sale to third parties. If a shareholder of Class E shares receive a firm and written proposal from a third party for the purchase of his holding, said proposal must be firstly notified in forty five (45) days to the shareholders of Class C and D shares, even though the amount of the offer is the same as that of the price originally offered. During that term the shareholders of Class C and D Shares shall be entitled to equalize the offer and acquire the Class E shares or may request a valuation of the shares offered. In the latter case, since the notification of the valuation period and in a term of thirty (30) days the shareholders of Class C and D shares for one part and the shareholder or Class E shares for the other part must each one chose an appraiser of said shares, who must be widely experienced with the activity developed by the corporation. The appraiser so designated must appoint a third appraiser. The appraisers shall take a decision in a term of forty five (45) days and must notify the parties the result of their decision. In case of any conflict between the appraisers, the shareholders of Class C and D shares shall be entitled to acquire the shares (i) at the price determined by the appraisers; (ii) at the lowest average valuation or (iii) at the original price, if it were lower. The fees of the appraisers shall he absorbed by the shareholder of Class E shares in case the final price is lower than the original price or by the shareholders of Class C and D shares if the valuation price is higher than the original price. Upon notice of the result is given, the shareholders of Class C and D shares shall have thirty (30) days to exercise their preferential right. If the shareholders of Class C and D do not exercise their right, the shareholders of class A and B shall again have the right to acquire the Class E shares in the same terms and conditions as those at which the shareholders of Class C and D would have acquired them, after the valuation. If after the thirty (30) days of said notification to acquire the shares offered, they do not exercise their right, then the shareholder of Class E shares may complete the transfer to the offering third party in the terms originally offered by him, who is to execute all the documentation to which the shareholder of Class E was subject prior to said transfer. In any event of resulting purchasers of the Class E shares, the shareholders of Class A and B or the shareholders of Class C and D, within the ten (10) days of their acquisition, are bound to offer to the other group half of the Class E shares acquired, in the same terms and conditions as those at which they would have acquired the shares, having such other group thirty (30) days to decide if they accept or not said offer, so that after the transfer is completed the shareholders of Class A and B shares may hold fifty per cent (50%) of the capital stock with voting right and the shareholders of Class C and D, Jointly, may hold the other fifty per cent (50%) of the capital stock with voting right. Upon the transfer of the Class E shares by the application of the present clause, said shares shall automatically become into Class A, B, C or D shares in the same proportion as inquired; Nine.two (9.2) Whenever a shareholder wishes to transfer his shares, he should firstly offer them for sale to the other shareholders pursuant to the provisions of paragraph nine.one (9.1) and must so notify it to the President of the Board of Directors and to the shareholder entitled to preferential right as to the transfer he pretends, the price and other terms of the operation (which in any case shall be for cash) and the whereabouts of the person to whom he intends to transfer his shares, so that the shareholders entitled to preferential right may exercise their right and purchase all said shares. This right must be exercised within the thirty (30) days upon receipt of the notification of the decision to sell. The answer must be given in writing and shall be notified in the same manner to the President of the Board of Director and to the seller shareholder. If no answer is received from the shareholder entitled to preferential right, it shall be understood that he rejects the offer. In those cases in which the preferential right corresponds successively to more than one shareholder, and the first shareholder does not exercise his preferential right, in the same manner and in the same term the seller shareholder must notify to the subsequent shareholder with preferential right so that he may exercise his right. Nine.three (9.3) If the shareholder with preferential right had accepted timely and formally the offer, the transferor shareholder must deliver the shares within the thirty (30) days after the date of the notice of the acceptance given by the acquiring shareholder, who shall at that time pay for the price agreed and shall perform the remaining formalities required by the terms of the sale. Nine.four (9.4) The exercise of the preferential right is to be made for all the shares offered. If the term for the shareholders to exercise said right is elapsed, the President of the Board of Directors shall so advise to the shareholder who informed of this decision to transfer his shares that he may transfer said shares to the offering third party identified in the original notice and in the price and under the conditions indicated therein. If the latter transfer is not completed within the term of thirty (30) days after receipt of the notice from the President, which transfer is to be entered into in the respective registry books of the Corporation, then the seller shareholder must again follow the procedure set forth in the provisions of this Clause nine (9) and the corresponding shareholders shall recuperate their preferential right over said shares. Nine.five (9.5) The acquisition of the shares of the corporation implies the acceptance of the Articles of Incorporation, of the By-Laws, of the resolutions adopted by the Assembly of Shareholders and of the agreements of the shareholders, which should be expressly declared by the acquiring shareholder in the corresponding agreement of acquisition. Nine.six (9.6) The shareholders of the corporation being corporate bodies may freely transfer their shares, without being subject to the foregoing proceeding, whenever the transfer is made to a corporation considered as main office, affiliated, subsidiary, controlled/controlling/associated office of the transferor shareholder corporation, for which purpose the shareholder should meet with the formality of giving notice by any means to the President of the corporation of his intention to transfer their shares to the controlled, controlling, associated, main or affiliated office, which notice must be accompanied with all corporate documents necessary to evidence the corporate status of the corporation to which they pretend to transfer their shares. In any event, in the contract for the purchase sale of shares or in the instrument whereby they are transferred, the acquiring corporation must expressly declare that they observe, approve and are bound by the Articles of Incorporation, the By-laws and by the agreements adopted by the Assembly of Shareholders and by the agreement of the exiting shareholders. Nine-seven (9.7): Any notices to be given through authentic means, shall be deemed to have been made in the same day that they are handed to postal offices and the term for delivery shall start at the third (3rd) day after said date if the address or the sender is in the Republic of Panama, or at the sixth (6th) day if the address is abroad. If the notice is given in person through notary public, the term for delivery shall start the day after the notarial notice is made. Nine.eight (9.8): The preceding provisions referring to the preferential right to purchase shall not apply when the Board of Directors approve the transfer unanimously by approval of its five (5) members. Nine.nine (9.9): Only the transfers or shares which meet with the preceding provisions at these Articles of Incorporation shall be entered into the Stock Registry Book of the Corporation. Nine.Ten (9.10): If the application of Article Nine.one (9.1) (iii) and nine.one (9.1) (iv) would result in a third party acquiring shareholder of Class A and or B the Clauses Eleventh and Sixteenth of these Articles of Incorporation shall automatically become without effect, and from that time the relation between shareholders shall be regulated by the Corporate Law. The seller shareholders Shall be bound to include in the respective contract a clause expressly stating this provision. This clause shall not be applicable to other transfers of shares nor to those defined in article Nine.six (9.6) even though the transfers of Class A and/or B are affected. ARTICLE TENTH: By resolution adopted at a Special Meeting or Shareholders, the corporation may hereinafter issue debentures, negotiable instruments and any other evidence of indebtedness for its private or public investment, within or without the country, in the conditions of price, interests and amortization which may be deemed by the Assembly and subject to the standing legal provisions. The above mentioned titles may be issued in national or foreign currency with collateral, common or special guaranty. ARTICLE ELEVENTH: The Corporation shell be managed by a Board of Directors composed of five (5) members, one for each class or shares, who shall hold their office during the term of one (1) year. The Assembly is to designate substitute members in equal number of principal members, for each class and to hold their office during the same term in order to fill the vacancies created in each class. At their first meeting, the members of the Board of Directors must appoint one President and may designate one Vicepresident; the latter replaces the first in case of absence or inability. The Board of Directors may act with the presence of four (4) of their members, who shall constitute quorum, and resolution may be adopted by the vote likewise of four (4) members. In the case of transfer of Class E shares pursuant to the provisions of paragraph nine.one (9.1) and thus the elimination of Class E shares, then the Board of Directors shall be composed of four (4) members, one for each class of shares, and shall act with the presence of three (3) members and the resolutions shall be adopted by the vote likewise of three (3) members. The Presidency of the Board of Directors shall correspond alternatively to the Class A and B shares to hold the office during one period and to the Class C and D shares to hold the office during the following period, and thus subsequently. The Vicepresidency shall correspond to The Class of shares which is not holding the office of the Presidency. Class E shares may hold the offices unanimously determined by the Board of Directors. At the meetings of the Board of Directors, any Director may be represented and vote by proxy or proxies (who do not need to be Directors) designated by written instrument (including telex or cable), with or without power to delegate. ARTICLE TWELFTH: The Directors must give a guarantee in cash of $1,000 (one thousand Pesos). ARTICLE THIRTEENTH: The Board of Directors have full power to manage and dispose of the properties, including those which by law require special powers of attorney, and may, therefore, sell, mortgage, alienate and otherwise dispose of the properties of the Corporation without the consent of shareholders or the authorization of the Assembly of Shareholders. Consequently, they may enter into all kinds of legal proceedings on behalf of the corporation for the performance of the purposes thereof, to trade with Banks of any part of the world, and other credit institutions public or private, within or without the country; to establish agencies, branches and other type of representations within or without the country; proceed with the purchase, sale, exchange, lease in all types of arrangements as time charter, voyage or bareboat, leasing, renting, importation of all types of goods, supply and assignment of vessels, their spare parts and apparatus, accessories, materials and supplies, mediation in the consideration of the insurances to cover the risks for the services agreed and those covering the properties of the corporation or those hired by it or the risks for third parties which might be caused by these properties, and the carrying out of all kinds of commercial activities normally developed in ports; to contract obligations, to acquire, dispose of and mortgage vessels and other personal and real properties, facilities and in general all kinds of rights and abandon ships and other properties of the Corporation in favor of underwriters, of any State or of any other third party if its is deemed convenient to the interests of the Corporation, as well as to carry out all the industrial operations, commercial transactions and contracts related directly or indirectly to the purposes of the Corporation; to carry out credit operations with or without expressed warranty, aimed to facilitate its normal operational development for the performance of related activities, accessory and complementary to those constituted by its main purposes, to enter agreements of temporary association for commercial purposes without formal partnership, of "Union Transitoria de Empresas" and of "Agrupacion de Colaboracion Empresaria"; to grant to one or more persons special Judicial powers of attorney - including for criminal complaint - and extrajudicial with the purpose and as broad as it may be deemed convenient and to engage in any other act of disposition, investment, management and exploitation related and benefitial to the purposes of the corporation. The legal representative of the corporation shall be the President of the Board of Directors or the Vicepresident in case of absence or inability. In case of absence of the president and of the vicepresident, the legal representation of the company shall be held jointly by two directors, one of them being of the Class A and B Shares and the other director of the Class C and D Shares. ARTICLE FOURTEENTH: The domicile of the corporation shall be in the City of Panama, Republic of Panama. By decision of the Board of Directors the domicile of the corporation may be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any part of the world. ARTICLE FIFTEENTH: The Ordinary or Special Assemblies of Shareholders may be held within or without the Republic of Panama. Any Shareholder may appoint a proxy by means of a public or private document to be represented at any meeting of General Assembly of Shareholders to be held. The quorum and majority attendance for holding the Ordinary and Special Assemblies of Shareholders in all cases, for the first as well as for the second notice, shall be of eighty per cent (80%) of the issued and outstanding shares with voting right. In the case that due to transfer or Class E shares pursuant to what is provided in paragraph nine. one (9.1) said shares are eliminated, the quorum and majority attendance in all cases shall be or seventy five per cent (75%) or the issued and outstanding shares with voting right. ARTICLE SIXTEENTH: The fiscal year ends on the thirty first (31st) day of december of each year. At that time the financial statements shall be prepared in accordance with standing accounting and technical principles commonly in use. The Assembly may amend the fiscal year ending by the recordal of pertinent resolution at Public Registry Office. The net and taken profits shall be consigned as follows: (a) Five per cent (5%), to reach up to twenty per cent (20%) of the capital subscribed, for the funds or legal reservation; (b) For remuneration of the Board of Directors in such case; (c) For dividends of the Preferred Stock, with priority the unpaid cumulative; (d) The surplus, in whole or partially, to additional participation of the Preferred Stock, or to funds for contingency or preservation reserve or to a new account or to a consignment determined by the Assembly. The dividends are to be paid in proportion to the respective participations, within the year of its authorization. ARTICLE SEVENTEENTH: The winding-up of the corporation may be effected by the Board of Directors or by the liquidator or liquidators appointed by the Assembly. Having paid the liabilities and, having reimbursed the capital, the surplus shall be distributed among the shareholders, with the preferences mentioned in the preceding article. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LIHARES P., of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA & ASOCIADOS" whose address is as follows: Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) floor, Post office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama. C) The Directors of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), male, of legal age, Panamanian, domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AQUIRRE (Clarissa P. de Aguirre), female, of legal age, domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, and ELSA MARIA SOUSA QUINTERO (Elsa Ma. souaa), female, of legal age, domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer;and ELSA MARIA SOUSA (Elsa Ma, Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identification card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Vielka Diaz de Canizales, with personal identification card number eight-four hundred and twenty one-six hundred and seventy three (8-421-673), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number SEVEN THOUSAND THREE HUNDRED AND SEVENTY ONE. (7371) (sgd.) ELOY ALFARO -- JULIO E LINARES F.-- Aura I. S. de Castillero -- Vielka D. de Canizales -- RUBEN AROSEMENA QUARDIA, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, on the Twentieth (20th) day of the month of July, in the year one thousand nine hundred and ninety two (1992), agrees with its original. (sgd .) RUBEN AROSEMENA QUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 03:06:45.1. on the 20th day of July of 1992, as per Volume 215 and Entry 10859 of the Journal, by JUAH MONTES G.- Duties Paid B/. 1,281,00; Liquidation No. 892039402 -(sgd.) Gonzalo Cornejo Campos, Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Rocio A. de Vidal, Chief of the Section. This document has been recorded at Microjacket 261886, Roll 35991, Frame 0156, of the Microfilm (Mercantile) Section of the Public Registry Office, on July 21, 1992- (sgd.) Ivonne Arjona, Chief of the Section. I, SONIA E. GOMEZ V., do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, January 7, 1993 PRINCELY INTERNATIONAL FINANCE CORP. BY-LAWS CHAPTER ONE Office Article One.- Main Offices. The main offices of this corporation shall be at Plaza 2000, 4th Floor, Via General Nicanor A. de Obarrio (50th Street), City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting, at such hour and on such business date as may be determined by the Board and designated in the notice of the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. 2 If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each owner of stocks of the company, with voting rights, shall have the right to one vote for each share at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is with 51% of the votes, unless the Articles of Incorporation or the Law provides to the contrary Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall 3 specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. Chair and Secretary of the meetings. The President, or in his/her absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until 4 the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - The Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of 5 the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He 6 shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of 7 Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. 8 All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Canceled and Lost Certificates. All stock certificates waived shall be canceled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the 9 Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums 10 that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. 11 EX-3.20 21 y04808exv3w20.txt MEMO AND ARTICLE OF ASSOCIATION OF REGAL INT'L. INVESTMENTS S.A. EXHIBIT 3.20 PUBLIC DOCUMENT NUMBER FIVE THOUSAND TWO HUNDRED AND THIRTY SIX (5236) WHEREBY the Corporation known as "REGAL INTERNATIONAL INVESTMENTS S. A.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, May 18, 1993 In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the eighteenth (18th) day of the month of May, in the year one thousand nine hundred and ninety three (1993), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama Circuit, holder of personal identification card number eight-sixty four-four hundred eighty two (8-64-482), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation subject to the following Articles of Incorporation: FIRST: The name of the Company is: "REGAL INTERNATIONAL INVESTMENTS S. A.". SECOND: The objects and purposes of the corporation are: a) The purchase and sale in general of all kinds of real estates, movables, livestocks, or of any nature; b) The management in general of personal property or immovables, whether as owner, or for the account of third -2- parties; c) The investments in general and the financing and in general operations in personal or real property, as well as the participation in industrial, commercial, real estate or financial corporations; d) The purchase or acquisition of patents, trademarks, copyrights, licenses and formulas and the commercial exploitation of the same; e) The undertaking of loans, whether with Banks, whether with private or public institutions, to increase or to apply to the businesses of the corporation, being able to guarantee the liabilities that in this sense may be incurred through the issuance of bonds, notes, promissory notes, pledge or mortgages upon all or any of the properties of the corporation; f) The purchase and sale in general of shares, bonds or other valuable securities of other corporations, whether on its own account, whether for the account of third parties, including the management of said securities, as well as for the corporation as in favour and for the account of third parties; g) The financing in general of other corporations or the participation in the same, through the payment of contributions in the integration of the capital stock of the same; h) The exploitation of mines, of any nature, as well as the exploitation of any industry; i) The exploitation, whether in whole, whether in part, of any other businesses, whether of maritime nature, whether in relation to fluvial, maritime, air or land transportation; j) Any other lawful business permitted by the laws of the Republic of Panama or which these may allow in the future; all of which purposes, the Corporation may carry out within or outside of the Republic of Panama. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR -3- NOMINATIVE SHARES, of a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The -4- holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing, (through telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of -5- these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA & ASOCIADOS" whose address is as follows: Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama. C) The Directors of the Corporation shall be: Mr. TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; Mrs. CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and Mrs. ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), domiciled at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, -6- Fourth (4th) Floor, City of Panama, Republic of Panama; D) The Officers of the Corporation shall be: Mr. TOMAS ALVARADO MONTENEGRO (Tomas Alvarado M.), President; Mrs. CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer; and Mrs. ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary; I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identification card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identification card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number FIVE THOUSAND TWO HUNDRED AND THIRTY SIX (5236) (sgd.) ELOY ALFARO--JULIO E. LINARES F.--Aura I. S. de Castillero--Ma. I. Gonzalez--RUBEN AROSEMENA GUARDIA, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the eighteenth (18th) day of the month of May, in the year one thousand nine hundred and ninety three(1993), agrees with its original. (sgd.) RUBEN AROSEMENA GUARDIA, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 10:24:01.2 a.m., on the 19th day of May of 1993, as per Volume 221 and Entry 7770 of the Journal, by Francisco Linares.- Duties Paid B/.60.00; Liquidation No. 893031393 -7- (sgd.) Auristela Rodriguez, Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) M. Y. de De Diego, Chief of the Section. This document has been recorded at Microjacket 272792, Roll 38754, Frame 0094, of the Microfilm (Mercantile) Section of the Public Registry Office, on May 20, 1993.- (sgd.) Ivonne Arjona, Chief of the Section. I, SONIA E. GOMEZ V., do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, July 28, 1993. /s/ [ILLEGIBLE] --------------- SONIA E. GOMEZ V. Interprete Publico [ILLEGIBLE] Resolucion No. 378 de 1978 MINISTERIO DE GOBIERNO Y JUSTICIA TRANSLATION.- PUBLIC DEED NUMBER TEN THOUSAND SEVEN HUNDRED TWENTY THREE (10,723) WHEREBY it was notarized an authentic copy of minutes of a special meeting of the Shareholders of "REGAL INTERNATIONAL INVESTMENTS S. A.", by means of which the corporation amends Article Third (3rd) of the Articles of Incorporation of the corporation. Panama, September 30th, 1993. In the City of Panama, Capital of the Republic and seat of the Notarial circuit of the same name, on the thirtieth (30th) day of September, of the year one thousand nine hundred and ninety three (1993), before me, RUBEN AROSEMENA GUARDIA, Third Notary Public of the Panama circuit, holder of personal identity card number eight-sixty four-four hundred eighty two (8-64-482), personally appeared MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identity card number eight-two hundred thirty one-seven hundred thirty five (8-231-735), in his capacity of member of the law firm "TAPIA & ASOCIADOS", which is in turn the Resident Agent of the corporation "REGAL INTERNATIONAL INVESTMENTS S. A.", recorded as per Microjacket 272792, Roll 38754 and Frame 0094, of the Microfilm (Mercantile) Section of the Public Registry Office, to me known, and he requested that I notarized, as I in effect notarize, an authentic copy of minutes of a special meeting of the shareholders of "REGAL INTERNATIONAL INVESTMENTS S. A.", by means of which the corporation amends Article Third of the Articles of Incorporation of the Corporation. -2- I made known to the appearing party before me that a copy of this public instrument must be registered; and having been read to him in the presence of the attesting witnesses, Aura Isabel Santiago de castillero, with personal identity card number eight-one hundred and eighty three-nine hundred and seventy nine (8-183-979) and Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred and twenty eight-one hundred and forty nine (8-128-149), of legal age and residents of this city, to me known and qualified to discharge the duty, he found it to be correct, he approved it, and they all sign it, as a matter of record, before me, the Notary Public, whereunto I attest. This Document bears number TEN THOUSAND SEVEN HUNDRED TWENTY THREE (sgd.) Mario E. Correa.- Ma. I. Gonzalez.--Aura I. S. de Castillero.--RUBEN AROSEMENA GUARDIA, Third Notary Public. REGAL INTERNATIONAL INVESTMENTS S. A. Minutes of a Special Meeting of Shareholders. A special Meeting of the Shareholders of "REGAL INTERNATIONAL INVESTMENTS S. A." was held at Via General Nicanor A. de Obarrio (50th Street), Bancomer Plaza, 4th Floor, City of Panama, Republic of Panama, at ten o'clock in the forenoon, on the 22th day of September, 1993. There were present the shareholders as also the Directors: Mr. Tomas Alvarado Montenegro (Tomas Alvarado M.) and Mrs. Elsa Maria Sousa Quintero (Elsa Ma. sousa). The President of the Corporation, Mr. Tomas Alvarado M., acted as Chairman of the meeting. The Secretary of the Corporation, Mrs. Elsa Ma. Sousa, acted as Secretary of the meeting. The Secretary then stated that there were present the holders of all the issued and outstanding shares of the Corporation, who waived notice of the meeting; and the President, therefore, declared the meeting duly installed and ready for the -3- transaction of business. Immediately the acting President informed that he deemed it convenient to the interests of the corporation to increase the authorized capital from TWO MILLIONS THREE HUNDRED THOUSAND DOLLARS (US$2,300,000.00) to THREE MILLION THREE HUNDRED THOUSAND DOLLARS (US$3,300,000.00), for which reason he submitted this proposal to the consideration of the meeting. On motion duly made, seconded and carried, the following resolution was proposed: IT IS RESOLVED: To increase, as it is in effect increased, the authorized capital of the corporation and consequently to amend, as it is hereby amended, Article Third of the Articles of Incorporation of the corporation REGAL INTERNATIONAL INVESTMENTS, S. A., for the following: "THIRD: The capital of the corporation is of THREE MILLION THREE HUNDRED THOUSAND DOLLARS (US$3,300,000.00), legal currency of the United States of America, divided into THREE THOUSAND THREE HUNDRED (3,300) BEARER OR NOMINATIVE SHARES, of a par value of ONE THOUSAND DOLLARS (US$l,000.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote". The ballot was ordered, the Secretary collected the ballots cast and announced that all the shareholders had voted in favour of the above mentioned proposal. Therefore, the President informed that above resolution had been unanimously approved. There being no further business to come before the meeting, it was adjourned. The Secretary of the meeting, -4- (sgd.) Elsa Maria Sousa Quintero (Elsa Ma. Sousa). APPROVED: (sgd.) Tomas Alvarado Montenegro (Tomas Alvarado M.).- Elsa Maria Sousa Quintero (Elsa Ma. Sousa). The undersigned, Secretary of the Corporation "REGAL INTERNATIONAL INVESTMENTS S. A.", hereby CERTIFY: that the foregoing is a true copy of the original minutes of a special meeting of the Shareholders of the corporation held in the city of Panama, Republic of Panama, on September 22th, 1993, at which meeting the holders of all the issued and outstanding shares of the corporation approved to amend the Articles of Incorporation. Panama, September 22th, 1993. (sgd.) Elsa Ma. Sousa. This copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the thirtieth (30th) day of the month of September, one thousand nine hundred and ninety three (1993). (sgd.) Ruben Arosemena Guardia, Third Notary Public. There appears a stamped seal of the Third Notary Public Office. PUBLIC REGISTRY OFFICE -PANAMA- This document was filed at 11.27.57.4 a.m. on the 12th day of November of 1993, at Volume 225 and Entry 8675 of the Journal, by Anabel Gamallo; Duties Paid B/.120.60; Receipt 893076870. (sgd.) Auristela Rodriguez Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (sgd.) ROSA ELVIRA H. DE DUTARI, Chief of the Section. This document has been recorded at Microjacket 272792, Roll 40615, Frame 0070, of the Microfilm Section of the Public Registry Office, Duties: B/.120.60. on November 25, 1993. (sgd.) Arelis odila E. de Poveda. Chief of the Section. I, BERTILDA DE TORRES, an authorized Public Translator, do hereby certify the foregoing as a true and correct translation of its original in Spanish. Panama, December 14th., 1993. /s/ Bertilda R. De Torres ------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 BY-LAWS OF REGAL INTERNATIONAL INVESTMENTS S. A. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. -2- Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. -3- Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the -4- time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to -5- bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. -6- CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two.- Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three.- Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when -7- called by the President with two days notice in advance given to each Director, whether by personal delivery or by mail, telex or fax. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five.- Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six.- Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven.- Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person -8- who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the -9- corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his -10- care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for -11- the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. -12- Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and -13- cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. -14- Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. -15- CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. The undersigned, Secretary of "REGAL INTERNATIONAL INVESTMENTS S. A.", a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y: That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama, Republic of Panama, on the 20th day of May, 1993. /s/ Elsa Maria Sousa Quintero ---------------------------------------- Elsa Maria Sousa Quintero (Elsa Ma. Sousa ) EX-3.21 22 y04808exv3w21.txt ARTICLES OF INC. & BY-LAWS OF RIVERVIEW COMMERCIAL CORP. EXHIBIT 3.21 TRANSLATION.- PUBLIC DOCUMENT NUMBER NINE THOUSAND TWO HUNDRED SEVENTY SEVEN (9277) WHEREBY the Corporation known as "RIVERVIEW COMMERCIAL CORP.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, October 24th, 2003. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the twenty-fourth (24th) day of the month of October, of the year two thousand and three (2003), before me, Licentiate RUBEN ELIAS RODRIGUEZ AVILA, Third Notary Public of the Panama Circuit, holder of the identity card number four-eighty nine-six hundred forty two (4-89-642), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "RIVERVIEW COMMERCIAL CORP.". SECOND: The objects and purposes which the corporation shall mainly undertake, develop and carry on within or outside the Republic of Panama are the following: (a) to acquire, possess, administrate, encumber, lease, alienate and dispose of in any form, all types of goods, such as chattel, real estate, livestock or of any other nature, including rights, obligations and quotas of participation, whether as owner or for the account of third parties; (b) to issue, administer, buy, sell and negotiate all types of shares, quotas, documents, bonds, titles or securities, whether on its own account or on the account of third parties; (c) to buy, acquire, sell, or grant patents, marks, copyrights, licenses and formulas, and to exploit them commercially; (d) to buy, sell, charter and administrate all types of ships; as well as to operate maritime agencies and carry on maritime operations in general; (e) to invest in companies, businesses or projects, and the negotiation, exploitation or participation in mining, industrial, -2- commercial, real estate, maritime or any another class of companies; (f) to open, operate and administer accounts in banks or other lending or financial institutions; and to give and take loans; to remit, accept, endorse, discount and grant notes, drafts and other negotiable documents, and to offer all kinds of guarantees in favor of third parties upon all or any of the assets of the company; and (g) to engage in any another lawful business permitted by the Laws of the Republic of Panama or which these may allow in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into TEN THOUSAND (10,000) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE DOLLAR (US$1.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world, and may likewise re-domicile or change its domicile of incorporation in order to continue existing under the laws of another country or jurisdiction, subject to the authorization of the Board of Directors or the Assembly of Shareholders of the corporation. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the by-laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. -3- EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the by-laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, the Legal Representative shall be the Vice-president. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the by-laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. -4- FINAL PROVISIONS: (A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de Obarrio - - Fiftieth (50th) Street, Plaza 2000, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Plaza 2000, City of Panama, Republic of Panama, ONE (1) SHARE. (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Plaza 2000, Post Office Box cero eight one six - cero two nine eight four (0816- 02984), Panama, Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). (C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, CLARISSA PLATA DE AGUIRRE and ELSA MARIA SOUSA QUINTERO, all with domicile at Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Plaza 2000, City of Panama, Republic of Panama. (D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, President; CLARISSA PLATA DE AGUIRRE, Vice-president and Treasurer; ELSA MARIA SOUSA QUINTERO, Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Vielka Mireya Diaz de Canizales, with personal identity card number eight-four two one-six seven three (8-421-673); and Miss Luz Marela Antinori Nunez, with personal identity card number N-eighteen-three hundred thirty one (N-18-331), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number NINE THOUSAND TWO HUNDRED SEVENTY SEVEN (9277) (sgd) Mario E. Correa -- Julio E. Linares F. -- Vielka D. de Canizales -- Luz Marela Antinori N. -- Ruben Elias Rodriguez Avila, Third Notary Public. -5- Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the twenty-fourth (24th) day of the month of October, in the year two thousand three (2003).- (sgd.) Lic. Ruben Elias Rodriguez Avila, Third Notary Public. FILED IN THE PUBLIC REGISTRY OFFICE OF PANAMA: Province: PANAMA.- Date and Hour: 2003/10/28 16:03:35:6.- Volume: 2003.- Entry: 121533.- Presenting: TATIANA DEL MORAL.- Identity card number: 8-733-611 Liquidation No. 8463550.- Total Duties: 60.00.- Filed by: EDEHER.- Sgd. Illegible signature.- There is a stamped seal of the Public Registry Office of Panama.- Record in the Technological System of Information of the Public Registry Office. Mercantile Section, Microjacket No. 442687, Initials S.A., Document Redi No. 546748 - work performed Articles of Incorporation, Registration Duties B/. 50.00 - Qualification Duties B/. 10.00 - Place and date of record Panama, October 30th, 2003.- (sgd.) U. Pedreschi. There is a stamped seal of the Public Registry Office of Panama. I, Bertilda R. de Torres, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, April 19th, 2004. /s/ Bertilda R. De Torres ------------------------- [SEAL] BY-LAWS OF RIVERVIEW COMMERCIAL CORP. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Plaza 2000, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two.- Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three.- Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six.- Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven.- Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the moneys and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Canceled and Lost Certificates. All stock certificates waived shall be canceled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. **** The undersigned, Secretary of "RIVERVIEW COMMERCIAL CORP." company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y: That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held at Via General Nicanor A. de Obarrio (50th Street), Plaza 2000, City of Panama, Republic of Panama, on the 16th day of April, 2004. Panama, April 16th, 2004. /s/ Elsa Maria Sousa Quintero ----------------------------- Elsa Maria Sousa Quintero EX-3.22 23 y04808exv3w22.txt MEMO AND ARTICLE OF ASSOCIATION OF SOVEREIGN MARITIME LTD. EXHIBIT 3.22 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 2 of 1990) Certificate of Incorporation (Section 11 and 12) No. 71,249 B SOVEREIGN MARITIME LTD. I, JACINDA P. BUTLER, ASST....... Registrar General of the Commonwealth Of The Bahamas Do Hereby Certify pursuant to the International Business Companies Act (No. 2 of 1990) that all the requirements of the said Act in respect of incorporation have been satisfied, and that SOVEREIGN MARITIME LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 21ST day of JANUARY 1998 Given under my hand and seal at Nassau in the Common- wealth of The Bahamas /s/ J. P. BUTLER ---------------------------- ASST. REGISTRAR GENERAL THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 ARTICLES OF ASSOCIATION OF SOVEREIGN MARITIME LTD. 1. These Articles shall constitute the Regulations of the Company and reference therein to "the Act" shall mean the International Business Companies Act, 1989. 2. In these Regulations, words and expressions defined in the Act shall have the same meaning; and unless there be something in the subject or context inconsistent therewith references to directors shall mean the Board of Directors despite the fact that the Board may consist of one director only, and references to persons shall include corporations and all entities capable of having a legal existence. SHARE CAPITAL 3. The shares shall be under the control of the directors who may offer, allot, grant options or otherwise dispose of them to such persons or redeem them at such times for such consideration and upon such terms and conditions as they may determine by resolution. 4. Shares in the Company may be issued with such designations, powers, preferences and rights, qualifications, limitations and restrictions with regard to dividend, voting, return of capital or otherwise as the directors may determine by resolution without prejudice to any rights attaching to any existing shares and subject to the provisions of the Act. 5. Redeemable shares shall be redeemed on such terms and conditions and in such manner as the directors may determine by resolution before or at the time of the issue of such shares; and such shares may be redeemed at a premium. SHARE CERTIFICATES 6. Certificates of title to shares shall be issued and the signatures or common seal thereon may be facsimiles. 7. Every member shall be entitled to one certificate for the shares registered in his name or to several certificates, each for one or more of such shares. In respect of shares held jointly by two or more persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate in respect of the share or shares to one of several joint holders shall be delivery to all. 8. If a certificate is worn or lost, the directors may issue a new certificate on satisfactory proof of its loss or the production of the worn-out certificate and upon such indemnity, as is reasonable, against any loss or liability which the Company or its directors may incur by reason of wrongful or fraudulent use or representation made by any person by virtue of the possession of such certificate. 9. The Company shall be entitled to treat the member specified in the share certificate as absolute owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person except as required by these Articles or by order of a court of competent jurisdiction under authority of the Act or other laws of The Bahamas. 10. The Company may issue share certificates, otherwise known as warrants, to bearer in respect of any fully paid-up shares of the Company, stating that the bearer of the warrant is entitled to the shares therein specified. Such warrants shall be issued upon such terms and subject to such conditions as may be resolved upon by the directors. -2- WE, the several persons, whose names and addresses are subscribed herein are desirous of incorporating an International Business Company under the laws of the Commonwealth of The Bahamas in pursuance of this Memorandum of Association. NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS 1. AEGIS LIMITED By: /s/ [ILLEGIBLE] ------------------------- Assistant Secretary Nassau, Bahamas 2. RAPPEL LIMITED By: /s/ [ILLEGIBLE] ------------------------ Assistant Secretary Nassau, Bahamas Dated this 21st day of January, A.D. 1998. WITNESS TO THE ABOVE SIGNATURES: /s/ [ILLEGIBLE] - --------------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER -------------------------- Asst. Registrar General January 21st, 1998 THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989 MEMORANDUM OF ASSOCIATION OF SOVEREIGN MARITIME LTD. 1. The name of the Company is SOVEREIGN MARITIME LTD. 2. The Registered Office of the Company will be situate at the Chambers of Harry B. Sands & Company in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 3. The Registered Agent of the Company will be Harry B. Sands & Company, Chambers, P.O. Box N-624, in the Island of New Providence one of the Islands of the Commonwealth of The Bahamas. 4. The objects or purposes of the Company are:- (1) To own, construct, hire, purchase, bareboat charter, charter, lease otherwise acquire and work ships and vessels of any class, and to establish and maintain lines or regular services of ships or other vessels, and generally to carry on the business of shipowners; (2) To engage in any act or activity, business or otherwise, which is not prohibited under the International Business Companies Act, 1989 or any other law for the time being in force in the Commonwealth of The Bahamas. 5. Shares in the Company shall be issued in the currency of The United States of America. 6. The Company shall have an authorized capital of U.S.$5,000.00 with an aggregate par value of U.S. $5,000.00. 7. The Company shall have one class of shares of one series comprising 5,000 ordinary common shares with a par value of U.S.$1.00 each, but the Company is hereby authorized to issue other classes and series of shares as the directors may by resolution determine. 8. The directors shall have the authority and the power to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions (if any) as shall appertain to any class or series of shares. 9. The number of shares into which the share capital is divided may be issued as registered shares or as shares issued to bearer as the directors may by resolution determine. 10. Registered shares may be exchanged and converted into shares issued to bearer and shares issued to bearer may be exchanged and converted into registered shares. 11. Any notice or other information required by the International Business Companies Act, 1989 to be given to the holder of shares issued to bearer shall be given in accordance with the Articles of Association of the Company. 12. The Company may exercise any of the powers granted under the International Business Companies Act, 1989 without any of the limitations imposed thereby unless such limitations shall be otherwise expressly contained or set out in this Memorandum or the Articles of Association of the Company. 13. The Memorandum or Articles of Association of the Company may be amended by a resolution of members or of the directors. 14. The liability of the members of the Company is limited to the amount unpaid on the shares respectively held by them. -2- TRANSFER AND TRANSMISSION 11. Upon the request of a holder of registered shares that such shares be exchanged for bearer shares, the directors may cancel the share certificate in respect thereof and the entry in the Share Register and in such event shall issue in substitution therefor a certificate evidencing shares issued to bearer subject to such indemnity and upon such terms and subject to such conditions as the directors may reasonably require. 12. Upon the request of a holder of a certificate in respect of shares issued to bearer that such shares be exchanged for registered shares, the directors may, subject to the terms and conditions on which the same were issued, cancel such certificate and issue, in substitution, a certificate evidencing registered shares and enter the name and address of the holder thereof in the Share Register, subject to such indemnity as the directors may reasonably require. 13. Any person who becomes entitled by operation of law or otherwise to a share or shares in the Company in consequence of the death, incompetence or bankruptcy of any member, shall be the only person recognized by the Company as having any title to the shares; and may execute a valid transfer; or upon application to the Company, may be registered as a member upon such evidence as may reasonably be required by the directors. An application by any such person to be registered as a member shall be deemed to be a transfer of shares for all purposes. ALTERATION OF SHARE CAPITAL 14. Any new shares issued to increase the authorized share capital of the Company shall be issued upon such terms and conditions and with such rights and privileges and other attributes annexed thereto as the directors by resolution shall determine; and except so far as otherwise provided by the terms of issue shall be considered part of the original capital for all purposes under the Act and these Articles. PROXIES AND REPRESENTATIVES AT MEETINGS OF MEMBERS 15. A member who is an individual or corporation may be represented at a meeting of members by a proxy. The instrument appointing a proxy shall be in writing or in such a form as the Chairman of the meeting shall deem acceptable. VOTING AT MEETING OF MEMBERS 16. Every member holding voting shares shall either in person or by proxy have one vote on a show of hands and on a poll shall have one vote for every voting share held. Where a corporation, being a member, wishes to be present, it must be represented by a proxy; such proxy shall be entitled to vote for such corporation on a show of hands and also on a poll. If there be joint registered holders of any shares, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted, to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 17. A Committee appointed for a member of unsound mind may vote on his behalf at any meeting of members which such member is entitled to attend and vote. PROCEEDINGS AT MEETINGS OF MEMBERS 18. The President of the Company, or in his absence, any Vice-President, shall preside as Chairman of meetings of members; if both are absent, the members shall choose one of their numbers present at the meeting to be the Chairman. 19. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in the case of an equality of votes the Chairman shall, both on a show of hands and at the poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member. -3- 20. At any general meeting of the members unless a poll is demanded by a member present in person or by proxy, a declaration by the Chairman that a resolution has been carried and an entry to that effect in the book of proceedings of the members shall be sufficient evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. 21. If a poll is demanded it shall be taken in such manner as the Chairman directs and the result of such poll shall be deemed to be the resolution of the members. 22. When all members entitled to be present and vote sign either personally or by proxy the minutes of an annual general or an extraordinary general meeting, the same shall be deemed to have been duly held notwithstanding that the members have not actually come together or that there may have been technical defects in the proceedings and a resolution in writing signed by all the members aforesaid shall be as valid and effectual as if it had been passed at a meeting of the members duly called and constituted. 23. The Chairman, with the consent of the meeting, may adjourn any meeting to any time and place as he shall determine; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 24. A meeting of members may be held by telephone or other electronic means, without prior notice, if all members entitled to vote participate and are able to hear each other at the same time and recognize each other's voice; and a resolution approved by simple majority vote, in writing or by telex, telegram, telephone, cable, telefax or other written electronic communication from a duly authenticated source, shall be effectual at the date thereof as a resolution of members. SERVICE OF NOTICE ON MEMBERS 25. In the case of members holding registered shares, notice of meetings of members and other information or written statement required to be given to members, shall be given by personal service, or sent by airmail, or by telex, telegram, telefax, cable or other electronic means at the discretion of the directors, to each member at the address shown in the Share Register, or in the case of joint holders of the same share or shares, at the address of the holder first named in the Share Register and notice so given shall be sufficient notice to all such joint holders. 26. In the case of members holding shares issued to bearer, notice of meetings of members or other information or written statement required to be given to members, shall be given by airmail addressed to the agent or attorney whose name and address has been given, to the Company in writing, for service of notice by the bearer of the share, identified for this purpose by the number on the share certificate; or in the absence of such address or if the notice, information or written statement cannot be served for any other reason, by publishing the notice information or written statement in a newspaper circulated in The Bahamas and in a newspaper circulated in the place where the Company has its principal office. 27. Seven days notice of any meeting shall be given to members holding both registered shares and shares issued to bearer. Any notice if served by post, shall be deemed to have been served within seven days of posting; and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and delivered into the care of the postal authorities. The non-receipt of notice by any member shall not invalidate the proceedings of any meeting. DIRECTORS 28. Subject as hereinafter provided the Company shall have at least one director but not more than seven. The Company or the Directors may, by resolution, amend the Articles from time to time to increase the minimum number or vary the maximum number of directors. 29. The first directors of the Company shall be elected by the subscribers to the Memorandum of Association and thereafter the directors shall be elected by resolution of members or resolution of directors for such terms as may be specified by the enabling resolution. -4- 30. A director need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a director. 31. Each director shall hold office according to the terms of his appointment. In addition to the provisions of Section 42(2) and (3) of the Act, a director shall vacate his office if he becomes bankrupt or makes any arrangement or composition with his creditors generally, or becomes of unsound mind, or of such infirm health as to be incapable of managing his affairs. A director may be removed by resolution of members. 32. The directors by resolution may fix the emoluments of directors in respect of services rendered or to be rendered in any capacity to the Company, subject to any resolution of members; and such emoluments shall be paid out of the funds of the Company. Directors shall also be paid out of funds of the Company all expenses, including travelling and hotel expenses, properly incurred by them in connection with the business of the Company, as may be approved by resolution of directors and subject to any resolution of members. 33. A director may hold concurrently with his office as director any other office or position of profit (except that of auditor) with the Company or any other company or legal entity in which the Company may be interested as shareholder or otherwise for such remuneration and on such other terms and conditions as the directors of the Company may determine and shall not be accountable to the Company for the same. POWERS OF DIRECTORS 34. The business and affairs of the Company shall be managed by the directors who may exercise all the powers of the Company that are not expressly reserved to the members under the Act or any other laws of the Bahamas. 35. If the Board comprises only one, such sole director shall full power to represent the Company and to manage the affairs and business of the Company. If there be any vacancy in the Board, the continuing director or directors may act notwithstanding any vacancy in their body, save that if the number of directors has been fixed at two or more persons, and by reason of vacancies having occurred among the directors there shall be only one continuing director, he shall be authorized to act alone only for the purpose of appointing another director. MEETINGS OF DIRECTORS 36. The directors may meet upon not less than two clear days' notice at such place within or outside The Bahamas as and whenever they think necessary for the dispatch of business and may adjourn, and otherwise regulate their meetings and proceedings as they think fit. A meeting of directors may be convened by the President or failing him any Vice President or any other director. 37. A majority of the Board of Directors may waive notice of any meeting. 38. A properly constituted meeting of directors shall be competent to exercise all or any of the powers, duties, authorities and discretions for the time being vested in, or exercisable by, them as a body under authority of the Act, the Memorandum and these Articles. Where the Board comprises more than one director a quorum shall constitute fifty percent of the membership of the Board. 39. The President, or in his absence, a Vice-President shall preside at meetings of directors and if both are not present within fifteen minutes from the time appointed by the meeting the directors present may choose one of their number to be the Chairman. 40. Questions arising at any meeting of directors, or committee of directors shall be decided by simple majority of votes; and in the case of an equality of votes, the Chairman shall have a second or casting vote. 41. All acts done at any meeting of directors, or committee of directors, shall be valid notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such director or person acting as a director or in any director's entitlement to vote or in the proceedings at such meeting. -5- 42. When all the directors in person or by their alternates sign the minutes of a meeting of directors, the meeting shall be deemed to have been duly held notwithstanding any defects in the proceedings. 43. A resolution in writing signed by all the directors shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. ALTERNATE DIRECTOR 44. Any alternate director appointed shall be deemed to be a director of the Company and not an agent of the director so appointing him. 45. A director by written instrument under his hand deposited at the Registered Office of the Company may revoke, at any time, the appointment of his alternate; and if a director shall die or cease to hold office, the appointment of his alternate shall thereupon cease and terminate. CORPORATE DIRECTOR 46. A director who is a body corporate may appoint, by written instrument deposited at the Registered Office of the Company, any individual as its representative for purposes of representing such director at board meetings or meetings of a committee of directors and transacting the business of the Company. COMMITTEE OF DIRECTORS 47. A committee of directors duly appointed by powers conferred by the Act or these Articles, may meet and adjourn as they think fit and may elect a Chairman to preside at its meetings. If no such Chairman is elected, or if at any meeting the Chairman is not present within fifteen minutes from the time appointed for the meeting, the directors present may choose one of their number to be the Chairman. OFFICERS AND AGENTS 48. Any person, including a director, may be appointed by resolution of directors to be an officer or agent of the Company; and the directors may entrust to or confer upon such officer or agent any of the powers and authorities, including the power and authority to affix the common seal of the company, exercisable by directors upon such terms and conditions as the Board of Directors think fit, either collaterally with, or to the exclusion of, its own powers and subject to limitations under the Act and any regulations prescribed by the enabling resolution. 49. Officers appointed may consist of a President, one or more Vice-Presidents, a Secretary, a Treasurer and such other officers as the directors may deem desirable from time to time. In the absence of any specific allocation of powers and authorities, it shall be the responsibility of the President to manage the day-to-day affairs of the Company, the Vice-Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as are delegated to them by the President, the Secretary to maintain the registers, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 50. The emoluments of officers and agents shall be fixed by resolution of directors, subject to any resolution of members. CORPORATE OFFICER 51. Any officer who is a corporation may appoint by written instrument deposited at the Registered Office of the Company any individual as its representative to carry out the duties and exercise the powers and authorities attaching to such office. -6- BORROWING POWERS 52. The directors on behalf of the Company may raise, borrow or secure money, may mortgage, pledge or otherwise charge the Company's assets for such purposes, and may issue securities whenever money is borrowed or as security for any debt, liability or obligation of the Company, as approved by resolution of the directors. GUARANTEES 53. The directors may by resolution guarantee the repayment or performance of any liability, debt or obligation of any person and secure the same by mortgage, pledge or other charge on any of the Company's assets. DIVIDENDS 54. Subject to the rights of holders of shares entitled to special rights as to dividends, all dividends shall be declared and paid pari passu to shareholders of record at the date of the declaration of the dividend; but no dividend shall be paid on those shares which are held by the Company as Treasury shares. If several persons are registered as joint holders of any share, any of them may give effectual receipt for any dividend or other moneys payable in respect of the share. 55. In the case of shares issued to bearer, the directors may provide for the payment of dividends by reference to counterfoils or warrants issued with the certificate for such shares, and the production of such share counterfoil or warrant shall evidence entitlement to receipt of such dividend in the same way and to such extent as the production of the certificate itself. At the time of presentation of such counterfoils or warrants as may be required to permit receipt, the directors may issue such further counterfoils or warrants as may be required to permit receipt by the holder thereof of subsequent dividends. 56. No dividend shall bear interest against the Company. 57. The directors at their discretion may deduct from the dividends payable to any member all sums of money as may be owing by him to the Company; and the directors shall keep such records of dividends paid and deductions made as are necessary to reflect the financial position in this regard. 58. Notice of any dividend that is declared shall be given in a manner herein prescribed for notices to members. RESERVES 59. The directors may, before recommending any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for special dividends or bonuses, or for repairing, improving, maintaining any of the property of the Company, and for such other purpose as the directors shall in their absolute discretion think conducive to the interests of the Company. 60. The directors may invest the several sums so set aside upon such investments as they may think fit; and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Company; and may divide the reserve fund into any special fund as they think fit and employ the reserve fund or any part thereof in the business of the Company, without being bound to keep the same separate from the other assets. CAPITALIZATION OF PROFITS 61. The directors may resolve to capitalize in whole or part the amount for the time being standing to the credit of any of the Company's reserve accounts, or to the credit of the profit and loss account, or profits otherwise available for distribution to members, and distribute such amount amongst members, not in cash, but in fully paid shares, debentures or other -7- securities of the Company in the same proportion as such members would have been entitled to if the equivalent amount had been distributed as a cash dividend. 62. If the directors resolve to capitalize such undistributed profits as aforesaid, they shall have full power to make all decisions and provisions and do all acts necessary to effect the capitalization and consequent issue of shares, debentures or other securities to members according to their respective entitlement; and to enter into such agreements with members entitled to a distribution upon capitalization as they deem appropriate, which agreements shall be binding on such members. 63. The directors shall keep such accounts and records of the capitalization of profits and distribution as they deem appropriate; and in the case of an issue of bonus shares, the directors shall make the necessary entries in the Share Register in accordance with requirements in these Articles and the Act. CREATION OF TRUST 64. Subject to the provisions of the Act, the directors by resolution may transfer assets of the Company to any corporation or other legal entity other than an individual upon trust for the benefit of the Company, its members, creditors or other persons having a direct or indirect interest in the Company. SEAL 65. The directors shall provide for the safe custody of the Seal which shall not be used except by the authority of a resolution of directors. ACCOUNTS 66. The Company shall keep such accounts and financial records as the directors deem necessary and desirable to reflect the financial position of the Company; and if such accounts are prepared, the directors may by resolution call for such accounts to be examined by an auditor or accountant appointed by them at such remuneration as may from time to time be agreed; and such books of accounts shall be kept at the Registered Office of the Company. AMENDMENTS OF ARTICLES 67. The Company may alter or modify the conditions contained in these Articles as originally prepared or as amended by resolution of directors or members from time to time but where the Articles expressly provide that resolutions of directors shall be subject to any resolution of members, such provision shall not be altered except by resolution of members. INDEMNITY 68. Notwithstanding any of the provisions of the Act, the directors, secretary and other officers and the Registered agent for the time being of the Company and the trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them and every one of their heirs, executors and administrators shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts except such (if any) as they shall incur or sustain through or by their own wilful neglect or default respectively and none of them shall be answerable for the acts, receipts or defaults of the other or others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody or for the insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out or invested or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts or in relation thereto except the same shall happen by or through their own wilful neglect or default respectively. -8- IN WITNESS WHEREOF We, the Subscribers to the Memorandum of Association have hereunto subscribed our names this 21st day of January, A.D. 1998. AEGIS LIMITED By: /s/ [ILLEGIBLE] ------------------------- Assistant Secretary RAPPEL LIMITED By: /s/ [ILLEGIBLE] ------------------------- Assistant Secretary Signed by the Subscribers to the Memorandum of Association in the presence of: /s/ [ILLEGIBLE] ------------------------- COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ J. P. BUTLER ------------------------- Asst. Registrar General January 21st, 1998 EX-3.23 24 y04808exv3w23.txt ARTICLES OF INC. & BY-LAWS OF STANMORE SHIPPING INC. EXHIBIT 3.23 PUBLIC DOCUMENT NUMBER ONE THOUSAND TWO HUNDRED SEVENTY NINE (1279) WHEREBY the Corporation known as "STANMORE SHIPPING INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, 4th of February 2000. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the fourth day of the month of february, in the year two thousand (2000), before me, Licentiate BLANCA VANEGAS DE JACOME, Fifth Notary Public of the Circuit of Panama, holder of personal identity card number eight-two hundred one-one thousand nine hundred nineteen (8-201-1919), personally appeared the following persons, to me known: MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), male, of legal age, single, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty-one thousand six hundred and sixty six (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "STANMORE SHIPPING INC.". SECOND: The objects and purposes which the corporation shall mainly undertake, develop and carry on within or outside the Republic of Panama are the following: (a) to acquire, possess, administrate, encumber, lease, alienate and dispose of in any form, all types of goods, such as chattel, real estate, livestock or of any other nature, including rights, obligations and quotas of participation, whether as owner or for the account of third parties; (b) to issue, administer, buy, sell and negotiate all types of shares, quotas, documents, bonds, titles or securities, whether on its own account or on the account of third parties; (c) to buy, acquire, sell, or grant patents, marks, copyrights, licenses and formulas, and to exploit them commercially; (d) to buy, sell, charter and administrate all types of ships; as well as to operate maritime agencies and carry on maritime operations in general; (e) to invest in companies, businesses or projects, and the financing, negotiation, exploitation or participation in mining, industrial, commercial, real estate, financial, maritime or any another class of companies; (f) to open, operate and administer accounts in banks or other lending or financial institutions; and to give and take loans; to remit, accept, endorse, discount and grant notes, drafts and other negotiable documents, and to offer all kinds of guarantees in favor of third parties upon all or any of the assets of the company; and (g) to engage in any another lawful business permitted by the Laws of the Republic of Panama or which these may allow in the future. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world, and may likewise re-domicile or change its domicile of incorporation in order to continue existing under the laws of another country or jurisdiction, subject to the authorization of the Board of Directors or the Assembly of Shareholders of the corporation. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the by-laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. -3- SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the by-laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, the Legal Representative shall be the Vice-president. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the by-laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, -4- in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: (A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: MARIO E. CORREA, of Via General Nicanor A. de Obarrio - - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). (C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, CLARISSA PLATA DE AGUIRRE and ELSA MARIA SOUSA QUINTERO, all with domicile at Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, City of Panama, Republic of Panama. (D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ, President; CLARISSA PLATA DE AGUIRRE, Vice-president and Treasurer; ELSA MARIA SOUSA QUINTERO, Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me -5- known end qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number ONE THOUSAND TWO HUNDRED SEVENTH NINE. (1279) (sgd.) MARIO E. CORREA--JULIO E. LINARES F.--Aura I. S. de Castillero--Ma. I. Gonzalez--,BLANCA V. DE JACOME, Fifth Notary Public. CONFORMS with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the fourth day of the month of February, in the two thousand (2000). (sgd.), BLANCA VANEGAS DE JACOME, Fifth Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 10:25 a.m., on the 10th day of February 2000, as per Volume 2000 and Entry 16107 of the Journal, by Katherine Knight.- Duties Paid B/.60.00; Liquidation No.2008025756.- (sgd.), Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.), Chief of the Section. Inscribed the previous document in the Public Registry of Panama Department _________ (Mercantile) Roll 374637, Document 75646, Duties paid B/.60.00, on Panama, 11th February 2000. (sgd.), Chief of the Section. I, Bertilda R. de Torres, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, September 4,2000. /s/ Bertilda R. de Torres -------------------------- [SEAL] BY-LAWS OF STANMORE SHIPPING INC. CHAPTER ONE OFFICES Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same, not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder, or by an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum, the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders, just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vice-President, shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vice-President of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favor of third persons or Agents, in connection with the business of the corporation. Article Three. Vice-President. The Vice-President shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six.- Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven.- Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three.- Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four.- Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven.- Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of STANMORE SHIPPING INC., a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the Republic of Panama, on February 4, 2000. /s/ Elsa Ma. Sousa ---------------------------------- Elsa Ma. Sousa Secretary EX-3.24 25 y04808exv3w24.txt ARTICLES OF INC. & BY-LAWS OF TIPTON MARINE INC. EXHIBIT 3.24 PUBLIC DOCUMENT NUMBER SEVEN THOUSAND FIVE HUNDRED AND THREE (7503) WHEREBY the Corporation known as "TIPTON MARINE INC.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, June 30, 1995. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the-thirty (30)-day of the month of June, in the year one thousand nine hundred and ninetyfive (1995), before me, Licentiate RAQUEL TORRIJOS DE GOMEZ, Third Notary Public of the Panama Circuit, holder of personal identity card number eight-two hundred and forty three-seven hundred and forty seven (8-243-747), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), varon, mayor de edad, casado, abogado, panamefio y vecino de esta ciudad, portador de la cedula de identidad personal numero ocho-ciento veintinueve-novecientos doce (8-129-912); and JULIO ERNESTO LINARES FRANCO (Julio E. Linares F.), varon, mayor de edad, casado, abogado, panamefio y vecino de esta ciudad, portador de la cedula de identidad personal numero ocho-doscientos treinta-mil seiscientos sesenta y seis (8-230-1666); and they requested that I issue this Public Instrument to make of record that they are incorporting a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "TIPTON MARINE INC." SECOND: The objects and purposes of the corporation are: a) The purchase, the sale, the chartering, the administration in general of vessels, or ships, and the operation of navigation lines, either in Panama or in any part of the world; b) The operation of maritime agencies and the execution or maritime operations in general, either in the territory of the Republic of Panama or any foreign country; c) The purchase, sale, exchange, lease and negotiation in real or personal property and merchandise of any kind and any other commercial or financial operation relative to and depending to the corporate purpose, as well as participation in other corporations, either Panamanian or foreign; d) The purchase of and dealing with stock or shares of capital stock in general any other commercial, maritime or financial, movable or unmovable operations, permitted by the Laws of the Republic of Panama or which may be permitted in the future; all of which purposes may be carried out by the Corporation within or without of the Republic of Panama. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR NOMINATIVE SHARES, with a nominal value of ONE HUNDRED DOLLARS (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred [ILLEGIBLE] The corporation may develop its activities and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one percent (51%) of the outstanding stock of the Corporation shall essentially constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any Shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a notary public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of Incorporation, in the manner permitted by the laws of the Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the Officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and JULIO E. LINARES F., of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of [ILLEGIBLE] (B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post Office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). The Resident Agent of the corporation is duly empowered to act as resident agent, represent, register, apply for flag registration, obtain Patents of Navigation and Radio Licenses, as well as to file applications, objections, protests, claims and affidavits, appeals and challenges, to pay taxes, to obtain evidences, to serve notices, rename vessels, accept their transfer, to cancel their registry and to make any other necessary acts before the authorities of the Republic of Panama in connection with the vessels owned by the corporation registered or to be registered in the Republic of Panama, including without limitation the acceptance on its behalf of the sales of vessels made thereto, for which purpose a power of attorney is hereby granted; C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), of Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa) , Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number SEVEN THOUSAND FIVE HUNDRED AND THREE (7503) (sgd.) ELOY ALFARO JULIO E. LINARES F Aura I. S. de Castillero Ma. I. Gonzalez RAQUEL TORRIJOS DE GOMEZ, Third Notary Public. Conforms with its original this copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the thirty (30) day of the month of June, in the year one thousand nine hundred and ninety five (1995). (sgd.) Raquel Torrijos de Gomez, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 03:11:55:7 p.m., on the 4 day of July of 1995, as per Volume 239 and Entry 6113 of the Journal, by Jorge Sierra.- Duties Paid B/.60.00; Liquidation No. 895049436.- (sgd.) Jorge Luis [ILLEGIBLE] There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) ROSA ELVIRA H. DE DUTARI, Chief of the Section. This document has been recorded at Microjacket 304181, Roll 46593, Frame 0011, of the Microfilm (Mercantile) Section of the Public Registry Office, on July 10, 1995.- (sgd.) Arelis Odila E. de Poveda, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, July 27, 1995. /s/ Bertilda R. De Torres ------------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION NO. 112 DE 1993 BY-LAWS OF TIPTON MARINE S. A. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holdine meetings. The meetings of the General Assembly of Stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. Article Four.- Notice of meetings. Notice of the date and place of the annual meeting or any special meeting of the stockholders shall be given by the Secretary of the corporation to each stockholder entitled to vote thereat by mailing a letter to each stockholder to the address left by him at the office of the Secretary of the corporation, or to his last known address, or by personal delivery of the same. not less than ten days before such meetings. The notices for special meetings shall also indicate the purposes of the meeting. All or any of the Stockholders may waive notice of a meeting before or after the holding of such meeting and the presence of a stockholder at any meeting, in person or by proxy shall be considered as a waiver on his part to the notice of said meeting. The meetings of the stockholders may be held at any time, for any purpose, without notice, when all the Stockholders are present in person or represented by proxy, or when all the stockholders shall waive notice and consent to the holding of such meeting. If the corporation has issued shares to bearer the notice for the meetings of the stockholders, unless waived by writing before or after the meeting, shall be published in a newspaper designated by the Board of Directors. Article Five. Voting at the meetings of the Assembly of Stockholders. In every Assembly of Stockholders, each of the owners of stock of the company, with voting rights, shall have the right to one vote for each share appearing registered in his name at the time of closing of the books, prior to said meeting, and if such books would not have been closed, then for each share registered in his name on the date fixed by the Board of Directors, as prescribed in Article 6 of Chapter V of these by-laws. In the event of shares issued to bearer, the holder of a certificate or certificates, representing such shares entitled to vote, shall be entitled to one vote at any meeting of the Stockholders, for each share entitled to vote, upon presentation at said meeting of said certificate or certificates or upon presentation of any other evidence of ownership as may be prescribed by the Board of Directors. Article Six.- Proxies. Each of the stockholders shall be entitled to vote in person or by a special proxy, appointed by an instrument in writing, or by letter, executed with the signature of the stockholder. or bv an attorney duly authorized. Article Seven.- Voting Procedure. All election shall be made by ballots, and all matters shall be decided by a majority of votes, that is, more than one half. Article Eight.- Stock Register. The Officer or Agent in charge of the Stock Register shall keep a complete alphabetical list of the Stockholders entitled to vote, containing the residence and the number of shares held by each, which list and Stock Register shall be kept on file at any office of the corporation. The Stock Register shall be the only evidence as to who are the Stockholders entitled to vote at any meeting of the Stockholders. In the event of shares issued to bearer the Stock Register shall specify the number of shares so issued, the date of issue and that such shares are fully paid and non-assessable. Article Nine.- Quorum. The holders of a majority of the total number of shares issued and outstanding entitled to vote at any meeting, present personally or by proxy, shall constitute a quorum for the transaction of business, unless the Law shall require the representation of a larger number. In the absence of a quorum. the Stockholders present or represented on the date and place at which the meeting should have been held may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted by a quorum of Stockholders. just as it might have been transacted at the meeting originally called. Article Ten. President and Secretary. The President, or in his absence, the Vicepresident. shall declare open all meetings of the General Assembly of Stockholders and shall preside such meetings; but in the absence of the President and the Vicepresident of the corporation, the Stockholders may elect a Chairman to preside the meeting. The Secretary of the corporation shall act as Secretary at all meetings of the Assembly of Stockholders, but in the absence of the Secretary of the corporation, the Stockholders may appoint any person to act as Secretary of the meeting. CHAPTER THREE Board Of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President, He shall also have the powers and duties that may he conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares: but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st, of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revolted by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of "TIPTON MARINE S. A.", a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama, Republic of Panama, on the 11 day of July, 1995. Panama, July 11, 1995 /s/ Elsa Ma. Sousa ---------------------------------- Elsa Ma. Sousa EX-3.25 26 y04808exv3w25.txt ARTICLES OF INC. & BY-LAWS OF ULTRAPETROL INT'L. S.A. EXHIBIT 3.25 (1,408) WHEREBY the Corporation known as "ULTRAPETROL INTERNATIONAL S. A.", with domicile in the City of Panama, Republic of Panama, is incorporated. Panama, March 3, 1997. In the City of Panama, capital of the Republic and seat of the notarial circuit of the same name, on the - third (3rd) - day of the month of March, in the year one thousand nine hundred and ninety seven (1997), before me, RAQUEL TORRIJOS DE GOMEZ, Third Notary Public of the Panama Circuit, holder of personal identity card number eight-two hundred and forty three-seven hundred and forty seven (8-243-747), personally appeared the following persons, to me known: ELOY ALFARO DE ALBA (Eloy Alfaro), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-one hundred and twenty nine-nine hundred and twelve (8-129-912); and MARIO EDUARDO CORREA ESQUIVEL (Mario E. Correa), male, of legal age, married, lawyer, Panamanian and resident of this city, holder of personal identification card number eight-two hundred and thirty one-seven hundred and thirty five (8-231-735); and they requested that I issue this Public Instrument to make of record that they are incorporating a corporation, according to Panamanian law, subject to the following Articles of Incorporation: FIRST: The name of the Company is: "ULTRAPETROL INTERNATIONAL S. A.". SECOND: The objects and purposes of the corporation are: a) The purchase and sale in general of all kinds of real estates, movables, livestocks, or of any nature; b) The management in general of personal property or immovables, whether as owner, or for and the financing and in general operations in personal or real property, as well as the participation in industrial, commercial, real estate or financial corporations; d) The purchase or acquisition of patents, trademarks, copyrights, licenses and formulas and the commercial exploitation of the same; e) The undertaking of loans, whether with Banks, whether with private or public institutions, to increase or to apply to the businesses of the corporation, being able to guarantee the liabilities that in this sense may be incurred through the issuance of bonds, notes, promissory notes, pledge or mortgages upon all or any of the properties of the corporation; f) The purchase and sale in general of shares, bonds or other valuable securities of other corporations, whether on its own account, whether for the account of third parties, including the management of said securities, as well as for the corporation as in favour and for the account of third parties; g) The financing in general of other corporations or the participation in the same, through the payment of contributions in the integration of the capital stock of the same; h) The exploitation of mines, of any nature, as well as the exploitation of any industry; i) The exploitation, whether in whole, whether in part, of any other businesses, whether of maritime nature, whether in relation to fluvial, maritime, air or land transportation; j) Any other lawful business permitted by the laws of the Republic of Panama or which these may allow in the future; all of which purposes the Corporation may carry out within or outside of the Republic of Panama. THIRD: The authorized capital stock of the corporation is of TEN THOUSAND DOLLARS (US$10,000.00), legal currency of the United States of America, divided into ONE HUNDRED (100) BEARER OR [ILLEGIBLE] (US$100.00) each. The holder of a certificate issued to bearer may have said certificate exchanged for another certificate in his name for equal number of shares; and the holder of nominative shares may have his certificate exchanged for another to bearer for equal number of shares. The capital stock may be increased; more and new shares may be issued and the nominal value, class and rights pertaining to said shares may be changed. Each share shall be entitled to one vote. FOURTH: The Board of Directors of the Corporation shall authorize the issue of shares of the corporation and prescribe their distribution. FIFTH: The domicile of the corporation shall be the City of Panama, Republic of Panama. The Board of Directors may determine the domicile of the corporation to be transferred to any other place within or without the Republic of Panama. The corporation may develop its activities and establish branches and offices in any other part of the world. SIXTH: The number of the first directors shall be three (3). The Board of Directors may, however, increase the number of Directors to seven (7) and may also designate them. The Board of Directors shall have the duties and exercise the powers specifically set forth in the By-Laws of the Corporation. It shall not be necessary to be a shareholder in order to be a Director. SEVENTH: The duration of the corporation shall be perpetual. EIGHTH: The Officers of the corporation shall be elected in the manner and according to what is prescribed in the By-Laws of the Corporation. The same person may perform two (2) or more offices. NINTH: The President of the corporation is the Legal Representative. In his absence or inability, shall be the Vicepresident. TENTH: The holders of fifty one [ILLEGIBLE] shall constitute quorum for the transaction of business on the part of the General Assembly of Shareholders. In order that the resolution of the General Assembly of Shareholders may be valid the affirmative vote of the majority of the holders of the outstanding stock, present or represented by proxy, is required. The meetings of the General Assembly of Shareholders shall be held in the Republic of Panama or at any other place outside the Republic of Panama which the Board of Directors or the General Assembly by themselves may determine. ELEVENTH: Any shareholder may grant a Proxy by means of a public or private document to be represented in any meeting or General Assembly of Shareholders to be held. In case of Bearer Shares this Proxy shall be granted before a Notary Public and on it the Notary shall record the number of share certificates presented by the grantor shareholder to the Notary, specifying the number of shares represented by each certificate. TWELFTH: The Board of Directors may make, change, amend or revoke the By-Laws of the Corporation, and prescribe and change from time to time the amounts of capital stock which it shall keep in reserve for any legitimate purpose. THIRTEENTH: The Board of Directors may hold its meetings, maintain one or more offices and keep the books of the Corporation at the places which the Board itself may at any time designate, within or without the Republic of Panama. During the meetings of the Board of Directors, any Director may be represented and vote by Proxy or Proxies (who do not need to be Directors) appointed in writing (through fax, telex or cable), with or without power of substitution. FOURTEENTH: The Corporation reserves the right to amend, change or revoke any of the provisions of these Articles of [ILLEGIBLE] Republic of Panama, it being understood that all rights conferred by these Articles of Incorporation upon the officers, the Board of Directors and the Shareholders of the corporation are subject to such reservation. FINAL PROVISIONS: A) The name and the domicile of each of the subscribers to these Articles of Incorporation and the number of shares to which each of them agrees to subscribe, are as follows: ELOY ALFARO, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE; and MARIO E. CORREA, of Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama, ONE (1) SHARE. B) The Resident Agent shall be the Law Firm "TAPIA, LINARES Y ALFARO" whose address is as follows: Via General Nicanor A. de Obarrio - Fiftieth (50th) Street, Bancomer Plaza, Fourth (4th) Floor, Post office Box Seven thousand four hundred and twelve (7412), Panama Five (5), Republic of Panama; Telephone: five zero seven (507) two six three - six zero six six (263-6066); Fax: five zero seven (507) two six three - five three zero five (263-5305). C) The Directors of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), with domicile at Via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), with domicile at via General Nicanor A. de Obarrio (Fiftieth (50th) Street), Bancomer Plaza, Fourth (4th) Floor, City of Panama, Republic of Panama; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), with domicile at Via General Nicanor A. de [ILLEGIBLE] (4th) Floor, City of Panama, Republic of Panama. D) The Officers of the Corporation shall be: JUAN ARTURO MONTES GOMEZ (Juan A. Montes G.), President; CLARISSA PLATA DE AGUIRRE (Clarissa P. de Aguirre), Vicepresident and Treasurer; and ELSA MARIA SOUSA QUINTERO (Elsa Ma. Sousa), Secretary. I made known to the parties appearing before me that a copy of this public instrument must be registered; and it having been read to them in the presence of the attesting witnesses, Mrs. Aura Isabel Santiago de Castillero, with personal identity card number eight-one hundred eighty three-nine hundred seventy nine (8-183-979); and Miss Maria Isabel Gonzalez Diaz, with personal identity card number eight-one hundred twenty eight-one hundred forty nine (8-128-149), of legal age, and residents of this city, to me known and qualified to discharge the duty, they found it to be correct, and they all sign it as a matter of record, before me, the Notary Public, whereunto I attest. THIS Document bears number ONE THOUSAND FOUR HUNDRED AND EIGHT (1,408) (sgd.) ELOY ALFARO. MARIO E. CORREA.- Ma. I. Gonzalez.- Aura I. S. de Castillero.- RAQUEL T. DE GOMEZ, Third Notary Public. This copy which I issue, seal and sign in the City of Panama, Republic of Panama, on the third (3rd) day of the month of March, in the year one thousand nine hundred and ninety seven (1997), agrees with its original. (sgd.) RAQUEL T. DE GOMEZ, Third Notary Public. PUBLIC REGISTRY OFFICE - PANAMA - This document was filed at 08.58.27.1 a.m., on the 5th day of March of 1997, as per Volume 254 and Entry 13221 of the Journal, by Balbino Ponce.- [ILLEGIBLE] Alcides R. Tufion A., Chief of the Section. There is a stamped seal of the Public Registry Office of Panama. BE IT REGISTERED (Sgd.) Honorina R. de Portillo, Chief of the Section. This document has been recorded at Microjacket 327153, Roll 53242, Frame 0019, of the Microfilm (Mercantile) Section of the Public Registry office, on March 5, 1997.- (sgd.) Arelis Odila E. de Poveda, Chief of the Section. I, BERTILDA R. DE TORRES, do hereby certify that the foregoing is a true and exact translation of its original in Spanish. Panama, March 10, 1997. /s/ Bertilda R. De Torres ------------------------- BERTILDA R. DE TORRES INTERPRETE PUBLICO CED. 9-81-1421 RESOLUCION No. 112 DE 1993 BY-LAWS OF ULTRAPETROL INTERNATIONAL S. A. CHAPTER ONE OFFICE Article One.- Main Offices. The main offices of this corporation shall be at Bancomer Plaza, 4th Floor, Via General Nicanor A. de Obarrio, City of Panama, Republic of Panama. Article Two.- Other Offices. The corporation may have other offices at such places as the Board of Directors may, from time to time, designate or where the business of the corporation may require. CHAPTER TWO General Assembly of Stockholders Article One.- Place of holding meetings. The meetings of the General Assembly of stockholders of the corporation shall be held at the offices of the corporation in the Republic of Panama, unless otherwise specified in the notice or in the waiver of notice of the meeting, being understood, however, that this provision shall be subject to what is provided in Article Four of this Chapter, and being further understood that the Directors may, by resolution of the Board, change the place for the holding of meetings of the Assembly of Stockholders for any place within or without the Republic of Panama. Article Two.- Annual Meeting. Subject to what is provided in Article One and Four of this Chapter, and unless otherwise specified in the notice or in the waiver of notice of the meeting, the annual meeting of the Assembly of Stockholders of the corporation shall be held in the offices of the Company, in the Republic of Panama or as such other place within or without the Republic of Panama as may be determined by the Board of Directors, at 10:00 o'clock in the forenoon on the 12th day of January of each year, if not a legal holiday, and if it were a legal holiday then on the next day not being a legal holiday, for the purpose of electing Directors and for the transaction of such other business as may be brought before the meeting. If for any reason said meeting shall not be held on the date designated, the same may be held at any time thereafter, through notice or waiver of notice of the meeting, as it may be further established, and the matters to be discussed thereat may be transacted at any special meeting called for that purpose. Article Three.- Special Meetings. Special meetings of the Assembly of Stockholders may be called by orders of the President or the Board of Directors at any time deemed necessary, and it shall be binding to order the notice for such meetings when so requested in writing by the Stockholders owners of not less than one twentieth of the issued and outstanding shares entitled to vote thereat. The matters to be transacted at a special meeting shall be limited to the objects specified in the notice of the meeting. CHAPTER THREE Board of Directors Article One.- Election, Qualification and Vacancies. The properties and businesses of the corporation shall be managed and controlled by a Board of Directors, consisting of three (3) members, but such number may be changed at any time. In the event of an increase in the number of Directors until the meetings of the Assembly of Stockholders are held, the additional Directors may be elected by the Board of Directors already existing, to exercise their duties until the next meeting of the Assembly of Stockholders or until the election and qualification of their successors. In the event of a vacancy in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining Directors, by resolution approved by the majority thereof, shall have power to fill such vacancy for any unexpired term. A Director shall remain validly in his office until his successor shall be elected and shall qualify. Article Two. - Place of holding the meetings. Meetings of the Board of Directors may be held at the places designated by the Board of Directors, from time to time, or at the places agreed in writing by all the Directors. Article Three. - Regular Meetings. Regular meetings of the Board of Directors may be held with or without notice, as the Board of Directors may, from time to time, determine by resolution. Article Four.- Special Meetings. Special meetings of the Board of Directors may be held when called by the President with two days notice in advance given to each Director, whether by personal delivery, or by mail, telex, cable, fax or other method of communication. Special meetings of the Board of Directors may be held for any purpose, without notice, when all the Directors are present, or waive notice and consent to the holding of such meetings. Article Five. - Quorum. The majority of the Directors shall constitute a quorum and may decide validly on the matters submitted to the consideration of the Board of Directors. Article Six. - Directors may be represented by proxy, by public or private document, for such purpose, if it is expressly allowed by the Articles of Incorporation. Article Seven. - Compensation. The Directors, as such, shall not receive any fixed salary for their services, but by resolution of the Board of Directors the payment of a certain sum may be agreed upon, as well as the expenses for attendance, if any, for the attendance to each regular or special meeting of the Board of Directors; being it understood, however, that this provision shall not be construed as to prevent any Director from rendering his services to the corporation in any other capacity and from receiving the respective remuneration. The members of special or permanent committees may receive likewise compensation for the attendance to the meetings of the committee of which they are members. Article Eight.- Voting with respect of other shares. The Directors shall have the power to designate the person who shall be entitled to vote on behalf of the corporation with respect to the Stock, bonds or securities that the corporation has in other companies, as well as the person entitled to assign and transfer such stock, bonds or securities. CHAPTER FOUR Officers Article One.- Election, Term and Vacancies. The officers of the corporation shall be a President, a Secretary and a Treasurer, who shall be elected by the Board of Directors. The Board of Directors may also appoint such other Officers and Agents, including one or more Vice-Presidents, as it may deem necessary, who shall have the authorization and perform the duties conferred to them, from time to time, by the Board of Directors. The Officers elected by the Board of Directors shall exercise their offices for one year, or until their successors are elected and qualified, being it understood that any officer may be removed at any time by the affirmative vote of a majority of all the Directors. The vacancies occurring among the Officers of the corporation shall be filled by the Board of Directors, who shall fix their salaries. An Officer does not need to be a Director and any person may exercise two or more offices. Article Two. President. The President is the Legal Representative and Executive Chief of the corporation. He shall preside all meetings of the Assembly of Stockholders and of the Board of Directors. He shall have the general and active management of the businesses of the corporation, subject to the Board of Directors, and shall see that all the orders and resolutions of the Board of Directors be performed. Jointly with any other Officers designated by the Board of Directors he shall execute or shall procure the execution of contracts and shall sign or procure the signature of the other obligations authorized by the Board of Directors. Jointly with any other Officer designated by the Board of Directors and previous the authorization thereof, he may delegate or grant powers in favour of third persons or Agents, in connection with the business of the corporation. Article Three. Vicepresident. The Vicepresident shall have all the powers and shall perform all the duties of the President in the event of his absence or disability. He shall also have the powers and duties that may be delegated to him, from time to time, by the President. He shall also have the powers and duties that may be conferred to him by the Board of Directors. Article Four.- Secretary. The Secretary shall attend to all meetings of the Assembly of Stockholders, of the Board of Directors and of all the committees, and shall enter the votes and proceedings of such meetings in a book that he shall keep for such purpose. He shall keep safe custody of the Corporate Seal of the company, whenever adopted by the Board of Directors, which he shall affix on any instrument requiring such seal. He shall give and send the notices of the meetings, and shall be in charge of the books and documents corresponding to his office, or those entrusted to his care by the Board of Directors or by the committees. He shall also perform the other duties corresponding to his office or those conferred to him by the Board of Directors. Article Five.- Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation and shall keep complete and exact accounts of the entries and disbursements in the books belonging to the corporation and shall deposit all the monies and other valuable effects in the name and to the credit of the corporation with the depositories that the Board of Directors may appoint. He shall disburse the funds of the corporation in accordance with the orders of the Board of Directors, and shall keep adequate vouchers of such disbursements and shall render to the President or the Board of Directors, when required, an account of all his operations as Treasurer as well as a general balance sheet of the corporation. Article Six. - Oaths and bonds. The Board of Directors may by resolution require that any officers, agents or employees of the corporation take oaths or bonds for the faithful performance of their respective duties. Article Seven. - Signatures. All checks, drafts or orders for the payment of money, and all acceptance, bills of exchange and notes shall be signed by the Officer or Officers of the corporation and the Agents that the Board of Directors may appoint by resolution. Article Eight.- Vacancies. The vacancies occurring among the Officers may be filled for the unexpired portion of the term by the same body authorized to make its appointment. Article Nine.- Delegation of Duties. In the event of death, resignation, retirement, disability, incapacity, illness, absence, removal or negative from any officer or agent of the corporation, or for any other reasons that the Board of Directors may deem sufficient, the Board of Directors may delegate the powers and duties of such officer, or agent, upon any other officer, or agent, or in any other director, while the respective measurers are being provided. CHAPTER FIVE Shares of the Capital Stock Article One.- Stock Certificates. All Stock Certificates of the capital stock of the corporation shall be in the form, not incompatible with the laws nor with the Articles of Incorporation, as the Board of Directors may approve; they shall contain a reference to the inscription of the corporation in the Mercantile Registry; and shall be signed by Officers designated by the Board of Directors from time to time. All Stock Certificates shall bear consecutive numbers, the name of the person owner of the shares represented thereby, together with the number of such shares and the date of issue and shall be entered in the books of the company. Article Two.- Bearer Shares. Shares may be issued to bearer only if fully paid and non-assessable. Article Three. - Stockholders of Record. The corporation shall have the right to consider the holder of record of any share or shares of the capital stock of the corporation as the holder in fact thereof, and shall not be bound to recognize any claim or interest arising from any other person in respect to the shares of one class or another, even though it may have express notice thereof, except in the cases expressly provided in the Panama Laws. Article Four. - Register of Bearer Shares. In the event of shares issued to bearer the stock register shall indicate the number of shares issued, the date of issue and that such shares have been fully paid and are non-assessable. Article Five.- Cancelled and Lost Certificates. All stock certificates waived shall be cancelled, and the corresponding certificate shall not be issued unless waiver and cancellation of a similar certificates for a like number of shares is made. Any person who alleges the loss or destruction of a stock certificate shall make a statement or affirmation of such fact, and shall announce it in accordance with the requirements of the Board of Directors, and further, if the Board of Directors shall so require, shall serve a bond for the amount stipulated by the Board, whereupon a new certificate of the same tenor and for a like number of shares shall be issued in lieu of the certificate alleged to have been lost or destroyed. Article Six.- Transfers of Shares. Transfers of shares shall be made in the books of the corporation by the holder thereof or his attorney, by waiver and cancellation of the certificate or certificates for such shares; but the Board of Directors may appoint any bank or trust company to act as agent or registrar for the transfers of such certificates. The books of transfers of the corporation may be closed during the period that the Board of Directors determine, provided said period does not exceed forty days prior to the date fixed for the annual or a special meeting of the Assembly of Stockholders, and said period may also be closed by the Board of Directors for the time that said Board may deem necessary for the payment of dividends and meanwhile the shares shall not be transferable. The Directors may fix also a date not less than forty days before the holding of any meeting, as the date in which the stockholders of the class who are not holders of the shares issued to bearer, entitled to notice of and to vote at such meeting are determined, in which case only the stockholders of record in such date shall be entitled to notice of and to vote at such meeting. Shares issued to bearer shall be transferred by the delivery of the certificate or certificates representing the same. Article Seven. - Stockholders' Addresses. Every Stockholder of record shall give to the Secretary an address to which all or any notices shall be sent, but in the absence thereof, such notices may be sent to the last address of the stockholders or to the main office of the corporation, except in the case provided in the Second paragraph of Article 4, Chapter 2, of these By-Laws. Article Eight.- Regulations. The Board of Directors shall have the power and authorization to dictate the rules and regulations it may deem convenient to regulate the issue, transfer and registry of the stock certificates for the capital stock of the corporation. CHAPTER SIX Dividends Article One.- Dividends and Reserves. Before the payment of any dividend or the making of any distribution of profits, the Board of Directors may deduct from the surplus or the net profits of the corporation, such sum or sums that in its discretion may be proper as a fund of reserve for depreciation, renewal, indemnity and maintenance or for such other purposes that the Directors may deem conducive or convenient for the interests of the corporation. Dividends upon the issued and outstanding shares of the corporation may be declared at any regular or special meeting of the Board of Directors. Article Two.- Dividends in shares. When the Board of Directors shall so determine, dividends may be paid by the issue of shares of the corporation, provided that the capital required for such purpose is authorized and available, and provided that if such shares shall not have been previously issued, a sum be transferred from the surplus to the account of capital of the corporation at least equal to the one for which such shares could lawfully be sold. CHAPTER SEVEN Fiscal Year The fiscal year of the corporation shall be for a period of twelve months and shall end on the 31st. of December of each year. CHAPTER EIGHT Seal The company may adopt a corporate seal, which shall have the form and text approved by the Board of Directors, from time to time. CHAPTER NINE Amendments These By-Laws may be altered, amended or revoked by the Board of Directors, at any regular or special meeting, with or without notice of the proposed alteration, amendment or revocation. ***** The undersigned, Secretary of "ULTRAPETROL INTERNATIONAL S. A.", a company duly organized and existing in accordance with the Laws of the Republic of Panama, does hereby C E R T I F Y : That the foregoing is a true and exact copy of the By-Laws of said corporation, which were duly adopted at the meeting of the Board of Directors, held in the City of Panama, Republic of Panama, on the sixth (6th) day of March, 1997. Panama, March 6, 1997. /s/ Elsa Maria Sousa Quintero -------------------------------- Elsa Maria Sousa Quintero (Elsa Ma. Sousa) EX-3.26 27 y04808exv3w26.txt ARTICLES OF INC. & BY-LAWS OF ULTRAPETROL S.A. EXHIBIT 3.26 TRADUCCION PUBLICA On the left there is a seal that reads Notary Public Association. Capital Federal. Argentine Republic. Original Record of Deeds. Law 12.990. Sign and seal. It appears a number 0924. nine hundred twenty four up to 0928 in the last page of the document. There are two illegible signatures and two illegible seals. A seal reads Ricardo Mihura de Estrada. Register 4669. Notary Public. Another seal reads General Inspection of Justice. It appears a number 57781, another number 2. A seal that reads Notary Public Association of Capital Federal. It appears A 039631374 up to A 039631378 in the last page. INCORPORATION CHARTER. ULTRAPETROL S.A. PUBLIC DEED NUMBER TWO HUNDRED AND SIXTY In the city of Buenos Aires, Capital of the Argentine Republic, on the sixteenth (16) day of the month of July in the year one thousand nine hundred and ninety two (1992), before me, the Authorizing Notary Public, personally appeared the following persons to me known: Mr. Juan Ernesto CAMBIASO, argentine, married, holder of the Identity Card of the Federal Police number 4.734.417, lawyer, born on the twenty-fifth day of the month of February 1944, domiciled at Carlos Pellegrini 887, 3rd floor, Buenos Aires; and Mr. Luis Maria Gonzalez Lanusa, argentine, married, holder of the Identity Card of the Federal Police number 6.109.288, lawyer, born on the eighth day of the month of November 1954, domiciled at Carlos Pellegrini 887, 3rd floor, Buenos Aires. They are both authorized persons and to me known, I testify. The appearers say that they incorporate a corporation pursuant to the following Articles of Incorporation: ARTICLE 1: The name of the corporation is "ULTRAPETROL S.A." and its legal domicile is in the city of Buenos Aires. ARTICLE 2: Its duration is of ninety nine years from the date of its incorporation. ARTICLE 3: The purposes of the Corporation shall be to engage in the following activities, in this country or abroad, on its own account, or on the account of third parties, independently or associated to third parties, namely: a) To carry out the management and exploitation of vessels of its own and of third parties, as well as to act as representatives of other owners and shipowners or to engage in other related activities, inherent or complementary to said purposes. b) Handle the maritime, fluvial and lacustrine transportation, regular and/or not regular, domestic or international, of persons or of cargoes; correspondence and maritime works and services in general. c) To render training services to personnel relative to sea navigation. d) For the above mentioned purposes and, in general, for every activity developed in accordance with its Articles of Incorporation, the corporation may be constituted in owner, shipowner, to hire and lease vessels, in time charter, bareboat charter, or under any other charter to use vessels; to engage in the activities of transportation, transshipment and litherage operations and cargo complement; to develop loading, unloading and stowing operations; to render towage services; to act as shipbrokers and/or freighters, to act as maritime agents and to represent vessels of its own or of third parties; to build and repair vessels and many apparatus, as well as to exploit public and private franchises of any kind, to construct ports and also to operate them and represent third parties in any of the manner used in the maritime business. e) To mediate in every matter relative to the establishment, exploitation, management and distribution of new lines arisen from the policies fixed by competent authorities. f) The purchase, sale, building, management and exploitation of real estates, urban or rural, including the operations contemplated within the laws and rules regulating the one-floor ownership. g) To execute all kinds of acts, representations, agencies, commissions, consignments, business activities and management of properties, stocks and enterprises in general. For these purposes the corporation is legally empowered to acquire rights, enter into obligations and to perform all the acts which are not prohibited by law or by these articles. ARTICLE 4: The Capital stock is $12,000, divided into 1200 shares with a nominal value of $10 each. The Capital Stock may be increased by decision of the Ordinary Meeting up to the quintuple of its amount according to Article 188 of Law N(degrees)19,550. ARTICLE 5: The shares shall be registered shares, may be endorsed or not, ordinary or preferred. The latter shares shall be entitled to a preferential payment of dividend which may be cumulative or not, pursuant to the conditions of issue. An additional profit may also be fixed to them. ARTICLE 6: The stock certificates and the provisional certificates issued shall contain the specifications and data required by Article 211 of Law 19,550. Certificates representing more than one (1) share may be issued. ARTICLE 7: In case of arrearages to integrate the capital stock, The Board of Directors is empowered to proceed in accordance with any of the proceedings allowed by Article 193 of Law 19,550. ARTICLE 8: By resolution adopted at a Special Meeting of Shareholders, the corporation may hereinafter issue debentures, negotiable instruments and any other evidence of indebtedness for its private or public investment, within or without the country, in the conditions of price, interests and amortization which may be deemed by the Meeting and subject to the standing legal provisions. The above mentioned titles may be issued in national or foreign currency with collateral, common or special guaranty. ARTICLE 9: The Corporation shall be managed by a Board of Directors composed of the number of members stipulated by the Meeting between a minimum of one (1) to a maximum of five (5) who shall hold their office during the term of one (1) year. The Meeting is to designate substitute members in equal or less number than the principal members and to hold their office during the same term in order to fill the vacancies created in each class. At their first meeting, the members of the Board of Directors must appoint one President and, if there is more than one, may designated one Vice-president; the latter replaces the first in case of absence or inability. The Board of Directors may act with the presence of the simple majority of their members, and resolutions may be adopted by the majority of present votes. ARTICLE 10: The Directors must give a guarantee in cash of $ 1,000 (one thousand pesos). ARTICLE 11: The Board of Directors have full power to manage and dispose of the Properties, including those which by law require special powers of attorney according to Article 1881 of the Civil Code and Article 9 of Decree Law N(degrees) 5965/63. Consequently, they may enter into all kinds of legal proceedings on behalf of the Corporation for the performance of the purpose thereof, to trade with the Banks of Nacion Argentina, Nacional de Desarrollo, Provincia de Buenos Aires, Ciudad de Buenos Aires, Hipotecario Nacional and other credit institutions public or private, within or without the country; to establish agencies, branches or other type of representations within or without the country; to grant to one or more persons special judicial powers of attorney, including for criminal complaint, or extrajudicial with the purpose and as abroad as it may be deemed convenient. The legal representative of the Corporation shall be the President of the Board of Directors or the Vice-president in case of absence or inability or two Directors acting together. ARTICLE 12: The Corporation leaves out the trusteeship according to Article 284 of Law 19,550. In case of increasing the capital, the Corporation will be included in clause 2(degrees) of Article 299 of the mentioned Law, the Meeting shall annually appoint a Regular Trustee or a Substitute Trustee, to hold their office during the term of one (1) year. ARTICLE 13: Any Meeting shall be summoned according to Article 237 of Law 19,550, without detriment to the stipulated there for the case of unanimous Meeting. ARTICLE 14: Each ordinary share issued is entitled to one (1) to five (5) voting rights, as determined while the initial capital is subscribed and opportunely when it is so increased by the Meeting. The preferential shares may be issued with or without voting right. ARTICLE 15: The quorum and majority attendance according to Articles 243 and 244 of Law 19,550 depending on the kind of Meeting, notice, and subjects to be treated, except regarding the quorum of the Special Meeting in second notice, which is considered to be hold no matter the number of present shares with voting right. ARTICLE 16: the fiscal year ends on the thirty first (31) day of December of each year. At that time the financial statement shall be prepared in accordance with standing accounting and technical principles commonly in use. The Meeting may amend the fiscal year ending by the recordal of pertinent resolution at Public Registry of Commerce Office informing this to the control authority. The net and taken profits shall be consigned as follows: a) Five (5) per cent, to reach up to twenty per cent (20%) of the capital subscribed for the funds of legal reservation; b) For remuneration of the Board of Directors and Trustees in such case; c) For dividends of the preferred stocks, with priority the unpaid cumulatives; d) The surplus, in whole or partially, to additional participation of the preferred stocks and to a dividend of the ordinary stocks, or to funds for contingency or preservation reserve or to a new account or to a consignment determined by the Meeting. The dividends are to be paid in proportion to the respective participations, within the year of its authorization. ARTICLE 17: The winding-up of the Corporation may be effected by the Board of Directors or by the liquidator or liquidators appointed by the Meeting, under the observation of the Trustee or Trustees in such case. Having paid the liabilities and, reimbursed the capital, the surplus shall be distributed among the shareholders, with the preferences mentioned in the preceding article. Subscription and Payment of the Capital Stock: The Capital Stock is subscribed and paid as follows: Juan Ernesto Cambiaso subscribes six hundred (600) non endorsed ordinary registered shares, with a nominal value of ten (10) dollars and of one vote each one, that's to say $ 6,000, and pays cash the 25%, that's to say $ 1,500; and Luis Maria Gonzalez Lanuza subscribes six hundred (600) non endorsed ordinary registered shares, with a nominal value of ten (10) dollars and of one vote each one, that's to say $ 6,000, and pays cash the 25%, that's to say $ 1,500. The surplus shall be paid within two (2) years. Appointment of the Board of Directors: President : Juan Ernesto Cambiaso; Substitute Director: Luis Maria Gonzalez Lanuza. The appraisers hereby accept the posts for which they were appointed. Authorized: It is conferred SPECIAL POWER to the Directors and/or to the doctors Alfredo Miguel O'FARREL Marcos BENEGAS LYNCH Maria Alejandra FERRARI JASO and /or Sebastian Martin IRIBARNE, individually, concomitantly or alternately, indistinctively, to accept or propose modifications, to sign rectifying or complementary deeds, to carry out and withdraw deposits of capital, to answer hearings, to take steps to be approved by the control and register authority, to sign and seal books and specially set the social domicile according to the General Resolution of the General Inspection of Justice number 6/80 Article 16, clause a. And the appraisers go on saying: According to the stipulated resolution, the social domicile will be at Carlos Pellegrini 887, third floor, Buenos Aires. For the present deed it is paid $120 (one hundred twenty) regarding Stamp Duty Tax, that will appear in the corresponding Affidavit. READ AND APPROVE this present deed by the appraisers, they sign in agreement, before me, I testify. There appears four illegible signatures and a seal that reads ALVARO GUTIERREZ ZALDIVAR, Notary Public, Register 2101. NOTARIAL ORDER. Law 12.990. Sign and seal. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is an illegible seal and a number B000941509. It is in agreement with the original copy that is in leaf 924 of the Notarial Registry N(degrees) 374 of this Capital Federal, authorized by the Notary Public Doctor Alvaro Gutierrez Zaldivar for the Corporation. As Notary Public of this Registry I issue the present Copy in (five) photocopy/ies and the present sheet that I seal and sign in Buenos Aires on the sixteenth day of the month of July 1992. There appears an illegible seal and signature. GENERAL INSPECTION OF JUSTICE. PAGE 1. Official Proceeding 00291. Description: Incorporation Tram. Prequalified. Tram number. Correlative number 1559393. Corporation ULTRAPETROL. Before. Inscribed in this Registry under number 7542 of book 111, section A of SA. Deed/s 290 and 260. And/or private instruments. Buenos Aires 8/14/92. There is an illegible signature and a seal that reads Guillermo C. Rojas. Chief of the Registry Department. General Inspection of Justice. Another seal reads certified copy/ies T 003108024. It appears an illegible signature and a seal that reads Ricardo Mihura de Estrada. Register 4669. Notary Public. NOTARIAL ORDER. Law 404. Sign and seal. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is a number T 003108024. Buenos Aires, September 7th, 2004. As Notary Public HOLDER OF THE NOTARIAL REGISTRY 137 CERTIFIES that the enclosed document, issued in 7 leaf/ves, that I sign and seal, is/are a true copy/ies of its original, I have before me, I testify.. There is an illegible signature and a seal that reads Ricardo Mihura de Estrada. Register 4669. Notary Public. I, MARIA CRISTINA TOUBES, a Public Translator in the Argentine Republic, duly admitted and sworn, do hereby certify the foregoing to be a true and accurate translation into English of the document in Spanish I have before me, and hereunto annexed. Done and signed in Buenos Aires, this sixteenth day of November, 2004. ES TRADUCCION FIEL al idioma ingles de una fotocopia del documento original redactado en espanol que he tenido a la vista y al cual me remito. EN FE DE LO CUAL estampo mi firma y sello en la Ciudad de Buenos Aires, a los 16 dias del mes de noviembre de 2004. TRADUCCION PUBLICA. On the left there is a seal that reads Notary Public Association. Capital Federal. Argentine Republic. Original Record of Deeds. Law 12.990. Sign and seal. It appears a number 1181. one thousand one hundred eighty one. There are three illegible signatures and one illegible seal. It appears A 039683561 up to A 039683562 in the last page. There are three stamped seals. one is a number 57780, another number 2. Another that reads Notary Public Association of Capital Federal. 3/25/98. Certification $ 010,00. Machine N(degrees) 2. The other seals read Ricardo Mihura Seeber Notary Public. Registry 1950, Alvaro Gutierrez Zaldivar. AMENDMENT OF THE ARTICLE THIRD OF THE ARTICLES OF INCORPORATION. ULTRAPETROL S.A. (in formation) PUBLIC DOCUMENT NUMBER TWO HUNDRED NINETY. In the city of Buenos Aires, Capital of the Argentine Republic, on the fourth (4) day of the month of August in the year one thousand nine hundred and ninety two (1992), before me, the Authorizing Notary Public, personally appeared the doctor Maria Alejandra FERRARI JASO, single, of legal age, resident of this city, to me known and qualified, I testify: the person who comes for and on behalf of and as being the representative of ULTRAPETROL S.A. (in formation), legal status justified by the public document of the incorporation of the corporation on the sixteenth day of the month of July of one thousand nine hundred and ninety two (1992), written in leaf 224 of this Registry 374, that is in pending inscription. And the appearer, in the invoke character, says: That there are some parts of the article third of the incorporation that may be remarkable, and that by the present she comes to modify the mentioned article, as follows: "ARTICLE 3: The purposes of the Corporation shall be to engage in the following activities, in this country or abroad, on its own account, or on the account of third parties, independently or associated to third parties, namely: a) To carry out the management and exploitation of vessels of its own and of third parties, as well as to act as representatives of other owners and shipowners or to engage in other related activities, inherent or complementary to said purposes. b) Handle the maritime, fluvial and lacustrine transportation, regular and/or not regular, domestic or international, of cargoes; correspondence and maritime works and services in general. c) To render training services to personnel relative to sea navigation. d) For the above mentioned purposes and, in general, for every activity developed in accordance with its Articles of Incorporation, the corporation may be constituted in owner, shipowner, to hire and lease vessels, in time charter, bareboat charter, or under any other charter to use vessels; to engage in the activities of transportation, transshipment and litherage operations and cargo complement; to develop loading, unloading and stowing operations; to render towage services; to act as shipbrokers and/or freighters, to act as maritime agents and to represent vessels of its own or of third parties; to build and repair vessels and many apparatus, as well as to exploit public and private franchises of any kind, to participate in bids, to construct ports and also to operate them and represent third parties in any of the manner used in the maritime business. e) The purchase, sale, building, management and exploitation of real estates, urban or rural, including the operations contemplated within the laws and rules regulating the one-floor ownership. f) To execute all kinds of acts, representations, agencies, commissions, consignments, business activities and management of properties, stocks and enterprises in general. On top of this page it appears a number 1182.25. For these purposes the corporation is legally empowered to acquire rights, enter into obligations and to perform all the acts which are not prohibited by law or by these articles". READ AND APPROVE this present deed by the appraiser, she signs in agreement, before me, I testify. There appears three illegible signatures and a seal that reads ALVARO GUTIERREZ ZALDIVAR, Notary Public, Register 2101. At the back of the page it appears a seal of Alvaro Gutierrez Zaldivar. NOTARIAL ORDER. Law 12.990. Sign and seal. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is an illegible seal and a number B000960339. It appears the seal of Ricardo Mihura Seeber. Notary Public. Registry 1950. It is in agreement with the original copy that is in leaf 1181 of the Notarial Registry N(degrees) 374 of this Capital Federal, authorized by the Notary Public Doctor Alvaro Gutierrez Zaldivar for the Corporation. As Notary Public of this Registry I issue the present Copy in 2 (two) photocopy/ies and the present sheet that I seal and sign in Buenos Aires on the fourth day of the month of August 1992. There appears an illegible signature and a seal Alvaro Gutierrez Zaldivar. Notary Public. Registry 2101. GENERAL INSPECTION OF JUSTICE. PAGE 1. Official Proceeding 00291. Description: Incorporation Tram. Prequalified. Tram number. Correlative number 1559393. Corporation ULTRAPETROL. Before. Inscribed in this Registry under number 7542 of book 111, section A of SA. Deed/s 290 and 260. And/or private instruments. Buenos Aires 8/14/92. There is an illegible signature and a seal that reads Guillermo C. Rojas. Chief of the Registry Department. General Inspection of Justice. Another seal reads certified copy/ies under notary seal N(degrees) T 003234566. It appears an illegible signature and a seal that reads Ricardo Mihura Seeber. Register 1950. Notary Public. NOTARIAL ORDER. Law 404. Sign and seal. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is a number T 003234566. Buenos Aires, October 29th 2004. As Notary Public HOLDER OF THE NOTARIAL REGISTRY 137 CERTIFIES that the enclosed document , issued in 4 leaf/ves, that I sign and seal, is/are a true copy/ies of its original, I have before me, I testify. There is an illegible signature and a seal that reads Ricardo Mihura Seeber. Register 1950. Notary Public. I, MARIA CRISTINA TOUBES, a Public Translator in the Argentine Republic, duly admitted and sworn, do hereby certify the foregoing to be a true and accurate translation into English of the document in Spanish I have before me, and hereunto annexed. Done and signed in Buenos Aires, this sixteenth day of November, 2004. ES TRADUCCION FIEL al idioma ingles de una fotocopia del documento original redactado en espanol que he tenido a la vista y al cual me remito. EN FE DE LO CUAL estampo mi firma y sello en la Ciudad de Buenos Aires, a los 16 dias del mes de noviembre de 2004. TRADUCCION PUBLICA. On top of each page except for the final two there is a seal that reads Notary Public Association. Capital Federal. Argentine Republic. Original Record of Deeds. Law 12.990. Sign and seal. On the left of the first page it appears a number 3446. three thousand four hundred forty six. There are two illegible signatures and one seal that reads RICARDO MIHURA SEEBER, REGISTER NUMBER 1950; and another seal that reads BERNARDO MIHURA DE ESTRADA, REGISTRY NUMBER 4669 and one illegible seal. It appears A 043190816 up to A 043190826 in the last page. AMENDMENT OF THE INCORPORATION. ULTRAPETROL S.A. DEED NUMBER SIX HUNDRED AND THREE In the city of Buenos Aires, Capital of the Argentine Republic, on the fourteenth (14) day of the month of November in the year one thousand nine hundred and ninety four (1994), before me, the Authorizing Notary Public, personally appeared to me known: Mr. Manuel Lucio TORINO, Argentine, married, holder of the Identity Card of the Federal Police number 6,302,298, domiciled at Sarmiento 811, 6th floor of this city, of legal age, he is an authorized person and to me known, I testify; and that he comes for and on behalf of the corporation called "ULTRAPETROL S.A." as the Chairman of its Board of Directors and is duly qualified for this act, according to the following: FIRST.- The existence of the corporation with its Articles of Incorporation and later amendment, subscribed by deeds dated on the sixteenth day of July of 1992 and on the fourth day of August of 1992, before the notary public Alvaro Gutierrez Zaldivar to the leaves 924 and 1181 of the Notarial Registry 374, that in their evidences, inscribed together in the Public Registry of Commerce of the General Inspection of Justice on the fourteenth day of August of 1992 under number 7542 of the Book 111, Section A of Corporations, I have before me for this act and in a copy certified by me are enclosed to the leaf 1090, original record of deed of the year 1992 of this Registry, which I refer, ATTESTING: a) That there exists another amendment of the articles of incorporation, done by the Meeting on the twenty first day of July of 1992 and recorded in a protocol on the twenty second day of 1992, leaf 947 of the same notary public, lately approved by the Meeting on the thirtieth day of September 1992, that according to what the appraiser says it is not inscribed in the General Inspection of Justice and that, as it can be seen hereinafter has been discontinued; b) that the corporation has judicial capacity for this act, and it is directed and managed by a Board of Directors of 5 members, with one year term of office, among which one Chairman and maybe one Vicechairman have to be chosen, being the legal representation on charge of the Chairman or Vicechairman in its case, or two directors working together; c) that the capital stock is $12,000.- totally subscribed or integrated.- SECOND.- The election of the appraiser as President of the corporation derives from the Meeting of the thirty first day of January 1994 and of the meeting of the Board of Directors on the fifteenth day of February of 1994, whose acts, sealed respectively on leaves 52 to 54 and on leaves 48 and 49 of the Books of Acts of Assemblies and Board of Directors, sealed by the General Inspection of Justice on the thirty first day of August 1992 under numbers C 5822 and C 5823, I have before me for this act and in a copy certified by me I enclosed to the leaf 2855, original record of deed of the year 1994 of this Registry, which I refer to.- and THIRD.- The authorization for this act is according to the resolutions of the Special Meeting on the twenty seventh day of December of 1993, whose minutes will be describe completely hereinafter.- it STIPULATES: that the corporation that represents in its Ordinary and Special General Meeting celebrated on the twenty seventh day of December of 1993 decided TO SUSPEND the modifications incorporated to the Articles of Incorporation of the Special Meeting on the twenty first day of July of 1992, confirmed by the Special Meeting on the thirtieth day of September of 1992, whose conformation by the control authority is still pending; TO MODIFY THE NOMINAL VALUE OF THE SHARES; TO INCREASE THE CAPITAL STOCK AND TO REFORM COMPLETELY THE ARTICLES OF INCORPORATION OF THE CORPORATION.- The foregoing is stipulated in the act of the mentioned Meeting, sealed on leaves 35 to 51 of the mentioned Book of Acts, that shall be furtherly transcribed, after the entry corresponding to this Meeting of the Book of Stock Deposits and Register of Assistance to General Assemblies number 1, sealed by the General Inspection of Justice on the thirty first day of August of 1992 under number C5824.- The appraiser adds that this act LEGALIZES THE PUBLIC DEED of the amendment introduced to the Incorporation of the Corporation by the mentioned Meeting, and requests from the authorized person the transcription in this Registry on my behalf of the Entry of the Assistance Registry and the sealed Act of the mentioned Meeting, as well as the issuing of the copies, edict, expert's reports and other documentation necessary to enable the design of the amendments and their inscription, expressly authorizing the subscriber to do so. As required, the following transcriptions are done: "ORDINARY AND SPECIAL GENERAL MEETING ON THE TWENTY SEVENTH DAY OF DECEMBER OF 1993.- Serial Number. Date. Year 1993. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Eduardo Magarinos. National Identity Document 7,604,420. Sarmiento 811. fifth floor. AMOUNT OF SHARES OR CERTIFICATES. Class C 240. CAPITAL $ 2,400. Number of votes 240. SIGNATURES (there is a signature) Serial Number. Date. Year 1993. Day. Month. SHAREHOLDER (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Eduardo Magarinos. National Identity Document 7,604,420. Sarmiento 811. fifth floor. AMOUNT OF SHARES OR CERTIFICATES. Class D 240. CAPITAL $ 2,400. Number of votes 240. SIGNATURES (there is one signature) Serial Number. Date. Year 1993. Day. Month. SHAREHOLDER (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Identification) (Domicile). Eduardo Magarinos. National Identity Document 7,604,420. Sarmiento 811. fifth floor. AMOUNT OF SHARES OR CERTIFICATES. Class E 240. CAPITAL $2,400. Number of votes 240. SIGNATURES (there is one signature) Serial Number. Date. Year 1993. Day. Month. SHAREHOLDER (Complete Name and Surname) (Identity Document) (Domicile) Marine Financial Investment Corp. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile) Betina Di Croce. National Identity Document 14,464,127. Suipacha 1111. eighteenth floor. Capital Federal. AMOUNT OF SHARES OR CERTIFICATES. Class A 240. CAPITAL $ 2,400. Number of votes 240. SIGNATURES (there is one signature) Serial Number. Date. Year 1993. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Sociedad Anonima de Navegacion Petrolera (SONAP). REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Betina Di Croce. Identity National Identification 14,464,127. Suipacha 1111. eighteenth floor. Capital Federal. AMOUNT OF SHARES OR CERTIFICATES. Class B 240. CAPITAL $ 2,400. Number of votes 240. SIGNATURES (there is one signature) (TOTAL) AMOUNT OF SHARES OR CERTIFICATES. 1,200. CAPITAL $ 12,000. NUMBER OF VOTES 1,200. This Register has been filed at twelve on the twenty seventh day of December of 1993, before three shareholders, all represented, with a total of 1,200 shares which represent a capital of $ 12,000 and give rights to 1,200 votes. (there is a signature).- ACT NUMBER 7.- In the city of Buenos Aires, on the twenty seventh day of December of 1993, in the headquarters of the corporation there is a meeting in Special and Ordinary Meeting of the shareholders of ULTRAPETROL S.A. that are registered and sign the leaf 8 of the Book of Share Deposits and Assistance Register to Assemblies N(degrees) 1, being three, all duly represented, with a total of 1,200 shares, representing $12,000.- of capital, the 100%, and give rights to 12,000 votes. At 10 the meeting is opened being chairman Mr. Felipe Menendez and without the assistance of the Justice Inspector, certifying that the communications stipulated by article 238 of Law 19,550 presented to all shareholders have been received. After that the President informs to the present shareholders the following Agenda: 1) Considerations of the resolutions of the Special Meeting celebrated on the twenty first day of July of 1992, approved by Special Meeting on the thirtieth day of September of 1992 and its eventual reconsideration; 2) Modification of the nominal value of the shares; 3) Increasing of the Capital Stock up to six million eighty hundred sixteen thousand ninety hundred and eighty pesos ($ 6,816,980); 4) Total Reform of the Incorporation of the Corporation; 5) Appointment of the members of the Regulatory Commission; 6) To confer the necessary authorizations to carry out the stipulated; 7) Appointment of two shareholders to approve and sign the act. There follows the analysis of the first item of the Agenda: Considerations of the resolutions of the Special Meeting celebrated on the twenty first day of July of 1992, approved by Special Meeting on the thirtieth day of September of 1992 and its eventual reconsideration: The President expresses that the amendment of the articles of incorporation decided by the Special Meeting on the twenty first day of July of 1992 (Act N(degrees) 1) and approved by the Special Meeting on the thirtieth day of September of 1992 (Act N(degrees) 3) is still not inscribed in the General Inspection of Justice while some amendments were questioned. Lately, due to the incorporation of new shareholders to the Corporation, it was necessary to carry out new modifications that are still not approved. Thus, and regarding the shareholders' intention of amending again the incorporation, the resolutions taken in the Special Meeting on the twenty first day of July of 1992 (Act N(degrees) 1) and in the first item of the Special Meeting on the thirtieth day of September of 1992 (Act N(degrees) 3) shall be null and void, and this circumstance shall be communicated to the corresponding entity. After discussing the above mentioned, the shareholders unanimously accept the Chairman's report, considering the resolutions in the Special Meeting on the twenty first day of July of 1992 and in the first item of the Special Meeting on the thirtieth day of September of 1992 null void , being the valid incorporation the one that is inscribed in the Public Registry of Commerce on the fourteenth day of August 1992, with the N(degrees) 7542 of the Book 111, Section A of the Corporations. The second item of the Agenda: Modification of the nominal value of the shares in circulation: Mr. Chairman speaks and says that it is convenient to modify the nominal value of the shares, now from $10 to $1. After discussing it, those attending the meeting unanimously accept to modify the nominal value of the shares in circulation from $10 to $1, cancel the whole of the stock certificates in circulation, and issue new stock certificates according to the new nominal value, being the Board of Directors in charge of putting in force the already mentioned. Third item of the Agenda: Increase of the Capital Stock up to six million eight hundred and sixteen thousand nine hundred and eighty pesos ($ 6,816,980) the shareholders unanimously resolve, for the best fulfillment of the social objective, increase the capital stock in six million eight hundred and four thousand nine hundred and eighty pesos ($ 6,804,980), thus from the amount of $12,000 to $6,816,980 capital stock investing the irrevocable contributions made by the shareholders the twenty third day of July 1992, the sixteenth day of June 1993 and the thirtieth day of November 1993 to the nominal value of their respective payment for an amount the same as the one of the increase resolved, in proportion to their respective payments. By virtue of what has been resolved, considering the second item of the Agenda, the shareholders unanimously accept to issue the whole of the capital stock of $6,816,980, that is 6,816,980 non endorsed registered common stocks of $1 nominal value and with the right to one vote each, being the Board of Directors in charge of the issuing. The issuing of the corresponding stock certificates in favor of the shareholders shall be in proportion to their present holding. The fourth item of the Agenda: Total Reform of the Incorporation of the Corporation: the shareholders shall consider the need for the integral reform of the current incorporation of the corporation, since the amendment proposed that includes the modification of the articles and the inclusion of new ones is very long and complex, changing in that way the original order, it is unanimously resolved to completely adopt and approved the new text that follows: "ARTICLE 1: The name of the corporation is "ULTRAPETROL S.A." and its legal domicile is in the city of Buenos Aires. ARTICLE 2: Its duration is of ninety nine years from the date of its incorporation. ARTICLE 3: The purposes of the Corporation shall be to engage in the following activities, in this country or abroad, on its own account, or on the account of third parties, independently or associated to third parties, namely: a) To carry out the management and exploitation of vessels of its own and of third parties, as well as to act as representatives of other owners and shipowners or to engage in other related activities, inherent or complementary to said purposes. b) Handle the maritime, fluvial and lacustrine transportation, regular and/or not regular, domestic or international, of people or of cargoes; correspondence and maritime works and services in general. c) To render training services to personnel relative to sea navigation. d) For the above mentioned purposes and, in general, for every activity developed in accordance with its Articles of Incorporation, the Corporation may be constituted in owner, shipowner, to hire and lease vessels, in time charter, bareboat charter, or under any other charter to use vessels; to engage in the activities of transportation, transshipment in unloading operations and cargo complement; to carry out loading activities, unloading and stowing operations; to render towage services; to act as shipbrokers and/or freighters, to act as maritime agents and to represent vessels of its own or of third parties; to build and repair vessels and naval appliances, as well as to exploit public and private franchises of any kind, to participate in public bids, to construct ports and also to operate them and represent third parties in any way used in the maritime business. e) The purchase, sale, building, management and exploitation of real estates, urban or rural, including the operations contemplated within the laws and rules regulating the one-floor ownership. f) To execute all kinds of acts, representations, agencies, commissions, consignments, business activities and management of properties, stocks and enterprises in general. For these purposes the corporation is legally empowered to acquire rights, enter into obligations and to perform all the acts which are not prohibited by law or by these articles. ARTICLE 4: The Capital stock is six million eight hundred and sixteen thousand nine hundred and eighty pesos (6,816,980), represented by 6,816,980 shares with a nominal value of $1 each. ARTICLE 5: The shares shall be registered shares, may be endorsed or not, ordinary or preferred. The latter shares shall be entitled to a preferential payment of dividend which may be cumulative or not, pursuant to the conditions of issue. An additional profit may also be fixed to them. The ordinary shares shall be divided in five (5) classes A, B, C, D, and E. Each class shall represent a 20% of the social stock. ARTICLE 6: Each ordinary share issued is entitled to one (1) to five (5) voting rights, as determined while the initial capital is subscribed and opportunely when it is so increased by the Meeting. The preferential shares may be issued with or without voting right. ARTICLE 7: The stock certificates and the provisional certificates issued shall contain the specifications and data required by Article 211 of Law 19,550. Certificates representing more than one (1) share may be issued. ARTICLE 8: In case of arrearages to integrate the capital stock, The Board of Directors is empowered to proceed in accordance with any of the proceedings allowed by Article 193 of Law 19,550. ARTICLE 9: For the transfer of shares, the shareholders shall meet with the following provisions: 9.1: the shareholders shall have the preferential right to acquire the shares of the other shareholders and said requirement must be stated in the stock certificates issued by the Corporation, which shall read as follows: "In order to be transferred, the shares are to be offered first to the other shareholders, in the way stated in the By-laws of the Corporation ". In order to exercise this preferential right the shareholders must follow these regulations: (i) For the purposes of the preferential rights, shares class A and B are considered as a single class, except if they are considered to have individual rights in the present by-laws. Shares classes C, D and E are also considered as a single class. (ii) There shall be no partial offer of sale of shares of one class. Every offer must be made for all the shares representative of the class opened by the seller shareholder. (iii) If the seller were the shareholder of Class A shares, the shareholder of Class B shares must offer them for sale in the same conditions offered by the shareholder of Class A shares, and the said preferential right may only be jointly exercised by the shareholders of Classes C, D and E. In case of the exercise of this preferential right by the shareholders of Classes C, D and E jointly, they shall acquire the total shares jointly offered by the shareholders of Classes A and B, being unable to acquire shares from only one of the shareholders of Classes A and B. (iv) If the seller were the Class B shareholder, this preferential right shall be exercised, in the first place, by the Class A shareholders. If the Class A shareholders are not willing to exercise their preferential right, this right may be jointly exercised by the shareholders of Classes C, D and E, but the Class A shareholder shall be entitled to offer for sale together with the Class B and in the same terms and conditions, their shareholdings to the shareholders of Classes C, D and E, who, in case of exercising their preferential right, must jointly acquire the Classes A and B shares offered for sale. (v) If Classes C, D or E were the property of different shareholders, and one of the m were the seller of his shareholding, he shall offer them to the shareholders of Classes C, D and E who were not sellers. If they were both interested in buying the shares on sale, they shall jointly acquire them and in the same proportion. If one of them were interested in the purchase, he shall acquire the whole of the shares on sale. If two of the shareholders of shares Classes C, D or E were sellers, they shall jointly offer their shares for sale to the remaining shareholders of shares Classes C, D or E, so that they exercise their preferential right, who can buy both Classes or just one. If those having the right according to this clause shall not exercise their preferential right, then the seller shareholder/s shall offer their shareholdings for sale in the same conditions to the shareholders of Classes A and B jointly so that they can exercise their preferential right. If the shares Classes C, D or E belong to one shareholder and seller, he shall offer for sale the whole of his shareholding without being able to offer for sale in a partial way some of the Classes of shares that he holds. The purchase preference can only be exercised by the shareholders of Classes A and B jointly, who shall jointly buy all the shares of Classes C, D and E for sale, without being able to buy the shares of only one Class. 9.2: Whenever a shareholder wishes to totally or partially transfer his shares, he shall firstly offer them for sale to the other shareholders pursuant to the provisions of 9.1, and must so notify it to the Chairman of the Board of Directors and to the shareholder entitled to the preferential right as to the transfer he wants to carry out, the price and other terms of the operation (which in all cases shall be cash) and the whereabouts of the person to whom he intends to transfer his hares, so that the shareholders entitled to the preferential right may exercise their right and purchase all said shares. This right must be exercised within the thirty (30) days upon receipt of the notification of the decision to sell. The answer must be given in writing and shall be notified in the same way to the Chairman of the Board of Directors and to the seller shareholder. If no answer is received from the shareholder entitled to the preferential right, it shall be understood that he rejects the offer. In those cases in which the preferential right corresponds successively to more than one shareholder, and the first shareholder does not exercise his preferential right, in the same way and in the same term, the seller shareholder must notify to the subsequent shareholder with preferential right so that he may exercise his right. 9.3: If the shareholder with preferential right had accepted timely and formally the offer, the transferor shareholder must deliver the shares within the thirty (30) days after the date of the notice of the acceptance given by the acquiring shareholder, who shall comply with the purchase conditions. 9.4: The exercise of the preferential right is to be made for all the shares offered. If the term for the shareholders to exercise the said right is elapsed, the Chairman of the Board of Directors shall so advise to the shareholder who informed of this decision to transfer his shares that he may transfer the said shares to the offering third party identified in the original notice and in the price and under the conditions indicated therein. If the latter transfer is not completed within the term of thirty (30) days after receipt of the notice from the president, which transfer is to be entered into the respective registry books of the Corporation, then the seller shareholder must again follow the procedure set forth in the provisions of this Clause 9 and the corresponding shareholders shall recuperate their preferential right over the said shares. 9.5: The acquisition of the shares of the corporation, of the By-laws, of the resolutions adopted by the Meeting of Shareholders and of the agreements of the shareholders, which shall be expressly declared by the acquiring shareholder in the corresponding agreement of acquisition. 9.6: The shareholders of the corporation being corporate bodies may freely transfer their shares, without being subject to the foregoing proceeding, whenever the transfer is made to a controlled or controlling corporation of the transferor shareholder corporation, being a controlled or controlling corporation when the holding relation of the block of shares among those involved is no less than 80% (eighty per cent). In all cases, in order to transfer the shares, the shareholder that wants to transfer shall formally give notice by any means to the President of the Corporation of his intention to transfer his shares to the controlled or controlling corporation, notice which must accompany all corporate documents necessary to evidence the corporate status of the corporation to which they pretend to transfer their shares. In any event, in the contract purchase-sale of shares or in the instrument whereby they are transferred, the acquiring corporation must expressly declare that they observe, approve and are bound by the Articles of Incorporation, the By-laws and by the agreements adopted by the Meeting of Shareholders and by the agreement of the existing shareholders. 9.7: Any notices to be made by authentic means shall be deemed to have been made on the same day they are delivered by the Post Office, and the term for delivery shall start on the third day after the said date if the address of the sender is in the Argentine Republic, or on the sixth day if the address is abroad. If the notice is given in person through notary public, the term for delivery shall start the day after the notarial notice is made. 9.8: The preceding provisions referring the preferential right to purchase shall not apply when the Board of Directors unanimously approved the transfer by approval of its five members. 9.9: Only the transfers of shares which meet with the preceding provisions of these Articles of Incorporation shall be entered into the Stock Registry Book of the Corporation. 9.10: If the application of articles 9.1 (iii) and 9.1 (iv) resulted in a third party acquiring shares Class A and/or B the Clauses Eleventh and Sixteenth of these Articles of Incorporation shall automatically be null and void, and from that moment the relation between the shareholders shall be regulated by the Corporate Law. The seller shareholders shall be bound to include in the respective contract a clause expressly stating this provision. This clause shall not be applicable to other transfers of shares nor to those defined in article 9.6 even though the transfers of Class A and/or B are affected. ARTICLE 10: By resolution adopted at a Special Meeting of Shareholders, the corporation may hereinafter issue debentures, negotiable instruments and any other evidence of indebtedness for its private or public investment, within the country or abroad, in the conditions of price, interests and depreciation which may be deemed by the Meeting and subject to the standing legal provisions. The above mentioned certificates may be issued in national or foreign currency with collateral, common or special guaranty. ARTICLE 11: The Corporation shall be managed by a Board of Directors formed by five (5) members, one (1) for each Class of shares who shall hold their office during the term of one (1) year. The Meeting is to designate substitute members in equal number than the principal members and to hold their office during the same term in order to fill the vacancies created in each class. At their first meeting, the members of the Board of Directors must appoint one Chairman and one Vice-chairman; the latter replaces the first in case of absence or inability. The Board of Directors shall act with the presence of at least four (4) of its members, and resolutions shall be adopted by the votes of its four (4) directors. The Presidency of the Board of Directors shall correspond alternatively to the Classes A and B for one term, and to the Classes C, D and E the following term and thus subsequently. The vice-presidency shall correspond to the Class which is not holding the office of the presidency. ARTICLE 12: The Directors must give a guarantee in cash of $ 1,000. ARTICLE 13: The Board of Directors have full power to manage and dispose of the properties, including those which by law require special powers of attorney according to Article 1881 of the Civil Code and Article 4 of Decree Law N(degrees) 5965/63. Consequently, they may enter into all kinds of legal proceedings on behalf of the Corporation for the performance of the purpose thereof, to deal with all and any financial institution and/or o public or private banks within the country or abroad; to establish agencies, branches or other type of representations within the country or abroad; proceed with the purchase, sale, exchange, lease in all types of arrangements as time charter, voyage or bareboat, leasing, renting, import of all types of goods, supply and assignment of vessels, their spare parts and appliances, accessories, materials and supplies, mediation in the consideration of the insurance to cover the risks for the services agreed and those covering the properties of the corporation of those hired by it or the risks for third parties which might be caused by these properties, all kinds of commercial operations normally carried out in ports; to contract obligations, to acquire, dispose of and mortgage vessels and other personal and real estate properties, facilities and in general all kinds of rights and abandon vessels and other properties of the Corporation in favor of underwriters, of the National State or of any other third party if it is deemed convenient to the interests of the Corporation, as well as to carry out all the industrial operations, commercial transactions and contracts directly or indirectly related to the purposes of the Corporation; to carry out credit operations with or without expressed warranty; to contract debentures or any other debt certificate, aimed at facilitating its normal operational development for the performance of related activities, accessory and complementary to those constituted by its main purposes, to enter into agreements of temporary association for commercial purposes without formal partnership, of "Union Transitoria de Empresas " and of "Agrupacion de Colaboracion Empresaria "; to grant to one or more persons special judicial powers of attorney, including for criminal complaint, or extrajudicially with the purpose and extension deemed convenient, and to engage in any other act of disposition, investment, management and development related and beneficial to the purposes of the corporation. The legal representation of the Corporation shall be the President of the Board of Directors or the Vice-president in case of absence or inability. In case of absence of the Chairman and of the vice-chairman, the legal representation of the company shall be jointly held by two directors, one being of the Class A and B Shares and the other director of the Class C, D or E shares (being a substitute in case the third substitute director is absent). ARTICLE 14: The control of the Corporation shall be in charge of a Control Commission made of three trustees chosen by the Shareholders' Meeting for one year. The Meeting shall annually appoint a Regular Trustee or a Substitute Trustee, to hold their office during the term of one (1) year. The Control Commission shall meet at least once every three months, formed by the presence of all of its members shall take decisions with the majority of the present votes. Its members shall attend the meetings of the Board, and shall be represented there by one or more of its members. ARTICLE 15: Any Meeting shall be summoned according to Article 237 of Law 19,550, without detriment to the stipulated there for the case of unanimous Meeting. ARTICLE 16: The quorum of the Ordinary Meeting, both in the first and second notice, shall be that of the Article 293 of the Corporation Law. Its resolutions in both cases shall be taken by the 80% of the shares with the right to vote that are present. The quorum and the majority of the Special Assemblies shall be, both in the first and second notice, of the 80% of the shares in circulation with a voting right. For the Ordinary Meeting, the second notice shall not be carried out before ten days from the date of the first notice. Any Meeting, Ordinary and/or Special, shall be held with a previous notice for the shareholders with at least ten (10) days in advance from the date of the meeting without detriment to the article 237 of the Law 19,550. The notice shall be sent to the domiciles of the shareholders that appear in the Book of Registry of Shares. ARTICLE 17: the fiscal year ends on the thirty first (31) day of December of each year. At that time the financial statement shall be prepared in accordance with standing accounting and technical principles commonly in use. The Meeting may amend the fiscal year ending by the record of pertinent resolution at Public Registry of Commerce Office. The net and taken profits shall be consigned as follows: a) Five (5) per cent, to reach up to twenty per cent (20%) of the capital subscribed for the funds of legal reservation; b) For remuneration of the Board of Directors and Trustees in such case; c) For dividends of the preferred stocks, with priority the unpaid cumulative; d) The surplus, in whole or partially, to additional participation of the preferred stocks and to a dividend of the ordinary stocks, or to funds for contingency or preservation reserve or to a new account or to a consignment determined by the Meeting. The dividends are to be paid in proportion to the respective participations, within the year of its authorization. ARTICLE 18: The winding-up of the Corporation may be effected by the Board of Directors or by the liquidator or liquidators appointed by the Meeting, under the surveillance of the Trustee or Trustees in such case. Having paid the liabilities and, reimbursed the capital, the surplus shall be distributed among the shareholders, with the preferences mentioned in the preceding article". Mr. Chairman states that the Meeting is ordinary puts into the shareholders'consideration the fifth item of the Agenda: Appointment of the members of the Control Commission. After a short discussion, it is unanimously decided to appoint for one year as regular members Messrs. Alberto G. Deyros; Juan Carlos Pitrelli and Horacio Calo. As alternate members Messrs. Manuel Cerdeira, Pablo Clusellas and Jorge Jose Alvarez. The sixth item of the Agenda: Give the necessary authorizations to implement the following: It is unanimously resolved to authorize Doctors Juan Ernesto Cambiaso, Alfredo Miguel O'Farrell, Luis Maria Gonzalez Lanuza, Marcos J. Benegas Lynch, Maria Alejandra Ferrari Jaso, Isabela Pucci and/or Agustin R. Miguens so that any of them may carry out the dealings to obtain the inscription of the present resolutions in the Public Registry of Commerce or where appropriate, to sign rectifying or complementary deeds of the public or private instruments that were granted, being presented before the General Inspection of Justice or any other administrative, judicial, national, provincial or municipal authority of this Republic, due to problems related to the corporation, presenting claims and requests, claim and abandon this right and of any other legal resource and carry out all the dealings for the present authorization. The seventh item of the Agenda: Appointment of two shareholders to approve and sign the act. Mr. Menendez speaks and advises that all the shareholders should sign the incorporation, which is unanimously approved. With no further points to discuss, the meeting is adjourned at 13 hours. (Signatures) IT IS A TRUE COPY, I testify. READ to the party hereto, its content is approved and in agreement, before me, I testify. There follows some illegible words and 6.816.980. There appear two illegible signatures and a seal that reads RICARDO MIHURA SEEBER NOTARY PUBLIC, REGISTER 1950. NOTARIAL ORDER. Law 12.990. Sign and seal. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is an illegible seal and a number C000276987. It is in agreement with the original copy that is in leaf 3446 of the Notarial Registry N(degrees) 137 of this Capital Federal, authorized by Ricardo MIHURA SEEBER for THE CORPORATION. As Notary Public of this Registry I issue the present Copy in 11 (eleven) photocopy/ies and the present sheet that I seal and sign in Buenos Aires on the fifteenth day of the month of November 1994. There appears an illegible signature and seal RICARDO MIHURA SEEBER, NOTARY PUBLIC, REGISTER 1950. GENERAL INSPECTION OF JUSTICE. PAGE 1. Official Proceeding 00431, 01370. Description: Increase of capital Prequalified dealing. Modification of By-laws. Order number 1559393. Corporation ULTRAPETROL. Before. Inscribed in this Registry under number 7021 of book 117, section A of SA. Deed/s 603. And/or private instruments. Buenos Aires 8/7/95. Press simultaneously "Change" and "Print Page" to print, then enter. Count :* 0. There is an illegible signature and a seal that reads GUILLERMO C. ROJAS. Chief of the Registry Department. General Inspection of Justice. Another seal reads certified copy/ies under notary seal No T 003121810. It appears an illegible signature and a seal that reads BERNARDO MIHURA DE ESTRADA, REGISTRY NUMBER 4669. Notary Public. CERTIFICATION OF REPRODUCTIONS. LAW 404. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is a number T 003121810. Buenos Aires, September 16th 2004. As Notary Public HOLDER OF THE NOTARIAL REGISTRY 137 CERTIFIES that the enclosed reproduction, issued in 13 (thirteen) folio/s, that I sign and seal, is a TRUE COPY of its original, I have before me, I testify. There is an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. I, MARIA CRISTINA TOUBES, a Public Translator in the Argentine Republic, duly admitted and sworn, do hereby certify the foregoing to be a true and accurate translation into English of the document in Spanish I have before me, and hereunto annexed. Done and signed in Buenos Aires, this sixteenth day of November, 2004. ES TRADUCCION FIEL al idioma ingles de una fotocopia del documento original redactado en espanol que he tenido a la vista y al cual me remito. EN FE DE LO CUAL estampo mi firma y sello en la Ciudad de Buenos Aires, a los 16 dias del mes de noviembre de 2004. TRADUCCION PUBLICA. On top of each page there is a seal that reads Notary Public Association. Capital Federal. Argentine Republic. Original Record of Deeds. Law 12.990. Sign and seal. On the left of the first page and on the other pages it appears a number 582. FIVE HUNDRED AND EIGHTY TWO. There are two illegible signatures and one seal that reads RICARDO MIHURA SEEBER, REGISTRY NUMBER 1950 and another seal that reads BERNARDO MIHURA DE ESTRADA, REGISTRY NUMBER 4669. It appears A 049356772 up to A 049356779 in the last page. CAPITAL STOCK INCREASE AMENDMENT OF THE INCORPORATION. "ULTRAPETROL S.A." DEED NUMBER SEVENTY FIVE In the city of Buenos Aires, Capital of the Argentine Republic, on the ninth (9) day of the month of February of the year one thousand nine hundred and ninety eight (1998), before me, the Authorizing Notary Public, personally appeared to me known: MR. FELIPE MENENDEZ ROSS, Chilean, married, holder of the Identity Card of the Federal Police number 8.415.593, domiciled at 986 Leandro N. Alem Avenue, 11th floor of this city, of legal age, he is an authorized person and to me known, I testify; and that he comes for and on behalf of the corporation called "ULTRAPETROL S.A." as the President of its Board of Directors and is duly qualified for this act, according to the following: FIRST.- The existence of the corporation with its Articles of Incorporation and later amendment, subscribed by deeds dated on the sixteenth day of July of 1992, on the fourth day of August of 1992 and on the fourteenth day of November of 1994 before the notary public Alvaro Gutierrez Zaldivar to the leaves 924 and 1181 of the Notarial Registry 374, and the last one before me, to the leaves 3446 of this same Registry, that in their evidences, inscribed together in the Public Registry of Commerce of the General Inspection of Justice on the fourteenth day of August of 1992 under number 7542 of the Book 111, Section A of Corporations, and the last one on the seventh day of the month of August of the year 1995 under number 7021 of the Book 117, Section A of the Corporations, I have before me for this act and in copies certified the two first are enclosed to the leaf 1090, original record of deed of the year 1992 of this Registry, which I refer, ATTESTING: a) That the corporation has judicial capacity for this act, and it is directed and managed by a Board of Directors of 5 (five) members, with one year term of office, among which one President and maybe one Vice President have to be chosen, being the legal representation on charge of the President or Vice President in its case, or two directors working together; and c) that the capital stock is $6.816.980.- totally subscribed or integrated, represented by the same number of shares of $1 nominal value each. SECOND.- The election of the appraiser as President of the corporation derives from the Meeting of the second day of February of the year 1997 and of the meeting of the Board of Directors on the same date, whose acts, sealed respectively on the Books of Acts of Assemblies and Board of Directors, I have before me for this act and in a copy certified I enclosed to this deed, and THIRD.- The authorization for this act is according to the resolutions of the Special Meeting on the thirtieth day of December of 1997, whose minutes will be describe completely hereinafter.- It STIPULATES: that the corporation that represents in its Ordinary and Special General Meeting celebrated on the thirtieth day of December of 1997 decided to increase the Capital Stock to $7.614.692. and the modifications of the Articles 4, 5, 9, 11,13 and 16 of the Statute.- The foregoing is stipulated in the act, sealed on leaves 67 to 71 of the mentioned Book of Acts of Meeting 1, signed on the thirty first day of August of 1992 under number C 5822, that shall be furtherly transcribed, after the entry corresponding to this Meeting of the Book of Stock Deposits and Register of Assistance to General Assemblies number 1, sealed to folio 17 of the mentioned book, sealed on this thirty first day of the month of August of the year 1992 under number C 5824. The appraiser adds that this act legalizes the public deed of the amendment introduced to the Incorporation of the Corporation by the mentioned Meeting, and requests from the authorized person the transcription in this Registry on my behalf of the Entry of the Assistance Registry and the sealed Act of the mentioned Meeting, as well as the issuing of the copies, edict, expert's reports and other documentation necessary to enable the design of the amendments and their inscription, expressly authorizing the subscriber to do so. As required, the following TRANSCRIPTIONS are done: "ORDINARY AND SPECIAL GENERAL MEETING ON THE THIRTIETH DAY OF DECEMBER OF 1997.- Serial Number. Date. Year 19-. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Luis Maria Gonzalez Lanuza. National Identity Document 6.109.288. C. Pellegrini 885, 3(degrees) floor. AMOUNT OF SHARES OR CERTIFICATES. Class C 1.363.396. CAPITAL $ 1.363.396. Number of votes 1.363.396. SIGNATURES (there is a signature) Serial Number. Date. Year 19--. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Luis Maria Gonzalez Lanuza. National Identity Document 6.109.288. C.Pellegrini 885, 3(degrees) floor. AMOUNT OF SHARES OR CERTIFICATES. Class C 1.363.396. CAPITAL $ 1.363.396. Number of votes 1.363.396. SIGNATURES (there is a signature) Serial Number. Date. Year 19--. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Luis Maria Gonzalez Lanuza. National Identity Document 6.109.288. C.Pellegrini 885, 3(degrees) floor. AMOUNT OF SHARES OR CERTIFICATES. Class C 1.363.396. CAPITAL $ 1.363.396.. Number of votes 1.363.396. SIGNATURES (there is a signature) Serial Number. Date. Year 19--. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Societe International D'Investissement. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Luis Maria Gonzalez Lanuza. National Identity Document 6.109.288. C.Pellegrini 885, 3(degrees) floor, Capital Federal. AMOUNT OF SHARES OR CERTIFICATES. Class C 1.363.396. CAPITAL $ 1.363.396. Number of votes 1.363.396. SIGNATURES (there is a signature) Serial Number. Date. Year 19--. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Inversiones Los Avellanos S.A. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Bettina Di Croce. National Identity Document 14.464.127. Suipacha 1111 18(degrees) floor. Capital Federal. AMOUNT OF SHARES OR CERTIFICATES. Class A 1.363.396. CAPITAL $ 1.363.396. Number of votes 1.363.396. SIGNATURES (there is a signature) Serial Number. Date. Year 19--. Day. Month. SHAREHOLDER. (Complete Name and Surname) (Identity Document) (Domicile) Inversiones Los Avellanos S.A. REPRESENTATIVE. (Complete Name and Surname) (Identity Document) (Domicile). Bettina Di Croce. National Identity Document 14.464.127. Suipacha 1111 18(degrees) floor. Capital Federal. AMOUNT OF SHARES OR CERTIFICATES. Class B 1.363.396. CAPITAL $ 1.363.396. Number of votes 1.363.396. SIGNATURES (there is a signature) (TOTAL) amount of shares or certificates. 6.816.980. CAPITAL: $ 6.816.980. This Registry has been filed at ten on the thirtieth day of December of 1997, before two shareholders, all represented, with a total of 6.816.980 shares which represent a capital of $ 6.816.980 and give rights to 6.816.980 votes. (there is a signature).- SPECIAL AND ORDINARY MEETING ACT NUMBER 15.- In the city of Buenos Aires, on the thirtieth day of December of 1997, in the headquarters of the corporation there is a meeting of the Special and Ordinary Meeting of the shareholders of Ultrapetrol S.A. on the terms of article 237, third part of Law 19.550. Two shareholders are present, on representation, with a total of 6.816.980 shares, at a nominal price of $1 each, giving right to 1 vote per share, as mentioned in the Stock Certificate Register and Record of Attendance to Assemblies leaf 17, from which it is possible to see that a number of shareholders representing the total of the capital stock are present. Having the necessary legal quorum for this Meeting, at 10 the meeting is opened being president Mr. Felipe Menendez Ross in order to deal with the following Agenda: 1) Increasing of the Capital Stock up to seven million six hundred fourteen thousand six hundred and ninety two pesos ($ 7,614,692); and issuing of shares with premium. To resign to the right of preference. 2) Modification of Article 4(degrees) of the Statute. 3) Modification of Articles 5,9,11,13 and 16 of the Statute. 4) Appointment of two shareholders to approve and sign the act. After a short discussion, the agenda is approved unanimously. There follows the analysis of the first item of the Agenda: "Increasing of the Capital Stock up to seven million six hundred fourteen thousand six hundred and ninety two pesos ($ 7,614,692); and issuing of shares with premium. To resign to the right of preference." After a short discussion is approved unanimously: i) To increase the Capital Stock from $ 6,816,980 to $ 7,614,692; with 797,712 common, non endorsable registered shares, of $1 nominal value , one vote per share and with the right to one dividend from this fiscal year, with an issuing premium of $ 0,62966 each share, thus a total premium of $ 502,288; ii) That the shares shall be offered as a taking up to the shareholders and issue in this act; iii) that the shares shall be totally integrated in the taking up act. Then the representative of the shareholder of Los Avellanos S.A. says he wants to take up and pay up all the shares which represent the increase of capital of the Corporation allocating $1,300,000 of which $ 797,712 correspond to shares and $ 502,288 to the premium of the issuing, which he pays cash in this act. On the hand the representative of the shareholder Societe Internationale D'Investissement says that the person he represents resigns to the right of taking up as regards the shares that correspond to her according to her share holding and to her right to accession. Once this procedure finished, all the present shareholders, being 100% of the capital stock, approved it and confirm it unanimously. There follows the analysis of the second item of the Agenda: "Modification of Article 4(degrees) of the Statute." After a short discussion is approved unanimously: i) to modify Article 4 of the Statute to incorporate the increase in the capital stock above mentioned, ii) to approve the text of that article which is as follows: Text of Article 4 (degrees): "The Capital stock is $7,614,692 represented by 7,614,692 shares with a nominal value of $1 each." There follows the analysis of the third item of the Agenda: "Modification of Articles 5, 9,11,13 and 16 of the Statute." After a short discussion, the Meeting decides unanimously to modify Articles 5, 9, 11, 13, and 16 of the Statute, which are as follows: "ARTICLE 5: The shares shall be registered shares, may be endorsed or not, ordinary or preferred. The latter shares shall be entitled to a preferential payment of dividend which may be cumulative or not, pursuant to the conditions of issue. An additional profit may also be fixed to them. ARTICLE 9: For the transfer of shares, the shareholders shall meet with the following provisions: 9.1: the shareholders shall have the preferential right to acquire the shares of the other shareholders and said requirement must be stated in the stock certificates issued by the Corporation, which shall read as follows: "In order to be transferred, the shares are to be offered first to the other shareholders, in the way stated in the By-laws of the Corporation". In order to exercise this preferential right the shareholders must follow these regulations: i) there cannot be a partial offer of sale of shares. Any offer should be for the total of the shares of the shareholder who is selling; ii) Any sell, assignment or transfer of shares of the corporation or rights to take up shares among the shareholders shall be free and the restrictions established in this Article 9 shall not be applicable. Any other transference shall be done according to the previsions of this Article 9; 9.2: Whenever a shareholder wishes to totally or partially transfer his shares, he shall firstly offer them for sale to the other shareholders pursuant to the provisions of 9.1, and must so notify it to the President of the Board of Directors and to the shareholder entitled to the preferential right as to the transfer he wants to carry out, the price and other terms of the operation (which in all cases shall be cash) and the whereabouts of the person to whom he intends to transfer his hares, so that the shareholders entitled to the preferential right may exercise their right and purchase all said shares. This right must be exercised within the thirty (30) days upon receipt of the notification of the decision to sell. The answer must be given in writing and shall be notified in the same way to the President of the Board of Directors and to the seller shareholder. If no answer is received from the shareholder entitled to the preferential right, it shall be understood that he rejects the offer. In those cases in which the preferential right corresponds successively to more than one shareholder, such right shall be used pro rata of the corresponding share holding. 9.3: If the shareholder with preferential right had accepted timely and formally the offer, the transferor shareholder must deliver the shares within the thirty (30) days after the date of the notice of the acceptance given by the acquiring shareholder, who shall comply with the purchase conditions. 9.4: The exercise of the preferential right is to be made for all the shares offered. If the term for the shareholders to exercise the said right is elapsed, the President of the Board of Directors shall so advise to the shareholder who informed of this decision to transfer his shares that he may transfer the said shares to the offering third party identified in the original notice and in the price and under the conditions indicated therein. If the latter transfer is not completed within the term of thirty (30) days after receipt of the notice from the president, which transfer is to be entered into the respective registry books of the Corporation, then the seller shareholder must again follow the procedure set forth in the provisions of this Clause 9 and the corresponding shareholders shall recuperate their preferential right over the said shares. 9.5: The acquisition of the shares of the corporation, of the By-laws, of the resolutions adopted by the Meeting of Shareholders and of the agreements of the shareholders, which shall be expressly declared by the acquiring shareholder in the corresponding agreement of acquisition. 9.6: The shareholders of the corporation being corporate bodies may freely transfer their shares, without being subject to the foregoing proceeding, whenever the transfer is made to a controlled or controlling corporation of the transferor shareholder corporation, being a controlled or controlling corporation when the holding relation of the block of shares among those involved is no less than 80% (eighty per cent). In all cases, in order to transfer the shares, the shareholder that wants to transfer shall formally give notice by any means to the President of the Corporation of his intention to transfer his shares to the controlled or controlling corporation, notice which must accompany all corporate documents necessary to evidence the corporate status of the corporation to which they pretend to transfer their shares. In any event, in the contract purchase-sale of shares or in the instrument whereby they are transferred, the acquiring corporation must expressly declare that they observe, approve and are bound by the Articles of Incorporation, the By-laws and by the agreements adopted by the Meeting of Shareholders and by the agreement of the existing shareholders. 9.7: Any notices to be made by authentic means shall be deemed to have been made on the same day they are delivered by the Post Office, and the term for delivery shall start on the third day after the said date if the address of the sender is in the Argentine Republic, or on the sixth day if the address is abroad. If the notice is given in person through notary public, the term for delivery shall start the day after the notarial notice is made. 9.8: The preceding provisions referring the preferential right to purchase shall not apply when the Board of Directors unanimously approved the transfer by approval of its five members. 9.9: Only the transfers of shares which meet with the preceding provisions of these Articles of Incorporation shall be entered into the Stock Registry Book of the Corporation. ARTICLE 11: The Corporation shall be managed by a Board of Directors formed by five (5) members, who shall hold their office during the term of one (1) year. The shareholder who owns most of the capital stock of the corporation shall have the right to name three members of the Board. The minority shareholders shall have the right to choose two members of the Board. It shall be considered the majority shareholder the one who has the capacity to be present in every kind of shareholders Assemblies and Board of Directors meetings. The Meeting is to designate substitute members in equal number than the principal members m in order to fill the vacancies created. At their first meeting, the members of the Board of Directors must appoint one Chairman and one Vice-chairman; the latter replaces the first in case of absence or inability. The Board of Directors shall act with the presence of at least four (4) of its members, and resolutions shall be adopted by the votes of its four (4) directors. The Boards meetings shall be notified ten (10) days in advance in the domicile of each Director. The Presidency of the Board of Directors shall correspond alternatively to the major shareholder one term and to the minority shareholder the following term and so on unless the Board decides something different. The vice-presidency shall correspond to the shareholder who is not holding the office of the presidency. ARTICLE 13: The Board of Directors have full power to manage and dispose of the properties, including those which by law require special powers of attorney according to Article 1881 of the Civil Code and Article 4 of Decree Law N(degrees) 5965/63. Consequently, they may enter into all kinds of legal proceedings on behalf of the Corporation for the performance of the purpose thereof, to deal with all and any financial institution and/or o public or private banks within the country or abroad; to establish agencies, branches or other type of representations within the country or abroad; proceed with the purchase, sale, exchange, lease in all types of arrangements as time charter, voyage or bareboat, leasing, renting, import of all types of goods, supply and assignment of vessels, their spare parts and appliances, accessories, materials and supplies, mediation in the consideration of the insurance to cover the risks for the services agreed and those covering the properties of the corporation of those hired by it or the risks for third parties which might be caused by these properties, all kinds of commercial operations normally carried out in ports; to contract obligations, to acquire, dispose of and mortgage vessels and other personal and real estate properties, facilities and in general all kinds of rights and abandon vessels and other properties of the Corporation in favor of underwriters, of the National State or of any other third party if it is deemed convenient to the interests of the Corporation, as well as to carry out all the industrial operations, commercial transactions and contracts directly or indirectly related to the purposes of the Corporation; to carry out credit operations with or without expressed warranty; to contract debentures or any other debt certificate, aimed at facilitating its normal operational development for the performance of related activities, accessory and complementary to those constituted by its main purposes, to enter into agreements of temporary association for commercial purposes without formal partnership, of "Union Transitoria de Empresas" and of "Agrupacion de Colaboracion Empresaria"; to grant to one or more persons special judicial powers of attorney, including for criminal complaint, or extrajudicially with the purpose and extension deemed convenient, and to engage in any other act of disposition, investment, management and development related and beneficial to the purposes of the corporation. The legal representation of the Corporation shall be the President of the Board of Directors or the Vice-president in case of absence or inability. In case of absence of the President and of the vice-president, the legal representation of the company shall be jointly held by two directors, one should be a Director named by the majority shareholder the other one a Director chosen by the minority shareholder. ARTICLE 16: The quorum of the Ordinary Meeting, both in the first and second notice, shall be that of the Article 243 of the Corporation Law. Its resolutions in both cases shall be taken by the 80% of the shares with the right to vote that are present. The quorum and the majority of the Special Assemblies shall be, both in the first and second notice, of the 80% of the shares in circulation with a voting right. For the Ordinary Meeting, the second notice shall not be carried out before ten days from the date of the first notice. Any Meeting, Ordinary and/or Special, shall be held with a previous notice for the shareholders with at least ten (10) days in advance from the date of the meeting without detriment to the article 237 of the Law 19,550. The notice shall be sent to the domiciles of the shareholders that appear in the Book of Registry of Shares. Therefore, in view of the modifications of Articles 4, 5, 9, 11, 13, and 16 of the Social Statute it is unanimously decided to authorize Mr. Jorge Luis Perez Alati, Betina Di Croce, Paula Maria Suter, Lucian Veronica Zuccatosta, Maria Marta Sanchez de Bustamante y Adela Alicia Codagnone so that on behalf of Ultrapetrol S.A. and acting as any of them they may carry out the dealings to obtain the inscription from the General Inspection of Justice of the present modifications approved by this Meeting with the power to accept the modifications required by that agency, and propose, in such case, alternative texts presenting claims and requests, claim and abandon this right and of any other legal resource and carry out all the dealings for the present authorization to sign rectifying or complementary deeds of the public or private instruments that were granted The fourth item of the Agenda is being discussed: Appointment of two shareholders to approve and sign the act. After a short discussion it is decided that that all the shareholders should sign the incorporation, which is unanimously approved. With no further points to discuss, the meeting is adjourned at 11 hours. (Signatures) IT IS A TRUE COPY, I testify. READ to the party hereto, its content is approved and in agreement, before me, I testify. There follows some illegible words and three illegible signatures and a seal that reads Ricardo Mihura Seeber, Notary Public, Register 1950. NOTARIAL ORDER. Law 12.990. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there a number C000773133. It is in agreement with the original copy that is in leaf 0582 of the Notarial Registry No 137 of this Capital Federal, authorized by Ricardo MIHURA SEEBER for "ULTRAPETROL S.A." As Notary Public of this Registry I issue the present Copy in 8 (eight) photocopy/ies and the present sheet that I seal and sign in Buenos Aires on the tenth day of the month of February 1998. There appears an illegible signature and two seals Ricardo Mihura Seeber, Notary Public, register 1950. There appears an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. GENERAL INSPECTION OF JUSTICE. 1998. Official Proceeding Number 01201 284007. CAPITAL STOCK INCREASE. CORPORATE PURPOSE WIDENING. 01370 284007. AMENDMENT OF BYLAWS. NUMBER: 1559393. CORPORATION. Firm Name ULTRAPETROL, (before) Inscribed in this Registry under number 582 of book 1, section - of JOINT STOCK COMPANIES and/or private instruments. To count: *0. Buenos Aires, 04/14/98. There is an illegible signature and a seal that reads Dr. PATRICIA LAURA MAZZADI Chief. Registry Department. Another seal reads certified copy/ies in the Notarial Seal N(degrees) T003121814. It appears an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. CERTIFICATION OF REPRODUCTIONS. LAW 404. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is a number T 003121814. Buenos Aires, September 16th 2004. As Notary Public HOLDER OF THE NOTARIAL REGISTRY 137 CERTIFIES that the enclosed reproduction, issued in 010 (ten) folio/s, that I sign and seal, is a TRUE COPY of its original, I have before me, I testify. There is an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. I, MARIA CRISTINA TOUBES, a Public Translator in the Argentine Republic, duly admitted and sworn, do hereby certify the foregoing to be a true and accurate translation into English of the document in Spanish I have before me, and hereunto annexed. Done and signed in Buenos Aires, this sixteenth day of November, 2004. ES TRADUCCION FIEL al idioma ingles de una fotocopia del documento original redactado en espanol que he tenido a la vista y al cual me remito. EN FE DE LO CUAL estampo mi firma y sello en la Ciudad de Buenos Aires, a los 16 dias del mes de noviembre de 2004. TRADUCCION PUBLICA. [On the left there is a seal that reads Notaries' Public Association. Federal Capital. Argentine Republic. Original Record of Deeds, and another seal that reads MINISTRY OF JUSTICE, GENERAL INSPECTION OF JUSTICE. Folios are numbered A 046548863 through A 046548864. There are three illegible signatures and a seal that reads RICARDO MIHURA SEEBER, NOTARY PUBLIC, REGISTER 1950, another seal that reads General Inspection of Justice. There appears a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. On the top, left-hand side there appear numbers 3753 (three thousand, seven hundred and fifty three) (first page of document) and 3754 (three thousand, seven hundred and fifty four) (third page)]. FILING OF CHANGE OF REGISTERED OFFICE - "ULTRAPETROL S.A." - DEED No. FIVE HUNDRED AND SIXTY NINE. In Buenos Aires, Capital City of the Argentine Republic, on this TWENTY THIRDTH day OF OCTOBER of the year ONE THOUSAND AND NINETY SIX, before me authorizing Notary Public, there appears Mr. Manuel Lucio TORINO. Argentine, bearer of Cedula de Identidad (Identity Card) No. 6.302.298, issued by the Federal Police Department, neighbor of this city, capable, of age, personally known to me, I attest. I also witness that he appears in these proceedings in the name and on behalf of the corporation called "ULTRAPETROL S.A." in his capacity as Chairman of the Board, and that he has been especially empowered to enter into these presents, as evidenced by: 1) The existence of the Corporation with its By-laws and amendments delivered, the first and second, before Notary Public Alvaro Gutierrez Zaldivar and the third one before me by public deed on July 16th, 1992, August 4th, 1992 and November 14th 1994 registered on folio 924,1181 and 3446 of Notarial Record No. 374,374 and 137 in their Notarial act jointly registered the first and the second in the Public Registry of Commerce of the General Inspection of Justice on August 14th, 1992 under N(degrees) 7542, Book 111, volume A of Corporations and the third one on August 7th, 1995 under N(degrees) 7021, Book 117, Volume A of Corporations I have before me, a certified copy of the former was attached on folio 1090, Year 1992 protocol on this same Record, I attest. IT IS HEREBY CERTIFIED a) that the corporation has legal capacity for the act and that it is managed by a Board of Directors formed by 5 regular members, who hold office for one year and that a Chairman shall be appointed among them and a Vice-chairman might be appointed from among its number and that the Chairman, or the Vice-Chairman in absence of the former, or two directors shall jointly act as the corporation's legal representatives and b) that the corporate domicile is in the city of Buenos Aires, and the previous registered office domicile was in Carlos Pellegrini 887, 3(degrees) floor. SECOND: The appointment of Mr. Manuel Lucio Torino as President of the Corporation results from the Shareholders' Meeting dated January 30th, 1996 and the Board Meeting dated February 22nd, 1996, whose Minutes were recorded on Folio 61 and following and folio 91 of the Minutes Book of Shareholders' and Board Meetings, registered on August 31st, 1992 under No. C 5822 and C 5823 and certified copies of which I attached to folio 2267, year 1996 protocol of this Record, I attest. And THIRD: The authorization for this act results by the resolution taken at the Board Meeting held on May 22nd, 1996 and recorded on folio 92 of the above-mentioned Minutes Book of Board Meetings I have before me and which is fully transcribed below. Mr. Manuel Lucio Torino, hereby DEPOSES AND REPRESENTS AS FOLLOWS: That the corporation he represents, at the Meeting held on May 22nd of the current year agreed to change the registered office. I herein below transcribe the following minutes of the Board of Meeting which I have before me: " In the City of Buenos Aires, on May 22nd, 1996, the undersigned Members of Ultrapetrol S.A. Board held their meeting at 15.30 under the Chairman Manuel Lucio Torino who starts the Meeting. He took the floor and stated it had been previously ommited to state that the corporation has moved its registered office to LEANDRO N. ALEM 986, 11(TH) FLOOR, CAPITAL FEDERAL. There being no further business to transact, the meeting was adjourned at 16:00." (Four signatures follow"). IT IS A TRUE COPY OF THE ORIGINAL, I ATTEST. He requests that I issue such copies, forms, opinions and writs as may be necessary to speed up both formalities, which I am authorized to register in the General Inspection of Justice. THESE PRESENTS HAVING BEEN READ, Mr. Manuel Lucio Torino ratifies these presents and affixes his hand, I attest. There follow three illegible signatures and a seal that reads RICARDO MIHURA SEEBER, NOTARY PUBLIC, REGISTER 1950. NOTARIAL ORDER. Law 12.990. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there a number C000571320. It is in AGREEMENT with the original copy that is in leaf 3753 of the Notarial Registry No 137 of this Capital Federal, authorized by Ricardo MIHURA SEEBER for THE COROPORATION. As NOTARY PUBLIC of this Registry I issue the present FIRST COPY in 2 (TWO) photocopy/ies and the present sheet that I seal and sign in Buenos Aires on the TWENTY THIRD day of the month of OCTOBER 1996. There appears an illegible signature and Seal. There appears an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. GENERAL INSPECTION OF JUSTICE. Official Proceeding Number 00081 222217. CHANGE OF REGISTERED OFFICE. NUMBER: 1559393. CORPORATION. Firm Name ULTRAPETROL, (before) Inscribed in this Registry under number 10697 of book 119, section A- of JOINT STOCK COMPANIES and/or private instruments. Deed/s 569. To count: *0. Buenos Aires, 10/29/96. There is an illegible signature and seal. Copy/ies certified under notarial seal No T 003108096. There follow an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. CERTIFICATION OF REPRODUCTIONS. LAW 404. Notary Public Association. Capital Federal. Argentine Republic. On the right margin there is a number T 003108096. Buenos Aires, September 16th 2004. As Notary Public HOLDER OF THE NOTARIAL REGISTRY 137 CERTIFIES that the enclosed reproduction, issued in 04 (four) folio/s, that I sign and seal, is a TRUE COPY of TRADUCCION PUBLICA. its original, I have before me, I testify. There is an illegible signature and a seal that reads BERNARDO MIHURA de ESTRADA, NOTARY PUBLIC, REGISTER 4669. I, MARIA CRISTINA TOUBES, a Public Translator in the Argentine Republic, duly admitted and sworn, do hereby certify the foregoing to be a true and accurate translation into English of the document in Spanish I have before me, and hereunto annexed. Done and signed in Buenos Aires, this sixteenth day of November, 2004. - -ES TRADUCCION FIEL al idioma ingles de una fotocopia del documento original redactado en espanol que he tenido a la vista y al cual me remito. EN FE DE LO CUAL estampo mi firma y sello en la Ciudad de Buenos Aires, a los 16 dias del mes de noviembre de 2004. EX-3.27 28 y04808exv3w27.txt MEMO AND ARTICLE OF ASSOCIATION OF UP OFFSHORE LTD. LTD. EXHIBIT 3.27 Commonwealth of The Bahamas IBC 01 The International Business Companies Act (No. 45 of 2000) Certificate of Incorporation (SECTION 16) No. 132727 B UP OFFSHORE (HOLDINGS) LTD. I, JACINDA P. BUTLER, Assistant Registrar General, the Commonwealth of The Bahamas do hereby certify pursuant to the International Business Companies Act 2000, (No. 45 of 2000) that all the requirements of the said Act in respect of incorporation have been satisfied, and that UP OFFSHORE (HOLDINGS) LTD. is incorporated in the Commonwealth of The Bahamas as an International Business Company this 12TH day of AUGUST, 2004 Given under my hand and seal At Nassau in the Commonwealth of The Bahamas /s/ J. P. BUTLER ------------------------------ ASSISTANT REGISTRAR GENERAL COMMONWEALTH OF THE BAHAMAS NEW PROVIDENCE COMPANY UNDER THE INTERNATIONAL BUSINESS COMPANIES ACT 2000 File No. _______________________ Reg. No. _______________________ MEMORANDUM AND ARTICLES OF ASSOCIATION OF UP OFFSHORE (HOLDINGS) LTD. INCORPORATED THE TWELFTH DAY OF AUGUST, A.D. 2004. CERTIFICATE OF COMPLIANCE PURSUANT TO SECTION 15 (7) OF THE INTERNATIONAL BUSINESS COMPANIES ACT, 2000 (NO. 45 OF 2000) We, H & J CORPORATE SERVICES LTD., acting as Registered Agent of UP OFFSHORE (HOLDINGS) LTD. (the "Company") hereby certify that the requirements of the International Business Companies Act, 2000 (No.45 of 2000), in respect of the registration of the Company have been complied with. DATED THIS TWELFTH DAY OF AUGUST, A.D., 2004. /s/ [ILLEGIBLE] --------------------------------- FOR H & J CORPORATE SERVICES LTD. REGISTERED AGENT H & J CORPORATE SERVICES LTD. SHIRLAW HOUSE 87 SHIRLEY STREET NASSAU, BAHAMAS COMMONWEALTH OF THE BAHAMAS THE INTERNATIONAL BUSINESS COMPANIES ACT 2000 MEMORANDUM OF ASSOCIATION OF UP OFFSHORE (HOLDINGS) LTD. 1. The name of the Company is UP OFFSHORE (HOLDINGS) LTD. REGISTERED OFFICE 2. The Registered Office of the Company will be at Shirlaw House, 87 Shirley Street, Nassau, New Providence, The Bahamas, the postal address of which is P.O. Box SS-19084, Nassau, New Providence, Bahamas. REGISTERED AGENT 3. The Registered Agent of the Company will be H & J Corporate Services Ltd., Shirlaw House, 87 Shirley Street, Nassau, New Providence, The Bahamas, the postal address of which is P.O. Box SS-19084, Nassau, New Providence, Bahamas. OBJECTS AND POWERS 4. (1) The objects for which the Company is established are to engage in any act or activity that is not prohibited under any law for the time being in force in The Bahamas. (2) The Company shall have all such powers as are permitted by any law for the time being in force in The Bahamas, irrespective of corporate benefit, to perform all acts and engage in all activities necessary or conducive to the conduct, promotion or attainment of the objects or purposes of the Company. (3) The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings and property or any part thereof to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. (4) Any mortgage or charge of the undertaking and property of the Company shall for the purposes of Section 80 of the Act be regarded as in the usual or regular course of the business carried on by the Company. CURRENCY 5. Shares in the Company shall be issued in the currency of United States Dollars. AUTHORISED CAPITAL 6. The authorised capital of the Company is US$5,000.00. -2- CLASSES, NUMBER AND PAR VALUE OF SHARES 7. The authorised capital is made up of one class of shares divided into 5,000 shares of US$1.00 each par value with one vote for each share. SHARE RIGHTS AND LIMITATIONS 8. The designations, powers, preferences, rights, qualifications, limitations and restrictions of each class and series of shares that the Company is authorised to issue shall be fixed by resolution of directors but the directors shall not allocate different rights as to voting, dividends, redemption or distributions on liquidation between the shares of the Company unless the Memorandum of Association shall have been amended to create separate classes of shares and shares of each separate class and series shall have identical rights as to voting, dividends, redemption and distributions. VARIATION OF CLASS RIGHTS 9. If at any time the authorised capital is divided into different classes or series of shares, the rights attached to any class or series (unless otherwise provided by the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or series and of the holders of not less than three-fourths of the issued shares of any other class or series of shares which may be affected by such variation. 10. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith. REGISTERED SHARES 11. Shares may be issued only as registered shares. LIABILITY OF MEMBERS 12. The liability of members is limited to the amount, if any, unpaid on the shares respectively held by them. AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION 13. The Company may amend its Memorandum of Association and Articles of Association by a resolution of members or by a resolution of the directors. DEFINITIONS 14. The meanings of words in this Memorandum of Association are as defined in the Articles of Association of the Company. -3- We, the subscribers whose names are subscribed are desirous of incorporating an International Business Company under the laws of The Bahamas in pursuance of this Memorandum of Association. AS WITNESS our hands this 12th day of August, A.D. 2004. Subscriber Subscriber LEX LTD. LEGIS LTD. By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] --------------------------- --------------------------- Its Authorised Signatory Its Authorised Signatory WITNESS to the above signatures: /s/ Gwyneth V. Saunders --------------------------- Gwyneth V. Saunders P.O. Box SS-19084 Nassau, Bahamas COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ [ILLEGIBLE] ---------------------------------------- Registrar General AUG 12 2004 COMMONWEALTH OF THE BAHAMAS THE INTERNATIONAL BUSINESS COMPANIES ACT 2000 ARTICLES OF ASSOCIATION OF UP OFFSHORE (HOLDINGS) LTD. TABLE OF CONTENTS

