F-4

As filed with the Securities and Exchange Commission on February 7, 2005

Registration No. 333-            

U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SECUNDA INTERNATIONAL LIMITED*

(Exact Name of Registrant as Specified in Its Charter)

Nova Scotia	4412	Not Applicable
(Province or other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

One Canal Street

Dartmouth, Nova Scotia

Canada B2Y 2W1

(902) 465-3400

(Address and Telephone Number of Registrant’s principal executive offices)

Wilmington Trust FSB

520 Madison Avenue – 33rd Floor

New York, New York 10022

(212) 415-0500

(Name, address and telephone number of agent for service)

Copies to:

T. Mark Kelly

Vinson & Elkins L.L.P.

1001 Fannin Street

Suite 2300

Houston, TX 77002-6760

(713) 758-2222

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.  ¨

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.  ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Principal Amount to be Registered		Proposed Maximum Offering Price per Unit		Proposed Maximum Aggregate Offering Price		Amount of Registration Fee
Senior Secured Floating Rate Notes due 2012	$	125,000,000	100	%(1)	125,000,000	(1)	$	14,712.50
Guarantees by certain subsidiaries of Secunda International Limited(2)*

(1) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457.

(2) Pursuant to Rule 457(n) no separate fee for the guarantees is payable because the guarantees relate to other securities that are being registered concurrently.

* Includes guarantees by certain subsidiaries of Secunda International Limited identified on the following pages.

3013563 Nova Scotia Limited

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Marine International Incorporated

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Marine Services Limited

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Global Marine Incorporated

(Exact name of registrant as specified in its charter)

Barbados	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

JDM Shipping Inc.

(Exact name of registrant as specified in its charter)

Barbados	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

International Shipping Corporation Inc.

(Exact name of registrant as specified in its charter)

Barbados	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Global International Inc.

(Exact name of registrant as specified in its charter)

Barbados	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Navis Shipping Incorporated

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Atlantic Incorporated

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Secunda Marine Atlantic Limited

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Offshore Logistics Incorporated

(Exact name of registrant as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its 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, as amended, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

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 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.

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 2005

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 is effective. This prospectus is not an offer to sell these securities and it not soliciting an offer to buy these securities in any state there the offer or sale is not permitted.

PROSPECTUS

US$125,000,000

SECUNDA INTERNATIONAL LIMITED

OFFER TO EXCHANGE

all outstanding

Senior Secured Floating Rate Notes due September 1, 2012

(US$125,000,000 aggregate principal amount)

for

Senior Secured Floating Rate Notes due September 1, 2012

(US$125,000,000 aggregate principal amount)

that have been registered under the Securities Act of 1933

US$125,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due September 1, 2012, referred to in this prospectus as the original notes, were originally issued and sold by us on August 26, 2004 in a transaction that was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and resold to qualified institutional buyers in compliance with Rule 144A under the Securities Act and to persons outside the United States in compliance with Regulation S under the Securities Act.

The terms of the exchange notes, referred to in this prospectus as the exchange notes, are identical to the terms of the original notes, and evidence the same indebtedness as the original notes, except that the exchange notes will be registered under the Securities Act, will not contain restrictions on transfer or provisions relating to special interest under circumstances related to the timing of the exchange offer, will bear a different CUSIP number from the original notes and will not entitle their holders to registration rights. References we make in this prospectus to the “notes” shall mean both the original notes and the exchange notes.

Our offer to exchange notes for original notes will expire at 5:00 p.m., New York City time, on                     , 2005, unless we extend the offer. The terms of the exchange offer are described in this prospectus.

We do not intend to list the notes on any additional securities exchange and do not expect that an established trading market for the exchange notes will develop.

See “ Risk Factors” beginning on page 11 for a discussion of risks that you should consider in connection with tendering your original notes in the exchange offer.

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

The date of this prospectus is February     , 2005

This prospectus is part of a registration statement we filed with the Securities and Exchange Commission. In making your investment decision, you should rely only on the information contained in this prospectus and in the accompanying letter of transmittal. We have not authorized anyone to provide you with any other information. If you receive any unauthorized information, you must not rely on it. We are not making an offer to sell these securities in any state where the offer is not permitted. 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 or the date of such document, as the case may be.

TABLE OF CONTENTS

ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS	1
NOTICE TO CANADIAN INVESTORS	1
PRESENTATION OF INFORMATION	1
WHERE YOU CAN FIND MORE INFORMATION	1
CURRENCY AND EXCHANGE RATE DATA	2
FORWARD-LOOKING STATEMENTS	3
PROSPECTUS SUMMARY	4
RISK FACTORS	11
USE OF PROCEEDS	23
CAPITALIZATION	23
SELECTED CONSOLIDATED FINANCIAL DATA	24
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
BUSINESS	37
MANAGEMENT	50
RELATED PARTY TRANSACTIONS	51
DESCRIPTION OF OTHER INDEBTEDNESS	52
THE EXCHANGE OFFER	53
DESCRIPTION OF THE EXCHANGE NOTES	60
TAX CONSIDERATIONS	116
PLAN OF DISTRIBUTION	120
LEGAL MATTERS	121
INDEPENDENT AUDITORS	121
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1
GLOSSARY OF SELECTED INDUSTRY TERMS	G-1
ANNEX A	A-1

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ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS

We are a corporation organized under the laws of Nova Scotia, Canada. Some of our directors, controlling persons and officers and certain of the experts named in this prospectus are not residents of the United States, and all or a substantial portion of their assets and all or a substantial portion of our assets are located outside the United States. We have agreed, in accordance with the terms of the indenture under which the original notes were issued, to accept service of process in any suit, action or proceeding with respect to the indenture or the notes brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. However, it may be difficult for you to effect service of process within the United States upon our directors, controlling persons, officers and experts who are not residents of the United States or to realize in the United States upon judgments of U.S. courts based upon the civil liability under the federal securities laws of the United States. We have been advised by McInnes Cooper, our Canadian counsel, that there is doubt as to the enforceability in Canada against us or against our directors, controlling persons, officers or experts, who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts, of liabilities based solely upon the federal securities laws of the United States.

NOTICE TO CANADIAN INVESTORS

Since we are not a reporting issuer in any province or territory of Canada and have no present intention of becoming a reporting issuer in any province or territory of Canada, the following legend is prescribed by applicable Canadian Securities legislation and applies to trades in the notes involving persons in Canada.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (i) AUGUST 26, 2004, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.

PRESENTATION OF INFORMATION

Unless otherwise indicated, statements in this prospectus relating to market share, ranking and data are derived from management estimates based, in part, on independent industry publications, reports by market research firms or other published independent sources. Any discrepancies in any table between totals and the sums of the amounts listed in such table are due to rounding.

All financial information in this prospectus is presented in accordance with U.S. GAAP. However, in this prospectus we also use EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization. EBITDA is not defined under U.S. GAAP. We have included EBITDA in this prospectus because it is used by investors to measure our performance or liquidity. To evaluate EBITDA, the components of EBITDA, such as net income and interest charges and the variability of such components over time, should also be considered. Investors should be cautioned, however, that EBITDA is not a measure recognized under U.S. GAAP and should not be construed as an alternative to net income, cash from operating activities or any other indicator of our performance or liquidity under U.S. GAAP. Our method of calculating EBITDA may differ from the methods used by other companies and, as a result, the EBITDA measures presented in this prospectus may not be comparable to other similarly titled measures disclosed by other companies. For a reconciliation of EBITDA to net income, see footnote (2) under “Selected Consolidated Financial Data.”

WHERE YOU CAN FIND MORE INFORMATION

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will become subject to reporting requirements with the SEC. You may read and copy any of these reports, statements, or other

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information that we file with the SEC at the SEC’s public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC will also be available to the public from commercial document retrieval services and at the SEC’s web site at “http://www.sec.gov”.

You may request a copy of any of these future filings, at no cost, by writing or calling us at the following address or phone number:

Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia B2Y 2W1 Canada

Attention: Investor Relations

Telephone: (902) 465-3400

The information that we file later with the SEC will automatically update and supersede the information included in this prospectus.

CURRENCY AND EXCHANGE RATE DATA

We present our consolidated financial statements in Canadian dollars. In this prospectus, except where otherwise indicated, all dollar amounts are expressed in Canadian dollars, references to “$” or “dollars” are to Canadian dollars and references to “US$” and “U.S. dollars” are to United States dollars.

The following table sets forth, for each period presented, the low and high exchange rates for Canadian dollars expressed in U.S. dollars, the exchange rate at the end of such period and the average exchange rate for such period, based on the inverse of the noon buying rate in the City of New York for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York. As of February     , 2005, the inverse of the noon Federal Reserve Bank of New York buying rate of Canadian dollars was $1.00 = US$            .

	Fiscal Year Ended June 30,
	2000		2001		2002		2003		2004
Low	$	0.697	$	0.683	$	0.662	$	0.749	$	0.788
High		0.661		0.633		0.620		0.626		0.709
Period end		0.676		0.659		0.658		0.738		0.746
Average		0.679		0.658		0.637		0.662		0.745

	Month Ended
	June 30, 2004		July 31, 2004		August 31, 2004		September 30, 2004		October 31, 2004		November 30, 2004
Low	$	0.746	$	0.764	$	0.771	$	0.791	$	0.820	$	0.849
High		0.726		0.749		0.751		0.765		0.786		0.815
Period end		0.746		0.752		0.760		0.791		0.819		0.840
Average		0.736		0.756		0.762		0.776		0.802		0.836

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FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements, including, without limitation, certain statements made under the sections entitled “Prospectus Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” We have based these forward-looking statements on our current views and assumptions about future events. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we cannot assure you that these plans, intentions or expectations will be achieved.

Like other businesses, we are subject to risks and other uncertainties that could cause our actual results to differ materially from any projections or that could cause other forward-looking information to prove incorrect. In addition to general economic and business risks, some of the specific risks to which our business is subject include:

• declines in oil or natural gas prices, which tend to cause reductions in exploration, development and production activities and, in turn, reductions in the use of offshore energy support vessels and in the rates paid for their use;

• increased construction of new, or increased availability of existing, offshore energy support vessels suitable for use in our markets, which can cause oversupply in the market and consequent reductions in the use of our offshore energy support vessels and reductions in the rates paid for their use;

• international political instability, which can lead to reductions in exploration, development and production activities, particularly in less developed regions;

• fluctuations in weather, which can lead to declines in energy consumption and resulting declines in oil or natural gas prices;

• changes in laws and regulations affecting the marine transportation industry, including any possible weakening of the legal and regulatory barriers to entry in eastern Canada marine operations, which could result in increased competition from non-Canadian companies and foreign built vessels in our Canadian offshore supply and support services;

• extremely adverse weather conditions, accidents, terrorist attacks or hijackings, which could disable or destroy one or more of our vessels and result in significant loss of hire and revenue;

• fluctuations in interest rates, which can materially affect the cost of our debt; and

• our success at managing the risks of the foregoing.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

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PROSPECTUS SUMMARY

This prospectus summary highlights selected information from this prospectus to help you understand our business and the terms of the notes. This prospectus summary does not contain all of the information that you should consider before investing in the notes. You should read the entire prospectus carefully. You should pay special attention to the “Risk Factors” section beginning on page 11. In this prospectus, “Secunda,” “company,” “we,” “us” and “our” refer to Secunda International Limited and its subsidiaries, except as otherwise indicated.

Secunda International Limited

Overview

We are a leading provider of supply and support services to the offshore oil and gas industry of the east coast of Canada. Since we began operations in 1983, we have increased the size of our fleet from one to 13 vessels and have focused on our core business of providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. We currently operate the largest fleet of supply and support vessels serving the Canadian east coast offshore market and believe that we are well-positioned to capitalize on the expected increase in activity in this region due to our strong customer relationships, our specialized and multi-function vessels and the technical skills of our workforce. For the fiscal year ended June 30, 2004, we generated total revenues of $66.2 million.

Our fleet is currently comprised of 13 specialized and multi-function vessels with large cargo capacities and harsh weather performance capabilities. In addition, six of our vessels are equipped with state-of-the-art dynamic positioning systems that allow for computer-guided, precision maneuverability for extended periods. Our expertise in identifying, acquiring, modifying and converting vessels that fit our business needs has enabled us to significantly improve the quality of our fleet and has helped position us to meet the increasing demand for offshore marine services off the east coast of Canada, particularly for production-related activities in this region. As part of this acquisition and conversion strategy, from 1998 to 2004, we built two new vessels and converted seven vessels to meet the needs of our customers operating in a harsh weather environment. During this period, we spent a total of $153 million on vessel acquisitions and conversions and a total of $67 million on newbuild vessels. We believe that the average effective age of our vessels is 10 to 12 years.

We have developed strong relationships with many of the largest global oil and gas companies, as well as other marine services companies, through our established record of providing reliable and cost-effective services in the uniquely demanding offshore region of the east coast of Canada. We have capitalized on these relationships to further serve these customers around the world wherever they require offshore marine services. Our largest customers include ExxonMobil, Petro-Canada and EnCana.

Recent Developments

New Senior Secured Credit Facility. On August 26, 2004, we entered into a $40.0 million senior secured bank credit facility with Fortis Capital Corp. and the group of lenders named in the agreement governing the facility. The credit facility provides for a two and a half year revolving period, followed by a five year repayment period. All amounts outstanding two and a half years from the closing of the credit facility will be repaid by us over the following five years. Our obligations under the credit facility, along with the notes and the subsidiary guarantees, are secured by a first priority lien for the benefit of the lenders under the credit facility and the holders of the notes on twelve of our existing vessels and related equipment, rights and other property including related charters and on all equity interests in certain subsidiaries, including the subsidiaries that own those vessels or charter or arrange for the charter of such vessels, with the lenders under the new credit facility entitled to priority on all collateral proceeds resulting from the foreclosure of any of those vessels or equity interests for application up to the amount outstanding under the new credit facility.

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New Senior Secured Floating Rate Notes. On August 26, 2004, we completed the sale of the original notes pursuant to a private placement exempt from the registration requirements of the Securities Act. We received net proceeds of approximately $154.5 million from the sale of the original notes, which we used to retire all of our then outstanding indebtedness, except for the indebtedness related to one of our vessels, to acquire a vessel that was being utilized under an operating lease and for working capital and other general corporate purposes.

Global Marine Systems. Until recently, our vessel, the Bold Endurance, was chartered to Global Marine Systems Limited, or GMS, under a charter set to expire on January 9, 2005. In early October 2004, we received notice from GMS, through an “Administrator” appointed under the bankruptcy protection laws in the United Kingdom that GMS had been placed in “Administration”. The Administrator, on behalf of GMS, informed us that charter fees due under GMS’ charter with us would not be paid but that we would be eligible as an unsecured creditor to participate in any “Company Voluntary Arrangement” initiated by the Administrator and designed to allow GMS continue as a going concern. At that time, GMS owed us charter fees in advance for the month of October 2004 and had an obligation to pay charter fees through to the end of the charter with us, together with certain other miscellaneous payments. On November 8, 2004, the unsecured creditors of GMS accepted a Company Voluntary Arrangement. On November 19, 2004, we met with representatives of GMS and concluded a settlement agreement that provides us with compensation consisting of cash, equipment and other consideration. As a result of the GMS settlement, we believe we are now in the same financial position we would be in if GMS had fulfilled its contractual obligations through the end of the term of its charter with us.

Restricted Payments. In November 2004, we made the following restricted payments, totaling $6,500,000:

• a dividend in the amount of $5,499,999 to our common shareholder of record, 3002534 Nova Scotia Limited, which is controlled by our President and Chief Executive Officer, Alfred A. Smithers;

• our redemption of 100 Class A Preference Shares of Secunda International Limited held by 3002534 Nova Scotia Limited, at a redemption price of $10,000 per share for a total of $1,000,000; and

• our redemption of 100 Class B Preference Shares of Secunda International Limited held by 3002534 Nova Scotia Limited, at a redemption price of $.01 per share for a total of $1.00.

All of these restricted payments were approved by our board of directors on November 3, 2004 and were made in accordance with the terms of the indenture governing the notes.

Our corporate offices are located at One Canal Street, Dartmouth, Nova Scotia B2Y 2W1 Canada, and our telephone number is (902) 465-3400.

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The Exchange Offer

On August 26, 2004, we completed a private placement of the original notes. As part of that private placement, we entered into a registration rights agreement with the initial purchasers of the original notes in which we agreed, among other things, to deliver this prospectus to you and to use our reasonable best efforts to complete the exchange offer within 270 days after the date we issued the original notes. The following is a summary of the exchange offer.

Exchange Offer	We are offering to exchange the exchange notes for original notes.
Expiration Date	The exchange offer will expire at 5:00 p.m. New York City time, on                      2005, unless we decide to extend it.
Condition to Exchange Offer	The registration rights agreement does not require us to accept original notes for exchange if the exchange offer or the making of any exchange by a holder of the original notes would violate any applicable law or interpretation of the staff of the SEC. A minimum aggregate principal amount of original notes being tendered is not a condition to the exchange offer.
Procedures for Tendering Original Notes	To participate in the exchange offer, you must follow the procedures established by The Depository Trust Company, which we call “DTC,” for tendering notes held in book-entry form. These procedures, which we call “ATOP,” require that the exchange agent receive, prior to the expiration date of the exchange offer, a computer generated message known as an “agent’s message” that is transmitted through DTC’s automated tender offer program and that DTC confirm that: •      DTC has received your instructions to exchange your notes, and •      you agree to be bound by the terms of the letter of transmittal.
	For more details, please read “Exchange Offer — Terms of the Exchange Offer” and “— Procedures for Tendering.”
Guaranteed Delivery Procedures	None.
Withdrawal of Tenders	You may withdraw your tender of original notes at any time prior to the expiration date. To withdraw, you must submit a notice of withdrawal to the exchange agent using ATOP procedures before 5:00 p.m. New York City time on the expiration date of the exchange offer. Please read “Exchange Offer — Withdrawal of Tenders.”
Acceptance of Original notes and Delivery of Exchange Notes	If you fulfill all conditions required for proper acceptance of original notes, we will accept any and all original notes that you properly tender in the exchange offer on or before 5:00 p.m. New York City time on the expiration date. We will return any original notes that we do not accept for exchange to you without expense as promptly as practicable after the expiration date. We will deliver the exchange notes as promptly as practicable after

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	the expiration date and acceptance of the original notes for exchange. Please read “Exchange Offer — Terms of the Exchange Offer.”
Fees and Expenses	We will bear all expenses related to the exchange offer. Please read “Exchange Offer — Fees and Expenses.”
Use of Proceeds	The issuance of the exchange notes will not provide us with any new proceeds. We are making this exchange offer solely to satisfy our obligations under our registration rights agreement.
Consequences of Failure to Exchange Original Notes	If you do not exchange your original notes in this exchange offer, you will no longer be able to require us to register the original notes under the Securities Act except in the limited circumstances provided under our registration rights agreement. In addition, you will not be able to resell, offer to resell or otherwise transfer the original notes unless we have registered the original notes under the Securities Act, or unless you resell, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act.
U.S. Federal Income Tax Considerations	The exchange of exchange notes for original notes in the exchange offer should not be a taxable event to you for U.S. federal income tax purposes. Please read “Tax Conderations — Federal Income Tax Considerations.”
Exchange Agent	We have appointed Wells Fargo Bank, NA as exchange agent for the exchange offer. You should direct questions and requests for assistance and requests for additional copies of this prospectus (including the letter of transmittal) to the exchange agent addressed as follows: Wells Fargo Bank, N.A., Corporate Trust Operations, MAC N9303-121, 6th & Marquette Avenue, Minneapolis, MN 55479. Attention: Bondholder Communications. Eligible institutions may make requests by facsimile at (612) 667-6282, Attention: Bondholder Communications.