-2- DEFINITIONS 1. In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear the meanings set opposite them respectively in the second column thereof. WORDS MEANING Act The International Business Companies Act 2000 including any modification, extension, re-enactment or renewal thereof and any regulations made thereunder. Articles These Articles of Association as they may from time to time be amended. capital The sum of the aggregate par value of all outstanding shares with par value of the Company and shares with par value held by the Company as treasury shares plus (a) the aggregate of the amounts designated as capital of all outstanding shares without par value of the Company and shares without par value held by the Company as treasury shares, and (b) the amounts as are from time to time transferred from surplus to capital by a resolution of directors. member A person who holds shares in the Company. Memorandum The Memorandum of Association of the Company as it may from time to time be amended. person An individual, a corporation, a trust, the estate of a deceased individual, a partnership or an unincorporated association of persons. resolution (a) A resolution approved at a duly constituted meeting of of directors directors or of a Committee of directors of the Company by the affirmative vote of a simple majority of the directors present who voted and did not abstain; or (b) a resolution consented to in writing by a simple majority of all directors or of all members of the Committee of directors, as the case may be; except where a director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority. resolution (a) A resolution approved at a duly constituted meeting of of members the members of the Company by the affirmative vote of (i) a simple majority of the votes of the members present and entitled to vote thereon and who voted and did not abstain; or (ii) a simple majority of the votes of the members of each class or series of shares present and entitled to vote thereon as a class or series and who voted and did not abstain and of a simple majority of the votes of the remaining members present and entitled to vote -3- thereon and who voted and did not abstain; or (b) a resolution consented to in writing by (i) a simple majority of the votes of the members entitled to vote thereon, or (ii) a simple majority of the votes of the shareholders entitled to vote thereon as a class and of a simple majority of the votes of the remaining members entitled to vote thereon; Seal Any seal which has been duly adopted as the Common Seal of the Company. securities Shares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debt obligations. surplus The excess, if any, at the time of the determination of the total assets of the Company over the sum of its total liabilities, as shown in its books of account, plus its issued and outstanding share capital. treasury shares Shares in the Company that were previously issued but were repurchased, redeemed or otherwise acquired by the Company and not cancelled. 2. "Written" or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced by any mode of reproducing words in a visible form, including telex, telefax, telegram, cable or other form of writing produced by electronic communication. 3. Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles. 4. Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits, include the others. 5. The realisable value in relation to the assets of the Company shall mean such value as the directors may decide upon as the value of the assets, which value in the absence of fraud shall be conclusive unless a question of law is involved. 6. A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according to the provisions of the Memorandum. PRIVATE COMPANY 7. The Company is registered as a private company, and accordingly: (a) the right to transfer shares is restricted in the manner provided in these Articles; (b) the number of the members of the Company is limited to fifty. Provided that where two or more persons hold one or more shares in the Company jointly they shall for the purposes of this Article be treated as a single member; and (c) any invitation to the public to subscribe for any shares, debentures or other securities of the Company is prohibited. -4- REGISTERED SHARES 8. Subject to such conditions as the Directors may reasonably determine for the issue of Certificates every member holding registered shares in the Company shall be issued a certificate which shall be signed by a director or officer of the Company and under the Seal specifying the share or shares held by him and the signature of the director or officer and the Seal may be stamped thereon. 9. Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a share certificate for registered shares be worn out or defaced, the directors may upon surrender thereof for cancellation issue a new one in its stead and if it be lost or destroyed, the directors may upon the loss or destruction being established to their satisfaction and upon such indemnity being given to the Company as it by resolution of directors may determine issue a new one in its stead. 10. If several persons are registered as holders of any shares, any one of such persons may give an effectual receipt for any dividend payable in respect of such shares. SHARES, AUTHORISED CAPITAL AND CAPITAL 11. Subject to the provisions of these Articles and to any resolution of members the unissued shares of the Company shall be at the disposal of the directors who may without prejudice to any rights previously conferred on the holders of any existing shares or class or series of shares offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolution of directors determine. 12. Shares in the Company shall be issued for money, services rendered, personal property, an estate in real property, a promissory note or other binding obligation to contribute money or property or any combination of the foregoing as shall be determined by a resolution of directors. 13. Shares in the Company may be issued for such amount of consideration as the Company may from time to time by resolution of directors determine, except that in the case of shares with par value, the amount shall not be less than the par value, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue is conclusive unless a question of law is involved. The consideration in respect of the shares with par value constitutes capital to the extent of the par value and the excess constitutes surplus. 14. A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall be treated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respect of the other share, debt obligation or security. 15. Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company may by resolution of directors determine. 16. The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares. 17. Upon the issue by the Company of a share without par value, if an amount is -5- stated in the Memorandum to be authorised capital represented by such shares then each share shall be issued for no less than the appropriate proportion of such amount which shall constitute capital, otherwise the consideration in respect of the share constitutes capital to the extent designated by the directors and the excess constitutes surplus, except that the directors shall designate as capital an amount of the consideration that is at least equal to the amount that the share is entitled to as, a preference if any, in the assets of the Company upon liquidation of the Company. 18. The Company may purchase, redeem or otherwise acquire and hold its own shares but no purchase, redemption or other acquisition shall be made unless the directors determine that immediately after the purchase, redemption or other acquisition the Company will be able to satisfy its liabilities as they become due in the ordinary course of its business and the realisable value of the assets of the Company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in the books of account. 19. A determination by the directors under the preceding Article is not required where shares are purchased, redeemed or otherwise acquired (a) pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for money or other property of the Company; (b) in exchange for newly issued shares in the Company; (c) by virtue of the provisions of Section 81 of the Act; and (d) pursuant to an order of the court. 20. Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 18 may be cancelled or held as treasury shares unless the shares are purchased, redeemed or otherwise acquired out of capital pursuant to Section 34 of the Act in which case they shall be cancelled. 21. Where shares in the Company are held by the Company as treasury shares or are held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the votes in the election of directors of the other company, the members of the Company shall not be entitled to vote in respect of such shares or to have dividends paid thereon and such shares shall not be treated as outstanding for any purpose except for purposes of determining the capital of the Company. LIEN ON SHARES 22. The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money or property or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in the name of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether the time for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such member or his estate and any other person, whether a member of the Company or not. The Company's lien on a share shall extend to all dividends payable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Article. 23. In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company may sell, -6- in such manner as it may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of twenty one days after a notice in writing, stating and demanding payment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share. 24. The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment or discharge of the binding obligation in respect of which the lien exists so far as the same is presently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorise some person to transfer the share sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale. TRANSFER OF SHARES 25. All transfers of shares may be effected by transfer in writing in the usual common form, or in such other form as the Directors may accept, and may be under hand only. 26. The instrument of transfer of a share shall be signed by or on behalf of the transferor and transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register of Members in respect thereof. 27. The Directors may in their absolute discretion and without assigning any reason therefor decline to register any transfer of shares (whether fully paid or not) to a person of whom they shall not approve, and they may also decline to register any transfer of shares on which the Company has a lien. If the Directors refuse to register a transfer they shall within two months after the date on which the transfer was lodged with the Company send to the transferee notice of the refusal. 28. The Directors may decline to recognise any instrument of transfer, unless:- (a) The instrument of transfer is deposited at the office or such other place as the Directors may appoint accompanied by the certificate of the shares to which it relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and (b) The instrument of transfer is in respect of only one class of shares. All instruments of transfer which are registered may be retained by the Company. 29. Notwithstanding anything to the contrary contained in these presents the Directors may upon the written request of the transferor register a transfer of shares without an instrument of transfer being produced to them or lodged with the Company whether or not an instrument of transfer has been executed. TRANSMISSION OF SHARES 30. The executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt member shall be the only person recognised by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of the Company until they -7- have proceeded as set forth in the next following 3 Articles. 31. The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation as personal representative of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by the Company even if the deceased, incompetent or bankrupt member is domiciled outside The Bahamas if the document evidencing the grant of probate or letters of administration, confirmation as personal representative, appointment as guardian or trustee in bankruptcy is issued by a foreign court which had competent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directors may obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee in bankruptcy. 32. Any person becoming entitled by operation of law or otherwise to a share or shares in consequence of the death, incompetence or bankruptcy of any member may be registered as a member upon such evidence being produced as may reasonably be required by the directors. An application by any such person to be registered as a member shall for all purposes be deemed to be a transfer of shares of the deceased, incompetent or bankrupt member and the directors shall treat it as such. 33. Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of being registered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shall likewise be treated as if it were a transfer. 34. What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and the circumstances of the case. REDUCTION OR INCREASE IN AUTHORISED CAPITAL 35. The Company may amend the Memorandum to increase or reduce its authorised capital and in connection therewith the Company may in respect of any unissued shares, increase or reduce the number of such shares, increase or reduce the par value of any such shares or effect any combination of the foregoing. 36. The Company may amend the Memorandum to (a) divide the shares, including issued shares, of a class or series into a larger number of shares of the same class or series; or (b) combine the shares, including issued shares, of a class or series into a smaller number of shares of the same class or series; Provided, however, that where shares are divided or combined under (a) or (b) of this Article, the aggregate par value of the new shares must be equal to the aggregate par value of the original shares. 37. The capital may by a resolution of directors be increased by transferring an amount out of the surplus of the Company to capital. 38. Subject to the provisions of the 2 next succeeding Articles the capital may by resolution of directors be reduced by: (a) returning to members any amount received by the Company upon the issue of any of its shares, the amount being surplus to the requirements of the Company, -8- (b) cancelling any capital that is lost or not represented by assets having a realisable value or (c) transferring capital to surplus for the purpose of purchasing, redeeming or otherwise acquiring shares that the directors have resolved to purchase, redeem or otherwise acquire. 39. No reduction of capital shall be effected that reduces the capital to an amount that immediately after the reduction is less than the aggregate par value of all outstanding shares with par value and all shares with par value held by the Company as treasury shares and the aggregate of the amounts designated as capital of all outstanding shares without par value and all shares without par value held by the Company as treasury shares that are entitled to a preference, if any, in the assets of the Company upon liquidation of the Company. 40. No reduction of capital shall be effected unless the directors determine that immediately after the reduction the Company will be able to satisfy its liabilities as they become due in the ordinary course of its business and that the realisable value of the assets of the Company will not be less than its total liabilities, other than deferred taxes, as shown in the books of the Company and its remaining issued and outstanding share capital. MEETINGS AND CONSENTS OF MEMBERS 41. The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside The Bahamas as the directors consider necessary or desirable. 42. Upon the written request of members holding 10 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting of members. 43. The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date of the notice is given appear as members in the Share Register and are entitled to vote at the meeting. 44. The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at the meeting. 45. A meeting of members may be held in contravention of the requirement to give notice if members holding not less than 90 percent of; (a) the total number of shares of the members entitled to vote on all matters to be considered at the meeting, or (b) the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with an absolute majority of the remaining votes, have waived notice of the meeting; and for this purpose presence at the meeting shall be deemed to constitute waiver. 46. The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, shall not invalidate the meeting. 47. A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member including otherwise than on a poll and that proxy need not to be a member. 48. The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. -9- 49. An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properly evidencing the wishes of the member appointing the proxy. Only members who are individuals may appoint proxies. (NAME OF COMPANY) I/We being a member of the above Company With shares HEREBY APPOINT of or failing him of to be my/our proxy to vote for me/us at the meeting of members to be held on the day of and at any adjournment thereof. (Any restrictions on voting to be inserted here.) Signed this day of _______________ Member 50. The following shall apply in respect of co-ownership of shares: (a) if 2 or more persons hold shares together each of them may be present in person or by proxy at a meeting of members and may speak as a member; (b) if only one of them is present in person or by proxy he may vote on behalf of all of them, and (c) if 2 or more are present in person or by proxy they must vote as one. 51. A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating in the meeting are able to hear each other and recognise each other's voice and for this purpose participation shall constitute prima facie proof of recognition. 52. A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy members representing not less than 50 percent of the votes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present, notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed by such person accompanied where such person be a proxy by the proxy form or a copy thereof shall constitute a valid resolution of members. 53. If within one hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the next business day at the same time and place and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy members representing not less than one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. 54. At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be the chairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present in person or appointed under an instrument of proxy in prescribed form at the meeting shall -10- preside as chairman failing which the oldest individual member or representative of a member present shall take the chair. 55. The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. 56. At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have any doubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shall fail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at any meeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman. 57. Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment of representatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where, and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice from any qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice without incurring any liability to any member. 58. Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of the Company. 59. The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a copy of such proxy or authority authenticated by the certificate of a Notary which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall be disregarded. 60. Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class or series of shares in the Company. 61. An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing without the need for any notice, but if any resolution of members is adopted otherwise than by the unanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members who shall not have had the opportunity of consenting or objecting to such resolution. DIRECTORS 62. The first directors of the Company shall be elected by the subscribers to the memorandum; and thereafter, the directors shall be elected by the members or the directors for such term as the members or the directors, as the case may be, determine. 63. The minimum number of directors shall be one and the maximum number shall be 7. -11- 64. Each director shall hold office for the term, if any, fixed by resolution of members or by resolution of directors, as the case may be, or until his earlier death, resignation or removal, or in the case of a company upon the making of an order for the winding up or dissolution of the company or upon the removal of a defunct company by the Registrar otherwise than pursuant to a winding up order. 65. A director may be removed from office, with or without cause, by a resolution of members. 66. A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice is received by the Company or from such later date as may be specified in the notice. 67. A vacancy in the Board of Directors may be filled by a resolution of members or by a resolution of a majority of the remaining directors. 68. The directors may, by a resolution of directors, fix the emoluments of directors with respect to services to be rendered in any capacity to the Company. 69. A director shall not require a share qualification, and may be an individual or a company. POWERS OF DIRECTORS 70. The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with the formation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or these Articles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorised by these Articles and to such requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistent with these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made. 71. The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company and the directors may remove any such person so appointed. 72. Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth in these Articles or in the resolution of directors appointing the officer or agent but the directors may revoke or vary such powers. No officer or agent has any power or authority with respect to matters requiring a resolution under this Article or under Articles 69, 72 and 76. 73. Any director which is a body corporate may appoint in writing any person its duly authorised representative for the purpose of representing it at meetings of the Board of Directors and the person so appointed shall be entitled to exercise the same powers on behalf of such body corporate as the body corporate could exercise if it were an individual director. 74. The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the number fixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purpose of appointing directors to fill any vacancy that has arisen or summoning a meeting of members. 75. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed, -12- drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors. PROCEEDINGS OF DIRECTORS 76. The directors or any Committee thereof may meet at such times and in such manner and places within or outside The Bahamas as the directors may determine to be necessary or desirable. 77. A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating in the meeting are able to hear each other and recognise each other's voice and for this purpose participation shall constitute prima facie proof of recognition. 78. A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to all directors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presence of a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, shall not invalidate the meeting. 79. A director may by a written instrument appoint an alternate who need not be a director and who shall be entitled to attend meetings in the absence of the director who appointed him and to vote or consent in the place of the director. 80. A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2. Where any director is participating in a meeting in accordance with the provisions of Article 77 he shall be counted for the purpose of determining whether the meeting is duly constituted. 81. If the Company shall have only one director the provisions herein contained for meetings of the directors and shall not apply but such sole director shall have full power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by the members of the Company in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution of directors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes. 82. At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board of Directors is not present at the meeting the Deputy Chairman of the Board of Directors shall preside. If there is no Deputy Chairman of the Board of Directors or if the Deputy Chairman of the Board of Directors is not present at the meeting the directors present shall choose some one of their number to be chairman of the meeting. 83. An action that may be taken by the directors or a Committee of directors at a meeting may also be taken by a resolution of directors or of a Committee of directors consented to in writing without the need for any notice and a resolution of directors consented to in writing as aforesaid may consist of several documents in like form (though they may differ by the means by which they are communicated). If any resolution of directors is adopted otherwise than by the unanimous written consent of all directors a copy of such resolution shall forthwith be sent to any director who shall not have had the opportunity of consenting or objecting to such resolution. 84. The directors shall cause the following corporate records to be kept: -13- (a) minutes of all meetings of directors, members, committees of directors, committees of officers and committees of members; (b) copies of all resolutions consented to by directors, members, committees of directors, committees of officers and committees of members; and (c) such other accounts and records as the directors by resolution of directors consider necessary or desirable in order to reflect the financial position of the Company. 85. The books, statutory registers, records and minutes shall be kept at the registered office of the Company. 86. The directors may, by resolution of directors, designate one or more Committees, each consisting of one or more directors. 87. Each Committee of directors has such powers and authorities of the directors, including the power and authority to affix the Seal, as are set forth in the resolution of directors establishing the Committee, except that no Committee has any power or authority to amend the Memorandum or these Articles, to appoint directors or fix their emoluments, or to appoint officers or agents of the Company. 88. The meetings and proceedings of each Committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions of these Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the Committee. OFFICERS 89. The Company may by resolution of directors appoint officers of the Company at such time as shall be considered necessary or expedient. Such officers may consist of a Chairman of the Board of Directors, a Deputy Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries and Treasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person. 90. The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibility of the Chairman of the Board of Directors to preside at meetings of directors and members, the Deputy Chairman to act in the absence of the Chairman, the President to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as may be delegated to them by the President, the Secretaries to maintain the Share Register, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurer to be responsible for the financial affairs of the Company. 91. The emoluments of all officers shall be fixed by resolution of directors. 92. The officers of the Company shall hold office until their successors are duly elected, but any officer elected or appointed by the directors may be removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolution of directors. CONFLICT OF INTERESTS 93. No agreement or transaction between the Company and one or more of its directors or any person in which any director has a financial interest or to whom any director is related, including as a director of that other person, is void or -14- voidable for this reason only or by reason only that the director is present at the meeting of directors or at the meeting of the Committee of directors that approves the agreement or transaction or that the vote or consent of the director is counted for that purpose if the material facts of the interest of each director in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith or are known by the members entitled to vote at a meeting of members and the agreement or transaction is approved or ratified by a resolution of members. 94. A director who has an interest in any particular business to be considered at a meeting of directors or members may be counted for purposes of determining whether the meeting is duly constituted. INDEMNIFICATION 95. Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal or administrative proceedings any person who (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil or administrative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; or (b) is or was, at the request of the Company, serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise. 96. The Company may only indemnify a person if the person acted honestly and in good faith with a view to the best interests of the Company. 97. The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who at the request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles. SEAL 98. The Company may have more than one Seal and references herein to the Seal shall be references to every Seal which shall have been duly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the registered office. Except as otherwise expressly provided herein the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of a director or an officer or any other person so authorised from time to time by resolution of directors. Such authorisation may be before or after the Seal is affixed, may be general or specific and may refer to any number of sealings. The directors may provide for a stamp of the Seal and of the signature of any director, officer or authorised person which may be reproduced by printing or other means on any instrument and it shall have the same force and validity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described. DIVIDENDS 99. The Company may by a resolution of directors declare and pay dividends in money, shares, or other property. In the event that dividends are paid in specie -15- the directors shall have responsibility for establishing and recording in the resolution of directors authorising the dividends, a fair and proper value for the assets to be so distributed. 100. The directors may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the Company. 101. The directors may, before declaring any dividend, set aside out of the profits of the Company such sum as they think proper as a reserve fund, and may invest the sum so set apart as a reserve fund upon such securities as they may select. 102. No dividend shall be declared and paid unless the directors determine that immediately after the payment of the dividend the Company will be able to satisfy its liabilities as they become due in the ordinary course of its business and the realisable value of the assets of the Company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in its books of account, and its issued and outstanding share capital. 103. Notice of any dividend that may have been declared shall be given to each member in manner hereinafter mentioned and all dividends unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of the Company. 104. No dividend shall bear interest as against the Company and no dividend shall be paid on treasury shares or shares held by another company of which the Company holds directly or indirectly, shares having more than 50 percent of the vote in electing directors. 105. A share issued as a dividend by the Company shall be treated for all purposes as having been issued for money equal to the surplus that is transferred to capital upon the issue of the share. 106. In the case of a dividend of authorised but unissued shares with par value, an amount equal to the aggregate par value of the shares shall be transferred from surplus to capital at the time of the distribution. 107. In the case of a dividend of authorised but unissued shares without par value, the amount designated by the directors shall be transferred from surplus to capital at the time of the distribution, except that the directors shall designate as capital an amount that is at least equal to the amount that the shares are entitled to as a preference, if any, in the assets of the Company upon liquidation of the Company. 108. A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having a proportionately smaller par value shall not constitute a dividend of shares. ACCOUNTS 109. The books of account, as shall be deemed necessary or desirable by the directors to reflect the financial position of the Company shall be kept at the registered office of the Company. 110. The directors shall if required by resolution of members cause to be made out and shall serve on the members or lay before a meeting of members at some date not later than three months after the date of the said resolution a profit and loss account for the financial period stipulated in the said resolution and a balance sheet as at the date to which the profit and loss account is made up. The Company's profit and loss account and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit or loss of the Company for that financial period, and a true and fair view of the state of affairs of the Company as at the end of that financial period. -16- 111. A copy of such profit and loss account and balance sheet shall where it is not intended to be laid before a meeting of the members be served on every member in the manner prescribed herein for notices calling a meeting of members. 112. The Company may by a resolution of directors include in the computation of surplus for any purpose the unrealised appreciation of the assets of the Company, and, in the absence of fraud, the decision of the directors as to the value of the assets is conclusive, unless a question of law is involved. AUDITORS 113. The Company may by resolution of members call for the accounts to be examined by auditors. 114. The first auditors shall be appointed by resolution of directors; subsequent auditors shall be appointed by a resolution of members. 115. The auditors may be members of the Company but no director or other officer shall be eligible to be an auditor of the Company during his continuance in office. 116. The remuneration of the auditors of the Company, in the case of auditors appointed by the directors, may be fixed by resolution of directors but subject thereto shall be fixed by resolution of members or in such manner as the Company may by resolution of members determine. 117. The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meeting of the members of the Company and shall state in a written report whether or not (a) In their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered by the accounts, and of the state of affairs of the Company at the end of that period; (b) all the information and explanations required by the auditors have been obtained. 118. The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Company or shall be served on the members. 119. Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors. 120. The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company's profit and loss account and balance sheet are to be presented. NOTICES 121. Any notice, information or written statement to be given by the Company to members shall be served by personal service or by mail addressed to each member at the address shown in the Share Register or if the Share Register does not contain an address for the member, then to the last known address for such member. -17- PENSION AND SUPERANNUATION FUNDS 122. The directors may establish and maintain or procure the establishment and maintenance of any non-contributory or contributory pension or superannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to any persons who are or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated with the Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid or who hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any such other company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may make payments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with any such other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment, or office shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument. ARBITRATION 123. Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the other hand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed, omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to any Act affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a single arbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the reference appoint an umpire. 124. If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitrator shall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint an arbitrator to act in the place of the arbitrator of the defaulting party. VOLUNTARY WINDING UP AND DISSOLUTION 125. The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it may voluntarily commence to wind up and dissolve by resolution of directors. CONTINUATION 126. The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporated under the laws of a jurisdiction outside The Bahamas in the manner provided under those laws. -18- SIGNATURE OF THE 2 SUBSCRIBERS OF THE MEMORANDUM OF ASSOCIATION Subscriber Subscriber LEX LTD. LEGIS LTD. By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] -------------------- ------------------------ Its Authorised Signatory Its Authorised Signatory WITNESS to the above Signatures: /s/ Gwyneth V. Saunders ------------------------------------- Gwyneth V. Saunders P.O. Box SS-19084 Nassau, Bahamas COMMONWEALTH OF THE BAHAMAS REGISTRAR GENERAL'S DEPARTMENT I certify the foregoing to be a true copy of the original document. /s/ [ILLEGIBLE] ----------------------------------------- Registrar General AUG 12 2004 EX-4.2 29 y04808exv4w2.txt REGISTRATION RIGHTS AGREEMENT EXHIBIT 4.2 EXECUTION COPY $180,000,000 Ultrapetrol (Bahamas) Limited 9% First Preferred Ship Mortgage Notes Due 2014 REGISTRATION RIGHTS AGREEMENT November 10, 2004 CREDIT SUISSE FIRST BOSTON LLC Eleven Madison Avenue New York, New York 10010-3629 Dear Sirs: Ultrapetrol (Bahamas) Limited, a Bahamas corporation (the "Issuer"), proposes to issue and sell to Credit Suisse First Boston LLC (the "Initial Purchaser"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), $180,000,000 aggregate principal amount of its 9% First Preferred Ship Mortgage Notes Due 2014 (the "Initial Securities") to be unconditionally guaranteed on a senior secured basis by the entities set forth on Schedule A hereto (the "Guarantors") and secured by assets pledged by Maritima SIPSA S.A. ("Maritima"), Riverpar S.A. ("Riverpar"), and UABL S.A. ("UABL S.A.") (Maritima, Riverpar and UABL S.A. the "Pledgors"). The Initial Securities will be issued pursuant to an Indenture, dated as of November 24, 2004, (the "Indenture") among the Issuer, the Guarantors, the pledgors named therein and Manufacturers and Traders Trust Company, as trustee (the "Trustee"). The Issuer, the Guarantors and the Pledgors are collectively referred to herein as the "Company". The obligations of the Issuer, the Guarantors and the Pledgors in this Agreement are joint and several obligations of the Issuer, the Guarantors and the Pledgors. As an inducement to the Initial Purchaser to enter into the Purchase Agreement, the Company agrees with the Initial Purchaser, for the benefit of the holders of the Initial Securities (including, without limitation, the Initial Purchaser), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively the "Holders"), as follows: 1. Registered Exchange Offer. The Company shall, at its own cost, prepare and, not later than 60 days (or if the 60th day is not a business day, the first business day thereafter) (such 60th day, or the first business day thereafter, being a "Filing Deadline") after the date of original issue of the Initial Securities (the "Issue Date"), file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the "Exchange Securities") of the Issuer issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) that would be registered under the Securities Act. The Company (i) shall use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective under the Securities Act within 150 days (or if the 150th day is not a business day, the first business day thereafter) (such Page 1 150th day, or the first business day thereafter, being an "Effectiveness Deadline") after the Issue Date of the Initial Securities and (ii) shall keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period"). If the Company commences the Registered Exchange Offer, the Company (i) will be entitled to close the Registered Exchange Offer 30 days after such commencement (provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer) and (ii) will consummate the Registered Exchange Offer no later than 40 days after the date on which the Exchange Offer Registration Statement is declared effective (such 40th day, the "Consummation Deadline"). Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall, as promptly as practicable, commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder that is a broker-dealer electing to exchange Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if the Initial Purchaser elects to sell Exchange Securities acquired in exchange for Initial Securities constituting any portion of its unsold allotment, it is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. The Company shall use its best efforts to keep the Exchange Offer Registration Statement effective, and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or the Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchaser have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer or other person with similar prospectus delivery requirements for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the effective date of the Exchange Offer Registration Statement (or such shorter period during which such persons are required by Page 2 applicable law to deliver such prospectus). If, upon consummation of the Registered Exchange Offer, the Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to the Initial Purchaser upon the written request of the Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by the Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the "Private Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "Securities". In connection with the Registered Exchange Offer, the Company shall: (a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders; (c) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, or Baltimore, Maryland, which may be the Trustee or an affiliate of the Trustee; (d) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and (e) otherwise comply with all applicable laws. As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall: (x) accept for exchange all the Initial Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; (y) deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and (z) cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange. The Indenture will provide that (i) the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture, (ii) all the Securities will vote and consent together on all matters as one class and (iii) that none of the Securities will have the right to vote or consent as a class separate from one another on any matter. Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been Page 3 paid on the Initial Securities, from the date of original issue of the Initial Securities. Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate", as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 2. Shelf Registration. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within 180 days of the Issue Date, (iii) the Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange or may not resell the Exchange Securities acquired by it in the Registered Exchange Offer to the public without delivering a prospectus, the Company shall take the following actions (the date on which any of the conditions described in the foregoing clauses (i) through (iv) occur, including in the case of clauses (iii) or (iv) the receipt of the required notice, being a "Trigger Date"): (a) The Company shall, at its cost, as promptly as practicable (but in no event more than 30 days after the Trigger Date (such 30th day being a "Filing Deadline")) (x) in the case of a Shelf Registration Statement filed pursuant to clause (i) of the foregoing paragraph, no later than 150 days after the Issue Date and (y) in the case of a Shelf Registration Statement filed pursuant to clause (ii), (iii) or (iv) of the foregoing paragraph, no later than 60 days after the applicable Filing Deadline (such 150th or 60th day, as the case may be, being an "Effectiveness Deadline"), file with the Commission Page 4 and thereafter shall use its reasonable best efforts to cause to be declared effective a registration statement (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder (other than the Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. (b) The Company shall use its best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the Issue Date or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) can be sold pursuant to Rule 144 under the Securities Act without any limitations under clauses (c), (e), (f) or (h) thereof. The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law. (c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 3. Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply: (a) The Company shall (i) furnish to the Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that the Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as the Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by the Initial Purchaser, include the information Page 5 required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution", reasonably acceptable to the Initial Purchaser, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchaser based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders, who propose to sell Securities pursuant to the Shelf Registration Statement, as selling security holders. (b) The Company shall give written notice to the Initial Purchaser, the Holders of the Securities and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): (i) when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading. (c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement. (d) The Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without Page 6 charge, at least one copy of the effective Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). (e) The Company shall deliver to each Exchanging Dealer and the Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the effective Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference). (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) The Company shall deliver to the Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by the Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement. (h) Prior to any public offering of the Securities, pursuant to any Registration Statement, the Company shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject. (i) The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement. Page 7 (j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchaser, the Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchaser, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchaser, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j). (k) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with printed certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company. (l) The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 90 days after the end of a 12-month period (or 180 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period. (m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (n) The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable Page 8 time after receiving such request. (o) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration. (p) In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by a representative of the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated by you and, on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof. (q) In the case of any Shelf Registration, the Company, if requested by a majority of the Holders of Securities covered thereby, shall cause (i) its counsel or counsels to deliver an opinion or opinions and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof in form and substance reasonably satisfactory to such Holders and the managing underwriters and dated, in the case of the initial opinion or opinions, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion or opinions shall include those matters customarily covered by opinions delivered in connection with a Shelf Registration); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof reasonably requested by any underwriters of the applicable Securities and (iii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. (r) In the case of the Registered Exchange Offer, if requested by the Initial Purchaser or any known Participating Broker-Dealer, the Company shall, at the time of the consummation of such Registered Exchange Offer, cause (i) its counsels to deliver to the Initial Purchaser or such Participating Broker-Dealer signed opinions in the form set forth in Sections 6(c)(i) through (viii) of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Registration Statement to deliver to the Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Page 9 Section 6(a) of the Purchase Agreement, with appropriate date changes. (s) If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or cause to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied. (t) The Company will use its best efforts to (i) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (ii) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of at least a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any. (u) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. (v) The Company shall use its best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby. 4. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof, whether or not the Exchange Offer Registration Statement or a Shelf Registration Statement is filed or becomes effective, and, in connection with any Registration Statement, shall reimburse the Initial Purchaser and the Holders (i) of the Securities being tendered in connection with the Registered Exchange Offer and/or (ii) selling or reselling Securities in connection with a Shelf Registration, for the reasonable fees and disbursements of one firm of counsel, who shall be Cravath, Swaine & Moore LLP unless another firm shall be chosen by the Holders of at least a majority in principal amount of the Securities for whose benefit such Registration Statement is being prepared. 5. Indemnification. (a) The Company agrees to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who is a director or officer of such Holder or such Page 10 Participating Broker-Dealer or who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such directors, officers and controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the final prospectus if the Company had previously furnished copies thereof to such Holder or Participating Broker-Dealer; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders. (b) Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately Page 11 preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons. (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified Page 12 party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this subsection (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. (e) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 6. Additional Interest Under Certain Circumstances. (a) Additional interest (the "Additional Interest") with respect to the Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iv) below a "Registration Default"): (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline; (ii) any Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline; (iii) the Registered Exchange Offer has not been consummated on or prior to the Consummation Deadline; or (iv) any Registration Statement required by this Agreement has been declared effective by the Commission, but (A) such Registration Statement thereafter ceases to be effective, or (B) such Registration Statement or the related prospectus ceases to be usable in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder. Each of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to operation of law or as a result of any action or inaction by the Commission. Additional Interest shall accrue on the Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 1.00% per annum (the "Additional Interest Rate"); provided, however, that if a Registration Default shall occur and be continuing on the date that is two years Page 13 following the Issue Date, such additional interest at the rate of 1.00% per annum will accrue permanently on the Securities. (b) A Registration Default referred to in Section 6(a)(iv)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 45 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured. (c) Any amounts of Additional Interest due pursuant to Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Initial Securities, and further multiplied by a fraction, the numerator of which is the number of days such Additional Interest Rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360. (d) "Transfer Restricted Securities" means each Security until (i) the date on which such Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. 7. Rules 144 and 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Securities, make publicly available other information so long as necessary to permit sales of its securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchaser upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 8. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten Page 14 offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Holders of at least a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering, provided that such selection is reasonably satisfactory to the Company. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. Miscellaneous. (a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of at least a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents. Without the consent of the Holder of each Security adversely effected, however, no change may be made to the provisions relating to the payment of Additional Interest. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery: (1) if to a Holder of the Securities, at the most current address given by such Holder to the Company. (2) if to the Initial Purchaser; Credit Suisse First Boston LLC Eleven Madison Avenue New York, NY 10010-3629 Fax No.: (212) 325-8278 Attention: Transactions Advisory Group with a copy to: Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, NY 10019-7475 Fax No.: (212) 474-3700 Attention: William J. Whelan, III (3) if to the Company, at its address as follows: Ultrapetrol (Bahamas) Limited H & J Corporate Services Ltd. Shirlaw House 87 Shirley Street P. O. Box SS-19084 Nassau, Bahamas Facsimile: (242) 320 6919 Attention: Felipe Menendez Ross with a copy to: Ultrapetrol S.A. Page 15 Leandro N. Alem 986 - 11th floor (C1001AAR) Buenos Aires - Argentina Facsimile: (5411) 4315-0468 Attention: Felipe Menendez Ross with a copy to: Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 Facsimile: 212-480-8421 Attention: Lawrence Rutkowski All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery. (c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. (d) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (h) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (i) Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (j) Third Party Beneficiaries. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. (k) Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed CT Corporation System, 111 Eighth Avenue, New York, New York 10011 (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement that may be instituted in any Federal or state court in the State of New York or brought under Federal or state securities laws, and acknowledges that CT Corporation System has accepted such designation, (ii) submits to the nonexclusive jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon CT Corporation System and written notice of said service to the Company shall be deemed in every respect effective service of process upon it in any such suit or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of CT Corporation System in full force and effect so long as any of the Securities shall be outstanding. To the extent that the Company may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of this Agreement, to the fullest extent permitted by law. Page 16 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Initial Purchaser and the Company in accordance with its terms. Very truly yours, ULTRAPETROL (BAHAMAS) LIMITED By : /s/ Leonard J. Hoskinson ---------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact BAYHAM INVESTMENTS S.A. BALDWIN MARITIME INC. CAVALIER SHIPPING INC. CORPORACION DE NAVEGACION MUNDIAL S.A. DANUBE MARITIME INC. GENERAL VENTURES INC. IMPERIAL MARITIME LTD. (BAHAMAS) INC. KATTEGAT SHIPPING INC. KINGLY SHIPPING LTD. MAJESTIC MARITIME LTD. MASSENA PORT S.A. MONARCH SHIPPING LTD. NOBLE SHIPPING LTD. OCEANPAR S.A. OCEANVIEW MARITIME INC. PARFINA S.A. PARKWOOD COMMERCIAL CORP. PRINCELY INTERNATIONAL FINANCE CORP. REGAL INTERNATIONAL INVESTMENTS S.A. RIVERVIEW COMMERCIAL CORP. SOVEREIGN MARITIME LTD. STANMORE SHIPPING INC. TIPTON MARINE INC. ULTRAPETROL INTERNATIONAL S.A. ULTRAPETROL S.A. UP OFFSHORE (HOLDINGS) LTD. each as a Guarantor, By : /s/ Leonard J. Hoskinson ------------------------------ Name: Leonard J. Hoskinson Title: Attorney-in-Fact MARITIMA SIPSA S.A. RIVERPAR S.A. UABL S.A., each as a Pledgor, By : /s/ Leonard J. Hoskinson ------------------------------ Name: Leonard J. Hoskinson Title: Attorney-in-Fact Page 17 The foregoing Registration Rights Agreement is hereby and accepted as of the date first above written. By CREDIT SUISSE FIRST BOSTON LLC By : /s/ Adam Inselbuch ------------------------- Name: Adam Inselbuch Title: Managing Director Page 18 ANNEX A Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." Page 19 ANNEX B Each broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution." Page 20 ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 200 , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.(1) - ---------------------- (1) In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus. The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. Page 21 ANNEX D | | CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ____________________________________________ Address: ___________________________________________ ___________________________________________ If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Page 22 SCHEDULE A GUARANTORS Subsidiary Country of Organization - ---------- ----------------------- Bayham Investments S.A. Panama Baldwin Maritime Inc. Panama Cavalier Shipping Inc. Panama Corporacion de Navegacion Mundial S.A. Chile Danube Maritime Inc. Panama General Ventures Inc. Liberia Imperial Maritime Ltd. (Bahamas) Inc. Panama Kattegat Shipping Inc. Panama Kingly Shipping Ltd. Bahamas Majestic Maritime Ltd. Bahamas Massena Port S.A. Uruguay Monarch Shipping Ltd. Bahamas Noble Shipping Ltd. Bahamas Oceanpar S.A. Paraguay Oceanview Maritime Inc. Panama Parfina S.A. Paraguay Parkwood Commercial Corp. Panama Princely International Finance Corp. Panama Regal International Investments S.A. Panama Riverview Commercial Corp. Panama Sovereign Maritime Ltd. Bahamas Stanmore Shipping Inc. Panama Tipton Marine Inc. Panama Ultrapetrol International S.A. Panama Ultrapetrol S.A. Argentina UP Offshore (Holdings) Ltd. Bahamas Page 23 EX-4.3 30 y04808exv4w3.txt INDENTURE EXHIBIT 4.3 EXECUTION COPY ================================================================================ ULTRAPETROL (BAHAMAS) LIMITED 9% First Preferred Ship Mortgage Notes Due 2014 The SUBSIDIARY GUARANTORS named herein The PLEDGORS named herein -------------------------- INDENTURE Dated as of November 24, 2004 -------------------------- MANUFACTURERS AND TRADERS TRUST COMPANY, Trustee ================================================================================ CROSS-REFERENCE TABLE