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The Exchange Notes

The exchange notes will be identical to the original notes except that the exchange notes are registered under the Securities Act and will not have restrictions on transfer, registration rights or provisions for special interest and will contain different administrative terms. The exchange notes will evidence the same debt as the original notes, and the same indenture will govern the exchange notes and the original notes.

The following summary contains basic information about the exchange notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the exchange notes, please read “Description of the Exchange Notes.” As used in this summary of the exchange notes, references to “we,” “us,” “our” and similar terms, as well as references to “Secunda” refer to Secunda International Limited only, without reference to its subsidiaries.

Securities Offered	US$125,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due 2012.
Maturity	September 1, 2012.
Interest	The exchange notes will accrue interest at a rate per annum equal to LIBOR (as defined) plus 8.0%. Interest on the exchange notes will be reset quarterly.
Interest Payment Dates	We will pay interest on the exchange notes quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing January 15, 2005.
Ranking	The exchange notes will rank equally in right of payment with all of our other existing and future senior indebtedness and senior in right of payment to any future subordinated indebtedness.
Guarantees	The exchange notes will be fully and unconditionally guaranteed, jointly and severally, by all of our current material and, in some circumstances, future restricted subsidiaries. Each subsidiary’s guarantee will rank equally in right of payment with all of its existing and future senior indebtedness and senior in right of payment to any future subordinated indebtedness.
Security	The exchange notes and the subsidiary guarantees will be secured by a first priority lien for the benefit of the holders of the notes and the lenders under our credit facility on twelve of our existing vessels and related equipment, rights and other property including related charters and on all equity interests in certain subsidiaries, including the subsidiaries that own those vessels, with the lenders under the credit facility entitled to priority on all collateral proceeds resulting from the foreclosure of any of those vessels or equity interests for application up to the amount outstanding under the credit facility. The property and rights securing the exchange notes and our credit facility are described in “Description of the Exchange Notes — Security — Collateral.”

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Optional Redemption	We may, at our option, redeem all or a part of the exchange notes at any time on or after September 1, 2006, at the redemption prices described in this prospectus. In addition, we may, at our option, redeem up to 35% of the principal amount of the notes, at any time prior to September 1, 2007, with the net proceeds from any qualifying equity offerings at a redemption price (expressed as a percentage of principal amount) equal to the sum of (i) 100% plus (ii) the interest rate per annum (expressed as a percentage) in effect on the date which notice is given, plus accrued and unpaid interest.
	We may also redeem the exchange notes as a whole but not in part at any time at 100% of the principal amount of the exchange notes, plus accrued interest to the date of redemption, in the event of changes affecting withholding taxes that would require us to pay “additional amounts” to holders of the notes. See “Description of the Exchange Notes — Redemption for Changes in Withholding Taxes” and “— Additional Amounts.”
Change of Control	If we experience a change of control, we will be required to offer to purchase all of the exchange notes for cash at 101% of the principal amount of the exchange notes, plus accrued and unpaid interest.
Annual Reduction Offer	On each August 1, from August 1, 2006 through August 1, 2011, we will be required to offer to purchase exchange notes in an aggregate principal amount of US$3,800,000 for cash at 100% of the principal amount of the exchange notes, plus accrued and unpaid interest.
Certain Covenants	The terms of the notes contain certain covenants that limit our ability and that of certain of our subsidiaries to, among other things: •      incur additional indebtedness; •      pay dividends or make other distributions or purchase or redeem stock or other equity; •      incur restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; •      sell assets or stock of one our subsidiaries or merge or consolidate with another company; •      enter into transactions with affiliates; •      incur liens; and •      engage in sale / leaseback transactions. All of these limitations are subject to a number of important qualifications. See “Description of the Exchange Notes.”

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Additional Amounts

Any payments made by us with respect to the exchange notes will be made without withholding or deduction for taxes unless required by law. If we are required by law to withhold or deduct for taxes with respect to a payment to the holders of exchange notes, we will pay the additional amount necessary so that the net amount received by the holders of exchange notes (other than certain excluded holders) after the withholding is not less than the amount that they would have received in the absence of the withholding. See “Description of the Exchange Notes — Additional Amounts.”

Transfer Restrictions; Absence of a Public Market for the Notes

The exchange notes generally will be freely transferable; however, there can be no assurance as to the development or liquidity of any market for the exchange notes.

RISK FACTORS

See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the exchange notes.

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RISK FACTORS

An investment in the exchange notes involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus, before tendering your original notes for exchange notes.

Risks Relating to Our Business

Demand for many of our services substantially depends on the level of activity in offshore oil and natural gas exploration, development and production, especially in eastern Canada.

The level of offshore oil and natural gas exploration, development and production activity has historically been volatile and is likely to continue to be so in the future. The level of activity is subject to large fluctuations in response to relatively minor changes in a variety of factors that are beyond our control, including:

• prevailing oil and natural gas prices and expectations about future prices and price volatility;

• the cost of exploring for, producing and delivering oil and natural gas offshore;

• worldwide demand for energy and other petroleum products as well as chemical products;

• availability and rate of discovery of new oil and natural gas reserves in offshore areas;

• local and international political and economic conditions and policies;

• technological advances affecting energy production and consumption;

• weather conditions;

• environmental regulation; and

• the ability of oil and natural gas companies to generate or otherwise obtain funds for capital requirements.

We expect levels of oil and natural gas exploration, development and production activity to continue to be volatile and affect the demand for and rates of our offshore energy supply and support services and marine services.

A prolonged material downturn in oil and natural gas prices is likely to cause a substantial decline in expenditures for exploration, development and production activity. Lower levels of expenditure and activity would result in a decline in the demand and lower rates for our offshore energy support services and marine transportation services. Moreover, approximately 69% of our total revenues for the fiscal year ended June 30, 2004 were attributable to our offshore energy support services conducted offshore of the east coast of Canada. As such, we are dependent on levels of activity in that region, which may differ from levels of activity in other regions of the world.

Intense competition in our lines of business could result in reduced profitability and loss of market share for us.

There is currently an oversupply of offshore supply vessels in many markets around the world. Contracts for our vessels are generally awarded on a competitive basis, and competition in the offshore energy support segment is intense. The most important factors determining whether a contract will be awarded include:

• suitability, reliability and capability of equipment;

• safety record;

• age of equipment;

• personnel;

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• price;

• service; and

• reputation.

Our major competitor in Canada is a much larger company with substantially greater financial resources and substantially larger operating staffs than we have. It may be better able to compete in making vessels available more quickly and efficiently or in constructing new vessels, meeting customers scheduling needs and withstanding the effect of downturns in the market. As a result, we could lose customers and market share to this or other competitors.

The loss of our vessel contracts for marine services with ExxonMobil or Petro-Canada or other significant customers could have an adverse effect on our results of operations.

The revenues we derive from our multi-year vessel contracts for marine services with ExxonMobil and Petro-Canada constitute a significant portion of our total revenues, representing 45% for the fiscal year ended June 30, 2004. Most of these contracts include option periods. Unless the customer chooses to exercise this option, the contract expires on the date or event stated in the contract. A decision by a customer not to renew a contract or exercise a contract option, could adversely affect our business, results of operations and financial condition.

The loss of one or more of our vessels which produce a significant portion of our total revenues could negatively impact our results of operations.

Operating revenues attributable to each of the Bold Endurance, Thebaud Sea, Trinity Sea and Burin Sea individually represented in excess of 10% of our total revenues for the fiscal year ended June 30, 2004. If one or more of these vessels sustained substantial hull, mechanical or other damage, rendering them incapable of service for an extended period of time, the resulting negative financial impact on our business, results of operations and financial condition could be substantial. We currently do not have business interruption insurance that would cover the lost revenues that could result from the temporary or permanent removal of one or more of our vessels from regular service.

Acquisition and conversion of vessels involve risks that could adversely affect our results of operations.

From time to time, we consider possible acquisitions of vessels that complement or expand our existing operations. Our ability to continue to grow depends, in part, on the success of our vessel acquisition and conversion program. The success of this program, in turn, depends on the availability and suitability of appropriate vessels as acquisition targets, and we may suffer delay and cost overruns inherent to large construction and conversion programs. We may also face competition for the acquisition of these vessels from other companies in the shipping or marine services industries, who may be larger and have greater economic resources than we have. In addition, there can be no assurance that we will be able to successfully integrate the vessels we acquire or maintain our growth objectives in the absence of vessel acquisition opportunities.

We may be required to raise additional capital in the future if we decide to make additional vessel acquisitions. The availability of future borrowings and access to capital markets for financing depends on prevailing market conditions and the acceptability of financing terms offered to us. There can be no assurance that future borrowings or equity financing will be available to us, or available on acceptable terms, in an amount sufficient to fund our needs.

The consolidation or loss of companies that charter our offshore supply and support vessels could adversely affect demand for our vessels and reduce our revenues.

Oil and gas companies and drilling contractors have undergone substantial consolidation in the last few years and additional consolidation is likely. Consolidation results in fewer companies to charter or contract for

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our vessels. Also, merger activity among both major and independent oil and natural gas companies affects exploration, development and production activity as the consolidated companies integrate operations to increase efficiency and reduce costs. Less promising exploration and development projects of a combined company may be dropped or delayed. Such activity may result in an exploration and development budget for a combined company that is lower than the total budget of both companies before consolidation, adversely affecting demand for our offshore energy support vessels and reducing our revenues.

Inability to replace aging vessels could materially affect our operations.

There can be no assurance that we will be able to maintain our fleet by extending the economic life of existing vessels, or that our financial resources will be sufficient to enable us to make expenditures necessary to maintain or upgrade our vessels or to acquire or build replacement vessels. In addition, we may determine that the expense necessary to satisfy required marine certification standards are no longer economically justifiable for certain of our older vessels.

Failure to comply with governmental regulation could materially affect our operations.

We operate in a highly regulated industry, both within Canada and internationally. Government regulation, such as international conventions, federal, provincial and local laws and regulations in jurisdictions where our vessels operate or are registered, have a significant impact on our business. These regulations relate to worker health and safety, the manning, construction and operation of vessels and other aspects of environmental protection. Changes to any of the laws, regulations, rules or policies respecting the provision of our services could have a significant impact on our business and there can be no assurance that we will be able to comply with any future laws, regulations, rules and policies. Failure by us to comply with applicable laws, regulations, rules or policies may subject us to revocation of licenses or to civil or regulatory proceedings, including fines, injunctions, recalls or seizures, which may have a material adverse effect on our financial condition and results of operations.

We also rely on licenses, permits and various other approvals issued by governmental and regulatory authorities in order to permit us to provide certain marine services. Any failure to renew our licenses, permits or approvals or any material alteration to the terms of such licenses, permits or approvals may have a material adverse effect on our financial condition and results of operations.

We conduct international operations, which involve additional risks.

We operate vessels worldwide. During the fiscal year ended June 30, 2004, approximately 6% of our total revenues were derived from operations outside of Canada. This percentage could increase. Our operations outside Canada, which have recently been expanded to include Tunisia and Libya, involve additional risks, including the possibility of:

• restrictive actions by foreign governments, including vessel seizure;

• foreign taxation and changes in foreign tax laws;

• limitations on repatriation of earnings;

• changes in currency exchange rates;

• local cabotage and local ownership laws and requirements;

• nationalization and expropriation;

• failure to comply with increasing national security requirements.

• loss of contract rights; and

• political instability, war and civil disturbances or other risks that may limit or disrupt markets.

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Our ability to compete in the international offshore energy support market may be adversely affected by foreign government regulations that favor or require the awarding of contracts to local persons, or that require foreign persons to employ citizens of, or purchase supplies from, a particular jurisdiction. Further, our Barbados subsidiaries may face governmentally imposed restrictions on the ability to transfer funds to us.

Environmental, safety and other laws and regulations could increase the cost of doing business or restrict our ability to conduct our business.

We are subject to a wide range of general and industry-specific environmental and other laws and regulations imposed by federal, provincial and local authorities in Canada, including those governing the use, storage, handling, generation, treatment, emission, release, discharge and disposal of certain hazardous materials and wastes, the remediation of contaminated soil and groundwater, and the health and safety of employees. If we are unable to extend or renew a material approval, license or permit required by such laws, or if there is a delay in renewing any material approval, license or permit, our business, financial condition, results of operations and cash flows could be materially adversely affected. Our failure to comply with applicable environmental and safety laws and regulations, and the permit requirements related thereto, could result in civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures, installation of equipment or remedial actions, any of which could result in significant capital expenditures or reduced results of operations. In addition, the failure of any of our customers to obtain necessary environmental approvals, including the completion of any necessary environmental impact assessments, could delay the commencement of new projects and, as a result, our employment for such projects. Future events such as any changes in environmental or other laws and regulations, including any new legislation that might arise as a result of the Government of Canada’s ratification of the United Nations Kyoto Protocol, or any change in interpretation or enforcement of laws and regulations, may give rise to additional expenditures or liabilities. These events could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The modification or repeal of laws and regulations favoring Canadian vessels in Canadian coastal trade could result in additional competition.

A substantial portion of our operations is conducted offshore of the east coast of Canada. Under the Coasting Trade Act of Canada and the immigration laws of Canada, all vessels working in the Canadian offshore must be Canadian-flagged and operated by Canadian crews. Canada Revenue Agency duties equal to 25% of the value of the vessel are also imposed on foreign vessels operating in Canada. Additionally, stringent Transport Canada Marine Safety regulations make it costly for foreign competitors to import foreign vessels to compete in Canadian controlled markets. However, Canadian authorities may grant exemptions to the 25% duty level where there is no suitable available Canadian ship. In such cases, foreign-flagged vessels would be allowed to operate in the Canadian offshore market after payment of a substantially reduced duty. An under supply of Canadian-flagged vessels in our principal market, as well as the liberalization or repeal of these laws and regulations, could result in additional competition from vessels built in lower-cost foreign shipyards which could have a material adverse effect on our business, results of operation, cash flows and financial condition.

Our business involves hazardous activities and other risks of loss against which we may not be adequately insured.

Our business is affected by a number of risks, including:

• harsh weather;

• the mechanical failure of our vessels;

• collisions;

• vessel loss or damage;

• cargo loss or damage;

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• terrorism;

• hostilities; and

• work stoppages.

In addition, the operation of any vessel is subject to the inherent possibility of a catastrophic marine disaster, including oil, fuel or chemical spills and other environmental mishaps, as well as other liabilities arising from owning and operating vessels. Any such event may result in the loss of revenues and increased costs and other liabilities. There can be no assurance that we have adequate insurance to cover these risks.

We depend on attracting and retaining qualified, skilled employees to operate our business and protect our competitive advantage.

Our results of operations depend in part upon our business skill. We believe that protection of our skill depends in large part on our ability to attract and retain highly skilled and qualified personnel.

Due to the reputation of our training program, our experienced employees are in high demand by competitors. We may lose some of our existing employees as a result of more desirable offers of employment from our competitors. The process involved in training replacement personnel could be costly and time-consuming. Additionally, there is no assurance that we would be able to find and train comparable replacement personnel. Any inability we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage and maintain our business and to protect our expertise.

Our success depends on key members of our management team, the loss of whom could disrupt our business operations.

We depend to a large extent on the business experience, efforts and continued employment of our executive officers and key management personnel. The loss of services of certain key members of our management could disrupt our operations and have a negative impact on our operating results. We currently do not have employment agreements with any members of our management team.

Our Chief Executive Officer controls our business, and his interests may conflict with the interests of our debtholders.

Alfred A. Smithers, our President, Chief Executive Officer and a director, indirectly controls all of our outstanding voting capital stock and consequently has the ability to exercise control over our business and affairs through his ability to elect our directors. Mr. Smithers’ interests in our business, operations and financial condition may not be aligned or may conflict, from time to time, with your interests.

Insurance costs in our industry are generally escalating and no assurance can be given that affordable insurance will be available to us in the future.

International marine insurers and protection and indemnity clubs are susceptible to investment losses, underwriting losses and higher reinsurance costs that could cause the cost of premiums to rise substantially, resulting not only in higher premium costs but also much higher levels of deductibles and self-insurance retentions for much of our industry. Any deterioration in this insurance market could lead to even higher levels of premiums, deductibles and self-insurance.

Risks Related to the Notes

If you do not properly tender your original notes, you will not receive exchange notes in the exchange offer, and you may not be able to sell your original notes.

We will issue exchange notes only in exchange for original notes that are timely received by the exchange agent, together with all required documents, including a properly completed and duly signed letter of transmittal.

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Therefore, you should allow sufficient time to ensure timely delivery of the original notes, and you should carefully follow the instructions on how to tender your original notes. Neither we nor the exchange agent is required to tell you of any defects or irregularities with respect to your tender of the original notes. If you do not tender your original notes or if we do not accept your original notes because you did not tender your original notes properly then, after we consummate the exchange offer, you will continue to hold original notes that are subject to the existing transfer restrictions. In general, you may not offer or sell the original notes unless they are registered under the Securities Act or offered or sold in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and applicable state securities laws. Although we may in the future seek to acquire unexchanged original notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise, we have no present plans and are not required to acquire any unexchanged original notes or to file with the SEC a shelf registration statement to permit resales of any unexchanged original notes. In addition, holders of original notes other than the initial purchasers or holders who are prohibited by applicable law or SEC policy from participating in the exchange offer or who may not resell the exchange notes acquired in the exchange offer without delivering a prospectus, will not have any further registration rights and will not have the right to receive special interest on their original notes.

The market for the original notes may be significantly more limited after the exchange offer.

Because we anticipate that most holders of original notes will elect to exchange their original notes, we expect that the liquidity of the market for any original notes remaining after the completion of the exchange offer may be substantially limited. Any original notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount of the original notes outstanding. Accordingly, the liquidity of the market for any original notes could be adversely affected and you may be unable to sell them. The extent of the market for the original notes and the availability of price quotations would depend on a number of factors, including the number of holders of original notes remaining outstanding and the interest of securities firms in maintaining a market in the original notes. An issue of securities with a smaller number of units available for trading may command a lower, and more volatile, price than would a comparable issue of securities with a larger number of units available for trading. Therefore, the market price for the original notes that are not exchanged may be lower and more volatile as a result of the reduction in the aggregate principal amount of the original notes outstanding.

Non-U.S. holders of the exchange notes are subject to restrictions on the resale of the exchange notes.

We sold the original notes in reliance on exemptions from the laws or other jurisdictions where the original notes were offered and sold, and therefore the original notes may be transferred and resold, including pursuant to the exchange offer, only in compliance with the laws of those jurisdictions to the extent applicable to the transaction, the transferor and/or the transferee. Although we registered the exchange notes under the Securities Act, we did not, and do not intend to, qualify the exchange notes for distribution in Canada by prospectus and, accordingly, the exchange notes will remain subject to restrictions on resale in Canada. In addition, non-U.S. holders will remain subject to restrictions imposed by the jurisdiction in which the holder is resident.

Our substantial indebtedness could adversely affect our financial condition and impair our ability to fulfill our obligations under the notes.

We currently have, and following the completion of this exchange offer we will have, substantial debt and substantial debt service requirements. For the year ended June 30, 2004, as adjusted to give effect to the offering of the original notes and the application of the proceeds therefrom, we would have had approximately $185.9 million of outstanding indebtedness, our pro forma net debt to EBITDA ratio would have been 7.6x and our EBITDA to pro forma interest expense ratio would have been 1.3x.

Our level of indebtedness may have important consequences for you, including:

• impairing our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes or to repurchase the notes from you upon a change of control;

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• requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on our indebtedness, which reduces the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• subjecting us to increased sensitivity to interest rate increases on our indebtedness with variable interest rates, including these notes and our borrowings under our new credit facility;

• increasing the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and

• limiting our ability to adjust to rapidly changing market conditions, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or our business than our competitors with less debt.

If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required to refinance all or a portion of our existing debt, including the notes, or to obtain additional financing. We cannot assure you that any such refinancing would be possible or that any additional financing could be obtained. Our inability to obtain such refinancing or financing may have a material adverse effect on us.

Despite our and our subsidiaries’ current levels of indebtedness, we may incur substantially more debt, which could further increase the risks associated with our substantial indebtedness.

Although the agreements governing our credit facility and the indenture governing the notes contain restrictions on the incurrence of additional indebtedness by us and our restricted subsidiaries, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. In addition to amounts that may be borrowed under our credit facility, the indenture governing the notes also allows us and our restricted subsidiaries to borrow significant amounts of money from other sources and places no restrictions on borrowings by our unrestricted subsidiaries. Also, these restrictions do not prevent us from incurring obligations that do not constitute “indebtedness” as defined in the relevant agreement. If new debt is added to the current debt levels, the related risks that we now face could intensify.

Fluctuations in interest rates could materially affect the cost of our debt.

The notes and our credit facility bear interest at a floating rate and, therefore, are subject to fluctuations in interest rates. Interest rate fluctuations are beyond our control and there can be no assurance that interest rate fluctuations will not have a significant adverse effect on our financial performance.

The instruments governing our debt contain cross default provisions that may cause all of the debt issued under such instruments to become immediately due and payable as a result of a default under an unrelated debt instrument.

The indenture governing the notes contains numerous operating covenants, and our credit facility contains numerous operating covenants and require us and our subsidiaries to meet certain financial ratios and tests. Our failure to comply with the obligations contained in the indenture, our credit facility or other instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets and otherwise curtail operations in order to pay our creditors.

Our credit facility contains covenants that restrict our activities.

Our credit facility:

• requires us to meet certain financial tests, including maximum ratios of leverage and the maintenance of minimum EBITDA, minimum current ratio and minimum fair market value ratio;

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• limits imposing certain liens;

• limits additional borrowing;

• restricts certain payments, including dividends, on shares of any class of capital stock; and

• limits our ability to do certain things, such as entering into certain types of business transactions, including mergers and acquisitions.

These provisions could limit our future ability to pursue actions or strategies that we believe would be beneficial to our company or our stockholders or may result in default of our borrowing agreements.

The holders of the notes may not be able to realize fully the value of the liens securing the notes.

The notes are secured by a first priority lien in favor of a collateral agent for the benefit of the holders of the notes and the lenders under our credit facility on twelve of our existing vessels and related equipment, rights and other property, including related charters, and on all equity interests in certain subsidiaries, including the subsidiaries that own those vessels, with the lenders under our credit facility entitled to priority on all collateral proceeds received from a foreclosure or other similar lien enforcement action up to the amount outstanding under our credit facility. The amount to be received from any foreclosure or similar disposition of the collateral would depend upon numerous factors including market and economic conditions, the availability of buyers, the timing and manner of sale and similar factors. There can be no assurance that the collateral could or would be liquidated in a short period of time. As a result, we cannot assure you that the proceeds of any forced sale of the collateral would be sufficient to satisfy, or would not be substantially less than, amounts due on the notes after satisfying our obligations secured for the benefit of the lenders under our credit facility. Accordingly, with respect to collateral proceeds received in these events, the notes are effectively subordinated in right of payment to our credit facility to the extent of the amount outstanding under our credit facility.

All rights to enforce the liens and otherwise take action with regard to the collateral will be subject to a collateral agency agreement. The agreement provides that a collateral agent will exercise the rights granted thereunder at the direction of the requisite holders of the notes and the lenders under our credit facility. Generally, that direction requires the joint participation of the requisite holders of the notes and the lenders under our credit facility. However, with regard to certain designated vessels and the capital stock of our subsidiaries that own or charter or arrange for the charter of those designated vessels and on all other collateral related to the designated vessels the lenders under our credit facility are permitted the right to direct the enforcement of the liens on those vessels and the capital stock of such subsidiaries (including the release of those liens), after the occurrence of an event of default, without the concurrence of the requisite holders of the notes. Currently there are four vessels in the collateral that comprise these designated vessels, and these vessels are used in our credit facility as a reference for our asset value to outstanding debt maintenance compliance requirement. If additional vessels are needed to permit us to comply with that test, additional vessels in the collateral can become designated vessels that are subject to the right of the lenders under our credit facility to direct the related lien enforcement. As a result, following an event of default, including a bankruptcy proceeding, the holders of the notes may have no right jointly to participate in the enforcement or release of liens in such designated vessels.

If the proceeds from the sale of the collateral were not sufficient to repay all amounts due on the notes, the holders of the notes would have only an unsecured claim against our remaining assets.

Maritime liens may arise and take priority over the liens securing the notes.

The laws of various jurisdictions in which our vessels may trade may give rise to the existence of maritime liens which may take priority over the liens securing the notes. Such liens may arise in support of, among other things, claims by unpaid ship builders or ship repairers remaining in possession of the vessel, claims for salvage, claims for damage caused by a vessel in collision, claims for seamen’s wages, master’s wages and other

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employment benefits and master’s disbursements and claims for pilotage, as well as potentially claims for necessary goods and services supplied to a vessel. This list should not be regarded as definitive or exhaustive, as the categories of claims giving rise to maritime liens, and the ranking of such liens, vary from one jurisdiction to another. Maritime liens can attach without any court action, registration or documentation and accordingly their existence cannot necessarily be identified.

To service our indebtedness, including the notes, we will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

Our ability to make scheduled payments of principal or interest with respect to our indebtedness, including the notes, will depend on our ability to generate cash and on our future financial results. Our ability to generate cash depends on the demand for our services, which is subject to levels of activity in offshore oil and natural gas exploration, development and production, general economic conditions, and financial, competitive, regulatory and other factors affecting our operations, many of which are beyond our control. We cannot assure you that our operations will generate sufficient cash flow or that future borrowings will be available to us under our credit facility or otherwise in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs.

We may not have the ability to repurchase the notes upon a change of control or on an annual reduction date as required by the indenture.

Upon the occurrence of a change of control (as defined in the indenture), we will be required to offer to purchase all outstanding notes at 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. On an annual reduction date (as defined in the indenture), we will be required to offer to purchase notes in the aggregate principal amount of US$3.8 million at 100% of their principal amount plus accrued and unpaid interest to the date of repurchase. Upon such a change of control or on such annual reduction date, as the case may be, we may not have sufficient funds available to repurchase all of the notes tendered pursuant to the applicable requirements. In addition, we may be prohibited by our credit facility from repurchasing any of the exchange notes unless the lenders thereunder consent. Our failure to repurchase the notes would be a default under the indenture, which would, in turn, be a default under our credit facility and, potentially, other debt. If any debt were to be accelerated, we may be unable to repay these amounts and make the required repurchase of the notes. See “Description of the Exchange Notes — Change of Control” and “— Annual Reduction Offer”.

An active trading market may not develop for the notes, which may limit your ability to resell them.

The notes constitute a new class of securities for which there is no established trading market. We do not intend to list the notes on a stock exchange or seek their admission for trading in the National Association of Securities Dealers Automated Quotation System. Accordingly, we cannot assure you that an active trading market for the notes will develop or, if a trading market develops, that it will continue. The lack of an active trading market for the notes would have a material adverse effect on the market price and liquidity of the notes. If a market for the notes develops, they may trade at a discount from their initial offering price.

The market price of the notes may be volatile.

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

• our operating performance and financial condition;

• our ability to complete the offer to exchange the notes for registered notes or to register the notes for resale in the United States;

• the interest of securities dealers in making a market;

• the market for similar securities; and

• prevailing interest rates.

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

Certain bankruptcy and insolvency laws may impair the trustee’s and/or the collateral agent’s ability to enforce remedies under the notes.

We and a majority of our guarantor subsidiaries are organized under the laws of the Province of Nova Scotia and substantially all of our assets are located in Canada. Under bankruptcy laws in the United States, courts typically have jurisdiction over a debtor’s property, wherever located, including property situated in other countries. There can be no assurance, however, that courts outside of the United States would recognize the U.S. bankruptcy court’s jurisdiction. Accordingly, difficulties may arise in administering a U.S. bankruptcy case involving a Canadian debtor like us with property located outside of the United States, and any orders or judgments of a bankruptcy court in the United States may not be enforceable in Canada against us.

The rights of the trustee to enforce remedies may be significantly impaired by the restructuring provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation if the benefit of such legislation is sought with respect to us. For example, both the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada) contain provisions enabling an “insolvent person” to obtain a stay of proceedings against its creditors and others and to prepare and file a proposal for consideration by all or some of its creditors to be voted on by the various classes of its creditors. Such a restructuring proposal, if accepted by the requisite majorities of creditors and approved by the court, may be binding on persons, such as holders of the notes, who may not otherwise be willing to accept it. Moreover, this provision of the legislation permits, in certain circumstances, an insolvent debtor to retain possession and administration of its property, even though it may be in default under the applicable debt instrument.

The powers of the court under the Bankruptcy and Insolvency Act (Canada) and particularly under the Companies’ Creditors Arrangement Act (Canada) have been exercised broadly to protect a restructuring entity from actions taken by creditors and other parties. Accordingly, if we were to seek protection under such Canadian bankruptcy legislation following commencement of or during such a proceeding, payments under the notes may be discontinued or suspended, the trustee may be unable to exercise its rights under the indenture and holders of the notes may not be compensated for any delays in payments, if any, of principal and interest.

In addition, the right of the collateral agent to repossess and dispose of the collateral upon the occurrence of an event of default is likely to be significantly impaired if a bankruptcy proceeding were to be commenced in the United States by or against us or one of our subsidiary guarantors prior to the collateral agent having repossessed and disposed of the collateral. Under the bankruptcy code, a secured creditor such as the collateral agent may be prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the bankruptcy code permits the debtor to continue to retain and to use collateral (and the proceeds, products, offspring, rents or profits of such collateral) even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended, in general, to protect the value of the secured creditor’s interest in the collateral and may include, if approved by the court, cash payments or the granting of additional security for any diminution in the value of the collateral as a result of the stay of repossession or the disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. The bankruptcy court has broad discretionary powers in all these matters, including the valuation of collateral. In addition, because the enforcement of the lien of the collateral agent in cash, deposit accounts and cash equivalents may be limited in a bankruptcy proceeding, the holders of the notes may not have any consent rights with respect to the use of those funds by us or any of our subsidiaries during the pendency of the proceeding. In view of these considerations, it

is impossible to predict how long payments under the notes could be delayed following commencement of a

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bankruptcy case, whether or when the collateral agent could 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. Further, the holders of the notes may receive in exchange for their claims a recovery that could be substantially less than the amounts of their claims (potentially even nothing) and any such recovery could be in the form of cash, new debt instruments or some other security. Finally, the collateral agent’s ability to foreclose on the collateral on your behalf may be subject to lack of perfection, procedural restrictions, the consent of third parties and practical problems associated with the realization of the security interest in the collateral.

It is impossible to predict what recovery, if any, would be available for such a secured claim if we or a guarantor became a debtor in a bankruptcy case, including what form any such recovery would take, such as cash, new debt instruments or other securities.

A court could subordinate or void the obligations under our subsidiaries’ guarantees and the liens granted by our subsidiary guarantors.

Under the U.S. federal bankruptcy laws and comparable provisions of state fraudulent conveyance laws and applicable Canadian federal and provincial law, a court could void obligations under the subsidiary guarantees and any liens granted to secure such guarantees, subordinate those obligations to other obligations of our subsidiary guarantors or require you to repay any payments made pursuant to the subsidiary guarantees, if:

(1) fair consideration or reasonably equivalent value was not received in for the obligation; and

(2) at the time the obligation was incurred, the obligor:

• was insolvent or rendered insolvent by reason of the obligation;

• was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or

• intended to incur, or believed that it would incur, debts beyond its ability to pay them as the debts matured.

The measure of insolvency for these purposes will depend upon the law of the jurisdiction being applied. Generally, however, a company will be considered insolvent if:

• the sum of its debts, including contingent liabilities, is greater than the saleable value of all of its assets at a fair valuation;

• the present fair saleable value of its assets is less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and matured; or

• it could not pay its debts as they become due or it ceases to meet its liabilities as they become due.

Moreover, regardless of solvency, a court might void the guarantees, or subordinate the guarantees, if it determined that the transaction was made with intent to hinder, delay or defraud creditors.

Each subsidiary guarantee will contain a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its subsidiary guarantee to be a fraudulent transfer. This provision, however, may not be effective to protect the subsidiary guarantees from attack under fraudulent transfer law.

The indenture requires that certain subsidiaries must guarantee the notes in the future. These considerations will also apply to these guarantees.

21

Your ability to enforce civil liabilities in Canada under U.S. securities laws may be limited.

We are organized under the laws of the Province of Nova Scotia. All of our directors, controlling persons and officers named in this prospectus are residents of Canada, and a substantial portion of their assets and substantially all of our assets are located outside the United States. It may not be possible, therefore, for you to effect service of process within the United States upon us, our directors and officers or such experts. There is uncertainty as to the enforceability in Canadian courts of (1) an original action predicated solely upon U.S. federal securities laws and (2) judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of U.S. federal securities laws. Therefore, you may not be able to secure judgment against us, our directors and officers or such experts in a Canadian court or, if successful in securing a judgment against us or them in a U.S. court, you may not be able to enforce such judgment in Canada.

We are exposed to currency exchange risk which could have a material adverse effect on us.

Our operating results are sensitive to fluctuations in the exchange rate of the Canadian dollar to the U.S. dollar, as prices for some of our services are denominated in U.S. dollars or linked to prices quoted in U.S. dollars. For the fiscal year ended June 30, 2004, 15% of our total revenues were denominated in U.S. dollars. An increase in the value of the Canadian dollar relative to the U.S. dollar reduces the amount of revenue in Canadian dollar terms realized by us from sales made in U.S. dollars, which reduces our operating margin and the cash flow available to fund our operations. From June 30, 2003 to June 30, 2004, the value of the Canadian dollar relative to the U.S. dollar increased by approximately US$0.01, or 1.1%.

In addition, we are exposed to currency exchange risk on our debt, including the notes and interest thereon, and assets denominated in U.S. dollars. Since we present our financial statements in Canadian dollars, any change in the value of the Canadian dollar relative to the U.S. dollar during a given financial reporting period would result in a foreign currency loss or gain on the translation of our U.S. dollar-denominated debt and assets into Canadian dollars. Consequently, our reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses.

We are not currently a party to any forward foreign currency exchange contract, or other similar contract that could serve to hedge our exposure to fluctuations in the U.S. dollar/Canadian dollar exchange rate.