N.A. means Not Applicable. - ---------- Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of the Indenture. Page 1 Table of Contents

Page 2 SECTION 3.05. Deposit of Redemption Price............................... 40 SECTION 3.06. Securities Redeemed in Part............................... 40 ARTICLE 4 Covenants SECTION 4.01. Payment of Securities..................................... 40 SECTION 4.02. SEC Reports............................................... 40 SECTION 4.03. Limitation on Indebtedness................................ 41 SECTION 4.04. Limitation on Restricted Payments......................... 43 SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries................................ 44 SECTION 4.06. Limitation on Asset Sales................................. 45 SECTION 4.07. Limitation on Lines of Business........................... 47 SECTION 4.08. Limitation on Affiliate Transactions...................... 47 SECTION 4.09. Limitation on Liens....................................... 47 SECTION 4.10. Limitation on Sale/Leaseback Transactions................. 47 SECTION 4.11. Change of Control......................................... 48 SECTION 4.12. Future Subsidiary Guarantors.............................. 49 SECTION 4.13. Impairment of Security Interest........................... 49 SECTION 4.14. Application of Proceeds upon Sale or Loss of a Mortgaged Vessel....................................... 50 SECTION 4.15. Application of Proceeds upon Permitted Bareboat Charter................................................ 51 SECTION 4.16. Tender of a Qualified Substitute Vessel; Excess Proceeds Offers........................................ 53 SECTION 4.17. Additional Amounts........................................ 56 SECTION 4.18. Compliance Certificate.................................... 58 SECTION 4.19. Further Instruments and Acts.............................. 58 SECTION 4.20. Reflagging of Vessels..................................... 59 ARTICLE 5 Successor Company SECTION 5.01. When Company May Merge or Transfer Assets................. 59 ARTICLE 6 Defaults and Remedies SECTION 6.01. Events of Default......................................... 61 SECTION 6.02. Acceleration.............................................. 63 SECTION 6.03. Other Remedies............................................ 64 SECTION 6.04. Waiver of Past Defaults................................... 64 SECTION 6.05. Control by Majority....................................... 64 SECTION 6.06. Limitation on Suits....................................... 64 SECTION 6.07. Rights of Holders To Receive Payment...................... 65 SECTION 6.08. Collection Suit by Trustee................................ 65 SECTION 6.09. Trustee May File Proofs of Claim.......................... 65 SECTION 6.10. Priorities................................................ 65 SECTION 6.11. Undertaking for Costs..................................... 66 SECTION 6.12. Waiver of Stay or Extension Laws.......................... 66 ARTICLE 7 Trustee SECTION 7.01. Duties of Trustee......................................... 66 SECTION 7.02. Rights of Trustee......................................... 68 SECTION 7.03. Individual Rights of Trustee.............................. 68 SECTION 7.04. Trustee's Disclaimer...................................... 68

Page 3 SECTION 7.05. Notice of Defaults........................................ 68 SECTION 7.06. Reports by Trustee to Holders............................. 69 SECTION 7.07. Compensation and Indemnity................................ 69 SECTION 7.08. Replacement of Trustee.................................... 69 SECTION 7.09. Successor Trustee by Merger............................... 70 SECTION 7.10. Eligibility; Disqualification............................. 71 SECTION 7.11. Preferential Collection of Claims Against Company......... 71 ARTICLE 8 Discharge of Indenture; Defeasance SECTION 8.01. Discharge of Liability on Securities; Defeasance.......... 71 SECTION 8.02. Conditions to Defeasance.................................. 72 SECTION 8.03. Application of Trust Money................................ 73 SECTION 8.04. Repayment to Company...................................... 73 SECTION 8.05. Indemnity for Government Obligations...................... 74 SECTION 8.06. Reinstatement............................................. 74 ARTICLE 9 Amendments SECTION 9.01. Without Consent of Holders................................ 74 SECTION 9.02. With Consent of Holders................................... 75 SECTION 9.03. Compliance with Trust Indenture Act....................... 76 SECTION 9.04. Revocation and Effect of Consents and Waivers............. 76 SECTION 9.05. Notation on or Exchange of Securities..................... 77 SECTION 9.06. Trustee To Sign Amendments................................ 77 SECTION 9.07. Payment for Consent....................................... 77 ARTICLE 10 Guarantees SECTION 10.01. Guarantees............................................... 77 SECTION 10.02. Limitation on Liability.................................. 79 SECTION 10.03. Successors and Assigns................................... 79 SECTION 10.04. No Waiver................................................ 79 SECTION 10.05. Modification............................................. 79 SECTION 10.06. Release of Subsidiary Guarantor.......................... 80 ARTICLE 11 Pledged Collateral SECTION 11.01. Grant of Security Interest............................... 80 SECTION 11.02. Delivery of Collateral................................... 81 SECTION 11.03. Representations and Warranties........................... 81 SECTION 11.04. Further Assurances....................................... 82 SECTION 11.05. Dividends; Voting Rights; Release of Collateral.......... 82 SECTION 11.06. Trustee Appointed Attorney-in-Fact....................... 83 SECTION 11.07. Trustee May Perform...................................... 84 SECTION 11.08. Trustee's Duties......................................... 84 SECTION 11.09. Remedies upon Event of Default........................... 84 SECTION 11.10. Application of Proceeds.................................. 85 SECTION 11.11. Continuing Lien.......................................... 85 SECTION 11.12. Certificates and Opinions................................ 85 SECTION 11.13. Additional Agreements.................................... 85 ARTICLE 12 Security Agreements

Page 4 SECTION 12.01. Collateral and Security Agreements....................... 86 SECTION 12.02. Recording; Annual Opinions............................... 86 SECTION 12.03. Disposition of Collateral Without Release................ 88 SECTION 12.04. Release of Mortgaged Collateral.......................... 89 SECTION 12.05. Eminent Domain, Expropriation and Other Governmental Takings................................... 92 SECTION 12.06. Permitted Releases Not To Impair Lien; Trust Indenture Act Requirements............................. 93 SECTION 12.07. Suits To Protect the Mortgaged Collateral................ 94 SECTION 12.08. Purchaser Protected...................................... 94 SECTION 12.09. Powers Exercisable by Receiver or Trustee................ 94 SECTION 12.10. Disposition of Obligations Received...................... 94 SECTION 12.11. Determinations Relating to Mortgaged Collateral.......... 95 SECTION 12.12. Release upon Termination of the Company's Obligations............................................ 95 SECTION 12.13. Substitution of Mortgaged Vessel......................... 95 ARTICLE 13 Application of Trust Moneys SECTION 13.01. "Trust Moneys" Defined................................... 98 SECTION 13.02. Retirement of Securities................................. 98 SECTION 13.03. Withdrawals of Insurance Proceeds and Condemnation Awards; Withdrawals of Net Available Cash............. 99 SECTION 13.04. Powers Exercisable Notwithstanding Event of Default...... 103 SECTION 13.05. Powers Exercisable by Trustee or Receiver................ 104 SECTION 13.06. Disposition of Securities Retired........................ 104 SECTION 13.07. Investment and Use of Trust Moneys....................... 104 ARTICLE 14 Miscellaneous SECTION 14.01. Trust Indenture Act Controls............................. 105 SECTION 14.02. Notices.................................................. 105 SECTION 14.03. Communication by Holders with Other Holders.............. 106 SECTION 14.04. Certificate and Opinion as to Conditions Precedent....... 106 SECTION 14.05. Statements Required in Certificate or Opinion............ 106 SECTION 14.06. When Securities Disregarded.............................. 107 SECTION 14.07. Rules by Trustee, Paying Agent and Registrar............. 107 SECTION 14.08. Legal Holidays........................................... 107 SECTION 14.09. Governing Law............................................ 107 SECTION 14.10. No Recourse Against Others............................... 107 SECTION 14.11. Successors............................................... 107 SECTION 14.12. Multiple Originals....................................... 107 SECTION 14.13. Table of Contents; Headings.............................. 108 SECTION 14.14. Agent for Service; Submission to Jurisdiction; Waiver of Immunities................................... 108

Rule 144A/Regulation S Appendix Exhibit 1 - Form of Initial Security Exhibit A - Form of Exchange Security or Private Exchange Security Exhibit B - [Intentionally Omitted] Exhibit C - Form of Mortgage Schedule I - Pledged Shares Schedule II - Pledged Barges Exhibit 2 - Transferee Form of Letter of Representation Page 5 INDENTURE dated as of November 24, 2004, among ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation (the "Company"), the guarantors listed on the signature pages hereto (the "Subsidiary Guarantors"), the pledgors listed on the signature pages hereto (the "Pledgors") and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's 9% First Preferred Ship Mortgage Notes Due 2014 and, if and when issued pursuant to a registered exchange for Initial Securities, the Company's 9% First Preferred Ship Mortgage Notes Due 2014 and if and when issued pursuant to a private exchange for Initial Securities, the Company's 9% First Preferred Ship Mortgage Notes Due 2014: ARTICLE 1 Definitions and Incorporation by Reference ------------------------------------------ SECTION 1.01. Definitions. "Acquisition Contract" means a sale and purchase contract executed by the Company or a Restricted Subsidiary to acquire an additional Vessel or Vessels or any Shipping Business Assets. "Additional Assets" means (i) any property or assets (other than Indebtedness and Capital Stock) in a Shipping Business; (ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in clause (ii) or (iii) above is primarily engaged in a Shipping Business. "Adjusted Treasury Rate" means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after November 24, 2009, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For Page 6 purposes of Sections 4.04, 4.06 and 4.08 only, "Affiliate" shall also mean any beneficial owner of Capital Stock representing 5% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or of rights or warrants to purchase such Capital Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof. "Applicable Premium" means with respect to a Security at any redemption date, the greater of (i) 1.00% of the principal amount of such Security and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Security on November 24, 2009 (such redemption price being described in Section 5 of the Securities exclusive of any accrued interest), plus (2) all required remaining scheduled interest payments due on such Security through November 24, 2009 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Security on such redemption date. "Appraisal Date" means each date as of which the Appraised Value of the Mortgaged Vessels has been determined. "Appraised Value" means the average of the fair market sale values as of a specified date of a specified asset that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined by two Appraisers selected by the Company and, in the event either of such Appraisers is not a Designated Appraiser (as defined in the definition of Appraiser), reasonably acceptable to the Trustee. If the Trustee does not accept an Appraiser (other than a Designated Appraiser) selected by the Company within 10 days of the first giving of notice by the Company to the Trustee requesting a determination of an Appraised Value (the "Appraisal Request Date"), such Appraised Value shall be determined by a panel of three Appraisers, one of whom shall be selected by the Company, another of whom shall be selected by the Trustee and the third of whom shall be selected by such other two Appraisers or, if such Appraisers shall be unable to agree upon a third Appraiser within 5 days of the selection date of the second of such two Appraisers, by an arbitrator mutually acceptable to the Company and the Trustee; provided, however, that, if either party shall not select its Appraiser within 20 days after the Appraisal Request Date, such Appraised Value shall be determined solely by the Appraiser selected by the other party. The Appraiser or Appraisers appointed pursuant to the foregoing procedure shall be instructed to determine such Appraised Value within 25 days after the final appointment of any Appraiser pursuant hereto, and such determination shall be final and binding upon the parties. If three Appraisers shall be appointed, (a) if the median of the determinations of the Appraisers shall equal the average of such determinations, such average shall constitute the determination of the Appraisers; otherwise (b) the determination of the Appraiser that shall differ most from the other two Appraisers shall be excluded, the remaining two determinations shall be averaged and such average shall constitute the determination of the Appraisers. For this purpose, the purchase price of any Mortgaged Vessel acquired after the most recent Appraisal Date shall constitute that Vessel's Appraised Value. "Appraiser" means each of Charles R. Weber Company, Inc.; Mallory, Jones, Lynch, Flynn & Associates; Poten & Partners; J.C. O'Keefe Shipbroking Limited; H. Clarkson & Company Limited; Galbraiths Limited; Arrow Valuations, a division of Arrow Research Ltd.; Associated Shipbroking S.A.M.; Barry Rogliano Salles; Braemar Seascope Valuations Limited; Cooper Brothers S.R.L.; Compass Maritime Services LLC; E.A. Gibson Shipbrokers Ltd.; Ernst Russ GmbH & Co. KG; Fearnleys A.S.; J.E. Hyde & Co. Ltd.; Howe Robinson Marine Evaluations, a division of Howe Robinson & Co. Ltd.; L&R Midland Inc.; Marint (Offshore Services) U.K. Ltd; Marcon International, Inc.; Offshore Shipbrokers Limited.; P.F. Bassoe AS; R.S. Partners Inc.; R.S. Platou Shipbrokers AS; Samuel Stewart & Co.; Simpson Spence & Young Ltd.; and Page 7 Atlantic Shipbrokers Limited D/B/A Southport Atlantic (each a "Designated Appraiser") (and each successor thereto), together with any other Person not affiliated with the Company engaged in the business of appraising vessels. "Asset Sale" means any sale, lease, transfer or other disposition (other than a vessel charter that is not a bareboat charter with a purchase option) (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a "disposition") in one transaction or a series of related transactions, of (i) any shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary), (ii) any Vessel, all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary or (iii) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above, (w) any modification or termination of a charter in the ordinary course of business, (x) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary, (y) for purposes of Section 4.06 only, a disposition that constitutes a Permitted Investment or a Restricted Payment permitted by Section 4.04 and (z) disposition of assets with a fair market value of less than $500,000). "Assignment of Insurance" means an assignment of insurance with respect to any Mortgaged Vessel substantially in the form of and to the effect set forth as Exhibit D to the Escrow Agreement. "Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Securities, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "Average Life" means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum of the products of numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (ii) the sum of all such payments. "Bareboat Charter" means a bareboat charter of a Mortgaged Vessel pursuant to which the chartering-in party has the right to purchase the Mortgaged Vessel at the conclusion of the bareboat charter period for a less than fair market value purchase price. "Bareboat Charter Funds" means the charterhire payments received by the Company, a Subsidiary Guarantor or a Pledgor pursuant to a Bareboat Charter of a Mortgaged Vessel. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board. "Business Day" means each day which is not a Saturday, Sunday or a day on which banking institutions are authorized or permitted to close in New York City, New York and Baltimore, Maryland. "Capital Lease Obligation" means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the Page 8 last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Capital Stock" of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Change of Control" shall mean the occurrence of any of the following events: (i) prior to the earlier to occur of (A) the first public offering of common stock of Parent or (B) the first public offering of common stock of the Company, the Permitted Holders cease to be the "beneficial owner" (as defined in rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the total voting power of the Voting Stock of the Company, whether as a result of issuance of securities of the Parent or the Company, any merger, consolidation, liquidation or dissolution of the Parent or the Company, any direct or indirect transfer of securities by Parent or otherwise (for purposes of this clause (i) and clause (ii) below, the Permitted Holders shall be deemed to beneficially own any Voting Stock of a corporation (the "specified corporation") held by any other corporation (the "parent corporation") so long as the Permitted Holders beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent corporation); (ii) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder, is or becomes the beneficial owner (as defined in clause (i) above, except that for purposes of this clause (ii) such person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company; provided, however, that the Permitted Holders beneficially own (as defined in clause (i) above), directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company than such other person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors (for the purposes of this clause (ii), such other person shall be deemed to beneficially own any Voting Stock of a specified corporation held by a parent corporation, if such other person is the beneficial owner (as defined in this clause (ii)), directly or indirectly, of more than 35% of the voting power of the Voting Stock of such parent corporation and the Permitted Holders beneficially own (as defined in clause (i) above), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Voting Stock of such parent corporation and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of such parent corporation); (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of 66?% of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; and Page 9 (iv) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person other than (A) a transaction in which the survivor or transferee is a Person that is controlled by the Permitted Holders or (B) a transaction following which (1) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and (2) in the case of a sale of assets transaction, each transferee becomes an obligor in respect of the Securities and a Subsidiary of the transferor of such assets. "Charters" is defined to mean each time charter party between a Subsidiary Guarantor and any third party with respect to such Subsidiary Guarantor's Mortgaged Vessel, and as the same may be amended from time to time. For purposes of this definition, each Pledgor shall be deemed to be a Subsidiary Guarantor. "Code" means the Internal Revenue Code of 1986, as amended. "Collateral" is defined to mean, in each case as pledged and assigned to the Trustee pursuant to the Indenture or the Security Agreements, (1) all the issued and outstanding Capital Stock of each Subsidiary Guarantor owned, directly or indirectly, by the Company (subject to the limitations described in clause (i) of Section 11.01), pledged from time to time in favor of the Trustee pursuant to this Indenture and the Security Agreements; (2) all cash held by the Trustee pursuant to this Indenture or the Security Agreements or in the Escrow Account pursuant to the Escrow Agreement; and (3) each Subsidiary Guarantor's and each Pledgor's right, title and interest in and to (i) its respective Mortgaged Vessel, pursuant to a Mortgage issued by such Subsidiary Guarantor or Pledgor, as the case may be, in favor of the Trustee; (ii) the Charters, if any, relating to its Mortgaged Vessel, including the collateral right to receive all monies and claims for monies due and to become due under such Charters or in respect of such Mortgaged Vessel and all claims for damages arising under such Charters or relating to such Mortgaged Vessel, including all moneys or other compensation payable by reason of requisition of title or for hire or other compulsory acquisition and all claims for damages in respect of the actual or constructive total loss of the Mortgaged Vessel; (iii) the freights, hires, passage moneys or payments in respect of indemnities relating to its Mortgaged Vessel; (iv) all its policies and contracts of insurance taken out from time to time in respect of its Mortgaged Vessel; and (v) all proceeds of any of the foregoing. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities from the redemption date to November 24, 2009, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to November 24, 2009. "Comparable Treasury Price" means, with respect to any redemption date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date. "Consolidated Coverage Ratio" as of any date of determination means the ratio of (i) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements have been made publicly available Page 10 to (ii) Consolidated Interest Expense for such four fiscal quarters; provided, however, that: (1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding on the date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period; (2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness; (3) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Sale, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Sale for such period, or increased by an amount equal to the EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Sale for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale); (4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and (5) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Sale, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, Page 11 EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Sale, Investment or acquisition occurred on the first day of such period. For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets and the amount of income or earnings relating thereto or to an Asset Sale, any Investment or the amount of Consolidated Interest Expense associated with any Indebtedness Incurred, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest of such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). For purposes of this definition, whenever pro forma effect is to be given to an acquisition of a Vessel or the financing thereof, the Company may (i) if the Vessel is to be subject to a time charter of at least one year's duration by the Company, apply pro forma EBITDA for such Vessel based on such new time charter or (ii) if the Vessel is to be subject to hire on a voyage charter basis by the Company, apply EBITDA for such Vessel based upon historical earnings of the most comparable Vessel of the Company or any of its Subsidiaries (as determined in good faith by the Board of Directors) during such period, or if there is no such comparable Vessel, based upon industry average earnings for comparable vessels (as determined in good faith by the Board of Directors). "Consolidated Current Liabilities" as of the date of determination means the aggregate amount of liabilities of the Company and its consolidated Restricted Subsidiaries which may properly be classified as current liabilities (including taxes accrued as estimated), on a consolidated basis, after eliminating (i) all intercompany items between the Company and any Restricted Subsidiary and (ii) all current maturities of long-term Indebtedness, all as determined in accordance with GAAP consistently applied. "Consolidated Interest Expense" means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries, without duplication, (i) interest expense attributable to capital leases and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction, (ii) amortization of debt discount and debt issuance cost, (iii) capitalized interest, (iv) noncash interest expense, (v) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (vi) net costs associated with Hedging Obligations (including amortization of fees), (vii) Preferred Stock dividends in respect of all Preferred Stock held by Persons other than the Company or a Restricted Subsidiary to the extent paid in cash in such period, (viii) interest incurred in connection with Investments in discontinued operations, (ix) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary and (x) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust. "Consolidated Net Income" means, for any period, the net income of the Company and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income: (i) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that (A) subject to the exclusion contained in clause (iv) below, the Company's equity in the net Page 12 income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (iii) below) and (B) the Company's equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income; (ii) any net income (or loss) of any Person acquired by the Company or a Subsidiary in a pooling of interests transaction for any period prior to the date of such acquisition; (iii) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that (A) subject to the exclusion contained in clause (iv) below, the Company's equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income, but only to the extent that such Restricted Subsidiary was not prohibited from distributing such net income of such Restricted Subsidiary during such period as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause) and (B) the Company's equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income; (iv) any gain (but not loss) realized upon the sale or other disposition of any assets of the Company or its consolidated Subsidiaries (including pursuant to sales of Vessels and to any sale-and-leaseback arrangement) and any gain (but not loss) realized upon the sale or other disposition of any Capital Stock of any Person, in each case which is not sold or otherwise disposed of in the ordinary course of business, as determined in good faith by the Board of Directors; (v) extraordinary gains or losses; and (vi) the cumulative effect of a change in accounting principles. Notwithstanding the foregoing, for the purposes of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted pursuant to Section 4.04(a)(3)(D). "Consolidated Net Tangible Assets" as of any date of determination, means the total amount of assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) which would appear on a balance sheet of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP (provided that any Vessel shall be valued for purposes of this definition at its Appraised Value as of the most recent Appraisal Date occurring not more than 30 days prior to the date of determination), and after giving effect to purchase accounting and after deducting therefrom Consolidated Current Liabilities and, to the extent otherwise included, the amounts of: (i) minority interests in consolidated Subsidiaries held by Persons other than the Company or a Restricted Subsidiary; (ii) excess of cost over fair value of assets of businesses acquired, as determined in good faith by the Board of Directors; (iii) any revaluation or other write-up in book value of assets subsequent to the Issue Date as a result of a change in the method of valuation in accordance with GAAP consistently applied; (iv) unamortized debt discount and Page 13 expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items; (v) treasury stock; (vi) cash set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such obligation is not reflected in Consolidated Current Liabilities; and (vii) Investments in and assets of Unrestricted Subsidiaries. "Consolidated Net Worth" means the total of the amounts shown on the balance sheet of the Company and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of the Company for which financial statements have been made publicly available prior to the taking of any action for the purpose of which the determination is being made, as (i) the par or stated value of all outstanding Capital Stock of the Company plus (ii) paid-in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock. "Currency Agreement" means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement designed to protect such Person against fluctuations in currency values. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the first anniversary of the Stated Maturity of the Securities; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the first anniversary of the Stated Maturity of the Securities shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the provisions described under Sections 4.06, 4.11 and 4.16. "EBITDA" for any period means the sum of Consolidated Net Income, plus Consolidated Interest Expense plus the following to the extent deducted in calculating such Consolidated Net Income: (a) all income tax expense of the Company and its consolidated Restricted Subsidiaries, (b) depreciation expense of the Company and its consolidated Restricted Subsidiaries, (c) amortization expense (including amortization of dry dock expense) of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid cash item that was paid in a prior period) and (d) all other noncash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such noncash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period), in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and noncash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, Page 14 orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders; provided, however, that, for purposes of the definition of Consolidated Coverage Ratio, EBITDA for a period attributable to a Mortgaged Vessel subject to a Bareboat Charter shall be limited to the product of the EBITDA Portion and the Bareboat Charter Funds received in respect of such Mortgaged Vessel during such period. "EBITDA Portion" in respect of Bareboat Charter Funds received by the Company, its Subsidiary Guarantors or the Pledgors in respect of a Mortgaged Vessel subject to a Bareboat Charter means a fraction, expressed as a percentage, the numerator of which is the average annual amount of EBITDA attributable to such Mortgaged Vessel derived by the Company, its Subsidiary Guarantors and the Pledgors during the two-year period immediately preceding the commencement of such Bareboat Charter (or such shorter period during which such Mortgaged Vessel was owned by the Company, its Subsidiary Guarantors or the Pledgors, in which case such actual EBITDA shall be annualized), and the denominator of which is the annual amount of Bareboat Charter Funds to be received by the Company, its Subsidiaries Guarantors or the Pledgors pursuant to such Bareboat Charter. "Escrow Account" has the meaning assigned thereto in the Escrow Agreement. "Escrow Agreement" means that certain Escrow Agreement, dated as of the date hereof, between the Company and Manufacturers and Traders Trust Company, as escrow agent (the "Escrow Agent"). "Escrowed Property" has the meaning assigned thereto in the Escrow Agreement. "Event of Loss" is defined to mean any of the following events: (a) the actual or constructive total loss of a Vessel or the agreed or compromised total loss of a Vessel, (b) the destruction of a Vessel, (c) damage to a Vessel to an extent, determined in good faith by the Board of Directors within 90 days after the occurrence of such damage (and evidenced by an Officers' Certificate to such effect delivered to the Trustee within such 90-day period), as shall make repair thereof uneconomical or shall render such Vessel permanently unfit for normal use (other than obsolescence) or (d) the condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to a Vessel, or use of a Vessel that shall not be revoked within six months. An Event of Loss shall be deemed to have occurred: (i) in the event of the destruction or other actual total loss of a Vessel, on the date of such loss; (ii) in the event of a constructive, agreed or compromised total loss of a Vessel, on the date of the determination of such total loss pursuant to the relevant insurance policy; (iii) in the case of any event referred to in clause (c) above, upon the delivery of the Company's Officers' Certificate to the Trustee; or (iv) in the case of any event referred to in clause (d) above, on the date six months after the occurrence of such event. "Event of Loss Proceeds" means all compensation, damages and other payments (including insurance proceeds other than certain liability insurance proceeds) received by the Company, any Subsidiary Guarantor, any Pledgor or the Trustee, jointly or severally, from any Person, including any governmental authority, with respect to or in connection with an Event of Loss. "Excess Proceeds" means the sum of (i) any cash released to the Company by the Trustee from Collateral following a redemption date as described under Section 4.14 or following a Vessel Tender Date, as described under Section 4.16, to the extent cash is not applied by the Company toward a Permitted Excess Cash Use within 12 months after such redemption date or Vessel Tender Date, as the case may be, (ii) any Loss Excess Proceeds and (iii) any Sale Excess Proceeds. Page 15 "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Securities" has the meaning assigned thereto in the Rule 144A/Regulation S/IAI Appendix hereto. "Fuel Hedging Agreements" means any spot, forward or option fuel price protection agreements and other types of fuel hedging agreements designed to protect against or manage exposure to fluctuations in fuel prices. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the relevant date of determination, including those set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board, (iii) such other statements by such other entity as approved by a significant segment of the accounting profession and (iv) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Sections 13 or 15(d) of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing any obligation. "Guarantee Agreement" means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor becomes subject to the applicable terms and conditions of this Indenture. "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Fuel Hedging Agreement. "Holder" or "Securityholder" means the Person in whose name a Security is registered on the Registrar's books. "IFC Loan Agreement" means an agreement as in effect on the Issue Date between or among any of the Company, UABL Limited, UP Offshore (Bahamas) Ltd. or any of their respective Subsidiaries, as borrower, and International Finance Corporation or KfW, as lender or lenders, as the case may be, as it may be amended or Refinanced from time to time. "Incidental Asset" is defined to mean any equipment, outfit, furniture, furnishings, appliances, spare or replacement parts or stores owned by the Company, a Subsidiary Guarantor or a Pledgor that have become obsolete or unfit for use or no longer useful, necessary or profitable in the conduct of the business of the Company or such Subsidiary Guarantor or Pledgor, as the case may be. In no event shall the term "Incidental Asset" include a Vessel or a Mortgaged Vessel. Page 16 "Incur" means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a correlative meaning. The accretion of principal of a non-interest bearing or other discount security shall be deemed the Incurrence of Indebtedness. "Indebtedness" means, with respect to any Person on any date of determination (without duplication): (i) the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable; (ii) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person; (iii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding any accounts payable arising in the ordinary course of business); (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers' acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i) through (iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit); (v) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with this Indenture (but excluding, in each case, any accrued dividends); (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, Guarantor or otherwise, including by means of any Guarantee; (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the fair market value of such property or assets or the amount of the obligation so secured; and (viii) to the extent not otherwise included in this definition, Hedging Obligations of such Person. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving Page 17 rise to the obligation, of any contingent obligations at such date. Notwithstanding the above, the following shall not constitute Indebtedness for purposes hereof: any commercial obligations assumed or undertaken by the Company in the ordinary course of business including purchasing or hedging purchases of bunkers or other consumables and obligations to suppliers. "Indenture" means this Indenture as amended or supplemented from time to time. "Initial Securities" has the meaning assigned thereto in the Rule 144A/Regulation S/IAI Appendix hereto. "Interest Rate Agreement" means in respect of a Person any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement designed to protect such Person against fluctuations in interest rates. "Investment" in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. For purposes of the definition of "Unrestricted Subsidiary," the definition of "Restricted Payment" and Section 4.04, (i) "Investment" shall include the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if positive) equal to (x) the Company's "Investment" in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors. "Issue Date" means the date on which the Securities are originally issued. "KfW" means Kreditanstalt fur Wiederaufbau, an institution incorporated under the public law of the Federal Republic of Germany. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Loss Excess Proceeds" means at any time the amount by which the Net Event of Loss Proceeds received by the Company or any of its Restricted Subsidiaries from one or more Events of Loss with respect to Vessels other than Mortgaged Vessels occurring on or after the Issue Date in the most recent period of 12 consecutive months prior to such time exceeds $12.5 million, less the amount of such excess Net Event of Loss Proceeds applied toward a Permitted Excess Cash Use. "Loss Redemption Price" means, per $1,000 principal amount of Security, the sum of (a) 100% of such principal amount and (b) accrued and unpaid interest on such Security to the redemption date. "Maritima SIPSA S.A." means Maritima SIPSA S.A., a Chilean Page 18 company 49% indirectly owned by the Company as of the Issue Date and its successors. "Mortgage" means a mortgage and the related deed of a covenant, if any, on a Vessel substantially in the form of and to the effect set forth as Exhibit C to this Indenture. "Mortgaged Collateral" means all the collateral that is subject to a Mortgage. "Mortgaged Vessels" means certain vessels and barges owned by Subsidiary Guarantors or by Pledgors from time to time, including, as of the Issue Date, the Vessels listed below and the 193 barges identified on Schedule II to this Indenture:
Official or Year Vessel Flag Patente Number Built - ------ ---- -------------- ----- Alianza Campana........ Panama 20554-96-C 1976 Alianza G2.............. Panama 20350-92-C 1994(1) Alianza G3............. Panama 20563-93-C 1993(2) Alianza Rosario......... Panama 20333-92-C 1976 2378-R Cavalier I.............. Paraguay 1966 26998-00 Cavalier II............. Paraguay 1954 HRB-113 Cavalier III............ Bolivia 1956 Princess Katherine...... Panama 27248-00 1986 Princess Marina......... Chile 3074 1986 Princess Nadia.......... Panama 25829-98-A 1987 Princess Susana......... Panama 25834-98 1986 San Antonio I........... Panama 29307-PEXT-4 1972 San Ignacio I........... Panama 29312-PEXT-1 1998 San Lorenzo I........... Panama 32153-PEXT-1 1971 San Martin I............ Panama 29311-PEXT-2 1973 San Nicolas I........... Panama 29309-PEXT-1 1982 San Pedro............... Panama 32108-PEXT-1 1979 Santa Fe II............. Panama 29310-PECT-3 1967
- ------------- (1) The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered in 1984. It was refurbished and converted to its current use in 1994. (2) The barge, Alianza G3, was built in 1982 and was refurbished and converted to its current use in 1993. If one of such vessels shall be sold pursuant to the terms of this Indenture, such vessel shall cease to be a Mortgaged Vessel from and after the Sale Date. A Qualified Substitute Vessel or a Substitute Mortgaged Vessel may be substituted for a Mortgaged Vessel in certain circumstances and such substituted vessel shall become a Mortgaged Vessel upon substitution in accordance with the terms of this Indenture. "Net Available Cash" from an Asset Sale means cash payments received therefrom (including, with respect to any Asset Sale pursuant to Section 4.06(b), any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other noncash form), in each case net of (i) all legal, title and recording tax expenses, commissions Page 19 and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Sale, (ii) all payments made on any Indebtedness which is secured by any assets subject to such Asset Sale, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must, by its terms, or in order to obtain a necessary consent to such Asset Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale, (iii) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale, (iv) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale and (v) all Ready for Sale Costs incurred in connection with such Asset Sale, but only to the extent that such Ready for Sale Costs directly result, in the good faith determination of the Board of Directors (which determination shall be evidenced in the form of a resolution of the Board of Directors and delivered to the Trustee), in the Company, a Restricted Subsidiary or a Pledgor, as the case may be, receiving greater cash proceeds in connection with such Asset Sale than the Company or such Restricted Subsidiary, as the case may be, would have received if such Ready for Sale Costs were not incurred. "Net Cash Proceeds" means, with respect to any issuance or sale of Capital Stock, the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof. "Net Event of Loss Proceeds" is defined to mean, with respect to any Event of Loss, the Event of Loss Proceeds from such Event of Loss net of related fees and expenses and payments made to repay Indebtedness or any other obligation outstanding at the time of such Event of Loss; provided, however, that such Indebtedness or other obligation is either (A) secured by a Lien on the property or assets that suffered the Event of Loss or (B) required to be paid as a result of such Event of Loss. "Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company or any duly appointed attorney-in-fact of the Company. "Officers' Certificate" means a certificate signed by one or more Officers, provided that any Release Certificate (as defined in the Escrow Agreement) shall be signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Parent" means any Person that owns directly or indirectly all the Voting Stock of the Company. "Permitted Excess Cash Use" means (i) the repayment of Senior Indebtedness of the Company or of a Subsidiary Guarantor (in each case other than Indebtedness owed to an Affiliate of the Company), (ii) the investment in Additional Assets or (iii) working capital of the Company and its Restricted Subsidiaries, but only, in the case of this clause (iii), to the extent reasonable (as determined by the Board of Directors in good faith) in light of the operations and prospects of the Company and its Restricted Subsidiaries. "Permitted Flag Jurisdiction" means the Marshall Islands, the United States of America, any State of the United States or the District of Columbia, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Page 20 Panama, the Commonwealth of Bermuda, Singapore, the British Virgin Islands, the Cayman Islands, the Isle of Man, Cyprus, the Philippines, Norway, Greece, the United Kingdom, Argentina, Malta, Brazil, Chile, Paraguay, India, Bolivia, Spain, Uruguay and any other jurisdiction generally acceptable to institutional lenders in the shipping industry, as determined in good faith by the Board of Directors. "Permitted Holders" means Solimar Holdings Ltd., Inversiones Los Avellanos S.A., SIPSA S.A., and their Affiliates as of the Issue Date. Except for a Permitted Holder specifically identified by name, in determining whether Voting Stock is owned by a Permitted Holder, only Voting Stock acquired and held by a Person while it is an Affiliate of one of the Permitted Holders specifically identified by name herein and as of the Issue Date will be treated as "beneficially owned" by a Permitted Holder "Permitted Investment" means an Investment by the Company or any Restricted Subsidiary in (i) the Company (including an Investment in the Securities), a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Shipping Business; (ii) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person's primary business is a Shipping Business; (iii) Temporary Cash Investments; (iv) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances; (v) payroll, travel and similar advances, and advances to ship agents, ship managers and similar advances, in each case, to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (vi) office space and related equipment; (vii) loans or advances to employees made in the ordinary course of business in an aggregate amount not to exceed $250,000 outstanding at any one time; (viii) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments; (ix) agreements in respect of Hedging Obligations; (x) any partnership or joint venture that is not a Restricted Subsidiary in an aggregate amount not to exceed $15.0 million at any one time; provided, however, that such partnership's or such joint venture's primary business is a Shipping Business; and (xi) any other Persons not to exceed $2.0 million in the aggregate at any one time. "Permitted Liens" means, with respect to any Person, (a) Liens securing obligations under this Indenture, the Securities and the Security Agreements; (b) Liens existing on the Issue Date (other than Liens being released effective on the Issue Date); (c) Liens granted after the Issue Date in favor of the Holders; (d) Liens with respect to the assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the Company to secure Indebtedness owing to the Company by such Restricted Subsidiary; (e) Liens for crews' wages (including the wages of a master and the wages of stevedores employed directly by a Vessel) and pledges or deposits by such Person under worker's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or Page 21 leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business; (f) Liens imposed by law, for sums that are not yet due, are being contested in good faith by appropriate proceedings or are fully insured (other than customary deductibles) or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review; (g) Liens for property taxes not yet subject to penalties for nonpayment or which are being contested in good faith and by appropriate proceedings; (h) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness; (i) Liens securing such Person's reimbursement obligations in connection with letters of credit issued for the account of such Person in connection with the establishment of the financial responsibility thereof under Title 33 Code of Federal Regulations Part 138 or Title 46 Code of Federal Regulations Part 540; (j) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; (k) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property of such Person, including Vessels; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Subsidiaries at the time the Lien is Incurred (except property already subject to a Lien in connection with financing by the same financing source pursuant to the same financing scheme); provided further that no such Liens shall extend to any property constituting Collateral or to any Capital Stock that at such time is not part of the Collateral as a result of the application of the provisions set forth in Section 11.01(i); (l) Liens on receivables of the Company and its Restricted Subsidiaries or on receivables of Ultrapetrol International S.A. to secure Indebtedness permitted under Section 4.03(b)(1); (m) Liens on property or shares of Capital Stock of another Person (other than a Subsidiary Guarantor) at the time such other Person becomes a Subsidiary of such Person; provided, however, that such Liens are not created, incurred or assumed in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Lien may not extend to any other property owned by such Person or any of its Subsidiaries; (n) Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of Page 22 a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that such Liens may not extend to any other property owned by such Person or any of its Subsidiaries; (o) Liens securing Hedging Obligations so long as such Hedging Obligations relate to Indebtedness that is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations; (p) any Lien which arises in favor of an unpaid seller in respect of goods, plant or equipment sold and delivered to the Company in the ordinary course of business until payment of the purchase price for such goods or plant or equipment or any other goods, plant or equipment previously sold and delivered by that seller (except to the extent that such Lien secures Indebtedness or arises otherwise than due to deferment of payment of purchase price); (q) any Lien or pledge created or subsisting in the ordinary course of business over documents of title, insurance policies or sale contracts in relation to commercial goods to secure the purchase price thereof; (r) Liens to secure any Refinancing (or successive Refinancings) or replacement as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (a),(b), (k), (m) and (n); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements to or on such property), (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, the committed amount of the Indebtedness described under clause (a), (b), (k), (m) or (n) at the time the original Lien became a Permitted Lien and (B) an amount necessary to pay any fees and expenses, including premiums, related to such Refinancing and (z) such Lien need not be Incurred at the same time the original Lien is released; (s) charters, leases or subleases granted to others in the ordinary course of business that are subject to the relevant Mortgage and that do not materially interfere with the ordinary course of business of such Person and its Restricted Subsidiaries, taken as a whole; (t) (A) Liens in favor of the Company or any Subsidiary Guarantor, (B) Liens arising from the rendering of a final judgment or order against such Person that does not give rise to an Event of Default and (C) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and products and proceeds thereof; (u) Liens in favor of customers and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods; (v) Liens for salvage and general average; (w) Liens, including any existing or future Liens, to secure Indebtedness permitted under Section 4.03(b)(10); provided, however, that no such Liens shall extend to any property constituting Collateral or to any Capital Stock that at such time is not part of the Collateral as a result of the application of the provisions set forth in Section 11.01(i); and (x) Liens securing Indebtedness not in excess of $25.0 million in the aggregate at any time outstanding; provided, however, that no such Liens shall extend to any property constituting Collateral or to any Page 23 Capital Stock that at such time is not party the Collateral as a result of the application of the provisions set forth in Section 11.01(i). Notwithstanding the foregoing, "Permitted Liens" will not include any Lien described in clause (k), (m) or (n) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly from Net Available Cash pursuant to Section 4.06 or acquired pursuant to a Permitted Excess Cash Use. For purposes of this definition, the term "Indebtedness" shall be deemed to include interest on such Indebtedness. "Person" means any individual, corporation, partnership, limited liability issuer, joint venture, association, joint-stock issuer, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Pledgor" means any of Maritima SIPSA S.A., UABL S.A. and Riverpar S.A. for so long as such entity owns a Mortgaged Vessel. "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person. "Princely" means Princely International Finance Corp., a Panamanian corporation, and its successors. "principal" of a Security means the principal of the Security plus the premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time. "Private Exchange Securities" has the meaning assigned thereto in the Rule 144A/Regulation S/IAI Appendix hereto. "Public Equity Offering" means an underwritten primary public offering of common stock of the Company or Parent (i) pursuant to an effective registration statement under the Securities Act or (ii) in an offshore offering pursuant to Regulation S under the Securities Act, so long as such common stock shall be listed for trading on a Designated Offshore Securities Market (as such term is defined in the Securities Act). "Public Market" means any time after (x) a Public Equity Offering has been consummated and (y) at least 15% of the total issued and outstanding common stock of the Company or Parent has been distributed by means of an effective registration statement under the Securities Act or is eligible for distribution pursuant to Rule 144(k) under the Securities Act or is listed for trading on any nationally recognized securities quotation or any Designated Offshore Securities Market (as such term is defined in the Securities Act). "Purchase Money Indebtedness" means Indebtedness (including Capital Lease Obligations) (1) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds or similar Indebtedness, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and (2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements, in the ordinary course of business; provided, however, that any Lien arising in connection with any such Indebtedness shall be limited to the specific asset being financed (except property already subject to a Lien in connection with a financing by the same financing source pursuant to the same financing scheme) or, in the case of real property or fixtures, including additions and Page 24 improvements, the real property on which such asset is attached. "Qualified Substitute Vessel" means, as of any date, one or more Vessels which (i) are not Mortgaged Vessels as of such date, (ii) will be, upon acquisition thereof wholly owned by a Restricted Subsidiary of the Company or, if the Vessel is replacing the Princess Marina prior to the date of the sale by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted Subsidiary, Maritima SIPSA S.A., (iii) are registered under the laws of a Permitted Flag Jurisdiction and (iv) have an Appraised Value (which for these purposes shall be deemed to include any credit (as certified in writing in the form of an Officers' Certificate and delivered to the Trustee) (which has not previously been applied) to which the Company shall be entitled arising from the tender on a previous occasion of a Qualified Substitute Vessel having an Appraised Value in excess of the Appraised Value of the Sold Mortgaged Vessel or the Lost Mortgaged Vessel in substitution for which it was tendered) at the Vessel Tender Date applicable to the last Vessel being tendered in substitution for any Sold Mortgaged Vessel or Lost Mortgaged Vessel at least equal to the Vessel for which it is being substituted, assuming compliance by the applicable Subsidiary Guarantor with all the terms of this Indenture and the applicable Mortgage. "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. "Ready for Sale Cost" is defined to mean, with respect to a Vessel or Vessels (including any Mortgaged Vessel) to be sold or leased (under a Capital Lease Obligation) by the Company or any Subsidiary Guarantor, the aggregate amount of all expenditures incurred to bring such Vessel or Vessels to the condition and location necessary or desirable to market such Vessel or Vessels for sale or lease, or necessary for its intended use by the purchaser or lessor thereof, including any and all vessel preparation and transportation expenses (including crew wages and transit insurance), loading and discharge expenses, inspections, appraisals, repairs, modifications, additions, improvements, permits and licenses in connection with such sale or lease. "Ready for Sea Cost" is defined to mean, with respect to a Vessel or Vessels (including any Qualified Substitute Vessel) to be acquired or leased (under a Capital Lease Obligation) by the Company or any Subsidiary Guarantor, the aggregate amount of all expenditures incurred to acquire or construct and bring such Vessel or Vessels to the condition and location necessary for its intended use, including any and all vessel preparation and transportation expenses, loading and discharge expenses, inspections, appraisals, repairs, modifications, additions, improvements, permits and licenses in connection with such acquisition or lease; provided that in each case such expenditures would be classified and accounted for as "property, plant and equipment" in accordance with GAAP. "Receivables" means at any date of determination all receivables accounted for on the consolidated balance sheet of Ultrapetrol International S.A. as of the end of the most recent fiscal quarter for which financial statements are publicly available in accordance with GAAP plus an amount equal to the receivables reasonably expected to be established on such balance sheet upon completion of voyages in progress at such date by Ultrapetrol International S.A.'s chartered-in vessels. "Reference Treasury Dealer" means Credit Suisse First Boston LLC and its successors and assigns and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers. "Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, Page 25 expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date. "Refinance" means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings. "Refinancing Indebtedness" means Indebtedness that Refinances any Indebtedness of the Company or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with this Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that (i) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, (ii) such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced and (iii) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. "Restricted Payment" with respect to any Person means (i) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and dividends or distributions payable solely to the Company or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation)); (ii) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company held by any Person or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than a Restricted Subsidiary), including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock); (iii) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of acquisition); or (iv) the making of any Investment (other than a Permitted Investment) in any Person. "Restricted Subsidiary" means the Subsidiary Guarantors and any other Subsidiary of the Company that is not an Unrestricted Subsidiary. "Riverpar S.A." means Riverpar S.A., an indirect subsidiary of Ultrapetrol (Bahamas) Limited incorporated under the laws of Paraguay and its successors. "Sale Equivalent Portion" in respect of Bareboat Charter Funds received by the Company, its Subsidiary Guarantors or the Pledgors in respect of a Mortgaged Vessel subject to a Bareboat Charter means the excess of such Bareboat Charter Funds over the product of the EBITDA Portion and such Bareboat Page 26 Charter Funds. "Sale Excess Proceeds" is defined to mean the amount of excess Net Available Cash from Asset Sales not applied (or committed to be applied) as set forth in Section 4.06(b)(i). "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person. "Sale Redemption Price" means, per $1,000 principal amount of Security, the sum, as calculated by the Company, of (a) the greater of (i) 100% of such principal amount and (ii)(x) if such redemption date is on or after November 24, 2009, the redemption price then applicable as described in paragraph 5 of the Securities or (y) if such redemption date is prior to November 24, 2009, the sum of the remaining scheduled payments of principal and interest on such Security, as discounted to their present values to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the Adjusted Treasury Rate, and (b) accrued and unpaid interest on such Security to the redemption date. "SEC" means the Securities and Exchange Commission. "Secured Indebtedness" means any Indebtedness of the Company secured by a Lien. "Securities" has the meaning assigned thereto in the Rule 144A/Regulation S/IAI Appendix hereto. "Securities Act" means the Securities Act of 1933. "Security Agreements" means the Escrow Agreement, Mortgages, assignments of Charters, assignments of freights and hires and assignments of insurance and any other instruments or documents entered into or delivered in connection with any of the foregoing, as such agreements, instruments or documents may from time to time be amended in accordance with the terms hereof and thereof. "Senior Indebtedness" of any Person means (i) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred, and (ii) accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company to the extent post-filing interest is allowed in such proceeding) in respect of (A) indebtedness for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable unless, in the case of (i) and (ii), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are subordinate in right of payment to the Securities or the related Subsidiary Guarantee; provided, however, that Senior Indebtedness shall not include (1) any obligation of such Person to any subsidiary of such Person, (2) any liability for Federal, state, local or other taxes owed or owing by such Person, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness of such Person (and any accrued and unpaid interest in respect thereof) which is subordinate or junior in any respect to any other Indebtedness or other obligation of such Person or (5) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of this Indenture. "Shipping Business" means the ownership or operation of Vessels and any activities within the ship owning and shipping industries and all businesses which are complementary, incidental, related or ancillary to any such Page 27 activities, industries and businesses, including owning barges and all kind of floating vessels or crafts, floating storage production units, storage tanks and terminals, salvage, port facilities and services, pipelines and all kinds of loading and discharging facilities and equipment related thereto (including any investment in real estate in respect of the foregoing). "Shipping Business Assets" means any assets used in the ordinary course of the Shipping Business. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. "SIPSA S.A." means SIPSA S.A., a company organized under the laws of Chile. "Solimar Holdings Ltd." means Solimar Holdings Ltd., a company organized under the laws of Bermuda. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred). "Subordinated Obligation" means any Indebtedness of the Company or a Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Securities or the related Subsidiary Guarantee pursuant to a written agreement to that effect. "Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "Subsidiary Guarantor" means Princely International Finance Corp. and each Subsidiary of the Company, whether now owned or hereafter formed, that executes and delivers a Subsidiary Guarantee. "Subsidiary Guarantee" means a Guarantee of the Company's obligations with respect to the Securities issued by a Subsidiary of the Company. "Substitute Mortgaged Vessel" is defined to mean, as of any date, one or more Vessels which (i) are not Mortgaged Vessels as of such date, (ii) will be owned by a Restricted Subsidiary of the Company, (iii) are registered under the laws of a Permitted Flag Jurisdiction and (iv) have an Appraised Value at the Vessel Substitution Date at least equal to the Appraised Value of the Mortgaged Vessel for which it is being substituted, assuming compliance by the applicable Subsidiary Guarantor with all the terms of this Indenture and the applicable Mortgage. "Temporary Cash Investments" means any of the following: (i) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof; (ii) investments in time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition Page 28 thereof issued by (A) any bank or trust company organized under the laws of Argentina or Brazil; provided that, with respect to the Company, the aggregate amount of such deposits shall not exceed $10.0 million at any time, and (B) a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor; (iii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) above entered into with a bank meeting the qualifications described in clause (ii) above; (iv) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of "P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings Group; and (v) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's Investors Service, Inc. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "UABL S.A." means UABL S.A., an indirect subsidiary of Ultrapetrol (Bahamas) Limited incorporated under the laws of Argentina and its successors. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "Unrestricted Subsidiary" means (i) any Subsidiary of the Company (other than a Subsidiary Guarantor) that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary (other than a Subsidiary Guarantor)) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under Section 4.04. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (x) the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions. Page 29 "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. "Vessel" means a tanker, bulk carrier, barge, liquid petroleum gas/liquid natural gas tanker, chemical carrier, bulk carrier, container vessel, reefer vessel, tug boat, push boat, off shore supply vessel, floating storage production unit, barge and in general any floating craft whose purpose may be partially or wholly to deploy, procure, process, transport, load, discharge, transfer or store lawful commodities or to transport crew, personnel or passengers, and all related spares, stores, equipment, additions and improvement equipment related to such work whether it is attached to such vessel or not. It will also include any participation in the described vessels by joint venture or other commercial forms of participation. "Vessel Percentage" is defined to mean as of and after any Sale Date or the Loss Date, as the case may be, and prior to any subsequent adjustment as provided below, for each of the initial Mortgaged Vessels and the Escrowed Property, the percentage set forth below opposite such Mortgaged Vessel:
Vessel Percentage - ------ ---------- Alianza G2 2.27 Alianza G3 2.07 Alianza Compana 0.51 Alianza Rosario 0.51 Cavalier I 0.54 Cavalier II 0.45 Cavalier III 0.70 Princess Katherine 13.80 Princess Marina 9.20 Princess Nadia 14.31 Princess Susana 13.67 San Antonio I 0.66 San Ignacio I 1.68 San Lorenzo I 0.47 San Martin I 0.89 San Nicolas I 0.61 San Pedro 0.75 Santa Fe II 0.44 Aggregate of 193 barges 21.13 Escrowed Property 15.34 Total....................................... 100.0%
- -------------- * Reflects the aggregate Vessel Percentage represented by the 193 barges that are Mortgaged Vessels under this Indenture as of the Issue Date, with each barge having an individual Vessel Percentage of approximately 0.13%. ; provided, however, that each Vessel Percentage shall be adjusted, in connection with any redemption of the Securities following a Sale or Loss of a Mortgaged Vessel, in each case to give effect to the occurrence of, and after giving effect to, (i) the acquisition of a Vessel with Escrowed Property and the delivery of a Mortgage with respect to such Vessel, (ii) the delivery after the Issue Date of any Qualified Substitute Vessel as part of the Collateral pursuant to the terms of this Indenture, (iii) the delivery after the Issue Date of any other Vessel as part of the Collateral, (iv) an Event of Loss after the Issue Date with respect to any Mortgaged Vessel, (v) the sale after the Issue Date of any Mortgaged Vessel, in each case effected in accordance with the terms of this Page 30 Indenture, to be, for each Mortgaged Vessel remaining after such an occurrence, the percentage that the Appraised Value of such Mortgaged Vessel at the time of and after giving effect to such occurrence bears to the sum of the aggregate Appraised Value of the remaining Mortgaged Vessels at the time of and after giving effect to such occurrence plus the amount of Escrowed Property then remaining as part of the Collateral. Notwithstanding the foregoing, if any Vessel Percentage is required to be calculated or adjusted at a time when cash is on deposit with the Trustee as part of the Collateral as a result of the sale of a Mortgaged Vessel or the occurrence of an Event of Loss with respect to a Mortgaged Vessel, the amount of such cash on deposit shall be deemed to be the Appraised Value of such Vessel giving rise to such cash on deposit and such Vessel shall be deemed to remain a Mortgaged Vessel for purposes of such computation or adjustment of Vessel Percentage. The Company shall make all calculations provided for herein and shall, for any such calculations made after the Issue Date, provide to the Trustee an Officers' Certificate certifying that such calculations were performed in accordance the provisions hereof. "Voting Stock" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. "Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital Stock of which (other than directors' qualifying shares) is owned by the Company or one or more Wholly Owned Subsidiaries. SECTION 1.02. Other Definitions.
Defined in Term Section ---- ------- "Additional Amounts"......................................... 4.17 "Affiliate Transaction"...................................... 4.08 "Appendix"................................................... 2.01 "Bankruptcy Law"............................................. 6.01 "covenant defeasance option"................................. 8.01(b) "Custodian".................................................. 6.01 "Event of Default"........................................... 6.01 "Excess Proceeds Offer"...................................... 4.16(b) "Excess Proceeds Payment".................................... 4.16(b) "Excluded Holder"............................................ 4.17 "legal defeasance option".................................... 8.01(b) "Legal Holiday".............................................. 14.08 "Loss Date".................................................. 4.14 "Lost Mortgaged Vessel"...................................... 4.14 "Mortgaged Vessel Asset"..................................... 4.06(a) "Notification Date".......................................... 4.14 "Obligations"................................................ 10.01 "Offer Amount"............................................... 4.16(c) "Offer Period"............................................... 4.16(c) "Paying Agent"............................................... 2.03 "Pledged Collateral"......................................... 11.01 "Pledged Shares"............................................. 11.01 "Proceeds Receipt Date"...................................... 4.14 "Purchase Date".............................................. 4.16(c) "Redemption Amount".......................................... 4.14 "Registrar".................................................. 2.03 "Release Notice"............................................. 12.04 "Sale Date".................................................. 4.14 "Sold Mortgaged Vessel"...................................... 4.14 "Successor Company".......................................... 5.01(a) "Taxes"...................................................... 4.17
Page 31 "Tendered Vessel Owner"...................................... 4.16(a) "Trust Moneys"............................................... 13.01 "Vessel Substitution Date"................................... 12.13 "Vessel Tender Date"......................................... 4.16(a)

SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities and the Subsidiary Guarantees; "indenture security holder" means a Securityholder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the indenture securities means the Company each Subsidiary Guarantor and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; (6) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; (7) secured Indebtedness shall not be deemed to be subordinate or junior to any other secured Indebtedness merely because it has a junior priority with respect to the same collateral; (8) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP and accretion of principal on such security shall be deemed to be the Incurrence of Indebtedness; (9) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater; Page 32 and (10) all references to the date the Securities were originally issued shall refer to the date the Initial Securities were originally issued. ARTICLE 2 The Securities -------------- SECTION 2.01. Form and Dating. Provisions relating to the Initial Securities, the Private Exchange Securities and the Exchange Securities are set forth in the Rule 144A/Regulation S/IAI Appendix attached hereto (the "Appendix") which is hereby incorporated in and expressly made part of this Indenture. The Initial Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Securities, the Private Exchange Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in the Appendix and Exhibit A are part of the terms of this Indenture. SECTION 2.02. Execution and Authentication. One Officer shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate and deliver Securities for original issue in aggregate principal amount of $180.0 million upon a written order of the Company signed by an Officer of the Company. Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated. The aggregate principal amount of Securities outstanding at any time may not exceed that amount except as provided in Section 2.06. The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Page 33 Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent or to notify the Trustee as provided in the previous sentence, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent. The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities. SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.06. Replacement Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-401(1) of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Security. Every replacement Security is an additional Obligation of the Company. SECTION 2.07. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancelation and those described in this Section as not outstanding. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. If a Security is replaced pursuant to Section 2.06, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to Page 34 them that the replaced Security is held by a bona fide purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.08. Temporary Securities. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities. SECTION 2.09. Cancelation. The Company at any time may deliver Securities to the Trustee for cancelation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancelation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancelation. SECTION 2.10. Defaulted Interest. If the Company defaults in a payment of interest on the Securities, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Securityholders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Securityholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.11. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. SECTION 2.12. Transfer and Exchange. The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar's or co-registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.11 and 9.05). The Company shall not be required to Page 35 make and the Registrar need not register transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. ARTICLE 3 Redemption SECTION 3.01. Notices to Trustee. If the Company elects to redeem Securities pursuant to paragraph 5 of the Securities or is required to redeem Securities pursuant to paragraph 6 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and the paragraph of the Securities pursuant to which the redemption will occur. If the Company is required to redeem Securities pursuant to paragraph 6 of the Securities, it may reduce the principal amount of Securities required to be redeemed to the extent it is permitted a credit by the terms of the Securities and it notifies the Trustee of the amount of the credit and the basis for it. If the reduction is based on a credit for redeemed or canceled Securities that the Company has not previously delivered to the Trustee for cancelation, it shall deliver such Securities with the notice. The Company shall give each notice to the Trustee provided for in this Section not less than 45 days nor more than 60 days before the redemption date unless the Trustee consents in writing to a shorter period. Such notice shall be accompanied by an Officers' Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein. SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata to the extent practicable. The Trustee shall make the selection from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000. Securities and portions of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed. SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a date for redemption of Securities, the Company shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder's registered address. Page 36 The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price or the method of calculating such redemption price pursuant to this Indenture; (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed; (6) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Securities pursuant to which the Securities called for redemption are being redeemed; and (8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities. At the Company's written request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with the information required by this Section. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. At least one Business Day prior to the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which have been delivered by the Company to the Trustee for cancelation. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 Covenants SECTION 4.01. Payment of Securities. The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner Page 37 provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal and interest then due. The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. SECTION 4.02. SEC Reports. The Company shall file with the Trustee and provide Securityholders, within 15 days after it files them with the SEC, copies of its annual report and the information, documents and other reports which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act (if any). Notwithstanding that the Company may not be required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act applicable to a "foreign private issuer" (as such term is defined in Rule 3b-4 under the Exchange Act), the Company shall file with the SEC and furnish to the Trustee and Securityholders (i) within 120 days from the end of each fiscal year, an annual report on Form 20-F (or any successor form) containing the information required to be contained therein for such fiscal year, and (ii) within 45 days from the end of each of the first three quarters in each fiscal year, quarterly reports on Form 6-K containing unaudited financial statements (including a balance sheet and statement of income, changes in stockholders' equity and cash flows) and Management's Discussion and Analysis of Financial Condition and Results of Operations for and as of the end of each of such quarters (with comparable financial statements for such quarter of the immediately preceding fiscal year). In each such report, the Company shall disclose in reasonable detail its calculation of EBITDA for the twelve-month period ended as of the end of such fiscal year or such fiscal quarter, as applicable. The Company also shall comply with the other provisions of TIA ss. 314(a). SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness except that the Company and its Subsidiary Guarantors may Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto, the Consolidated Coverage Ratio exceeds 2.0 to 1.0. (b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries may Incur, directly or indirectly, any or all of the following Indebtedness: (1) Indebtedness of the Company and the Subsidiary Guarantors Incurred pursuant to a working capital line of credit in an amount which, when added together with the amount of all other Indebtedness Incurred pursuant to this clause (1) and then outstanding does not exceed $15.0 million; (2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or another Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the Company; (3) the Securities; (4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clause (1), (2), (3) or (10) of this Section 4.03(b)); (5) Refinancing Indebtedness in respect of Indebtedness Incurred Page 38 pursuant to Section 4.03(a) or pursuant to clause (3), (4), this clause (5) or clause (8) below; (6) Indebtedness (A) in respect of performance, surety, appeal or similar bonds provided in the ordinary course of business, and (B) arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business or assets of the Company or any of its Restricted Subsidiaries, including all or any interest in any Restricted Subsidiary, and not exceeding the gross proceeds therefrom, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business or assets of the Company or any of its Restricted Subsidiaries for the purpose of financing such acquisition; (7) Hedging Obligations consisting of Interest Rate Agreements or Currency Agreements directly related to Indebtedness permitted to be Incurred by the Company pursuant to this Indenture; (8) Purchase Money Indebtedness Incurred to finance the acquisition by the Company or a Restricted Subsidiary of additional Vessels or Shipping Business Assets; provided, however, that, at the date of such Incurrence, the amount of such Indebtedness shall not exceed 80% of the cost of acquiring such Vessel or such Shipping Business Assets, including the purchase price of such Vessel or such Shipping Business Assets under the Acquisition Contract in respect thereof plus any Ready for Sea Cost; (9) Indebtedness consisting of the Subsidiary Guarantee of a Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of Indebtedness Incurred pursuant to clause (3) or (4) or pursuant to clause (5) to the extent the Refinancing Indebtedness Incurred thereunder directly or indirectly Refinances Indebtedness Incurred pursuant to clause (3) or (4); (10) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to any IFC Loan Agreement in an aggregate principal amount which, when added together with the amount of all other Indebtedness Incurred pursuant to this clause (10) and then outstanding, does not exceed $40.0 million; and (11) Indebtedness of the Company, the Subsidiary Guarantors and other Restricted Subsidiaries in an aggregate principal amount which, together with all other Indebtedness of the Company outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1) through (10) above or paragraph (a)), does not exceed $15.0 million; provided that the aggregate principal amount of Indebtedness that may be Incurred pursuant to this clause (11) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $10.0 million at any time outstanding. (c) Notwithstanding the foregoing, the Company shall not Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations unless such Indebtedness shall be subordinated to the Securities to at least the same extent as such Subordinated Obligations. (d) For purposes of determining compliance with this Section 4.03, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item Page 39 of Indebtedness in any manner that complies with this covenant and only be required to include the amount and type of such Indebtedness in one of the above clauses and (ii) an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness. SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and be continuing (or would result therefrom); (2) the Company is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a); or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of: (A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter during which the Securities are originally issued to the end of the most recent fiscal quarter for which financial statements are publicly available prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); (B) the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees to the extent such issuance or sale is financed with proceeds of debt provided by the Company or any Subsidiary of the Company); (C) the amount by which Indebtedness of the Company is reduced on the Company's balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange); (D) an amount equal to the sum of (i) the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances or other transfers of assets, in each case to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, and (ii) the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary; and (E) $7.5 million (b) The provisions of Section 4.04(a) shall not prohibit: (i) any Restricted Payment made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees); provided, however, that (A) the amount of such Restricted Payment shall be Page 40 excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the calculation of amounts under Section 4.04(a)(3)(B); (ii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company or a Subsidiary Guarantor which is permitted to be Incurred pursuant to Section 4.03; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments; (iii) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that at the time of payment of such dividend, no other Default shall have occurred and be continuing (or result therefrom); provided further, however, that such dividend shall be included in the calculation of the amount of Restricted Payments; or (iv) the repurchase or other acquisition of shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases and other acquisitions shall not exceed $250,000 in any calendar year; provided further, however, that such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments. SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (b) make any loans or advances to the Company or (c) transfer any of its property or assets to the Company, except: (i) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date; (ii) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness or Preferred Stock Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company (other than Indebtedness or Preferred Stock Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and outstanding on such date; (iii) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness or Preferred Stock Incurred pursuant to an agreement referred to in clause (i) or (ii) of this Page 41 covenant or this clause (iii) or contained in any amendment to an agreement referred to in clause (i) or (ii) of this covenant or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are in the aggregate no less favorable to the Securityholders than encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements; (iv) any such encumbrance or restriction consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder; (v) in the case of clause (c) above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages; (vi) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and (vii) any such restriction applicable to a Restricted Subsidiary contained in agreements evidencing or relating to Purchase Money Indebtedness of such Restricted Subsidiary. SECTION 4.06. Limitation on Asset Sales. (a) The Company shall not, and shall not permit any Restricted Subsidiary to engage in Asset Sales of Collateral (other than an Incidental Asset and other than pledged Capital Stock of a Subsidiary that is not a Subsidiary Guarantor); provided, however, that (i) the Company or a Restricted Subsidiary may sell all the Capital Stock of a Subsidiary Guarantor and (ii) a Subsidiary Guarantor may sell a Mortgaged Vessel (together with the applicable charters, freights and hires and other related agreements) or transfer a Mortgaged Vessel pursuant to a Bareboat Charter (any such asset proposed to be sold or transferred pursuant to this clause (ii) is referred to herein as a "Mortgaged Vessel Asset"), if such sale or transfer of a Mortgaged Vessel Asset shall be made in compliance with each of the following conditions: (i) no Default shall have occurred and be continuing; (ii) the sale or transfer shall be effected in a commercially reasonable manner as determined by the Board of Directors and evidenced by a board resolution; (iii) the entire consideration for such sale, and all Bareboat Charter Funds in respect of a Bareboat Charter, shall be cash, which shall be not less than the Appraised Value of such Mortgaged Vessel Asset determined within 90 days prior to the date of such sale; (iv) funds in an amount equal to the Net Available Cash (or the Sale Equivalent Portion of Bareboat Charter Funds) shall be paid in full directly to the Trustee as Collateral and shall be received by the Trustee free of any Lien (other than the Lien of this Indenture and the Security Agreements); and (v) the Company shall have complied with the other provisions of this Indenture applicable to such sale; Page 42 provided further, however, that the Appraised Value of all Mortgaged Vessels subject to Bareboat Charters shall not exceed 10% of the aggregate of the Appraised Values (as of a date not more than 90 days prior to such Bareboat Charter) of all the Mortgaged Vessels. The Company shall apply the proceeds from such sale as described under Sections 4.14, 4.15 and 4.16. (b) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any Asset Sales (other than Asset Sales permitted by Section 4.06(a)) unless (x) (A) such Asset Sale is by a Restricted Subsidiary that is not a Subsidiary Guarantor or (B) such Asset Sale is the sale of an Incidental Asset or of the pledged Capital Stock of a Subsidiary that is not a Subsidiary Guarantor and (y) in the event and to the extent that the Net Available Cash received by the Company or any such Restricted Subsidiary from one or more of such Asset Sales occurring on or after the Issue Date in any period of 12 consecutive months exceeds $12.5 million, then the Company shall or shall cause such Restricted Subsidiary to, within 30 days after the date Net Available Cash so received exceeds $12.5 million in any period of 12 consecutive months, apply an amount equal to such Net Available Cash either (i) toward a Permitted Excess Cash Use or (ii) treat (no later than the end of such 30-day period) such excess Net Available Cash (to the extent not applied pursuant to clause (i) above) as Sale Excess Proceeds. SECTION 4.07. Limitation on Lines of Business. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than the Shipping Business. SECTION 4.08. Limitation on Affiliate Transactions. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with any Affiliate of the Company (an "Affiliate Transaction") unless the terms thereof (1) are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of such transaction in arm's-length dealings with a Person who is not such an Affiliate, (2) if such Affiliate Transaction involves an amount in excess of $500,000, (i) are set forth in writing and (ii) have been approved by a majority of the members of the Board of Directors having no personal stake in such Affiliate Transaction and (3) if such Affiliate Transaction (other than chartering contracts or contracts for the transportation of cargo not in excess of 13 months) involves an amount in excess of $2,000,000, have been determined by a reasonably appropriate independent qualified appraiser given the size and nature of the transaction to be fair, from a financial standpoint, to the Company and its Restricted Subsidiaries. (b) The provisions of Section 4.08(a) shall not prohibit (i) any Permitted Investment or Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options, stock ownership and other employee benefit plans approved by the Board of Directors, (iii) the grant of stock options or similar rights to employees and directors of the Company pursuant to plans approved by the Board of Directors, (iv) loans or advances to employees in the ordinary course of business in accordance with the past practices of the Company or its Restricted Subsidiaries, but in any event not to exceed $500,000 in the aggregate outstanding at any one time, (v) the payment of reasonable fees to directors of the Company and its Restricted Subsidiaries who are not employees of the Company or its Restricted Subsidiaries and (vi) any Affiliate Transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries. Page 43 SECTION 4.09. Limitation on Liens. The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature whatsoever on any of its properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, other than Permitted Liens, without effectively providing that the Securities shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured. SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless (i) the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Securities pursuant to Section 4.09, (ii) the net proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair value (as determined by the Board of Directors) of such property and (iii) the Company applies the proceeds of such transaction in compliance with Section 4.06. SECTION 4.11. Change of Control. (a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase such Holder's Securities at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in Section 4.11(b). (b) Within 30 days following any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder's Securities at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); (2) the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control); (3) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (4) the instructions determined by the Company, consistent with the covenant described hereunder, that a Holder must follow in order to have its Securities purchased. (c) Holders electing to have a Security purchased will be required to surrender the Security, with an appropriate form duly completed, to the Company at the address specified in the notice at least three Business Days prior to the purchase date. Holders will be entitled to withdraw their election if the Trustee or the Company receives not later than one Business Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased. (d) On the purchase date, all Securities purchased by the Company Page 44 under this Section shall be delivered to the Trustee for cancelation, and the Company shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto. (e) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.11. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.11, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.11 by virtue thereof. SECTION 4.12. Future Subsidiary Guarantors. (a) To the extent that, after the Issue Date, the Company acquires additional Vessels with the Escrowed Property, each such Vessel shall be acquired by a Restricted Subsidiary, the Company shall cause such Restricted Subsidiary to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the Securities on the same terms and conditions as those set forth in Article 10 of this Indenture (unless such Restricted Subsidiary is already a Subsidiary Guarantor), to execute a Mortgage in favor of the Trustee pursuant to which such acquired Vessel shall thereafter be a Mortgaged Vessel for all purposes under this Indenture, to execute the related Security Agreements and to satisfy such other conditions set forth in Section 3 of the Escrow Agreement. (b) To the extent that, after the Issue Date, any Restricted Subsidiary that is not a Subsidiary Guarantor acquires any Mortgaged Vessel, the Company shall cause such Restricted Subsidiary to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the Securities on the same terms and conditions as those set forth in Article 10 of this Indenture, to execute a Mortgage in favor of the Trustee pursuant to which such acquired Vessel shall thereafter be a Mortgaged Vessel for all purposes under this Indenture, to execute the related Security Agreements and to satisfy such other conditions set forth in Section 3 of the Escrow Agreement and the other Security Agreements. SECTION 4.13. Impairment of Security Interest. Other than in connection with the creation of Permitted Liens, (a) the Company shall not, and shall not permit any Restricted Subsidiary or Maritima SIPSA S.A. to, take or knowingly or negligently omit to take, any action which action or omission might or would have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and the Holders of the Securities, and (b) the Company shall not, and shall not permit any Restricted Subsidiary or Maritima SIPSA S.A. to, grant to any Person other than the Trustee, for the benefit of the Trustee and the Holders of the Securities, any interest whatsoever in any of the Collateral. SECTION 4.14. Application of Proceeds upon Sale or Loss of a Mortgaged Vessel. (a) If either: (1) a Mortgaged Vessel or the Capital Stock of a Subsidiary Guarantor or a Pledgor is sold (other than the sale by a Pledgor of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) (which term shall not include the transfer of the operation of a Mortgaged Vessel pursuant to a bareboat charter with a purchase option, which is covered under Section 4.15) in compliance with Section 4.06(a) (the Mortgaged Vessel so sold or owned by the Subsidiary Guarantor or Pledgor whose Capital Stock is so sold being the "Sold Mortgaged Vessel"), or (2) an Event of Loss occurs at any time with respect to a Mortgaged Page 45 Vessel (the Mortgaged Vessel suffering such Event of Loss being the "Lost Mortgaged Vessel"), then within 25 days after the date title of the Mortgaged Vessel passes to the buyer (such date being the "Sale Date"), in the case of a sale, or within 25 days after the date such Event of Loss was deemed to have occurred (the "Loss Date"), the Company shall give written notice (such date of notice being the "Notification Date") to the Trustee whether it elects to redeem Securities in connection with such sale or Event of Loss; provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the Company shall redeem Securities in accordance with Section 4.14(c). Upon the receipt by the Company, a Subsidiary Guarantor or a Pledgor of the Net Available Cash attributable to a Sold Mortgaged Vessel (other than the receipt by a Pledgor of Net Available Cash attributable to the sale of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) or of the Net Event of Loss Proceeds attributable to a Lost Mortgaged Vessel, such amounts shall be deposited with the Trustee pursuant to Article 13 and shall constitute Collateral pending application in accordance with Section 4.14(c). (b) If the Company elects to (or is required to) redeem Securities, the Company shall apply Net Available Cash or Net Event of Loss Proceeds, as the case may be, and any other cash, not later than 60 days after the date (the "Proceeds Receipt Date") of the receipt of such funds in an amount (the "Redemption Amount") at least equal to the Vessel Percentage applicable to the Sold Mortgaged Vessel as of the Sale Date or the Lost Mortgaged Vessel as of the Loss Date, as the case may be, multiplied by the principal amount of the Securities outstanding on the Sale Date or the Loss Date, as the case may be (provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the amount required to be applied by the Company to redeem Securities shall equal the greater of such Redemption Amount and such Net Available Cash or Net Event of Loss Proceeds, as the case may be), to redeem such principal amount of Securities as can be redeemed at the Sale Redemption Price or the Loss Redemption Price, as the case may be. (c) On the redemption date attributable to a Sold Mortgaged Vessel or a Lost Mortgaged Vessel, the Trustee shall apply the applicable Net Available Cash or the applicable Net Event of Loss Proceeds then on deposit with it pursuant to Article 13 (together with any funds the Company delivers to the Trustee to the extent necessary to pay the Sale Redemption Price or the Loss Redemption Price for the Securities to be redeemed) to pay the Sale Redemption Price or the Loss Redemption Price to the Holders of Securities being redeemed. Upon the effectuation of any such redemption, all accrued and unpaid interest on the Securities so redeemed shall be deemed fully paid. To the extent that after the Sale Redemption Price or the Loss Redemption Price has been paid with respect to all Securities to be redeemed in respect of such Sold Mortgaged Vessel or Lost Mortgaged Vessel, as the case may be, any Net Available Cash or Net Event of Loss Proceeds attributable to such Sold Mortgaged Vessel or Lost Mortgaged Vessel remains on deposit with the Trustee and no Default has occurred and is continuing, such Net Available Cash or Net Event of Loss Proceeds may be released to the Company upon its request, free of the lien of this Indenture; provided, however, that such funds may only be used by the Company for a Permitted Excess Cash Use or to make an Excess Proceeds Offer. SECTION 4.15. Application of Proceeds upon Permitted Bareboat Charter. (a) If the Company, a Subsidiary Guarantor or a Pledgor enters into a Bareboat Charter with respect to a Mortgaged Vessel, then within 25 days after title to such Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, the Company shall give written notice to the Trustee Page 46 whether it elects to redeem Securities in connection with such Bareboat Charter; provided, however, that if a Default shall have occurred and be continuing on such Notification Date, the Company shall be required to redeem Securities in accordance with Section 4.15(b). Upon receipt by the Company, a Subsidiary Guarantor or a Pledgor of Bareboat Charter Funds, the Sale Equivalent Portion of such Bareboat Charter Funds shall be deposited with the Trustee pursuant to Article 13 and shall constitute Collateral pending application in accordance with Section 4.15(b) and (c). (b) If the Company elects to redeem Securities, the Company shall apply the Sale Equivalent Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel plus accrued interest thereon, not later than 60 days after the date title to the relevant Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, to redeem such principal amount of Securities as can be redeemed at the Sale Redemption Price. On the redemption date attributable to such Bareboat Charter, the Trustee shall apply the Sale Equivalent Portion of such Bareboat Charter Funds then on deposit with it (together with any funds the Company delivers to the Trustee to the extent necessary to pay the Sale Redemption Price for the Securities to be redeemed) to pay the Sale Redemption Price. (c) In the event the Company elects not to redeem Securities in respect of a Mortgaged Vessel subject to a Bareboat Charter, then by the date which is 12 months after the date title to such Mortgaged Vessel passes to the charterer at the end of the bareboat charter period, the Company shall tender, or cause to be tendered, to the Trustee as part of the Collateral one or more Vessels purchased using the Sale Equivalent Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel and then on deposit with the Trustee together with such funds otherwise available to the Company, provided that if such funds are insufficient to purchase Vessels they shall remain on deposit with the Trustee as Collateral pursuant to Article 13 for application in accordance with the terms and conditions of this Indenture. The Sale Equivalent Portion of Bareboat Charter Funds shall be available from time to time (including prior to the end of the Bareboat Charter period) to the Company pursuant to the terms of, and subject to the conditions of, this Indenture, including Article 13 hereof, to make any deposits in respect of, or to consummate the purchase of, one or more Vessels. On the date on which a Vessel is tendered to the Trustee as part of the Collateral with respect to a Mortgaged Vessel that is subject to a Bareboat Charter, the Company shall deliver to the Trustee, or shall cause the owner of such Vessel, which shall be a Restricted Subsidiary of the Company or, if the Princess Marina is subject to a Bareboat Charter prior to the date of the sale by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted Subsidiary, Maritima SIPSA S.A., to deliver to the Trustee, as the case may be, the following documents and certificates: (i) a fully executed Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form attached as Exhibit F to the Escrow Agreement; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel that was subject to the Bareboat Charter and the owner of the replacement Vessel is not a Wholly Owned Subsidiary; (ii) a fully executed Mortgage substantially in the form attached as Exhibit C to this Indenture (or a preliminary registration thereof, pending delivery of a copy of the Mortgage) and any related Security Agreements with respect to such Vessel dated the date such Vessel was tendered to the Trustee (such Mortgage having been duly received for recording in the appropriate registry office or, if not practicable, then Page 47 subject to arrangements reasonably satisfactory to the Trustee having been made for such recording as soon as practicable, but in no event more than 5 Business Days, after the date such Vessel is tendered to the Trustee); (iii) appropriate legal opinions substantially in the form attached as Exhibit E to the Escrow Agreement with respect to the Guarantee Agreement referred to in clause (i), the Mortgage referred in clause (ii) (including the validity, perfection, enforceability and priority thereof) and the related Security Agreements; (iv) original certificates, certified to be true and complete by an Officer of the Company, representing the Capital Stock of any Restricted Subsidiary acquiring such Vessel of which the Company or a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record and beneficial owner (unless such Restricted Subsidiary is already a Subsidiary Guarantor), together with an Officers' Certificate with respect thereto; (v) copies, certified to be true and complete by an Officer of the Company, of any Charters related to such Vessel; (vi) the report of an insurance broker required by Section 3(U)(viii) of the form of Mortgage attached as Exhibit C to this Indenture, with respect to insurance policies maintained in respect of each such Vessel, which report shall include loss payable clauses substantially in the form set forth in Schedule 1 to the form of Assignment of Insurance; (vii) written appraisals by two independent Appraisers of the value of such Vessel as of a date within 90 days prior to the date on which the Vessel is tendered to the Trustee; and (viii) with respect to any oceangoing Vessel, a classification certificate, dated as of a date not more than 30 days prior to the date on which such Vessel is tendered, from a classification society with respect to each such Vessel to the Trustee. SECTION 4.16. Tender of a Qualified Substitute Vessel; Excess Proceeds Offers. (a) In the event that the Company elects, with respect to a Sold Mortgaged Vessel or a Lost Mortgaged Vessel, not to redeem Securities as described under Section 4.14, then within 12 months after the Proceeds Receipt Date, the Company shall tender, or cause to be tendered, to the Trustee as part of the Collateral one or more Vessels constituting a Qualified Substitute Vessel; provided, however, that if at any time prior to the Vessel Tender Date (as defined below), an Event of Default shall occur, the Company shall thereupon become obligated to redeem Securities in accordance with the provisions of Section 4.14. Net Available Cash or Net Event of Loss Proceeds, as the case may be, attributable to such Sold Mortgaged Vessel or such Lost Mortgaged Vessel, as the case may be, will be made available to the Company pursuant to the terms, and subject to the conditions, of this Indenture, including Article 13 hereof, to make any deposits in respect of, or to consummate the purchase of, or pay any Ready for Sea Cost in respect of, the Qualified Substitute Vessel. To the extent that any such Net Available Cash or Net Event of Loss Proceeds attributable to such Sold Mortgaged Vessel or Lost Mortgaged Vessel remain on deposit with the Trustee after the tender of the Qualified Substitute Vessel, such funds shall be released to the Company, free of the Lien of this Indenture, and the Company shall use such funds for any Permitted Excess Cash Use or to make an Excess Proceeds Offer. On the date on which a Qualified Substitute Vessel is tendered to the Trustee as part of the Collateral (a "Vessel Tender Date") following a sale of or an Event of Loss with respect to a Mortgaged Vessel, the Company shall deliver to the Trustee, or shall cause the owner of such Qualified Substitute Vessel, which shall be a Restricted Subsidiary of the Company or, if the Page 48 Qualified Substitute Vessel is replacing the Princess Marina prior to the date of the sale by Maritima SIPSA S.A. of the Princess Marina to a Restricted Subsidiary, Maritima SIPSA S.A. (the "Tendered Vessel Owner"), to deliver to the Trustee, as the case may be, the following documents and certificates: (i) a fully executed Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form attached as Exhibit F to the Escrow Agreement; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel and the owner of the Qualified Substitute Vessel is not a Wholly Owned Subsidiary; (ii) a fully executed Mortgage substantially in the form attached as Exhibit C to this Indenture (or a preliminary registration thereof, pending delivery of a copy of the Mortgage) and any related Security Agreements with respect to such Qualified Substitute Vessel dated the Vessel Tender Date (such Mortgage having been duly received for recording in the appropriate registry office or, if not practicable, then subject to arrangements reasonably satisfactory to the Trustee having been made for such recording as soon as reasonably practicable, but in no event more than 5 Business Days, after the Vessel Tender Date); (iii) appropriate legal opinions substantially in the form attached as Exhibit E to the Escrow Agreement with respect to the Guarantee Agreement referred to in clause (i), the Mortgage referred in clause (ii) (including the validity, perfection, enforceability and priority thereof) and the related Security Agreements; (iv) original certificates, certified to be true and complete by an Officer of the Company, representing the Capital Stock of any Restricted Subsidiary acquiring such Qualified Substitute Vessel of which the Company or a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record and beneficial owner (unless such Restricted Subsidiary is already a Subsidiary Guarantor), together with an Officers' Certificate with respect thereto; (v) copies, certified to be true and complete by an Officer of the Company, of any Charters related to such Qualified Substitute Vessel; (vi) the report of an insurance broker required by Section 3(U)(viii) of the form of Mortgage attached as Exhibit C to this Indenture, with respect to insurance policies maintained in respect of such Qualified Substitute Vessel, which report shall include loss payable clauses substantially in the form set forth in Schedule 1 to the form of Assignment of Insurance; (vii) written appraisals by two independent Appraisers of the value of such Qualified Substitute Vessel as of a date within 90 days prior to the Vessel Tender Date; and (viii) with respect to oceangoing Vessels, a classification certificate, dated as of a date not more than 30 days prior to the Vessel Tender Date, from a classification society with respect to such Qualified Substitute Vessel. (b) If, as of the first day of each January, April, July or October, the aggregate amount of Excess Proceeds not theretofore subject to an Excess Proceeds Offer (as defined below), totals at least $12.5 million, the Company shall, not later than the fifteenth Business Day of such month, make an offer (an "Excess Proceeds Offer") to purchase from the holders pursuant to and subject to the conditions contained in Section 4.16(c) on a pro rata basis an aggregate principal amount of Securities equal to the Excess Proceeds available on such first day of the month, at a purchase price equal to 100% of their principal amount, plus, in each Page 49 case, accrued interest (if any) to the date of purchase (an "Excess Proceeds Payment"). (c) (1) Promptly, and in any event within 15 calendar days after the Company becomes obligated to make an Excess Proceeds Offer, the Company shall be obligated to deliver to the Trustee and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to have his Securities purchased by the Company either in whole or in part (subject to prorating as hereinafter described in the event such Offer is oversubscribed) in integral multiples of $1,000 of principal amount, at the applicable purchase price. The notice shall specify a purchase date not less than 30 days nor more than 60 days after the date of such notice (the "Purchase Date") and shall contain such information concerning the business of the Company which the Company in good faith believes will enable such Holders to make an informed decision (which at a minimum will include (i) the most recently filed Annual Report on Form 20-F (including audited consolidated financial statements) of the Company, the most recent subsequently filed Current Report on Form 6-K of the Company, other than Current Reports describing Asset Sales otherwise described in the offering materials (or corresponding successor reports), (ii) a description of material developments in the Company's business subsequent to the date of the latest of such Reports, and (iii) if material, appropriate pro forma financial information) and all instructions and materials necessary to tender Securities pursuant to the Offer, together with the information contained in clause (3). (2) Not later than the date upon which written notice of an Excess Proceeds Offer is delivered to the Trustee as provided above, the Company shall deliver to the Trustee an Officers' Certificate as to (i) the amount of the Excess Proceeds Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from the Asset Sales pursuant to which such Offer is being made and (iii) the compliance of such allocation with the provisions of this Indenture. By not later than 4:00 p.m. on such date, the Company shall also irrevocably deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust) in Temporary Cash Investments, maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Excess Proceeds Offer remains open (the "Offer Period"), the Company shall deliver to the Trustee for cancelation, by no later than 10:00 a.m. on the next Business Day, the Securities or portions thereof which have been properly tendered to and are to be accepted by the Company. The Paying Agent shall, on the Purchase Date, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Securities delivered by the Company to the Paying Agent is less than the Offer Amount, the Paying Agent shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section. (3) Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address specified in the notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than one Business Day prior to the Purchase Date, a telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased. If at the expiration of the Offer Period the aggregate principal amount of Securities surrendered by Holders exceeds the Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased). Holders whose Securities are Page 50 purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered. (4) At the time the Company notifies the Trustee which Securities are to be accepted for purchase and delivers the same to the Trustee, the Company shall also deliver an Officers' Certificate stating that such Securities (or portions thereof) are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Security shall be deemed to have been accepted for purchase at the time the Paying Agent, mails or delivers payment therefor to the surrendering Holder. (d) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Securities pursuant to an Excess Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.16, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.16 by virtue thereof. SECTION 4.17. Additional Amounts. (a) If the Company, any Subsidiary Guarantor or any Pledgor (or any of their respective successors), as applicable, is required by law or by the interpretation or administration thereof by the relevant government authority or agency to withhold or deduct any amount for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) imposed or levied by or on behalf of the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile or by any authority or agency therein or thereof having power to tax (or the jurisdiction of incorporation of any successor of the Company, any Subsidiary Guarantor or any Pledgor) (hereinafter "Taxes") from any payment made under or with respect to the Securities, any Subsidiary Guarantee or any Mortgaged Vessel, as applicable, the Company, such Subsidiary Guarantor or such Pledgor (or any of their respective successors), as applicable, shall pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by each Holder (including Additional Amounts) after such withholding or deduction will not be less than the amount the Holder would have received if such Taxes had not been withheld or deducted; provided, however, that no Additional Amounts shall be payable with respect to payments made to a Holder (an "Excluded Holder") in respect of a beneficial owner (i) which is subject to such Taxes by reason of its being connected with the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile otherwise than by the mere holding of Securities or the receipt of payments thereunder (or under the related Subsidiary Guarantee), (ii) which presents any Security for payment of principal more than 60 days after the later of (x) the date on which payment first became due and (y) if the full amount payable has not been received by the Trustee on or prior to such due date, the date on which, the full amount payable having been so received, notice to that effect shall have been given to the Holders by the Trustee, except to the extent that the Holder would have been entitled to such Additional Amounts on presenting such Security for payment on the last day of the applicable 60-day period, (iii) which failed to duly and timely comply with a reasonable, timely request of the Company to provide information, documents or other evidence concerning the Holder's nationality, residence, entitlement to treaty benefits, identity or connection with the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile or any political subdivision or authority thereof, if and to the extent that due and timely compliance with such request would have reduced or eliminated any Taxes as to which Additional Amounts would have otherwise been payable to such Holder but for this clause (iii), (iv) on account of any estate, inheritance, gift, sale, transfer, personal property or other similar Tax, (v) which is a fiduciary, a partnership or not the beneficial owner of any payment on a Security, if and to the extent that any beneficiary or settlor of such fiduciary, any partner in such partnership or the beneficial owner of such payment (as the case may be) would not have been entitled to Page 51 receive Additional Amounts with respect to such payment if such beneficiary, settlor, partner or beneficial owner had been the Holder of such Security or (vi) any combination of the foregoing numbered clauses of this proviso. The Company, the Subsidiary Guarantors or the Pledgors (or any of their respective successors), as applicable, shall make such withholding or deduction and remit the full amount deducted or withheld to the relevant authority as and when required in accordance with applicable law. (b) The Company, the Subsidiary Guarantors or the Pledgors (or any of their respective successor), as applicable, shall furnish to the Trustee, within 30 days after the date the payment of any Taxes is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by the Company, the Subsidiary Guarantors or the Pledgors (or any of their respective successors), as applicable, in such form as provided in the normal course by the taxing authority imposing such Taxes and as is reasonably available to the Company, the Subsidiary Guarantors or the Pledgors (or any of their respective successors), as applicable. The Trustee shall make such evidence available to the Holders upon request. The Company, the Subsidiary Guarantors or the Pledgors (or any of their respective successors), as applicable, shall upon written request of each Holder (other than an Excluded Holder), reimburse each such Holder for the amount of (i) any Taxes so levied or imposed and paid by such Holder as a result of payments made under or with respect to the Securities, the Subsidiary Guarantees or a Mortgaged Vessel, as applicable, and (ii) any Taxes imposed with respect to any such reimbursement under the immediately preceding clause (i), but excluding any such Taxes on such Holder's net income, so that the net amount received by such Holder after such reimbursement will not be less than the net amount the Holder would have received if Taxes (other than such Taxes on such Holder's net income) on such reimbursement had not been imposed. (c) Whenever in this Indenture there is mentioned, in any context, (a) the payment of principal, (b) purchase prices in connection with a purchase of Securities, (c) interest or (d) any other amount payable on or with respect to any of the Securities, or any payment pursuant to the Subsidiary Guarantees or in respect of a Mortgaged Vessel such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof. (d) The Company, the Subsidiary Guarantors or the Pledgors shall pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of the Securities the Subsidiary Guarantees or a Mortgage or any other document or instrument in relation thereto, or the receipt of any payments with respect to the Securities, the Subsidiary Guarantees, or a Mortgage excluding such taxes, charges or similar levies imposed by any jurisdiction outside of the Bahamas, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile, the jurisdiction of incorporation of any successor of the Company or any jurisdiction in which a paying agent is located, and hereby indemnifies the Holders for any such taxes paid by such Holders. SECTION 4.18. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also shall comply with TIA ss. 314(a)(4). Page 52 SECTION 4.19. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.20. Reflagging of Vessels. Notwithstanding anything to the contrary herein, a Restricted Subsidiary or Maritima SIPSA S.A. may (a) reflag any of its Vessels under the laws of a Permitted Flag Jurisdiction or (b) reconstitute itself in another jurisdiction or merge with or into another Restricted Subsidiary for the purpose of reflagging a Vessel that it owns or operates pursuant to a bareboat charter so long as at all times each Restricted Subsidiary or Maritima SIPSA S.A. remains a Person organized and existing under the laws of a Permitted Flag Jurisdiction; provided that the Trustee may release the Mortgage and related Security Agreements to which any Mortgaged Vessel is subject in connection with the reflagging of such Mortgaged Vessel in another Permitted Flag Jurisdiction only if (i) the owner of the Mortgaged Vessel has executed (A) a Mortgage and (B) the related Security Agreements with respect to such Mortgaged Vessel, dated the date such Mortgaged Vessel shall be released from the existing Mortgage and related Security Agreements to which it is subject, which Mortgage and related Security Agreements shall be in appropriate form for recording a registration in the appropriate governmental offices of the Permitted Flag Jurisdiction under which it is being reflagged if required by applicable law in order to perfect the security interest therein created, as to which the Trustee shall be entitled to rely on the Opinion of Counsel to the Company with respect thereto; and (ii) arrangements reasonably satisfactory to the Trustee have been made for recording the Mortgage referred to in clause (i) above in the appropriate registry office of the Permitted Flag Jurisdiction under which the Mortgaged Vessel is being reflagged as soon as reasonably practicable, but in no event more than 5 Business Days, after the date on which such Mortgaged Vessel is released from the Mortgage to which it was previously subject. ARTICLE 5 Successor Company SECTION 5.01. When Company May Merge or Transfer Assets. (a) The Company shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, directly or indirectly, all or substantially all its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a Person organized and existing under the laws of a Permitted Flag Jurisdiction, and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; (iii) immediately after giving effect to such transaction, the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a); (iv) immediately after giving effect to such transaction, the Successor Company shall have Consolidated Net Worth in an amount that is not less than the Consolidated Net Worth of the Company immediately prior Page 53 to such transaction; (v) the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation , merger or transfer and such supplemental indenture (if any) comply with this Indenture; and (vi) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such transaction and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such transaction had not occurred. The Successor Company shall be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, but the predecessor Company, in the case of a conveyance, transfer or lease shall not be released from the obligation to pay the principal of and interest on the Securities. (b) The Company shall not permit any Subsidiary Guarantor to consolidate with or merger with or into, or convey, transfer or lease (other than any vessel charter, including a bareboat charter, entered into in the ordinary course of business), in one transaction or a series of transactions, all or substantially all its assets to, any Person (other than the Company or another Subsidiary Guarantor) unless: (i) except in the case of a (x) Subsidiary Guarantor that has been disposed of in its entirety to another Person (other than to the Company or any of its Affiliates), whether through a merger, consolidation or sale of Capital Stock or assets, if in connection therewith the Company provides an Officer's Certificate to the Trustee to the effect that the Company will comply with its obligations under Section 4.06 in respect of such disposition and (y) a Bareboat Charter, the resulting, surviving or transferee Person (if not such Subsidiary Guarantor) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of a Permitted Flag Jurisdiction (provided that arrangements reasonably satisfactory to the Trustee have been made for recording any Mortgage required to be recorded to maintain the Lien of this Indenture on the Mortgaged Vessel in the appropriate registry office as soon as practicable after such merger, consolidation or conveyance, but in no event more than 5 Business Days after the date on which any Mortgaged Vessel is released from the Mortgage to which it was previously subject in connection with such merger, consolidation or conveyance), and such Person shall expressly assume, by a Guarantee Agreement, in a form satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary Guarantee; (ii) immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and (iii) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee Agreement, if any, complies with this Indenture. ARTICLE 6 Defaults and Remedies SECTION 6.01. Events of Default. An "Event of Default" occurs if: Page 54 (1) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for a period of 30 days; (2) the Company (i) defaults in the payment of the principal of any Security when the same becomes due and payable at its Stated Maturity, upon redemption, upon required repurchase, upon declaration or otherwise, or (ii) fails to redeem or purchase Securities when required pursuant to this Indenture or the Securities following notice thereof properly given under this Indenture; (3) the Company fails to comply with Section 5.01; (4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.20 (other than a failure to purchase Securities when required under Section 4.06, 4.11 or 4.16) and such failure continues for 30 days after the notice specified below; (5) the Company or any Subsidiary Guarantor or Pledgor fails to comply with any of its agreements in the Securities, this Indenture (other than those referred to in clause (1), (2), (3) or (4) above) or the Security Agreements, or the occurrence of an event of default under a Mortgage, and such failure continues for 60 days after the notice specified below; (6) Indebtedness of the Company or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $5,000,000, or its foreign currency equivalent at the time; (7) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors; or takes any comparable action under any foreign laws relating to insolvency; (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Significant Subsidiary in an involuntary case; (B) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of the Company or any Significant Subsidiary; or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days; Page 55 (9) any judgment or decree (other than and to the extent such judgment or decree has been issued by a court which does not have any personal jurisdiction over the Company or such Significant Subsidiary or any of their respective assets, and in a proceeding in which the Company or such Significant Subsidiary has made no official appearance) for the payment of money in excess of $5,000,000 or its foreign currency equivalent at the time (provided that the amount of such money judgment or decree shall be calculated net of any insurance coverage that the Company has determined in good faith is available in whole or in part with respect to such money judgment or decree) is entered against the Company or any Significant Subsidiary, remains outstanding for a period of 60 days following the entry of such judgment or decree and is not discharged, waived or the execution thereof stayed within 10 days after the notice specified below; (10) a Subsidiary Guarantee ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee; or (11) the security interest under the Security Agreements shall, at any time, cease to be in full force and effect for any reason (other than by operation of this Indenture and the Security Agreements) other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture or any security interest created thereunder shall be declared invalid or unenforceable or the Company or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clauses (4), (5), (6) or (9) is not an Event of Default until the Trustee or the holders of at least 25% in principal amount of the outstanding Securities notify the Company of the Default and the Company does not cure such Default within the time specified after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default". The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of Default under clause (6), (10) or (11) and any event which with the giving of notice or the lapse of time would become an Event of Default under clause (4), (5) or (9), its status and what action the Company is taking or proposes to take with respect thereto. SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Securities then outstanding by notice to the Company and the Trustee, may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(7) or (8) with Page 56 respect to the Company occurs, the principal of and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholders. The Holders of a majority in principal amount of the Securities then outstanding by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Security or (b) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Securityholder may pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and Page 57 (5) the Holders of a majority in principal amount of the Securities then outstanding do not give the Trustee a direction inconsistent with the request during such 60-day period. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. In the event that the Definitive Securities are not issued to any beneficial owner promptly after the Registrar has received a request from the Holder of a Global Security to issue such Definitive Securities to such beneficial owner of its nominee, the Company expressly agrees and acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to this Indenture, the right of such beneficial holder of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial holder's Securities as if such Definitive Securities had been issued. SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order: FIRST: to holders of preferred maritime liens or other liens, if any, that arise by operation of law and that are prior to the Lien of this Indenture, the Mortgages or the Security Agreements; SECOND: to the Trustee for amounts due under Section 7.07; THIRD: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and FOURTH: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice Page 58 that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities. SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 7 Trustee SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and the Security Agreements and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the Security Agreements and no implied covenants or obligations shall be read into this Indenture and the Security Agreements against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture and the Security Agreements. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture and the Security Agreements. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. Page 59 (d) Every provision of this Indenture and the Security Agreements that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee shall not be liable for interest on any money received by it. (f) Money held in trust by the Trustee shall be segregated, in a separate trust account from other funds. (g) No provision of this Indenture or of the Security Agreements shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or thereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture or of the Security Agreements relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or such other information as it may reasonably request. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct or negligence. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture, the Security Agreements and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Security Agreements or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in this Indenture, the Page 60 Security Agreements or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is known to an officer in the corporate trust department of the Trustee, the Trustee shall mail to each Securityholder notice of the Default within 90 days after it occurs. Except in the case of a Default in payment of principal of or interest on any Security (including payments pursuant to the redemption provisions of such Security, if any), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. The Trustee shall have no obligation to notify the insurers of the Mortgaged Vessels of any Default unless it has actual knowledge of such Default and a reasonable period of time to act upon it. SECTION 7.06. Reports by Trustee to Holders. As promptly as practicable after each June 1 beginning with the June 1 following the date of this Indenture, and in any event prior to July 31 in each year, the Trustee shall mail to each Securityholder a brief report dated as of June 1 that complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it (including costs of collection or costs of any sale or retaking incurred in connection with the Trustee's exercise, as mortgagee, of its rights and remedies under the Mortgages), in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company shall indemnify the Trustee and hold it harmless from and against any and all damages, suits, actions, loss, liability or expense (including attorneys' fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder and under the Security Agreements, including adequate advances against costs that may be incurred by it. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee's own willful misconduct, negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Securities. The Company's payment obligations pursuant to this Section shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(7) or (8) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any Page 61 time by so notifying the Company. The Holders of a majority in principal amount of the Securities then outstanding may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Securities then outstanding and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07 and shall be relieved of all further liability hereunder for actions arising from and after such date of resignation or removal. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. Page 62 SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA ss. 310(b); provided, however, that there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA ss. 310(b)(1) are met. SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated. ARTICLE 8 Discharge of Indenture; Defeasance SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.06) for cancelation or (ii) all outstanding Securities have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Article 3 hereof and the Company irrevocably deposits with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Securities, including interest thereon to maturity or such redemption date (other than Securities replaced pursuant to Section 2.06), and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture and the Security Agreements shall, subject to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture and the Security Agreements on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Company. (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all its obligations under the Securities and this Indenture ("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.20 and the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9), 6.01(10) and 6.01(11) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) and the limitations contained in Sections 5.01(a)(iii) and (iv) and 5.01(b), its obligations under Articles 11 and 13 and each Subsidiary Guarantor's obligations under Articles 10 and 12 and under the Security Agreements ("covenant defeasance option"). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9), 6.01(10) and 6.01(11) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or because of the failure of the Company to comply with Section 5.01(a)(iii) or (iv) or 5.01(b). If the Company exercises its legal defeasance option or its covenant defeasance option, each Subsidiary Guarantor, if any, shall be released from all its obligations with respect to its Subsidiary Guarantee and under the Security Agreements including Article 12 and the Company shall be released from its obligations under Articles 11 and 13 and under the Security Agreements. Page 63 Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates. (c) Notwithstanding clauses (a) and (b) above, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this Article 8 shall survive until the Securities have been paid in full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive. SECTION 8.02. Conditions to Defeasance. The Company may exercise its legal defeasance option or its covenant defeasance option only if: (1) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations for the payment of principal of and interest on the Securities to maturity or redemption, as the case may be; (2) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be; (3) 123 days pass after the deposit is made and during the 123-day period no Default specified in Sections 6.01(7) or (8) with respect to the Company occurs which is continuing at the end of the period; (4) the deposit does not constitute a default under any other agreement binding on the Company; (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (6) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (7) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (8) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities as contemplated by this Article 8 have been complied with. Page 64 Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 3. SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities. SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent shall promptly turn over to the Company upon request and in accordance with the terms of this Indenture any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look to the Company for payment as general creditors. SECTION 8.05. Indemnity for Government Obligations. The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and the Subsidiary Guarantors' obligations under this Indenture, the Security Agreements and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the Company has made any payment of interest on or principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 9 Amendments SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend this Indenture, the Security Agreements or the Securities without notice to or consent of any Securityholder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Article 5; (3) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; (4) to provide additional security for the Securities; (5) to add guarantees with respect to the Securities, including any Page 65 Subsidiary Guarantees; (6) to add to the covenants of the Company, a Restricted Subsidiary or a Pledgor for the benefit of the Holders or to surrender any right or power herein conferred upon the Company, a Subsidiary Guarantor or a Pledgor; (7) to comply with any requirements of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA; (8) to make any change that does not adversely affect the rights of any Securityholder; or (9) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Securities; provided, however, that (a) compliance with this Indenture as so amended would not result in Securities being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Securities. After an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.02. With Consent of Holders. The Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange for the Securities) and any past default or compliance with any provision may also be waived with the consent of Holders of at least a majority in principal amount of Securities then outstanding. However, without the consent of each Securityholder affected thereby, an amendment may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the rate of or extend the time for payment of interest on any Security; (3) reduce the principal of or extend the Stated Maturity of any Security; (4) reduce the premium payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed in accordance with Article 3; (5) make any Security payable in money other than that stated in the Security; (6) make any changes in the Security Agreements or in Articles 10, 11, 12 or 13 that adversely affect the Holders or would terminate the Lien of this Indenture or any Security Agreement on any property subject thereto or deprive the Holder of the security afforded by the Lien of this Indenture or the Security Agreements; (7) make any change in Section 6.04 or 6.07 or the second sentence of this Section; (8) make any change in any Subsidiary Guarantee that would adversely affect the Securityholders; Page 66 (9) make any change in Section 4.17 that adversely affects the rights of any Securityholder or amend the terms of the Securities or this Indenture in a way that would result in the loss of an exemption from any of the Taxes described therein. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture, the Security Agreements or the Securities shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder. An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture. SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid Page 67 any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE 10 Guarantees SECTION 10.01. Guarantees. Each Subsidiary Guarantor hereby unconditionally and irrevocably guarantees, jointly and severally, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption, by required repurchase or otherwise, and all other monetary obligations of the Company and the Subsidiary Guarantors under this Indenture and the Securities and of the Subsidiary Guarantors under the Security Agreements and (b) the full and punctual performance within applicable grace periods of all other obligations of the Company and the Subsidiary Guarantors under this Indenture, the Security Agreements and the Securities (all the foregoing being hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound under this Article 10 notwithstanding any extension or renewal of any Obligation. Each Subsidiary Guarantor waives presentation to, demand of, payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any default under the Securities or the Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Security Agreements, the Securities or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Security Agreements, the Securities or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (e) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Obligations; or (f) subject to Section 10.06, any change in the ownership of such Subsidiary Guarantor. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Obligations. Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Security Agreements, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or Page 68 otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Obligation, each Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid interest on such Obligations (but only to the extent not prohibited by law) and (iii) all other monetary Obligations of the Company or the Subsidiary Guarantors to the Holders and the Trustee. Each Subsidiary Guarantor agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6, such Obligations (whether or not due and payable) shall forthwith become due and payable by such Subsidiary Guarantor for the purposes of this Section. Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing any rights under this Section. SECTION 10.02. Limitation on Liability. Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall enure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture, in the Security Agreements and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other Page 69 rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise. SECTION 10.05. Modification. No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances. SECTION 10.06. Release of Subsidiary Guarantor. Upon the occurrence of a sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of such Subsidiary Guarantor (in each case other than to the Company or an Affiliate of the Company), such Subsidiary Guarantor shall be deemed released from all obligations under this Article 10 without any further action required on the part of the Trustee or any Holder. At the request of the Company and upon receipt of an Officers' Certificate, the Trustee shall execute and deliver an appropriate instrument evidencing such release. ARTICLE 11 Pledged Collateral SECTION 11.01. Grant of Security Interest. To secure the full and punctual payment when due and the full and punctual performance of the Obligations, the Company and the Subsidiary Guarantors hereby grant to the Trustee, for the benefit of the Trustee and the Holders, a security interest in all its right, title and interest in and to the following, other than such of the following which are released from the Lien of this Indenture pursuant to Section 11.05 (the "Pledged Collateral"): (i) all shares of Capital Stock and other securities of the Subsidiary Guarantors now owned or hereafter acquired by the Company or the Subsidiary Guarantors, which on the date hereof are identified on Schedule I hereto (collectively, the "Pledged Shares"); provided, however, that (A) shares of Capital Stock and other securities will constitute Pledged Shares only to the extent that such Capital Stock and other securities can secure the Securities without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act ("Rule 3-10" and "Rule 3-16," respectively) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary Guarantor to be filed with the SEC (or any other governmental regulatory agency); (B) in the event that either Rule 3-10 or Rule 3-16 requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental regulatory agency) of separate financial statements of any Subsidiary Guarantor due to the fact that such Subsidiary Guarantor's Capital Stock and other securities constitute Pledged Shares, then upon delivery to the Trustee of an Officer's Certificate identifying Pledged Shares in respect of a Subsidiary Guarantor that must be released from the Lien of this Indenture in order for the Company to avoid having to file separate financial statements for such Subsidiary Guarantor with the SEC, such Capital Stock and other securities shall automatically be deemed not to be Pledged Shares, but only to the extent necessary to not be subject to such requirement; and (C) in the event that either Rule 3-10 or Rule 3-16 is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Capital Stock and other securities to Page 70 constitute Pledged Shares without the filing with the SEC (or any other governmental regulatory agency) of separate financial statements of such Subsidiary Guarantor's, then such Capital Stock and other securities and shall automatically be deemed to be Pledged Shares, but only to the extent necessary to not be subject to any such financial statement requirement; (ii) all certificates representing any of the Pledged Shares; and (iii) all dividends, cash, instruments and other property and proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing. SECTION 11.02. Delivery of Collateral. Any and all cash, certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on behalf of the Trustee and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Trustee. The Trustee shall have the right, at any time after the occurrence and during the continuance of an Event of Default, in its discretion and without notice to the Company, to transfer to or to register in the name of the Trustee or any of its nominees any or all the Pledged Collateral. In addition, the Trustee shall have the right at any time to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of different denominations. SECTION 11.03. Representations and Warranties. The Company and the Subsidiary Guarantors hereby represent and warrant on the Issue Date as follows: (a) Each of them is the record and beneficial owner of the applicable Pledged Shares described on Schedule I, free and clear of any Lien, except for the Lien created by this Indenture; (b) Each of them has full corporate power, authority and legal right to pledge all the Pledged Collateral pledged by it pursuant to this Indenture. (c) The Pledged Shares described on Schedule I have been duly authorized and are validly issued, fully paid and nonassessable. (d) The pledge in accordance with the terms of this Indenture creates a valid and perfected first priority Lien on the Pledged Collateral securing the payment and performance of the Obligations. (e) The shares described in Schedule I hereto represent 100.0% of the shares of Capital Stock of the Subsidiary Guarantors owned by the Company and the Subsidiary Guarantors. (f) There are no existing options, warrants, calls or commitments of any character relating to any authorized and unissued Capital Stock of any Subsidiary Guarantor. SECTION 11.04. Further Assurances. The Company and the Subsidiary Guarantors each agree that at any time and from time to time, at the expense of the Company and the Subsidiary Guarantors, the Company will, or will cause the Subsidiary Guarantors and Pledgors, promptly execute and deliver all further instruments and documents and take all further action that may be necessary or that the Trustee may reasonably request in order to perfect and protect any Lien granted or purported to be granted hereby or to enable the Trustee to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral. Without limiting the foregoing, the Company and the Subsidiary Guarantors shall, subject to the limitations set forth in clause (i) of Section 11.01, (i) at the time of the issuance by a Subsidiary Guarantor of any shares of Capital Stock after the Issue Date, deliver 100.0% of such shares to the Page 71 Trustee as Pledged Collateral and provide to the Trustee a revised Schedule I, and (ii) at the time of any release of Pledged Shares pursuant to Section 11.05, provide to the Trustee a revised Schedule I. Any such revised Schedule shall reflect any changes made necessary by the applicable acquisition or release, at which time the Company and the Subsidiary Guarantors shall be deemed to make their representations and warranties set forth in paragraphs (a) through (f) of Section 11.03 with respect to such Schedule, as so revised. SECTION 11.05. Dividends; Voting Rights; Release of Collateral. (a) As long as no Default shall have occurred and be continuing and until written notice thereof from the Trustee to the Company, the Company and the Subsidiary Guarantors shall be entitled to receive and retain all dividends and other distributions paid in respect of the Pledged Shares owned by the Company and the Subsidiary Guarantors; provided, however, that the provisions of this Indenture, including Section 4.04, shall in all respects govern the Company's use or other disposition of such cash or other property. Any cash dividends or distributions delivered to or otherwise held by the Trustee pursuant to this Section 11.05, and any other cash constituting Collateral delivered to the Trustee, shall be invested, at the written direction of the Company, by the Trustee in Temporary Cash Investments. (b) Upon the occurrence and during the continuance of a Default and upon written notice thereof from the Trustee to the Company, the Trustee shall be entitled to receive and retain as Collateral all dividends paid and distributions made in respect of the Pledged Shares, whether so paid or made before or after any Default. Any such dividends shall, if received by the Company or the Subsidiary Guarantors, be received in trust for the benefit of the Trustee, be segregated from the other property or funds of the Company and the Subsidiary Guarantors, and be forthwith delivered to the Trustee as Collateral in the same form as so received (with any necessary endorsement). (c) As long as no Default shall have occurred and be continuing and until written notice thereof from the Trustee to the Company, the Company and the Subsidiary Guarantors shall be entitled to exercise any and all voting and other consensual rights relating to Pledged Shares or any part thereof for any purpose; provided, however, that no vote shall be cast, and no consent, waiver or ratification given or action taken, which would be inconsistent with or violate any provision of this Indenture, the Security Agreements or the Securities. (d) Upon the occurrence and during the continuance of a Default, all rights of the Company and the Subsidiary Guarantors to exercise the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 11.05(c) shall cease upon notice from the Trustee to the Company and the Subsidiary Guarantors and upon the giving of such notice all such rights shall thereupon be vested in the Trustee who shall thereupon have the sole right to exercise such voting and other consensual rights. (e) In order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant to Section 11.05(d), and to receive all dividends and distributions which it may be entitled to receive under Section 11.05(b), the Company and the Subsidiary Guarantors shall, if necessary, upon written notice of the Trustee, from time to time execute and deliver to the Trustee such instruments as the Trustee may reasonably request. (f) Notwithstanding anything to the contrary in this Article 11, upon satisfaction by the Company of the conditions set forth in Page 72 Article 8 to its legal defeasance option, its covenant defeasance option or to the discharge of this Indenture, the Lien of this Indenture on all the Collateral shall terminate and all the Pledged Collateral shall be released without any further action on the part of the Trustee or any other Person. In addition, in connection with any release of a Subsidiary Guarantor pursuant to Section 10.06, the pledge of the Capital Stock of such Subsidiary Guarantor pursuant to this Article 11 shall be released and the security interest in the Mortgaged Collateral shall be released without any further action required on the part of the Trustee or any Holder. At the request of the Company, the Trustee shall execute and deliver appropriate instruments evidencing any release pursuant to this Section 11.05(f). SECTION 11.06. Trustee Appointed Attorney-in-Fact. The Company and the Subsidiary Guarantors each hereby appoint the Trustee as their attorney-in-fact, with full authority in the place and stead of the Company and the Subsidiary Guarantors, and in the name of the Company and the Subsidiary Guarantors or otherwise, from time to time in the Trustee's discretion but only after the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Trustee may deem necessary or advisable in order to accomplish the purposes of this Article 11, including to receive, endorse and collect all instruments made payable to the Company and the Subsidiary Guarantors representing any dividend, interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same. This power, being coupled with an interest, is irrevocable. SECTION 11.07. Trustee May Perform. If the Company and the Subsidiary Guarantors fail to perform any agreement contained in this Article 11, the Trustee may itself (but shall not be obligated to) perform, or cause performance of, such agreement, and the expenses of the Trustee incurred in connection therewith shall be payable by the Company under Section 7.07. SECTION 11.08. Trustee's Duties. The powers conferred on the Trustee under this Article 11 are solely to protect its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting for moneys actually received by it under this Article 11, the Trustee shall have no duty as to any Pledged Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Pledged Collateral. SECTION 11.09. Remedies upon Event of Default. If any Event of Default shall have occurred and be continuing, the Trustee may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies provided a secured party upon the default of a debtor under the Uniform Commercial Code at that time, and the Trustee may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Trustee's offices or elsewhere, for cash, on credit or for future delivery, upon such terms as the Trustee may determine to be commercially reasonable, and the Trustee or any Securityholder may be the purchaser of any or all the Pledged Collateral so sold and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind. The Company and the Subsidiary Guarantors each agree that, to the extent notice of sale shall be required by law, at least 10 days' notice to the Company and the Subsidiary Guarantors of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Trustee shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Trustee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without Page 73 further notice, be made at the time and place to which it was so adjourned. The Trustee shall incur no liability as a result of the sale of the Pledged Collateral, or any part thereof, at any private sale conducted in a commercially reasonable manner. The Company and the Subsidiary Guarantors each hereby waive any claims against the Trustee arising by reason of the fact that the price at which any Pledged Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Trustee accepts the first offer received and does not offer such Pledged Collateral to more than one offeree. The Company and the Subsidiary Guarantors recognize that, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws, the Trustee may be compelled, with respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who will agree, among other things, to acquire such securities for their own account, for investment, and not with a view to the distribution or resale thereof. The Company and the Subsidiary Guarantors acknowledge and agree that any such sale may result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions and, notwithstanding such circumstances, agree that any such sale shall be deemed to have been made in a commercially reasonable manner. The Trustee shall be under no obligation to delay the sale of any of the Pledged Collateral for the period of time necessary to permit the Company and the Subsidiary Guarantors to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if the Subsidiary Guarantors or the Company would agree to do so. SECTION 11.10. Application of Proceeds. Upon the occurrence and during the continuance of an Event of Default and after the acceleration of the Securities pursuant to Section 6.02 (so long as such acceleration has not been rescinded), any cash held by the Trustee as Pledged Collateral and all cash proceeds received by the Trustee in respect of any sale of, collection from, or other realization upon, all or any part of the Pledged Collateral, shall be applied by the Trustee in the manner specified in Section 6.10. SECTION 11.11. Continuing Lien. Except as provided in Section 11.05, this Indenture shall create a continuing Lien on the Pledged Collateral that shall (i) remain in full force and effect until payment in full of the Securities, (ii) be binding upon the Company and the Subsidiary Guarantors and their successors and assigns and (iii) enure to the benefit of the Trustee and its successors, transferees and assigns. SECTION 11.12. Certificates and Opinions. The Company shall comply with (a) TIA ss. 314(b), relating to Opinions of Counsel regarding the Lien of this Indenture and (b) TIA ss. 314(d), relating to the release of Pledged Collateral from the Lien of this Indenture and Officers' Certificates or other documents regarding fair value of the Pledged Collateral, to the extent such provisions are applicable. Any certificate or opinion required by TIA ss. 314(d) may be executed and delivered by an Officer of the Company to the extent permitted by TIA ss. 314(d). SECTION 11.13. Additional Agreements. The Company and the Subsidiary Guarantors each agree that, upon the occurrence and during the continuance of a Default hereunder, each of them will, at any time and from time to time, upon the written request of the Trustee, use its best efforts to take or to cause the issuer of the Pledged Shares and any other securities distributed in respect of the Pledged Shares (collectively with the Pledged Shares, the "Pledged Securities") to take such action and prepare, distribute or file such documents, as are required or advisable in the reasonable opinion of counsel for the Trustee to permit the public sale of such Pledged Securities. The Company and the Subsidiary Guarantors each further agree to indemnify, defend and hold harmless the Trustee, each Holder, any underwriter and their respective officers, directors, affiliates and controlling persons from and against all loss, liability, expenses, costs of counsel (including reasonable fees and Page 74 expenses of legal counsel to the Trustee), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to the Company and the Subsidiary Guarantors or the issuer of such Pledged Securities by the Trustee or any Holder expressly for use therein. The Company and the Subsidiary Guarantors each further agree, upon such written request referred to above, to use its best efforts to qualify, file or register, or cause the issuer of such Pledged Securities to qualify, file or register, any of the Pledged Securities under the Blue Sky or other securities laws of such states as may be requested by the Trustee and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. The Company and the Subsidiary Guarantors will bear all costs and expenses of carrying out its obligations under this Section 11.13. The Company and the Subsidiary Guarantors acknowledge that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 11.13 and that such failure would not be adequately compensable in damages, and therefore agree that their agreements contained in this Section 11.13 may be specially enforced. ARTICLE 12 Security Agreements SECTION 12.01. Collateral and Security Agreements. (a) To secure the due and punctual payment of the Obligations, the Company, the Subsidiary Guarantors, the Pledgors and the Trustee have entered or, under the circumstances described in the Escrow Agreement, will enter, into the Security Agreements. The Trustee and the Company hereby acknowledge and agree that the Trustee holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the terms of the Security Agreements. Each Holder, by accepting a Security, shall be deemed to have agreed to all the terms and provisions of the Security Agreements. (b) As among the Holders, the Mortgaged Collateral shall be held for the equal and ratable benefit of such Holders without preference, priority or distinction of any thereof over any other. (c) Each Holder, by accepting a Security, agrees to all of the terms and provisions of the Security Agreements, as the same may be amended from time to time pursuant to the provisions of the Security Agreements and this Indenture, and authorizes and directs the Trustee to perform its obligations and exercise its rights under the Security Agreements in accordance therewith; provided, however, that if any provisions of the Security Agreements limit, qualify or conflict with the duties imposed by the provisions of the TIA, the TIA will control. SECTION 12.02. Recording; Annual Opinions. (a) The Company, the Subsidiary Guarantors and the Pledgors will take or cause to be taken all action required to maintain, preserve and protect the Lien on the Mortgaged Collateral granted by the Security Agreements, including causing the Mortgages and any other Security Agreement, instruments of further assurance and all amendments or supplements thereto, to be promptly recorded, registered and filed and at all times to be kept recorded, registered and filed, and will execute and file statements and cause to be issued and filed statements, all in such manner and in such places and at such times as are prescribed in the Escrow Agreement or in this Indenture as may be required by law fully to preserve and protect the rights of the Holders and the Trustee under this Indenture and the Security Agreements to the Mortgaged Collateral. Page 75 The Company, the Subsidiary Guarantors and the Pledgors will from time to time promptly pay and discharge all recording or filing fees, charges and taxes relating to the filing or registration of this Indenture and the Security Agreements, any amendments thereto and any other instruments of further assurance. (b) The Company, the Subsidiary Guarantors and the Pledgors shall furnish to the Trustee: (i) on the Issue Date or as soon as practicable after the execution and delivery of this Indenture, an Opinion of Counsel either (a) to the effect that, in the opinion of such Counsel, this Indenture and the assignment of the Collateral intended to be made by the Security Agreements and all other instruments of further assurance or assignment have been properly recorded, registered and filed (or proper provision has been made for such recording, registration and filing) to the extent necessary to make effective the Lien created by such Security Agreements and reciting the details of such action, and stating that as to the Lien created pursuant to such Security Agreements, such recordings, registerings and filings are the only recordings, registerings and filings necessary to give notice thereof and that no re-recordings, re-registerings or refilings are necessary to maintain such notice (other than as stated in such opinion), and further stating that all statements have been executed and filed (or proper provision has been made for such filing) that are necessary fully to preserve and protect the rights of the Holders and the Trustee with respect to the Lien under this Indenture and such Security Agreements, or (b) to the effect that, in the opinion of such counsel, no such action is necessary to perfect such Lien; and (ii) on or before November 1 in each year beginning with November 1, 2005, an Opinion of Counsel, dated as of such date, either (a) to the effect that, in the opinion of such counsel, such action has been taken with respect to the recordings, registerings, filings, re-recordings, re-registerings and re-filings of this Indenture, the Security Agreements and all financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the Lien of this Indenture and the Security Agreements and reciting with respect to such Lien the details of such action or referencing to prior Opinions of Counsel in which such details are given, and stating that all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the rights of the Holders and the Trustee hereunder and under the Security Agreements with respect to such Lien, or (b) to the effect that, in the opinion of such Counsel, no such action is necessary to maintain such Lien. SECTION 12.03. Disposition of Collateral Without Release. (a) Notwithstanding the provisions of Section 12.04, so long as no Event of Default shall have occurred and be continuing, the Company, the Subsidiary Guarantors and the Pledgors, as the case may be, may, without any release or consent by the Trustee: (i) sell or otherwise dispose of any machinery, equipment, furniture, apparatus, tools or implements, materials or supplies or other similar property subject to the Lien of this Indenture and the Security Agreements, which may have become worn out or obsolete, not exceeding in aggregate value in any one calendar year $1,000,000, or which may constitute an Incidental Asset, upon substituting for the same other machinery, equipment, furniture, apparatus, tools or implements, materials or supplies or other similar property not Page 76 necessarily of the same character but of at least equal value to the Company as, and costing not less than the amount realized from, the Collateral disposed of, which shall forthwith become, without further action, subject to the Lien of this Indenture and the Security Agreements; (ii) abandon, terminate, cancel, release or make alterations in or substitutions of any contracts subject to the Lien of this Indenture and any of the Security Agreements; provided, however, that any altered or substituted contracts shall forthwith, without further action, be subject to the Lien of this Indenture and the Security Agreements to the same extent as those previously existing; (iii) surrender or modify any franchise, license or permit subject to the Lien of this Indenture and any of the Security Agreements which it may own or under which it may be operating; provided, however, that, after the surrender or modification of any such franchise, license or permit, the Company, the applicable Subsidiary Guarantor or the applicable Pledgor shall still, in the reasonable opinion of the Board of Directors of the Company, be entitled, under some other or without any franchise, license or permit, to conduct its business as it was operating immediately prior to such surrender or modification; or (iv) demolish, dismantle, tear down, abandon or scrap any portion of the Mortgaged Collateral (other than a Mortgaged Vessel), if in the good faith opinion of the Board of Directors, as evidenced by a Board Resolution, such demolition, dismantling, tearing down, abandoning or scrapping is in the best interests of the Company and the fair market value and utility of the Collateral as an entirety, and the security for the Securities, will not thereby be impaired. (b) In the event that the Company, a Subsidiary Guarantor or a Pledgor has sold, exchanged or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral which under the provisions of this Section 12.03 may be sold, exchanged or otherwise disposed of by the Company without any release or consent of the Trustee, and the Company requests the Trustee to furnish a written disclaimer, release or quitclaim of any interest in such property under this Indenture and the Security Agreements, the Trustee shall execute such an instrument upon delivery to the Trustee of (i) an Officers' Certificate by the Company reciting the sale, exchange or other disposition made or proposed to be made and describing in reasonable detail the property affected thereby, and stating that such property is property which by the provisions of this Section 12.03 may be sold, exchanged or otherwise disposed of or dealt with by the Company without any release or consent of the Trustee and (ii) an Opinion of Counsel stating that the sale, exchange or other disposition made or proposed to be made was duly taken by the Company, the Subsidiary Guarantor or the Pledgor in conformity with a designated subsection of Section 12.03(a) and that the execution of such written disclaimer, release or quitclaim is appropriate to confirm the propriety of such sale, disposition or other disposition under this Section 12.03. SECTION 12.04. Release of Mortgaged Collateral. In addition to its rights under Section 12.03, the Company shall have the right, at any time and from time to time, to sell, exchange or otherwise dispose of any of the Mortgaged Collateral (other than Trust Moneys, which are subject to release from the Lien of this Indenture and the Security Agreements as provided under Article 13), upon compliance with the requirements and conditions of this Section 12.04, Section 4.06, Section 4.14 and Section 4.20, and the Trustee shall release the same from the Lien of this Indenture and the Security Agreements upon receipt by the Trustee of a Release Notice requesting such release and describing the Page 77 property to be so released, together with: (a) If the property to be released has a book value of at least $5,000,000, a Board Resolution requesting such release and authorizing an application to the Trustee therefor. (b) An Officers' Certificate, dated not more than 30 days prior to the date of the application for such release, in each case stating in substance as follows: (i) that, in the opinion of the signers, the security afforded by this Indenture and the Security Agreements will not be impaired by such release in contravention of the provisions of this Indenture, and that if the Mortgaged Collateral to be released is not being replaced by comparable property, such Collateral has a book value equal to or less than $1,000,000 and is not necessary for the efficient operation of the Company's remaining property or in the conduct of the business of the Company; (ii) that the Company, a Subsidiary Guarantor or a Pledgor has disposed of or will dispose of the Collateral so to be released for a consideration representing, in the opinion of the signers, its fair value, which consideration may consist of any one or more of the following, to the extent otherwise permitted by this Indenture: (A) cash or cash equivalents, (B) obligations secured by a purchase money Lien upon the property so to be released and (C) any other property or assets that, except as provided in Section 12.04(d), upon acquisition thereof by the Company, a Subsidiary Guarantor or a Pledgor would be subject to the Lien of this Indenture and the Security Agreements, and subject to no Lien other than Permitted Liens which, under the applicable provisions of the Security Agreements relating thereto, are permitted to be superior to the Lien of the Trustee herein and therein, all of such consideration to be briefly described in the certificate; (iii) that no Event of Default has occurred and is continuing; (iv) the fair value, in the opinion of the signers, of the property to be released at the date of such application for release; provided, however, that it shall not be necessary under this clause (iv) to state the fair value of any property whose fair value is certified in a certificate of an Appraiser under Section 12.04(c); (v) whether the aggregate fair value of all Collateral to be released and of all other Collateral released from the Lien of this Indenture and the Security Agreements pursuant to this Section 12.04 since the commencement of the then current calendar year is 10% or more of the aggregate principal amount of the Securities outstanding on the date of the application and whether said fair value of the property to be released is at least $100,000 and at least 1% of the aggregate principal amount of the Securities outstanding on the date of the application, and if such is the case, that a certificate of an Appraiser as to the fair value of the property to be released will be furnished under Section 12.04(c); (vi) that if the Mortgaged Collateral to be released is only a portion of a Mortgaged Vessel, following such release, that the fair value of the Mortgaged Vessel (exclusive of the fair value of the released Mortgaged Collateral) shall not be less than the fair value of such Mortgaged Vessel (exclusive of the fair value of the released Mortgaged Collateral) prior to such release; (vii) that all conditions precedent herein provided for Page 78 relating to the release of the Collateral in question have been complied with. (c) If (i) the fair value of the property to be released and of all other property released from the Lien of this Indenture and the Security Agreements pursuant to this Section 12.04 since the commencement of the then current calendar year, as shown by the certificate required by Section 12.04(b)(v), is 10% or more of the aggregate principal amount of the Securities outstanding on the date of the application, and (ii) the fair value of the Mortgaged Collateral to be so released, as shown by the certificate filed pursuant to Section 12.04(b)(v), is at least $25,000 and at least 1% of the aggregate principal amount of the Securities outstanding on the date of the application, a certificate of an Appraiser stating: (1) the then fair value, in the opinion of the signer, of the property to be released; and (2) that such release, in the opinion of the signer, will not impair the Lien of this Indenture or the Security Agreements in contravention of its terms. (d) The Net Available Cash, which will be paid to the Trustee (except Net Available Cash from any Asset Sale which is not required, or cannot be required through the passage of time or otherwise, to be used to repurchase or redeem or to make an offer to repurchase Securities hereunder); and, if any property other than cash, cash equivalents or obligations is included in the consideration received in connection with such Asset Sale, such instruments of conveyance, assignment and transfer, if any, as may be necessary, in the Opinion of Counsel to be given pursuant to Section 12.04(e), to subject to the Lien of this Indenture and the Security Agreements all the right, title and interest of the Company or the applicable Subsidiary Guarantor in and to such property. (e) An Opinion of Counsel substantially to the effect (i) that any obligation included in the consideration for any property so to be released and to be received by the Trustee pursuant to Section 12.04(d) is a valid and binding obligation enforceable in accordance with its terms and is effectively pledged under the Security Agreements, (ii) that any Lien granted by a purchaser to secure a purchase money obligation is a fully perfected Lien and such instrument granting such Lien is enforceable in accordance with its terms, (iii) either (x) that such instruments of conveyance, assignment and transfer as have been or are then delivered to the Trustee are sufficient to subject to the Lien of this Indenture and the applicable Security Agreements all the right, title and interest of the Company or the applicable Subsidiary Guarantor or Pledgor in and to any property, other than cash, cash equivalents and obligations, that is included in the consideration for the Mortgaged Collateral so to be released and is to be received by the Trustee pursuant to Section 12.04(d), subject to no Lien other than Permitted Liens or (y) that no instruments of conveyance, assignment or transfer are necessary for such purpose, (iv) that the Company or the applicable Subsidiary Guarantor or Pledgor has corporate power to own all property included in the consideration for such release, and (v) that all conditions precedent herein and under the Security Agreements relating to the release of such Collateral have been complied with. (f) If the Mortgaged Collateral to be released is only a portion of a Mortgaged Vessel, an Opinion of Counsel relating to the Mortgaged Vessel confirming that after such release, the Lien of the Mortgage continues unimpaired as a perfected Lien upon the Mortgaged Vessel subject only to Permitted Liens. Page 79 In connection with any release, the Company shall (i) execute, deliver and record or file and obtain such instruments as the Trustee may reasonably require, including amendments to the Security Agreements and this Indenture, and (ii) deliver to the Trustee such evidence of the satisfaction of the conditions included in this Indenture and the Security Agreements as the Trustee may reasonably require. The Company shall exercise its rights under this Section by delivery to the Trustee of a notice (each, a "Release Notice"), which shall refer to this Section, describe with particularity the items of property proposed to be covered by the release and be accompanied by a counterpart of the instruments proposed to give effect to the release fully executed and acknowledged (if applicable) by all parties thereto other than the Trustee and in form for execution by the Trustee. Upon such compliance, the Company shall direct the Trustee to execute, acknowledge (if applicable) and deliver to the Company such counterpart within 10 Business Days after receipt by the Trustee of a Release Notice and the satisfaction of the requirements of this Section. In case an Event of Default shall have occurred and be continuing, the Company, a Subsidiary Guarantor or a Pledgor, while in possession of the Mortgaged Collateral (other than cash, cash equivalents, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or under any Security Agreement or with the trustee, mortgagee or other holder of a Permitted Lien), may do any of the things enumerated in this Section 12.04, if the Trustee in its discretion, or the Holders of a majority in aggregate principal amount of the Securities outstanding, by appropriate action of such Holders, shall consent to such action, in which event any certificate filed under this Section shall omit the statement to the effect that no Event of Default has occurred and is continuing. This paragraph shall not apply, however, during the continuance of an Event of Default of the type specified in Section 6.01(1) or 6.01(2). All cash or cash equivalents received by the Trustee pursuant to this Section 12.04 shall be held by the Trustee, for the benefit of the Holders, as Trust Moneys under Article 13 subject to application as therein provided. All purchase money and other obligations received by the Trustee pursuant to this Section 12.04 shall be held by the Trustee for the benefit of the Holders as Mortgaged Collateral. SECTION 12.05. Eminent Domain, Expropriation and Other Governmental Takings. If any of the Mortgaged Collateral is taken by eminent domain, expropriation or other similar governmental taking (including a requisition for hire which is not revoked within six months or a requisition for title) or is sold pursuant to the exercise by any governmental authority of any right which it may then have to purchase, or to designate a purchaser or to order a sale of, all or any part of the Mortgaged Collateral, the Trustee shall release the property so taken or purchased, but only upon receipt by the Trustee of the following: (a) an Officers' Certificate stating that such property has been taken by eminent domain, expropriation or other similar governmental taking and the amount of the award therefor, or that such property has been sold pursuant to a right vested in a governmental authority to purchase, or to designate a purchaser, or order a sale of such property and the amount of the proceeds of such sale, that the amount of the proceeds of the property so sold is not less than the amount to which the Company or the applicable Subsidiary Guarantor or Pledgor is legally entitled under the terms of such right to purchase or designate a purchaser, or under the order or orders directing such sale, as the case may be, and that all conditions precedent herein provided for relating to such release have been complied with; (b) to hold as Trust Moneys, subject to the disposition thereof Page 80 pursuant to Article 13 hereof, the award for such property or the proceeds of such sale to the extent provided under the Security Agreements; and (c) an Opinion of Counsel substantially to the effect that: (1) such property has been taken by eminent domain, expropriation or other similar governmental taking (including a requisition for hire which is not revoked within six months or a requisition for title) or has been sold pursuant to the exercise of a right vested in a governmental authority to purchase, or to designate a purchaser or order a sale of, such property; and (2) the instruments and the award or proceeds of such sale which have been or are therewith delivered to and deposited with the Trustee conform to the requirements of this Indenture and the Security Agreements and that, upon the basis of such application, the Trustee is permitted by the terms hereof and of the Security Agreements to execute and deliver the release requested, and that all conditions precedent herein provided for relating to such release have been complied with. In any proceedings for the taking or purchase or sale of any part of the Mortgaged Collateral, by eminent domain, expropriation or other similar governmental taking or by virtue of any such right to purchase or designate a purchaser or to order a sale, the Trustee may be represented by counsel who may be counsel, at the Company's expense, for the Company. All cash received by the Trustee pursuant to this Section 12.05 shall be held by the Trustee as Trust Moneys under Article 13 subject to application as therein provided. All purchase money and other obligations received by the Trustee pursuant to this Section 12.05 shall be held by the Trustee as Mortgaged Collateral subject to application as provided in Section 12.10. SECTION 12.06. Permitted Releases Not To Impair Lien; Trust Indenture Act Requirements. The release of any Mortgaged Collateral from the terms hereof and of the Security Agreements or the release of, in whole or in part, the Liens created by the Security Agreements, will not be deemed to impair the Lien on the Collateral in contravention of the provisions hereof if and to the extent the Collateral or Liens are released pursuant to the applicable Security Agreements and pursuant to the terms of this Article 12. The Trustee and each of the Holders acknowledge that a release of Mortgaged Collateral or a Lien strictly in accordance with the terms of the Security Agreements and of this Article 12 will not be deemed for any purpose to be an impairment of the Lien on the Mortgaged Collateral in contravention of the terms of this Indenture. To the extent applicable, the Company and each obligor on the Securities shall cause ss. 314(d) of the TIA relating to the release of property or securities from the Lien hereof and of the Security Agreements to be complied with. Any certificate or opinion required by ss. 314(d) of the TIA may be made by an officer of the Company, except in cases which ss. 314(d) of the TIA requires that such certificate or opinion be made by an independent person. SECTION 12.07. Suits To Protect the Mortgaged Collateral. Subject to the provisions of the Security Agreements, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Mortgaged Collateral by any acts which may be unlawful or in violation of any of the Security Agreements or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests and the interests of the Holders in the Mortgaged Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, Page 81 rule or order would impair the Lien on the Mortgaged Collateral or be prejudicial to the interests of the Holders or the Trustee). SECTION 12.08. Purchaser Protected. In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 12 to be sold be under obligation to ascertain or inquire into the authority of the Company or the applicable Subsidiary Guarantor to make any such sale or other transfer. SECTION 12.09. Powers Exercisable by Receiver or Trustee. In case the Mortgaged Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 12 upon the Company or a Subsidiary Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or a Subsidiary Guarantor or of any officer or officers thereof required by the provisions of this Article 12; and if the Trustee shall be in the possession of the Mortgaged Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee. SECTION 12.10. Disposition of Obligations Received. All purchase money and other obligations received by the Trustee under this Article shall be held by the Trustee as a part of the Mortgaged Collateral. Upon payment in cash or cash equivalents by or on behalf of the Company to the Trustee of the entire unpaid principal amount of any such obligation, to the extent not constituting Net Available Cash which may be required, through the passage of time or otherwise, to be used to redeem or repurchase or to make an offer to redeem or repurchase Securities, the Trustee shall release and transfer such obligation and any mortgage securing the same upon receipt of any documentation that the Trustee may reasonably require. Any cash or cash equivalents received by the Trustee in respect of the principal of any such obligations shall be held by the Trustee as Trust Moneys under Article 13 subject to application as therein provided and as provided in the Security Agreements. Until the Securities are accelerated, pursuant to Section 6.02, all interest and other income on any such obligations, when received by the Trustee shall be paid to the Company from time to time in accordance with Section 13.08. If the Securities have been accelerated pursuant to Section 6.02, any such interest or other income not theretofore paid, when collected by the Trustee, shall be applied by the Trustee in accordance with Section 6.10. SECTION 12.11. Determinations Relating to Mortgaged Collateral. In the event (i) the Trustee shall receive any written request from the Company, a Subsidiary Guarantor or a Pledgor under any Security Agreement for consent or approval with respect to any matter or thing relating to any Mortgaged Collateral or the Company's, a Subsidiary Guarantor's or a Pledgor's obligations with respect thereto or (ii) there shall be due to or from the Trustee under the provisions of any Security Agreement any material performance or the delivery of any material instrument or (iii) the Trustee shall become aware of any material nonperformance by the Company, a Subsidiary Guarantor or a Pledgor of any covenant or any material breach of any representation or warranty of the Company, a Subsidiary Guarantor or a Pledgor set forth in any Security Agreement, then, in each such event, the Trustee shall be entitled to hire, at the sole reasonable cost and expense of the Company, experts, consultants, agents and attorneys to advise the Trustee on the manner in which the Trustee should respond to such request or render any requested performance or response to such nonperformance or breach. The Trustee shall be fully protected in accordance with Article 7 hereof in the taking of any action recommended or approved by any such expert, consultant, agent or attorney and by indemnification provided in accordance with Section 6.05 and other sections of Page 82 this Indenture if such action is agreed to by Holders of a majority in principal amount of the Securities pursuant to Section 6.05 and, the Trustee may, in its sole discretion, prior to taking such action if such action could subject it to environmental liabilities or taxation, require (i) direction from the Holders of a majority in principal amount of the Securities in accordance with Section 6.05 hereof and (ii) indemnification in accordance with Section 6.05. SECTION 12.12. Release upon Termination of the Company's Obligations. In the event that the Company delivers an Officers' Certificate certifying that all the obligations under this Indenture, the Securities and the Security Agreements have been satisfied and discharged by complying with the provisions of Article 8 or by the payment in full of the Company's obligations under the Securities, this Indenture and the Security Agreements, the Trustee shall deliver to the Company a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Mortgaged Collateral, and any rights it has under the Security Agreements. SECTION 12.13. Substitution of Mortgaged Vessel. In addition to its rights under Sections 12.03 and Section 12.04, the Company shall have the right, at any time and from time to time, to substitute any Mortgaged Vessel with a Substitute Mortgaged Vessel, upon compliance with the requirements and conditions of this Section 12.13 and Section 4.06 (if applicable) and Section 4.14. On the date on which a Substitute Mortgaged Vessel is tendered to the Trustee as part of the Collateral (the "Vessel Substitution Date"), the Trustee shall release such Mortgaged Vessel from the Lien of this Indenture and the Security Agreements upon receipt by the Trustee of a Substitution Notice requesting such substitution, describing the Mortgaged Vessel to be released and the Substitute Mortgaged Vessel that the Company or a Restricted Subsidiary will tender, or cause to be to be tendered, to the Trustee as Collateral in substitution for the Mortgaged Vessel, together with: (a) If the Mortgaged Vessel to be released has a book value of at least $5,000,000, a Board Resolution requesting such release and authorizing an application to the Trustee to tender a Substitute Mortgaged Vessel in substitution therefor. (b) An Officers' Certificate, dated not more than 30 days prior to the date of the application for such release, in each case stating in substance as follows: (i) that, in the opinion of the signers, the security afforded by this Indenture and the Security Agreements will not be impaired by such substitution in contravention of the provisions of this Indenture; (ii) that no Event of Default has occurred and is continuing; (iii) the Appraised Value of the Substitute Mortgaged Vessel at the Vessel Substitution Date is at least equal to the Appraised Value of the Mortgaged Vessel for which it is being substituted; and (iv) that all conditions precedent herein provided for relating to the release of the Mortgaged Vessel and the tender of the Substitute Mortgaged Vessel in question have been complied with. (c) An Opinion of Counsel substantially to the effect (i) that such instruments of conveyance, assignment and transfer as have been or are then delivered to the Trustee are sufficient to subject the Substitute Mortgaged Vessel to the Lien of this Indenture and the applicable Security Agreements and to transfer all the right, title and interest of the Company or the applicable Subsidiary Guarantor or Pledgor in and to such Substitute Mortgaged Vessel to be received by the Trustee pursuant to this Section, subject to no Lien other than Permitted Liens, (ii) that the Page 83 Company or the applicable Subsidiary Guarantor or Pledgor has corporate power to own all Substitute Mortgaged Vessels included in the consideration for such substitution, and (iii) that all conditions precedent herein and under the Security Agreements relating to the release of such Collateral have been complied with. (d) Written appraisals by two independent Appraisers as of the Vessel Substitution Date, stating (i) the approximate fair value of the Mortgaged Vessel to be released and (ii) the approximate fair value of the Substitute Mortgaged Vessel to be tendered to the Trustee as Collateral in substitution for the Mortgaged Vessel to be released. (e) Original certificates, certified to be true and complete by an Officer of the Company, representing the Capital Stock of any Restricted Subsidiary owning such Substitute Mortgaged Vessel of which the Company or a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record and beneficial owner (unless such Restricted Subsidiary is already a Subsidiary Guarantor), together with an Officers' Certificate with respect thereto. (f) Copies, certified to be true and complete by an Officer of the Company, of any Charters related to such Substitute Mortgaged Vessel. (g) The report of an insurance broker required by Section 3(U)(viii) of the form of Mortgage attached as Exhibit C to this Indenture, with respect to insurance policies maintained in respect of each such Substitute Mortgaged Vessel, which report shall include loss payable clauses substantially in the form set forth in Schedule 1 to the form of Assignment of Insurance. (h) With respect to oceangoing Vessels, a classification certificate, dated as of a date not more than 30 days prior to the date on which such Substitute Mortgaged Vessel is tendered, from a classification society with respect to each such Substitute Mortgaged Vessel. (i) a fully executed Guarantee Agreement in respect of its Subsidiary Guarantee substantially in the form attached as Exhibit F to the Escrow Agreement; provided that no Subsidiary Guarantee need be provided if each of the owner of the Mortgaged Vessel and the owner of the Substitute Mortgaged Vessel is not a Wholly Owned Subsidiary; In connection with any substitution, the Company shall (i) execute, deliver and record or file and obtain such instruments as the Trustee may reasonably require, including a Mortgage (which shall be submitted to the appropriate registry office as soon as reasonably practicable, but in no event later than 5 Business Days, after the Vessel Substitution Date), the Security Agreements and this Indenture, and (ii) deliver to the Trustee such evidence of the satisfaction of the conditions included in this Indenture and the Security Agreements as the Trustee may reasonably require. The Company shall exercise its rights under this Section by delivery to the Trustee of a notice (each, a "Substitution Notice"), which shall refer to this Section, describe with particularity the Mortgaged Vessels and Substitute Mortgaged Vessels proposed to be covered by the substitution and be accompanied by a counterpart of the instruments proposed to give effect to the substitution fully executed and acknowledged (if applicable) by all parties thereto other than the Trustee and in form for execution by the Trustee. Upon such compliance, the Company shall direct the Trustee to execute, acknowledge (if applicable) and deliver to the Company, at the Company's sole cost and expense, such counterpart within 10 Business Days after receipt by the Trustee of a Substitution Notice and the satisfaction of the requirements of this Section. In case an Event of Default shall have occurred and be continuing, Page 84 the Company, a Subsidiary Guarantor or a Restricted Subsidiary, while in possession of the Mortgaged Vessels, may do any of the things enumerated in this Section 12.13, if the Trustee in its discretion, or the Holders of a majority in aggregate principal amount of the Securities outstanding, by appropriate action of such Holders, shall consent to such action, in which event any certificate filed under this Section shall omit the statement to the effect that no Event of Default has occurred and is continuing. This paragraph shall not apply, however, during the continuance of an Event of Default of the type specified in Section 6.01(1) or 6.01(2). ARTICLE 13 Application of Trust Moneys SECTION 13.01. "Trust Moneys" Defined. All cash or cash equivalents received by the Trustee: (a) upon the release of property from the Lien of this Indenture and the Security Agreements, including all moneys received in respect of the principal of all purchase money, governmental and other obligations; or (b) as compensation for, or proceeds of sale of, any part of the Mortgaged Collateral taken by eminent domain or purchased by, or sold pursuant to an order of, a governmental authority or otherwise disposed of; or (c) as proceeds of insurance upon any part of the Mortgaged Collateral (other than any liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it); or (d) for application under this Article as elsewhere provided in this Indenture or any Security Agreement, or whose disposition is not elsewhere otherwise specifically provided for herein or in any Security Agreement; (all such moneys being herein sometimes called "Trust Moneys"), shall be held by the Trustee for the benefit of the Holders of Securities as a part of the Mortgaged Collateral, shall be held in United States dollars or U.S. dollar denominated obligations, and, upon any entry upon or sale of the Mortgaged Collateral or any part thereof pursuant to Article 6, said Trust Moneys shall be applied in accordance with Section 6.10; but, prior to any such entry or sale, all or any part of the Trust Moneys may be withdrawn, and shall be released, paid or applied by the Trustee, from time to time as provided in Sections 13.02 to 13.05, inclusive, may be applied by the Trustee as provided in Section 13.07(b) and, if applicable, shall be released pursuant to Section 4.17. SECTION 13.02. Retirement of Securities. The Trustee shall apply Trust Moneys from time to time to the payment of the principal of and interest on any Securities, at final maturity or to the redemption thereof or the purchase thereof upon tender or in the open market or at private sale or upon any exchange or in any one or more of such ways, including pursuant to a redemption under Article 3 or a required repurchase pursuant to Section 4.11 or 4.16(b), as the Company shall request, upon receipt by the Trustee of the following: (a) a resolution of the Board of Directors directing the application pursuant to this Section of a specified amount of Trust Moneys (denominated in U.S. dollars) and in case any such moneys are to be applied to payment, designating any Securities, so to be paid and, in case any such moneys are to be applied to the purchase of any Securities, prescribing the method of purchase, the price or Page 85 prices to be paid and the maximum principal amount of any Securities, to be purchased and any other provisions of this Indenture governing such purchase; (b) additional cash (denominated in U.S. dollars) to the extent necessary to fund the entire payment amount or purchase price purchase, which cash shall be held by the Trustee in trust for such purpose; (c) an Officers' Certificate, dated not more than five days prior to the date of the relevant application, stating (i) that no Default exists; and (ii) that all conditions precedent and covenants herein provided for relating to such application of Trust Moneys have been complied with; and (d) an Opinion of Counsel stating that the documents and the cash or cash equivalents, if any, which have been or are therewith delivered to and deposited with the Trustee conform to the requirements of this Indenture and that all conditions precedent herein provided for relating to such application of Trust Moneys have been complied with. Upon compliance with the foregoing provisions of this Section, the Trustee shall apply Trust Moneys available therefor as directed and specified by such resolution, up to, but not exceeding, the principal amount of the Securities to be so paid, redeemed or purchased. A resolution of the Board of Directors expressed to be irrevocable directing the application of Trust Moneys under this Section to the payment of the principal of particular Securities shall for all purposes of this Indenture be deemed the equivalent of the deposit of money with the Trustee in trust for such purpose. Such Trust Moneys and any cash deposited with the Trustee pursuant to subsection (b) of this Section shall not, after compliance with the foregoing provisions of this Section, be deemed to be part of the Collateral or Trust Moneys. SECTION 13.03. Withdrawals of Insurance Proceeds and Condemnation Awards; Withdrawals of Net Available Cash. (a) To the extent that any Trust Moneys consist of either (i) the proceeds of insurance upon any part of the Mortgaged Collateral or (ii) any award for or the proceeds from any of the Collateral being taken by eminent domain, expropriation or other similar governmental taking (including a requisition for hire which is not revoked within six months or a requisition for title) or sold pursuant to the exercise by any governmental authority of any right which it may then have to purchase, or to designate a purchaser or to order a sale of any part of the Mortgaged Collateral, such Trust Moneys may be withdrawn by the Company or the applicable Subsidiary Guarantor or Pledgor and shall be paid by the Trustee upon a request by the Company to the Trustee by the proper officer or officers of the Company or the applicable Subsidiary Guarantor or Pledgor to reimburse the Company or the applicable Subsidiary Guarantor or Pledgor for expenditures made, or to pay costs incurred, by the Company or the applicable Subsidiary Guarantor or Pledgor to repair, rebuild or replace the property destroyed, damaged or taken (including the acquisition of a Qualified Substitute Vessel), upon receipt by the Trustee of the following: (I) an Officers' Certificate dated not more than 30 days prior to the date of the application for the withdrawal and payment of such Trust Moneys and setting forth: (i) that expenditures have been made, or costs incurred, Page 86 including any Ready for Sea Cost, or will be incurred simultaneous with such withdrawal of Trust Moneys, by the Company or the applicable Subsidiary Guarantor or Pledgor in a specified amount for the purpose of making certain repairs, rebuildings and replacements of the Mortgaged Collateral (including the acquisition of a Qualified Substitute Vessel), which shall be briefly described, and stating the fair value (which shall be substantiated by an Appraiser's certificate attached thereto) thereof to the Company at the date of the acquisition thereof by the Company, except that it shall not be necessary under this paragraph to state the fair value of any of such repairs, rebuildings or replacements that are separately described pursuant to paragraph (vi) of this subsection (I) and whose fair value is stated in the Appraiser's certificate under the following subsection (II) of this Section; (ii) that no part of such expenditures, in any previous or then pending application, has been or is being made the basis for the withdrawal of any Trust Moneys pursuant to this Section 13.03; (iii) that no part of such expenditures or costs has been paid out of either the proceeds of insurance upon any part of the Mortgaged Collateral not required to be paid to the Trustee under the Mortgage or any award for or the proceeds from any of the Mortgaged Collateral being taken not required to be paid to the Trustee under Section 12.05 hereof, as the case may be; (iv) that there is no outstanding indebtedness or other obligation, other than costs for which payment is being requested, known to the Company, after due inquiry, for the purchase price or construction of such repairs, rebuildings or replacements, or for labor, wages, materials or supplies in connection with the making thereof, which, if unpaid, might become the basis of a vendor's, mechanics', laborer's, materialmen's, statutory or other similar Lien upon any of such repairs, rebuildings or replacement, which Lien might, in the opinion of the signers of such certificate, materially impair the security afforded by such repairs, rebuildings or replacement; (v) that the property to be repaired, rebuilt or replaced is necessary or desirable in the conduct of the Company's, the Subsidiary Guarantors' or the Pledgors' business; (vi) whether any part of such repairs, rebuildings or replacements, within six months before the date of acquisition thereof by the Company, a Subsidiary Guarantor or a Pledgor, has been used or operated by others other than the Company, a Subsidiary Guarantor or a Pledgor in a business similar to that in which such property has been or is to be used or operated by the Company, a Subsidiary Guarantor or a Pledgor, and whether the fair value to the Company, a Subsidiary Guarantor or a Pledgor, at the date of such acquisition, of such part of such repairs, rebuildings or replacement is at least $25,000 and 1% of the aggregate principal amount of the outstanding Securities; and, if all such facts are present, such part of said repairs, rebuildings or replacements shall be separately described, and it shall be stated that an Appraiser's certificate as to the fair value to the Company of such separately described repairs, rebuildings or replacements will be furnished under the following subsection (II) of this Section 13.03(a); (vii) that no Default shall have occurred and be continuing; (viii) that the Trust Moneys that will remain after such Page 87 withdrawal will be sufficient to complete the maintenance or repairs of the property destroyed, damaged or taken; and (ix) that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with. (II) In case any part of such maintenance or repairs is separately described pursuant to the foregoing paragraph (vi) of subsection (I) of this Section, a certificate of an Appraiser stating the fair value to the Company, the Subsidiary Guarantors or the Pledgor, in such Appraiser's opinion, of such separately described maintenance or repairs at the date of the completion thereof by the Company, the Subsidiary Guarantors or the Pledgors. (III) An Opinion of Counsel substantially stating: (i) that the instruments that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture or the Security Agreements, and that, upon the basis of such Company request and the accompanying documents specified in this Section 13.03, all conditions precedent herein provided for relating to such withdrawal and payment have been complied with, and the Trust Moneys whose withdrawal is then requested may be lawfully paid over under this Section 13.03; (ii) that the Company or the applicable Subsidiary Guarantor or Pledgor has acquired title to said repairs, rebuildings and replacements at least the equivalent to its title to the property destroyed, damaged or taken, and that the same and every part thereof are free and clear of all Liens prior to the Lien of this Indenture and the Security Agreements, except Permitted Liens to which the property so destroyed, damaged or taken shall have been subject at the time of such destruction, damage or taking; and (iii) that all the Company's or the applicable Subsidiary Guarantor's or Pledgor's right, title and interest in and to said repairs, rebuilding or replacements, or combination thereof, are then subject to the Lien of this Indenture and the Security Agreements. (b) To the extent that any Trust Moneys consist of Net Available Cash attributable to a Sold Mortgaged Vessel (other than the receipt by a Pledgor of Net Available Cash attributable to the sale of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) or to the Sale Equivalent Portion of Bareboat Charter Funds, such Trust Moneys may be withdrawn by the Company or the applicable Subsidiary Guarantor or Pledgor, and shall be paid by the Trustee, upon a request by the Company to the Trustee by the proper officer or officers of the Company or the applicable Subsidiary Guarantor or Pledgor, to the Company or the applicable Subsidiary Guarantor or Pledgor, in connection with the acquisition of a Qualified Substitute Vessel, including certain related maintenance and repairs, in accordance with the conditions set forth below and, upon receipt by the Trustee of the following: (I) an Officers' Certificate dated not more than 30 days prior to the date of the application for the withdrawal and payment of such Trust Moneys and setting forth: (i) either (x) that expenditures have been made, or costs incurred, or will be incurred simultaneously with such withdrawal of Trust Moneys, by the Company or the applicable Subsidiary Guarantor or Pledgor in a specified amount in connection with the acquisition of a Qualified SubstituteVessel in accordance with the terms of an Page 88 Acquisition Contract that has been (or will be) executed and is (or will be) in full force and effect for the purpose of acquiring a Qualified Substitute Vessel to replace the Mortgaged Vessel, which Qualified Substitute Vessel shall be briefly described, and stating the fair value thereof (which shall be substantiated by an Appraiser's certificate attached thereto) to the Company at the date of the acquisition thereof by the Company, or (y) that expenditures have been made, or costs incurred, including Ready for Sea Costs, or will be incurred simultaneously with such withdrawal of Trust Moneys, by the Company or the applicable Subsidiary Guarantor or Pledgor in a specified amount for the purpose of making certain maintenance, repairs (including structural modifications) or drydocking expenses, including survey expenses, relating to such Qualified Substitute Vessel, which shall be briefly described, and stating the fair value thereof (which shall be substantiated by an Appraiser's certificate attached thereto) to the Company at the date of the acquisition thereof by the Company; (ii) that no part of such expenditures, in any previous or then pending application, has been or is being made the basis for the withdrawal of any Trust Moneys pursuant to this Section 13.03; (iii) that there is no outstanding indebtedness or other obligation, other than costs for which payment is being requested, known to the Company, after due inquiry, for the purchase price or construction of such maintenance or repairs, or for labor, wages, materials or supplies in connection with the making thereof, which, if unpaid, might become the basis of a vendor's, mechanics', laborer's, materialmen's, statutory or other similar Lien upon any of such repairs, rebuildings or replacement, which Lien might, in the opinion of the signers of such certificate, materially impair the security afforded by such repairs, rebuildings or replacement; (iv) that the Qualified Substitute Vessel to be acquired, maintained or repaired is necessary or desirable in the conduct of the Company's, the Subsidiary Guarantors' or the Pledgors' business; (v) that no Default shall have occurred and be continuing; (vi) that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with. (II) An Opinion of Counsel substantially stating: (i) that the instruments that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture and the Security Agreements, and that, upon the basis of such Company, Subsidiary Guarantor or Pledgor request and the accompanying documents specified in this Section 13.03, all conditions precedent herein provided for relating to such withdrawal and payment have been complied with, and the Trust Moneys whose withdrawal is then requested may be lawfully paid over under this Section 13.03; (ii) that the Company or the applicable Subsidiary Guarantor or Pledgor has acquired title to said Qualified Substitute Vessel, and that the same and every part thereof are free and clear of all Liens prior to the Lien of this Indenture and the Security Agreements, except Permitted Liens; and (iii) that all the Company's or the applicable Subsidiary Guarantor's or Pledgor's right, title and interest in and to such Qualified Substitute Vessel, are then subject to the Lien of this Page 89 Indenture and the Security Agreements. (c) Upon compliance with the foregoing provisions of this Section 13.03(a) or (b), the Trustee shall pay on the Company's request an amount of Trust Moneys of the character aforesaid equal to the amount of the expenditures or costs stated in the Officers' Certificate required by Section 13.03(a) or (b); provided, however, that notwithstanding the above, so long as no Default shall have occurred and be continuing, in the event that any insurance proceeds or award for such property or proceeds of such sale, in each case contemplated by Section 13.03(a), does not exceed $5,000,000, and, in the good faith estimate of the Company and the applicable Subsidiary Guarantor or Pledgor, such destruction or damage resulting in such insurance proceeds or such taking or sale resulting in such award does not detrimentally affect the value or use of the Mortgaged Collateral in any material respect, upon delivery to the Trustee of an Officers' Certificate to such effect, the Company may direct the Trustee and, upon such direction, the Trustee and the Company shall direct the insurer to release directly to the Company or the applicable Subsidiary Guarantor or Pledgor such insurance proceeds or award for such property or proceeds of such sale, free of the Lien hereof and of the Security Agreements. SECTION 13.04. Powers Exercisable Notwithstanding Event of Default. In case Default shall have occurred and shall be continuing, the Company, while in possession of the Mortgaged Collateral (other than cash, cash equivalents, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or under the Security Agreements), may do any of the things enumerated in Sections 13.02 and 13.03 if the Trustee in its discretion, or the Holders of a majority in aggregate principal amount of the outstanding Securities, by appropriate action of such Holders, shall consent to such action, in which event any certificate filed under any of such Sections shall omit the statement to the effect that no Default has occurred and is continuing. This Section 13.04 shall not apply, however, during the continuance of a Default of the type specified in Section 6.01(1) or 6.01(2). SECTION 13.05. Powers Exercisable by Trustee or Receiver. In case the Mortgaged Collateral (other than any cash, cash equivalents, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder or under the Security Agreements) shall be in the possession of a receiver or trustee lawfully appointed, the powers hereinbefore in this Article 13 conferred upon the Company, the Subsidiary Guarantors and the Pledgors with respect to the withdrawal or application of Trust Moneys may be exercised by such receiver or trustee, in which case a certificate signed by such receiver or trustee shall be deemed the equivalent of any Officers' Certificate required by this Article 13. If the Trustee shall be in possession of any of the Mortgaged Collateral hereunder or under the Security Documents, such powers may be exercised by the Trustee in its discretion. SECTION 13.06. Disposition of Securities Retired. All Securities received by the Trustee and for whose purchase Trust Moneys are applied under this Article 13, if not otherwise canceled, shall be promptly canceled and destroyed by the Trustee unless the Trustee shall be otherwise directed by Company request. Upon destruction of any Securities, the Trustee shall issue a certificate of destruction to the Company. SECTION 13.07. Investment and Use of Trust Moneys. (a) All or any part of any Trust Moneys held by the Trustee hereunder (except such as may be held for the account of any particular Securities), shall from time to time at the direction of the Company be invested or reinvested by the Trustee in Temporary Cash Investments. Unless a Default occurs and is continuing, any interest on such Temporary Cash Investments (in excess of any accrued interest paid at the time of purchase) which may be received by the Trustee shall be paid periodically to the Company. Such Temporary Cash Investments shall be held by Page 90 the Trustee as a part of the Mortgaged Collateral, subject to the same provisions hereof as the cash used by it to purchase such cash equivalents. The Trustee shall not be liable or responsible for any loss resulting from such investments or sales except only for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct in complying with this Section 13.07. (b) If the Company or any Subsidiary Guarantor or Pledgor shall fail to perform any of its covenants in this Indenture or under any Security Agreement, the Trustee may (but shall not be required to) at any time and from time to time, use, apply and advance any Trust Moneys held by it under this Article 13 or make advances to effect performance of any such covenant on behalf of the Company, such Subsidiary Guarantor or such Pledgor as contemplated by this Indenture or the Security Agreements; provided, however, that the Trustee shall not be required to make any such advances from its own funds; provided further, however, that all moneys so used or advanced by the Trustee, together (in the case of funds advanced by the Trustee) with interest at the rate borne by the Securities shall be repaid by the Company or the applicable Subsidiary Guarantor or Pledgor upon demand and such advances shall be secured under the Mortgages prior to the Securities. For repayment of all such advances the Trustee shall have the right to use and apply any Trust Moneys at any time held by it under Article 13 but no such use of Trust Moneys or advance shall relieve the Company, such Subsidiary Guarantor or such Pledgor from any Default. ARTICLE 14 Miscellaneous SECTION 14.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 14.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or overnight courier addressed as follows: if to the Company or any Subsidiary Guarantor or Pledgor: Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Attention of Secretary with a copy to: Ultrapetrol (Bahamas) Limited c/o Ravenscroft Shipping Inc. 3251 Ponce de Leon Boulevard Coral Gables, Florida 33134 Attention of Secretary if to the Trustee: Manufacturers and Traders Trust Company Corporate Trust Administration 25 South Charles Street Baltimore, MD 21201 Page 91 Attention: Robert D. Brown Facsimile: 410-244-4236 The Company, the Subsidiary Guarantors, the Pledgors or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 14.03. Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA ss. 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Subsidiary Guarantors, the Pledgors, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c). SECTION 14.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company, Subsidiary Guarantor or a Pledgor to the Trustee to take or refrain from taking any action under this Indenture, the Company or such Subsidiary Guarantor shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 14.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 14.06. When Securities Disregarded. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be Page 92 outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 14.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 14.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York and the State of Maryland. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 14.09. Governing Law. This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 14.10. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company or any Subsidiary Guarantor under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 14.11. Successors. All agreements of the Company, the Subsidiary Guarantors and Pledgors in this Indenture and the Securities shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 14.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 14.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. SECTION 14.14. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the execution and delivery of this Indenture, the Company and each of the Pledgors and the Subsidiary Guarantors (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed CT Corporation System (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Indenture, the Securities or the Security Agreements that may be instituted in any federal or state court in the State of New York, Borough of Manhattan or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder), and acknowledges that CT Corporation System has accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon CT Corporation System and written notice of said service to the Company or the applicable Pledgor or Subsidiary Guarantor, shall be deemed in every respect effective service of process upon the Company or such Pledgor or Subsidiary Guarantor, as the case may be, in any such suit or proceeding. The Company and each of the Pledgors and the Subsidiary Guarantors further agree to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of CT Corporation System in full force and effect so long as this Indenture shall be in full force and effect. The Company and each of the Pledgors and the Subsidiary Guarantors hereby irrevocably and unconditionally waive, to the fullest extent they may legally effectively do so, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Indenture, the Security Agreements or the Securities in any federal or state court in the State of New York, Borough of Manhattan. The Company and each of the Pledgors and the Subsidiary Guarantors hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. To the extent either the Company or any of the Pledgors or the Subsidiary Guarantors has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in Securities and the Security Agreements, to the extent permitted by law. Page 93 In Witness Whereof, the parties have caused this Indenture to be duly executed as of the date first written above. ULTRAPETROL (BAHAMAS) LIMITED, as principal obligor on the Securities, By: /s/ Leonard J. Hoskinson --------------------------- Name: Leonard J. Hoskinson Title: Secretary Bayham Investments S.A. Baldwin Maritime Inc. Cavalier Shipping Inc. Corporacion de Navegacion Mundial S.A. Danube Maritime Inc. General Ventures Inc. Imperial Maritime Ltd. (Bahamas) Inc. Kattegat Shipping Inc. Kingly Shipping Ltd. Majestic Maritime Ltd. Massena Port S.A. Monarch Shipping Ltd. Noble Shipping Ltd. Oceanpar S.A. Oceanview Maritime Inc. Parfina S.A. Parkwood Commercial Corp. Princely International Finance Corp. Regal International Investments S.A. Riverview Commercial Corp. Sovereign Maritime Ltd. Stanmore Shipping Inc. Tipton Marine Inc. Ultrapetrol International S.A. Ultrapetrol S.A. UP Offshore (Holdings) Ltd. each as a Subsidiary Guarantor, By: /s/ Leonard J. Hoskinson ---------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact RIVERPAR S.A. UABL S.A., each as a Pledgor, By: /s/ Leonard J. Hoskinson ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, By: /s/ Robert D. Brown ------------------------- Name: Robert D. Brown Title: Vice President Page 94 RULE 144A / REGULATION S / IAI APPENDIX PROVISIONS RELATING TO INITIAL SECURITIES, PRIVATE EXCHANGE SECURITIES AND EXCHANGE SECURITIES 1 Definitions 1.1 Definitions For the purposes of this Appendix the following terms shall have the meanings indicated below: "Applicable Procedures" means, with respect to any transfer or transaction involving a Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depository for such a Regulation S Global Security, to the extent applicable to such transaction and as in effect from time to time. "Definitive Security" means a certificated Initial Security or Exchange Security or Private Exchange Security bearing, if required, the appropriate restricted securities legend set forth in Section 2.3(e). "Depository" means The Depository Trust Company, its nominees and their respective successors. "Distribution Compliance Period", with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Securities are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Securities. "Exchange Securities" means the 9% First Preferred Ship Mortgage Notes due 2014 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement. Page 95 "IAI" means an institutional "accredited investor", as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act. "Initial Purchaser" means Credit Suisse First Boston LLC. "Initial Securities" means $180,000,000 aggregate principal amount of 9% First Preferred Ship Mortgage Notes due 2014 issued on the Issue Date. "Private Exchange" means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchaser to issue and deliver to the Initial Purchaser, in exchange for the Initial Securities held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Securities. "Private Exchange Securities" means any 9% First Preferred Ship Mortgage Notes due 2014 issued in connection with a Private Exchange. "Purchase Agreement" means the Purchase Agreement dated November 10, 2004, among the Company, the Subsidiary Guarantors and the Pledgors named therein and the Initial Purchaser. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registered Exchange Offer" means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act. "Registration Rights Agreement" means the Registration Rights Agreement dated November 24, 2004, among the Company, the Subsidiary Guarantors and the Pledgors named therein and the Initial Purchaser. "Rule 144A Securities" means all Securities offered and sold to QIBs in reliance on Rule 144A. "Securities" means the Initial Securities, the Exchange Securities and the Private Exchange Securities, treated as a single class. "Securities Act" means the Securities Act of 1933. "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depository), or any successor Person thereto, and shall initially be the Trustee. "Shelf Registration Statement" means the registration statement issued by the Company in connection with the offer and sale of Initial Securities or Private Exchange Securities pursuant to a Registration Rights Agreement. "Transfer Restricted Securities" means Securities that bear or are required to bear the legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e) hereto. 1.2 Other Definitions
Term Defined in Section: ---- ------------------- ~~"Agent Members" 2.1(b) "Global Securities" 2.1(a)~~
Page 96 "IAI Global Security" 2.1(a) "Regulation S" 2.1(a) "Regulation S Global Security" 2.1(a) "Rule 144A" 2.1(a) "Rule 144A Global Security" 2.1(a)