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USE OF PROCEEDS

The exchange offer is intended to satisfy our obligations under our registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes, the terms of which are identical in all material respects to those of the original notes. In consideration for issuing the exchange notes as contemplated by this prospectus, we will receive original notes in a like principal amount. The original notes surrendered in exchange for the exchange notes will be cancelled and cannot be reissued. The issuance of the exchange notes will not result in any change in our aggregate indebtedness. On August 26, 2004, we sold the original notes for net proceeds of approximately US$117.7 million ($154.5 million based on the noon buying rate of US$1.3123 = $1.00 on August 26, 2004). We used the net proceeds from the sale of the original notes to repay all of our then outstanding indebtedness (except for indebtedness related to one of our vessels), to acquire a vessel that was being utilized under an operating lease and for working capital and other general corporate purposes.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2004 and pro forma as adjusted to give effect to our sale of the original notes and the application of the net proceeds from the offering. You should read the information below in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	As of June 30, 2004
	Actual		Pro Forma As Adjusted
	($ in thousands)
Cash	$	815	$	10,882
Existing debt (including current portion)	$	136,231	$	21,829
Senior secured floating rate notes due 2012 (1)		—		164,038
Total debt		136,231		185,867
Shareholder’s equity (2)		33,858		30,527
Total book capitalization	$	170,089	$	216,394

(1) Equivalent to the US$125 million principal amount of the notes at the noon Federal Reserve Bank of New York buying rate of $1.3123 = US$1.00 as of August 26, 2004.

(2) Adjustment includes the one time charge of estimated debt prepayment costs, deferred financing costs and deferred corporate transaction expenses arising from the original notes offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data as of and for the four years ended on or prior to June 30, 2004 is derived from our consolidated financial statements which have been audited by our independent auditors and prepared in accordance with U.S. GAAP. Prior to and during the fiscal year ended June 30, 2000, the financial statements for the Company were prepared in accordance with accounting principles generally accepted in Canada. The financial information available for the fiscal year ended June 30, 2000 does not incorporate the current treatment of drydocking and maintenance capital costs or the deferred income tax effect related thereto utilized in our more recent financial statements prepared in accordance with U.S. GAAP. To revise the treatment of drydocking and maintenance capital costs or the deferred income tax effect related thereto for the financial statements and selected financial data derived therefrom for the fiscal year ended June 30, 2000 would cause us to incur unreasonable effort and expense. Therefore, this prospectus does not include selected consolidated financial data for the year ended June 30, 2000. The selected consolidated financial data presented below should be read in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this prospectus.

	Fiscal Year Ended June 30,
	2001			2002			2003			2004
	($ in thousands)
Statement of Earnings Data:
Total revenues	$	78,269		$	72,919		$	69,374		$	66,213
Costs and expenses:
Vessel operating		38,870			31,270			30,861			31,334
Cost of goods sold		3,725			4,631			5,454			4,969
General and administrative		7,073			6,690			6,817			5,879
		49,668			42,591			43,132			42,182
		28,601			30,328			26,242			24,031
Other income (loss)		4,950			859			4,801			763
Depreciation and amortization		9,480			9,579			10,275			12,001
Corporate transaction costs		—			—			—			1,226
Interest expense		11,203			7,381			7,321			8,563
Lease expense		8,137			9,994			9,498			7,673
Earnings (loss) before taxes		4,731			4,233			3,948			(4,669	)
Capital taxes		413			368			445			474
Income taxes (recovery)(1)		(1,166	)		(889	)		(2	)		(1,587	)
Net earnings (loss)	$	5,484		$	4,755		$	3,506		$	(3,556	)
Cash Flow Data:
Cash derived from operating activities	$	6,763		$	13,756		$	5,221		$	8,626
Cash derived from (applied to) financing activities		(38,781	)		9,441			8,828			(9,677	)
Cash derived from (applied to) investing activities		32,399			(26,183	)		(14,049	)		1,866
Other Financial Data (unaudited):
EBITDA(2)	$	25,001		$	20,826		$	21,100		$	15,421
Capital expenditures:
Expenditures for drydocking and maintenance capital		1,230			2,356			1,557			2,761
Purchase of vessels, equipment and other property and other assets		6,559			27,545			20,328			764
Ratio of earnings to fixed charges(3)		1.3	x		1.3	x		1.2	x		0.6	x
Other Operating Data (unaudited):
Number of vessels (period end)(4)		10			11			12			11
Average utilization(4)(5)		85.1	%		78.6	%		78.3	%		71.6	%
Average dayrate(4)(6)	$	18,410		$	21,208			19,703		$	19,181

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	As of June 30,
	2003		2004
	($ in thousands)
Balance Sheet Data:
Vessels, equipment and property	$	148,434	$	163,165
Total assets		172,025		180,160
Total debt		120,209		136,231
Total shareholder’s equity		37,813		33,858

(1) Provision for income taxes reflects an increase in the carrying value of our deferred tax asset net of taxes paid.

(2) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization. EBITDA is included because it is used by investors to measure our performance or liquidity. EBITDA is not a measure recognized under U.S. GAAP and should not be considered as an alternative to net income or net cash from operating activities or any other indicator of the company’s performance or liquidity under U.S. GAAP. The table below shows the reconciliation from EBITDA to net income.

	Fiscal Year Ended June 30,
	2001			2002			2003			2004
	($ in thousands)
Net earnings (loss)	$	5,484		$	4,755		$	3,506		$	(3,556	)
Interest expense		11,203			7,381			7,321			8,563
Income taxes		(1,166	)		(889	)		(2	)		(1,587	)
Depreciation and amortization		9,480			9,579			10,275			12,001
EBITDA	$	25,001		$	20,826		$	21,100		$	15,421

In addition, the table below shows the reconciliation from EBITDA to cash derived from operating activities:

	Fiscal Year Ended June 30,
	2001			2002			2003			2004
	($ in thousands)
EBITDA	$	25,001		$	20,826		$	21,100		$	15,421
Income taxes paid in cash		(142	)		(177	)		(128	)		(112	)
Interest expense		(11,203	)		(7,381	)		(7,321	)		(8,563	)
Corporate transaction costs		—			—			—			1,226
Expenditures for drydockings and maintenance capital		(1,230	)		(2,356	)		(1,557	)		(2,761	)
Translation of foreign currency denominated debt		486			96			(2,253	)		(40	)
Recognition of deferred income and other		68			55			230			159
Gain on disposal of assets		(4,547	)		(504	)		(2,247	)		(431	)
Change in non-cash operating working capital		(1,670	)		3,199			(2,603	)		3,727
Cash derived from operating activities	$	6,763		$	13,756		$	5,221		$	8,626

(3) For purposes of calculating the ratio of earnings to fixed charges, (i) earnings consist of pre-tax income (loss) plus fixed charges less capital taxes and capitalized interest and (ii) fixed charges consist of interest expense plus capitalized interest, a portion of lease expense deemed to be representative of interest and amortization of deferred financing fees. For the fiscal year ended June 30, 2004, the ratio of earnings to fixed charges was less than 1:1. To have achieved a coverage of 1:1, we would have needed to generate additional earnings of $5,142,770.

(4) Excludes vessels in cold lay-up.

(5) Utilization rates are average rates based on a 365-day year. Vessels are considered utilized when they are generating revenues.

(6) Average dayrates represent average revenue per day, based on the number of days during the period that the vessels generated revenue.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and their notes included elsewhere in this prospectus. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under “Risk Factors” and elsewhere in this prospectus.

General

We are a leading provider of supply and support services to the offshore oil and gas industry of the east coast of Canada. Since we began operations in 1983, we have increased the size of our fleet from one to 13 vessels and have focused on our core business of providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. We currently operate the largest fleet of supply and support vessels serving the Canadian east coast offshore market and believe that we are well-positioned to capitalize on the expected increase in activity in this region due to our strong customer relationships, our specialized and multi-function vessels and the technical skills of our workforce.

We provide our services primarily offshore of the east coast of Canada, and have also operated in the Gulf of Mexico, the North Sea, the North Pacific, the Caribbean and offshore of Latin America and North and West Africa.

Vessels supporting offshore exploration and production of oil and natural gas transport materials, supplies and personnel to offshore facilities, and move and position drilling structures when required. Vessels supporting the maintenance of subsea telecommunications cable and other subsea construction and maintenance, transport construction and maintenance equipment, supplies and personnel to offshore work locations. As of June 30, 2004 we had eight vessels operating offshore of the east coast of Canada, one operating in North Africa and a subsea telecommunications maintenance vessel operating off the west coast of North America. At June 30, 2004 three vessels were not working. Our fleet has grown in both size and capability from the first vessel acquired in 1983 to the present level of 13 vessels. Our growth has been accomplished through strategic acquisitions and new construction of technologically advanced vessels, partially offset by dispositions of vessels no longer suitable to the markets we serve.

We also provide shorebase management services and sell offshore consumables, safety and other marine equipment through our onshore operations business.

Our operating results are affected primarily by dayrates, fleet utilization and the number and type of vessels in our fleet. Utilization and dayrates, in turn, are influenced principally by the demand for vessel services from the exploration and production sectors of the oil and gas industry. The supply of vessels necessary to meet this fluctuating demand is related directly to the current and anticipated future activity in both the drilling and production phases of the oil and natural gas industry as well as the availability of capital to build or acquire vessels to meet the changing market requirements.

During the last two years, despite consistently high commodity prices in the oil and gas industry, exploration and production activities by oil and gas companies on a worldwide basis have not increased. This constrained exploration and production activity has led to lower utilization in the offshore supply vessel market over the last two years than had been experienced in the last decade and applied downward pressure on dayrates. This phenomenon has been considerably less prevalent in our primary market of the east coast of Canada which is somewhat isolated from the worldwide decrease in offshore supply vessel demand and has a limited number of

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vessels working in the market due to the factors described in this prospectus under “Business.” Over the past few years, the reduction in the laying of new subsea fiber optic telecommunication cables has moved us to focus on subsea maintenance of existing cables for our two subsea maintenance vessels.

Our operating costs are primarily a function of fleet configuration and utilization levels. The most significant direct operating costs are crew wages, maintenance and repairs, and marine insurance. Short-term fluctuations in vessel utilization have little effect on direct operating costs. As a result, direct operating costs as a percentage of revenues may vary substantially as a result of changes in dayrates and utilization.

In addition to direct operating costs, we incur charges related to depreciation of our fleet, drydock inspections, maintenance and repairs to ensure compliance with applicable regulations and maintaining certifications for our vessels with various international classification societies. Costs incurred for drydock inspection, related maintenance and regulatory compliance are capitalized and amortized over the period applicable to the scheduled maintenance. This period varies from 24 to 60 months.

Under applicable maritime regulations, vessels must be drydocked twice in a five-year period for inspection and routine maintenance and repair. Total expenditures for drydockings may vary from quarter to quarter based on the number of drydockings undertaken and the complexity of the work to be performed.

Critical Accounting Policies

Our consolidated financial statements included in this prospectus have been prepared in accordance with accounting principles generally accepted in the United States. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles. In other circumstances, we are required to make estimates, judgments and assumptions that we believe are reasonable based upon available information. We base our estimates and judgments on historical experience and various other factors that we believe are reasonable based upon the information available. Actual results may differ from these estimates under different assumptions and conditions. We believe that of our significant accounting policies discussed in Note 2 to our consolidated financial statements, the following may involve estimates that are inherently more subjective.

Revenue recognition. Our primary source of revenue is derived from time charter contracts of our vessels on a rate per day of service basis. As a result, marine vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally either on a term basis (average three months to five years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate; provided, however, that the term contracts at times include escalation clauses to recover specific additional costs. A spot contract is a short-term contract to provide offshore marine services to a customer for a specific short-term job. The spot contracts generally range from one day to three months. Marine vessel revenues for all contracts are recognized on a daily basis throughout the contract period.

Carrying value of vessels. Generally, we depreciate our vessels, for accounting purposes, over 20 years. In estimating the useful life of these assets, we have considered the effects of physical deterioration from operating use and other economic and regulatory factors that could impact commercial viability. Events or changes in circumstances in the future may result in situations in which recoverability of the carrying amount of a vessel might not be possible. Examples of events or changes in circumstances that could indicate that the recoverability of a vessel’s carrying amount should be reassessed include a significant and sustained decrease in market value and current period operating or cash flow losses combined with a history of operating or cash flow losses or a projection or forecast that anticipates continuing losses associated with a vessel. If events or changes in circumstances as set forth above indicate a vessel’s carrying amount may not be recoverable, we would then be required to estimate the undiscounted future cash flows expected to result from use of the vessel and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the vessel, we would be required to recognize an impairment loss.

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Recertification, drydocking and maintenance costs. Our vessels are required by regulation to be recertified after certain periods of time. These recertification costs are typically incurred while the vessel is in drydock (or at a dock) where routine repairs and maintenance or major replacements and improvements are performed. Recertification costs can be accounted for in one of three ways: (1) defer and amortize, (2) accrue in advance, or (3) expense as incurred. Companies in our industry use either the defer and amortize, or the expense as incurred accounting method. We defer and amortize recertification costs over the length of time in which the recertification is expected to last, which is generally 24 to 60 months. Major replacements and improvements, which extend the vessel’s economic useful life or functional operating capability, are capitalized and depreciated over the vessel’s remaining economic useful life. Inherent in this process are estimates we make regarding the nature of costs incurred and the period the incurred costs will benefit. We expense routine repairs and maintenance as they are incurred.

In June 2001, the Accounting Standards Executive Committee (“AcSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued an exposure draft of a proposed Statement of Position (“SOP”) entitled Accounting for Certain Costs and Activities Related to Property, Plant and Equipment. Under the proposed SOP, the Company would expense major maintenance costs as incurred and be prohibited from deferring the cost of a planned major maintenance activity. Currently, the costs incurred to drydock the Company’s vessels are deferred and amortized on a straight-line basis over the period to the next drydocking, generally 24 to 60 months. At its April 14, 2004 meeting, the FASB voted not to clear AcSEC’s proposed SOP. It has indicated that the accounting matters covered by the SOP will be addressed during the 2005-2006 time frame.

Concentration of credit risk. Charter revenues are typically paid in arrears and we therefore extend credit to companies generally in the energy and subsea telecommunications cable industry that may be affected by changes in economic or other external conditions. Our policy is to manage exposure to credit risk through credit approvals and limits. Historically, credit losses have been insignificant. As of June 30, 2003 and June 30, 2004, an allowance for doubtful accounts was not required.

Income taxes. We follow the tax liability method for determining income taxes. Under this method, future income tax assets and liabilities are determined according to differences between their respective carrying amounts and tax bases. Future tax assets and liabilities are measured based on enacted or substantially enacted tax rates and bases at the date of the financial statements for the years in which these temporary differences are expected to reverse. Adjustments to these balances are recognized in earnings as they occur. The future income tax asset is the result of non-capital loss carryforwards for tax purposes exceeding temporary timing differences, relating primarily to capital assets. We currently have not reflected a valuation allowance to reduce our future tax assets. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. In the event we were to determine that we could not realize our future tax assets in the future, an adjustment to the future tax asset would be charged to expense in the period such determination was made.

Results of Operations

The table below sets forth, average dayrates and utilization rates for our vessels and the number of vessels owned at period end for the periods indicated. These vessels generate substantially all of our revenues and operating profit.

	Years Ended June 30,
	2002			2003			2004
Number of vessels (period end) (1)		11			12			11
Average utilization (2)		78.6	%		78.3	%		71.6	%
Average dayrate (2)	$	21,208		$	19,703		$	19,181

(1) Number of vessels does not include Cabot Sea and the J.D. Mitchell. These vessels are in cold lay-up.

(2) Excludes the above noted vessels that are in cold lay-up.

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The following table sets forth summarized financial information concerning our reportable segments.

	Year Ended June 30,
	2002			2003		2004
	($ in thousands)
Revenues by segment:
Oil and gas services	$	47,334		$	51,058	$	48,250
Construction and maintenance		18,504			9,951		9,487
Corporate and other		7,081			8,365		8,476
		72,919			69,374		66,213
Costs and expenses by segment:
Oil and gas services	$	22,139		$	24,822	$	24,433
Construction and maintenance		7,485			4,466		4,916
Corporate and other		12,967			13,844		12,833
		42,591			43,132		42,182
Other income		859			4,801		763
Depreciation and amortization		9,579			10,275		12,001
Corporate transaction costs		—			—		1,226
Interest expense		7,381			7,321		8,563
Lease expense		9,994			9,498		7,673
Income tax (recovery)		(521	)		443		(1,113	)
Net earnings (loss)	$	4,755		$	3,506	$	(3,556	)

Fiscal Year Ended June 30, 2004 Compared to Fiscal Year Ended June 30, 2003

Total Revenues. Total revenues were $66.2 million for the fiscal year ended June 30, 2004, compared to $69.4 million for the fiscal year ended June 30, 2003, a decrease of $3.2 million or 4.6%.

Revenues from our oil services segment were $48.3 million for fiscal 2004, compared to $51.1 million for fiscal 2003, a decrease of $2.8 million or 5.5%. This decrease was primarily the result of lower utilization of our fleet, particularly during the quarter ended March 31, 2004. While the available number of vessel days for our oil and gas services fleet increased in the year ended June 30, 2004 as a result of vessel additions during the fourth quarter of fiscal 2003, utilization and dayrates decreased, reducing segment revenues. The decrease in dayrates and utilization was due to a continuation of the soft oil and gas services segment market that began in mid-2002. In addition, utilization was reduced by lower than expected activity in the east coast of Canada market. We took the opportunity presented from the low utilization in the third quarter to complete maintenance on our vessels Mariner Sea and Panuke Sea, two of our vessels operating in this market, to prepare them for expected activity during the summer of 2004. During May 2004, the Panuke Sea commenced an 18 month charter and the Mariner Sea commenced an 80 day charter, both offshore of the east coast of Canada.

Revenues from our construction and maintenance segment were $9.5 million for fiscal 2004 compared to $10.0 million for fiscal 2003, a decrease of $0.5 million or 4.7%. The charter revenue in this segment was received in U.S. dollars and fluctuation in the Canadian – U.S. dollar exchange rate resulted in the segment revenue decrease.

Revenues from our corporate and other segment were $8.5 million for fiscal 2004 compared to $8.4 million for fiscal 2003, an increase of $0.1 million or 1.3%. The segment revenue increase was the result of increased revenues from our shorebase management services. This increase was partially offset by decreased sales of offshore consumables, safety equipment and other marine supplies resulting from our disposal, in February 2004, of a portion of the business in this segment operated as the Associated Marine division.