2. The Securities. 2.1 (a) Form and Dating. The Initial Securities will be offered and sold by the Company pursuant to a Purchase Agreement. The Initial Securities will be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act ("Regulation S"). Initial Securities may thereafter be transferred to, among others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Securities initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "Rule 144A Global Security"); Initial Securities initially resold pursuant to Regulation S shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "Regulation S Global Security"); and Initial Securities to be resold to IAIs shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "IAI Global Security"), in each case without interest coupons and with the global securities legend and the applicable restricted securities legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Securities represented thereby with the Securities Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. Beneficial ownership interests in the Regulation S Global Security will be exchangeable for interests in a Rule 144A Global Security, an IAI Global Security or a Definitive Security only after the expiration of the Distribution Compliance Period. Beneficial interests in Regulation S Global Securities or IAI Global Securities may be exchanged for interests in Rule 144A Global Securities if (1) such exchange occurs in connection with a transfer of Securities in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Regulation S Global Security or the IAI Global Security, as applicable, first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Regulation S Global Security or the IAI Global Security, as applicable, is being transferred to a Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the States of the United States and other jurisdictions. Beneficial interests in Regulation S Global Securities and Rule 144A Global Securities may be exchanged for an interest in IAI Global Securities if (1) such exchange occurs in connection with a transfer of the Securities in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Security or Rule 144A Global Security, as applicable, first delivers to the Trustee on behalf of the transferee a written certificate (substantially in the form of Exhibit 2) to the effect that the Regulation S Global Security or Rule 144A Global Security, as applicable, is being transferred (x) to an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional investor acquiring the Securities for its own account or for the account of such Page 97 an institutional accredited investor, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act, (y) in accordance with all applicable securities laws of the States of the United States and other jurisdictions and (z) in an aggregate principal amount of Securities of no less than $250,000 or, if such transfer is in an aggregate principal amount of Securities of less than $250,000, such transferor shall also deliver to the Trustee an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act. Beneficial interests in a Rule 144A Global Security or an IAI Global Security may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Security, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable). The Rule 144A Global Security, the IAI Global Security and the Regulation S Global Security are collectively referred to herein as "Global Securities". The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided. (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depository. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Securities that (a) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as custodian for the Depository. Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Security, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security. (c) Definitive Securities. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Definitive Securities. 2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $180.0 million 9% First Preferred Ship Mortgage Notes due 2014, and (2) Exchange Securities or Private Exchange Securities for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Securities, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities, Exchange Securities or Private Exchange Securities. The aggregate principal amount of Securities outstanding at any time may not exceed Page 98 $180,000,000 except as provided in Section 2.06 of this Indenture. 2.3 Transfer and Exchange. Transfer and Exchange of Definitive Securities. When Definitive Securities are presented to the Registrar with a request: (x) to register the transfer of such Definitive Securities; or (y) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Securities surrendered for transfer or exchange: (i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and (ii) if such Definitive Securities are required to bear a restricted securities legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable: (A) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or (B) if such Definitive Securities are being transferred to the Company, a certification to that effect; or (C) if such Definitive Securities are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Security) and (ii) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security. A Definitive Security may not be exchanged for a beneficial interest in a Rule 144A Global Security, an IAI Global Security or a Regulation S Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with: (i) certification, in the form set forth on the reverse of the Security, that such Definitive Security is either (A) being transferred to a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Security in reliance on Regulation S to a buyer who elects to hold its interest in such Security in the form of a beneficial interest in the Regulation S Global Security; Page 99 and (ii) written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Security (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global Security (in the case of a transfer pursuant to clause (b)(i)(B)) or Regulation S Global Security (in the case of a transfer pursuant to clause (b)(i)(C)) to reflect an increase in the aggregate principal amount of the Securities represented by the Rule 144A Global Security, IAI Global Security or Regulation S Global Security, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Securities Custodian, the aggregate principal amount of Securities represented by the Rule 144A Global Security, IAI Global Security or Regulation S Global Security, as applicable, to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Security, IAI Global Security or Regulation S Global Security, as applicable, equal to the principal amount of the Definitive Security so canceled. If no Rule 144A Global Securities, IAI Global Securities or Regulation S Global Securities, as applicable, are then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate of the Company, a new Rule 144A Global Security, IAI Global Security or Regulation S Global Security, as applicable, in the appropriate principal amount. Transfer and Exchange of Global Securities. (i) The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Security shall deliver to the Registrar a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Security. The Registrar shall, in accordance with such instructions, instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Security and to debit the account of the Person making the transfer the beneficial interest in the Global Security being transferred. (ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Security from which such interest is being transferred. (iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Page 100 (iv) In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company. Restrictions on Transfer of Regulation S Global Securities. During the Distribution Compliance Period, beneficial ownership interests in Regulation S Global Securities may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S or (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States. Legend. (i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Security certificate evidencing the Global Securities (and all Securities issued in exchange therefor or in substitution thereof), in the case of Securities offered otherwise than in reliance on Regulation S, shall bear a legend in substantially the following form: THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, as amended (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN institutional "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. Page 101 Each certificate evidencing a Security offered in reliance on Regulation S shall bear a legend in substantially the following form: THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. Each Definitive Security shall also bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. (ii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Security that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Security). (iii) After a transfer of any Initial Securities or Private Exchange Securities pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, as the case may be, all requirements pertaining to legends on such Initial Security or such Private Exchange Security will cease to apply, the requirements requiring any such Initial Security or such Private Exchange Security issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Security or Private Exchange Security or an Initial Security or Private Exchange Security in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Securities or Private Exchange Securities upon exchange of such transferring Holder's certificated Initial Security or Private Exchange Security or directions to transfer such Holder's interest in the Global Security, as applicable. (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Exchange Securities in certificated or global form, in each case without the restricted securities legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Securities in such Registered Exchange Offer. (v) Upon the consummation of a Private Exchange with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Private Page 102 Exchange Securities in global form with the global securities legend and the applicable restricted securities legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Securities in such Private Exchange. Cancellation or Adjustment of Global Security. At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, redeemed, purchased or canceled, such Global Security shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, redeemed, purchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction. No Obligation of the Trustee. (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depository participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 2.4 Definitive Securities. (a) A Global Security deposited with the Depository or with the Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security and the Depository fails to appoint a successor depository or if at any time such Depository ceases to be a "clearing agency" registered under the Exchange Act and, in either case, a successor depository is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under this Indenture. (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal corporate trust office in the Borough of Manhattan, The City of New York, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depository shall direct. Any Definitive Security delivered in exchange for an interest in the Transfer Restricted Security shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted securities legend and definitive securities legend set forth in Exhibit 1 hereto. (c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. (d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of Definitive Securities in definitive, fully registered form without interest coupons. In the event that such Definitive Securities are not issued, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.06 of the Indenture, the right of any beneficial owner of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner's Securities as if such Definitive Securities had been issued. Page 103 EXHIBIT 1 to RULE 144A / REGULATION S / IAI APPENDIX [FORM OF FACE OF INITIAL SECURITY] [Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. [[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.] [Restricted Securities Legend for Securities offered otherwise than in Reliance on Regulation S] THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. [Restricted Securities Legend for Securities Offered in Reliance on Regulation S.] THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. [Definitive Securities Legend] IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. Page 104 No. CUSIP:______________ ISIN:________________ 9% First Preferred Ship Mortgage Notes Due 2014 ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation, promises to pay to ______________ , or registered assigns, the principal sum of Dollars on November 24, 2014. Interest Payment Dates: May 24 and November 24. Record Dates: May 9 and November 9. Additional provisions of this Security are set forth on the other side of this Security. Dated:_____________ ULTRAPETROL (BAHAMAS) LIMITED, by ________________________________ Name: TRUSTEE'S CERTIFICATE OF AUTHENTICATION MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, certifies that this is one of the Securities referred to in the Indenture. by ______________________________ Authorized Signatory Page 105 [FORM OF REVERSE SIDE OF INITIAL SECURITY] 9% First Preferred Ship Mortgage Note Due 2014 1. Interest Ultrapetrol (Bahamas) Limited, a Bahamian corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above; provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, interest will accrue on this Security at a rate of 10% per annum from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Company will pay interest semiannually on May 24 and November 24 of each year, commencing May 24, 2005. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from November 24, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the May 9 or November 9 next preceding the interest payment date Page 106 even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Company will make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Manufacturers and Traders Trust Company, a New York banking corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Securities under an Indenture dated as of November 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors, the Pledgors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms. The Securities are general secured obligations of the Company limited to $180,000,000 aggregate principal amount (subject to Section 2.06 of the Indenture). The Initial Securities issued on the Issue Date and all Exchange Securities or Private Exchange Securities issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit (i) the incurrence of additional debt by the Company and its subsidiaries, (ii) the payment of dividends on capital stock of the Company and the purchase, redemption or retirement of capital stock or subordinated indebtedness, (iii) investments, (iv) certain liens and Sale/Leaseback transactions, (v) certain transactions with affiliates, (vi) sales of assets, (vii) lines of business and (viii) certain consolidations, mergers and transfers of assets. The Indenture also prohibits certain restrictions on distributions from subsidiaries. These covenants are subject to important exceptions and qualifications. 5. Optional Redemption Except as set forth in the next three paragraphs and in paragraph 6 below, the Securities may not be redeemed prior to November 24, 2009. On and after that date, the Company may redeem the Securities in whole at any time or in part from time to time upon not less than 30 nor more than 60 days' notice at the following redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date): Page 107 if redeemed during the 12-month period beginning November 24, of the year set forth below
Period Percentage - ------ ---------- 2009....................................................... 104.500% 2010....................................................... 103.000 2011....................................................... 101.500 2012 and thereafter........................................ 100.000
In addition, at any time and from time to time prior to November 24, 2007, the Company shall be entitled at its option on one or more occasions to redeem Securities in an aggregate principal amount not to exceed 35% of the aggregate principal amount of Securities with the proceeds of one or more Public Equity Offerings following which there is a Public Market, at a redemption price (expressed as a percentage of principal amount) of 109.00% plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date); provided, however, that at least $115.0 million aggregate principal amount of the Securities must remain outstanding and be held, directly or indirectly, by Persons other than the Company and its Affiliates, after each such redemption. Prior to November 24, 2009, the Company shall be entitled at its option to redeem all, but not less than all, of the Securities at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). In addition, Securities may be redeemed, at the option of the Company, at any time as a whole but not in part, on not less than 30 nor more than 60 days' notice, at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), in the event the Company or the Subsidiary Guarantors or the Pledgors, as the case may be, has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the Securities, any Additional Amounts as a result of a change in or an amendment to the laws (including any regulations or rulings promulgated thereunder) of the Bahamas, Argentina, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile (or any relevant jurisdiction, political subdivision or taxing authority thereof or therein), or any change in or amendment to any official position regarding the application or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), which change or amendment is announced or becomes effective on or after the Issue Date and the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, cannot avoid such obligations by taking reasonable steps to avoid them; provided, however, that (a) no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, would be obligated to pay such Additional Amounts if a payment in respect of the Securities or the Subsidiary Guarantee were then due, and (b) at the time any such redemption notice is given, such obligation to pay Additional Amounts must remain in effect. Prior to any such redemption of the Securities, the Company shall deliver to the Trustee or any paying agent an Officers' Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of redemption have occurred. 6. Other Redemptions To the extent that, after the close of business on December 31, Page 108 2005, the amount of cash and the fair market value (as determined by the Board of Directors in good faith) of securities on deposit in the Escrow Account exceeds $1.0 million, the Company will be obligated to use all such remaining Escrowed Property to redeem (the "Special Mandatory Redemption") as much principal amount of the Securities as can be redeemed with such Escrowed Property at a redemption price equal to the sum of 101% of the principal amount of such Securities, and the accrued interest thereon to the Special Mandatory Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) (such redemption price, the "Special Mandatory Redemption Price"). For purposes hereof, "Special Mandatory Redemption Date" means January 30, 2006. Upon the permitted sale of a Mortgaged Vessel or the Capital Stock of a Subsidiary Guarantor (other than the sale by a Pledgor of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) (which term shall not include the transfer of the operation of a Mortgaged Vessel pursuant to a bareboat charter with a purchase option) or an Event of Loss with respect to a Mortgaged Vessel, the Company must either (a) not later than 60 days after the Proceeds Receipt Date, redeem Securities, in whole or in part on a pro rata basis, in an aggregate principal amount equal to (i) the Redemption Amount or (ii) the Net Available Cash or Net Event of Loss Proceeds, as the case may be, at a redemption price equal to the Sale Redemption Price or the Loss Redemption Price, as the case may be (provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the amount required to be applied by the Company to redeem Securities shall equal the greater of such Redemption Amount and such Net Available Cash or Net Event of Loss Proceeds, as the case may be), or (b) if no Default shall have occurred and be continuing, tender to the Trustee a Qualified Substitute Vessel within 12 months after the Proceeds Receipt Date. In the event that the Company, a Subsidiary Guarantor or a Pledgor enters into a Bareboat Charter, the Company must either (a) not later than 60 days after the date title to the relevant Mortgaged Vessel passes to the charterer, redeem Securities, in whole or in part on a pro rata basis, in such principal amount as can be redeemed with the Sale Equivalent Portion of the Bareboat Charter Funds at the Sale Redemption Price or (b) if no Default shall have occurred and be continuing, tender to the Trustee as part of the Collateral one or more Vessels within 12 months of the date title to such Mortgaged Vessel passes to the charterer. 7. Notice of Redemption Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption. 8. Put Provisions Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date) as provided in, and subject to the terms of, the Indenture. 9. Guarantee Page 109 The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior basis by each of the Subsidiary Guarantors to the extent set forth in the Indenture. 10. Security The Securities will be secured by the Mortgages on the Mortgaged Vessels, the security interests created by the other Security Agreements, the Escrowed Property and all the issued and outstanding Capital Stock of certain of the Subsidiary Guarantors. 11. Denominations; Transfer; Exchange The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. 12. Persons Deemed Owners The registered Holder of this Security may be treated as the owner of it for all purposes. 13. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 14. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some or all of its and the Subsidiary Guarantors' obligations under the Securities, the Security Agreements and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be. 15. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Security Agreements or the Securities may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Securityholder, the Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend the Indenture, the Security Agreements or the Securities to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the Indenture, or to provide for uncertificated Securities in addition to or in place of certificated Securities, or to add additional guarantees with respect to the Securities or to provide additional security for the Securities, or to add Page 110 additional covenants or surrender rights and powers conferred on the Company or a Subsidiary Guarantor or a Pledgor, or to comply with any request of the SEC in connection with qualifying the Indenture under the Act, or to make any change that does not adversely affect the rights of any Securityholder. 16. Defaults and Remedies Under the Indenture, Events of Default include (i) default for 30 days in payment of interest on the Securities; (ii) default in payment of principal on the Securities at maturity, upon redemption pursuant to paragraph 5 or 6 of the Securities, upon required purchase, upon acceleration or otherwise, or failure by the Company or the Subsidiary Guarantors to redeem or purchase Securities when required; (iii) failure by the Company to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (iv) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company or Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0 million; (v) certain events of bankruptcy or insolvency with respect to the Company or Significant Subsidiaries; (vi) certain judgments or decrees for the payment of money in excess of $5.0 million and (vii) certain events or defaults with respect to the Subsidiary Guarantees or the Security Agreements. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 19. Authentication This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security. 20. Abbreviations Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 21. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 22. Holders' Compliance with Registration Rights Agreement Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company and the Subsidiary Guarantors to the extent provided therein. 23. Governing Law THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to: Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Attention of Secretary Page 111 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: Your Signature: Sign exactly as your name appears on the other side of this Security. In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Securities are being transferred in accordance with its terms: CHECK ONE BOX BELOW |_| to the Company; or (1) |_| pursuant to an effective registration statement under the Securities Act of 1933; or (2) |_| inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (3) |_| outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act of 1933 in compliance with Rule 904 under the Securities Act of 1933; or (4) |_| pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or (5) |_| to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements and, if applicable, an opinion of counsel satisfactory to the Company that such transfer is in compliance with the Securities Act of 1933. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. ------------------------------- Signature Signature Guarantee: - ------------------------------ ------------------------------- Signature must be guaranteed Signature Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Page 112 TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ----------------------------- Notice: To be executed by an executive officer Page 113 [TO BE ATTACHED TO GLOBAL SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY The following increases or decreases in this Global Security have been made: Amount of Amount of Principal decrease in increase in amount of this Signature of Principal Principal Global authorized amount of amount of Security officer of this this following such Trustee or Date of Global Global decrease or Securities Exchange Security Security increase Custodian Page 114 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section 4.11 or 4.16 of the Indenture, check the box: If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.11 or 4.16 of the Indenture, state the amount in principal amount: $_____________________ Dated: Your Signature: --------------------- -------------------- (Sign exactly as your name appears on the other side of this Security.) Signature Guarantee: ----------------------------------------------- (Signature must be guaranteed) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Page 115 EXHIBIT A TO THE RULE 144A / REGULATION S / IAI APPENDIX FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY */**/ */ If the Security is to be issued in global form add the Global Securities Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY". **/If the Security is a Private Exchange Security issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1. Page 116 No. CUSIP:______________ ISIN:________________ 9% First Preferred Ship Mortgage Notes Due 2014 ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation, promises to pay to ________ , or registered assigns, the principal sum of ________ Dollars on November 24, 2014. Interest Payment Dates: May 24 and November 24. Record Dates: May 9 and November 9. Additional provisions of this Security are set forth on the other side of this Security. Dated: ULTRAPETROL (BAHAMAS) LIMITED, by ____________________________ Name: TRUSTEE'S CERTIFICATE OF AUTHENTICATION MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, certifies that this is one of the Securities referred to in the Indenture. by _________________________ Authorized Signatory Page 117 [FORM OF REVERSE SIDE OF EXCHANGE SECURITY [OR PRIVATE EXCHANGE SECURITY]] 9% First Preferred Ship Mortgage Note Due 2004 1. Interest Ultrapetrol (Bahamas) Limited, a Bahamian corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above; provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, interest will accrue on this Security at a rate of 10% per annum from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Company will pay interest semiannually on May 24 and November 24 of each year, commencing May 24, 2005. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from November 24, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the May 9 or November 9 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Company will make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Manufacturers and Traders Trust Company, a New York banking corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Securities under an Indenture dated as of November 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors, the Pledgors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms. The Securities are general secured obligations of the Company limited to $180,000,000 aggregate principal amount (subject to Section 2.06 of the Indenture). The Initial Securities issued on the Issue Date and all Exchange Page 118 Securities or Private Exchange Securities issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit (i) the incurrence of additional debt by the Company and its subsidiaries, (ii) the payment of dividends on capital stock of the Company and the purchase, redemption or retirement of capital stock or subordinated indebtedness, (iii) investments, (iv) certain liens and Sale/Leaseback transactions, (v) certain transactions with affiliates, (vi) sales of assets, (vii) lines of business and (viii) certain consolidations, mergers and transfers of assets. The Indenture also prohibits certain restrictions on distributions from subsidiaries. These covenants are subject to important exceptions and qualifications. 5. Optional Redemption Except as set forth in the next three paragraphs and in paragraph 6 below, the Securities may not be redeemed prior to November 24, 2009. On and after that date, the Company may redeem the Securities in whole at any time or in part from time to time upon not less than 30 nor more than 60 days' notice at the following redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date): if redeemed during the 12-month period beginning November 24, of the year set forth below
Period Percentage - ------ ---------- 2009....................................................... 104.500% 2010....................................................... 103.000 2011....................................................... 101.500 2012 and thereafter........................................ 100.000
In addition, at any time and from time to time prior to November 24, 2007, the Company shall be entitled at its option on one of more occasions to redeem Securities in an aggregate principal amount not to exceed 35% of the aggregate principal amount of Securities with the proceeds of one or more Public Equity Offerings following which there is a Public Market, at a redemption price (expressed as a percentage of principal amount) of 109.00% plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date); provided, however, that at least $115.0 million aggregate principal amount of the Securities must remain outstanding and be held, directly or indirectly, by Persons other than the Company and its Affiliates, after each such redemption. Prior to November 24, 2009, the Company shall be entitled at its option to redeem all, but not less than all, of the Securities at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). In addition, Securities may be redeemed, at the option of the Company, at any time as a whole but not in part, on not less than 30 nor more than 60 days' notice, at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), in the event the Company or the Subsidiary Guarantors or the Pledgors, as the case may be, has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the Securities, any Additional Amounts as a result of a change in or an amendment to Page 119 the laws (including any regulations or rulings promulgated thereunder) of the Bahamas, Argentina, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or Chile (or any relevant jurisdiction, political subdivision or taxing authority thereof or therein), or any change in or amendment to any official position regarding the application or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), which change or amendment is announced or becomes effective on or after the Issue Date and the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, cannot avoid such obligations by taking reasonable steps to avoid them; provided, however, that (a) no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company, the Subsidiary Guarantors or the Pledgors, as the case may be, would be obligated to pay such Additional Amounts if a payment in respect of the Securities or the Subsidiary Guarantee were then due, and (b) at the time any such redemption notice is given, such obligation to pay Additional Amounts must remain in effect. Prior to any such redemption of the Securities, the Company shall deliver to the Trustee or any paying agent an Officers' Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of redemption have occurred. 6. Other Redemptions To the extent that, after the close of business on December 31, 2005, the amount of cash and the fair market value (as determined by the Board of Directors in good faith) of securities on deposit in the Escrow Account exceeds $1.0 million, the Company will be obligated to use all such remaining Escrowed Property to redeem (the "Special Mandatory Redemption") as much principal amount of the Securities as can be redeemed with such Escrowed Property at a redemption price equal to the sum of 101% of the principal amount of such Securities, and the accrued interest thereon to the Special Mandatory Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) (such redemption price, the "Special Mandatory Redemption Price"). For purposes hereof, "Special Mandatory Redemption Date" means January 30, 2006. Upon the permitted sale of a Mortgaged Vessel or the Capital Stock of a Subsidiary Guarantor (other than the sale by a Pledgor of its Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted Subsidiary) (which term shall not include the transfer of the operation of a Mortgaged Vessel pursuant to a bareboat charter with a purchase option) or an Event of Loss with respect to a Mortgaged Vessel, the Company must either (a) not later than 60 days after the Proceeds Receipt Date, redeem Securities, in whole or in part on a pro rata basis, in an aggregate principal amount equal to (i) the Redemption Amount or (ii) the Net Available Cash or Net Event of Loss Proceeds, as the case may be, at a redemption price equal to the Sale Redemption Price or the Loss Redemption Price, as the case may be (provided, however, that if a Default shall have occurred and be continuing on the Notification Date, the amount required to be applied by the Company to redeem Securities shall equal the greater of such Redemption Amount and such Net Available Cash or Net Event of Loss Proceeds, as the case may be), or (b) if no Default shall have occurred and be continuing, tender to the Trustee a Qualified Substitute Vessel within 12 months after the Proceeds Receipt Date. In the event that the Company, a Subsidiary Guarantor or a Pledgor enters into a Bareboat Charter, the Company must either (a) not later than 60 days after the date title to the relevant Mortgaged Vessel passes to the charterer, redeem Securities, in whole or in part on a pro rata basis, in such principal amount as can be redeemed with the Sale Equivalent Portion of the Bareboat Charter Funds at the Sale Redemption Price or (b) if no Default shall have occurred and be continuing, tender to the Trustee as part of the Collateral one or more Vessels within 12 months of the date title to such Mortgaged Vessel passes to the charterer. Page 120 7. Notice of Redemption Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption. 8. Put Provisions Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date) as provided in, and subject to the terms of, the Indenture. 9. Guarantee The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior basis by each of the Subsidiary Guarantors to the extent set forth in the Indenture. 10. Security The Securities will be secured by the Mortgages on the Mortgaged Vessels, the security interests created by the other Security Agreements, the Escrowed Property and all the issued and outstanding Capital Stock of certain of the Subsidiary Guarantors. 11. Denominations; Transfer; Exchange The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. 12. Persons Deemed Owners The registered Holder of this Security may be treated as the owner of it for all purposes. 13. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 14. Discharge and Defeasance Page 121 Subject to certain conditions, the Company at any time may terminate some or all of its and the Subsidiary Guarantors' obligations under the Securities, the Security Agreements and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be. 15. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Security Agreements, or the Securities may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Securityholder, the Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend the Indenture, the Security Agreements or the Securities to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the Indenture, or to provide for uncertificated Securities in addition to or in place of certificated Securities, or to add additional guarantees with respect to the Securities or to provide additional security for the Securities, or to add additional covenants or surrender rights and powers conferred on the Company or a Subsidiary Guarantor or a Pledgor, or to comply with any request of the SEC in connection with qualifying the Indenture under the Act, or to make any change that does not adversely affect the rights of any Securityholder. 16. Defaults and Remedies Under the Indenture, Events of Default include (i) default for 30 days in payment of interest on the Securities; (ii) default in payment of principal on the Securities at maturity, upon redemption pursuant to paragraph 5 or 6 of the Securities, upon required purchase, upon acceleration or otherwise, or failure by the Company or the Subsidiary Guarantors to redeem or purchase Securities when required; (iii) failure by the Company to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (iv) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company or Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0 million; (v) certain events of bankruptcy or insolvency with respect to the Company or Significant Subsidiaries; (vi) certain judgments or decrees for the payment of money in excess of $5.0 million and (vii) certain events or defaults with respect to the Subsidiary Guarantees or the Security Agreements. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or Page 122 pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 19. Authentication This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security. 20. Abbreviations Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 21. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 22. Holders' Compliance with Registration Rights Agreement Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company and the Subsidiary Guarantors to the extent provided therein. 23. Governing Law THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to: Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box 55-19084 Nassau, Bahamas Attention of Secretary Page 123 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: Your Signature: Sign exactly as your name appears on the other side of this Security. Page 124 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section 4.11 or 4.16 of the Indenture, check the box: If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.11 or 4.16 of the Indenture, state the amount in principal amount: $_____________________ Dated: ____________________ Your Signature: _________________________ (Sign exactly as your name appears on the other side of this Security.) Signature Guarantee: __________________________________________________ (Signature must be guaranteed) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Page 125 Exhibit B [Intentionally Omitted] Page 126 EXHIBIT C FIRST PREFERRED [FLEET] MORTGAGE DATED: ___, 2004 [MORTGAGOR] TO MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee Page 127 THIS FIRST PREFERRED [FLEET] MORTGAGE dated this [DAY] day of [MONTH], 2004 is made and given by [MORTGAGOR], a corporation organized and existing under the laws of [JURISDICTION OF FORMATION], having its registered office at [ADDRESS], (the "Owner," which expression includes its successors and assigns), to MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, with offices at 25 South Charles Street, Baltimore, Maryland as trustee (the "Trustee", which expression shall include its successors and assigns), for the holders of the Securities (as defined below) pursuant to the Indenture dated as of November ___, 2004 (as amended or supplemented from time to time, the "Indenture," the form of which is attached hereto as Exhibit A) among Ultrapetrol (Bahamas) Limited, a Bahamian corporation (the "Company"), the guarantors whose names are set forth on the signature pages thereof ([including the Owner and, ]collectively, the "Guarantors"), the pledgors whose names are set forth on the signature pages thereof ([including the Owner and,]collectively, the "Pledgors") and the Trustee. W I T N E S S E T H: WHEREAS: (1) The Owner is the sole, legal and beneficial owner of the whole of [each of] the [NATIONALITY] flag vessel[s] listed on Schedule 1 attached hereto and made a part hereof (the ["Vessels", and each a] "Vessel"). (2) Pursuant to the Indenture, the Company issued certain Securities (as defined in the Indenture), in the aggregate principal amount of One Hundred Eighty Million United States Dollars (US$180,000,000), the proceeds of which have been used to repay the Company's existing 10 1/2% First Preferred Ship Mortgage Notes due 2008, to refinance the acquisition cost of other vessels owned by the Guarantors, and for general corporate purposes. (3) By the Indenture, the Guarantors [(including the Owner)], have jointly and severally guaranteed, upon the terms and conditions contained therein, the punctual payment, performance and observance when due of the obligations of the Company under and in connection with the Securities, including, but not limited to, the Company's obligation to pay the principal of, and premium and interest on, the Securities as provided in the Indenture and the Securities. (4) The Owner[, as a Pledgor under the Indenture,] has agreed to grant this Mortgage to secure its, the [other] Subsidiary Guarantors' and the Company's obligations under the Indenture. (5) Subject to the terms hereof, in order to secure the prompt and due payment to the Trustee of any and all sums which may be or become due to the Trustee and/or the Securityholders from the Owner under or pursuant to the Indenture, the Securities, this Mortgage and any Security Agreement and also to secure the exact performance and observance and compliance with all and any of the covenants and agreements and terms and conditions contained in the Indenture, the Securities, this Mortgage and in the other Security Agreements, Page 128 NOW, THEREFORE, THIS MORTGAGE WITNESSETH: 1. Definitions. (A) Capitalized terms used in this Mortgage and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture, and the definitions of such terms shall be equally applicable to both the singular and plural forms of such terms. In this Mortgage and in the recitals hereto unless the context otherwise requires: "Earnings" means all freight, hire and passage moneys, compensation payable in the event of requisition of [the/any] Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and any other earnings whatsoever due or to become due in respect of [the/any] Vessel at any time during the Security Period; "Event of Default" means any of the events of default set out in Clause 5 of this Mortgage; "Insurances" includes all policies and contracts of insurance and all entries of [the/each] Vessel in a protection and indemnity or war risks association or club which are from time to time taken out or entered into pursuant to this Mortgage in respect of [the/each] Vessel and [its/their] respective Earnings or otherwise howsoever in connection with the Vessel[s]; "Mortgage" means this first preferred [fleet] mortgage; "Obligations" means the obligations of the Owner to the Trustee and the holders of the Securities under or in connection with the Indenture, including the payment of all sums of money (whether for principal, premium, if any, interest, fees, expenses or otherwise) from time to time payable by the Owner pursuant to the Indenture, the payment of the principal of (and premium, if any) and interest on the Securities, the payment of all other sums payable by the Company under the Indenture, the payment of all other sums payable under the Security Agreements, and this Mortgage and the performance of all other provisions contained in the Indenture, the Security Agreements and this Mortgage , which sums shall be payable by the Owner on demand made by the Trustee following an Event of Default specified in Clause 5 hereof; "Permitted Flag Jurisdiction" means the Republic of the Marshall Islands, the United States of America, any State of the United States or the District of Columbia, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, Singapore, the British Virgin Islands, the Cayman Islands, the Isle of Man, Cyprus, the Philippines, Norway, Greece, the United Kingdom, Argentina, Malta, Brazil, Chile, Paraguay, India, Bolivia, Spain, Uruguay and any other jurisdiction generally acceptable to institutional lenders in the shipping industry, as determined in good faith by the Board of Directors of the Company; "Requisition Compensation" means all moneys or other compensation payable and belonging to the Owner during the Security Period by reason of requisition for title or other compulsory acquisition of [the/any] Vessel otherwise than by requisition for hire; "Security Period" means the period terminating upon discharge of the security created by the Indenture, the Securities, the Security Agreements and this Mortgage by satisfaction of all Obligations including the payment of all monies payable thereunder; "Total Loss" means: Page 129 (a) the actual total loss or destruction of [the/any] Vessel; (b) the constructive total loss of [the/any] Vessel as agreed by the underwriters of the insurance carried on such Vessel; (c) damage to the [the/any] Vessel which shall make repair thereof uneconomical or shall render such Vessel permanently unfit for normal use for any reason whatsoever; and (d) the theft, entrapment, condemnation, confiscation, requisition, seizure, forfeiture, purchase or other taking of title to or use [the/any] Vessel, and the continuation of any such event for a period of one hundred eighty (180) days. "Vessel[s]" means the whole of [the/each] vessel listed on Schedule 1 hereto (which the Owner hereby warrants to be free from any charge or encumbrance whatsoever except liens permitted hereby, and of which the Owner hereby warrants that it is the sole legal and beneficial owner thereof) and includes any share or interest therein and, to the extent owned by the Owner, her boats and her engines, machinery, tackle, outfit, spare gear, fuel consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired; (B) In Clause 3(U) hereof: (i) "excess risks" means the proportion of claims for general average and salvage charges and under the ordinary running-down clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value; (ii) "protection and indemnity risks" means the usual risks covered by a United States or an English protection and indemnity association or club including the proportion not recoverable in case of collision under the ordinary running-down clause; and (iii) "war risks" means the risk of mines and all risks excluded from the standard form of United States marine policy by the War, Strikes and Related Exclusions Clause. (C) This Mortgage shall be read together with the Indenture but in case of any conflict between the two instruments the provisions of the Indenture shall prevail. 2. Grant of Mortgage; Continuing Security. 2.1 In consideration of the premises and of other good and valuable consideration, the receipt and adequacy whereof are hereby acknowledged, and in order to secure the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in the Indenture and in this Mortgage contained, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage to and in favor of the Trustee, its successors and assigns, for the benefit of the holders of the Securities the whole of the Vessel[s] to the intent that this Mortgage shall constitute in favor of the Trustee a first and absolute mortgage on the Vessel[s] named herein in accordance with the provisions of [REFERENCE TO RELEVANT DOMESTIC LAW] as amended, TO HAVE AND TO HOLD the same unto the Trustee, its successors and assigns, forever, upon the terms set forth in this Mortgage for the enforcement of the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in the Indenture and in this Mortgage contained; Page 130 PROVIDED, ONLY, and the conditions of these presents are such that, if the Owner or any of the other Guarantors and/or their respective successors or assigns shall pay or cause to be paid to the Trustee, its successors and assigns, the Obligations as and when the same shall become due and payable in accordance with the terms of the Indenture and this Mortgage and shall perform, observe and comply with all and singular of the covenants, terms and conditions in the Indenture and this Mortgage contained, expressed or implied, to be performed, observed or complied with by and on the part of the Owner or its successors or assigns, all without delay or fraud and according to the true intent and meaning hereof and thereof, then, these presents and the rights of the Trustee under this Mortgage shall cease and determine and, in such event, the Trustee agrees, at the expense of the Owner, to execute all such documents as the Owner may reasonably require to discharge this Mortgage under the laws of the [JURISDICTION]; otherwise to be and remain in full force and effect. 2.2 IT IS DECLARED AND AGREED: (A) that the security created by this Mortgage and the other Security Agreements shall be held by the Trustee as a continuing security for the payment of the Obligations; that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured; that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Trustee for all or any part of the monies hereby and thereby secured; that every power and remedy given to the Trustee hereunder shall be in addition to and not a limitation of any and every other power or remedy vested in the Trustee under any other of the Security Agreements and that all the powers so vested in the Trustee may be exercised from time to time and as often as the Trustee may deem expedient; (B) that the security created by this Mortgage and the other Security Agreements shall not be impaired, affected or discharged by reason of any time or other indulgence granted by the Trustee to the Owner or any other party thereto or any forbearance (whether as to payment, time, performance or otherwise howsoever) which might but for this provision have any such effect or by reason of any variation in the terms of any of the Security Agreements or by reason of the unenforceability, invalidity or termination of or any irregularity in any of the Security Agreements or the execution thereof by the Owner or any other party thereto or any deficiency in the power of the Owner or any other party thereto to enter into and perform their respective obligations thereunder and should any obligation or purported obligation of the Owner or any such other party which if enforceable or valid or continuing would be secured by this Mortgage and the Security Agreements be or become wholly or in part unenforceable or invalid or terminated for any reason whatsoever the Owner will keep the Trustee fully indemnified against any loss suffered by the Trustee as a result of any failure by the Owner or such other party to perform any such obligation or purported obligation; and (C) any certificate submitted by the Trustee to the Owner as to the amount owing in respect of the Obligations of any part thereof shall be conclusive and binding on the Owner in the absence of manifest error. 3. Covenants. The Owner hereby covenants with the Trustee and undertakes throughout the Security Period as follows: (A) to repay the Obligations in accordance with the provisions of the Indenture and the Securities; (B) to remain a corporation, validly organized and in good standing under the laws of the [JURISDICTION], to keep, at all times, the Vessel[s] duly documented under [JURISDICTION] law and to pay all taxes, assessments, Page 131 governmental charges, fines and penalties lawfully imposed on [the/any] Vessel or any income therefrom and not to do or suffer to be done anything whereby such registration may be forfeited or imperiled, except as permitted in the Indenture; (C) not to suffer to be continued any lien, charge, mortgage or encumbrance for longer than ninety (90) days after same becomes due and payable except for the lien of this Mortgage, Permitted Liens (as defined in the Indenture), or liens for loss, damage or expense, which are fully covered by insurance or, in respect of which, a bond or other security has been posted by the Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of [the/any] Vessel from arrest on account of such claim or lien, and not, except in favor of this Mortgagee, to pledge, charge, assign or otherwise encumber (in favor of any person other than this Mortgagee) the Insurances, Earnings or Requisition Compensation of the Vessel[s] or to suffer the creation of any such pledge, charge, assignment or encumbrance as aforesaid to or in favor of any person other than this Mortgagee; and the Owner will pay or cause to be discharged or make adequate provisions for the satisfaction or discharge of all claims or demands, or will cause the Vessel[s] to be released or discharged from any lien, encumbrance or charge therefor; (D) not to transfer or change the flag or port of documentation of [the/any] Vessel[s] except to a Permitted Flag Jurisdiction, and not to sell, agree to sell, mortgage, transfer, abandon or otherwise dispose of [the/any] Vessel or any interest therein unless permitted by the terms of the Indenture; (E) not (without the previous consent in writing of the Trustee which shall be granted so long as such agreement is permitted by the terms of the Indenture) to enter into any agreement or arrangement whereby the Earnings of [the/any] Vessel (after payment only of all operating costs of such Vessel and service of the Owner's obligations under the Indenture) may be shared with any other person; (F) not (without the previous consent in writing of the Trustee) to make or permit any charterer to make, any modification to [the/any] Vessel which would involve material detrimental alteration of her structure, type or performance characteristics; (G) to, at the Owner's expense, comply with and satisfy all of the requisites and formalities established by the laws of [JURISDICTION], in order to establish this Mortgage as a first preferred [fleet] mortgage thereunder, upon the Vessel[s] and to comply with the provisions of all laws regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the [NATIONALITY] flag; (H) to at all times and without cost or expense to the Trustee, maintain and preserve, or cause to be maintained and preserved, [the/each] Vessel in good running order and repair, so that [the/each] Vessel shall be in every respect seaworthy; and, in the case of the ocean going vessels, will keep [the/each] Vessel, or cause [the/each] Vessel to be kept, in such condition as will entitle [the/each] Vessel to maintain its [respective] current classification [ratings] and annually will furnish the Trustee a certificate by such classification society confirming that such classification is maintained; and to comply with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws of the [JURISDICTION] and to procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel[s]; (I) in the case of the ocean going vessels, to submit [the/each] Vessel regularly to such periodical or other surveys as may be required for classification purposes and to supply to the Trustee, upon request, copies of Page 132 all survey reports and confirmation of class certificates issued in respect thereof; (J) to permit or to cause the Trustee by surveyors or other persons appointed by the Trustee on the Trustee's behalf to board [the/any] Vessel at all reasonable times for the purpose of inspecting her condition or for the purpose of satisfying themselves in regard to proposed or executed repairs and to afford all proper facilities aboard such Vessel for such inspections (in a manner and at a time not to interfere with the normal operation of such Vessel); (K) to pay and discharge all debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against [the/any] Vessel except to the extent permitted by Clause 3(C) hereof and in the event of an arrest of [the/any] Vessel pursuant to legal process or in the event of her detention in the exercise or purported exercise of any such lien as aforesaid to procure the release of such Vessel from such arrest or detention within fifteen (15) days from such arrest or detention upon receiving notice thereof by providing bail or otherwise as the circumstances may require; (L) not to permit [the/any] Vessel to be operated in any manner contrary to law, or to engage in unlawful trade or carry any cargo that would expose such Vessel to penalty, forfeiture or capture, and not to permit to be done anything which can or may injuriously affect the registration or enrollment of such Vessel under the laws and regulations of [JURISDICTION] and will at all times keep such Vessel documented thereunder, except in the case of any change of registry permitted by the Indenture or this Mortgage, in which case a Mortgage will be recorded against such Vessel under the laws of such new registry state; (M) not to enter or trade to or to continue to trade in any zone after it is declared a war zone by [the/such] Vessel's war risk insurers unless the Trustee shall have first given its consent thereto in writing or the Owner shall have obtained such special insurance cover as the Trustee may reasonably require; (N) to promptly furnish to the Trustee all such information as it may from time to time reasonably require regarding [the/any] Vessel, her employment position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever concerning her; (O) to notify or cause to be notified to the Trustee forthwith by electronic means (thereafter confirmed by letter) of: (i) any accident to [the/any] Vessel involving repairs the cost whereof will or is likely in the opinion of the Owner to exceed One Million United States Dollars (US$1,000,000) (or the equivalent in any other currency); (ii) any occurrence in consequence whereof [the/any] Vessel has become or is likely to become a Total Loss; (iii) any arrest of [the/any] Vessel or the exercise or purported exercise of any lien on [the/any] Vessel or its [respective] Earnings; (iv) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with within the time required for compliance by said insurer, classification society or other competent authority; or Page 133 (v) any occurrence of an Event of Default specified in Clause 5 hereof or an event which with the giving of notice, lapse of time (or both) will constitute or be likely to constitute an Event of Default specified therein; (P) to promptly to pay or cause to be paid all tolls, dues and other outgoings whatsoever in respect of [each of] the Vessel[s] and to keep or cause to be kept proper books of account in respect of [each of] the Vessel[s] and its [respective] Earnings; (Q) not without the previous consent of the Trustee in writing, or as otherwise permitted in the Indenture, to demise charter [the/any] Vessel or to permit [the/any] Vessel to be demised chartered; (R) other than for routine drydocking and as otherwise contemplated by the Indenture, not without the previous consent in writing of the Trustee to put [the/any] Vessel into the possession of any person for the purpose of work being done upon her if the Vessel has become or is likely to become a total loss or for an amount exceeding or likely to exceed Two Million United States Dollars (US$2,000,000) (or the equivalent in any other currency) unless such work is fully covered by insurance or unless such person shall first have given to the Trustee, 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 otherwise; (S) to pay to the Trustee on demand all monies (including counsel fees) whatsoever which the Trustee shall from time to time may expend, be put to or become liable for, in or about the protection, maintenance or enforcement of the security created by this Mortgage, the Indenture and the other Security Agreements or in or about the exercise by the Trustee of any of the powers vested in it hereunder or thereunder and to pay interest thereon at the Default Rate; (T) to place or to cause to be placed and at all times and places to retain or to cause to be retained a properly certified copy of this Mortgage on board [the/each] Vessel with its [respective] papers and cause this Mortgage to be exhibited to any and all persons having business with [the/any] Vessel which might give rise to any lien thereon other than liens for crew's wages and salvage, and to any representative of the Trustee on demand; and to place and keep or to cause to be placed and kept prominently displayed in the chart room and in the Master's cabin of [the/each] Vessel a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than six (6) inches wide by nine (9) inches high, reading as follows: "NOTICE OF MORTGAGE" "This Vessel is covered by a First Preferred [Fleet] Mortgage in favor of Manufacturers and Traders Trust Company, as Trustee/Mortgagee, under the authority of the laws of the [JURISDICTION]. Under the terms of the said First Preferred [Fleet] Mortgage, neither the Owner nor any charterer nor the Master, nor any officer or agent of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than the lien of said First Preferred [Fleet] Mortgage and liens for crew's wages or salvage." (U) (i) at all times and at its own cost and expense to cause to be carried and maintained in respect of [the/each] Vessel insurance payable in United States dollars in amounts, against risks (including marine hull and machinery (including excess value) insurance, marine protection and indemnity insurance, war risks insurance and liability arising out of pollution and the spillage or leakage of cargo and cargo liability insurance) and in a form which is substantially equivalent to the coverage carried by other responsible and experienced companies engaged in the operation of vessels similar to the Page 134 Vessel[s] and with insurance companies, underwriters, mutual insurance associations or clubs of recognized standing; (ii) to procure that no insurance referred to in sub-clause (i) above, will provide for a deductible amount in excess of One Million United States Dollars (US$1,000,000) per occurrence; (iii) to use its best efforts with its insurance brokers/underwriters to include a clause to the effect that no policy is to be cancellable or subject to lapse without at least seven (7) business days' prior notice to the Trustee; (iv) in the case of all marine and war risk hull and machinery policies, to cause the Trustee to be named an additional insured and to use its best efforts (and cause its insurance broker to use its best efforts) to cause the insurers under such policies to waive any liability of the Trustee for premiums or calls payable under such policies; (v) for purposes of insurance against total loss, to insure [the/each] Vessel for an amount not less than its fair value. Unless the Trustee shall have otherwise directed, a total loss or any loss involving damage to [the/any] Vessel which is not in excess of One Million United States Dollars (US$1,000,000) may be paid directly for repair or salvage or to reimburse the Owner for the same; (vi) to obtain the protection and indemnity insurances referred to in sub-clause (i) above with the least limited liability available on commercially reasonable terms (including without being limited thereto provisions as to additional insureds, loss payees and prior notice of cancellation); (vii) to renew all such Insurances or cause or procure the same to be renewed before the relevant policies or contracts expire and to procure that the insurers or the firm of insurance brokers referred to hereinbelow shall promptly confirm in writing to the Trustee as and when each such renewal or replacement is effected; (viii) to procure concurrently with the execution hereof and thereafter at intervals of not more than twelve (12) calendar months, a detailed report from a firm of marine insurance consultants or brokers who shall not be an affiliate of the Company, appointed by the Owner , with respect to the Insurances together with their opinion to the Trustee that the Insurances comply in all material respects with the provisions of this Clause 3(U); (ix) to use its best efforts to cause the said marine insurance broker or the insurers to agree to advise the Trustee promptly of any failure to renew or any default in payment of any premium in respect of Insurances on [the/any] Vessel; (x) to use its best efforts to cause the said independent marine insurance brokers to agree to mark their records and to use their best efforts to advise the Trustee, at least ten (10) (seven (7) in respect of war risks) business days prior to the expiration date of any of the Insurances, that such Insurances have been renewed or replaced with new insurance which complies with the provisions of this Clause 3(U); Page 135 (xi) duly and punctually to pay or to cause duly and punctually to be paid all premiums, calls, contributions or other sums payable in respect of all such Insurances, and duly and punctually to perform and observe or to cause duly and punctually to be performed and observed any other obligations and conditions under all such Insurances; (xii) to execute or to cause to be executed such guarantees as may from time to time be required by any relevant protection and indemnity association or club; (xiii) to procure that all policies, bindings, cover notes or other instruments of the Insurances referred to in sub-clause (i) above shall be taken out in the name of the Owner as named assured and shall incorporate a Loss Payable Clause naming the Trustee as loss payee prepared in compliance with the terms of this Mortgage; (xiv) to procure that copies of all such instruments of Insurances as are referred to in sub-clause (xiii) above shall be from time to time deposited with the Trustee after receipt by the Owner thereof and that the insurers shall, if so requested by the Trustee, furnish the Trustee with a letter or letters of undertaking in such form as may be reasonably required by the Trustee in respect of such Insurances; (xv) to use its best efforts to procure that the protection and indemnity association or club wherein [the/each] Vessel is entered shall, if so required by the Trustee, furnish the Trustee with a letter or letters of undertaking in such form as may be reasonably required by the Trustee; (xvi) not to employ [the/any] Vessel or suffer [the/any] Vessel to be employed otherwise than in conformity with the terms of all policies, bindings, cover notes or other instruments of the Insurances (including any warranties express or implied therein) without first obtaining the written consent of the insurers to such employment (if required by such insurers) and complying with such requirements as to extra premiums or otherwise as the insurers may prescribe; (xvii) to do all things necessary, proper and desirable, and execute and deliver all documents and instruments to enable the Trustee to collect or recover any moneys to become due in respect of the Insurances; (xviii) in the event of an actual, constructive or compromised Total Loss of [the/any] Vessel, any adjustment or compromise of such loss by the Owner shall be for the highest amount reasonably obtainable, and all insurance or other payments for such loss shall be applied as set forth in the Indenture; and (xix) not to change any material terms of any insurances or suffer them to be changed in a manner that is adverse to the Mortgagee without the Trustee's written approval. 4. Mortgagee's Right to Cure. (A) The Trustee shall without prejudice to its other rights and powers hereunder be entitled (but not bound) at any time and as often as may be necessary to take any such action as it may in its absolute discretion think fit for the purpose of protecting the security created by this Mortgage, the Indenture and the other Security Agreements and each and Page 136 every expense or liability so incurred by the Trustee in or about the protection of the security shall be repayable to it by the Owner on demand together with interest thereon at the Default Rate. (B) Without prejudice to the generality of the foregoing: (i) in the event that the provisions of Clause 3(U) hereof or any of them shall not be complied with, the Trustee shall be at liberty to effect and thereafter to replace, maintain and renew all such Insurances upon [the/each] Vessel as in its sole discretion it may think fit; (ii) in the event that the provisions of Clauses 3(H) and/or (I) hereof shall not be complied with, the Trustee shall be at liberty to arrange for the carrying out of such repairs and/or surveys as it deems expedient or necessary; (iii) in the event that the provisions of Clause 3(K) hereof are not complied with, the Trustee shall be at liberty to pay and discharge all such debts, damages and liabilities as are therein mentioned and/or to take any such measures as it deems expedient or necessary for the purpose of securing the release of the relevant Vessel; and each and every expense or liability so incurred by the Trustee shall be recoverable from the Owner as hereinbefore provided. 5. Events of Default. Upon happening of any of the following events (an "Event of Default") the Trustee may declare immediately due and payable all the Obligations (in which case all of the same shall be immediately due), and bring suit at law, in equity or in admiralty, as it may be advised, to recover judgment for the Obligations and collect the same out of any and all property of the Owner whether covered by this Mortgage or otherwise. The events referred to above are any and/or all of the following: (a) an Event of Default under the Indenture; (b) a default in the payment of the Obligations, when due at maturity (together with any applicable grace period) or by acceleration; (c) a default by the Owner in the due and punctual observance of any of the covenants contained in subclauses (A), (B), (C), (D), (E), (F), (G), (K), (L), (M), (N), (P), (Q), (R), (S), and (U) of Clause 3 of this Mortgage; (d) a default by the Owner in the due and punctual observance of any of the covenants contained in subclauses (H), (I), (J), (O) and (T) of Clause 3 of this Mortgage which default continues unremedied for a period of thirty (30) days after notice thereof from the Trustee to the Owner; (e) it becomes impossible or unlawful for the Owner to fulfill any of the covenants and obligations contained in this Mortgage and the Trustee considers that such impossibility or illegality will have a material adverse effect on its rights under this Mortgage or the enforcement thereof; 6. Remedies. Subject to Clause 11 below, if an Event of Default specified in Clause 5 hereof occurs, the Trustee shall become forthwith entitled to put into force and to exercise all rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of applicable law and all the powers possessed by it as mortgagee of [the/each] Vessel and in particular: Page 137 (A) To take and enter into possession of the Vessel[s, or any of them], at any time, wherever the same may be, without legal process and without being responsible for loss or damage, and the Owner or other person in possession forthwith upon demand of the Trustee will surrender to the Trustee possession of the Vessel[s, or any of them], and the Trustee may, without being responsible for loss or damage, hold, lay-up, lease, charter, operate or otherwise use the Vessel[s, or any of them,] for such time and upon such terms as it may deem to be for its best advantage, and demand, collect and retain all hire, freights, earnings, issues, revenues, income, profits, return premiums, salvage awards or recoveries in general average, and all other sums due or to become due in respect of the Vessel[s, or any of them], or in respect of any insurance thereon from any person whomsoever, in accordance with the terms of this Mortgage. (B) To take and enter into possession of the Vessel[s, or any of them], at any time, wherever the same may be, without legal process, and if it seems desirable to the Trustee and without being responsible for loss or damage, sell the Vessel[s, or any of them,] at any place and at such time as the Trustee may specify and in any such manner and such place (whether by public or private sale) as the Trustee may deem advisable, in accordance with the terms of this Mortgage and with power to postpone any such sale and without being answerable for any loss occasioned by such sale or resulting from postponement thereof. (C) To discharge, compound, release or compromise claims against the Owner in respect of the Vessel[s, or any of them,] which have given or may give rise to any charge or lien on the Vessel[s, or any of them], or which are or may be enforceable by proceedings against the Vessel[s, or any of them]. (D) Pending sale of the Vessel[s, or any of them], to manage, insure, maintain and repair the Vessel[s, or any of them], and to employ, sail or lay up the Vessel[s, or any of them,] in such manner and for such period as the Trustee in its absolute discretion shall deem expedient and for the purposes aforesaid the Trustee shall be entitled to do all acts and things incidental or conducive thereto and in particular to enter into such arrangements respecting the Vessel[s, or any of them,] its respective insurance, management, maintenance, repair, classification and employment including (without limitation) giving all necessary instructions to the Master concerning use and operation of the Vessel[s, or any of them,] in all respects as if the Trustee were the owner of the Vessel[s] and without being responsible for any loss thereby incurred. (E) To recover from the Owner on demand any such losses as may be incurred by the Trustee in or about the exercise of the power vested in the Trustee under sub-clause (D) above. (F) To recover from the Owner on demand all expenses, payments and disbursements incurred by the Trustee in or about or incidental to the exercise by it of any of the powers aforesaid. (G) To exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of any applicable law. PROVIDED ALWAYS that Page 138 (a) upon any sale of the Vessel[s, or any of them], or by the Trustee pursuant to sub-clause (B) above the purchaser shall not be bound to see or inquire whether the Trustee's power of sale has arisen in the manner herein provided, and the sale shall be deemed to be within the power of the Trustee, and the receipt of the Trustee for the purchase money shall effectively discharge the purchaser who shall not be or be in any way answerable therefor; (b) any sale of the Vessel[s, or any of them,] made in pursuance of the Trustee's right under this Mortgage will operate to divest all right, title and interest of any nature whatsoever of the Owner therein and thereto and shall bar any claim from the Owner, its successors and assigns, and all persons claiming by, through or under them. 7. Right of Sale. The Trustee is hereby appointed attorney-in-fact of the Owner to execute and deliver to any buyer aforesaid, and is hereby vested with full power and authority to make, in the name and on behalf of the Owner, a good conveyance of the title to the Vessel[s] so sold, provided, however, that the Trustee shall not exercise any of its powers under this Clause 7 unless an Event of Default specified in Clause 5 hereof shall have occurred. In the event of a sale of the Vessel[s, or any of them], under any power herein contained, the Owner will, if and when required by the Trustee, execute such form of conveyance of the Vessel[s, or any of them,] as the Trustee may direct or approve. 8. Receiver. Whenever any right to enter and take possession of the Vessel[s, or any of them,] accrues to the Trustee, the Trustee may require the Owner to deliver or to cause to be delivered, and the Owner shall on demand, at its own cost and expense, deliver or cause to be delivered to the Trustee the Vessel[s, or any of them], as demanded. If any legal proceedings shall be taken to enforce such right under this Mortgage, the Trustee shall be entitled as a matter of right to the appointment of a receiver of the Vessel[s, or any of them], and the freights, hire, earnings, revenues, income and profits due or to become due and arising from the operation thereof. 9. Right to Defend. Upon the happening of any Event of Default specified in Clause 5 hereof, the Owner authorizes and empowers the Trustee or its appointee to appear in the name of the Owner, its successors and assigns, in any court of any country or nation of the world where a suit is pending against the Vessel[s, or any of them,] because of or on account of any alleged lien against the Vessel[s, or any of them,] from which the Vessel[s, or any of them,] has not been released and to take such proceedings as may seem proper towards the defense of such suit and the purchase or discharge of such lien, and all expenditures made or incurred by it for the purpose of such defense, purchase, or discharge shall be a debt due from the Owner, its successors, and assigns to the Trustee, and shall be secured by the lien of this Mortgage and the rights of the Trustee hereunder. 10. Remedies Cumulative. Each and every power and remedy herein given to the Trustee shall be cumulative and shall be in addition to every other power and remedy herein given or now or hereafter existing at law, in equity, admiralty, or by statute, and each and every power and remedy whether herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Trustee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other power or remedy. No delay or omission by the Trustee or any of the Securityholders in the exercise of any right or power or in pursuance of any remedy accruing upon any Event of Default specified in Clause 5 hereof shall impair any such right, power, or remedy or be construed to be a waiver of any such Event of Default or to be any acquiescence therein; nor shall the acceptance by the Trustee of any security or of any payment of or on account of any part of the Obligations Page 139 falling due for payment after any such Event of Default or of any payment on account of any past default be construed to be a waiver of any right to take advantage of any future Event of Default or of any past Event of Default not completely cured thereby. 11. Acceptance of Cure. If at any time after an Event of Default specified in Clause 5 hereof and prior to the actual sale of the Vessel[s, or any of them,] by the Trustee or prior to the commencement of any foreclosure proceedings, the Owner offers to cure completely all such Events of Default and to pay to the Trustee all expenses and advances incurred or made by it consequent on such Events of Default, then the Trustee may accept, but is not obligated to accept except as required pursuant to the terms of the Indenture, such offer and payment and restore the Owner to its former position, but such action shall not affect any subsequent Event of Default or impair any rights of the Trustee consequent thereto. 12. Application of Proceeds. All monies received by the Trustee in respect of: (i) the sale of the Vessel[s, or any of them], (ii) Requisition Compensation, or (iii) the charter, use or other disposition the Vessel[s, or any of them]. shall be first applied to pay or make good all such payments, disbursements, expenses, attorneys fees and losses whatsoever (together with interest thereon as hereinbefore provided for in the Indenture) as may have been incurred by the Trustee in or about or incidental to the exercise by the Trustee of the powers specified or otherwise referred to in Clauses 6, 7, 8, 9 and 14 hereof or any of them and the balance shall be applied in the manner prescribed in the Indenture. PROVIDED ALWAYS that in the event that such balance is insufficient to pay in full the whole of the Obligations the Trustee shall be entitled to collect the shortfall from the Owner or any other person liable therefor. 13. No Waiver; Illegality; Invalidity. (A) No delay or omission of the Trustee or any of the Securitiesholders to exercise any right or power vested in them under this Mortgage, the Indenture or the Security Agreements or any of them shall impair such right or power or be construed as a waiver of or as acquiescence in any default by the Owner and no express waiver given by the Trustee or any of the Securityholders in relation to any default by the Owner, or breach by the Owner of any of its obligations under this Mortgage shall prejudice the rights of the Trustee under this Mortgage, the Indenture or the Security Agreements arising from any subsequent default or breach (whether or not such subsequent default or breach is of a nature different from the previous default or breach) nor shall the giving by the Trustee of any consent to the doing of any act which by the terms hereof requires the consent of the Trustee prejudice the right of the Trustee to give or withhold as it may think fit its consent to the doing of any other such similar act. (B) The Trustee shall not be obliged to make any inquiry as to the nature or sufficiency of any payment received by it hereunder or following the occurrence of an Event of Default specified in Clause 5 hereof to make any claim or take any action to collect any monies hereby assigned or to enforce any rights and benefits hereby assigned to the Trustee or to which the Trustee may at any time be entitled hereunder. (C) In case any one or more the provisions contained in this Mortgage should be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any be affected or impaired thereby and shall remain in full Page 140 force and effect. 14. Delegation. The Trustee shall be entitled at any time and as often as may be expedient to delegate all or any of the powers and discretions vested in it by the Indenture, the Security Agreements or this Mortgage or any of them (including the power vested in it by virtue of Clause 11 hereof) in such manner upon such terms and to such persons as the Trustee in its absolute discretion may think fit, provided, however, that the Trustee shall not exercise its rights under this Clause 14 until an Event of Default specified in Clause 5 hereof shall have occurred and be continuing. 15. Indemnity. THE OWNER HEREBY AGREES AND UNDERTAKES to indemnify the Trustee against all obligations and liabilities whatsoever and whensoever arising which the Trustee may incur in good faith in respect of, in relation to, or in connection with the Vessel[s, or any of them], or otherwise howsoever in relation to or in connection with any of the matters dealt with in the Indenture, this Mortgage or the Security Agreements. 16. Mortgagee as Attorney-in-Fact. (A) The Owner hereby irrevocably appoints the Trustee as its attorney-in-fact for the duration of the Security Period to do in its name or in the name of the Owner all acts which the Owner, or its successors or assigns could do in relation to [any of] the Vessel[s], including without limitation, to demand, collect, receive, compromise, settle and sue for (insofar as the Trustee lawfully may), all freights, hire, earnings, issues, revenues, income, and profits of the Vessel[s], and all amounts due from underwriters under the Insurances as payment of losses or as return premiums or otherwise, salvage awards and recoveries, recoveries in general, average or otherwise, and all other sums due or to become due to the Owner or in respect of the Vessel[s], and to make, give and execute in the name of the Owner, acquittances, receipts, releases, or other discharges for the same, whether under seal or otherwise, to take possession of, sell or otherwise dispose of or manage or employ, [any of] the Vessel[s], to execute and deliver charters and a bill of sale with respect to [any of] the Vessel[s], and to endorse and accept in the name of the Owner all checks, notes, drafts, warrants, agreements and all other instruments in writing with respect to the foregoing. PROVIDED, HOWEVER, that, unless the context otherwise permits under this Mortgage, such power shall not be exercisable by or on behalf of the Trustee unless and until any Event of Default stipulated in Clause 5 hereof shall have occurred and be continuing. (B) The exercise of the power granted in this Clause 16 by or on behalf of the Trustee shall not require any person dealing with the Trustee to conduct any inquiry as to whether any such Event of Default has occurred and is continuing, nor shall such person be in any way affected by notice that any such Event of Default has not occurred nor is continuing, and the exercise by the Trustee of such power shall be conclusive evidence of its right to exercise the same. 17. Owner's Right of Possession and Use. Unless and until an Event of Default specified in Clause 5 hereof has occurred and be continuing, the Owner (i) shall be permitted and suffered to retain title, actual possession and use of the Vessel[s], and (ii) shall have the right, from time to time, in its discretion, and without application to the Trustee, to dispose of, free from the lien hereof, any boilers, engine, machinery, masts, spars, sail, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any other appurtenances of the Vessel[s] that are no longer useful, necessary, profitable or advantageous in the operation of the Vessel[s], subject to first or simultaneously replacing the same by new boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or other appurtenances of substantially equal value to the Owner which shall forthwith become subject to the lien of this Mortgage as a first preferred [fleet] mortgage thereon. 18. Further Assurances. THE OWNER HEREBY FURTHER UNDERTAKES at its own Page 141 expense to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the reasonable opinion of the Trustee may be necessary or desirable for the purpose of more effectually mortgaging the Vessel[s] or perfecting the security constituted by the Indenture and this Mortgage. 19. Extent of Security. The Vessel[s] and their respective equipment and appurtenances shall respond for the principal amount of the indebtedness secured by this Mortgage, including interest, costs and other charges secured by this Mortgage. 20. Special Power of Attorney. The Owner and the Trustee each confer a special power of attorney with right of substitution upon [LOCAL COUNSEL NAME], lawyers of [JURISDICTION] empowering them to take all necessary steps to permanently record this instrument of mortgage in the appropriate registry of the [JURISDICTION] and from time to time details of the indebtedness secured hereby. 21. No Waiver of Preferred Status. Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the preferred status of this Mortgage under the laws of the [JURISDICTION], the United States Vessel Mortgage Act, 1920, as amended, inter alia, by Public Law 100-710 (46 USC Section 30101 et seq.) or the corresponding provisions of the laws of any other jurisdiction in which it is sought to be enforced and that, if any provision or portion thereof herein shall be construed to waive the preferred status of this Mortgage, then such provision to such extent shall be void and of no effect. 22. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier, facsimile transmission or similar writing) and shall be given to such party at its address or facsimile number set forth below or at such other address or facsimile number as such party may hereafter specify for the purpose by notice to each other party hereto. Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Clause and telephonic confirmation of receipt thereof is obtained or (ii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in this Clause or when delivery at such address is refused. If to the Owner: [MORTGAGOR] [ADDRESS] Attention: [NAME] Facsimile: [NUMBER] with copy to: Seward & Kissel LLP One Battery Park Plaza New York, New York 10004 Attention: Lawrence Rutkowski, Esq. Facsimile: 212-480-8421 If to the Trustee: Manufacturers and Traders Trust Company Corporate Trust Administration 25 South Charles Street Baltimore, Maryland 21201 Attention: Robert D. Brown Facsimile: 410-244-4236 with copy to: Ober, Kaler, Grimes & Shriver 120 East Baltimore Street Baltimore, Maryland 21202-1643 Attention: Patrick Cameron, Esq. Facsimile: 443-263-7540 23. Successors and Assigns. This Mortgage and the rights and obligations of each of the parties hereto under the Securities and the Security Agreements shall be binding upon, and inure to the benefit of, the Owner and the Trustee and their respective successors and assigns, except that the Owner may not assign any of its rights or obligations under any such documents without the prior written consent of the Trustee. In giving consent as aforesaid to an assignment by the Owner, the Trustee shall be entitled to impose such conditions as shall be reasonable. 24. Headings. In this First Preferred [Fleet] Mortgage, clause headings are inserted for convenience of reference only and shall be ignored in the interpretation of this First Preferred [Fleet] Mortgage. 25. Governing Law. This Mortgage shall be governed by the laws of the [JURISDICTION] and the owner hereby irrevocably submits to the nonexclusive jurisdiction of the Courts of the State of New York. 26. Recording. For the purpose of recording this First Preferred [Fleet] Mortgage as required by [REFERENCE TO RELEVANT DOMESTIC LAW], the total amount is One Hundred Eighty Million United States Dollars (US$180,000,000) plus interest and performance of mortgage covenants. The discharge amount is the same as the total amount. [It is not intended that this Mortgage shall include property other than the Vessels and it shall not include property other than the Vessel[s] as the term "vessel" is used in [REFERENCE TO RELEVANT DOMESTIC LAW]. Notwithstanding the foregoing, for property other than the Vessel[s], if any should be determined to be covered by this Mortgage, the discharge amount is zero point zero one percent (0.01%) of the total amount.] [ 27. Language. If any inconsistency shall arise between the English and Spanish test of this Mortgage, the English text thereof shall prevail.] [Signature page follows.] Page 142 IN WITNESS whereof the parties hereto have caused this Mortgage to be executed the day and year first before written. [MORTGAGOR] By___________________________ [TITLE] Page 143 NOTARIAL CERTIFICATE [STATE OF NEW YORK ) : ss: COUNTY OF NEW YORK] ) I, ___________, a notary public in and for the [County of New York], hereby certify: On the ____ day of _______________, 2004 before me personally appeared __________________ to me known and known to me to be the person who signed the foregoing First Preferred [Fleet] Mortgage on the [NATIONALITY] flag vessels described therein, as Attorney-in-Fact of [MORTGAGOR], a corporation organized under the laws of the [JURISDICTION]. I further certify that sufficient proof was submitted to me that _______ is duly authorized to sign the foregoing First Preferred [Fleet] Mortgage for and on behalf of the said corporation and that the purposes for which the said instrument is granted are within the scope of the objects and activities of the said corporation. I further certify that the signature of _______, the person who executed the foregoing Mortgage on behalf of the said corporation, was set thereon in my presence and is, therefore, authentic. IN WITNESS WHEREOF, I have hereunder set my hand this [DAY] day of [MONTH] 2004. ____________________________ Notary Public Page 144 SCHEDULE 1 ----------
Official Gross Net Vessel Name Number Length Breadth Depth Tons Tons - ----------- ------ ------ ------- ----- ---- ---- ~~mts mts mts~~
Page 145 SCHEDULE I TO THE INDENTURE Description of Pledged Shares -----------------------------
Number Certificate of # Issuer Number Shares Record Owner - --- -------------------------- ----------- ------ ---------------------- 1. Baldwin Maritime Inc. 1 100 Princely International Finance Corp. 2. Bayham Investments S.A. 1 100 Regal International Investments S.A. 3. Cavalier Shipping Inc. 11 100 Regal International Investments S.A. 4. Corporacion de Navigacion Mundial S.A. 1 999 Princely International Finance Corp. Corporacion de Navigacion Mundial S.A. 2 1 Regal International Investments S.A. 5. Danube Maritime Inc. 3 33 Princely International Finance Corp. Danube Maritime Inc. 5 67 Princely International Finance Corp. 6. General Ventures Inc. 1 500 Princely International Finance Corp. 7. Imperial Maritime Ltd.
Page 146 (Bahamas) Inc. 2 100 Princely International Finance Corp. 8. Kattegat Shipping Inc. 2 100 Ultrapetrol (Bahamas) Limited 9. Kingly Shipping Ltd. 1 5,000 Princely International Finance Corp. 10. Majestic Maritime Ltd. 1 5,000 Ultrapetrol (Bahamas) Limited 11. Massena Port S.A. 1 5,000 Ultrapetrol (Bahamas) Limited 12. Monarch Shipping Ltd. 1 5,000 Princely International Finance Corp. 13. Noble Shipping Ltd. 1 5,000 Princely International Finance Corp. 14. Oceanview Maritime Inc. 2 100 Princely International Finance Corp. 15. Parkwood Commercial Corp. 1 100 Ultrapetrol (Bahamas) Limited 16. Princely International Finance Corp. 12 670,211 Ultrapetrol (Bahamas) Limited 17. Regal International Investments S.A. 6 660 Princely International Finance Corp. 18. Regal International Investments S.A. 7 660 Princely International Finance Corp. 19. Regal International Investments S.A. 8 660 Princely International Finance Corp. 20. Regal International Investments S.A. 9 660 Princely International Finance Corp. 21. Regal International Investments S.A. 10 660 Princely International Finance Corp. 22. Riverview Commercial Corp. 1 10,000 Princely International Finance Corp. 23. Sovereign Maritime Ltd. 1 5,000 Princely International Finance Corp. 24. Stanmore Shipping Inc. 1 100 Ultrapetrol (Bahamas) Limited 25. Tipton Marine Inc. 1 100 Princely International Finance Corp.