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Costs and Expenses. Costs and expenses were $42.2 million for fiscal 2004, compared to $43.1 million for fiscal 2003, a decrease of $0.9 million or 2.2%. The decrease in costs and expenses was primarily attributable to decreased general and administrative expenses for fiscal 2004 compared to fiscal 2003.

Costs and expenses for our oil and gas services segment decreased to $24.4 million for fiscal 2004 from $24.8 million for fiscal 2003, a decrease of $0.4 million or 1.6%. Fiscal 2004 was the first full year of operations for the vessels Panuke Sea and Mariner Sea. The increased costs related to the longer period of operations for these vessels in fiscal 2004 compared to fiscal 2003 were offset by cost savings resulting from lower utilization, cost management and by reduced costs resulting from the Magdalen Sea leaving the fleet in February 2004.

Costs and expenses for our construction and maintenance segment were $4.9 million for fiscal 2004 compared to $4.5 million for fiscal 2003 an increase of $0.4 million or 10.1%. This increase was primarily due to increased repairs and maintenance costs on the Agile, preparing it for future contracts.

Costs and expenses for our corporate and other segment were $12.8 million for fiscal 2004, compared to $13.8 million for fiscal 2003, a decrease of $1.0 million or 7.3%. This decrease in costs and expenses was primarily attributable to a decrease in general and administrative expenses as we took steps to reduce head office costs in response to the weakness in the offshore vessel industry. In addition, costs of goods sold pertaining to sales of offshore consumables, safety equipment and other marine supplies decreased as a result of the February 2004 disposal of a portion of the business in this segment operated as the Associated Marine division.

Other income. Other income was $0.8 million for fiscal 2004, compared to $4.8 million for fiscal 2003, a decrease of $4.0 million or 84.1%. During fiscal 2003 we disposed of a vessel that was being constructed in Europe, for a gain of $2.3 million. In addition, during fiscal 2003 we recorded a foreign currency translation gain of $2.3 million on converting our U. S. dollar repayable debt into Canadian dollars at June 30, 2003. As at June 30, 2004 the amount we recorded related to the same debt was less than $0.1 million. In February 2004 we disposed of an older, stand-by vessel (Magdalen Sea), recording a gain of $0.4 million.

Depreciation and amortization. Depreciation and amortization totaled $12.0 million for fiscal 2004, compared to $10.3 million for fiscal 2003, an increase of $1.7 million or 16.8%. The increase was primarily attributable to fiscal 2004 being the first full year the Mariner Sea and the Panuke Sea were present in our vessel fleet as well as increased amortization of previously deferred expenditures for drydocking and maintenance capital.

Corporate transaction costs. Corporate transaction costs totaled $1.2 million for fiscal 2004. We had no corporate transaction costs for fiscal 2003. In June of 2004, the Company ceased its activities respecting a previous corporate financing transaction. As a result of this decision, deferred corporate transaction costs related to this transaction were expensed.

Interest expense. Interest expense was $8.6 million for fiscal 2004 compared to $7.3 million for fiscal 2003, an increase of $1.2 million or 17.0%. The increase in interest expense resulted from there being no capitalized interest during fiscal 2004, compared to $0.7 million during fiscal 2003 and from debt levels which were higher in fiscal 2004 as a result of the acquisition and conversion of the Mariner Sea during the last 2 quarters of fiscal 2003.

Lease expense. Lease expense was $7.7 million for fiscal 2004 compared to $9.5 million for fiscal 2003, a decrease of $1.8 million or 19.2%. This decrease was the result of two factors. Fluctuations in the Canada – U.S. exchange rate impacted the cost of an operating lease for the vessel Thebaud Sea, a lease requiring lease payments to be made in U.S. dollars. In addition, during the 3rd quarter of fiscal 2004 we renegotiated an operating lease on the Trinity Sea resulting in its reclassification as a capital lease. The related lease payments, of approximately $313,000 per month, are accordingly no longer accounted for as lease expense but rather as principal reduction and interest expense.

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Tax expense. Tax recovery was $1.1 million for fiscal 2004 compared to tax expense of $0.4 million for fiscal 2003, an increase of $1.5 million. This increase was attributable to the recording of additional future income tax assets resulting from our Canadian operating tax losses for the period with the result that as at June 30, 2004 we had recorded a net future income tax asset.

Fiscal Year Ended June 30, 2003 Compared to Fiscal Year Ended June 30, 2002

Total revenues. Total revenues were $69.4 million for the fiscal year ended June 30, 2003, compared to $72.9 million for fiscal year ended June 30, 2002, a decrease of $3.5 million or 4.9%. While the average size of the fleet increased in fiscal 2003 as compared to fiscal 2002 with the net addition of one oil services vessel in the fourth quarter of fiscal 2003, utilization and dayrates decreased in fiscal 2003 compared to fiscal 2002.

Revenues from our oil and gas services segment were $51.1 million for fiscal 2003, compared to $47.3 million for fiscal 2002, an increase of $3.7 million or 7.9%. This increase was primarily the result of higher oil and gas services fleet utilization, offset by lower dayrates for vessels operating in the spot market. Fiscal 2003 was also the first full year of operations for the Sable Sea, a vessel added to the fleet in the second quarter of fiscal 2002.

Revenues from our construction and maintenance segment were $10.0 million for fiscal 2003, compared to $18.5 million for fiscal 2002, a decrease of $8.6 million or 46.2%. This decrease in revenues was primarily the result of the Agile completing its time charter during the fourth quarter of fiscal 2002. This vessel remained idle throughout fiscal 2003 as we worked on repositioning it into the oil and gas subsea construction industry. Revenues from this vessel were $7.7 million in fiscal 2002. In addition, the charter generating revenue in this segment was received in U.S. dollars. Fluctuations in the U.S. dollar/Canadian dollar exchange rate also resulted in a decrease in segment revenue.

Revenues from our corporate and other segment were $8.4 million for fiscal 2003, compared to $7.1 million for fiscal 2002, an increase of $1.3 million or 18.1%. The increase in segment revenue was the result of increased sales of offshore consumables, safety equipment and other marine equipment, as well as increased revenues from our shorebase management services. The shorebase contract was renewed for an additional five years in January 2003 with resulting increased revenues.

Costs and expenses. Costs and expenses were $43.1 million for fiscal 2003, compared to $42.6 million for fiscal 2002, an increase of $0.5 million or 1.3%.

Costs and expenses for our oil and gas services segment were $24.8 million for fiscal 2003, compared to $22.1 million for fiscal 2002, an increase of $2.7 million or 12.1%. This increase was primarily the result of the Sable Sea, which was acquired for fiscal 2002, being in service for the entire year of 2003 compared to only part of the year in 2002. In addition, during 2003 the Magdalen Sea, a standby vessel, conducted a lump-sum tow contract, which required us to pay for fuel thereby increasing costs, and expenses that were not incurred during fiscal 2002 as no similar contract was in place. Increased costs and expenses pertaining to the Mariner Sea and Panuke Sea, added to the fleet in fiscal 2003, were offset by reduced costs and expenses attributable to the Riverton, a leased vessel which was returned to its owner in the second quarter of fiscal 2003.

Costs and expenses for our construction and maintenance segment were $4.5 million for fiscal 2003, compared to $7.5 million for fiscal 2002, a decrease of $3.0 million or 40.3%. This decrease in costs and expenses was due to decreased utilization for the Agile, as it ended its charter in the fourth quarter of 2002. Costs and expenses in this segment were further reduced as the other vessel in the segment, Bold Endurance, underwent repairs and maintenance in fiscal 2002 that were not repeated in fiscal 2003.

Costs and expenses for our corporate and other segment were $13.8 million for fiscal 2003, compared to $13.0 million for fiscal 2002, an increase of $0.9 million or 6.8%. The increase in costs and expenses for our

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corporate and other segment was primarily attributable to the five year renewal of the contract for provision of shorebase services for a production project offshore Nova Scotia. The original contract for this service was structured with costs “passing through” to the customer. The terms of the renewal are such that costs are for our account with increased revenue from the customer. As a result, costs attributable to this operation increased, as did revenue.

Other income. Other income was $4.8 million for fiscal 2003, compared to $0.9 million for fiscal 2002, an increase of $3.9 million. During fiscal 2003, we disposed of a vessel that was being constructed in Europe, for a gain of $2.3 million. In fiscal 2002, gain on sale of vessels was $0.5 million. In addition, in fiscal 2003 we recognized $2.3 million in translation gain on our foreign denominated, long-term debt, compared to a $0.2 million translation gain in fiscal 2002.

Depreciation and amortization. Depreciation and amortization was $10.3 million for fiscal 2003, compared to $9.6 million for fiscal 2002, an increase of $0.7 million or 7.3%. The increase was attributable to additions to the fleet of vessels, as well as increased amortization of previously deferred drydocking and maintenance capital costs.

Interest expense. Interest expense was $7.3 million for fiscal 2003, compared to $7.4 million for fiscal 2002. Interest rate reductions on floating rate loans offset increases in expense as a result of additional debt related to vessels added during fiscal 2003.

Lease expense. Lease expense was $9.5 million for fiscal 2003, compared to $10.0 million for fiscal 2002, a decrease of $0.5 million or 5.0%. This decrease was the result of fluctuations in the U.S. dollar/Canadian dollar exchange rate on our operating lease for the Thebaud Sea, which is paid in U.S. dollars.

Income taxes. Income tax expense was $0.4 million for fiscal 2003, compared to a recovery of $0.5 million for fiscal 2002, an increase of $1.0 million. This increase in tax expense was attributable to increased earnings during the year.

Liquidity and Capital Resources

Our capital requirements have historically been financed with cash flow from operations, debt instruments, and borrowings under our credit facilities. We require capital to fund ongoing operations, construction of new vessels, vessel acquisitions, vessel recertifications, other capital expenditures and debt service. Since inception, we have been active in the acquisition of additional vessels through identifying, acquiring, modifying and converting vessels from the resale market that fit our business needs as well being active in new construction. Bank financing and internally generated funds have historically provided funding for these activities. Our capital requirements are not expected to significantly change during fiscal 2005.

See “Description of Other Indebtedness” and “Description of the Exchange Notes” for a description of the terms and covenants under our new credit facility and the exchange notes offered hereby.

All of our long-term debt facilities and capital and operating lease obligations were refinanced with the proceeds of the original notes, with the exception of the long-term debt associated with the Bold Endurance in the amount $21.8 million as of June 30, 2004. This facility bears interest at Canadian Bankers Acceptance rate plus 4.88%, is repayable monthly and matures in July 2013. See “Description of Other Indebtedness” for a more detailed description of this credit facility.

We believe that our current working capital, projected cash flow from operations and available capacity under our demand operating credit facility will be sufficient to meet our cash requirements for the foreseeable future. Although we expect to continue generating positive working capital from our operations, events beyond our control, such as weather conditions, reduction in international consumption of refined petroleum products, or

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declines in expenditures for exploration, development and production activity may affect our financial condition or results of operations. Depending on the market demand for oil and gas services supply vessels and offshore construction and maintenance vessels and other growth opportunities that may arise, we may require additional debt or equity financing.

Operating activities. We rely primarily on cash flows from operations to provide working capital for current and future operations. Cash flows from operating activities for the fiscal years ended June 30, 2002, 2003 and 2004 totaled $13.8 million, $5.2 million and $8.6 million respectively. The increase in operating cash flow for fiscal 2004 compared with fiscal 2003 was primarily the result of lower receivables levels at June 30, 2004 as compared to June 30, 2003. The decrease in operating cash flow for the fiscal year ended June 30, 2002 to the fiscal year ended June 30, 2003 was primarily the result of lower fleet utilization and reduced average dayrates, combined with increases in non-cash operating working capital reductions.

As of June 30, 2004, we had net operating loss carry-forward of approximately $28.0 million available through 2011 to offset future taxable income. Our use of these federal tax net operating losses and additional tax benefits may be limited due to Canadian tax laws.

Financing activities. Financing activities during fiscal 2004 consisted primarily of long-term debt repayments of $8.9 million, repayment of our demand operating line of credit in the amount of $0.3 million and dividends paid in the amount of $0.4 million. Financing activities during fiscal 2003 consisted of the incurrence of additional long-term financing, netting approximately $19.4 million, which was used for financing the construction of a newbuild vessel in Europe and the continued conversion of the vessel Panuke Sea. Long-term debt obligations and demand operating line of credit were repaid in the amount of $8.9 million and $1.3 million respectively and dividends were paid in the amount of $0.4 million. Financing activities during fiscal 2002 consisted of additional long-term financing, netting approximately $16.0 million, which was used for financing the acquisition of the vessel Sable Sea and the acquisition and conversion of the vessel Panuke Sea as well as additional drawings on our demand operating line of credit in the amount of $1.6 million. Long-term debt obligations were repaid in the amount of $7.8 million and dividends were paid in the amount of $0.4 million.

Investing activities. Investing activities for fiscal 2004 included $0.8 million for equipment purchases and $0.2 million in advances to affiliates, offset by $2.8 million in proceeds on the sale of the Magdalen Sea. During fiscal 2003, investing activities were $20.3 million for continuation of the construction a newbuild vessel in Europe, the continued conversion of the vessel Panuke Sea, the acquisition and conversion of the vessel Mariner Sea, and miscellaneous capital expenditures offset by proceeds from sale of the newbuild vessel we were constructing in Europe, in the amount of $6.3 million. During fiscal 2002, investing activities were $27.5 million for the construction of a newbuild vessel in Europe, financing the acquisition of the vessel Sable Sea and the acquisition and conversion of the vessel Panuke Sea, equipment upgrades to two of our oil and gas services vessels, and miscellaneous capital expenditures offset by proceeds from sale of our sail training vessel, in the amount of $1.5 million.

We are amortizing our long-term debt over a term that is shorter than the estimated useful life of the related vessels. As a result, cash resources are reduced and we at times report a net cash deficiency. To ensure the ability to fully satisfy our responsibilities to trade creditors and others, we have arranged a $6 million operating line of credit with our principal banker. On August 26, 2004 all of our long-term debt facilities and capital and operating lease obligations were refinanced with the proceeds of the sale of the original notes, with the exception of the long-term debt associated with the Bold Endurance in the amount $21.8 million as of June 30, 2004. See “Description of Other Indebtedness” and “Description of the Exchange Notes” for a description of the terms and covenants under our new credit facility and the exchange notes offered hereby.

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Contractual Obligations

The following table sets forth our aggregate contractual obligations as of June 30, 2004.

	Total		Less than 1 Year		1-3 Years		3-5 Years		Thereafter
	($ in thousands)
Floating rate, Canadian dollar denominated loans (1)	$	92,883	$	92,883	$	—	$	—	$	—
Fixed rate, U.S. dollar denominated loan		16,695		16,695		—		—		—
Capital lease obligations (2)		25,489		670		2,912		3,571		18,336
Operating lease obligations (3)		54,884		54,884		—		—		—
	$	189,951	$	165,132	$	2,912	$	3,571	$	18,336

(1) Includes $39.7 million due upon demand that has been classified above as “less than 1 year”.

(2) Included in capital lease obligations are commitments for one of our vessels, as well as for a portable firefighting system.

(3) Included in operating lease obligations are commitments for one of our vessels, as well as for other ancillary equipment.

On August 26, 2004 we completed the sale of the original notes. We used the net proceeds from the sale of the original notes to repay all of our then outstanding indebtedness (except for indebtedness related to one of our vessels), to acquire a vessel that was being utilized under an operating lease and for working capital and other general corporate purposes. As such, the contractual obligations described in the table above have all been repaid, except for the indebtedness related to one of our vessels. See “Description of the Exchange Notes” and “Description of Other Indebtedness – Bold Endurance Credit Facility” for a description of the terms of the notes and the indebtedness related to one of our vessels still outstanding after our refinancing.

Off-Balance Sheet Transactions

We currently do not utilize any off-balance sheet arrangements with unconsolidated entities to enhance liquidity and capital resource positions, or for any other purpose. Any future transactions involving off-balance sheet arrangements would be analyzed and disclosed by us.

Recent Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 changes the accounting guidance for certain financial instruments that, under previous guidance, could have been classified as either a liability or equity. SFAS No. 150 now requires those instruments to be classified as liabilities (or as assets under some circumstances) in the statement of financial position. SAFS No. 150 also requires the terms of those instruments and any settlement alternatives to be disclosed. SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003. Otherwise, it is effective for all financial instruments beginning in the second quarter of 2003. We are in compliance with the requirements of SFAS No. 150.

In December 2003, the FASB published a revision to Interpretation 46 (FIN 46R) to clarify certain provisions of FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” and to exempt certain entities from its requirements. FIN 46R requires a company to consolidate a variable interest entity (VIE), as defined, when the company will absorb a majority of the variable interest entity’s expected losses, receive a majority of the variable interest entity’s expected residual return, or both. FIN 46R also requires consolidation of existing, non-controlled affiliates if the VIE is unable to finance its operations without investor support, or where

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the other investors do not have exposure to the significant risks and rewards of ownership. FIN 46R applies immediately to a VIE created or acquired after January 31, 2003. For a VIE acquired before February 1, 2003, FIN 46R applies in the first interim period ending after March 15, 2004. We have completed our assessment of the impact of FIN 46R and concluded that the Interpretation does not affect the Company’s consolidated financial statements.

Currency Fluctuations and Inflation

Contracts for our vessels in our construction and maintenance segment are denominated in U.S. dollars while the costs for these vessels are generally in Canadian dollars. In our oil and gas services segment, our international revenues are primarily denominated in U.S. dollars with operating costs denominated primarily in Canadian dollars. During the fiscal year ended June 30, 2004, the U.S. dollar (US$)/Canadian dollar ($) exchange rate ranged from a high of US$ = $0.709 to a low of US$ = $0.788 with an average of US$ = $0.745 for the period.