Page 147 26. Ultrapetrol International S.A. 1 20 Princely International Finance Corp. 27. Ultrapetrol International S.A. 2 20 Princely International Finance Corp. 28. Ultrapetrol International S.A. 3 20 Princely International Finance Corp. 29. Ultrapetrol International S.A. 4 20 Princely International Finance Corp. 30. Ultrapetrol International S.A. 5 20 Princely International Finance Corp. 31. UP Offshore (Holdings) Ltd. 1 5000 Ultrapetrol (Bahamas) Limited

Page 148 SCHEDULE II TO THE INDENTURE Pledged Barges
Barge Number Barge Flag ID Number Owner - -------------------------------------------------------------------------------- 1. IGUAZU 400 Liberia 12073 General Ventures Inc. 2. IGUAZU 401 Liberia 12074 General Ventures Inc. 3. IGUAZU 402 Liberia 12075 General Ventures Inc. 4. IGUAZU 403 Liberia 12076 General Ventures Inc. 5. IGUAZU 404 Liberia 12090 General Ventures Inc. 6. IGUAZU 405 Liberia 12105 General Ventures Inc. 7. IGUAZU 435 Panama 32586-PEXT General Ventures Inc. 8. IGUAZU 900 Liberia 12077 General Ventures Inc. 9. IGUAZU 901 Liberia 12078 General Ventures Inc. 10. IGUAZU 902 LIberia 12079 General Ventures Inc. 11. IGUAZU 904 Liberia 12081 General Ventures Inc. 12. IGUAZU 905 Liberia 12082 General Ventures Inc. 13. IGUAZU 906 Liberia 12083 General Ventures Inc. 14. IGUAZU 907 Liberia 12084 General Ventures Inc. 15. IGUAZU 908 Liberia 12085 General Ventures Inc. 16. IGUAZU 909 Liberia 12086 General Ventures Inc. 17. IGUAZU 910 Liberia 12089 General Ventures Inc. 18. IGUAZU 912 Liberia 12091 General Ventures Inc. 19. IGUAZU 913 Liberia 12092 General Ventures Inc. 20. IGUAZU 914 Liberia 12093 General Ventures Inc. 21. IGUAZU 915 Liberia 12094 General Ventures Inc. 22. MATADOR I Bolivia HRB 083 Monarch Shipping Ltd. 23. MATADOR II Bolivia HRB 084 Monarch Shipping Ltd. 24. MATADOR III Bolivia HRB 085 Monarch Shipping Ltd. 25. MATADOR IV Bolivia HRB 086 Monarch Shipping Ltd. 26. MATADOR IX Bolivia HRB 091 Monarch Shipping Ltd. 27. MATADOR LXI Bolivia HRB 112 Monarch Shipping Ltd. 28. MATADOR V Bolivia HRB 087 Monarch Shipping Ltd. 29. MATADOR VI Bolivia HRB 088 Monarch Shipping Ltd. 30. MATADOR VII Bolivia HRB 089 Monarch Shipping Ltd.
Page 149 31. MATADOR VIII Bolivia HRB 090 Monarch Shipping Ltd. 32. MATADOR X Bolivia HRB 092 Monarch Shipping Ltd. 33. MATADOR XI Bolivia HRB 093 Monarch Shipping Ltd. 34. MATADOR XII Bolivia HRB 094 Monarch Shipping Ltd. 35. MATADOR XIII Bolivia HRB 095 Monarch Shipping Ltd. 36. MATADOR XIV Bolivia HRB 096 Monarch Shipping Ltd. 37. MATADOR XIX Bolivia HRB 101 Monarch Shipping Ltd. 38. MATADOR XV Bolivia HRB 097 Monarch Shipping Ltd. 39. MATADOR XVI Bolivia HRB 098 Monarch Shipping Ltd. 40. MATADOR XVII Bolivia HRB 099 Monarch Shipping Ltd. 41. MATADOR XVIII Bolivia HRB 100 Monarch Shipping Ltd. 42. MATADOR XX Bolivia HRB 102 Monarch Shipping Ltd. 43. MATADOR XXII Bolivia HRB 103 Monarch Shipping Ltd. 44. MATADOR XXIII Bolivia HRB 104 Monarch Shipping Ltd. 45. MATADOR XXIV Bolivia HRB 105 Monarch Shipping Ltd. 46. MATADOR XXIX Bolivia HRB 110 Monarch Shipping Ltd. 47. MATADOR XXV Bolivia HRB 106 Monarch Shipping Ltd. 48. MATADOR XXVI Bolivia HRB 107 Monarch Shipping Ltd. 49. MATADOR XXVII Bolivia HRB 108 Monarch Shipping Ltd. 50. MATADOR XXVIII Bolivia HRB 109 Monarch Shipping Ltd. 51. MATADOR XXX Bolivia HRB 111 Monarch Shipping Ltd. 52. GAUCHO IX Paraguay 2808-BTQ Oceanpar S.A. 53. GAUCHO V Paraguay 2804-BTQ Oceanpar S.A. 54. GAUCHO VI Paraguay 2805-BTQ Oceanpar S.A. 55. GAUCHO VII Paraguay 2806-BTQ Oceanpar S.A. 56. GAUCHO VIII Paraguay 2807-BTQ Oceanpar S.A. 57. GAUCHO X Paraguay 2809-BTQ Oceanpar S.A. 58. GAUCHO XI Paraguay 2810-BTQ Oceanpar S.A. 59. MATADOR L Paraguay 2831 B Oceanpar S.A. 60. MATADOR LI Paraguay 2832 B Oceanpar S.A. 61. MATADOR LII Paraguay 2833 B Oceanpar S.A. 62. MATADOR LIII Paraguay 2834 B Oceanpar S.A. 63. MATADOR LIV Paraguay 2835 B Oceanpar S.A. 64. MATADOR LIX Paraguay 2838 B Oceanpar S.A. 65. MATADOR LVII Paraguay 2836 B Oceanpar S.A. 66. MATADOR LVIII Paraguay 2837 B Oceanpar S.A. 67. MATADOR LX Paraguay 2839 B Oceanpar S.A. 68. MATADOR LXII Paraguay 2824 B Oceanpar S.A. 69. MATADOR XL Paraguay 2820 B Oceanpar S.A. 70. MATADOR XLI Paraguay 2821 B Oceanpar S.A. 71. MATADOR XLII Paraguay 2822 B Oceanpar S.A. 72. MATADOR XLIII Paraguay 2823 B Oceanpar S.A. 73. MATADOR XLIV Paraguay 2826 B Oceanpar S.A. 74. MATADOR XLV Paraguay 2827 B Oceanpar S.A. 75. MATADOR XLVI Paraguay 2828 B Oceanpar S.A. 76. MATADOR XLVII Paraguay 2829 B Oceanpar S.A. 77. MATADOR XLVIII Paraguay 2830 B Oceanpar S.A. 78. MATADOR XXXI Paraguay 2811 B Oceanpar S.A. 79. MATADOR XXXII Paraguay 2812 B Oceanpar S.A. 80. MATADOR XXXIII Paraguay 2813 B Oceanpar S.A. 81. MATADOR XXXIV Paraguay 2814 B Oceanpar S.A. 82. MATADOR XXXIX Paraguay 2819 B Oceanpar S.A. 83. MATADOR XXXV Paraguay 2815 B Oceanpar S.A. 84. MATADOR XXXVI Paraguay 2816 B Oceanpar S.A. 85. MATADOR XXXVII Paraguay 2817 B Oceanpar S.A. 86. MATADOR XXXVIII Paraguay 2818 B Oceanpar S.A. 87. GAUCHO I Paraguay 2379-BTQ Parfina S.A. 88. GAUCHO II Paraguay 2380-BTQ Parfina S.A. 89. GAUCHO III Paraguay 2381-BTQ Parfina S.A. 90. GAUCHO IV Paraguay 2382-BTQ Parfina S.A. 91. RIVER 824 Paraguay 2880-BTQ Riverpar S.A. 92. RIVER 825 Paraguay 2881-BTQ Riverpar S.A. 93. RIVER 826 Paraguay 2882-BTQ Riverpar S.A.

Page 150 94. RIVER 827 Paraguay 2883-BTQ Riverpar S.A. 95. RIVER 828 Paraguay 2884-BTQ Riverpar S.A. 96. RIVER 829 Paraguay 2885-BTQ Riverpar S.A. 97. RIVER 830 Paraguay 2886-BTQ Riverpar S.A. 98. RIVER 831 Paraguay 2887-BTQ Riverpar S.A. 99. RIVER 832 Paraguay 2888-BTQ Riverpar S.A. 100. RIVER 833 Paraguay 2889-BTQ Riverpar S.A. 101. RIVER 834 Paraguay 2890-BTQ Riverpar S.A. 102. ACBL 200 Panama 32089NY Riverview Commercial Corp. 103. ACBL 208 Panama 32103NY Riverview Commercial Corp. 104. ACBL 209 Panama 32120NY Riverview Commercial Corp. 105. ACBL 215 Panama 32119NY Riverview Commercial Corp. 106. ACBL 251 Panama 32117NY Riverview Commercial Corp. 107. ACBL 253 Panama 32115NY Riverview Commercial Corp. 108. ACBL 254 Panama 32114NY Riverview Commercial Corp. 109. ACBL 255 Panama 32113NY Riverview Commercial Corp. 110. ACBL 257 Panama 32111NY Riverview Commercial Corp. 111. ACBL 258 Panama 32110NY Riverview Commercial Corp. 112. ACBL 259 Panama 32109NY Riverview Commercial Corp. 113. ACBL 312 Panama 32086NY Riverview Commercial Corp. 114. ACBL 313 Panama 32085NY Riverview Commercial Corp. 115. ACBL 314 Panama 32087NY Riverview Commercial Corp. 116. ACBL 315 Panama 32095NY Riverview Commercial Corp. 117. ACBL 316 Panama 32094NY Riverview Commercial Corp. 118. ACBL 317 Panama 32093NY Riverview Commercial Corp. 119. ACBL 318 Panama 32092NY Riverview Commercial Corp. 120. ACBL 319 Panama 32090NY Riverview Commercial Corp. 121. ACBL 320 Panama 32082NY Riverview Commercial Corp. 122. ACBL 321 Panama 32091NY Riverview Commercial Corp. 123. ACBL 621 Panama 32126NY Riverview Commercial Corp. 124. ACBL 624 Panama 32128NY Riverview Commercial Corp. 125. ACBL 630 Panama 32127NY Riverview Commercial Corp. 126. ACBL 633 Panama 32125NY Riverview Commercial Corp. 127. ACBL 636 Panama 32124NY Riverview Commercial Corp. 128. ACBL 651 Panama 32121NY Riverview Commercial Corp. 129. ACBL 652 Panama 32123NY Riverview Commercial Corp. 130. ACBL 653 Panama 32122NY Riverview Commercial Corp. 131. ACBL 654 Panama 32133NY Riverview Commercial Corp. 132. ACBL 655 Panama 32132NY Riverview Commercial Corp. 133. ACBL 657 Panama 32131NY Riverview Commercial Corp. 134. ACBL 658 Panama 32130NY Riverview Commercial Corp. 135. ACBL 659 Panama 32129NY Riverview Commercial Corp. 136. ACBL 665 Panama 32084NY Riverview Commercial Corp. 137. ACBL 666 Panama 32104NY Riverview Commercial Corp. 138. ACBL 667 Panama 32105-NY Riverview Commercial Corp. 139. ACBL 668 Panama 32106-NY Riverview Commercial Corp. 140. ACBL 695 Panama 32107-NY Riverview Commercial Corp. 141. ACBL 696 Panama 32096-NY Riverview Commercial Corp. 142. ACBL 697 Panama 32083NY Riverview Commercial Corp. 143. ACBL 698 Panama 32099NY Riverview Commercial Corp. 144. RIVER 810 Panama 32101-NY Riverview Commercial Corp. 145. RIVER 811 Panama 32102-NY Riverview Commercial Corp. 146. RIVER 822B Panama 32097-NY Riverview Commercial Corp. 147. RIVER 823B Panama 32100-NY Riverview Commercial Corp. 148. ACBL 285 Liberia 12014 UABL S.A. 149. ACBL 286 Liberia 12015 UABL S.A. 150. ACBL 287 Liberia 12016 UABL S.A. 151. ACBL 288 Liberia 12017 UABL S.A. 152. ACBL 289 Liberia 12018 UABL S.A. 153. ACBL 290 Liberia 12019 UABL S.A. 154. ACBL 291 Liberia 12020 UABL S.A. 155. ACBL 292 Liberia 12021 UABL S.A. 156. ACBL 295 Liberia 12024 UABL S.A.

Page 151 157. ACBL 296 Liberia 12025 UABL S.A. 158. ACBL 297 Liberia 12026 UABL S.A. 159. ACBL 299 Liberia 12027 UABL S.A. 160. ACBL 300 Liberia 12028 UABL S.A. 161. ACBL 301 Liberia 12029 UABL S.A. 162. ACBL 302 Liberia 12030 UABL S.A. 163. ACBL 303 Liberia 12031 UABL S.A. 164. ACBL 304 Liberia 12032 UABL S.A. 165. ACBL 305 Liberia 12033 UABL S.A. 166. ACBL 307 Liberia 12035 UABL S.A. 167. ACBL 310 Liberia 12038 UABL S.A. 168. ACBL 680 Liberia 12056 UABL S.A. 169. ACBL 682 Liberia 12058 UABL S.A. 170. ACBL 684 Liberia 12060 UABL S.A. 171. ACBL 687 Liberia 11863 UABL S.A. 172. ACBL 688 Liberia 11864 UABL S.A. 173. ACBL 689 Liberia 11865 UABL S.A. 174. ACBL 690 Liberia 11866 UABL S.A. 175. ACBL 691 Liberia 11867 UABL S.A. 176. ACBL 692 Liberia 11868 UABL S.A. 177. ACBL 693 Liberia 11869 UABL S.A. 178. ACBL 694 Liberia 11870 UABL S.A. 179. ACBL 812 Panama 29226-03 UABL S.A. 180. ACBL 813 Panama 29222-03 UABL S.A. 181. ACBL 814 Panama 29223-03 UABL S.A. 182. ACBL 815 Panama 29215-03 UABL S.A. 183. ACBL 816 Panama 29228-03 UABL S.A. 184. ACBL 817 Panama 29220-03 UABL S.A. 185. ACBL 818 Panama 29225-03 UABL S.A. 186. TN 1502 Argentina 2191 UABL S.A. 187. TN 1503 Argentina 2192 UABL S.A. 188. TN 1505 Argentina 2193 UABL S.A. 189. TN 1506 Argentina 2194 UABL S.A. 190. ACBL 217 Panama 32118NY Riverview Commercial Corp. 191. ACBL 252 Panama 32116NY Riverview Commercial Corp. 192. ACBL 256 Panama 32112NY Riverview Commercial Corp. 193. ACBL 699 Panama 32098NY Riverview Commercial Corp.

Page 152 EXHIBIT 2 TO THE RULE 144A / REGULATION S / IAI APPENDIX Form of Transferee Letter of Representation Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box 55-19084 Nassau, Bahamas Attention of Secretary In care of [ ] Ladies and Gentlemen: This certificate is delivered to request a transfer of $[ ] principal amount of the 9% First Preferred Ship Mortgage Notes due 2014 (the "Securities") of Ultrapetrol (Bahamas) Limited (the "Company"). Page 153 Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows: Name:_________________________________________ Address:______________________________________ Taxpayer ID Number:___________________________ The undersigned represents and warrants to you that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor", and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We are purchasing at least $250,000 principal amount of the Securities or, if less, are furnishing herewith an opinion of counsel as described in clause (iii) of paragraph 2 below. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment. 2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the "Resale Restriction Termination Date") only (i) to the Company, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing for its own account or for the account of an institutional accredited investor, in each case in a minimum principal amount of the Securities of $250,000, or if such transfer is in respect of an aggregate principal amount of Securities of less than $250,000, only if such institutional accredited investor furnishes to the Trustee an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act, (iv) outside the United States in a transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) subject to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (iii), (iv) or (v) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Company and the Trustee. TRANSFEREE:_____________________________, 539411 by:___________________________ Page 154 EX-5.1 31 y04808exv5w1.txt FORM OF OPINION OF SEWARD & KISSEL LLP EXHIBIT 5.1 ___________, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19085 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as United States and New York counsel to Ultrapetrol (Bahamas) Limited, a Bahamas corporation (the "Company") and to the Company's subsidiaries listed on Exhibit A hereto (each a "Guarantor" and collectively the "Guarantors" and, together with the Company, the "Ultrapetrol Group") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantors and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantors (the "Guarantees") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantors and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantors and others. We have assumed due authorization of the Exchange Notes and the Guarantees under the laws of incorporation of the respective the Company and each Guarantor, as the case may be. With respect to the due authorization of the Exchange Notes and the Guarantees we have relied upon the opinions of counsel of each of the Company and each Guarantor filed as exhibits to the Registration Statement, and we have assumed that each has been validly executed and delivered by the Company and each Guarantor, as the case may be. We have further assumed for the purposes of this opinion that the Indenture and all documents contemplated by the Indenture to be executed in connection with the Exchange Offer, have been duly authorized and validly Page 1 executed and delivered by each of the parties thereto. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Exchange Notes and the Guarantees, when the Exchange Notes are executed and authenticated in accordance with the Indenture and delivered pursuant to the Exchange Offer upon the terms and conditions set forth in the Prospectus, will constitute the valid and binding obligations of the Company and the Guarantors, respectively, enforceable against the Company and the Guarantors in accordance with their terms, except as (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance, reorganization, arrangement, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally and may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We are members of the bar of the State of New York, and this opinion is limited to the law of the State of New York and the federal laws of the United States of America as in effect on the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to each reference to us and the discussions of advice provided by us under the headings "Enforceability of Civil Liabilities," and "Legal Matters" in the Prospectus, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, /s/ Seward & Kissel LLP Page 2 Exhibit A --------- Bayham Investments S.A. Baldwin Maritime Inc. Cavalier Shipping Inc. Corporacion De Navegacion Mundial S.A. Danube Maritime Inc. Imperial Maritime Ltd. (Bahamas) Inc. General Ventures Inc. Kattegat Shipping Inc. Kingly Shipping Ltd. Majestic Maritime Ltd. Massena Port S.A. Monarch Shipping Ltd. Noble Shipping Ltd. Oceanpar S.A. Oceanview Maritime Inc. Page 3 Parfina S.A. Parkwood Commercial Corp. Princely International Finance Corp. Regal International Investments S.A. Riverview Commercial Corp. Sovereign Maritime Ltd. Stanmore Shipping Inc. Tipton Marine Inc. Ultrapetrol International S.A. Ultrapetrol S.A. UP Offshore (Holdings) Ltd. 02351.0008 #533176 Page 4 EX-5.2 32 y04808exv5w2.txt FORM OF OPINION OF PEREZ, ALATI ETAL. EXHIBIT 5.2 _________2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Argentine counsel to Ultrapetrol S.A. and UABL S.A., each a corporation (sociedad anonima) organized and existing under the laws of the Republic of Argentina (the "Argentine Subsidiaries") in connection with the Registration Statement on Form F-4 (the "Registration Statement") of Ultrapetrol (Bahamas) Limited, a Bahamas Company (the "Company") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantors and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantors (the "Guarantees") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantors, and the Argentine Subsidiaries and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantors, the Argentine Subsidiaries and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantees have been duly authorized and validly executed and delivered by each of the parties thereto other than the Argentine Subsidiaries. 1. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that each of the Guarantees to which an Argentine Subsidiary is a party has been duly authorized, executed and delivered by each of the Argentine Subsidiaries. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities" and "Summary of the Terms of the Exchange Notes: Additional Amounts", contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Argentine law, subject to the limitations and conditions set forth therein, constitutes the opinion of Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz (jr). It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. This opinion is limited to the laws of the Republic of Argentina. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, PEREZ ALATI, GRONDONA, BENITES, ARNTSEN & MARTINEZ DE HOZ (JR) EX-5.3 33 y04808exv5w3.txt FORM OF OPINION OF HIGGS & JOHNSON EXHIBIT 5.3 January _________, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas RE: 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014 Ladies and Gentlemen: We have acted as special Bahamian counsel to Ultrapetrol (Bahamas) Limited, a Bahamian company (the "COMPANY") and to the Company's Bahamian subsidiaries listed on Exhibit A hereto (each a "GUARANTOR" and collectively the "GUARANTORS" in connection with the Company's Registration Statement on Form F-4 (the "REGISTRATION STATEMENT") as filed with the United States Securities and Exchange Commission (the "COMMISSION"), with respect to the Company's offer to exchange up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "EXCHANGE NOTES") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "OUTSTANDING NOTES"). The Exchange Notes are to be issued pursuant to an Indenture dated as of November 24, 2004 between the Company, the Guarantors and Manufacturers Traders and Trust Company, as Trustee (the "INDENTURE") and, when issued, will be guaranteed by the Guarantors (the "GUARANTEES") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company included in the Registration ULTRAPETROL (BAHAMAS) LIMITED JANUARY______, 2005] PAGE 2 Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes; and (vi) such corporate documents and records of the Company and the Guarantors and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantors and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantees have been duly authorized and validly executed and delivered by each of the parties thereto other than the Company and the Guarantors. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Exchange Notes and Guarantees have been duly authorized, executed and delivered by the Company and the Guarantors. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities," "Summary of the Terms of the Exchange Notes: Additional Amounts," and "Tax Considerations -Bahamian Tax Considerations" contained in the Registration Statement, insofar as such discussion represents legal conclusions or statements of Bahamian law, subject to the limitations and conditions set forth therein, constitutes the opinion of Higgs & Johnson. It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. ULTRAPETROL (BAHAMAS) LIMITED JANUARY______, 2005] PAGE 3 This opinion is limited to the laws of the Commonwealth of The Bahamas. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement to be filed with the Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, HIGGS & JOHNSON EXHIBIT A LIST OF BAHAMIAN SUBSIDIARIES
NAME JURISDICTION OF INCORPORATION ---- ----------------------------- Kingly Shipping Ltd. Bahamas Majestic Maritime Ltd. Bahamas Monarch Shipping Ltd. Bahamas Noble Shipping Ltd. Bahamas Sovereign Maritime Ltd. Bahamas UP Offshore (Holdings) Ltd. Bahamas
EX-5.4 34 y04808exv5w4.txt FORM OF OPINION OF BARROS & ERRAZURIZ ABOGADOS LTD. EXHIBIT 5.4 [LETTERHEAD OF] BARROS Y ERRAZURIZ ABOGADOS LIMITADA January____, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Chilean counsel to Ultrapetrol (Bahamas) Limited, a Bahamas company (the "Company") and to Corporacion de Navegacion Mundial S.A., a (corporation) organized and existing under the laws of the Republic of Chile, and one of the Company's subsidiaries (the "Guarantor" and, together with the Company, the "Ultrapetrol Group") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantor and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantor (the "Guarantee") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantor and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter Ultrapetrol (Bahamas) Limited January_____, 2005] Page 2 expressed (collectively the "Documents"). In such examinations, we have assumed and not verified: (a) the authenticity of all documents submitted to us as originals; (b) the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed; (c) the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents; (d) the due compliance of the Documents with all matters of, and the validity and enforceability thereof under, all such laws as govern or relate to them (other than the laws of Chile as to which we are opining); (e) that any required consents, licenses, permits, approvals, exemptions or authorizations of or by any governmental authority or regulatory body of any jurisdiction other than Chile in connection with the transactions contemplated by the Documents have been obtained. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantor and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantee have been duly authorized and validly executed and delivered by each of the parties thereto other than the Company and the Guarantor. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Guarantee to which the Guarantor is a party have been duly authorized, executed and delivered by it. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities" and "Summary of the Terms of the Exchange Notes: Additional Amounts" contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Chile law, subject to the limitations and conditions set forth therein, constitutes the opinion of Barros & Errazuriz Abogados Ltda. and fairly presents the information disclosed therein in all material respects. This opinion is limited to the laws of Chile. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances Ultrapetrol (Bahamas) Limited January_____, 2005] Page 3 occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, BARROS Y ERRAZURIZ ABOGADOS LIMITADA EX-5.5 35 y04808exv5w5.txt FORM OF OPINION OF SEWARD & KISSEL LLP EXHIBIT 5.5 _____________, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Liberian counsel to General Ventures Inc., a Liberian company ("Guarantor") and a subsidiary of Ultrapetrol (Bahamas) Limited, a Bahamas company (the "Company") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24,2004 between the Company, the Guarantor, Manufacturers Traders and Trust Company, as Trustee (the "Trustee") and the other parties thereto (the "Indenture") and, when issued, will be guaranteed by the Guarantor (the "Guarantee") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantor and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the Ultrapetrol (Bahamas) Limited _____________, 2005 Page 2 opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Guarantor and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantee have been duly authorized and validly executed and delivered by each of the parties thereto other than the Guarantor. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Guarantee has been duly authorized, executed and delivered by the Guarantor. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities," and "Summary of the Terms of the Exchange Notes: Additional Amounts," contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Liberian law, subject to the limitations and conditions set forth therein, constitutes the opinion of Seward & Kissel LLP. It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. This opinion is limited to the laws of Liberia. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, /s/ Seward & Kissel LLP EX-5.6 36 y04808exv5w6.txt FORM OF OPINION OF PALACIOS, PRONO & TALAVERA EXHIBIT 5.6 January_____, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Paraguayan counsel to Ultrapetrol (Bahamas) Limited, a Bahamas company (the "Company") and to the Company's subsidiaries listed on Exhibit A hereto (each a "Guarantor" and collectively the "Guarantors" and, together with the Company, the "Ultrapetrol Group") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantors and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantors (the "Guarantees") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantors and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the Ultrapetrol (Bahamas) Limited January_____, 2005 Page 2 opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantors and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantees have been duly authorized and validly executed and delivered by each of the parties thereto other than the Company and the Guarantors. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Exchange Notes and Guarantees have been duly authorized, executed and delivered by the Company and the Guarantors. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities," and "Summary of the Terms of the Exchange Notes: Additional Amounts," contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Paraguayan law, subject to the limitations and conditions set forth therein, constitutes the opinion of Palacios, Prono & Talavera, Abogados. It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. This opinion is limited to the laws of Paraguay. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, Palacios, Prono & Talavera, Abogados Ultrapetrol (Bahamas) Limited January_____, 2005 Page 3 EXHIBIT A 1. Parfina S.A. 2. Oceanpar S.A. EX-5.7 37 y04808exv5w7.txt FORM OF OPINION OF TAPIA, LINARES Y ALFARO EXHIBIT 5.7 January_________, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Panamanian counsel to Ultrapetrol (Bahamas) Limited, a Bahamas company (the "Company") and to the Company's Panamanian subsidiaries listed on Exhibit A hereto (each a "Guarantor" and collectively the "Guarantors" and, together with the Company, the "Ultrapetrol Group") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantors and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantors (the "Guarantees") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records of the Company and the Guarantors and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to Ultrapetrol (Bahamas) Limited January________, 2005 Page 2 complete the execution of documents. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantors and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantees have been duly authorized and validly executed and delivered by each of the parties thereto other than the Company and the Guarantors. Based upon and subject to the foregoing, and having regard to such other legal considerations, which we deem relevant, we are of the opinion that the Exchange Notes and Guarantees have been duly authorized, executed and delivered by the Company and the Guarantors. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities," "Summary of the Terms of the Exchange Notes: Additional Amounts," and "Tax Considerations - Panama Tax Considerations" contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Panamanian law, subject to the limitations and conditions set forth therein, constitutes the opinion of Tapia, Linares y Alfaro. It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. This opinion is limited to the laws of Panama. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, Tapia, Linares y Alfaro Mario E. Correa Ultrapetrol (Bahamas) Limited January__, 2005 Page 3 EXHIBIT A Baldwin Maritime Inc. Bayham Investments S.A. Cavalier Shipping Inc. Danube Maritime Inc. Imperial Maritime Ltd. (Bahamas) Inc. Kattegat Shipping Inc. Oceanview Maritime Inc. Parkwood Commercial Corp. Princely International Finance Corp. Regal International Investments S.A. Riverview Commercial Corp. Stanmore Shipping Inc. Tipton Marine Inc. Ultrapetrol International S.A. EX-5.8 38 y04808exv5w8.txt FORM OF OPINION OF RAMELA & REGULES RUCKER, ABOGADOS EXHIBIT 5.8 RAMELA & REGULES RUCKER Abogados Carlos RAMELA REGULES Julio Herreray Obes 1416, piso 8 Pedro REGULES ZABALETA Tel: (05982) 900-1232/900-0494 Fernando MENDEZ VALLES 902-1585/902-0693 Ricardo SOMMARUGA SANGUINETTI Telefax: (05982) 902-1585 Milagros SAPRIZA RAMELA E-mail: regules@dcd.com.uy Abogados C.P. 11.100 - MONTEVIDEO URUGUAY Alejandro REGULES ZABALETA Escribano ________________, 2005 Ultrapetrol (Bahamas) Limited c/o H& J Corporation Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: We have acted as special Uruguayan counsel to Ultrapetrol (Bahamas) Limited, a Bahamas company (the "Company") and to Massena Port S.A. (the "Guarantor" and, together with the Company, the "Ultrapetrol Group") in connection with the Company's Registration Statement on Form F-4 (the "Registration Statement") as filed with the United States Securities and Exchange Commission (the "Commission"), with respect to the Company's offer to exchange (the "Exchange Offer") up to $180,000,000 of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for an identical principal amount at maturity of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"). The Exchange Notes are to be issued pursuant to the Indenture dated as of November 24, 2004 between the Company, the Guarantor and Manufacturers Traders and Trust Company, as Trustee (the "Trustee") (the "Indenture") and, when issued, will be guaranteed by the Guarantor (the "Guarantee") pursuant to the Indenture. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the "Prospectus") included in the Registration Statement; (iii) the Indenture; (iv) the form of the Outstanding Notes; (v) the form of the Exchange Notes and (vi) such corporate documents and records Paraguay 609 - 6 K - Tel: (05411) 4311-1412/8385 - Telefax: (05411)4311-1700 C.P. 1057 - BUENOS AIRES - ARGENTINA of the Company and the Guarantor and such other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities (whoever are or will become signatories thereto) to complete the execution of documents. As to various questions of fact that are material to the opinion hereinafter expressed, we have relied upon statements or certificates of public officials, directors or officers of the Company and the Guarantor and others. We have further assumed for the purposes of this opinion that each of the Indenture and all documents contemplated by the Indenture to be executed in connection with the issuance of the Exchange Notes and Guarantee have been duly authorized and validly executed and delivered by each of the parties thereto other than the Guarantor. Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that the Guarantee has been duly authorized, executed and delivered by the Guarantor. We hereby confirm that the discussion under the headings "Enforceability of Civil Liabilities," and "Summary of the Terms of the Exchange Notes: Additional Amounts," contained in the Company's Registration Statement on Form F-4, insofar as such discussion represents legal conclusions or statements of Uruguayan law, subject to the limitations and conditions set forth therein, constitutes the opinion of Ramela & Regules Rucker. It is our further opinion that the discussion set forth under such captions accurately states our views as to the matters discussed therein. This opinion is limited to the laws of the Republic of Uruguay. This opinion is rendered as of the date hereof, and we have no responsibility to update this opinion for events or circumstances occurring after the date hereof, nor do we have any responsibility to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Company's Registration Statement on Form F-4 to be filed with the United States Securities and Exchange Commission with respect to the Exchange Notes, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the Registration Statement. Very truly yours, Dr. Pedro Regules Zabaleta RAMELA & REGULES RUCKER Abogados EX-8.1 39 y04808exv8w1.txt FORM OF OPINION OF SEWARD & KISSEL LLP EXHIBIT 8.1 _____________, 2005 Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19085 Nassau, Bahamas Ladies and Gentlemen: Re: 9% First Preferred Ship Mortgage Notes due 2014 Ladies and Gentlemen: In connection with the Registration Statement filed by Ultrapetrol (Bahamas) Limited, a Bahamas corporation (the "Company") on Form F-4 with the Securities and Exchange Commission pursuant to the Securities Act of l933 (the "Registration Statement") in connection with the exchange offer of the Company's 9% First Preferred Ship Mortgage Notes due 2014 (the "Notes"), we have been requested to render our opinion regarding certain United States federal income tax matters. In formulating our opinion as to these matters, we have examined such documents as we have deemed appropriate, including the Registration Statement and the prospectus that forms a part thereof (the "Prospectus"). We also have obtained such additional information as we have deemed relevant and necessary from representatives of the Company. Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement. Based on the facts as set forth in the Registration Statement and, in particular, on the representations, covenants, assumptions, conditions and qualifications described under the captions "Summary of the Terms of The Exchange Offer - U.S. Federal Income Tax Considerations," "The Exchange Offer - Transfer Taxes," and "Tax Considerations - United States Federal Income Tax Considerations" we hereby confirm that the opinions of Seward & Kissel LLP with respect to federal income tax matters are those opinions attributed to Seward & Kissel LLP in the Registration Statement under the captions "Summary of the Terms of The Exchange Offer - U.S. Federal Income Tax Consideration," "The Exchange Offer - Transfer Taxes," and "Tax Considerations - United States Federal Income Tax Considerations." It is our further opinion that the tax discussion set forth under the captions "Summary of the Terms of The Exchange Offer - U.S. Federal Income Tax Consideration," "The Exchange Offer - Transfer Taxes," and "Tax Considerations - United States Federal Income Tax Considerations" in the Registration Statement accurately states our views as to the tax matters discussed therein. Our opinions and the tax discussion as set forth in the Registration Statement are based on the current provisions of the Internal Revenue Code of l986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service which may be cited or used as precedents, and case law, any of which may be changed at any time with retroactive effect. No opinion is expressed on any matters other than those specifically referred to above by reference to the Registration Statement, and we have no responsibility to update this opinion or to advise you of any change in the laws after the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to all references to our firm included in or made part of the Registration Statement. Very truly yours, /s/ Seward & Kissel LLP 02351.0008 #533182 Page 1 EX-10.2 40 y04808exv10w2.txt FORM OF INSURANCE ASSIGNMENT EXHIBIT 10.2 ================================================================================ ASSIGNMENT OF INSURANCES in favor of MANUFACTURERS AND TRADERS TRUST COMPANY as Assignee ================================================================================ [DATE], 2004 ASSIGNMENT OF INSURANCES THIS ASSIGNMENT is made this [DAY] day of [MONTH], 2004, from [ASSIGNOR], a company organized and existing under the laws of the [JURISDICTION OF INCORPORATION], with offices at [ADDRESS] (the "Assignor"), in favor of MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, with offices at 25 South Charles Street, Baltimore, Maryland, as trustee under the Indenture referred to in Recital B hereto (the "Assignee"). W I T N E S S E T H T H A T: WHEREAS: (A) The Assignor is the sole, legal and beneficial owner of the whole of [each of] the [NATIONALITY] flag vessel[s] listed on Schedule 1 hereto (the ["Vessels", and each a] "Vessel"); (B) Pursuant to an indenture dated as of November 24, 2004, by and among Ultrapetrol (Bahamas) Limited, as issuer (the "Company"), the Guarantors party thereto (the "Guarantors"), the Pledgors party thereto (the "Pledgors") and the Assignee as trustee, (as amended or supplemented from time to time, the "Indenture"), the Company issued its 9% First Preferred Ship Mortgage Notes due 2014 (the "Securities") in the aggregate principal amount of One Hundred Eighty Million United States Dollars (US$180,000,000), the proceeds of which have been used to repay the Company's 10 1/2% First Preferred Ship Mortgage Notes dues 2008, to refinance the acquisition cost of other vessels owned by the Guarantors, and for general corporate purposes; (C) By the Indenture, the Guarantors [(including the Assignor)], have jointly and severally guaranteed, upon the terms and conditions contained therein, the punctual payment, performance and observance when due of the obligations of the Company under and in connection with the Securities, including, but not limited to, the Company's obligation to pay the principal of, and premium and interest on, the Securities as provided in the Indenture and the Securities; (D) By the Security Agreements (other than this Assignment), the Guarantors [(including the Assignor)] and the Pledgors [(including the Assignor)] have, upon the terms and conditions contained therein, pledged certain assets held by them, including the Vessel[s], and assigned certain insurances obtained by them, to secure the punctual payment, performance and observance when due of the obligations of the Company under and in connection with the Indenture and Securities, including, but not limited to, the Company's obligation to pay the principal of, and premium and interest on, the Securities as provided in the Indenture and the Securities; and (E) The Assignor has agreed to grant this Assignment to secure its, the [other] Subsidiary Guarantors' and the Company's obligations under the Indenture, and in order to secure the prompt and due payment to the Trustee of any and all sums which may be or become due to the Trustee and/or the Securityholders from the Assignor under or pursuant to the Indenture and also to secure the exact performance and observance and compliance with all and any of the covenants and agreements and terms and conditions contained in the Indenture. NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Assignor: 1. Defined Terms. Unless otherwise defined herein, terms defined in the Indenture shall have the same meanings when used herein. 2. Grant of Security. As security for all Obligations of the Assignor, the Company and the [other] Subsidiary Guarantors pursuant to the Indenture, and in consideration of One Dollar ($1) lawful money of the United States of America, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Assignor as legal and beneficial owner does hereby sell, assign, transfer and set over and grant a security interest unto the Assignee, for the benefit of the Assignee and its successors and assigns, and does hereby grant the Assignee a security interest in, all of the Assignor's right, title and interest in, to and under all policies and contracts of insurance, including the Assignor's rights under all entries in any Protection and Indemnity or War Risks Association or Club, which are from time to time taken out by or for the Assignor in respect of [the/any] Vessel, her hull, machinery, freights, disbursements, profits or otherwise, and all the benefits thereof including, without limitation, all claims of whatsoever nature, as well as return premiums (all of which are herein collectively called the "Insurances"), and in and to all moneys and claims for moneys in connection therewith and all other rights of the Assignee under or in respect of said insurances and all proceeds of all of the foregoing. 3. Notices; Loss Payable Clauses. (A) All Insurances, except entries in Protection and Indemnity Associations or Clubs or insurances effected in lieu of such entries, relating to [the/any] Vessel shall contain a loss payable and notice of cancellation clause in substantially the form of Exhibit 1 hereto or in such other form as the Assignee may agree. (B) All entries in Protection and Indemnity Associations or Clubs or insurances effected in lieu of such entries relating to [the/any] Vessel shall contain a loss payable clause in substantially the form of Exhibit 2 hereto or in such other form as the Assignee may agree. 4. Covenants and Undertakings. The Assignor hereby represents to and covenants with the Assignee that: 2 (A) it will do or permit to be done each and every act or thing which the Assignee may from time to time reasonably require to be done for the purpose of enforcing the Assignee's rights under this Assignment and will allow its name to be used as and when required by the Assignee for that purpose; (B) it will forthwith give notice in the form set out in Exhibit 3 attached hereto, or cause its insurance brokers to give notice, of this Assignment to all insurers, underwriters, clubs and associations providing insurance in connection with [the/any] Vessel and her earnings and procure that such notice is endorsed on all the policies and entries of insurances in respect of [the/any] Vessel and her respective earnings; (C) the Insurances in effect on the date hereof are now valid and in full force and effect, and the Assignor will not do or omit or knowingly suffer to be done or omitted anything whereby any of the Insurances assigned hereby may become void or voidable in whole or in part or the Assignee or any other person claiming title through it may be prevented from receiving the proceeds thereof; (D) if by reason of anything done or omitted or knowingly suffered to be done or omitted the Insurances assigned hereby shall at any time become voidable in whole or in part, the Assignor will forthwith at its own cost take all such action as shall be necessary for keeping such Insurances in force and in particular will pay all premiums as they become due; and (E) if by reason of anything done or omitted or knowingly suffered to be done or omitted the Insurances assigned hereby or any of them shall at any time become void in whole or in part, the Assignor shall, at its expense, affect new insurances in compliance with the terms of the Mortgage over the Vessel[s,or any of them,] in favor of the Assignee, and shall forthwith (if required by the Assignee), execute an assignment of such new insurances in favor of the Assignee, and will pay any sums payable by way of premiums under the new insurances. 5. No Duty of Inquiry. The Assignee shall not be obliged to make any inquiry as to the nature or sufficiency of any payment received by it hereunder or to make any claim or take any other action to collect any moneys or to enforce any rights and benefits hereby assigned to the Assignee or to which the Assignee may at any time be entitled hereunder except such reasonable action as may be requested by any underwriter, association or club. The Assignor shall remain liable to perform all the obligations assumed by it in relation to the property hereby assigned, and the Assignee shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever (including, without limitation, any obligation or liability with respect to the payment of premiums, calls, assessments or any other sums at any time due and owing in respect of the Insurances) in the event of any failure by the Assignor to perform such obligations. 6. Negative Pledge. The Assignor does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the Insurances or other moneys and claims hereby assigned, to anyone other than the Assignee, and it will not take or omit to take any action, the taking or omission of which might result in an 3 alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment; and the Assignor hereby irrevocably appoints and constitutes the Assignee as the Assignor's true and lawful attorney-in-fact with full power (in the name of the Assignor or otherwise) should an Event of Default (as such term is defined in the Indenture) have occurred and be continuing to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys assigned hereby, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Assignee may deem to be necessary or advisable and otherwise to do any and all things which the Assignor itself could do in relation to the property hereby assigned, including, but not limited to, filing any and all Uniform Commercial Code financing statements or renewals thereof in connection with this Assignment which the Assignee may deem to be necessary or advisable in order to perfect or maintain the security interest granted hereby. The powers and authorities granted to the Assignee have been given for valuable consideration and are hereby declared irrevocable. 7. Further Assurances. The Assignor agrees that any time and from time to time upon the written request of the Assignee it will promptly and duly execute and deliver to the Assignee any and all such further instruments and documents as the Assignee may reasonably deem advisable in obtaining the full benefits of this Assignment and of the rights and powers herein granted. 8. Remedies Cumulative and Not Exclusive; No Waiver. Each and every right, power and remedy herein given to the Assignee shall be cumulative and shall be in addition to every other right, power and remedy of the Assignee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Assignee, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by the Assignee in the exercise of any right or power in the pursuance of any remedy accruing upon any breach or default of the Indenture by the Assignor, the Company or any other Guarantor or Pledgor shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Assignee of any security or of any payment of or on account of any of the amounts due from the Assignor, the Company or any other Guarantor or Pledgor under or in connection with the Indenture or any document delivered in connection therewith and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach or default not completely cured thereby. 9. Invalidity. If any provision of this Assignment shall at any time for any reason be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Assignment, or the validity of this Assignment as a whole, which shall remain in full force and effect. In the event that it should transpire that by reason of any law or regulation, or by reason of a ruling of any court, or by any other reason whatsoever, the assignment herein 4 contained is either wholly or partly defective, the Assignor hereby undertakes to furnish the Assignee with an alternative assignment or alternative security and/or to do all such other acts as, in the sole opinion of the Assignee, shall be required in order to ensure and give effect to the full intent of this Assignment. 10. Continuing Security. It is declared and agreed that the security created by this Assignment shall be held by the Assignee as a continuing security for the payment of all moneys which may at any time and from time to time be or become payable by the Company, the [other] Subsidiary Guarantors or the Assignor under the Indenture and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby secured and that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any other collateral or security now or hereafter held by the Assignee for all or any part of the moneys hereby secured. 11. Waiver; Amendment. None of the terms and conditions of this Assignment may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Assignee and the Assignor. 12. Termination. If the Assignor shall pay and discharge all of its obligations under or in connection with the Indenture and the Securities or is released therefrom in accordance with the terms thereof, all the right, title and interest herein assigned shall revert to the Assignor, and this Assignment shall terminate. 13. WAIVER OF JURY TRIAL. EACH OF THE ASSIGNOR, AND BY ITS ACCEPTANCE HEREOF, THE ASSIGNEE, HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS ASSIGNMENT, THE INDENTURE OR THE SECURITY AGREEMENTS TO WHICH THEY ARE PARTY THEREIN DESCRIBED, ANY AMENDMENTS THERETO, OR ANY TRANSACTIONS CONTEMPLATED THEREBY. 14. Notices. Notices and other communications hereunder shall be in writing and may be given or made by facsimile as follows: If to the Assignor: [ASSIGNOR] [ADDRESS] Attention: [NAME]. Facsimile: [NUMBER] 5 with copy to: Seward & Kissel LLP One Battery Park Plaza New York, New York 10004 Attention: Lawrence Rutkowski, Esq. Facsimile: 212-480-8421 If to the Assignee- Manufacturers and Traders Trust Company Corporate Trust Department Mail Code 101-591 25 South Charles Street Baltimore, Maryland 21201 Attention: Robert D. Brown Facsimile: 410-244-4236 with copy to: Ober, Kaler, Grimes & Shriver 120 East Baltimore Street Baltimore, Maryland 21202-1643 Attention: Patrick Cameron, Esq. Facsimile: 443-263-7540 or to such other address as either party shall from time to time specify in writing to the other. Any notice or communication sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter. Every notice or other communication shall, except so far as otherwise expressly provided by this Assignment, be deemed to have been received (provided that it is received prior to 2 p.m. New York time; otherwise it shall be deemed to have been received on the next following Business Day) in the case of a facsimile at the time of dispatch thereof (provided further that if the date of dispatch is not a Business Day in the locality of any party to whom such notice or communication is sent it shall be deemed to have been received on the next following Business Day in such locality), and in the case of a letter, at the time of receipt thereof. 15. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of New York. 16. Headings. In this Assignment, Section headings are inserted for convenience of reference only and shall be ignored in the interpretation hereof. 6 IN WITNESS WHEREOF, the Assignor has caused this Assignment to be executed and delivered on the day and year first above written. By____________________________ [NAME] [TITLE] 7 SCHEDULE 1
Official Gross Net Vessel Name Number Length Breadth Depth Tons Tons - ----------- -------- ------ ------- ----- ----- ---- mts mts mts
8 EXHIBIT 1 LOSS PAYABLE CLAUSE Hull and Machinery Loss, if any, is payable to the [ASSIGNOR], as Owner, or to its order, unless and until the underwriters receive notice from MANUFACTURERS AND TRADERS TRUST COMPANY, as Mortgagee, that the Owner is in default under the Mortgage, in which case any loss involving any damage to the Vessels or liability of the Vessels, the underwriters may pay directly for the repair salvage, liability or other charges involved, otherwise any other payment will be paid by the underwriters to the Mortgagee except if the Mortgagee authorizes in writing such payment to be made to the Owner. In addition, regardless of whether the Owner is in default under the Mortgage, in the event of the actual total loss or agreed, compromised or constructive total loss of the Vessels, payment shall be made to MANUFACTURERS AND TRADERS TRUST COMPANY, as Assignee, for distribution by it to itself and to the Owner as their respective interests appear. EXHIBIT 2 LOSS PAYABLE CLAUSE Protection and Indemnity Payment of any recovery that [OWNER] (the "Owner") is entitled to make out of the funds of the Association in respect of any liability, costs or expenses incurred by it shall be made to the Owner or to its order unless and until the Association receives notice from MANUFACTURERS AND TRADERS TRUST COMPANY, as Mortgagee, that the Owner is in default under the Mortgage, in which event all recoveries shall thereafter be paid to the Mortgagee for distribution by it to itself and the Owner, as their respective interests may appear, or order; provided always that no liability whatsoever shall attach to the Association, its managers or their agents for failure to comply with the latter obligation until after the expiry of two business days from the receipt of such notice. EXHIBIT 3 NOTICE OF ASSIGNMENT OF INSURANCES TO: TAKE NOTICE: (a) that by an Assignment of Insurances dated the [DAY] day of[MONTH], 2004 made by us to Manufacturers and Traders Trust Company (the "Assignee"), a copy of which is attached hereto, we have assigned to the Assignee as from the date hereof, inter alia, all our right, title and interest in, to and under all policies and contracts of insurance, including our rights under all entries in any Protection and Indemnity or War Risk Association or Club, which are from time to time taken out by us in respect of the [NATIONALITY] flag vessels, [VESSEL NAME] [Patente/Official] No. [NUMBER] (the "Vessels"), and its earnings and all the benefits thereof including all claims of whatsoever nature (all of which together are hereinafter called the "Insurances"). (b) that you are hereby irrevocably authorized and instructed to pay as from the date hereof all payments under (i) all Insurances, except entries in Protection and Indemnity Associations or Clubs or insurances effected in lieu of such entries, relating to the Vessels in accordance with the loss payable clause in Exhibit 1 of the Assignment of Insurances; and (ii) all entries in Protection and Indemnity Associations or Clubs or insurances affected in lieu of such entries relating to the Vessel in accordance with the loss payable clause in Exhibit 2 of the Assignment of Insurances. (c) that you are hereby instructed to endorse the assignment, notice of which is given to you herein, on all policies or entries relating to the Vessels. DATED AS OF THE [DAY] day of [MONTH], 2004. [ASSIGNOR] By______________________________ Name: Title: We hereby acknowledge receipt of the foregoing Notice of Assignment and agree to act in accordance with the terms thereof: By_______________________ Name: Title: EX-10.3 41 y04808exv10w3.txt FORM OF EARNINGS ASSIGNMENT EXHIBIT 10.3 ================================================================================ ASSIGNMENT OF EARNINGS AND CHARTERPARTIES in favor of MANUFACTURERS AND TRADERS TRUST COMPANY as Assignee ================================================================================ [DATE], 2004 ASSIGNMENT OF EARNINGS AND CHARTERPARTIES THIS ASSIGNMENT is made this [DAY] day of [MONTH], 2004, from [ASSIGNOR], a company organized and existing under the laws of the [JURISDICTION OF INCORPORATION], with offices at [ADDRESS] (the "Assignor"), in favor of MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, with offices at 25 South Charles Street, Baltimore, Maryland, as trustee pursuant to the Indenture referred to in Recital B hereto (the "Assignee"). W I T N E S S E T H T H A T: WHEREAS: (A) The Assignor is the sole, legal and beneficial owner of the whole of [each of] the [NATIONALITY] flag vessel[s] listed on Schedule 1 hereto (the ["Vessels", and each a] "Vessel"); (B) Pursuant to an indenture dated as of November 24, 2004, by and among Ultrapetrol (Bahamas) Limited, as issuer (the "Company"), the Guarantors party thereto (the "Guarantors"), the Pledgors party thereto (the "Pledgors") and the Assignee as trustee, (as amended or supplemented from time to time, the "Indenture"), the Company issued its 9% First Preferred Ship Mortgage Notes due 2014 (the "Securities") in the aggregate principal amount of One Hundred Eighty Million United States Dollars (US$180,000,000), the proceeds of which have been used to repay the Company's 10 1/2% First Preferred Ship Mortgage Notes dues 2008, to refinance the acquisition cost of other vessels owned by the Guarantors, and for general corporate purposes; (C) By the Indenture, the Guarantors [(including the Assignor)], have jointly and severally guaranteed, upon the terms and conditions contained therein, the punctual payment, performance and observance when due of the obligations of the Company under and in connection with the Securities, including, but not limited to, the Company's obligation to pay the principal of, and premium and interest on, the Securities as provided in the Indenture and the Securities; (D) By the Security Agreements (other than this Assignment), the Guarantors [(including the Assignor)] and the Pledgors [(including the Assignor)] have, upon the terms and conditions contained therein, pledged certain assets held by them, including the Vessel[s], and assigned certain insurances obtained by them, to secure the punctual payment, performance and observance when due of the obligations of the Company under and in connection with the Indenture and Securities, including, but not limited to, the Company's obligation to pay the principal of, and premium and interest on, the Securities as provided in the Indenture and the Securities; and (E) The Assignor has agreed to grant this Assignment to secure its and the Company's obligations under the Indenture, and in order to secure the prompt and due payment to the Trustee of any and all sums which may be or become due to the Trustee and/or the Securityholders from the Assignor under or pursuant to the Indenture and also to secure the exact performance and observance and compliance with all and any of the covenants and agreements and terms and conditions contained in the Indenture, NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Assignor: 1. Defined Terms. Unless otherwise defined herein, terms defined in the Indenture shall have the same meanings when used herein. 2. Grant of Security. As security for all Obligations of the Assignor, the [other] Subsidiary Guarantors and the Company pursuant to the Indenture and the other Security Agreements, and in consideration of One Dollar ($1) lawful money of the United States of America, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Assignor, as legal and beneficial owner, does hereby grant, sell, convey, assign, transfer and set over unto the Assignee, for the benefit of the Assignee and its successors and assigns, and does hereby grant the Assignee a security interest in, all of the Assignor's right, title and interest in and to (i) any charter or other contract entered into by the Assignor in respect of [the/any] Vessel; (ii) all earnings of the Vessel[s], including, but not limited to, all moneys and claims for moneys due and to become due thereto, whether as charter hire, freights, passage moneys, indemnities, payments or otherwise, under, and all claims for damages arising out of any breach of (or payment for variation or termination), any charter or any other bareboat, time or voyage charter, contract of affreightment or other contract for the use or employment of [the/any] Vessel and operations of every kind whatsoever of [the/any] Vessel, (iii) all remuneration for salvage and towage services, demurrage and detention moneys and any other earnings whatsoever due or to become due to the Assignor arising from the use or employment of [the/any] Vessel, (iv) all moneys or other compensation payable by reason of requisition for title or for hire or other compulsory acquisition of [the/any] Vessel and all claims for damages in respect of the actual or constructive total loss of [the/any] Vessel, and (v) all proceeds of all of the foregoing (herein called "Earnings"). 3. Occurrences following Default. The Assignor hereby further covenants and agrees that upon the occurrence of a Default or an Event of Default (a) it will have all the Earnings and other freights, hire and other monies hereby assigned paid over directly to the Assignee, (b) will procure that notice of this Assignment in substantially the form of Exhibit 1 attached hereto and a letter of instructions shall be duly given to each person who becomes party to any charter or contract of affreightment entered into with the Assignor in respect of [the/any] Vessel or to any Person who may receive any earnings and monies hereby assigned, (c) it will instruct each such person to provide consent where the consent of any such person is required pursuant to any charter or contract of affreightment assigned hereby, and (d) it will instruct such 2 person to acknowledge directly to the Assignee receipt of the Assignor's notification and instructions. 4. Performance under Charters; No Duty of Inquiry. The Assignor hereby undertakes that, notwithstanding the assignment herein contained, it shall punctually perform all its obligations under all charters and contracts pertaining to [the/each] Vessel to which it is a party. It is hereby expressly agreed that, anything contained herein to the contrary notwithstanding, the Assignor shall remain liable under all charters and contracts pertaining to [the/each] Vessel to which it is a party to perform the obligations assumed by it thereunder, and the Assignee shall have no obligation or liability under any such charter or contract by reason of or arising out of the assignment contained herein, nor shall the Assignee be required to assume or be obligated in any manner to perform or fulfill any obligation of the Assignor under or pursuant to any such charter or contract or to make any payment or make any inquiry as to the nature or sufficiency of any payment received by the Assignee, or, unless and until indemnified to its satisfaction, to present or file any claim or to take any other action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled hereunder or pursuant hereto at any time or times. 5. Requisition. The Assignor shall promptly notify the Assignee in writing of the commencement and termination of any period during which [the/any] Vessel may be requisitioned. 6. Employment of Vessel[s]. The Assignor hereby further covenants and undertakes promptly to furnish the Assignee with all such information as it may from time to time require regarding the employment, position and engagements of [the/any] Vessel. 7. Negative Pledge. The Assignor does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the Earnings and other moneys and claims hereby assigned to anyone other than the Assignee, and it will not take or omit to take any action, the taking or omission of which might result in an alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment; and the Assignor does hereby irrevocably appoint and constitute the Assignee as the Assignor's true and lawful attorney-in-fact with full power (in the name of the Assignor or otherwise) should an Event of Default have occurred and be continuing to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys assigned hereby, to endorse any checks or other instruments or orders in connection therewith, to file any claims or take any action or institute any proceedings which the Assignee may deem to be necessary or advisable in the premises and to file any and all Uniform Commercial Code financing statements or renewals thereof in connection with this Assignment which the Assignee may deem to be necessary or advisable in order to perfect or maintain the security interest granted hereby. 8. Application of Proceeds. All moneys collected or received from time to time by the Assignee pursuant to this Assignment shall be dealt with as provided in the Indenture. 3 9. Further Assurances. The Assignor agrees that at any time and from time to time, upon the written request of the Assignee, the Assignor will promptly and duly execute and deliver any and all such further instruments and documents as the Assignee may deem desirable in obtaining the full benefits of this Assignment and of the rights and powers herein granted. 10. Remedies Cumulative and Not Exclusive; No Waiver. Each and every right, power and remedy herein given to the Assignee shall be cumulative and shall be in addition to every other right, power and remedy of the Assignee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Assignee, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by the Assignee in the exercise of any right or power or in the pursuance of any remedy accruing upon any breach or default by the Company or the Assignor or any other Guarantor or Pledgor shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Assignee of any security or of any payment of or on account of any of the amounts due from the Company or the Assignor or any other Guarantor or Pledgor to the Assignee and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach or default not completely cured thereby. 11. Invalidity. If any provision of this Assignment shall at any time for any reason be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Assignment, or the validity of this Assignment as a whole, which shall remain in full force and effect. In the event that it should transpire that by reason of any law or regulation, or by reason of a ruling of any court, or by any other reason whatsoever, the assignment herein contained is either wholly or partly defective, the Assignor hereby undertakes to furnish the Assignee with an alternative assignment or alternative security and/or to do all such other acts as, in the sole opinion of the Assignee, shall be required in order to ensure and give effect to the full intent of this Assignment. The powers and authorities granted to the Assignee and its successors or assigns herein have been given for valuable consideration and are hereby declared to be irrevocable. 12. Continuing Security. It is declared and agreed that the security created by this Assignment shall be held by the Assignee as a continuing security for the payment of all moneys which may at any time and from time to time be or become payable by the Assignor or the Company pursuant to the Indenture and that the security so created shall not be satisfied by an intermediate payment or satisfaction of any part of the amount hereby secured and that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Assignee for all or any part of the moneys hereby secured. 4 13. Waiver; Amendment. None of the terms and conditions of this Assignment may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Assignee and the Assignor. 14. Termination. If the Assignor shall pay and discharge all of its obligations under or in connection with the Indenture or is released therefrom in accordance with the terms thereof, all of the right, title and interest herein assigned shall revert to the Assignor and this Assignment shall terminate. 15. WAIVER OF JURY TRIAL. EACH OF THE ASSIGNOR, AND BY ITS ACCEPTANCE HEREOF, THE ASSIGNEE, HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS ASSIGNMENT, THE INDENTURE OR THE SECURITY AGREEEMENTS TO WHICH THEY ARE PARTY THEREIN DESCRIBED, ANY AMENDMENTS THERETO, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 16. Notices. Notices and other communications hereunder shall be in writing and may be sent by facsimile as follows: If to the Assignor: [ASSIGNOR] [ADDRESS] Attention: [NAME]. Facsimile: [NUMBER] with copy to: Seward & Kissel LLP One Battery Park Plaza New York, New York 10004 Attention: Lawrence Rutkowski, Esq. Facsimile: 212-480-8421 If to the Assignee: Manufacturers and Traders Trust Company Corporate Trust Department Mail Code 101-591 25 South Charles Street Baltimore, Maryland 21201-1643 Attention: Robert D. Brown Facsimile: 410-244-4236 With copy to: Ober, Kaler, Grimes & Shriver 120 East Baltimore Street Baltimore, Maryland 21202 Attention: Patrick Cameron, Esq. Facsimile: 443-263-7540 5 or to such other address as either party shall from time to time specify in writing to the other. Any notice sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter. Every notice or other communication shall, except so far as otherwise expressly provided by this Assignment, be deemed to have been received (provided that it is received prior to 2 p.m. New York time; otherwise it shall be deemed to have been received on the next following Business Day) in the case of a facsimile on the date of dispatch thereof (provided further that if the date of dispatch is not a Business Day in the locality of the party to whom such notice or demand is sent, it shall be deemed to have been received on the next following Business Day in such locality), and in the case of a letter, at the time of receipt thereof. 17. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of New York. 18. Headings. In this Assignment, Section headings are inserted for convenience of reference only and shall be ignored in the interpretation hereof. IN WITNESS WHEREOF, the Assignor has caused this Assignment to be executed on the day and year first above written. By__________________________ [NAME] [TITLE] 6 SCHEDULE 1
Official Gross Net Vessel Name Number Length Breadth Depth Tons Tons - ----------- -------- ------ ------- ----- ----- ---- mts mts mts
7 EXHIBIT 1 EARNINGS ASSIGNMENT NOTICE TO: TAKE NOTICE: (a) that by an Assignment of Earnings dated the [DAY] day of [MONTH], 2004 made by us (the "Assignor") to MANUFACTURERS AND TRADERS TRUST COMPANY (the "Assignee"), we, the owner of the [NATIONALITY] flag vessels [VESSEL NAME], Provisional Patente No. [NUMBER] (the "Vessels"), have assigned to the Assignee as from the date thereof all our right, title and interest in and to: (i) any moneys whatsoever payable to us under any bareboat, time or voyage charter, contract of affreightment or other contract for the use or employment of the Vessels, all freight, hires, passage monies and all other rights and benefits whatsoever accruing to us thereunder, including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by any charterer or other party thereto of any such bareboat, time or voyage charter, contract of affreightment or other contract for the use or employment of the Vessels; and (ii) all freights, passage moneys, hire moneys or other compensation payable to us in the event of the requisition of the Vessels for title or hire, remuneration for salvage and towage services, demurrage and detention moneys and any other earnings whatsoever due or to become due to us arising from the use or employment of the Vessels; as security for that indenture dated as of November 24, 2004, (as at any time amended or modified, the "Indenture") among the Assignor, certain other Guarantors named therein, the Pledgors named therein, the Assignee and Ultrapetrol (Bahamas) Limited. (b) that you are hereby irrevocably authorized and instructed to pay as from the date hereof all of such aforesaid moneys to the Assignee, for the account of Ultrapetrol (Bahamas) Limited (Account No. [NUMBER]) at the above address of the Assignee (or at such other place as the Assignee may direct). DATED THIS [DAY] day of [MONTH], 2004 By____________________________ Name: Title: 2 EX-10.4 42 y04808exv10w4.txt ESCROW AGREEMENT EXHIBIT 10.4 EXECUTION COPY ESCROW AND PLEDGE AGREEMENT, dated as of November 24, 2004 (the "Agreement"), between ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation (the "Company"), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as Escrow Agent (the "Escrow Agent"). This Agreement is being entered into in connection with (i) the Purchase Agreement (the "Purchase Agreement"), dated November 24, 2004, among the Company, the Subsidiary Guarantors (as named therein), the Pledgors (as named therein) and Credit Suisse First Boston LLC, as the Initial Purchaser, and (ii) the Indenture (the "Indenture"), dated as of November 24, 2004, among the Company, the Subsidiary Guarantors (as named therein), the Pledgors (as named therein) and Manufacturers and Traders Trust Company ("MT&T"), as trustee (MT&T or any successor trustee, the "Trustee"). Pursuant to the Purchase Agreement, the Company is selling (the "Offering") $180,000,000 in aggregate principal amount of its 9% First Preferred Ship Mortgage Notes Due 2014 (the "Securities"). Concurrently with the closing of such sale, the Company will deposit with the Escrow Agent as hereinafter provided, approximately $30.0 million of the net proceeds thereof. Such funds will be used (a) to purchase additional Vessels and pay for certain delivery, maintenance and repair costs as set forth herein or (b) to fund the Special Mandatory Redemption and for no other purposes other than as set forth herein. Accordingly, the Company and the Escrow Agent agree as follows: 1. Definitions. Capitalized terms used but not defined herein have the respective meanings specified in the Indenture. In addition, the following terms shall have the following meanings when used herein: "Escrow Account" means an account established by the Escrow Agent in the name of "Manufacturers and Traders and Trust Company," as Escrow Agent for the Company. "Initial Deposit" means an amount of cash equal to $30,000,000.00. "Permitted Investments" means (i) Treasury Securities; (ii) investments in time deposits, certificates of deposit or money market deposits maturing within 90 days of the date of acquisition thereof, entitled to U.S. Federal deposit insurance for the full amount thereof or issued by a bank or trust company which is organized under the laws of the United States or any state thereof having capital and surplus in excess of $500 million; (iii) any proprietary money-market funds of MT&T or any of its subsidiaries for which funds it or one of its affiliates serves as investment advisor or to which it provides other services and receives compensation therefor or any other non-proprietory money market mutual funds of investment grade; or (iv) any other Temporary Cash Investment; provided, however, that no investment bearing a maturity date shall mature later than the Special Mandatory Redemption Date. "Special Mandatory Redemption" means the redemption on January 30, 2006 (the "Special Mandatory Redemption Date"), by the Company of Securities at a redemption price of 101% of the principal amount of the Securities, plus accrued and unpaid interest to the redemption date, in the event the amount of cash and the fair market value (as determined by the Board of Directors in good faith) of all Permitted Investments the Escrow Account exceeds $1.0 million after the close of business on December 31, 2005. "Treasury Securities" means debt obligations issued or guaranteed by Page 1 the government of the United States of America or any agency thereof for which the full faith and credit of the United States of America is pledged to secure payment in full at maturity and which are not redeemable at the option of the issuer prior to maturity. 2. Delivery and Acceptance of Escrowed Property. (a) (i) On the date hereof, the Escrow Agent shall establish the Escrow Account into which the Escrow Agent will, concurrently with the execution and delivery hereof, deposit the Initial Deposit received from the Company. (ii) The Company may, concurrently with such cash deposit, deliver to the Escrow Agent (A) a written confirmation or sales order for delivery to the Escrow Account which sets forth the cost of Permitted Investments to be acquired by the Company and their principal amount at maturity, if applicable, and (B) irrevocable instructions directing the Escrow Agent to release some or all of the cash constituting the Initial Deposit to the seller of such Permitted Investments in an amount equal to the purchase price thereof against delivery of such Treasury Securities. (b) The Initial Deposit, together with the interest, dividends and distributions thereon, less any amounts released pursuant to the terms of this Agreement, shall from time to time constitute the "Escrowed Property." The Escrow Agent further agrees to invest any portion of the Escrowed Property represented by cash in Permitted Investments as directed in writing from time to time by the Company. Any funds received by the Escrow Agent for which the Company has not given written investment instructions shall be invested in an interest bearing Permitted Investment at a non-United States (i.e., offshore) financial institution or mutual fund selected by the Escrow Agent in his sole discretion. (c) The obligation and liability of the Escrow Agent to make the payments and transfers required by this Agreement shall be limited to the Escrowed Property and any other moneys on deposit with it pursuant to this Agreement. The Escrow Agent shall not be liable for any loss resulting from any investment made pursuant to this Agreement in compliance with the provisions hereof. 3. Disbursement of Escrowed Property. (a) On any date (a "Release Date"), the Escrow Agent will release Escrowed Property to or at the order of the Company, provided that the Escrow Agent shall have received a written request in the form of Exhibit A hereto (the "Release Certificate") from the Company, signed by two Officers of the Company, at least 5 Business Days prior to such Release Date, and provided that the following conditions have been satisfied, in the reasonable judgment of the Escrow Agent, prior to or simultaneous with the release of Escrowed Property: (i) If the Company proposes to consummate on the date of the release of the Requested Amount, one or more Acquisition Contracts in connection with the acquisition of one or more additional Vessels, the Escrow Agent shall have received: (A)(1) fully executed mortgage releases and satisfaction documents (the "Release Documents") from the holders of any existing indebtedness with respect to such additional Vessels, which Release Documents shall be in appropriate form for recording or registration in the appropriate governmental offices, as to which the Escrow Agent shall be entitled to rely on the Opinion of Counsel (as defined below) to the Company described in clause (iv) below and (2) evidence satisfactory to the Escrow Agent to the effect that any existing indebtedness had been, or will be, repaid as of such Date; (B) fully executed mortgages and related deeds of covenant, if required, and fully executed related assignments of insurance, assignments Page 2 of time charter and assignments of freights and hires, all substantially in the form of Exhibit D hereto (the "Security Agreements") with respect to each such additional Vessel, dated the date such additional Vessel is to be tendered to the Trustee which Security Agreements shall be in appropriate form for recording a registration in the appropriate governmental offices if required by applicable law in order to perfect the security interest therein created, as to which the Escrow Agent shall be entitled to rely on the Opinion of Counsel to the Company described in clause (iv) below; (C) original certificates representing the Capital Stock of the Restricted Subsidiary acquiring such additional Vessel of which the Company or a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record and beneficial owner (unless such Restricted Subsidiary is already a Subsidiary Guarantor), together with an Officers' Certificate in the form of Exhibit B hereto; (D) copies, certified to be true and complete by an Officer of the Company, of one or more fully executed Acquisition Contracts covered by such Release Certificate; (E) copies, certified to be true and complete by an Officer of the Company, of any Charters related to such additional Vessels; (F) the report of an insurance broker required by Section 3(U)(viii) of the form mortgage or deed of covenant attached hereto as part of Exhibit D, with respect to insurance policies maintained in respect of each such additional Vessel, which report shall include loss payable clauses substantially in the form set forth in Schedule 1 to the assignments of insurances attached hereto as part of Exhibit D; (G) with respect to oceangoing vessels, a classification certificate, dated as of a date not more than 30 days prior to the Release Date, from a classification society with respect to each such additional Vessel; (H) a Guarantee Agreement executed by the owner of such additional Vessel as a new Subsidiary Guarantor (if not already a Subsidiary Guarantor), substantially in the form of Exhibit F hereto; and (I) written appraisals by two independent Appraisers of the value of such additional Vessel as of a date within 90 days prior to such Release Date. (ii) If such Release Request is made in connection with the execution (but not the consummation) of one or more Acquisition Contracts in respect of one or more additional Vessels, the Escrow Agent shall have received: (A) copies, certified to be true and complete by an Officer of the Company, of one or more fully executed Acquisition Contracts covered by such Release Requests; (B) a fully executed Officers' Certificate of the Company substantially in the form of Exhibit B hereto; (C) to the extent available, copies, certified to be true and complete by an Officer of the Company, of any Charters related to the additional Vessels, to the extent such Charters will continue after consummation of the Acquisition Contracts: (iii) If such Release Request is made in connection with, or within six months after, the acquisition of an additional Vessel with Escrowed Property, for the purpose of necessary maintenance, repair (including structural modifications) or drydocking expenses in relation to such vessel, the Escrow Agent shall have received Page 3 (A) a fully executed Officers' Certificate of the Company substantially in the form of Exhibit B hereto; (B) all invoices or written estimates of the cost of such maintenance, repair or drydocking expenses in relation to the additional Vessel; (iv) The Escrow Agent shall have received one or more signed opinions of counsel substantially in the form of Exhibit E hereto with such changes as may be necessary to conform to the legal requirements of the relevant jurisdiction (the "Opinion of Counsel"); and (v) The Escrow Agent shall have received any other documents or certificates reasonably requested by the Escrow Agent to establish that the conditions described in Section 3(a) have been complied with in all material respects. (b) Notwithstanding paragraph 3(a) above, if the Escrow Agent receives a notice from the Trustee or otherwise becomes aware that a Default or Event of Default has occurred and is continuing, the Escrow Agent will not release any Escrowed Property to the Company unless and until the Escrow Agent receives a notice from the Trustee that such Default or Event of Default, as the case may be, is not continuing or has been waived in accordance with the terms of the Indenture. 4. Disbursement of Escrowed Property in Connection with Special Mandatory Redemption. If the Escrow Agent receives notice or otherwise becomes aware that the Securities have become subject to the Special Mandatory Redemption pursuant to paragraph 6 of the Securities and Article 3 of the Indenture, the Escrow Agent shall (i) liquidate all Escrowed Property then held by it not later than the third Business Day prior to the Special Mandatory Redemption Date and (ii) release all the Escrowed Property to the Paying Agent on the Special Mandatory Redemption Date. To the extent that, after the close of business on December 31, 2005, the amount of cash and the fair market value (as determined by the Board of Directors in good faith) of securities (including the Permitted Investments) on deposit in the Escrow Account with the Escrow Agent is equal to or less than $1.0 million, such cash and Permitted Investment will be promptly released to the Company, free of any lien of the Indenture or the Escrow Agreement, and the Escrow Agreement will be terminated. 5. Disbursement of Escrowed Property upon the Occurrence of Remedies Trigger Event. (a) If the Escrow Agent receives a notice from the Trustee that the principal of and interest on the Securities then outstanding have become immediately due and payable pursuant to Section 6.02 of the Indenture (an "Acceleration Event") and such acceleration is not rescinded on or prior to the earlier of five Business Days after receipt of such notice and the Special Mandatory Redemption Date (a "Remedies Trigger Event"), the Escrow Agent will liquidate all Escrowed Property then held by it in accordance with paragraph (b) below. (b) Upon the occurrence and during the continuance of a Remedies Trigger Event (so long as the acceleration related thereto has not been rescinded), but not otherwise, the Escrow Agent may, without notice except as specified below, sell the Escrowed Property or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Escrow Agent's offices or elsewhere, for cash, on credit or for future delivery, upon such terms as the Escrow Agent may determine to be commercially reasonable, and the Escrow Agent, the Trustee or any holder of the Securities may be the purchaser of any or all of the Escrowed Property so sold and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind. The Company agrees that, to the extent notice of sale shall be required by Page 4 law, at least 2 Business Days' notice to the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Escrow Agent shall not be obligated to make any sale of Escrowed Property regardless of notice of sale having been given. The Escrow Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Escrow Agent shall incur no liability as a result of the sale of the Escrowed Property, or any part thereof, at any private sale conducted in a commercially reasonable manner. The Company hereby waives any claims against the Escrow Agent arising by reason of the fact that the price at which any Escrowed Property may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Escrow Agent accepts the first offer received and does not offer such Escrowed Property to more than one offeree. (c) Upon the occurrence and during the continuance of a Remedies Trigger Event (so long as the acceleration related thereto has not been rescinded), any cash held by the Escrow Agent as Escrowed Property and all cash proceeds received by the Escrow Agent in respect of any sale of, collection from, or other realization upon, all or any part of the Escrowed Property pursuant to Section 5(b), shall be released by the Escrow Agent to the Paying Agent for payment to the holders of the Securities. (d) This Agreement shall create a continuing Lien on the Escrowed Property that shall (i) remain in full force and effect until the earlier of (A) the payment in full of the Securities and the other Obligations and (B) the release of all Escrowed Property in accordance with the provisions of this Agreement, (ii) be binding upon the Company and its successors and assigns and (iii) enure to the benefit of the Escrow Agent, the holders of the Securities and their respective successors, transferees and assigns. 6. Security Interest in Favor of Escrow Agent; Escrowed Property. (a) To secure the full and punctual payment when due and the full and punctual performance of all amounts that may be payable from time to time under the Indenture, the Security Agreements and the Securities, the Company hereby grants to the Escrow Agent, for the benefit of the Escrow Agent, the Trustee and the holders of the Securities, a security interest in all its right, title and interest in and to the following, other than such of the following which are released from the Lien of this Agreement pursuant to Section 3 hereof: (i) the Initial Deposit and all certificates or instruments representing any of the Permitted Investments; and (ii) all interest, dividends, cash, instruments and other property and proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing. (b) Any and all cash, certificates or instruments representing or evidencing the Escrowed Property shall be delivered to and held by or on behalf of the Escrow Agent and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Escrow Agent. The Escrow Agent shall have the right, at any time after the occurrence and during the continuance of an Event of Default, in its discretion and without notice to the Company, to transfer to or to register in the name of the Escrow Agent or any of its nominees any or all the Escrowed Property. In addition, the Escrow Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Escrowed Property for certificates or instruments of different denominations. (c) The Company hereby represents and warrants with respect to any Escrowed Property: Page 5 (i) it is the legal and beneficial owner of the Escrowed Property and has full corporate power, authority and legal right to pledge all the Escrowed Property; and (ii) the pledge pursuant to Section 6(a) made in accordance with the terms of the Indenture creates a valid and perfected first priority Lien on the Escrowed Property securing the payment and performance of all amounts that may be payable from time to time under the Indenture, the Security Agreements and the Securities. (d) The Company agrees that at any time and from time to time, at the expense of the Company, the Company will promptly execute and deliver all further instruments and documents and take all further action that may be necessary or that the Escrow Agent may reasonably request in order to perfect and protect any Lien granted or purported to be granted hereby or to enable the Escrow Agent to exercise and enforce its rights and remedies hereunder with respect to any Escrowed Property. (e) (i) The Escrow Agent shall be entitled to receive and retain as collateral in the Escrow Account all interest and dividends paid and distributions made in respect of the Permitted Investments. Any such interest or dividends shall, if received by the Company, be received in trust for the benefit of the Escrow Agent, be segregated from the other property or funds of the Company and be forthwith delivered to the Escrow Agent as collateral in the same form as so received (with any necessary endorsement). (ii) As long as no Event of Default shall have occurred and be continuing and until written notice thereof from the Escrow Agent to the Company, the Company shall be entitled to exercise any and all voting and other consensual rights relating to Permitted Investments or any part thereof for any purpose; provided, however, that no vote shall be cast, and no consent, waiver or ratification given or action taken, which would be inconsistent with or violate any provision of this Agreement, the Indenture, the Security Agreements or the Securities. (iii) Upon the occurrence and during the continuance of an Event of Default, all rights of the Company to exercise the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 6(e)(ii) shall cease upon notice from the Escrow Agent to the Company and upon the giving of such notice all such rights shall thereupon be vested in the Escrow Agent who shall thereupon have the sole right to exercise such voting and other consensual rights. (iv) In order to permit the Escrow Agent to exercise the voting and other consensual rights which it may be entitled to exercise pursuant to Section 6(e)(iii), and to receive all interest, dividends and distributions which it may be entitled to receive under Section 6(e)(i), the Company shall, if necessary, upon written request from the Escrow Agent, from time to time execute and deliver to the Escrow Agent such instruments as the Escrow Agent may reasonably request. (f) The Company hereby appoints the Escrow Agent as the Company's attorney-in-fact, with full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in the Escrow Agent's discretion but only after the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Escrow Agent may deem necessary or advisable in order to accomplish the purposes of this Section 6, including to receive, endorse and collect all instruments made payable to the Company representing any dividend, interest payment or other distribution in respect of the Escrowed Property or any part thereof and to give full discharge for the same. This power, being coupled with an interest, is irrevocable. Page 6 (g) If the Company fails to perform any agreement contained in this Section 6, the Escrow Agent may itself (but shall not be obligated to) perform, or cause performance of, such agreement, and the expenses of the Escrow Agent incurred in connection therewith shall be payable by the Company under Section 7. (h) Upon the release of any Escrowed Property to or upon the order of the Company pursuant to Section 3, such Escrowed Property shall be delivered to or upon the order of the Company, free and clear of any and all interests of the Escrow Agent, the Trustee and the holders of the Securities. (i) The Company shall comply with (i) TIA ss. 314(b), relating to Opinions of Counsel regarding the Lien of this Agreement and (ii) TIA ss. 314(d), relating to the release of Escrowed Property from the Lien of this Agreement and Officers' Certificates or other documents regarding fair value of the Escrowed Property, to the extent such provisions are applicable. Any certificate or opinion required by TIA ss. 314(d) may be executed and delivered by an Officer of the Company to the extent permitted by TIA ss. 314(d). 7. Compensation and Indemnity. The Company shall pay to the Escrow Agent from time to time reasonable compensation for its services. The Company shall reimburse the Escrow Agent upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Escrow Agent's agents, counsel, accountants and experts. The Company shall indemnify the Escrow Agent and hold it harmless from and against any and all damages, suits, actions, loss, liability or expense (including reasonable attorneys' fees) incurred by it in connection with the administration of this Agreement and the performance of its duties hereunder, including adequate advances against costs that may be incurred by it. The Escrow Agent shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Escrow Agent to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Escrow Agent may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Escrow Agent through the Escrow Agent's own wilful misconduct, negligence or bad faith. The indemnification provisions of this Section 7 shall survive the termination of this Agreement. To secure the Company's payment obligations in this Section, the Escrow Agent shall have a security interest in the Escrowed Property pursuant to Section 6. 8. Modifications, Waivers and Amendments. The Escrow Agent shall not be bound by any modification, amendment, termination (except as provided in Section 11 hereof), cancelation, rescission or supercession of this Agreement unless the same shall be in writing and signed by the parties hereto, and, if its rights, duties, immunities or indemnities as Escrow Agent are affected thereby, unless it shall have given its prior written consent thereto. This Agreement may not be modified or amended or terminated (except as provided in Section 11 hereof) without the prior written consent of holders of all the Notes (except as permitted without such consent pursuant to the Indenture). 9. Concerning the Escrow Agent. (a) The Escrow Agent shall exercise the same degree of care toward the Escrowed Property as it exercises toward its own similar property and shall not be held to any higher standard of care under this Agreement, nor be deemed to owe any fiduciary duty to the Company. (b) The Escrow Agent may act upon any instrument or other writing believed by it in good faith to be genuine and to have been signed or presented by the proper person, and shall not be liable to any party hereto in connection Page 7 with the performance of its duties hereunder, except for its own negligence, wilful misconduct or bad faith. The duties of the Escrow Agent shall be determined only with reference to this Agreement and applicable laws, and the Escrow Agent is not charged with any knowledge of or any duties or responsibilities in connection with any other document or agreement. If in doubt as to its duties and responsibilities hereunder, the Escrow Agent may consult with counsel of its choice and shall be protected in any action taken or omitted in good faith in connection with the advice or opinion of such counsel. (c) The Escrow Agent may execute any of its powers or responsibilities hereunder and exercise any rights hereunder either directly or by or through its agents or attorneys. (d) Nothing in this Agreement shall be deemed to impose upon the Escrow Agent any duty to qualify to do business or to act as agent or otherwise in any jurisdiction other than the State of Maryland. (e) The Escrow Agent shall not be responsible for and shall not be under a duty to examine into or pass upon the validity, binding effect, execution or sufficiency of this Agreement, any agreement amendatory or supplemental hereto or of any certificates delivered to it hereunder. (f) The Escrow Agent makes no representation as to the validity, value, genuineness or collectability of any security or other document or instrument held by or delivered to it. (g) The Escrow Agent shall not be called upon to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder. (h) The Escrow Agent shall have the right at any time to resign hereunder by giving written notice of its resignation to the Company at the address set forth herein or at such other address as the Company shall provide, at least 60 days prior to the date specified for such resignation to take effect. Upon the effective date of such resignation, all cash and other payments and all other property then held by the Escrow Agent hereunder shall be delivered by it to a successor escrow agent. If no successor escrow agent is appointed, the Escrow Agent may apply to a court of competent jurisdiction for such appointment. (i) In the event that the Escrow Agent should at any time be confronted with inconsistent claims or demands to the Escrowed Property, the Escrow Agent shall have the right, but not the duty, to interplead the parties in any court of competent jurisdiction and request that such court determine the respective rights of the parties with respect to the Escrowed Property. In the event the Escrow Agent no longer holds any Escrowed Property, it shall be released from any obligation or liability as a consequence of any such claims or demands. 10. Notices. All notices required to be given hereunder shall be in writing and shall be deemed given when received at the following addresses until such time as the parties hereto designate a different or additional address or addresses: To the Company: Ultrapetrol (Bahamas) Limited c/o H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas Page 8 with a copy to: Ravenscroft Shipping Inc. 3251 Ponce de Leon Blvd. Coral Gables, FL 33134 Attention of: Leonard Hoskinson To the Escrow Agent: Manufacturers and Traders Trust Company Corporate Trust Administration 25 South Charles Street Baltimore, MD 21201 Attention of: Robert D. Brown Facsimile: 410-244-4236 11. Miscellaneous. (a) This Agreement sets forth exclusively the duties of the Escrow Agent with respect to any and all matters pertinent hereto and no implied duties or obligations shall be read into this Agreement against the Escrow Agent. (b) This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. (c) This Agreement shall terminate when all Escrowed Property has been disbursed pursuant to Section 3, 4 or 5, or if the Securities and the other Obligations shall be repaid in full or the Company has exercised either its covenant defeasance or legal defeasance option in accordance with the terms of the Indenture and thereafter the Escrow Agent shall have no further obligation or liability hereunder. (d) This Agreement shall be governed by the laws of the State of New York. (e) By the execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed CT Corporation System (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement that may be instituted in any federal or state court in the State of New York, Borough of Manhattan or brought by the Escrow Agent (whether in its individual capacity or in its capacity as Escrow Agent under this Agreement), and acknowledges that CT Corporation System has accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon CT Corporation System and written notice of said service to the Company shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of CT Corporation System in full force and effect so long as this Agreement shall be in full force and effect. Page 9 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above. ULTRAPETROL (BAHAMAS) LIMITED By: /s/ Leonard J. Hoskinson ------------------------ Name: Leonard J. Hoskinson Title: Secretary MANUFACTURERS AND TRADERS TRUST COMPANY, as Escrow Agent, By: /s/ Robert D. Brown ------------------- Name: Robert D. Brown Title: Vice President Page 10 EXHIBIT A to Escrow Agreement [Form of Release Certificate] Manufacturers and Traders Trust Company Corporate Trust Administration 25 South Charles Street Baltimore, MD 21201 Attention of Robert D. Brown [Date] Ultrapetrol (Bahamas) Ltd. Escrow and Pledge Agreement Release Certificate Dear Sirs: Reference is made to that Escrow and Pledge Agreement, dated as of November 24, 2004 between you, as Escrow Agent, and the undersigned (the "Escrow Agreement"). Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Escrow Agreement or the Indenture, as the case may be. As of the date hereof, to the knowledge of the undersigned, no Default or Event of Default under the Indenture dated as of November 24, 2004 has occurred and is continuing. The undersigned hereby requests that Escrowed Property in an amount equal to $__________ (the "Requested Amount") be released to the undersigned (or pursuant to the undersigned's further written instructions) on [ ], which date is not less than 5 days after the date hereof. "Release Request 1": [This Release Request is being made in connection with the execution of an Acquisition Contract to acquire a Vessel or Vessels and (i) such Acquisition Contract has been signed by the applicable seller, is in full force and effect as of the date of the Release Certificate and the signers of the Release Certificate are not aware of any default thereunder by the Company or the applicable seller, (ii) the Requested Amount does not exceed 90.9% of the amount required to pay a deposit to the applicable seller, or to pay other pre-delivery expenses, in each case called for by the Acquisition Contract, and (iii) the balance of the cash needed to pay such deposit will come from one or more sources other than from the Incurrence of Indebtedness or the proceeds of an Asset Sale.] Page 11 "Release Request 2": [This Release Request is being made in connection with the acquisition of a Vessel or Vessels pursuant to an Acquisition Contract and release of Requested Amount, and (i) the Requested Amount made pursuant to any Release Request 2 together with any amounts previously released pursuant to any Release Request 1 with respect to the acquisition of such Vessel or Vessels does not exceed 90.9% of the sum of the amounts payable to the applicable seller pursuant to the Acquisition Contract plus the related transaction costs incurred by the Company, including the reasonable fees and expenses of counsel, (ii) the Vessel or Vessels proposed to be acquired pursuant to the Acquisition Contract will have an Appraised Value, as of a date not more than 30 days prior to the acquisition date of such Vessel or Vessels, of at least 110% of the aggregate amount of Escrowed Proceeds used (pursuant to all Release Requests (as defined below) made in respect of such Vessel or Vessels) to acquire or repair such Vessel or Vessels, and (iii) the balance of the cash needed to acquire and repair such Vessel or Vessels will come from one or more sources other than the Incurrence of Indebtedness or the proceeds of an Asset Sale.] "Release Request 3": [This Release Request is being in connection with, or within six months after, the acquisition of a Vessel by the Company with Escrowed Proceeds, (i) the Company has undertaken or is undertaking necessary maintenance, repair (including structural modifications) or drydocking expenses, including survey expenses, relating to such Vessel, (ii) the Requested Amount does not exceed 90.9% of the amount of such expenses, and (iii) the balance of the cash needed to perform such maintenance and repair such Vessel or Vessels will come from one or more sources other than the Incurrence of Indebtedness or the proceeds of an Asset Sale.] The Release Request 1, Release Request 2 and Release Request 3 are collectively referred to as the "Release Requests". Very truly yours, ULTRAPETROL (BAHAMAS) LIMITED, by ----------------------------------- Name: Title: by ----------------------------------- Name: Title: Page 12 EXHIBIT B to Escrow Agreement Form of Officers' Certificate for Release Date This certificate is being delivered pursuant to Section 3(a) of the Escrow and Pledge Agreement dated as of November 24, 2004 (the "Escrow Agreement"), between Ultrapetrol (Bahamas) Limited (the "Company") and Manufacturers and Traders Trust Company, as Escrow Agent (the "Escrow Agent"). Capitalized terms used but not defined herein have the meanings given such terms in the Escrow Agreement or the Indenture, as the case may be. The Company hereby certifies through the undersigned officers that: 1. [The Company and the applicable seller have executed the following Acquisition Contracts or other sale and purchase contracts to acquire an additional Vessel(s): Ship Name: Seller: Deposit Amount: Purchase Price: Appraised Value:] [The Company has undertaken or is undertaking [necessary maintenance, repair or drydocking expenses relating to an additional Vessel]: Ship Name: Cost of [Maintenance][Conversion]: [The Company is required to pay [a deposit] [pre-delivery expenses] called for by the Acquisition Contract]: Ship Name: Cost of [Deposit] [Pre-Delivery Expenses]: 2. All conditions precedent in the Escrow Agreement for the release of Escrowed Property on the Release Date have been satisfied or will be satisfied concurrently with the release of the Escrowed Property described below in paragraph 7. 3. The Company, or a Wholly Owned Subsidiary that is a Subsidiary Guarantor of either of them as the case may be, is the record and beneficial owner of the Pledged Shares, free and clear of any Lien, except for the Lien created by the Indenture. 4. The Company directs that the following amounts be released from the Escrow Account to the following parties by wire transfer as provided below or, if no wire transfer instructions are provided, by check to the parties indicated (any amounts described below to be paid to the undersigned represent reimbursements of amounts previously paid by the undersigned in satisfaction of deposit amounts payable to the applicable seller(s) in respect of one or more Acquisition Contracts listed in paragraph 1 above):
Name Amount Wire Instructions - ---- ------ -----------------
IN WITNESS WHEREOF, Ultrapetrol (Bahamas) Limited, through the undersigned officers, has signed this Certificate this day of , . ULTRAPETROL (BAHAMAS) LIMITED, by ----------------------------------- Name: Title: by ----------------------------------- Name: Title: Page 13 EXHIBIT C [INTENTIONALLY OMITTED] Page 14 EXHIBIT D to Escrow Agreement [Forms of Security Agreements] [To be provided by Seward & Kissel] Page 15 EXHIBIT E to Escrow Agreement Form of Opinion of Counsel This opinion is being delivered pursuant to Section 3(a) of the Escrow and Pledge Agreement dated as of November 24, 2004 (the "Escrow Agreement"), between Ultrapetrol (Bahamas) Limited (the "Company") and Manufacturers and Traders Trust Company, as Escrow Agent (the "Escrow Agent"). Capitalized terms used but not defined herein have the meanings given such terms in the Escrow Agreement or the Indenture, as the case may be. We are of opinion that: 1. All conditions precedent in the Escrow Agreement to the release of Escrowed Property on the date hereof have been satisfied in all material respects or will be satisfied in all material respects immediately after the release of the Escrowed Property as described in the Officers' Certificate delivered pursuant to Section 3(a) of the Escrow Agreement. 2. [If this opinion is being delivered in respect of a new Subsidiary Guarantor, add--] The Guarantee Agreement constitutes a valid and legally binding obligation of the Guarantor party thereto, enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 3. The applicable Subsidiary Guarantor is a corporation validly existing and in good standing under the laws of [ ], and has all requisite corporate and legal right, power and authority to own its vessel and to transact the business it purports to transact. The applicable Subsidiary Guarantor has all requisite corporate and legal right, power and authority to execute and deliver the Security Agreements, Charters and the Guarantee Agreement, if applicable, to which it is a party and to consummate the transactions contemplated thereby and to perform its obligations thereunder. 4. Neither the execution and delivery and performance of the Security Agreements relating to each additional Vessel, which Security Agreements, if required by applicable law in order to perfect the security interests therein created, are in appropriate form for recording or registration in the appropriate governmental offices, will not result in a breach or Page 16 violation of any of the terms and provisions of, or constitute a default under, any statute, rule, regulation or order of any New York or Federal governmental agency or body or any court having jurisdiction over the Company or any Subsidiary of the Company or any of their respective properties, or to our knowledge, or any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject. 5. Neither the execution and delivery of the Security Agreements or Guarantee Agreement nor performance thereof nor the consummation of the transactions contemplated thereby will result in any violation of or be in conflict with or constitute a default under any term or provision of (i) the Articles of Incorporation or By-laws of the applicable Subsidiary Guarantor or (ii)(a) to our knowledge, any term or provision of any agreement, indenture, mortgage instrument or license that is material to the applicable Subsidiary Guarantor or (b) any statute, law, governmental rule, regulation or ordinance or order of any court, arbitrator or governmental authority and, in the case of each (a) and (b), applicable to it or its properties or assets, or result in the creation of (or impose any obligation on the applicable Subsidiary Guarantor to create) any Lien (other than the Lien of the Indenture and the Lien of the applicable mortgage) upon any of the properties or assets of the applicable Subsidiary Guarantor pursuant to any such term or provision. 6. The applicable Subsidiary Guarantor has, by all necessary corporate and shareholder action, duly authorized the execution and delivery of, and the performance of its obligations under each of the Security Agreements relating to each additional Vessel to which the Company or a Subsidiary Guarantor is a party, each Guarantee Agreement, if applicable, and each Charter to which a Subsidiary Guarantor is a party. 7. Subject to the consummation of the transactions herein described the applicable Subsidiary Guarantor has title of record to the additional Vessel free and clear of any Liens (as defined in the Indenture) of record, except for the lien of the related Mortgage and Permitted Liens. 8. The Guarantee Agreement has been duly authorized, executed and delivered by the applicable Subsidiary Guarantor. 9. All filing, registration and recording fees required in connection with any Security Agreement relating to each additional Vessel or other fees necessary to assure the validity, effectiveness and priority of any liens, charges and encumbrances created thereby have been paid. 10. No authorization, consent, license, permission, permit or approval (including exchange control approval) of or action by, and no notice to or filing with, any governmental authority or regulatory body is required for the execution, delivery and performance of any of the Security Agreements or the Guarantee Agreements by the respective parties thereto and no such authorization, consent, license, permission, permit, approval, action, notice or filing is required for the exercise by the Trustee of the rights and remedies granted to it under any of the Security Agreements, except for the filing and registration of the Mortgages in the office of the applicable flag jurisdiction. 11. Upon the recording of the Mortgages in the office of the applicable flag jurisdiction, each Mortgage will create of record the first priority mortgage lien covering the related Mortgaged Vessel which it purports to create [subject to standard or customary qualifications]. 12. The security interests created by each Security Agreement (other than the Mortgages) do not require any action to be taken under or pursuant Page 17 to the laws of the appropriate flag jurisdiction in order to create or perfect such security interests or to permit the Trustee to enforce its rights under the Security Agreements creating the same. 13. The choice of New York law to govern the Security Agreements and Guarantee Agreement constitutes a valid choice of law. The submission by the applicable Subsidiary Guarantor to the non-exclusive jurisdiction of any Federal or state court in the Borough of Manhattan, The City of New York (a "New York Court") is a valid submission insofar as the appropriate law is concerned, provided that CT Corporation System has accepted its appointment by the applicable Subsidiary Guarantor as its agent to accept service of process in the United States of America. 14. Neither the applicable Subsidiary Guarantor nor any of its property have any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise). 15. To our knowledge there are no legal or governmental actions, suits or proceedings now pending or threatened against the applicable Subsidiary Guarantor, or to which any of the properties of the applicable Subsidiary Guarantor all subject, except actions, suits and proceedings of the character normally incident to the business conducted by the applicable Subsidiary Guarantor (none of which calls into question the validity or legality of the Security Agreements or Guarantee Agreement or any action taken or to be taken pursuant thereto). 16. In a suit on the events before a court of the jurisdiction of the applicable Subsidiary Guarantor, such court will respect and enforce the agreement of the parties as to judgment currency. 17. No stamp or registration or similar taxes, duties, imposts or other charge are payable in respect of enforcement of the Security Agreements or Guarantee Agreement. Page 18 EXHIBIT F to Escrow Agreement Form of Guarantee Agreement [____] SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of ________, __, among ULTRAPETROL (BAHAMAS) LIMITED, a Bahamas corporation (the "Company"), the guarantors listed on the signature pages hereto (the "Guarantors"), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation (the "Trustee"), to the INDENTURE (the "Indenture") dated as of November 24, 2004 among the Company, the Pledgors, the guarantors named therein (the "Subsidiary Guarantors"), and the Trustee. WHEREAS, Sections 9.01(4), (5) and (8) of the Indenture provide that without the consent of any Securityholder, the Company, the Pledgors, the Subsidiary Guarantors and the Trustee may amend the Indenture to provide additional security for and to add additional Guarantees with respect to the Securities, including Subsidiary Guarantees, or to make any change that does not adversely affect the rights of any Securityholder; WHEREAS, Section 4.12 of the Indenture requires the Company to cause [____] to become a Subsidiary Guarantor, and [____] is hereby agreeing to become a Subsidiary Guarantor; Page 19 WHEREAS, the entry into this Supplemental Indenture by the parties hereto is in all respects authorized by the provisions of the Indenture; and WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company and the Guarantors in accordance with its terms have been done. NOW, THEREFORE, and in consideration of the premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Securityholders, as follows: SECTION 1. [NEW GUARANTOR] hereby agrees to become a Subsidiary Guarantor under the Indenture and, together with each other Subsidiary Guarantor, hereby unconditionally and irrevocably guarantees, jointly and severally, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption, by required repurchase or otherwise, and all other monetary obligations of the Company and the Subsidiary Guarantors under the Indenture and the Securities and of the Subsidiary Guarantors under the Security Agreements and (b) the full and punctual performance within applicable grace periods of all other obligations of the Company and the Subsidiary Guarantors under the Indenture, the Security Agreements and the Securities (all the foregoing being hereinafter collectively called the "Obligations"). Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Guarantor and that such Guarantor will remain bound under the Indenture notwithstanding any extension or renewal of any Obligation. The Guarantor is subject to all the provisions of the Indenture applicable to a Subsidiary Guarantor. SECTION 2. The Indenture, as supplemented and amended by this Supplemental Indenture and all other indentures supplemental thereto, is in all respects ratified and confirmed, and the Indenture, this Supplemental Indenture and all indentures supplemental thereto shall be read, taken and construed as one and the same instrument. SECTION 3. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. SECTION 4. All covenants and agreements in this Supplemental Indenture by the Subsidiary Guarantor shall bind its successors and assigns, whether so expressed or not. SECTION 5. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 6. Nothing in this Supplemental Indenture, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Securityholders any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture. SECTION 7. THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 8. All terms used in this Supplemental Indenture not otherwise defined herein that are defined in the Indenture shall have the meanings set forth therein. Page 20 SECTION 9. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but all of which, when taken together, shall constitute one and the same instrument. SECTION 10. The recitals contained herein shall be taken as statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of the Indenture, this Supplemental Indenture or of the Securities and shall not be accountable for the use or application by the Company of the Securities or the proceeds thereof. IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above. ULTRAPETROL (BAHAMAS) LIMITED, as principal obligor, by ---------------------------------- Name: Title: SUBSIDIARY GUARANTORS: BAYHAM INVESTMENTS S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact BALDWIN MARITIME INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact CAVALIER SHIPPING INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact CORPORACION DE NAVEGACION MUNDIAL S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact DANUBE MARITIME INC., By: Page 21 ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact GENERAL VENTURES INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact imperial maritime ltd. (bahamas) inc., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact KATTEGAT SHIPPING INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact KINGLY SHIPPING LTD., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact MAJESTIC MARITIME LTD., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact MASSENA PORT S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact MONARCH SHIPPING LTD., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact NOBLE SHIPPING LTD., Page 22 By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact OCEANPAR S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact OCEANVIEW MARITIME INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact PARFINA S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact PARKWOOD COMMERCIAL CORP., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact PRINCELY INTERNATIONAL FINANCE CORP., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact REGAL INTERNATIONAL INVESTMENTS S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact RIVERVIEW COMMERCIAL CORP., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact SOVEREIGN MARITIME LTD., Page 23 By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact STANMORE SHIPPING INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact TIPTON MARINE INC., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact ULTRAPETROL INTERNATIONAL S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact ULTRAPETROL S.A., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact UP OFFSHORE (HOLDINGS) LTD., By: ----------------------------- Name: Leonard J. Hoskinson Title: Attorney-in-Fact 539428 Page 24 EX-12.1 43 y04808exv12w1.txt COMPUTATION OF RATIO OR EARNINGS TO FIXED CHARGES . . . EXHIBIT 12.1 STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (stated in thousands of U S dollars)
Year ended December 31, --------------------------------------------------------------------------- 1999 2000 2001 2002 2003 -------------- ------------- ------------- -------------- ------------- Consolidated income (loss) before income tax and minority interest $ -8,291 $ -5,783 $ 2,805 $ -13,571 $ -10,000 Investment in affiliates - 1,646 692 45 -3,140 Interest expense 14,459 16,061 17,113 16,178 (1) 15,622 Amortization of debt issue costs 605 585 585 585 585 -------------- ------------- ------------- -------------- ------------- Earnings 6,773 12,509 21,195 3,237 3,067 ============== ============= ============= ============== ============= Interest expense $ 14,459 $ 16,061 $ 17,113 $ 16,178 $ (1) 15,622 Amortization of debt issue costs 605 585 585 585 585 -------------- ------------- ------------- -------------- ------------- Fixed Charges 15,064 16,646 17,698 16,763 16,207 ============== ============= ============= ============== ============= Ratio of Earnings to Fixed Charges (2) - (2) - 1.2 (2) - (2) - ============== ============= ============= ============== ============= Dollar amount of the coverage deficiency $ 8,291 $ 4,137 $ - $ 13,526 $ 13,140 Nine Pro Forma Months Pro Forma for the Year ended Ended for the Nine Months Period December 31, September 30, September 30, ------------------ ----------------- -------------------------- 2003 2004 2004 ------------------ ----------------- -------------------------- (unaudited) (unaudited) (unaudited) Consolidated income (loss) before income tax and minority interest $ -12,695 $ 12,968 $ 10,948 Investment in subsidiaries 692 -233 -233 Interest expense 19,893 (1) 11,933 13,985 Amortization of debt issue costs 500 407 375 -------------- ----------------- ------------- Earnings 8,390 25,075 25,075 ============== ================= ============= Interest expense $ 19,893 $ (1) 11,933 $ 13,985 Amortization of debt issue costs 500 407 375 -------------- ----------------- ------------- Fixed Charges 20,393 12,340 14,360 ============== ================= ============= Ratio of Earnings to Fixed Charges (2) - 2.0 1.7 ============== ================= ============= Dollar amount of the coverage deficiency $ 12,003 $ - $ -
(1) The interest expense amounts presented in this exhibit do not include the financial gain on exthinguishment of debt amounting $ 1,782 for the year ended December 31, 2003 and $ 1,344 for the nine-months period ended September 30, 2004. (2) In these fiscal years the earnings are inadequate to cover fixed charges. EX-21.1 44 y04808exv21w1.txt LIST OF SUBSIDIARIES . . . EXHIBIT 21.1 ULTRAPETROL (BAHAMAS) LIMITED SCHEDULE B1 - ALL ENTITIES IN WHICH THE COMPANY OWNS AN EQUITY INTEREST
STATE/ COUNTRY OF ENTITY ORGANIZATION PERCENTAGE OF OWNERSHIP -------------------------------------- ----------------- -------------------------------------------- 1 Arlene Investment Inc. Panama 100% - UABL Limited 2 Avemar (Holdings) Bahamas Ltd. Bahamas 100% - Ultrapetrol (Bahamas) Ltd. 3 Baldwin Maritime Inc. Panama 100% - Princely International Finance Corp. 4 Bayham Investments S.A. Panama 100% - Regal International Investments S.A. 5 Blueroad Finance Inc. Panama 100% - UABL Limited 6 Braddock Shipping Inc. Panama 100% - Ultracape International S.A. 7 Cavalier Shipping Inc. Panama 100% - Regal International Investments S.A. 8 Cedarino SL Spain 100% - Corydon International S.A. 9 Corporacion de Navegacion Mundial S.A. Chile 100% - Princely International Finance Corp. 10 Corydon International S.A. Uruguay 100% - UABL Limited 11 Dampierre Holdings Spain S.L. Spain 100% - Massena Port S.A. 12 Danube Maritime Inc. Panama 100% - Princely International Finance Corp. 13 General Ventures Inc. Liberia 100% - Princely International Finance Corp. 14 Imperial Maritime Ltd. Bahamas 100% - Princely International Finance Corp. 15 Imperial Maritime Ltd. (Bahamas) Inc. Panama 100% - Princely International Finance Corp. 16 Internationale Maritime S.A. Bahamas 100% - Ultrapetrol (Bahamas) Ltd. 17 Invermay Shipping Inc. Panama 100% - Ultracape International S.A. 18 Kattegat Shipping Inc. Panama 100% - Ultrapetrol (Bahamas) Ltd. 19 Kingly Shipping Ltd. Bahamas 100% - Princely International Finance Corp. 20 Lonehort S.A. Uruguay 100% - UABL Limited 21 Majestic Maritime Ltd. Bahamas 100% - Ultrapetrol (Bahamas) Ltd. 22 Maritima Sipsa S.A. Chile 49% - Coporacion de Navigacion Mundial 23 Marnave S.R.L. Paraguay 50% - Arlene Investment Inc. 50% - Blueroad Finance Inc. 24 Massena Port S.A. Uruguay 100% - Ultrapetrol (Bahamas) Ltd. 25 Monarch Shipping Ltd. Bahamas 100% - Princely International Finance Corp. 26 Noble Shipping Ltd. Bahamas 100% - Princely International Finance Corp.
ULTRAPETROL (BAHAMAS) LIMITED SCHEDULE B1 - ALL ENTITIES IN WHICH THE COMPANY OWNS AN EQUITY INTEREST
STATE/ COUNTRY OF ENTITY ORGANIZATION PERCENTAGE OF OWNERSHIP -------------------------------------------------- ----------------- -------------------------------------------- 27 Obras Terminales y Servicios S.A. Paraguay 50% - UABL Terminals (Paraguay) S.A. 28 Oceanpar S.A. Paraguay 1% - Princely International Finance Corp. 99% - Dampierre Holdings Spain S.L. 29 Oceanview Maritime Inc. Panama 100% - Princely International Finance Corp. 30 Packet Maritime Inc. Panama 100% - UP Offshore (Panama) S.A. 31 Padow Shipping Inc. Panama 100% - UP Offshore (Panama) S.A. 32 Pampero Navigation Inc. Panama 100% - UP Offshore (Panama) S.A. 33 Parabal S.A. Paraguay 90% - Cedarino S.L. 10% - Thurston Shipping Inc. 34 Parfina S.A. Paraguay 50% - Coporacion de Navigacion Mundial 50% - Dampierre Holdings Spain S.L. 35 Parkwood Commercial Corp. Panama 100% - Ultrapetrol (Bahamas) Ltd. 36 Parque Ecologico Industrial de Altamira S.A. de C.V. Mexico 99.99% - Ultracape Delaware, LLC 37 Princely International Finance Corp. Panama 100% - Ultrapetrol (Bahamas) Ltd. 38 Puertos del Sur S.A. Paraguay 50% - UABL Terminals (Paraguay) S.A. 39 Regal International Investments S.A. Panama 100% - Princely International Finance Corp. 40 Riverpar S.A. Paraguay 2.5% - Thurston Shipping Inc. 97.5% - Cedarino S.L. 41 Riverview Commercial Corp. Panama 100% - Princely International Finance Corp. 42 Sernova S.A. Argentina 0.4% - Thurston Shipping Inc. 99.6% - Cedarino S.L. 43 Sovereign Maritime Ltd. Bahamas 100% - Princely International Finance Corp. 44 Stanmore Shipping Inc. Panama 100% - Ultrapetrol (Bahamas) Ltd. 45 Thurston Shipping Inc. Panama 100% - UABL Limited 46 Tipton Marine Inc. Panama 100% - Princely International Finance Corp. 47 UABL Barges (Panama) Inc. Panama 100% - UABL Limited 48 UABL International S.A. Panama 100% - UABL Limited
ULTRAPETROL (BAHAMAS) LIMITED SCHEDULE B1 - ALL ENTITIES IN WHICH THE COMPANY OWNS AN EQUITY INTEREST
STATE/ COUNTRY OF ENTITY ORGANIZATION PERCENTAGE OF OWNERSHIP -------------------------------- ----------------- ------------------------------------------- 49 UABL Limited Bahamas 50% - UP River (Holdings) Limited 50% - UPB (Panama) Inc. 50 UABL Paraguay S.A. Paraguay 2.5% - Thurston Shipping Inc. 97.5% - Cedarino S.L. 51 UABL S.A. Argentina 3.4% - Thurston Shipping Inc. 96.6% - Cedarino S.L. 52 UABL Terminals (Paraguay) S.A. Panama 100% - Ultrapetrol (Bahamas) Ltd. 53 UABL Terminals Ltd. Bahamas 50% - UP River Terminals (Panama) S.A. 50% - UPB (Panama) Inc. 54 Ultracape (Holdings) Ltd. Bahamas 60% - Ultrapetrol (Bahamas) Ltd. 40% - AIG-GE Capital LAIF LP. 55 Ultracape Delaware, LLC USA 100% - Ultracape (Holdings) ltd. 56 Ultracape International S.A. Panama 100% - Ultracape (Holdings) Ltd. 57 Ultrapetrol International S.A. Panama 100% - Princely International Finance Corp. 58 Ultrapetrol S.A. Argentina 7% - Ocean par S.A. 93% - Dampierre Holdings Spain S.L. 59 UP Offshore (Bahamas) Ltd. Bahamas 27.78% - Ultrapetrol (Bahamas) Ltd. 66.67% - AIG-GE Capital LAIF LP. 5.55% - Comintra Enterprises Ltd. 60 UP Offshore (Holdings) Ltd. Bahamas 100% - Ultrapetrol (Bahamas) Ltd. 61 UP Offshore (Panama) S.A. Panama 100% - UP Offshore (Bahamas) Ltd. 62 UP Offshore Apoio Maritimo Ltda. Brazil 99.99% - UP Offshore (Bahamas) Ltd. 63 UP River (Holdings) Ltd. Bahamas 92.86% - Ultrapetrol (Bahamas) Ltd. 7.14% - International Finance Corp. 64 UP River Terminals (Panama) S.A. Panama 100% - Ultrapetrol (Bahamas) Ltd. 65 UPB (Panama) Inc. Panama 100% - Ultrapetrol (Bahamas) Ltd. 66 Wallasey Shipping Inc. Panama 100% - Ultracape (Holdings) Ltd.
ULTRAPETROL (BAHAMAS) LIMITED SCHEDULE B1 - ALL ENTITIES IN WHICH THE COMPANY OWNS AN EQUITY INTEREST
STATE/ COUNTRY OF ENTITY ORGANIZATION PERCENTAGE OF OWNERSHIP -------------------------------- ----------------- ------------------------------------------- ~~67 Yataity S.A. Paraguay 10% - Thurston Shipping Inc. 90% - Cedarino S.L.~~
EX-23.1 45 y04808exv23w1.txt CONSENT OF INDEPENDENT ACCOUNTING FIRM EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the caption "Experts" and to use of our report dated March 1, 2004 in the Registration Statement (Form F-4) and the related Prospectus of Ultrapetrol (Bahamas) Limited for the registration of $180,000,000 9% First Preferred Ship Mortgage Notes due 2014. /s/ Pistrelli, Henry Martin y Asociados S.R.L., a member of Ernst & Young Global Buenos Aires, Argentina January 24, 2005 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the caption "Experts" and to use of our report dated March 19, 2004 (except Note 20, as to which the date is November 10, 2004) in the Registration Statement (Form F-4) and the related Prospectus of Ultrapetrol (Bahamas) Limited for the registration of $180,000,000 9% First Preferred Ship Mortgage Notes due 2014. /s/ Pistrelli, Henry Martin y Asociados S.R.L., a member of Ernst & Young Global Buenos Aires, Argentina January 24, 2005 EX-23.2 46 y04808exv23w2.txt CONSENT OF DOLL SHIPPING CONSULTANCY EXHIBIT 23.2 Fred Doll Managing Director January 19, 2005 Ultrapetrol (Bahamas) Limited H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, The Bahamas Dear Sirs: Reference is made to the Form F-4 registration statement, as the same may be amended from time to time (collectively, the "Registration Statement"), of Ultrapetrol (Bahamas) Limited (the "Company"), to be filed with the United States Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to the exchange offer of the Company's First Preferred Ship Mortgage Notes due 2014. We hereby consent to (i) the use of the graphical and statistical information supplied by us as set forth in the Registration Statement, including, without limitation, such information set forth under the headings "Industry Overview" and "Industry and Market Data", (ii) the references to our company in the Registration Statement, (iii) the naming of our company as an expert in the Registration Statement, and (iv) the filing of this letter as an exhibit to the Registration Statement to be filed with the United States Securities and Exchange Commission pursuant to the Securities Act. We also hereby agree to execute and deliver such other and further consents as the Company may reasonably request. Very truly yours, /s/ Fred Doll ------------- Fred Doll for DOLL SHIPPING CONSULTANCY EX-25.1 47 y04808exv25w1.txt STATEMENT OF ELIGIBILITY EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an application to determine eligibility of a Trustee pursuant to Section 305(b)(2)__________ MANUFACTURERS AND TRADERS TRUST COMPANY (Exact name of trustee as specified in its charter) New York 16-0538020 (Jurisdiction of incorporation (I.R.S. employer or organization if not a national bank) identification No.) One M&T Plaza Buffalo, New York 14203-2399 (Address of principal executive offices) (Zip Code) Robert D. Brown Vice President Manufacturers and Traders Trust Company 25 South Charles Street Baltimore, Maryland 21201 (410) 244-4238 (Name, address and telephone number of agent of service) ULTRAPETROL (BAHAMAS) LIMITED (Exact name of obligor as specified in its charter) Bahamas (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) H&J Corporate Services Ltd., Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas (Address of principal executive offices) (Zip Code) 9% First Preferred Ship Mortgage Notes due 2014 (Title of indenture securities) ITEM 1. GENERAL INFORMATION Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Superintendent of Banks of the State of New York, One State Street, New York, New York 10004-1417 Federal Reserve Bank of New York, 33 Liberty Street, New York, New York 10045 (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR If the obligor is an affiliate of the trustee, describe each such affiliation. None. [ITEMS 3 THROUGH 15 OMITTED PURSUANT TO GENERAL INSTRUCTION B TO FORM T-1] ITEM 16. LIST OF EXHIBITS Exhibit 1. Organization Certificate of the Trustee as now in effect.* Exhibit 2. Certificate of Authority of the Trustee to commence business (contained in Exhibit 1). Exhibit 3. Authorization of the Trustee to exercise corporate trust powers (contained in Exhibit 1). Exhibit 4. Existing By-Laws of the Trustee.* Exhibit 5. Not Applicable. Exhibit 6. Consent of the Trustee.* Exhibit 7. Report of Condition of the Trustee.* Exhibit 8. Not Applicable. Exhibit 9. Not Applicable. - ----------------- * Filed Herewith 1 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, Manufacturers and Traders Trust Company, a trust company organized and existing under the laws of the State of New York, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Baltimore, and State of Maryland, on the_21st__day of January, 2005. MANUFACTURERS AND TRADERS TRUST COMPANY By: /s/ Robert D. Brown --------------------------------------- Robert D. Brown Vice President 2 EXHIBIT 1 ORGANIZATION CERTIFICATE OF THE TRUSTEE RESTATED ORGANIZATION CERTIFICATE OF MANUFACTURERS AND TRADERS TRUST COMPANY UNDER SECTION 8007 OF THE BANKING LAW The undersigned, being respectively, an Executive Vice President and Chief Financial Officer, and a Vice President and an Assistant Secretary, of Manufacturers and Traders Trust Company, pursuant to Section 8007 of the Banking Law of the State of New York, do hereby restate, certify and set forth as follows: (1) The name of the corporation is Manufacturers and Traders Trust Company. The name under which the corporation was originally incorporated was The Fidelity Trust and Guaranty Company of Buffalo (2) The organization certificate of the corporation was filed in the Office of the Superintendent of Banks of the State of New York on September 13, 1892, and in the Office of the Clerk of Erie County, New York on September 14, 1892, and the certificate of authorization of the Superintendent of Banks of the State of New York was issued on June 27, 1893. A first restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on August 6, 1954. Such restated organization certificate was amended from time to time thereafter. A second restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on February 26, 1991. A third restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on May 22, 1992. (3) The restated organization certificate is hereby further amended by adding a new Article 7 to read as follows: "7. Notwithstanding anything herein or in the Bylaws to the contrary, each of the following provisions of the Bylaws may not be amended, modified or repealed, nor may any Bylaw provisions be adopted that are inconsistent with such provisions, without the unanimous approval of the entire board of directors: - the last proviso of the first sentence of Article II, Section 1, - the entirety of Article II, Section 2(b), - the last proviso of Article IX, Section 1, Exhibit 1 - 1 - the entirety of Article IX, Section 2, and - the entirety of Article X. The provisions of this Article 7 shall automatically terminate without any action on the part of the corporation, the board of directors or the stockholders upon the termination of the foregoing provisions of the Bylaws in accordance with Article IX, Section 2 of the Bylaws." (4) The text of the corporation's organization certificate, as amended heretofore, is hereby restated without further change to read as hereinafter set forth in full: "ORGANIZATION CERTIFICATE OF MANUFACTURERS AND TRADERS TRUST COMPANY ______________________________________________ 1. The name by which the said corporation shall be known is Manufacturers and Traders Trust Company 2. The place where the principal office of the corporation is to be located is the City of Buffalo, County of Erie and State of New York. 3. The amount of the corporation's capital stock is $200,000,000. The number of shares into which such capital stock shall be divided is 5,000,000 common shares of the par value of $40 per share. 4. The number of directors which the corporation shall have shall be not less than seven (7)nor more than thirty (30). 5. The term of existence of the corporation shall be perpetual. 6. The corporation shall exercise the fiduciary powers conferred by Section 100 of the Banking Law, as amended from time to time, in addition to the other powers conferred upon banks and trust companies pursuant to the Banking Law or other applicable law. 7. Notwithstanding anything herein or in the Bylaws to the contrary, each of the following provisions of the Bylaws may not be amended, modified or repealed, nor may any Bylaw provisions be adopted that are inconsistent with such provisions, without the unanimous approval of the entire board of directors: - the last proviso of the first sentence of Article II, Section 1, - the entirety of Article II, Section 2(b), Exhibit 1 - 2 - the last proviso of Article IX, Section 1, - the entirety of Article IX, Section 2, and - the entirety of Article X. The provisions of this Article 7 shall automatically terminate without any action on the part of the corporation, the board of directors or the stockholders upon the termination of the foregoing provisions of the Bylaws in accordance with Article IX, Section 2 of the Bylaws." (5) This restatement of the organization certificate was authorized pursuant to Section 6015 of the Banking Law by the written consent, setting forth the action taken, of the holder of all of the outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, the undersigned have executed, signed and verified this certificate this _6th_day of July, 2004. MANUFACTURERS AND TRADERS TRUST COMPANY By: /s/ MICHAEL P. PINTO -------------------------------------------- Michael P. Pinto Executive Vice President and Chief Financial Officer By: /s/ BRIAN R. YOSHIDA -------------------------------------------- Brian R. Yoshida Vice President and Assistant Secretary Exhibit 1 - 3 STATE OF NEW YORK ) ss.: COUNTY OF ERIE ) Michael P. Pinto and Brian R. Yoshida, being first duly sworn, depose and say that they are respectively, an Executive Vice President and Chief Financial Officer and a Vice President and an Assistant Secretary of Manufacturers and Traders Trust Company, that they have read the foregoing certificate and know the contents thereof and that the statements therein contained are true. /s/ MICHAEL P. PINTO ----------------------------------------------- Michael P. Pinto /s/ BRIAN R. YOSHIDA ----------------------------------------------- Brian R. Yoshida Sworn to before me this 6th day of July, 2004. /s/ TIMOTHY G. McEVOY - --------------------------------- Notary Public Exhibit 1 - 4 EXHIBIT 6 CONSENT OF TRUSTEE Manufacturers and Traders Trust Company hereby consents, in accordance with the provisions of Section 321(b) of the Trust Indenture Act of 1939, that reports of examinations by federal, state, territorial and district authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. MANUFACTURERS AND TRADERS TRUST COMPANY By: /s/ ROBERT D. BROWN -------------------------------------------- Robert D. Brown Vice President Exhibit 6 EXHIBIT 7 REPORT OF CONDITION OF THE TRUSTEE MANUFACTURERS AND TRADERS TRUST COMPANY RESTATED ORGANIZATION CERTIFICATE OF MANUFACTURERS AND TRADERS TRUST COMPANY UNDER SECTION 8007 OF THE BANKING LAW The undersigned, being respectively, a Vice Chairman and Chief Financial Officer, and a Vice President and an Assistant Secretary, of Manufacturers and Traders Trust Company, pursuant to Section 8007 of the Banking Law of the State of New York, do hereby restate, certify and set forth as follows: (1) The name of the corporation is Manufacturers and Traders Trust Company. The name under which the corporation was originally incorporated was The Fidelity Trust and Guaranty Company of Buffalo. (2) The organization certificate of the corporation was filed in the Office of the Superintendent of Banks of the State of New York on September 13, 1892, and in the Office of the Clerk of Erie County, New York on September 14, 1892, and the certificate of authorization of the Superintendent of Banks of the State of New York was issued on June 27, 1893. A first restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on August 6, 1954. Such restated organization certificate was amended from time to time thereafter. A second restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on February 26, 1991. A third restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on May 22, 1992. A fourth restated organization certificate of the corporation was approved and filed in the Office of the Superintendent of Banks of the State of New York on April 1, 2003. (3) The restated organization certificate is hereby further amended by revising Article 1 to read as follows: "1. The name by which the said corporation shall be known is Manufacturers and Traders Trust Company or M&T Bank." (4) The text of the corporation's organization certificate, as amended heretofore, is hereby restated without further change to read as hereinafter set forth in full: "ORGANIZATION CERTIFICATE OF MANUFACTURERS AND TRADERS TRUST COMPANY ______________________________________________ 1. The name by which the said corporation shall be known is Manufacturers and Traders Trust Company or M&T Bank. 2. The place where the principal office of the corporation is to be located is the City of Buffalo, County of Erie and State of New York. 3. The amount of the corporation's capital stock is $200,000,000. The number of shares into which such capital stock shall be divided is 5,000,000 common shares of the par value of $40 per share. 4. The number of directors which the corporation shall have shall be not less than seven (7) nor more than thirty (30). 5. The term of existence of the corporation shall be perpetual. 6. The corporation shall exercise the fiduciary powers conferred by Section 100 of the Banking Law, as amended from time to time, in addition to the other powers conferred upon banks and trust companies pursuant to the Banking Law or other applicable law. 7. Notwithstanding anything herein or in the Bylaws to the contrary, each of the following provisions of the Bylaws may not be amended, modified or 2 repealed, nor may any Bylaw provisions be adopted that are inconsistent with such provisions, without the unanimous approval of the entire board of directors: - the last proviso of the first sentence of Article II, Section 1, - the entirety of Article II, Section 2(b), - the last proviso of Article IX, Section 1, - the entirety of Article IX, Section 2, and - the entirety of Article X. The provisions of this Article 7 shall automatically terminate without any action on the part of the corporation, the board of directors or the stockholders upon the termination of the foregoing provisions of the Bylaws in accordance with Article IX, Section 2 of the Bylaws." __________________________________________________ (5) This restatement of the organization certificate was authorized pursuant to Section 6015 of the Banking Law by the written consent, setting forth the action taken, of the holder of all of the outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, the undersigned have executed, signed and verified this certificate this 6th day of July, 2004. MANUFACTURERS AND TRADERS TRUST COMPANY By: __________________________________________ Michael P. Pinto Vice Chairman and Chief Financial Officer By: __________________________________________ Brian R. Yoshida Vice President and Assistant Secretary 3 STATE OF NEW YORK ) ) SS.: COUNTY OF ERIE ) Michael P. Pinto and Brian R. Yoshida, being first duly sworn, depose and say that they are respectively, an Vice Chairman and Chief Financial Officer and a Vice President and an Assistant Secretary of Manufacturers and Traders Trust Company, that they have read the foregoing certificate and know the contents thereof and that the statements therein contained are true. _______________________________________________ Michael P. Pinto _______________________________________________ Brian R. Yoshida Sworn to before me this 6th day of July, 2004. _________________________________ Notary Public 4 MANUFACTURERS AND TRADERS TRUST COMPANY BYLAWS (AS ADOPTED ON OCTOBER 21, 2003 AND EFFECTIVE AS OF JULY 15, 2003) BYLAWS OF MANUFACTURERS AND TRADERS TRUST COMPANY ARTICLE I MEETINGS OF STOCKHOLDERS SECTION 1. ANNUAL MEETING: The Annual Meeting of Manufacturers and Traders Trust Company ("M&T Bank"), for the election of directors and for transaction of such other business as may be set forth in the notice of meeting, shall be held at the principal office of M&T Bank or at such other place in the City of Buffalo, New York on the third Tuesday of April in each year, or on such date and at such time as the Board of Directors shall determine. SECTION 2. SPECIAL MEETINGS: Special meetings of the stockholders may be called to be held at the principal office of M&T Bank or elsewhere within the State of New York at any time by the Board of Directors or the Chairman of the Board, the Chief Executive Officer or the President, and shall be called by the Chairman of the Board, the Chief Executive Officer, the President, the Corporate Secretary or an Assistant Secretary at the request in writing of five or more members of the Board of Directors, or at the request in writing of the holders of record of at least 25% of the outstanding shares of M&T Bank entitled to vote. Such request shall state the purpose or purposes for which the meeting is to be called. -1- SECTION 3. NOTICE OF MEETINGS: Written notice of each meeting of the stockholders shall be given by depositing in the United States mail, postage prepaid, not less than 10 nor more than 50 days before such meeting, a copy of the notice of such meeting directed to each stockholder of record entitled to vote at the meeting, at the address as it appears on the record of stockholders for each such stockholder, or, if such stockholder shall have filed with the Corporate Secretary of M&T Bank a written request that notices be mailed to some other address, then directed to such other address. The notice shall state the place, date and hour of the meeting, the purpose or purposes for which the meeting is called and, unless it is the annual meeting, indicate that the notice is being issued by or at the direction of the person or persons calling the meeting. If action is proposed to be taken at any meeting which would, if taken, entitle dissenting stockholders to receive payment for their shares, the notice shall include a statement of that purpose and to that effect. At each meeting of stockholders only such business may be transacted which is related to the purpose or purposes set forth in the notice of meeting. SECTION 4. WAIVER OF NOTICE: Whenever under any provisions of these bylaws, the organization certificate, the terms of any agreement or instrument, or law, M&T Bank or the Board of Directors or any committee thereof is authorized to take any action after notice to any person or persons or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of such period of time, if at any time before or after such action is completed the person or persons entitled to such notice or entitled to participate in the action to be taken or, in the case of a stockholder, by such stockholder's attorney-in-fact, submit a signed waiver of notice of such requirements. The attendance of any stockholder at any -2- meeting, in person or by proxy, without protesting prior to the conclusion the lack of notice of such meeting, shall constitute a waiver of notice by such stockholder. SECTION 5. PROCEDURE: At every meeting of stockholders the order of business and all other matters of procedure may be determined by the person presiding at the meeting. SECTION 6. LIST OF STOCKHOLDERS: A list of stockholders as of the record date, certified by the officer of M&T Bank responsible for its preparation or by a transfer agent, shall be produced at any meeting of stockholders upon the request thereat or prior thereto of any stockholder. If the right to vote at any meeting is challenged, the inspectors of election, or person presiding thereat, shall require such list of stockholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be stockholders entitled to vote thereat may vote at such meeting. SECTION 7. QUORUM: At all meetings of the stockholders of M&T Bank a quorum must be present for the transaction of business and, except as otherwise provided by law, a quorum shall consist of the holders of record of not less than a majority of the outstanding shares of M&T Bank entitled to vote thereat, present either in person or by proxy. When a quorum is once present to organize a meeting of the stockholders, it is not broken by the subsequent withdrawal of any stockholders. SECTION 8. ADJOURNMENTS: The stockholders entitled to vote who are present in person or by proxy at any meeting of stockholders, whether or not a quorum shall be present or -3- represented at the meeting, shall have power by a majority vote to adjourn the meeting from time to time without further notice other than announcement at the meeting. At any adjourned meeting at which a quorum shall be present in person or by proxy any business may be transacted that might have been transacted on the original date of the meeting, and the stockholders entitled to vote at the meeting on the original date (whether or not they were present thereat), and no others, shall be entitled to vote at such adjourned meeting. SECTION 9. VOTING; PROXIES: Each stockholder of record entitled to vote shall be entitled at every meeting of stockholders of M&T Bank to one vote for each share of stock having voting power standing in each such stockholder's name on the record of stockholders on the record date fixed pursuant to Section 3 of Article VI of these bylaws. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent without a meeting may do so either in person or by proxy appointed by instrument executed in writing by such stockholder or such stockholder's duly authorized attorney-in-fact and delivered to the secretary of the meeting. No director, officer, clerk, teller or bookkeeper of M&T Bank shall act as proxy at any meeting. No proxy shall be valid after the expiration of 11 months from the date of its execution unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the stockholder executing it except as otherwise provided by law. Directors elected at any meeting of the stockholders shall be elected by a plurality of the votes cast. All other corporate action to be taken by vote of the stockholders shall, except as otherwise provided by law or these bylaws, be authorized by a majority of the votes cast. The vote for directors shall be by ballot, but otherwise the vote upon any question before a meeting shall not be by ballot unless the person -4- presiding at such meeting shall so direct or any stockholder, present in person or by proxy and entitled to vote thereon, shall so demand. SECTION 10. APPOINTMENT OF INSPECTORS OF ELECTION: The Board of Directors may, in advance of any meeting of the stockholders, appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed in advance of the meeting, the person presiding at such meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. In case any inspector appointed fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. No director, officer or candidate for the office of director of M&T Bank shall be eligible to act as an inspector of an election of directors of M&T Bank. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his or her ability. SECTION 11. DUTIES OF INSPECTORS OF ELECTION: The inspectors of election shall determine the number of shares outstanding and entitled to vote, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. -5- ARTICLE II DIRECTORS SECTION 1. NUMBER AND QUALIFICATIONS: Unless otherwise permitted by law, the number of directors of M&T Bank shall be not less than seven (7) nor more than thirty (30), with the exact number to be fixed from time to time by resolution of a majority of the directors, provided that the number of directors shall not be reduced so as to shorten the term of any director at the time in office; and provided, further, that, until the Sunset Date (as defined in Article X hereof), without the consent of the Significant Stockholder (as defined in Article X hereof), the number of directors shall not exceed twenty eight (28). If the number of directors be increased at any time, within the limits above set forth, the vacancy or vacancies in the board arising from such increase shall be filled as provided in Section 4 of this Article II. Each such vacancy, and each reduction in the number of directors, shall be reported to the Superintendent of Banks in the manner prescribed by law. All of the directors shall be of full age, and at least one-half of them shall be citizens of the United States at the time of their election and during their continuance in office, unless otherwise permitted by law. No more than one-third of the directors shall be active officers or employees of M&T Bank. SECTION 2. ELECTION AND TENURE OF OFFICE: (a) Except as otherwise provided by law or these bylaws, each director of M&T Bank shall be elected at an annual meeting of the stockholders or at any meeting of the stockholders held in lieu of such annual meeting, which meeting, for the purposes of these bylaws, shall be deemed the annual meeting, and shall hold office until the next annual meeting of stockholders -6- and until his or her successor has been elected and qualified. Each person who shall be elected a director of M&T Bank shall, before participating in any manner as a director of M&T Bank, qualify in the manner prescribed by law and take and subscribe the oath prescribed by law. (b) Notwithstanding anything herein to the contrary: (i) for so long as the Significant Stockholder holds at least fifteen percent (15%) of the outstanding shares of common stock of M&T Bank Corporation, the board of directors shall nominate and recommend for election as directors of M&T Bank four (4) persons designated by the Significant Stockholder, each of whom is reasonably acceptable to M&T Bank; (ii) for so long as the Significant Stockholder holds at least ten percent (10%), but less than fifteen percent (15%), of the outstanding shares of common stock of M&T Bank Corporation, the board of directors shall nominate and recommend for election as directors of M&T Bank two (2) persons designated by the Significant Stockholder, each of whom is reasonably acceptable to M&T Bank; (iii) for so long as the Significant Stockholder holds at least five percent (5%), but less than ten percent (10%), of the outstanding shares of common stock of M&T Bank Corporation, the board of directors shall nominate and recommend for election as a director of M&T Bank one (1) person designated by the Significant Stockholder, who is reasonably acceptable to M&T Bank. (iv) For purposes of determining the number of outstanding shares of common stock of M&T Bank Corporation for purposes of this Article II, Section 2(b), there shall be used the number of shares of common stock of M&T Bank Corporation disclosed as outstanding on the cover page of M&T Bank Corporation's most recently filed Annual Report on Form 10-K or Report on Form 10-Q, as the case may be, or the number of shares of common stock of M&T -7- Bank Corporation actually outstanding as of a later date, if requested by M&T Bank or the Significant Stockholder, determined on the same basis as the number of shares disclosed on such Reports. Any share held by any direct or indirect subsidiary of the Significant Stockholder of which the Significant Stockholder holds 80% or more of the outstanding equity capital or voting shares shall be deemed held by the Significant Stockholder. In the event that the transaction that would result in the Significant Stockholder's holdings being below any threshold set forth herein is a transaction that gives rise to an Issuance Event (as defined in Article X hereof), no diminution in the percentage of the outstanding shares of common stock of the Corporation held by the Significant Stockholder shall be deemed to have occurred until the earlier of such time as the Significant Stockholder gives written notice that it shall not exercise its Maintenance Rights (as defined in Article X hereof) or the deadline for exercise of such Maintenance Rights has passed without the Significant Stockholder having provided notice that it shall exercise the same. No diminution in the percentage of outstanding shares of common stock held by the Significant Stockholder shall be deemed to have occurred as a result of any issuance of shares that is subject to the Corporation's repurchase obligations under Section 7.2(c) or Section 7.2(e) of the Reorganization Agreement. In the event that the Significant Stockholder's holdings decrease to less than fifteen percent (15%), but not less than twelve percent (12%), of the outstanding common stock, the Significant Stockholder's holdings shall be deemed to be equal to fifteen percent (15%) for all purposes of the definition of Sunset Date and of this Article II, Section 2(b), unless, not later than one year from the date on which the Significant Stockholder's holdings decreased to less than fifteen percent (15%), the Significant Stockholder's holdings have not been restored to at least fifteen percent (15%) of the outstanding shares of common stock of M&T Bank Corporation. -8- (v) In the event that M&T Bank objects to any designee for board service on the grounds that such designee is not "reasonably acceptable" under any provision of this Article II, Section 2(b), M&T Bank shall fully cooperate and shall use best efforts to work with the Significant Stockholder to promptly resolve any such objection so that such designee may as promptly as practicable serve in the capacity for which he or she has been designated or, in the alternative, to promptly identify a substitute candidate that is reasonably acceptable, in order to give effect to the intention of the M&T Bank and the Significant Stockholder regarding board representation contemplated by this Article II, Section 2(b). SECTION 3. RESIGNATION: Any director of M&T Bank may resign at any time by giving his or her resignation to the Chairman of the Board, the Chief Executive Officer, the President or the Corporate Secretary. Such resignation shall take effect at the time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 4. VACANCIES: Except as set forth in Article II, Section 2(b) or as hereinafter provided, all vacancies in the office of director shall be filled by election by the stockholders entitled to vote at any meeting of the stockholders notice of which shall have referred to the proposed election. Subject to Article II, Section 2(b), vacancies not exceeding one-third of the entire board may be filled by the affirmative vote of a majority of the directors then in office, and the directors so elected shall hold office for the balance of the unexpired term; or two vacancies may, with the consent of the Superintendent of Banks of the State of New York, be left unfilled until the next annual election. Each vacancy in the office of director and each election by the -9- Board of Directors to fill any such vacancy shall be reported to the Superintendent of Banks in the manner provided by law. SECTION 5. DIRECTORS' FEES: Directors, except salaried officers of M&T Bank who are directors, may receive a fee for their services as directors and traveling and other out-of-pocket expenses incurred in attending any regular or special meeting of the board. The fee may be a fixed sum for attending each meeting of the Board of Directors or a fixed sum paid monthly, quarterly, or semiannually, irrespective of the number of meetings attended or not attended. The amount of the fee and the basis on which it shall be paid shall be determined by resolution of the Board of Directors. SECTION 6. MEETINGS OF DIRECTORS: A regular meeting of the Board of Directors shall be held at least six times each year, provided that during any three consecutive calendar months the board shall meet at least once. The first meeting of the Board of Directors after each annual meeting of the stockholders shall be held immediately after the adjournment of such annual meeting and shall constitute the regular meeting of the Board of Directors for the month in which such first meeting is held. The Board of Directors shall, from time to time, designate the place, date and hour for the holding of regular meetings but, in the absence of any such designation, regular meetings of the Board of Directors shall be held at the principal office of M&T Bank in the City of Buffalo, New York, at 11:00 o'clock a.m., on the third Tuesday of each January, February, April, July, September and October. No notice need be given of such regular meetings except such notice as these bylaws or the Board of Directors by resolution may require. Special meetings of the Board of Directors shall be held at such times and at such places as the Board of -10- Directors or the Chairman of the Board, the Chief Executive Officer or the President, and shall also be held upon the request of any 4 directors made in writing to the Chairman of the Board, the Chief Executive Officer or the President. SECTION 7. NOTICE OF SPECIAL MEETINGS OF THE BOARD OF DIRECTORS: Notice of each special meeting of the Board of Directors stating the time and place thereof, shall be given by the Chairman of the Board, the Chief Executive Officer, the President, the Corporate Secretary, or an Assistant Secretary, or by any member of the board to each member of the board not less than 3 days before the meeting by depositing the same in the United States mail, postage prepaid, addressed to each member of the board at his or her residence or usual place of business, or not less than 1 day before the meeting by telephoning or by delivering the same to each member of the board personally, or by sending the same by facsimile or electronic mail to his or her residence or usual place of business. Notice of a meeting need not be given to any director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him or her. The notice of any special meeting of the Board of Directors need not specify the purpose or purposes for which the meeting is called, except as provided in Article IX of these bylaws. SECTION 8. QUORUM: At all meetings of the Board of Directors, except as otherwise provided by law or these bylaws, a quorum shall be required for the transaction of business and shall consist of not less than one-third of the entire board, and the vote of a majority of the directors present shall decide any question which may come before the meeting. A majority of -11- the directors present at any meeting, although less than a quorum, may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. SECTION 9. MEETINGS BY CONFERENCE TELEPHONE: Any one or more members of the Board of Directors or any committee thereof may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting. SECTION 10. PROCEDURE: The order of business and all other matters of procedure at every meeting of directors may be determined by the person presiding at the meeting. SECTION 11. THE CHAIRMAN OF THE BOARD: The Board of Directors shall annually, at the first meeting (the "Annual Reorganization Meeting") of the board after the Annual Meeting of Stockholders, appoint or elect from its own number a Chairman of the Board who shall have such authority and perform such duties as the Board of Directors or the Executive Committee may from time to time prescribe. The Chairman of the Board shall, unless otherwise determined by the Board of Directors, hold office until the first meeting of the board following the next Annual Meeting of Stockholders and until his or her successor has been elected or appointed and qualified. SECTION 12. THE VICE CHAIRMEN OF THE BOARD: The Board of Directors shall annually, at the Annual Reorganization Meeting of the board after the Annual Meeting of -12- Stockholders, appoint or elect from its own number one or more Vice Chairmen of the Board who shall have such authority and perform such duties as the Board of Directors or the Executive Committee may from time to time prescribe. The Vice Chairmen of the Board shall, unless otherwise determined by the Board of Directors, hold office until the first meeting of the board following the next Annual Meeting of Stockholders and until their successors have been elected or appointed and qualified. The Board of Directors shall elect a non-executive Vice Chairman of the Board who will perform the duties of "lead outside director." ARTICLE III COMMITTEES SECTION 1. EXECUTIVE COMMITTEE: The Board of Directors shall, by resolution adopted by a majority of the entire board, designate from among its members an Executive Committee consisting of five or more directors. The Board of Directors may designate one or more directors as alternate members of the Executive Committee, who may replace any absent member or members of the Executive Committee at any meeting thereof. In the interim between meetings of the Board of Directors, the Executive Committee shall have all the authority of the Board of Directors except as otherwise provided by law. All acts done and powers and authority conferred by the Executive Committee from time to time within the scope of its authority shall be, and may be deemed to be, and may be certified as being, the act and under the authority of the Board of Directors. The Chief Executive Officer, or the Chairman of the Board in the absence of the Chief Executive Officer, shall preside at all meetings of the Executive Committee. The Executive -13- Committee shall elect from its members a chairman to preside at any meeting of the Executive Committee at which the Chief Executive Officer and the Chairman of the Board shall be absent. Four members of the Executive Committee shall constitute a quorum for the transaction of business. SECTION 2. EXAMINING COMMITTEE: The Board of Directors shall, by resolution adopted by a majority of the entire board, designate from among its members an Examining Committee consisting of not less than 3 directors to examine fully the books, papers and affairs of M&T Bank, and the loans and discounts thereof, as provided by law. The Examining Committee shall have the power to employ such assistants as it may deem necessary to enable it to perform its duties. SECTION 3. OTHER COMMITTEES: The Board of Directors may from time to time, by resolution or resolutions, appoint or provide for one or more other committees consisting of such directors, officers, or other persons as the board may determine. Each committee, to the extent provided in said resolution or resolutions, shall have such powers and functions in the management of M&T Bank as may be lawfully delegated by the Board of Directors in the interim between meetings of the board. Each committee shall have such name as may be provided from time to time in said resolution or resolutions, and shall serve at the pleasure of the Board of Directors. SECTION 4. MINUTES OF MEETINGS OF COMMITTEES: The Executive Committee, the Examining Committee, and each other committee shall keep regular minutes of its proceedings -14- and report the same to the Board of Directors at the next meeting thereof, or as soon thereafter as may be practicable under the circumstances. SECTION 5. FEES TO MEMBERS OF COMMITTEES: Members of committees, except salaried officers of M&T Bank who are members of committees, may receive a fee for their services as members of committees and traveling and other out-of-pocket expenses incurred in attending any regular or special meeting of a committee. The fee may be a fixed sum for attending each committee meeting or a fixed sum paid monthly, quarterly, or semiannually, irrespective of the number of meetings attended or not attended. The amount of the fee and the basis on which it shall be paid shall be determined by resolution of the Board of Directors. ARTICLE IV OFFICERS SECTION 1. OFFICERS: The Board of Directors shall annually, at the Annual Reorganization Meeting of the board after the Annual Meeting of Stockholders, elect from its own number a Chief Executive Officer and a President, and appoint or elect one or more Vice Presidents, a Corporate Secretary, a Treasurer, an Auditor, and such other officers as it deems necessary and appropriate. At the Annual Reorganization Meeting, the Board of Directors shall also reelect all of the then officers of M&T Bank until the next Annual Reorganization Meeting. In the interim between Annual Reorganization Meetings, the Board of Directors or the Executive Committee may also from time to time elect or appoint a Chief Executive Officer, a President or -15- such additional officers to the rank of Vice President, including (without limitation as to title or number) one or more Vice Presidents, Administrative Vice Presidents, Senior Vice Presidents and Executive Vice Presidents, and any other officer positions as they deems necessary and appropriate; and, the head of the Human Resources Department of M&T Bank or his or her designee or designees, may appoint officers below the rank of Vice President, including (without limitation as to title or number) one or more Banking Officers, Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Auditors. Each such person elected or appointed by the Board of Directors, the Executive Committee, or the head of the Human Resources Department of M&T Bank or his or her designee or designees, in between Annual Reorganization Meetings shall, unless otherwise determined by the Board or Directors, the Executive Committee or the head of the Human Resources Department of M&T Bank or his or her designee or designees, hold office until the next Annual Reorganization Meeting. SECTION 2. TERM OF OFFICE: The Chief Executive Officer, the President, each Vice President, the Corporate Secretary, the Treasurer, and the Auditor shall, unless otherwise determined by the Board of Directors, hold office until the first meeting of the board following the next annual meeting of stockholders and until their successors have been elected and qualified. Each additional officer appointed or elected by the Board of Directors, or by the Executive Committee, shall hold office for such term as shall be determined from time to time by the Board of Directors or the Executive Committee. Any officer, however, may be removed at any time by the Board of Directors, or his or her authority suspended by the Board of Directors, with or without cause. If the office of any officer becomes vacant for any reason, the Board of Directors shall have the power to fill such vacancy. -16- SECTION 3. THE CHIEF EXECUTIVE OFFICER: The Chief Executive Officer shall preside at all meetings of the stockholders and of the Board of Directors. The Chief Executive Officer shall, under control of the Board of Directors and the Executive Committee, have the general management of M&T Bank's affairs and shall exercise general supervision over all activities of M&T Bank. The Chief Executive Officer shall have the power to appoint or hire, to remove, and to determine the compensation of, all employees of M&T Bank who are not officers. SECTION 4. THE PRESIDENT: The President, subject to the control and direction of the Board of Directors and the Chief Executive Officer, shall have immediate supervision over the business, affairs, and properties of M&T Bank, shall have and exercise general authority with respect thereto, shall perform all duties and exercise all powers generally incident to this office and shall perform such additional duties and be vested with such additional powers as shall be assigned from time to time by the Board of Directors, the Executive Committee, and if he is not the Chief Executive Officer, by such officer. In the absence or incapacity of the Chairman of the Board, the President shall have the powers and exercise the duties of the Chairman of the Board, including the powers of Chief Executive Officer if the Chairman of the Board is the Chief Executive Officer. SECTION 5. THE VICE PRESIDENTS: The Vice Presidents shall have such powers and perform such duties as may be assigned to them respectively by the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or the President. Any one or more individuals may be designated by the Board of Directors as "Executive Vice President," "Senior Vice President," "Administrative Vice President" or "Vice President," or by -17- such other title or titles as the Board of Directors may determine. In the absence or incapacity of both the Chairman of the Board, the Chief Executive Officer and the President, the Vice Presidents shall exercise the powers and perform the duties of those officers in such order of precedence as shall be determined by the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or the President. SECTION 6. THE CORPORATE SECRETARY AND ASSISTANT SECRETARIES: The Corporate Secretary shall issue notices of all meetings of stockholders, the Board of Directors and the Executive Committee, where notices of such meetings are required by law or these bylaws. He or she shall attend all meetings of stockholders, the Board of Directors and the Executive Committee and keep the minutes thereof in proper books provided for that purpose. He or she shall affix the corporate seal to and sign such instruments as require the seal and his or her signature and shall perform such other duties as usually pertain to this office or as are properly required by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. The Assistant Secretaries may, in the absence or disability of the Corporate Secretary or at his or her request, perform the duties and exercise the powers of the Corporate Secretary, and shall perform such other duties as the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall prescribe. SECTION 7. THE TREASURER AND ASSISTANT TREASURERS: The Treasurer shall keep permanent records of the assets and liabilities and of all matters and transactions bearing upon -18- the financial affairs of M&T Bank. He or she shall, whenever required by the Board of Directors, present a statement of the business of M&T Bank, a balance sheet thereof as of the end of the last preceding month or such other date as may be so required. He or she shall make and sign such reports, statements and instruments as may be required by the Board of Directors or the President or by law and shall perform such other duties as usually pertain to this office or as are properly required by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. The Assistant Treasurers may, in the absence or disability of the Treasurer or at his or her request, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall prescribe. SECTION 8. THE AUDITOR: The Auditor shall be responsible to the Chair of the Examining Committee and, through the Examining Committee, to the Board of Directors for the safety of all operations and for the systems of internal audits and protective controls; he or she shall perform such other duties as the Chairman of the Board, the Chief Executive Officer or the President may prescribe and shall make such examinations and reports as may be required by the directors' Examining Committee. He or she shall have the duty to report to the Chairman of the Board, the Chief Executive Officer and the President on all matters concerning the safety of the operations of M&T Bank which he or she deems advisable or which the Chairman of the Board, the Chief Executive Officer or the President may request. In addition, the Auditor shall have the duty of reporting independently of all officers of M&T Bank to the directors' Examining Committee -19- whenever he or she deems it necessary or desirable to do so, but in any event not less often than annually on all matters concerning the safety of the operations of M&T Bank. The Assistant Auditors may, in the absence or disability of the Auditor, or at his or her request, perform the duties and exercise the powers of the Auditor, and shall perform such other duties as the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall prescribe. SECTION 9. OTHER OFFICERS: All other officers that may be elected or appointed by the Board of Directors, the Executive Committee or the head of the Human Resources Department of M&T Bank or his or her designee or designees shall exercise such powers and perform such duties as the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer or the President shall prescribe, except as the law may otherwise require. SECTION 10. OFFICERS HOLDING TWO OR MORE OFFICES: Any two or more offices may be held by the same person, except the offices of President and Corporate Secretary. No officer shall execute or verify any instrument in more than one capacity if such instrument be required by law or otherwise to be executed or verified by any two or more officers. SECTION 11. DUTIES OF OFFICERS MAY BE DELEGATED: In case of the absence or disability of any officer of M&T Bank, or in case of a vacancy in any office or for any other reason that the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President may deem sufficient, the Board of Directors, the Chairman of the Board, the Chief Executive Officer -20- or the President, except as otherwise provided by law or these bylaws, may delegate, for the time being, the powers or duties of any officer to any other officer or to any director. SECTION 12. COMPENSATION OF OFFICERS: The Nomination, Compensation and Governance Committee of the Board of Directors of M&T Bank Corporation shall, through appropriate consultation with the Board of Directors, determine the compensation and benefits of the Chief Executive Officer and other executive officers of M&T Bank. In the event and to the extent that the Nomination, Compensation and Governance Committee shall not hereafter exercise its discretionary power in respect of all other officers, the compensation to be paid to all other officers shall be determined by the Chief Executive Officer. SECTION 13. SPECIAL POWERS: The Chairman of the Board, the Vice Chairmen of the Board, the Chief Executive Officer, the President, any Vice President, any Assistant Vice President, any Banking Officer, the Corporate Secretary, any Assistant Secretary, and the Treasurer shall each have power and authority: To sign, countersign, certify, issue, assign, endorse, transfer and/or deliver notes, checks, drafts, bills of exchange, certificates of deposit, acceptances, letters of credit, advices for the transfer or payment of funds, orders for the sale and for delivery of securities, guarantees of signatures, and all other instruments, documents and writings in connection with the business of M&T Bank in its corporate or in any trust or fiduciary capacity; -21- To sign the name of M&T Bank and affix its seal, or cause the same to be affixed, to deeds, mortgages, satisfactions, assignments, releases, proxies, powers of attorney, trust agreements, and all other instruments, documents or papers necessary for the conduct of the business of M&T Bank, either in its corporate capacity or in any trust or fiduciary capacity; To endorse, sell, assign, transfer and deliver any stocks, bonds, mortgages, notes, certificates of interest, certificates of indebtedness, certificates of deposit and any evidences of indebtedness or of any rights or privileges which now are or may hereafter be held by or stand in the name of M&T Bank, either in its corporate capacity, or in any fiduciary or trust capacity, and to execute proxies, powers of attorney or other authority with respect thereto; To accept on behalf of M&T Bank any guardianship, receivership, executorship or any general or special trust specified in the Banking Law of the State of New York; To authenticate or certificate any bonds, debentures, notes, or other instruments issued under or in connection with any mortgage, deed of trust or other agreement or instrument under which M&T Bank is acting as trustee or in any other fiduciary capacity; -22- To sign, execute and deliver certificates, reports, checks, orders, receipts, certificates of deposit, interim certificates, and other documents in connection with its duties and activities as registrar, transfer agent, disbursing agent, fiscal agent, depositary, or in any other corporate fiduciary capacity. The powers and authority above conferred may at any time be modified, changed, extended or revoked, and may be conferred in whole or in part on other officers and employees by the Board of Directors or the Executive Committee. SECTION 14. BONDS: The Board of Directors may require any officer, agent or employee of M&T Bank to give a bond to M&T Bank, conditional upon the faithful performance of his or her duties, with one or more sureties and in such amount as may be satisfactory to the Board of Directors. ARTICLE V INDEMNIFICATION OF DIRECTORS AND OFFICERS SECTION 1. RIGHT OF INDEMNIFICATION: Each director and officer of M&T Bank, whether or not then in office, each director and officer of a subsidiary that M&T Bank directly or indirectly owns more than 50% of the voting securities of, whether or not then in office, and any person whose testator or intestate was such a director or officer, shall be indemnified by M&T Bank for the defense of, or in connection with, any threatened, pending or completed actions or -23- proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by the Banking Law of the State of New York or other applicable law, as such law now exists or may hereafter be amended; provided, however, that M&T Bank shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by such a director or officer only if such action or proceeding (or part thereof) was authorized by the Board of Directors. SECTION 2. ADVANCEMENT OF EXPENSES: Expenses incurred by a director or officer in connection with any action or proceeding as to which indemnification may be given under Section 1 of this Article V may be paid by M&T Bank in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such director or officer to repay such advancement in the event that such director or officer is ultimately found not to be entitled to indemnification as authorized by this Article V and (b) approval by the Board of Directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the Board of Directors or, if applicable, the stockholders, shall not be required under this Section 2, to find that the director or officer has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding. SECTION 3. AVAILABILITY AND INTERPRETATION: To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in this Article V (a) shall be available with respect to events occurring prior to the adoption of this Article V, (b) shall continue to exist after any recision or restrictive amendment of this Article V with respect -24- to events occurring prior to such recision or amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if M&T Bank and the director or officer for whom such rights are sought were parties to a separate written agreement. SECTION 4. OTHER RIGHTS: The rights of indemnification and to the advancement of expenses provided in this Article V shall not be deemed exclusive of any other rights to which any such director, officer or other person may now or hereafter be otherwise entitled whether contained in the organization certificate, these bylaws, a resolution of stockholders, a resolution of the Board of Directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in this Article V shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such director, officer or other person in any such action or proceeding to have assessed or allowed in his or her favor, against M&T Bank or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof. SECTION 5. SEVERABILITY: If this Article V or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Article V shall remain fully enforceable. -25- ARTICLE VI CAPITAL STOCK SECTION 1. CERTIFICATES OF STOCK: The shares of stock of M&T Bank shall be represented by certificates which shall be numbered and shall be entered in the books of M&T Bank as they are issued. Each stock certificate shall when issued state the name of the person or persons to whom issued and the number of shares and shall be signed by the Chairman of the Board, the Chief Executive Officer or the President or a Vice President and by the Corporate Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and shall be sealed with the seal of M&T Bank or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by M&T Bank with the same effect as if he were such officer at the date of its issue. No certificate of stock shall be valid until countersigned by a transfer agent if M&T Bank has a transfer agent, or until registered by a registrar, if M&T Bank has a registrar. SECTION 2. TRANSFERS OF SHARES: Shares of stock shall be transferable on the books of M&T Bank by the holder thereof, in person or by duly authorized attorney, upon the surrender of the certificate representing the shares to be transferred, properly endorsed. M&T Bank shall be entitled to treat the holder of record of any share or shares of stock as the owner thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice -26- thereof, save as specifically provided by the laws of the State of New York. The Board of Directors, to the extent permitted by law, shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock and may appoint one or more transfer agents and registrars of the stock of M&T Bank. SECTION 3. FIXING OF RECORD DATE: The Board of Directors may fix, in advance, a day and hour not more than 50 days nor less than 10 days before the date on which any meeting of stockholders is to be held, as the time as of which stockholders entitled to notice of and to vote at such meeting and at all adjournments thereof shall be determined; and, in the event such record date and time is fixed by the Board of Directors, no one other than the holders of record on such date and time of stock entitled to notice of or to vote at such meeting shall be entitled to notice of or to vote at such meeting or any adjournment thereof. If a record date and time shall not be fixed by the Board of Directors for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders, stockholders of record at the close of business on the day next preceding the day on which notice of such meeting is given, and no others, shall be entitled to notice of and to vote at such meeting or any adjournment thereof. The Board of Directors may fix, in advance, a day and hour, not exceeding 50 days preceding the date fixed for the payment of a dividend of any kind or the allotment of any rights, as the record time for the determination of the stockholders entitled to receive any such dividend or rights, and in such case only stockholders of record at the time so fixed shall be entitled to receive such dividend or rights. -27- SECTION 4. RECORD OF STOCKHOLDERS: M&T Bank shall keep at its office in the State of New York, or at the office of its transfer agent or registrar in this state, a record containing the names and addresses of all stockholders, the number and class of shares held by each and the dates when they respectively became the owner of record thereof. SECTION 5. LOST STOCK CERTIFICATES: The holder of any certificate representing shares of stock of M&T Bank shall immediately notify M&T Bank of any mutilation, loss or destruction thereof, and the Board of Directors may in its discretion cause one or more new certificates for the same number of shares in the aggregate to be issued to such holder upon the surrender of the mutilated certificate, or, in case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction and the deposit of indemnity by way of bond or otherwise in such form and amount and with such sureties or security as the Board of Directors may require to protect M&T Bank against loss or liability by reason of the issuance of such new certificates; but the Board of Directors may in its discretion refuse to issue such new certificates save upon the order of the court having jurisdiction in such matters. ARTICLE VII CORPORATE SEAL SECTION 1. FORM OF SEAL: The seal of M&T Bank shall be circular in form, with the words "Manufacturers and Traders Trust Company" in the margin thereof, and the numerals -28- "1856" and the word "seal" and the numerals "1892" in the center thereof. The seal on any corporate obligation for the payment of money may be facsimile. ARTICLE VIII EMERGENCY OPERATIONS Whenever the provisions of Article 7 of the New York State Defense Emergency Act (L. 1961, c. 654) become operative by reason of an "acute emergency," as defined in said Act, the following provision shall also become operative: 1. If the Chief Executive Officer of M&T Bank shall not be available, his or her powers and authority shall vest in and may be exercised by other officers of M&T Bank in the following order: a. The Chairman of the Board; b. Any Vice Chairman of the Board; c. The President; d. The Executive Vice Presidents in the order of seniority determined by length of service; e. The Senior Vice Presidents in the order of seniority determined by length of service; f. A Vice President selected from and by those Vice Presidents who shall be available. -29- 2. The directors and acting directors present at any meeting held as provided by statute may by resolution alter the foregoing order of succession or designate the person from among the foregoing group who shall act as Chief Executive Officer; provided, however, that the directors and acting directors shall have no power to remove any officer or to fill any vacancy on a permanent basis or to cause M&T Bank to enter into any contract of employment for a term of over one year. 3. The directors and acting directors shall take such action as counsel may advise in order that the normal operations of M&T Bank shall be restored as promptly as practicable. ARTICLE IX AMENDMENTS; TERMINATION SECTION 1. PROCEDURE FOR AMENDING BYLAWS: These bylaws may be added to, amended or repealed at any meeting of stockholders notice of which shall have referred to the proposed action, by the vote of the holders of record of a majority of the outstanding shares of M&T Bank entitled to vote, or at any meeting of the Board of Directors notice of which shall have referred to the proposed action, by the vote of a majority of the Board of Directors; provided, however, that if any bylaw regulating an impending election of directors is adopted or amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting of stockholders for the election of directors the bylaw so adopted or amended or repealed, together with a concise statement of the changes made; and provided further that the last proviso of the first sentence of -30- Article II, Section 1, the entirety of Article II, Section 2(b), the entirety of Article X and this proviso may not be amended, modified or repealed, nor may any Bylaw provisions be adopted that are inconsistent with such provisions, in each case, without the unanimous approval of the entire board of directors. SECTION 2. TERMINATION OF CERTAIN PROVISIONS: Each of the provisions of these Bylaws set forth in the last proviso of Article IX, Section 1 hereof shall automatically terminate without any action on the part of M&T Bank, the board of directors or the stockholders on the first date following the date upon which the Significant Stockholder ceases to be the beneficial owner of at least five percent (5%) of the outstanding shares of common stock of the Holding Company. ARTICLE X CERTAIN DEFINITIONS SECTION 1. DEFINITIONS: For purposes of Article II of these Bylaws: (a) "ISSUANCE EVENT" shall mean an "Issuance Event" defined in Section 1.42 of the Reorganization Agreement. (b) "MAINTENANCE RIGHTS" shall mean the "Seller Maintenance Rights" defined in Section 1.75 of the Reorganization Agreement. -31- (c) "REORGANIZATION AGREEMENT" shall mean the Agreement and Plan of Reorganization, dated September 26, 2002, by and among the Significant Stockholder, Allfirst Financial Inc. and M&T Bank Corporation, as amended or supplemented from time to time. (d) "SIGNIFICANT STOCKHOLDER" shall mean Allied Irish Banks, p.l.c., a limited liability company incorporated under the laws of Ireland having its registered office at Bankcentre, Ballsbridge, Dublin 4, Ireland, and any successor thereto. (e) "SUNSET DATE" shall mean the first date following the date upon which the Significant Stockholder ceases to be the beneficial owner of at least 15% of the outstanding shares of common stock of the Corporation, determined in accordance with, and subject to, paragraph (iv) of Article II, Section 2(b) hereof. -32- MANUFACTURERS AND TRADERS TRUST COMPANY CONDENSED CONSOLIDATED BALANCE SHEET
In thousands December 31, 2004 - ------------ ----------------- Assets Cash and due from banks $ 1,334,631 Money-market assets 189,494 Investment securities Available for sale (cost: $7,886,559) 7,882,481 Held to maturity (market value: $100,275) 98,050 Other (market value: $320,532) 320,532 ------------ Total investment securities 8,301,063 ------------ Loans and leases, net of unearned discount 38,127,775 Allowance for credit losses (624,181) ------------ Loans and leases, net 37,503,594 Other assets 5,085,358 ------------ Total assets $ 52,414,140 ============ Liabilities Deposits Noninterest-bearing $ 8,428,628 Interest-bearing 26,917,612 ------------ Total deposits 35,346,240 Short-term borrowings 4,703,664 Accrued interest and other liabilities 673,858 Long-term borrowings 5,486,046 ------------ Total liabilities 46,209,808 ------------ Stockholder's equity 6,204,332 ------------ Total liabilities and stockholder's equity $ 52,414,140 ============
EX-99.1 48 y04808exv99w1.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT 99.1 TENDERS OF OUTSTANDING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. ULTRAPETROL (BAHAMAS) LIMITED LETTER OF TRANSMITTAL 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014 By Mail, Hand or Overnight Courier: Manufacturers and Traders Trust Company 25 South Charles Street, 16th Floor Baltimore, MD 21201 Attn: Corporate Trust Administration Facsimile (for eligible institutions only): Fax: (410) 244-4236 confirm facsimile by telephone ONLY: Ph: (410) 949-3167 Delivery of this instrument to an address other than as set forth above (or transmission of instructions via a facsimile number other than the one listed above) will not constitute a valid delivery. The instructions accompanying this Letter of Transmittal (as defined below) should be read carefully before this Letter of Transmittal is completed. HOLDERS OF THE COMPANY'S (AS DEFINED BELOW) OUTSTANDING NOTES ("HOLDERS") WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES (AS DEFINED BELOW) FOR THEIR OUTSTANDING NOTES (AS DEFINED BELOW) UNDER THE EXCHANGE OFFER (AS DEFINED BELOW) MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OUTSTANDING NOTES TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON [____________, 2005], UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED OR EARLIER TERMINATED, THE "EXPIRATION DATE"). The undersigned acknowledges receipt of the Prospectus dated [_________, 2005] (the "Prospectus") of Ultrapetrol (Bahamas) Limited (the "Company") and the attachments thereto, which, together with this Letter of Transmittal (the "Letter of Transmittal"), constitutes the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), under a Registration Statement of which the Prospectus is a part, for each $1,000 principal amount of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"), of which $180,000,000 in principal amount is outstanding, upon the terms and conditions set forth in the Prospectus. Other capitalized terms used but not defined herein have the meaning given to them in the Prospectus. This Letter of Transmittal is to be used by Holders if: (i) certificates representing Outstanding Notes are to be physically delivered to the Exchange Agent herewith by such Holders; or (ii) tender of Outstanding Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under "Procedures for Tendering Outstanding Notes." Holders of Outstanding Notes who are financial institutions that are participants in The Depository Trust Company ("DTC") and whose name appears on a security position listing maintained by DTC as the owner of Outstanding Notes, may instead tender by book-entry transfer to the Exchange Agent's account at DTC pursuant to the procedures set forth in the Prospectus under "Procedures for Tendering Outstanding Notes" which details the method for tendering through the DTC Automated Tender Offer Program ("ATOP"). These DTC participants wishing to participate in the Exchange Offer must transmit their acceptance thereof to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent for its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of the Exchange Offer in lieu of execution and delivery of this Letter of Transmittal by the DTC participant identified in the Agent's Message. Accordingly, this Letter of Transmittal need not be completed by a Holder tendering through ATOP. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent. See Instruction 10 herein. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OUTSTANDING NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY OR TENDER THROUGH ATOP AND HAVE THE EXCHANGE AGENT RECEIVE AN AGENT'S MESSAGE. Page 1 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX BELOW. DESCRIPTION OF 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014 (OUTSTANDING NOTES)
Name(s) and Address(es) Aggregate Principal Principal Amount of Registered Holder(s) Certificate Amount Represented Tendered (if less (Please fill in, if blank) Number(s)* By Certificate(s) than all)** - -------------------------- ---------- ----------------- ----------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- TOTAL
- ------------------------ * Need not be completed by Holders tendering by book-entry transfer. ** Unless indicated in the column labeled "Principal Amount Tendered," any tendering Holders of Outstanding Notes will be deemed to have tendered the entire aggregate principal amount represented by the column labeled "Aggregate Principal Amount Represented by Certificate(s)." If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal. The minimum permitted tender is $1,000 in principal amount of Outstanding Notes. All other tenders must be integral multiples of $1,000. SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 4, 5 and 6) To be completed ONLY if certificates for Outstanding Notes in a principal amount not tendered or not purchased are to be issued in the name of someone other than the undersigned, or if the Outstanding Notes tendered by book-entry transfer that are not accepted for purchase or Exchange Notes issued in exchange for Outstanding Notes accepted for exchange are not to be credited to the undersigned's account maintained by DTC. Issue certificate(s) to: Page 2 Name:________________________________________________________ (Please Print) Address:_____________________________________________________ (Include Zip Code) _____________________________________________________________ (Tax Identification or Social Security No.) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 5 and 6) To be completed ONLY if certificates for Outstanding Notes in a principal amount not tendered or not purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than shown above. This section should not be completed if such Outstanding Notes are to be delivered to DTC for credit to the undersigned's account or to an account specified under "Special Issuance Instructions." Mail to: Name:________________________________________________________ (Please Print) Address:_____________________________________________________ (Include Zip Code) _____________________________________________________________ (Tax Identification or Social Security No.) [ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Delivering Institution: ____________________________________________ Book Entry-DTC Account Number: _____________________________________________ Transaction Code Number: ___________________________________________________ [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO AND COMPLETE THE FOLLOWING: Name: ________________________________________________________________ Address: _____________________________________________________________ Page 3 Ladies and Gentlemen: Subject to the terms and conditions of the Exchange Offer, the undersigned hereby irrevocably delivers to the Exchange Agent the number of Outstanding Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Outstanding Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Outstanding Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and as Trustee under the Indenture for the Outstanding Notes and Exchange Notes) with respect to the tendered Outstanding Notes with full power of substitution to (i) deliver certificates for such Outstanding Notes to the Company, or transfer ownership of such Outstanding Notes on the account books maintained by DTC, and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, and (ii) present such Outstanding Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Outstanding Notes, all in accordance with the terms and subject to the conditions of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Outstanding Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are acquired by the Company. The undersigned hereby further represents that any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby will have been acquired in the ordinary course of business of the beneficial owner receiving such Exchange Notes, whether or not such person is the undersigned, that neither the beneficial owner nor the undersigned has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes and that neither the beneficial owner nor the undersigned is an "affiliate," as defined in Rule 405 of the Securities Act, of the Company. If the undersigned is not a broker-dealer the undersigned represents that neither it nor the beneficial owner is engaged in, or intends to engage in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for the Outstanding Notes that were acquired as a result of market making activities or other trading activities, it acknowledges that it will deliver a Prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a Prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the assignment, transfer and purchase of the Outstanding Notes tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Outstanding Notes when, as and if, the Company has given written notice thereof to the Exchange Agent. If any tendered Outstanding Notes are not accepted for exchange under the Exchange Offer for any reason, certificates for any such unaccepted Outstanding Notes will be returned (except with respect to tenders made through book-entry with DTC), without expense, to the undersigned at the address shown below or at a different address as may be indicated in the "Special Delivery Instructions" promptly after the expiration or termination of the Exchange Offer in accordance with Rule 14(e)-1(c) of the Securities and Exchange Act of 1934, as amended. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death or incapacity of the undersigned, if an individual, or the dissolution of the undersigned and every obligation of the undersigned, if other than an individual, under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns, trustees in bankruptcy and other legal representatives. The undersigned understands that tenders of Outstanding Notes under the procedures described under the caption "Procedures for Tendering Outstanding Notes" in the Prospectus and in the instructions hereto will constitute a Page 4 binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated under "Special Issuance Instructions," please return any Outstanding Notes not exchanged to the undersigned (or in the case of the Outstanding Notes tendered by DTC, by credit to the undersigned's account at DTC (or if the undersigned does not have such an account, to the DTC participant's account). Unless otherwise indicated under "Special Issuance Instructions," please credit the Exchange Notes issued in exchange for the Outstanding Notes accepted for exchange by credit to the undersigned's account at DTC (or if the undersigned does not have such an account, to the DTC participant's account). The undersigned recognizes that Exchange Notes will be issued to DTC and registered in the name of Cede & Co., Euroclear Bank S.A./N.V. and/or Clearstream Banking, societe anonyme, as nominee(s) of DTC. Unless otherwise indicated under "Special Delivery Instructions," please send any certificates for Outstanding Notes not exchanged and accompanying documents, as appropriate to the undersigned at the address shown below the undersigned's signature(s), unless tender is being made through DTC. The undersigned recognizes that the Company has no obligation under the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Outstanding Notes from the name of the registered Holders(s) thereof if the Company does not accept for exchange any of the Outstanding Notes so tendered. Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available or (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent, or who cannot complete the procedure for book-entry transfer, prior to the Expiration Date, may tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Procedures for Tendering Outstanding Notes." See Instruction 1 regarding the completion of the Letter of Transmittal printed below. Page 5 PLEASE SIGN HERE IF OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY X________________________________ Date: X________________________________ Signature(s) of Registered Holder(s) Date: or Authorized Signatory Area Code and Telephone Number: _______________________________ The above lines must be signed by the registered Holder(s) of Outstanding Notes as their name(s) appear(s) on the Outstanding Notes or, if the Outstanding Notes are delivered by a participant in DTC, as such participant's name appears on a security position listing maintained by DTC as the owner of Outstanding Notes, or by person(s) authorized to become registered Holder(s) by a properly completed Assignment from the registered Holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Outstanding Notes to which this Letter of Transmittal relates are held of record by two or more joint Holders, then all such Holders must sign this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact or other person acting in a fiduciary capacity, such person must (i) set forth his or her full title below and (ii) unless waived by the Company and the Exchange Agent, submit evidence satisfactory to the Company and the Exchange Agent of such person's authority so to act. See Instruction 4 regarding the completion of this Letter of Transmittal below. Name(s):_______________________________________________________________________ (Please Print) Capacity: _____________________________________________________________________ Address: ______________________________________________________________________ (Include Zip Code) Signature(s) Guaranteed by an Eligible Institution: (If required by Instruction 4) _______________________________________________________________________________ (Authorized Signature) _______________________________________________________________________________ (Title) _______________________________________________________________________________ (Name of Firm) Date:_______________, 2005 Page 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Delivery of this Letter of Transmittal and Outstanding Notes. The Outstanding Notes (or a confirmation of a book-entry transfer into the Exchange Agent's account at DTC of all Outstanding Notes delivered electronically), a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof or an Agent's Message (if tender is through ATOP) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 P.M., New York City time, on the Expiration Date. The method of delivery of the tendered Outstanding Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder and, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Outstanding Notes should be sent to the Company. Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available, or (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent, or who cannot complete the procedure for book-entry transfer, prior to 5:00 P.M., New York City time, on the Expiration Date, must tender the Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus. Under such procedures: (i) such tender must be made by or through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended (an "Eligible Institution"); (ii) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder of the Outstanding Notes, the certificate number or numbers of such Outstanding Notes and the principal amount of Outstanding Notes tendered, stating that the tender is being made thereunder and guaranteeing that, within three New York Stock Exchange trading days after Page 7 the Expiration Date, this Letter of Transmittal or facsimile hereof together with the certificate(s) representing the Outstanding Notes (or a confirmation of electronic delivery of book-entry delivery into the Exchange Agent's account at DTC), must be received by the Exchange Agent, all as provided in the Prospectus. Any Holder of Outstanding Notes who wishes to tender his or her Outstanding Notes under the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 P.M., New York City time, on the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Outstanding Notes according to the guaranteed delivery procedures set forth above. All questions as to the validity, eligibility (including time of receipt) and acceptance of tendered Outstanding Notes will be determined by the Company and the Exchange Agent in their sole discretion, which determination will be final and binding. The Company and the Exchange Agent reserve the absolute right to reject any and all Outstanding Notes not properly tendered or any Outstanding Notes delivered to the Exchange Agent, receipt of which would, in the opinion of counsel for the Company or the Exchange Agent, be unlawful. The Company and the Exchange Agent also reserve the right to waive any defects or irregularities or conditions of the Exchange Offer and/or any procedures with respect to tenders of Outstanding Notes. The interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) by the Company and the Exchange Agent shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with deliveries of Outstanding Notes must be cured within such time as the Company and the Exchange Agent shall determine. Although the Company intends to request the Exchange Agent notify Holders of defects or irregularities with respect to tenders of Outstanding Notes, neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Outstanding Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived, will be returned by the Exchange Agent to the related Holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable. 2. Tender by Holder. Any beneficial holder of Outstanding Notes who is not the registered Holder and who wishes to tender should arrange with the registered Holder or DTC participant whose name appears on a security position listing maintained by DTC or the owner of the Outstanding Notes to tender through ATOP or execute and deliver this Letter of Transmittal on his or her behalf or must, and prior to completing and executing this Letter of Transmittal and delivering his or her Outstanding Notes, either make appropriate arrangements to register ownership of the Outstanding Notes in such holder's name or obtain a properly completed bond power from the registered Holder. 3. Partial Tender. Tenders of Outstanding Notes will be accepted only in multiples of $1,000. If less than the entire principal amount of any Outstanding Notes is tendered, the tendering Holder should fill in principal amount tendered in the fourth column under the heading "Principal Amount Tendered (if less than all)" of the box entitled "Description of 9% First Preferred Ship Mortgage Notes due 2014 (Outstanding Notes)" above. The entire principal amount of Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Exchange Notes will be issued in the form of one or more global notes issued to DTC and registered in the name of Cede & Co., Euroclear Bank S.A./N.V. and/or Clearstream Banking, societe anonyme, as nominee(s) of DTC. 4. Signatures on the Letter of Transmittal; Bond Powers and Endorsements; Guarantee of Signature. If this Letter of Transmittal or facsimile Page 8 hereof is signed by the record Holder(s) of the Outstanding Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Outstanding Notes or, if the Outstanding Notes are tendered by a participant in DTC, as such participant's name appears on a security position listing maintained by DTC listing as the owner of the Outstanding Notes, without alteration, enlargement or any change whatsoever. If a Holder other than DTC is tendering Outstanding Notes in exchange for Exchange Notes, such Holder must either properly endorse the Outstanding Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder or Holders of any Outstanding Notes listed, such Outstanding Notes must be endorsed or accompanied by appropriate bond powers signed as the name of the Registered Holder or Holders appears on the Outstanding Notes. If this Letter of Transmittal (or facsimile hereof) or any Outstanding Notes or bond powers are signed by trustees, executors, administrators guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons would so indicate when signing, and, unless waived by the Company, must submit evidence satisfactory to the Company of their authority so to act with this Letter of Transmittal. Endorsements on Outstanding Notes or signatures on bond powers required by this Instruction 4 must be guaranteed by an Eligible Institution. Except as otherwise instructed below, all signatures on this Letter of Transmittal (or facsimile hereof) must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal need not be guaranteed if: (i) this Letter of Transmittal is signed by the registered Holder(s) of the Outstanding Notes tendered herewith (including any participant in DTC whose name appears on a security position listing maintained by DTC as the owner of Outstanding Notes) and such person(s) has (have) not completed the box set forth herein entitled "Special Issuance Instructions" or the box set forth herein entitled "Special Delivery Instructions" or (ii) such Outstanding Notes are tendered for the account of an Eligible Institution. 5. Special Issuance and Delivery Instructions. Tendering Holders should indicate, in the applicable box or boxes, the name and address to which Exchange Notes are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal (or in the case of tender of Outstanding Notes through DTC, if different from DTC). In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 6. Tax Identification Number. United States federal income tax law requires that a Holder whose Outstanding Notes are accepted for exchange must provide the Company (as payer) with such Holder's correct Taxpayer Identification Number ("TIN"), which, in the case of a Holder who is an individual, is his or her social security number. If the Company is not provided with the correct TIN or an adequate basis for exemption, such Holder may be subject to a $50 penalty imposed by the Internal Revenue Service (the "IRS"), and payments made with respect to Outstanding Notes exchanged may be subject to backup withholding at the applicable rate. If withholding results in an overpayment of taxes, a refund may be obtained. Exempt Holders are not subject to these backup (including, among others, all corporations and certain foreign individuals) withholding and reporting requirements. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9." Page 9 To prevent backup withholding, each exchanging Holder that is a U.S. person must provide such Holder's correct TIN by completing the Substitute Form W-9 enclosed herewith, certifying that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (i) the Holder is exempt from backup withholding, (ii) the Holder has not been notified by the IRS that such Holder is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified the Holder that such Holder is no longer subject to backup withholding. In order to satisfy the Company that a foreign individual qualifies as an exempt recipient, such Holder must submit a statement signed under penalty of perjury attesting to such exempt status. Such statements may be obtained from the Company. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, consult the Substitute Form W-9 for information on which TIN to report. If you do not provide your TIN to the Company within 10 days, backup withholding will begin and continue until you furnish your TIN to the Company. 7. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the exchange of Outstanding Notes. If, however, certificates representing Exchange Notes are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Outstanding Notes tendered hereby, or if tendered Outstanding Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Exchange Notes for Outstanding Notes under the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or on any other persons) will be payable by the tendering Holder. Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes listed in this Letter of Transmittal. 8. Waiver of Conditions. The Company reserves the absolute right to amend, waive or modify specified conditions of the Exchange Offer in the case of any Outstanding Notes tendered. Any waiver of a defect or irregularity of a note or of a term of the Exchange Offer will be applicable to all Outstanding Notes. 9. Mutilated, Lost, Stolen or Destroyed Outstanding Notes. Any delivering Holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should write to the Trustee at the following address: Manufacturers and Traders Trust Company, Corporate Trust Administration, 25 South Charles Street, 16th Floor, Baltimore, Maryland 21201 requesting that a replacement Note be issued. 10. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of this Letter of Transmittal may be directed to the Exchange Agent at the address specified on the front of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. Page 10 (DO NOT WRITE IN SPACE BELOW)
Certificate Outstanding Notes Outstanding Notes Surrendered Tendered Accepted - ----------- -------- --------
Delivery Prepared by ____________ Checked by ___________ Date _____________ Page 11 PAYER'S NAME: SUBSTITUTE Name (if joint names, list first and circle the name of the persons or entity whose FORM W-9 number you enter in Part I below. See instructions if your name has changed). Address City, State and Zip code List account number(s) here (optional) Department of the Treasury Internal Part 1--PLEASE PROVIDE YOUR TAXPAYER Social security Revenue Service IDENTIFICATION NUMBER ("TIN") IN THE number or TIN BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Part 2--Check the box if you are NOT subject to backup withholding under the provisions of section 3408(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. Payer's Request CERTIFICATION- UNDER THE PENALTIES OF PART 3 for TIN PERJURY, I CERTIFY THAT THE INFORMATION AWAITING PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.