Our outstanding long-term debt and capital lease obligations as of June 30, 2004 of $135.1 million included $16.7 million Canadian dollars repayable in U.S. dollars. We also have an operating lease for one of our vessels, repayable in U.S. dollars, with total remaining lease payments, as at June 30, 2004, aggregating approximately $54.8 million Canadian dollars. For the fiscal year ended June 30, 2004, 15% of our total consolidated revenue was denominated in U.S. dollars. In addition, on August 26, 2004 we issued US$125. 0 million of the original notes, which bear interest at a floating rate, and we entered into a new $40.0 million revolving senior secured credit facility. See “Description of Other Indebtedness” and “Description of the Exchange Notes” for a description of the terms and covenants under our new credit facility and the exchange notes offered hereby. We have evaluated these conditions taking into account the cost of financial instruments to hedge this exposure, as well as our level of U.S. dollar expenditures and the opportunity for additional U.S. dollar denominated revenue being generated from our fleet. As a result of this evaluation, we have determined that it is in our interest not to utilize any financial instruments to hedge this exposure under present conditions. One or more of these factors may change and, in response, we may begin to use financial instruments to hedge risks of foreign currency fluctuations.

Day-to-day operating costs are generally affected by inflation. To date, general inflationary trends have not had a material effect on our operating revenues or expenses. Because the energy services industry requires specialized goods and services, general economic inflationary trends may not affect the company’s operating costs. One of the major consumables for the fleet is diesel fuel, the price of which has escalated significantly over the last year. Our customers are typically responsible for fuel; therefore, escalating fuel prices have not and likely will not adversely affect our operating cost structure.

A significant impact on operating costs is the level of offshore exploration, development and production spending by energy exploration and production companies. As the level of spending increases, prices of goods and services used by the energy industry and the energy services industry may increase. Future increases in vessel dayrates may shield us from inflationary effects on operating costs.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have not entered into any derivative financial instrument transactions to manage or reduce market risk or for speculative purposes. In general, the fair market value of debt with a fixed interest rate will increase as interest rates fall. Conversely, the fair market value of debt will decrease as interest rates rise. Our indebtedness has variable interest rates and therefore is not subject to interest rate risk.

On August 26, 2004, we refinanced the majority of our existing indebtedness with the net proceeds of the sale of the original notes. See “Description of Other Indebtedness” and “Description of the Exchange Notes” for a description of the terms and covenants under our credit facilities and the notes. The notes bear interest at LIBOR (as defined) plus 8.00%. A hypothetical 2.00% increase in the interest rates on the variable rate notes would cause our interest expense to increase by $3.3 million per year, with a corresponding decrease in our earnings before taxes.

Subsequent to our refinancing on August 26, 2004, $21.8 million in long-term debt associated with one of our vessels, the Bold Endurance, remained outstanding. This facility bears interest at Canadian Bankers Acceptance rate plus 4.88%, is repayable monthly and matures in July 2013. A hypothetical 2% increase in the interest rates on this loan would cause our interest expense to increase by approximately $0.4 million per year, with a corresponding decrease in our earnings before taxes.

We are located in Canada and report in Canadian dollars. The notes are denominated in U.S. dollars. A hypothetical increase in the value of U.S. dollar relative to the Canadian dollar of $0.01 would cause our Canadian dollar equivalent liability to increase by $1.3 million with a corresponding unrealized foreign exchange loss recorded in our income, and a corresponding decrease in our income before taxes. This would be a non-cash loss that would not be realized until ultimate repayment of the notes.

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BUSINESS

Overview

We are a leading provider of supply and support services to the offshore oil and gas industry of the east coast of Canada. Since we began operations in 1983, we have increased the size of our fleet from one to 13 vessels and have focused on our core business of providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. We currently operate the largest fleet of supply and support vessels serving the Canadian east coast offshore market and believe that we are well-positioned to capitalize on the expected increase in activity in this region due to our strong customer relationships, our specialized and multi-function vessels and the technical skills of our workforce. For the fiscal year ended June 30, 2004, we generated total revenues of $66.2 million.

We have developed strong relationships with many of the largest global oil and gas companies, as well as other marine services companies, through our established record of providing reliable and cost-effective services in the uniquely demanding offshore region of the east coast of Canada. We have capitalized on these relationships to further serve these customers around the world wherever they require offshore marine services. Our largest customers include ExxonMobil, Petro-Canada and EnCana.

Our workforce has extensive experience and has been rigorously trained by us for operations in one of the world’s most demanding marine environments. Through our comprehensive in-house training program, our personnel are able to obtain both the requisite sea time and the Transport Canada Certification necessary to achieve further certification up to the most senior positions of Master Foreign Going and Chief Engineer. We believe that by providing our crews with these opportunities for professional advancement, we have created a culture of strong commitment and loyalty. Our comprehensive training and focus on safe work conditions also enable us to attract and retain quality personnel who, we believe, provide our customers with a superior level of service and enhance our competitive position in our markets.

Offshore Marine Services Industry

We believe the oil and natural gas potential offshore of the east coast of Canada provides us with considerable long-term growth opportunities. To date, many major oil and gas companies, including ExxonMobil, ChevronTexaco, Shell, EnCana, Petro-Canada and Husky Energy, have invested more than $25 billion in exploration, development and production projects in the region. According to National Energy Board Reports, total potential resources offshore of the east coast of Canada are estimated at over five billion barrels of oil and over 90 trillion cubic feet of natural gas, or Tcf, with several significant projects still to be developed. Offshore energy operations in this region have made an important transition from predominantly exploration to long-term production with full-scale production activities underway at the Hibernia and Terra Nova oil fields and the Sable natural gas project. According to the Canadian Association of Petroleum Producers (“CAPP”), this region is expected to produce 25% of Canada’s conventional crude oil production by 2005 and has an estimated remaining life of 18 years. We believe this transition provides us with a significant opportunity, as fields in production generally provide for a more stable longer-term demand for our vessels.

The offshore region of the east coast of Canada has a concentrated supply vessel market. There are currently two principal, and a total of three, supply vessel companies operating in the region. Canadian regulatory and legal requirements give priority to Canadian-flagged vessels. Labor and safety standards and detailed Canadian content requirements for oil and natural gas development plans submitted to offshore regulatory authorities provide Canadian vessel owners with a competitive advantage over potential foreign competitors. Furthermore, the need for specialized training, experience and equipment in the harsh weather extremes of the region limits the supply of qualified vessels and crews entering the Canadian east coast offshore market from other geographic regions.

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Our Competitive Strengths

We believe we have the following strengths that allow us to compete successfully and maintain a leading position within the primary market in which we operate:

Specialized and Consolidated Market with High Barriers to Entry. The offshore region of the east coast of Canada is characterized by one of the world’s harshest marine environments, which requires highly specialized operating expertise and vessel capabilities. The combination of our highly skilled and experienced workforce and our specialized fleet of harsh weather vessels makes us one of a limited number of qualified operators currently able to compete effectively in such a challenging region. In addition, the Canadian marine regulatory environment offers certain protective measures for Canadian vessels operating in the offshore region of the east coast of Canada, including preferential “first-in-line” treatment for Canadian-flagged vessels, customs duties on foreign built vessels, stringent regulations under the Canada Shipping Act, rules requiring all vessels working in the Canadian offshore to be operated by Canadian crews and detailed Canadian and provincial content requirements for oil and gas natural development plans submitted by operators to offshore regulatory authorities. These protective provisions may significantly increase the cost and limit the attractiveness to a foreign competitor of participating in marine services in this region.

Leading Position in the Growing Canadian East Coast Offshore Market. We are a leading provider of supply and support services to the offshore oil and gas industry of the east coast of Canada. We operate eight of the 18 service and supply vessels currently operating in this region and currently have only one significant competitor in this market. The combination of over 20 years of experience operating in the Canadian east coast marketplace, the experience of our highly skilled and trained workforce operating within one of the world’s harshest marine environments and our superior fleet of specialized and multi-function vessels has provided us with a competitive advantage that we believe is difficult for new entrants in the market to replicate. Since 1990, we have provided marine services to every major oil and natural gas project offshore of the east coast of Canada.

Specialized and Multi-Function Fleet and Vessel Management. We believe that the specialized and multi-functional profile of our fleet provides us with a significant competitive advantage in meeting the specific long-term needs of our customers. We have assembled and actively managed a fleet of vessels that not only is designed to provide a wide range of marine services, but also is capable of operating in harsh environments under the management of our highly-trained and tenured workforce. In doing so, we have substantially increased the capabilities of our fleet and positioned ourselves to meet the expected rising demand for offshore marine services in the offshore region of the east cost of Canada where there has been a long-term shift towards production. Our successful track record for fleet management is tied to our in-house experience identifying customer demand for services that our fleet does not currently support, and subsequently seeking opportunities to acquire and/or convert vessels to serve the individual needs of our customers. This ability to source vessels on financially attractive terms and customize them for deployment in market niches enables us to better meet our customers’ needs and extend the effective life of our vessels. Similarly, when we determine that a vessel is no longer a good fit for the needs of our customers, we seek opportunities to dispose of the vessel on attractive terms.

Stable Cash Flows. The specialized and consolidated nature of the offshore marine services market of east coast Canada results in an environment of stable dayrates and activity that is generally insulated from commodity price volatility. Furthermore, offshore activity in the region has now made the transition from exploration to long-term production with significant commitments for further development from the large multi-national oil and gas companies operating in the region. The average remaining expected life of these major production projects is approximately 18 years. A high percentage of our revenues is tied to these projects. In addition, we seek to enter into long-term contracts to provide stability in revenues and cash flows. For the fiscal year ended June 30, 2004, 65% of our total revenues was contracted under term charters with terms, including extensions, which were in excess of one year.

Strong Customer Base with Long-Term Relationships. We enjoy strong relationships with our customers, which consist predominantly of large, well-established global corporations, primarily in the energy industry,

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including ExxonMobil, ChevronTexaco, Shell, Petro-Canada, EnCana, Husky Energy and TotalFinaElf as well as other marine services companies. The length of our relationships with these customers ranges from three to 20 years. By providing consistent, dependable and safe supply and support services 24-hours-per-day, 365-days-per-year, we help our customers avoid unnecessary downtime costs, a crucial factor in the ongoing operation of their offshore facilities. We believe that our customers continue to award us contracts because we have earned their confidence and loyalty by consistently satisfying their stringent quality, service, safety and delivery requirements. Furthermore, we have successfully leveraged our operating record with the major oil and gas companies operating offshore of the east coast of Canada into niche opportunities around the world.

Experienced Management Team. Our management team, led by Fred Smithers, has an average of 16 years of experience in the international marine transportation industry and an average of 12 years of tenure with us. This management team has consistently demonstrated its ability to secure profitable contracts in various market conditions, to deliver dependable services in a cost-effective manner and to optimize our fleet through its expertise in new construction, conversion and strategic vessel acquisitions and dispositions. The strength of our management team was demonstrated when we were recognized as one of the 50 Best Managed Companies in Canada in each year from 2001 through 2004.

Superior Quality and Safety Program. In May 1998, we became one of the first shipping companies in North America to achieve dual certification to the ISM Code (International Safety Management Code for the Safe Operation of Ships and Pollution Prevention) and ISO 9002: 1994 Quality Management Systems, by Det Norske Veritas (DNV), an internationally recognized vessel-class certification agency. In 2002, we implemented an integrated Quality, Health, Safety & Environmental Protection Management System (QSM) designed to comply with the ISM Code and the new ISO 9001: 2000 Standard for Quality Management Systems. We have improved our safety performance as a result of the commitment of both our management and employees to a safe work environment and the continued implementation of the QSM system.

Our Business Strategy

We believe our market leadership position, strong customer base and well-positioned fleet of specialized, multi-function vessels will allow us to take advantage of the expected growth opportunities for major oil and natural gas projects in the offshore region of the east coast of Canada. In addition, we will continue to leverage our existing customer relationships in order to exploit niche opportunities throughout the world. We intend to capitalize on these opportunities by pursuing the following strategies:

Strengthen Our Leading Market Share in the Canadian East Coast Region. By building on our more than 20 years of experience in the offshore region of the east coast of Canada, we intend to take advantage of the considerable long-term growth potential in this oil and natural gas-producing region. We plan to continue to adapt our fleet to meet the needs of our existing customers and to pursue long-term contracts for production projects that will allow us to profitably capture additional market share.

Continue to Effectively Manage and Optimize Our Specialized Fleet. Since 1998, we have spent a total of approximately $220 million enhancing the capabilities of our fleet through conversions, acquisitions and newbuild vessels. We intend to continue our disciplined approach of acquiring vessels capable of operating in harsh environments and converting them into specialized, multi-function vessels capable of offering a wide range of services for our customers. In addition, through our careful and consistent program of planned and preventative maintenance, we have been able to, and will continue to, extend the effective life of our vessels.

Pursue Niche Opportunities with Existing Customer Base. We plan to continue to capitalize on the relationships we have developed over more than 20 years with major oil and gas companies to meet their offshore supply and support needs throughout the world. By consistently delivering reliable and safe service to our customers at attractive commercial terms in the offshore marine services market of east coast Canada, we have earned the opportunity to work with these same customers to meet their offshore marine supply and support needs in the Gulf of Mexico, the Caribbean, the North Sea and North and West Africa.

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Preserve and Enhance our Vessel Crew Capabilities. We believe that our extensive training program is critical to our ability to maintain our high-quality vessel crews. We intend to continue to place a strong emphasis on vessel crew development and training in order to provide our customers with what we believe is a superior level of service. In addition, we intend to continue to maintain and improve our quality and safety programs.

Our Operations

Secunda Marine Services Limited, our principal operating subsidiary, commenced operations offshore of the east coast of Canada in 1983 in response to the major oil and natural gas exploration program underway in the region at the time. We were later incorporated in Nova Scotia, Canada, in 1985. Our business can be divided into two categories: (i) marine services to offshore oil and gas companies, and (ii) other marine services. Over the past 20 years, we have developed an expertise operating offshore of the east coast of Canada.

The chart below shows revenues generated by each of our business segments for the fiscal years ended June 30, 2002 through June 30, 2004:

	Fiscal Year Ended June 30,
	2002		2003		2004
	($ in thousands)
Marine services to offshore oil and gas companies	$	47,334	$	51,058	$	48,250
Other marine services:
Construction and maintenance		18,504		9,951		9,487
Corporate and other		7,081		8,365		8,476
Total	$	72,919	$	69,374	$	66,213

Marine Services to Offshore Oil and Gas Companies. We believe that the move towards increased production offshore of the east coast of Canada will increase the long-term demand for offshore marine services and our vessels. All offshore projects require offshore marine services. However, the move towards production will likely increase the demand for vessels capable of working in harsh environments for extended periods of time and carrying significant volumes of supplies.

We provide supply services, support services and supply base services to our oil and gas company customers.

• Supply Services. Supply services include the loading, transport and discharge of personnel and supplies between land and offshore installations to support offshore oil and natural gas exploration, development and production activities. The essential supplies delivered by us include all provisions required to support personnel on the offshore installations, including food, water and all other living requirements, as well as all material required to operate the offshore facility, including fuel, drill pipe, tools, casing and drilling mud, drill water, brine, glycol, fuel, cement, barite, mineral oil, drilling pipe, tools, casing, groceries, stores and other supplies required to keep the platform in continuous operation. Supplies are assembled by the platform operator and are loaded onto our supply vessel at an onshore logistics base. Once our supply vessel is onsite at the platform, the supplies are discharged to the platform as required. In addition, supply vessels often backhaul cargo to the logistics base.

• Support Services. Support services include standby rescue services, anchor handling, towing services and other specialty services. Standby services are provided when a standby vessel is required by the regulatory authorities to standby an offshore installation to provide emergency rescue and evacuation support. These standby services are required to be provided 24-hours-a-day, 365-days-a-year, to all offshore oil and natural gas facilities. Anchor handling and towing services include assistance in deploying rig anchors to secure a rig in its desired location and towing rigs between locations. Specialty

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services include providing a marine platform for remote operated vehicles, or ROV, or manned diving operations and assisting in seismic exploration, as well as assisting in subsea construction and maintenance.

• Supply Base Services. Supply base services involve managing shorebase and dock facilities required to support offshore oil and natural gas projects. These services include coordinating and deploying all goods and services destined for the offshore facility, managing and operating the dock, warehouse and marshalling yards and coordinating vessels to and from shore to offshore facilities. Providing supply base services is a natural complement to providing vessel supply and support services.

The timely and dependable performance of supply and support services is critical to the effective operation of offshore oil and natural gas facilities. Due to the very significant per hour costs associated with operating in an offshore environment, any supply shortage or towing or deployment delay will have a material impact on the operating and financial performance of an offshore facility. We have built a reputation for highly dependable supply and support services. Given the importance of these services and their low-cost relative to the total operating costs of an offshore facility, our ability to provide high quality services has resulted in the development of very strong and dedicated customer relationships. We believe that our customers are unlikely to switch service providers if services are currently being dependably provided due to the potential risks to the operator of an offshore facility from service interruptions due to a change of supplier.

We have participated in the supply and support services business in eastern Canada since 1983 and, as a result, have developed extensive experience operating supply vessels in harsh environments. Most of our vessels are capable of performing as either supply or support vessels. Offshore of the east coast of Canada, we have provided production supply and support services to rigs operated by Petro-Canada on the Terra Nova oil field, by Husky Energy on the White Rose oil field, by ExxonMobil on the Sable natural gas fields and by EnCana on the Panuke Cohasset oil field. In addition, we have provided supply and support services in the North Sea, the Gulf of Mexico and offshore of Latin America and Africa, including to customers that we have served offshore of the east coast of Canada.

Other Marine Services. In addition to the marine services provided to offshore oil and gas companies, we have exploited the flexibility of our vessels and crews in order to deploy our vessels for other marine services and to maximize the efficient utilization of our fleet. These other marine services are generally comprised of subsea construction and maintenance services, ocean towing and salvage work.

We provide vessels to be used as marine platforms for various types of subsea construction and maintenance projects, which primarily includes laying and maintaining fiber optic cables and pipelines. Once in operation, both fiber optic cables and pipelines must be maintained in order to remain consistently operational and provide their respective services 24-hours-per-day. The charterer’s crew generally operates the specialized subsea construction and maintenance equipment being used and the vessel operator’s crew operates and maintains the vessel. These services involve assistance both with the construction of the subsea pathways and with subsequent maintenance work. Maintenance assignments typically involve both actual maintenance, as well as the deployment of vessels on a standby basis to respond immediately to problems.