Signature:_____________________________ Date:_________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING ON ANY DISTRIBUTION PAYMENTS MADE TO YOU BY THE COMPANY. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. Page 12 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer.--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
Give the SOCIAL SECURITY For this type of account number of - ------------------------ --------- 1. An individual's The individual account 2. Two or more The actual owner of the individuals (joint account or, if combined account) funds, any one of the individuals(1) 3. Husband and wife The actual owner of the (joint account) account or, if joint funds, either person(1) 4. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 5. Adult and minor The adult or, if the minor (joint account) is the only contributor, the minor(1) 6. Account in the name The ward, minor or of guardian or incompetent person(3) committee for a designated ward, minor, or incompetent person 7. (a) The usual revocable The grantor-trustee savings trust account (grantor is also trustee) (b) So-called trust The actual owner(1) account that is not a legal or valid trust under State law 8. Sole proprietorship The owner(4) account

Give the EMPLOYER IDENTIFICATION For this type of account number of - ------------------------ --------- 9. A valid trust, The legal entity (Do not estate, or pension furnish the identifying trust number of the personal representative or trustee unless the legal entity itself is not designated in the account title.(5) 10. Corporate account The corporation 11. Religious, The organization charitable or educational organization account 12. Partnership account The partnership
Page 13 held in the name of the business 13. Association, club, The organization or other tax-exempt organization 14. A broker or The broker or nominee registered nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that received agricultural program payments

- ------------------------ (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate, or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. Page 14 Obtaining a Number If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. Payees Exempt from Backup Withholding Payees specifically exempted from backup withholding on ALL payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan. - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. Page 15 - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under Section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresidential partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if the interest if $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under Section 852). - Payments described in section 6049(b)(5) to non-resident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041(a), 6045 and 6050A. Privacy Act Notice--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1994, payers must generally withhold 20% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties (1) Penalty for Failure to Furnish Taxpayer Identification Number--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Failure to Report Certain Dividend and Interest Payments--If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of an underpayment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) Civil Penalty for False Information With Respect to Withholding--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) Criminal Penalty for Falsifying Information--Falsifying certificates or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. Page 16 EX-99.2 49 y04808exv99w2.txt FORM OF LETTER TO SECURITIES BROKERS ETAL. EXHIBIT 99.2 ULTRAPETROL (BAHAMAS) LIMITED OFFER TO EXCHANGE ITS OUTSTANDING 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014, FOR 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 [________, 2005] To Securities Brokers and Dealers, Commercial Banks, Trust Companies and Other Nominees: Ultrapetrol (Bahamas) Limited (the "Company") is making an offer (the "Exchange Offer") to exchange its 9% First Preferred Ship Mortgage Notes due 2014 (the "Exchange Notes") for any or all of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes"), as described in the enclosed prospectus dated [______, 2005] (the "Prospectus"), and the enclosed letter of transmittal (the "Letter of Transmittal"). We are asking you to contact your clients for whom you hold securities positions in Outstanding Notes. You will be reimbursed for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will pay any transfer taxes applicable to the exchange of Outstanding Notes for Exchange Notes in the Exchange Offer, except as otherwise provided in the Instructions in the Letter of Transmittal. Enclosed are copies of the following documents: 1. The Prospectus. 2. The Letter of Transmittal for your use and for the information of your clients. 3. A form of letter which may be sent to your clients for whose accounts you hold securities positions in Outstanding Notes, with Instructions With Respect to the Exchange Offer attached thereto, for obtaining such clients' instructions with regard to this Exchange Offer. 4. A return envelope addressed to Manufacturers and Traders Trust Company, as exchange agent (the "Exchange Agent"). Your prompt action is required. This Exchange Offer will expire at 5:00 p.m., New York City time, on [ , 2005], unless the Company extends it. You may withdraw tendered Outstanding Notes at any time prior to 5:00 p.m., New York City time, on [ , 2005], or thereafter in certain circumstances. To participate in this Exchange Offer, the Exchange Agent must receive, prior to the expiration of the Exchange Offer, either (1) book-entry confirmation of a valid book-entry transfer, or (2) certificates for Outstanding Notes and a duly executed and properly completed Letter of Transmittal, together with any other required documents described in the Letter of Transmittal and the Prospectus. Holders of Outstanding Notes who are tendering by book-entry transfer to the Exchange Agent's account at The Depository Trust Company ("DTC") can execute their tender through the DTC Automated Tender Offer Program ("ATOP"). DTC participants wishing to participate in the Exchange Offer must transmit their acceptance thereof to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent for its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of the Exchange Offer in lieu of execution and delivery of the Letter of Transmittal by the DTC participant identified in the Agent's Message. Accordingly, the Letter of Transmittal need not be completed by a holder tendering through ATOP. You may obtain additional copies of the enclosed material from Manufacturers and Traders Trust Company, as Exchange Agent; tel.: (410)-949-3167. Very truly yours, ULTRAPETROL (BAHAMAS) LIMITED Nothing in the Letter of Transmittal or in the enclosed documents will make you or any person an agent of Ultrapetrol (Bahamas) Limited or the Exchange Agent, or authorize you or any other person to make any statements on behalf of either of them with respect to this Exchange Offer, except for statements expressly made in the Prospectus or the Letter of Transmittal. Page 1 EX-99.3 50 y04808exv99w3.txt FORM OF LETTER TO CLIENTS EXHIBIT 99.3 ULTRAPETROL (BAHAMAS) LIMITED OFFER TO EXCHANGE ITS OUTSTANDING 9% FIRST PREFERRED SHIP MORGTAGE NOTES DUE 2014, FOR 9% FIRST PREFERRED SHIP MORGTAGE NOTES DUE 2014, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 [__________, 2005] To Our Clients: Enclosed for your consideration is a prospectus dated [________, 2005] (the "Prospectus"), and the related letter of transmittal (the "Letter of Transmittal"), relating to the offer (the "Exchange Offer") of Ultrapetrol (Bahamas) Limited, a Bahamas corporation (the "Company"), to exchange its 9% First Preferred Ship Mortgage Notes due 2014, which have been registered under the Securities Act of 1933, as amended (the "Exchange Notes"), for any or all of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes") previously issued on November 24, 2004, upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. This material is being forwarded to you as the beneficial owner of Outstanding Notes in which we hold a securities position for your account. A tender of such Outstanding Notes may only be made by us as the holder of the securities position in such Outstanding Notes and pursuant to your instructions. Accordingly, we request instructions as to whether you wish us to tender on your behalf the Outstanding Notes in which he hold a securities position for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. Your attention is directed to the following: 1. The Exchange Offer is for any and all Outstanding Notes. 2. The Exchange Offer is subject to the conditions set forth in the Prospectus in the section under the heading "The Exchange Offer - Conditions to the Exchange Offer." 3. Any transfer taxes incident to the transfer of Outstanding Notes from the holder to the Company will be paid by the Company, except as otherwise provided in the Instructions in the Letter of Transmittal. 4. The Exchange Offer expires at 5:00 p.m., New York City time, on [_____________, 2005], unless extended by the Company. If you wish to have us tender any or all of your Outstanding Notes, please so instruct us by completing and returning to us the instruction form attached hereto. Forward your instructions to us in ample time to permit us to submit a tender on your behalf by the expiration date of the Exchange Offer. The Letter of Transmittal is furnished to you for information only and may not be used directly by you to tender Outstanding Notes. None of the Outstanding Notes in which we hold a securities position for your account will be tendered unless we receive written instructions from you to do so. If you authorize a tender of your Outstanding Notes, we will tender the entire principal amount of Outstanding Notes held for your account unless you otherwise specify in the instruction form. The Company is not making this Exchange Offer to, nor will it accept tenders from or on behalf of, holders of the Outstanding Notes in any jurisdiction in which the making of this Exchange Offer or acceptance of tenders would not be in compliance with the laws of such jurisdiction or would otherwise not be in compliance with any provision of any applicable security law. Page 1 ULTRAPETROL (BAHAMAS) LIMITED INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Ultrapetrol (Bahamas) Limited with respect to its Outstanding Notes. This will instruct you to tender the principal amount of Outstanding Notes indicated below which you hold for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal. I understand that my signature below is the equivalent of my executing and delivering to Ultrapetrol (Bahamas) Limited the Letter of Transmittal, and thus I agree to be bound by all the terms of the Letter of Transmittal and make all the representations and warranties of a tendering holder set forth in it. The aggregate principal amount of Outstanding Notes held by you for the account of the undersigned is (fill in amounts, as applicable): $ of 9% First Preferred Ship Mortgage Notes due 2014. With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box): [ ] to TENDER $ of Outstanding Notes held by you for the account of the undersigned (insert principal amount of Outstanding Notes to be tendered, if any); [ ] NOT to TENDER any Outstanding Notes held by you for the account of the undersigned. If the undersigned instructs you to tender Outstanding Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving the Exchange Notes, whether or not such person is the undersigned, (ii) neither the undersigned nor any such other person is participating in, intends to participate in or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of Outstanding Notes or Exchange Notes, (iii) neither the undersigned nor any such other person is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company, and (iv) neither the undersigned nor any such other person is acting on behalf of any person who could not truthfully make the foregoing representations and warranties. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it represents that the Outstanding Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the Securities Act, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. SIGN HERE Dated:__________________________________ Signature(s):_______________________________________________________________ Print name(s) here:_________________________________________________________ Print Address(es):__________________________________________________________ Area Code and Telephone Number(s):__________________________________________ Tax Identification or Social Security Number(s):____________________________ Page 2 EX-99.4 51 y04808exv99w4.txt FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.4 NOTICE OF GUARANTEED DELIVERY for 9% FIRST PREFERRED SHIP MORTGAGE NOTES DUE 2014 of ULTRAPETROL (BAHAMAS) LIMITED As set forth in the Prospectus dated [________, 2005] (the "Prospectus") of Ultrapetrol (Bahamas) Limited (the "Company") and in the accompanying Letter of Transmittal and instructions thereto (the "Letter of Transmittal"), this form or one substantially equivalent hereto is to be used to accept the Company's offer (the "Exchange Offer") to exchange up to $180,000,000 of its outstanding 9% First Preferred Ship Mortgage Notes due 2014 (the "Outstanding Notes") for its 9% First Preferred Ship Mortgage Notes due 2014, which have been registered under the Securities Act of 1933, as amended (the "Exchange Notes"), if certificates for the Outstanding Notes are not immediately available or if the Outstanding Notes, the Letter of Transmittal or any other documents required thereby cannot be delivered to the Exchange Agent, or the procedure for book-entry transfer cannot be completed, prior to 5:00 P.M., New York City time, on [________, 2005], unless extended (the "Expiration Date"). This form may be delivered by an Eligible Institution by hand, overnight courier or mail to the Exchange Agent as set forth below. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. TENDERS OF OUTSTANDING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. - -------------------------------------------------------------------------------- By Mail, Hand or Overnight Delivery: Manufacturers and Traders Trust Company 25 South Charles Street, 16th Floor Baltimore, MD 21201 Attn: Corporate Trust Administration Facsimile (for eligible institutions only): Fax: (410) 244-4236 confirm facsimile by telephone ONLY: Ph: (410) 949-3167 Delivery of this instrument to an address, or transmission of instruction via facsimile, other than as set forth above, does not constitute a valid delivery. This form is not to be used to guarantee signatures. The signature on the Letter of Transmittal to be used to deliver Outstanding Notes required to be guaranteed by an "Eligible Institution" under the instructions thereto, must appear in the applicable space provided in the Letter of Transmittal. Page 1 Ladies and Gentlemen: The undersigned hereby tenders to the Exchange Agent, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which is hereby acknowledged, Outstanding Notes pursuant to the guaranteed delivery procedures set forth in Instruction 1 of the Letter of Transmittal. The undersigned understands that tenders of Outstanding Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned understands that tenders of Outstanding Notes under the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on the last business day prior to the Expiration Date. Tenders of Outstanding Notes may also be withdrawn if the Exchange Offer is terminated without any such Outstanding Notes being purchased thereunder or as otherwise provided in the Prospectus. All authority thereto conferred or agreed to be conferred by Notice of Guaranteed Delivery shall survive the death, incapacity or dissolution of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned. NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW. Certificate No(s). for Outstanding Notes (if available) Name(s) of Holder(s) __________________________________ ________________________________________ __________________________________ ________________________________________ Please Print or Type Principal Amount of Outstanding Notes Address __________________________________ ________________________________________ ________________________________________ Area Code and Telephone No. ________________________________________ Area Code and Telephone No. Signature(s) ________________________________________ ________________________________________ Dated: ________________________________________ Dated: ________________________________________ If Outstanding Notes will be delivered by book-entry transfer at the Depository Trust Company, Depository Account No. ________________________________________ Page 2 This Notice of Guaranteed Delivery must be signed by (i) the registered Holder(s) of Outstanding Notes exactly as its (their) name(s) appear on certificates for Outstanding Notes or on a security position listing maintained by DTC as the owner of Outstanding Notes or (ii) by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information: Please print name(s) and address(es) of person signing above. Name(s) _____________________________________________________ Capacity: _____________________________________________________ Address(es) _____________________________________________________ _____________________________________________________ Page 3 GUARANTEE (Not to be used for signature guarantee) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") including without limitation any financial institution that is a participant in a recognized Signature Guarantee Medallion Program, hereby (a) represents that the above named person(s) "own(s)" the Outstanding Notes tendered hereby within the meaning of Rule 14e-4 under the Exchange Act, (b) represents that such tender of Outstanding Notes complies with Rule 14e-4 under the Exchange Act and (c) guarantees that delivery to the Exchange Agent of certificates for the Outstanding Notes tendered hereby, in proper form for transfer (or confirmation of the book-entry transfer of such Outstanding Notes into the Exchange Agent's account at the Depository Trust Company, pursuant to the procedures for book-entry transfer set forth in the Prospectus), with delivery of a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), if required, with any required signatures and any other required documents, will be received by the Exchange Agent at one of its addresses set forth above on or prior to the Expiration Date. The undersigned acknowledges that it must deliver the Letter of Transmittal and Outstanding Notes tendered hereby to the Exchange Agent within the time period set forth therein and that failure to do so could result in financial loss to the undersigned. Name of Firm: ______________________ ________________________________________ Authorized Signature Address: __________________________ City/State: _______________________ Zip Code: __________________________ Name: __________________________________ Please Print or Type Area Code and Telephone No. Title: _________________________________ ____________________________________ Dated: _______________________, 2005 Dated: ____________________, 2005 NOTE: DONOT SEND OUTSTANDING NOTES WITH THIS FORM. OUTSTANDING NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN THREE NEW YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION DATE. 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Commonwealth of the Bahamas	4412	N/A
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)






		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering	Aggregate	Amount of
Securities to be Registered	Registered	Price per Unit	Offering Price	Registration Fee⁽¹⁾


9% First Preferred Ship Mortgage Notes due 2014	$180,000,000	100%	$180,000,000	$21,186

Guarantees relating to the 9% First Preferred Ship Mortgage Notes due 2014	—(2)	—(2)	—(2)	—(2)


		• make investments;

		• engage in sale and leaseback transactions;

		• engage in transactions with our affiliates;

		• engage in mergers and consolidations; and

		• impair the security interest with respect to the collateral.

		These covenants are subject to a number of important qualifications and exceptions, which are described under “Description of the Exchange Notes.”


Name	OPA phase-out date*	Current TVEL/COC issuance date**

Princess Katherine	N/A		March 26, 2003
Princess Nadia	January 2014		August 26, 2001
Princess Susana	November 2014		February 18, 2003
Princess Marina	March 2014		August 29, 2002



		As of September 30, 2004

						Pro Forma
		Actual		Pro Forma		As Adjusted


		(Dollars in millions)
Cash and cash equivalents		$	15.0	$	14.0	$	14.3

Debt:
	Existing credit facilities⁽¹⁾	$	16.3	$	16.3	$	—
	Existing credit facilities of non-guarantor subsidiaries⁽²⁾		41.5		36.4		36.4
	Prior Notes⁽³⁾		122.6		122.6		—
	9% First Preferred Ship Mortgage Notes due 2014⁽⁴⁾		—		—		180.0

Total debt⁽⁵⁾			180.4		175.3		216.4
Minority interest			40.3		10.6		10.6
Total shareholders’ equity⁽⁶⁾			36.0		36.0		29.5

Total capitalization		$	256.7	$	221.9	$	256.5


H&J Corporate Services Ltd. Shirlaw House 87 Shirley Street P.O. Box SS-19084 Nassau, Bahamas (242) 322-8571 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)		CT Corporation System 111 Eighth Avenue New York, New York 10011 (800) 624-0909 (Name, address, including zip code, and telephone number, including area code, of agent for service)


GLOSSARY OF SHIPPING TERMS			vi
SUMMARY			1
RISK FACTORS			19
USE OF PROCEEDS OF OUR OUTSTANDING NOTES			38
CAPITALIZATION			39
RATIO OF EARNINGS TO FIXED CHARGES			40
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION			40
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA			49
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			51
INDUSTRY OVERVIEW			62
BUSINESS			72
MANAGEMENT			88
OWNERSHIP			89
CERTAIN RELATED TRANSACTIONS			90
DESCRIPTION OF CREDIT FACILITIES AND OTHER INDEBTEDNESS			92
THE EXCHANGE OFFER			94
DESCRIPTION OF THE EXCHANGE NOTES			103
THE MORTGAGES ON THE VESSELS			152
TAX CONSIDERATIONS			155
PLAN OF DISTRIBUTION			159
LEGAL MATTERS			160
EXPERTS			160
WHERE YOU CAN FIND ADDITIONAL INFORMATION			161
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1


(1)	Owned by Ultracape (Holdings) Ltd., of which we own 60%.

(2)	Although Alianza G2 is considered part of our ocean fleet, it is currently engaged as a transfer station in the lower Parana River as part of our River Business.

(3)	The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered in 1984. It was refurbished and converted to its current use in 1994. The separate but integrated tug, Alianza Rosario, was built in 1976.

(4)	The barge, Alianza G3, was built in 1982 and refurbished and converted to its current use in 1993. The separate but integrated tug, Alianza Campana, was built in 1976.

(5)	As the tug carries no cargo, it is not considered in the calculations of aggregate dwt or age.


(1)	In a series of related transactions, on April 23, 2004, through two wholly owned subsidiaries, we acquired from ACBL the remaining 50% equity interest in UABL Limited that we did not previously own, along with a fleet of 50 river barges and seven river push boats. The results of UABL Limited’s operations have been included in our condensed consolidated financial statements since that date.

(2)	Freight revenues arise from arrangements whereby we have agreed to transport cargoes between ports and bear all voyage and vessel operating expenses, whereas hire revenues arise from our vessel time or voyage chartering operations.

(3)	Includes total revenue from our Ocean Business of $39,862 and from our River Business of $31,672.

(4)	Includes total revenue from our Ocean Business of $39,835 and from our River Business of $40,012.

(5)	Operating expenses include voyage expenses and running costs. Voyage expenses, which are incurred when a vessel is operating under a contract of affreightment (as well as any time when they are not operating under time or bareboat charter), comprise all costs relating to a given voyage, including port charges, canal dues and fuel (bunkers) costs, are paid by the vessel owner and are recorded as voyage expenses. Voyage expenses also include charterhire payments made by us to owners of vessels that we have chartered in. Running costs, or vessel operating expenses, include the cost of all ship management, crewing, repairs and maintenance, spares and stores, insurance premiums and lubricants and certain drydocking costs.

(6)	Management fees to related parties include payments to our affiliates Ravenscroft and Oceanmarine.

(7)	This relates to a loss resulting from the involuntary conversion of certain receivables from U.S. dollars to Argentine pesos. This conversion resulted pursuant to an emergency law passed by the Argentine government in January 2002. Under this law U.S. dollar obligations between private parties due after January 6, 2002 were to be liquidated in Argentine pesos at a negotiated rate of exchange which reflects a


	sharing of the impact of the devaluation. Our settlement in Argentine pesos of the U.S. dollar denominated agreements was completed in 2002 and resulted in a loss of $2,704.

(8)	The ratio of earnings to fixed charges is computed by aggregating income (loss) before income taxes, minority interest and fixed charges and dividing the total by fixed charges. Fixed charges comprise interest on all indebtedness including capital leases and amortization of debt expense.

(9)	In these fiscal years the earnings are inadequate to cover fixed charges.


	Our substantial indebtedness and interest expense could adversely affect our financial health, harm our ability to react to changes to our business and prevent us from fulfilling our obligations under our indebtedness, including the notes.


	Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.


	*To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.*


	*The indenture governing the notes and our credit facilities impose significant operating and financial restrictions on us that may limit our ability to successfully operate our business.*


	We are a holding company, and we depend entirely on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial and other obligations, including the notes.


	Unless our subsidiaries are guarantors of the notes, they have no obligations to pay amounts due on the notes and the notes will be effectively subordinated to all obligations of such subsidiaries.


	A substantial portion of our revenues are generated by, and a substantial portion of our assets are held by, our non-guarantor subsidiaries who have no obligations to pay amounts due on the notes and whose indebtedness and all other obligations are effectively senior to the notes.


	*The entity engaged in the Offshore Business has not guaranteed the notes and is not a restricted subsidiary under the indenture governing the notes.*


	*Your right to receive payments on the notes and the subsidiary guarantees may be effectively junior to all of our and the subsidiary guarantors’ future borrowings.*


	*If the value of the vessels or barges securing the notes declines, we are not obligated to pledge additional vessels or barges as collateral, and the notes may become under-secured.*


	*It may be difficult to serve process on or enforce a United States judgment against us, our officers and directors.*


	*Foreclosing on mortgaged vessels may be difficult due to the laws of certain jurisdictions.*


	*Your rights in the collateral may be adversely affected by bankruptcy proceedings.*


	*We may not be able to fulfill our repurchase obligations in the event of a change of control.*


	*Rights of holders of the notes in the collateral may be adversely affected by the failure to perfect security interests in certain collateral acquired in the future.*


	The capital stock of certain of our subsidiaries securing the notes will automatically be released from the collateral to the extent the pledge of such collateral would require the filing of separate financial statements for any of our subsidiaries with the SEC.


	*Federal, state and foreign laws permit a court to void the notes and the subsidiary guarantees, and if that occurs, you may not receive any payments on the notes.*


	*You may be unable to sell the notes because there is no public trading market for the notes.*


	*We do not exercise voting control over Maritima SIPSA S.A., the entity that owns the Princess Marina, one of the oceangoing vessels pledged to secure the notes and guarantees.*


	*Your ability to recover from our former independent public accountants for any potential financial misstatements is limited.*


	*We depend on a few significant customers for a large part of our revenues, and the loss of one or more of these customers could adversely affect our revenues.*


	*Our earnings may be reduced and volatile if we do not efficiently deploy our vessels between longer term and shorter term charters.*


	Our success depends upon our management team and other employees, and if we are unable to attract and retain key management personnel and other employees, our results of operations may be negatively impacted.


	*We operate in an inherently dangerous and risk-prone industry, and we may suffer substantial losses and reputation harm as a result of our operations.*


	*We may not have adequate insurance to compensate us if our vessels are damaged or lost or if we harm third parties or their property or the environment.*