Ocean towage involves the towing of marine equipment, such as ocean going construction barges, oil rigs and inoperative vessels, that are not equipped with transit propulsion systems to destinations requested by charterers.

Salvage involves the deployment of vessels that are able to assist in the recovery of other vessels in distress, resulting from navigation problems such as groundings, equipment failure or damage caused by severe weather. We employ experienced salvage masters and crews, salvage equipment and the vessels necessary to provide professional salvage services to vessels in distress. We are a recognized professional salvor and are able to respond and provide services throughout the northeastern Atlantic and along the east coast of North America.

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Our Fleet

Vessels. Our fleet is currently comprised of 13 specialized and multi-function vessels with large cargo capacities and harsh weather performance capabilities. In addition, six of our vessels are equipped with state-of-the-art dynamic positioning systems that allow for computer-guided, precision maneuverability for extended periods. Our expertise in identifying, acquiring, modifying and converting vessels that fit our business needs has enabled us to significantly improve the quality of our fleet and has helped position us to meet the increasing demand for offshore marine services off the east coast of Canada, particularly for production-related activities in this region. As part of this acquisition and conversion strategy, from 1998 to 2004, we built two new vessels and converted seven vessels to meet the needs of our customers operating in a harsh weather environment. During this period, we spent a total of $153 million on vessel acquisitions and conversions and a total of $67 million on newbuild vessels. We believe that the average effective age of our vessels is 10 to 12 years. The following table sets forth information regarding our fleet:

Name of Vessel	Year Built/ Rebuilt	Conversion Cost ($ in millions)		Dead Weight Tonnage	Horsepower	Flag		Deck Space (in meters2)	Other Capabilities
Anchor Handling, Tug Supply
Venture Sea Trinity Sea Burin Sea	1998 / — 1984 /1999 1984 /1999	$	—   31.4 31.5	2,400 2,853 2,850	12,280 10,000 10,000	Canada Canada Canada		510 581 581	— Ice Class DP /Ice Class
Platform Supply Vessel
Thebaud Sea Panuke Sea Sable Sea Mariner Sea	1999 / — 1984 /2003 1977 /2001 1979 /2003		—   14.2 1.6 3.3	3,400 2,850 2,774 4,129	5,000 7,200 6,000 5,000	Canada Canada Canada Canada	(1)	725 562 570 850	DP Ice Class / Towing — DP
ROV / Standby
Ryan Leet Hebron Sea	1978 /1993 1975 /1994		1.2 6.8	1,364 2,180	8,000 8,500	Canada Canada		—   546	DP / Salvage Ice Class
Subsea Construction /Maintenance
Agile Bold Endurance	1978 /1998 1979 /1999		22.6 20.7	8,250 8,250	6,420 6,420	Barbados Barbados		1,300 1,300	DP DP / Cable
Other
J.D. Mitchell (2) Cabot Sea (2)	1975 / — 1975 / —		—   —	5,936 650	8,250 4,200	Barbados Canada		—   —	Multi-Purpose Cargo Research / Dive

(1) Canadian registry has been voluntarily suspended by us, and the vessel currently is registered on the bareboat registry of Barbados.

(2) Currently in cold lay-up.

Fleet Management Strategy. We have built our fleet of vessels with the objective of ensuring that each vessel can serve multiple functions, spanning a range of marine services, for an extended period of time. When we identify client demand for services that our fleet does not currently support, we seek opportunities to acquire and/or convert vessels to serve this demand. Similarly, when we believe a vessel in our fleet is no longer a good fit for the needs of our customers in our markets, we seek opportunities to dispose of the vessel on attractive terms. This flexibility creates a competitive advantage that is tied to our experience in sourcing vessels on financially attractive terms and retrofitting them for deployment into market niches through our conversion capabilities. This competitive strength is further enhanced by our leadership and ability to act quickly when opportunities arise to acquire vessels in distress situations. Our practice of acquiring existing vessels on attractive terms and converting these vessels has also been important to the flexibility of the fleet.

Since our inception, we have grown our business by strategically acquiring vessels on attractive terms. We identify acquisition candidates through industry contacts, specialized marine brokers and vessel owner-operators. We pursue vessel acquisitions selectively, consummating only those where we believe the vessel is compatible

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with the demands of our customers. We have been successful in acquiring and selling vessels on attractive terms. Since 1996, we have disposed of nine vessels at a total price in excess of our total vessel cost for these vessels.

In response to the evolution of the region offshore of the east coast of Canada from exploration to development and production and what we believe to be a long-term trend towards deepwater oil and natural gas exploration, development and production activities, we made a decision in 1996 to significantly change the profile of our fleet. Given the fact that production operations in general, and deepwater oil and gas operations in particular, require supply and support vessels with larger cargo capacities, improved performance and more exacting maneuverability capabilities, we commenced a planned upgrade program which involved the disposal of certain existing vessels and the acquisition and/or conversion of other vessels to satisfy the requirements of the offshore oil and gas industry. As a result, we significantly increased the capabilities of our fleet and positioned ourselves for the growing demand for deepwater service providers, particularly on the east coast of Canada.

Vessel Conversion Expertise. In order to ensure the best fit between our vessels and our customers’ requirements, we have continuously engaged in vessel conversions to upgrade the functionality of our vessels. We have developed an in-house project capability that enables us to design and manage our own vessel conversions, adapt existing or newly acquired vessels for specialized purposes and oversee and manage the drydocking process.

We believe that this results in a lower overall cost of ownership over the life of our vessels. Since 1998, we have converted or retrofitted seven vessels.

Our Markets

We provide our services primarily offshore of the east coast of Canada, and have also operated in the Gulf of Mexico, the North Sea, the North Pacific, the Caribbean and offshore of Latin America and North and West Africa.

The chart below shows our revenues by geographic market segment for the fiscal years ended June 30, 2002 through June 30, 2004:

	Fiscal Year Ended June 30,
	2002				2003				2004
	($ in thousands)
Canada	$	48,614	67	%	$	62,110	90	%	$	62,036	94	%
International		24,305	33	%		7,264	10	%		4,177	6	%
Total	$	72,919	100	%	$	69,374	100	%	$	66,213	100	%

Canadian East Coast Oil and Gas Industry. The offshore region of the east coast of Canada has made an important transition from an exploration region to a development and production region with commencement of full scale production at the Hibernia and Terra Nova oil fields and at the Sable natural gas fields. In addition, the White Rose oil field is currently expected to start production in late 2005/early 2006. This transition is significant to marine service providers, as fields in production provide a more stable, long-term demand for their services. Additionally, the uniquely harsh conditions offshore of the east coast of Canada require marine service operators with particular expertise working in this extreme environment. Hibernia and Terra Nova alone are the two largest pools of conventional oil in Canada today. According to CAPP, Atlantic Canada will produce approximately 25% of Canada’s total crude oil production from conventional sources by 2005, based on oil production or equivalents from the Hibernia, Terra Nova and White Rose oil fields and the Sable natural gas fields. According to National Energy Board Reports, total potential resources offshore of the east coast of Canada are estimated at over 5 billion barrels of oil and over 90 Tcf of natural gas. Hibernia, Terra Nova and White Rose are also known to have significant natural gas reserves in addition to the oil already discovered.

Several large multinational oil and gas companies have made significant commitments to the region. ExxonMobil has major investments in the Hibernia and Terra Nova oil fields and in the Sable natural gas fields.

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Petro-Canada and Husky Energy, the operators of the Terra Nova oil field and the White Rose oil field, respectively, are significant participants in the Canadian oil and gas industry. The average remaining expected life on these projects is approximately 18 years. ChevronTexaco, Shell and EnCana have also made significant investments offshore of the east coast of Canada. The scale of their commitment to the region is evidenced by the development commitments undertaken by these companies under their offshore exploration licenses in the region. Current outstanding development commitments require licenseholders to spend in aggregate in excess of $1.5 billion on oil and natural gas exploration activities in the region offshore of Nova Scotia and in excess of $470 million offshore of Newfoundland. The significant infrastructure investments already made in the region includes $8.6 billion for the Hibernia and Terra Nova oil projects, $3.0 billion for the Sable natural gas project, and $2.4 billion for the White Rose oil project. In the development of these production fields, infrastructure such as storage terminals and pipelines reduces future exploration and development costs in the region, making it more attractive for oil and gas companies to conduct further production activity in the region.

Current production in the Canadian east coast offshore region, estimated at 462 MBoe/d, is attributable to the Hibernia field (200 MBbl/d), the Terra Nova field (150 MBbl/d) and the Sable natural gas project (550 MMcf/d). In addition, current near-term development projects and recent discoveries in this region, which include the White Rose field, the Deep Panuke development and the Hebron and Ben Nevis developments, provide an estimated 1.5 billion Boe of recoverable reserves.

Customers

Our customers are primarily large oil and natural gas exploration, development and production companies and large contractors to those companies. These companies are primarily global, blue chip companies with strong credit ratings. These customers undertake large capital-intensive projects in offshore environments, related to the exploration, development and production of oil and natural gas reserves. Due to the typical long duration of these projects, we can service only a small number of customers at any point in time. However, because of the significant scale and long duration of these projects, we are able to generate significant annual revenue and cash flow from a small number of customers. Because the large oil and gas companies and the large contractors generate new opportunities, our long standing good relationships with several of those large global oil and gas companies enables us to generate new opportunities to deploy our vessels. We have provided services to more than 50 companies over the past four years. Our oil and gas customers have included ExxonMobil, Petro-Canada, EnCana, ChevronTexaco, Shell, BHP Billiton Petroleum, ElPaso, Husky Energy, Marathon, TotalFinaElf, Hibernia Management and Enterprise Oil. In our other marine services businesses, we have provided a marine platform for cable laying and maintenance for Global Marine Services, Western Geophysical, Saipem and Thales Geo.

Contracts

The standard contract for vessel employment in the offshore oil and gas industry is a time charter priced on a per-day basis. Under a typical time charter, a customer will agree to charter a vessel for an agreed period. The supply vessel owner supplies the vessel and crew and is responsible for all operating costs, with the exception of fuel, and sometimes lubricating fluids, which are generally reserved for the account of the customer. Whether the operator uses the vessel or it sits at the dock has no bearing on the dayrate. Contracts that are a month or more in duration usually include a maintenance day allowance (typically one day for every 30 days worked) to give the operator a paid day to take the vessel out of service to do repair work that could not be performed during normal operating periods. Charter terms may vary from several days to several years.

Charters are generally awarded based on suitability and availability of equipment, price and reputation for quality and safe service. The pricing of a charter is dependent on market prices in that geographic region and the availability of competing vessels. In addition, vessels from outside the geographic region will also compete, although usually at a disadvantage because of barriers to entry and mobilization costs.

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Overall utilization for any vessel with respect to any period is the ratio of aggregate number of days worked by such vessel to total calendar days available during such period. Rates per day worked and utilization of our fleet are a function of demand for and availability of marine vessels, factors which are closely aligned with the level of exploration and development of offshore areas. The level of exploration of offshore areas is affected by both short-term and long-term trends in oil and natural gas prices that, in turn, are related to the demand for petroleum products and the current availability of oil and natural gas resources. In contrast, the volatility of oil and natural gas prices has little bearing on production activities, including the demand for marine services.

Towage contracts are performed on a charter basis with payment by way of lump sum or a time charter. Salvage work is performed on either a time charter dayrate basis or by way of a special salvage contract known as a “Lloyd’s Open Form,” which is a “no-cure, no-pay” contract. Under a Lloyd’s Open Form, the salvor is entitled to an award based on the service performed, which is generally higher margin. Under the Lloyd’s Open Form, a salvor has the right to convert the contract to a dayrate payment.

Competition

The principal competitive factors for fleets in the offshore marine service industry are price, vessel capabilities, experience, service, safety, reputation, the existence of national flag preference, operating conditions and intended use (all of which determine the suitability of vessel types), complexity of maintaining logistical support and the cost of transferring vessels and crews from one market to another. Foreign vessels operating in Canadian waters may be at a cost disadvantage relative to Canadian vessels. See “Business — Regulation.”

With the combination of our 20 years of experience working in the harsh climate offshore of the east coast of Canada, our diversified fleet of quality vessels, our experienced Canadian crews fostered through an in-house training and development program and our well established presence and long-term contracts in the production segment of the Canadian east coast market, we have capitalized upon opportunities offshore of the east coast of Canada and internationally. We believe our primary competitor in the region offshore of the east coast of Canada is Maersk Supply Service, part of the A.P. Moller Group (“Maersk”), a European-based, well-established international provider of offshore supply and support services. We currently have eight vessels operating offshore of the east coast of Canada while Maersk has seven vessels in this region. Atlantic Towing, the third operator in this region, currently has three large AHTS vessels operating offshore of the east coast of Canada.

We are able to effectively compete with Maersk and respond to changing market requirements as a result of our multi-function vessel fleet, fully integrated safety management system and computerized planned maintenance system, all of which have helped to make us a market leader offshore of the east coast of Canada. Through our proven capabilities of modifying and retrofitting vessels, we are price competitive with domestic and international operators seeking to enter the expanding Canadian offshore oil and gas marine services business. We are valued by our clients as a result of our continued investment in crews and vessels, our established presence in Canada and our proven track record. As a local Nova Scotia company, we understand and appreciate the various government regulations and policies that govern the industries in which we operate and are capable of working within these laws and regulations to ensure that we maximize any advantages they provide.

We have built a strong base in the Canadian marketplace from which to grow and expand into international markets. Our highly-trained crews, fostered with our corporate culture of flexibility and ingenuity, have easily adapted to the international marketplace and have been well received by oil and gas companies in foreign markets. In both Canada and international marketplaces, we have competed with the major offshore marine service companies, including Maersk, SEACOR SMIT and Tidewater. However, our highly-trained crews have differentiated their services from these and other offshore marine services operators.

Sales and Marketing

We have developed a diverse network of contacts in the offshore oil and gas and marine industries, including oil and gas companies, insurance companies for salvage and ocean towage and brokers involved in

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salvage, chartering and the purchase and sale of vessels, as well as major oil field service contractors. The strength of these relationships, combined with our track record of dependable performance, have enabled us to successfully compete for projects around the world. We are intimately familiar with the chartering practices of the various industry sectors and we have been able to build strong relationships with project personnel, having worked with them on multiple projects around the world.

In the offshore oil and gas business, different geographic regions operate under different business norms, such that companies must conduct themselves in accordance with the established practice of any given region. Certain regions in Canada and various international markets, including western Africa and the Gulf of Mexico, operate on the basis of direct dealings between offshore marine service companies and their customers (which are either the oil and gas companies themselves or large offshore contractors). In these regions, the relationship is direct and is usually based on established business relationships. In other regions, such as the North Sea, work is exclusively sourced through brokers who represent offshore marine service companies in business dealings with the oil and gas companies.

Seasonality; Expenditures and Divestitures

Seasonality has not historically had a material impact on our business. Our capital expenditures for fiscal 2004 included $0.8 million for equipment purchases. During the same period we sold the Magdelan Sea, realizing $2.8 million in proceeds. During fiscal 2003, our capital expenditures were $20.3 million for continuation of the construction of a newbuild vessel in Europe, the continued conversion of the vessel Panuke Sea, the acquisition and conversion of the vessel Mariner Sea and miscellaneous capital expenditures. During the same period, we realized proceeds in the amount of $6.3 million from our sale of a newbuild vessel we were constructing in Europe. During fiscal 2002, our capital expenditures were $27.5 million for the construction of a newbuild vessel in Europe, financing costs related to the acquisition of the vessel Sable Sea, the acquisition and conversion of the vessel Panuke Sea, equipment upgrades to two of our oil and gas services vessels and miscellaneous capital expenditures. During the same period we realized proceeds in the amount of $1.5 million from the sale of our sail training vessel.

Our principal capital expenditures subsequent to the fiscal year ended June 30, 2004 were $24.7 million, related to the acquisition of the vessel Thebaud Sea, a vessel that had previously been utilized under an operating lease arrangement, and which was acquired with the proceeds of the senior secured notes issue completed as described herein. In addition, subsequent to fiscal 2004 we commenced a vessel modification program on the vessel Agile. Total costs for this program are estimated to total $3.0 million. Subsequent to fiscal year ended June 30, 2004 there have been no divestitures.

Employees

We have 284 non-unionized employees. Our workforce is comprised of approximately 35 corporate personnel, 240 seafaring personnel and nine affiliated employees, many of whom have substantial expertise in marine services and working on ocean-going vessels in demanding environments or in shore base management and services. We place a strong emphasis on developing our human capital, promoting employee health, welfare and safety and providing competitive compensation packages.

Properties

Our principal offices are located at One Canal Street, Dartmouth, Nova Scotia B2Y 2W1 Canada, where we own approximately 16,000 square feet of office and shop space. In addition, we own 18,000 square feet of property adjacent to our principal offices located at Eighteen Canal Street, Dartmouth, Nova Scotia B2Y 2W1 Canada and currently lease this property to a third party.

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Subsidiaries

We conduct our operations through a number of wholly-owned subsidiaries. The table below sets forth certain information about all of our subsidiaries.

Name	Country of Incorporation	Proportion of Ownership Interest		Proportion of Voting Power Held
3013563 Nova Scotia Limited	Canada	100	%	100	%
Secunda Marine International Incorporated	Canada	100	%	100	%
Secunda Marine Services Limited	Canada	100	%	100	%
Navis Shipping Incorporated	Canada	100	%	100	%
Secunda Atlantic Inc.	Canada	100	%	100	%
Secunda Marine Atlantic Limited	Canada	100	%	100	%
Offshore Logistics Incorporated	Canada	100	%	100	%
Wright Cove Holdings Limited	Canada	100	%	100	%
Associated Marine Limited	Canada	100	%	100	%
Pol-E-Mar Inc.	Canada	100	%	100	%
Polyfab International Inc.	Canada	100	%	100	%
Secunda Global Marine Incorporated	Barbados	100	%	100	%
JDM Shipping Inc.	Barbados	100	%	100	%
International Shipping Corporation Inc.	Barbados	100	%	100	%
I.S. Atlantic Corporation Inc.	Barbados	100	%	100	%
I.S. Pacific Corporation Inc.	Barbados	100	%	100	%
Secunda Global International Inc.	Barbados	100	%	100	%

Regulation

East Coast of Canada. The Canadian marine regulatory environment offers certain protective measures for Canadian marine operating companies. Certain provisions in inter-governmental agreements among the Canadian federal government, Nova Scotia and Newfoundland augment these measures. Foreign flagged vessels seeking business opportunities offshore of Canada must demonstrate that no suitable Canadian vessels are available for the job at hand. Operators seeking to “Canadianize” foreign vessels must pay significant duties and comply with Canadian vessel standards. In all cases, Canadian crews must be employed.

International Regulation and Foreign Laws. We often operate in foreign jurisdictions or call at foreign ports and, therefore, are subject to the national laws, regulations and licensing requirements of these foreign jurisdictions for the operation of our vessels. We must also comply with numerous international conventions that regulate the operation of our vessels, including the International Convention for the Safety of Life at Sea (SOLAS), the International Convention for Prevention of Pollution by Ships (MARPOL), the International Ship and Ports Facility Code (ISPS) and the Convention for the Standards of Training and Certification for Watchkeepers (STCW).

Canadian Vessel and Marine Operation Regulations. The Canadian marine regulatory environment offers certain protective measures for Canadian marine operating companies. These protective provisions may increase the cost to foreign competitors of participating in the marine services offshore of Canada.

• Canadian Waters Reserved for Canadian Ships. Canadian waters (including the region offshore of Canada) are reserved for Canadian-flagged vessels. Foreign-flagged vessels can apply to operate temporarily in Canadian waters, but if a Canadian vessel is capable of doing the work, the foreign vessel can be blocked from entry.

• Customs Duties on Foreign Built Vessels. Foreign built vessels attract duty at a rate of 25% of the value of the vessel. Although vessels built in the United States can be imported into Canada free of duty under NAFTA, Goods and Service Tax or Harmonized Sales Tax is due upon importation but is generally

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refundable to vessel owners registered with Canada Revenue Agency as GST Registrants. In addition, the vessel must be registered in Canada to be automatically eligible to work in Canadian waters. Otherwise a temporary entry permit must be obtained for the vessel, which can be blocked by a Canadian ship. U.S. operators have a significant disincentive to change the flag of their vessels temporarily in order to exploit opportunities in Canadian waters – once a U.S. vessel is transferred from the U.S. registry, the vessel permanently loses its status as a U.S.-built vessel for purposes of working in the U.S. coasting trade.

• Canada Shipping Act. All vessels that are built outside of Canada and transferred onto the Canadian registry of vessels must meet stringent Canadian regulations. Our experience has been that the cost to convert a typical foreign supply vessel to meet these regulations is between $2 million and $3 million.

• Canadian Content – Oil and Natural Gas Development. All operators seeking to carry out offshore oil and natural gas development must submit detailed development plans to the Canadian offshore regulator, including detailed estimated expenditures for local Canadian and provincial benefits that will result from their development work. Operators are therefore under significant pressure to meet the Canadian content expenditures provided for in their development plan, which benefits Canadian operators. All significant contracts must be reviewed and approved by the offshore regulators to ensure oil companies have given Canadian suppliers full and fair access to the bid process. First consideration is given to Canadian companies if they are competitive on price, quality and delivery.

• Other Regulatory Requirements. The legislative and regulatory framework of the federal government has been extended to offshore oil and natural gas development, including immigration regulations which effectively require that Canadians be employed in all offshore activities.

Foreign Vessel and Marine Operation Regulations. We operate three vessels registered in Barbados. The vessels registered in this jurisdiction are subject to the laws of Barbados as to ownership, registration, manning and safety of vessels. In addition, these three vessels are subject to the requirements of a number of international conventions to which Barbados is a party. We believe that our vessels registered in Barbados are in compliance with all applicable material regulations and have all licenses necessary to conduct their business.

Environmental, Health and Safety Regulation. The inherent nature of our operations raise environmental, occupational health and safety issues relating to, among other things, our operation of marine vessels in demanding natural environments, our handling and marine transport of various hazardous substances (including, for example, bulk supplies of mud, brine and fuel to support drilling activities) and our work in inherently dangerous workplaces. We also lease real estate and carry out significant ship conversion and repair and maintenance operations. The inherent risk in these operations includes the risk of accidental injury to workers, and accidental spills or releases of hazardous substances (including petroleum products) on or into the land, air or water, which may cause damage to the natural environment. As a consequence, our operations are subject to a complex and increasingly stringent set of international, federal, provincial, state and local laws, regulations and other legal requirements (including common law requirements) relating to occupational health and safety and the environment (“Environmental, Health and Safety Regulations”).

We have implemented an integrated Quality, Health, Safety and Environmental Protection Management System (“QSM”) for protecting both the health and safety of our crews and the environment. Through the QSM, we have developed and implemented policies, procedures, training and instructions to promote compliance with Environmental, Health and Safety Regulations. For example, all vessels and onboard equipment are inspected, maintained and certified in accordance with applicable regulations, industry standards and company policies to ensure their continued reliability, safety and operational efficiency. All vessels are also inspected and surveyed by maritime authorities and recognized classification societies, such as Lloyds Registry of Shipping or Det Norske Veritas, at regulated intervals in order to maintain their respective statutory and class certification survey statuses.

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Risk Management/Insurance

We have property, casualty and liability insurance to cover standard marine risks from the operation of our vessels with rated insurers in the form and with coverages, limits and exclusions that we believe to be appropriate, including insurance against damage to vessel hulls and onboard machinery, protection and indemnity insurance (covering liability risks, such as third party injury and property damage, crew injury and pollution) and war risk insurance. Insurance is placed through Marsh Canada with approved insurers in London, New York and Toronto, or through other appropriate insurance arrangements.

Contracts in the offshore oil and gas industry are generally “knock-for-knock,” which is a contractual arrangement used in the industry to allocate liability, create contractual certainty and apportion risk. In a “knock-for-knock” arrangement, each party in the project takes responsibility for loss or damage to its own equipment and injury to its own personnel. Each party is required to enter similar arrangements with their own subcontractors. As a result, every commercial entity engaged in the project is responsible for their own equipment and personnel and cannot claim against others involved in the project for damage they cause. This arrangement eliminates the need for duplicate insurance and the determination of which party is responsible for damages.

Litigation

Our operations expose us to a variety of operating hazards and risks. As a result, at any given time we may be a defendant in legal proceedings and litigation arising in the ordinary course of business. There are currently no outstanding material legal proceedings to which we, or any of our subsidiaries is a party, nor are we or any of our subsidiaries aware of any material threatened or contemplated proceedings.

In addition, in May of 2004 a claim was brought against us and an arbitration proceeding commenced by a third party respecting negotiations resulting from an unsolicited offer to purchase the J. D. Mitchell. No amount of claim has been pleaded. We have appointed an arbitrator in response to commencement of the arbitration proceedings to represent our interests in this matter. We are of the view that the claim is without merit.

Security

Heightened awareness of security needs brought about by the events of September 11, 2001 has led to the adoption of heightened security procedures in Canada relating to ports with vessel access. Transport Canada, the regulatory agency responsible for overseeing Canadian transportation regulations, has recently begun to enforce new marine security requirements under the International Maritime Organization (“IMO”) International Ship and Port Facility Security (“ISPS”) Code. Under the ISPS Code requirements, all affected vessels wishing to enter Canadian waters must have an International Ship Security Certificate. The new requirements also apply to Canadian marine facilities and ports serving such vessels. We have complied with such new procedures and have revised our vessel access procedures in light of new requirements.

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MANAGEMENT

The following table lists the names, ages and positions of our current directors and senior management:

Name	Age	Current Positions
Alfred A. Smithers	62	President, Chief Executive Officer and Director
P. Michael Connolly	56	Chief Operating Officer and Director
P. L. Meier	56	Vice President — Finance and Director
Donald A. MacLeod	45	Vice President — General Counsel, Secretary and Director
J. Bernard Boudreau	60	Director

Alfred (“Fred”) A. Smithers is our President, Chief Executive Officer, director and founder. Mr. Smithers is a member of the board of directors of St. John Ambulance, Saint Mary’s University in Halifax, Nova Scotia, The Nova Scotia College of Art and Design, The Halifax Airport Authority and The Shaw Group Limited, a private Canadian construction products company. Prior to forming Secunda, Mr. Smithers owned and operated a concrete construction business in Nova Scotia. Mr. Smithers owns 100% of each of the Class A non-voting preferred shares, Class B voting preferred shares and Class C non-voting preferred shares of 3002534 Nova Scotia Limited, and a trust for the benefit of Mr. Smithers and his family owns 100% of the outstanding common shares of 3002534 Nova Scotia Limited. In turn, 3002534 Nova Scotia Limited owns 100% of our voting common shares, and Secunda Marine Services Limited, an indirect wholly-owned subsidiary of Secunda International Limited, owns 100% of our non-voting Class C preference shares.

P. Michael Connolly has served as Chief Operating Officer and director since July 2004. Mr. Connolly has served as Chief Operating Officer of Secunda Marine Services Limited, our principal operating subsidiary since May 2003. From November 1995 to May 2003 Mr. Connolly served as Vice President and Chief Financial Officer. Prior to joining Secunda in the Fall of 1995, Mr. Connolly provided contract senior executive services to several Atlantic Canadian businesses. From 1978 to 1990 Mr. Connolly worked with The Mortgage Insurance Company of Canada, a publicly traded private mortgage insurer, holding various positions including President and Chief Executive Officer, and Director

P. L. (“Paul”) Meier has served as Vice President — Finance and director since July 2004. Mr. Meier has served as Vice President — Finance of Secunda Marine Services Limited since May 2003. Prior to joining Secunda in 2003, Mr. Meier was Managing Partner of the Saint John, New Brunswick office of Grant Thornton LLP. From 1984 to 1989, Mr. Meier worked for John Labatt Limited in various capacities, including Director, Internal Audit and Corporate Controller and Treasurer. From 1970 to 1982, Mr. Meier worked in public practice with Clarkson Gordon and Doane Raymond the predecessor firm to Grant Thornton.

Donald A. MacLeod has served as Vice President — General Counsel, Secretary and director since July 2004. Mr. MacLeod has served as Vice President — General Counsel of Secunda Marine Services Limited since March 1989. Prior to joining Secunda, Mr. MacLeod was a political aid to a number of Canadian Federal Cabinet Ministers from 1984 to 1989. Mr. MacLeod is the Vice Chairman of the Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) and a Director of SOP (Bermuda), Spandilux SA and the Barbados Shipowners’ Association. He is a member of the Federal Government’s Shipbuilding and Industrial Marine Advisory Committee and sits on the Board of Governors of the Nova Scotia Community College and Board of Regents of Mount Allison University.

J. Bernard Boudreau was appointed as a director in July 2004. Mr. Boudreau was a Founding Member and Senior Partner with the law firm of Boudreau, Beaton and LeFosse in Sydney, Nova Scotia. Mr. Boudreau was first elected to the Provincial Legislature of Nova Scotia in September 1988. In September 1993, Mr. Boudreau was appointed Minister of Finance for the Province of Nova Scotia and subsequently served as Minister of Health. In 1999, Mr. Boudreau was appointed to the Senate of Canada and served as Leader of the Government in the Senate and Minister responsible for the Atlantic Canada Opportunities Agency (ACOA), where he served until January 2001. Mr. Boudreau is a former Director of the Bank of Canada and currently serves as a Director of Export Development Canada (EDC). Currently he is the President and CEO of Radcliff Consulting and Investment Limited based in Halifax, Nova Scotia.

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RELATED PARTY TRANSACTIONS

As of June 30, 2004, 3002534 Nova Scotia Limited, our parent company, had a loan outstanding in the amount of $1.3 million to 1680030 Nova Scotia Limited, a corporation wholly-owned by our Chief Executive Officer that owns and operates a golf course and related club called Granite Springs. As of January 31, 2005, the amount of this loan was $2.1 million. In addition, we have, from time to time, advanced funds to our Chief Executive Officer, which he has repaid out of funds received in dividends from us. As of June 30, 2004 and January 31, 2005, we had no outstanding advances to our Chief Executive Officer. In addition, as of June 30, 2004, we had a loan outstanding in the amount of $19,000 to Dwayne Smithers, our Sales Manager, of which $18,000 remained outstanding as of January 31, 2005. Subsequent to January 31, 2005, this loan was repaid in full. The loan by 3002534 Nova Scotia Limited bears interest at 1% annually. Neither the advances to our Chief Executive Officer nor the loan to Dwayne Smithers bears interest.

Prior to December 31, 2001 we loaned $691,000 to 3002534 Nova Scotia Limited, our parent company. As of June 30, 2004 and January 31, 2005, $691,000 remained outstanding pursuant to this loan. In 1998, we entered into an obligation with 3002534 Nova Scotia Limited pursuant to which we are required to fund a life insurance policy on the life of our chief executive officer for the benefit of our parent company and pay capital tax obligations incurred by our parent company that historically have not been in excess of $5,000 per annum. Pursuant to this obligation, we are required to pay annual premiums on the insurance policy and make capital tax remittances. As of June 30, 2004 and January 31, 2005, $709,000 was outstanding pursuant to this obligation. Both of our obligations with 3002534 Nova Scotia Limited are non-interest bearing with no set terms of repayment. As of June 30, 2004, and January 31, 2005 we also had a loan outstanding in the amount of $285,000 to a company that is wholly-owned by the spouse of our Chief Executive Officer and which was entered into prior to June 30, 2002. In addition, prior to January 31, 2002, we entered into obligations with certain companies owned by our chief executive officer to fund property tax, registry of joint stock fees and capital tax remittances of the companies. As of January 31, 2002 the balance owing from these companies to us was $281,000. The amount outstanding on these obligations as of June 30, 2004 and January 31, 2005 was $41,000 and $40,000 respectively. The loans are all non-interest bearing with no set terms of repayment.

In November 2004, we made the following restricted payments, totaling $6,500,000:

• a dividend in the amount of $5,499,999 to our common shareholder of record, 3002534 Nova Scotia Limited, which is controlled by our President and Chief Executive Officer, Alfred A. Smithers;

• our redemption of 100 Class A Preference Shares of Secunda International Limited held by 3002534 Nova Scotia Limited, at a redemption price of $10,000 per share for a total of $1,000,000; and

• our redemption of 100 Class B Preference Shares of Secunda International Limited held by 3002534 Nova Scotia Limited, at a redemption price of $.01 per share for a total of $1.00.

All of these restricted payments were approved by our board of directors on November 3, 2004 and were made in accordance with the terms of the indenture governing the notes.

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DESCRIPTION OF OTHER INDEBTEDNESS

The following is a description of the principal terms of our indebtedness, other than the notes:

New Senior Secured Credit Facility

On August 26, 2004 we entered into a $40.0 million senior secured bank credit facility with Fortis Capital Corp. and the group of lenders named in the agreement governing the facility. The credit facility provides for a two and a half year revolving period, followed by a five year repayment period. All amounts outstanding two and a half years from the closing of the credit facility will be repaid by us over the following five years. Our obligations under the credit facility, along with the notes and the subsidiary guarantees, are secured by a first priority lien for the benefit of the lenders under the credit facility and the holders of the notes on twelve of our existing vessels and related equipment, rights and other property including related charters and on all equity interests in certain subsidiaries, including the subsidiaries that own those vessels or charter or arrange for the charter of such vessels, with the lenders under the new credit facility entitled to priority on all collateral proceeds resulting from the foreclosure of any of those vessels or equity interests for application up to the amount outstanding under the new credit facility. See “Description of the Exchange Notes — Security.”

Borrowings under our credit facility bear interest at the Canadian Dollar LIBOR for an interest period elected by us of one, three or six months, plus an applicable margin which shall be fixed at a rate of 3.00% until March 31, 2005 and adjusted based on our ratio of funded debt to EBITDA (as defined in the credit agreement) on a quarterly basis thereafter.

In connection with the credit facility, we are subject to a number of restrictions on our business and financial maintenance covenants, including restrictions on incurring additional indebtedness and creating liens on the vessels, minimum EBITDA and working capital requirement, and collateral maintenance limitations.

Bold Endurance Credit Facility

Pursuant to the Bold Endurance term loan facility between GATX Capital Corporation as lender and our subsidiary 3013563 Nova Scotia Limited as borrower, indebtedness equal to $21.8 million remained outstanding as of June 30, 2004. The Bold Endurance facility provides for an interest rate equal to Canadian Bankers Acceptance rate plus 4.88%, and has a term which expires in July 2013. The interest rate on this facility as of June 30, 2004 was 6.95%. 3013563 Nova Scotia Limited’s obligations under the Bold Endurance facility are guaranteed by both our subsidiary Secunda Global International Inc. and us. The guarantee of Secunda Global International Inc. is collateralized by a first marine mortgage on the Bold Endurance, an assignment of the Bold Endurance charter and a pledge of the preference shares of Secunda Global International Inc.

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THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

In connection with the issuance of the original notes, we entered into a registration rights agreement. Under the registration rights agreement, we agreed to:

• on or prior to 120 days after the original issuance of the original notes on August 26, 2004, file a registration statement with the SEC with respect to a registered offer to exchange each original note for an exchange note having terms substantially identical in all material respects to such note except that the exchange note will not contain terms with respect to transfer restrictions, registration rights or special interest;

• use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act on or prior to 210 days after the original issuance of the original notes;

• unless the exchange offer would not be permitted by applicable law or SEC policy, we will commence the exchange offer and use our reasonable best efforts to issue, on or prior to 60 days after the date on which the registration statement is declared effective by the SEC, exchange notes in exchange for all original notes tendered prior thereto in the exchange offer; and

• keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the original notes.

We have fulfilled the agreements described in the first two of the preceding bullet points and are now offering eligible holders of the original notes the opportunity to exchange their original notes for exchange notes registered under the Securities Act. Holders are eligible if they are not prohibited by any law or policy of the SEC from participating in this exchange offer. The exchange notes will be substantially identical to the original notes except that the exchange notes will not contain terms with respect to transfer restrictions, registration rights or special interest.

Under limited circumstances, we agreed to use our reasonable best efforts to cause the SEC to declare effective under the Securities Act a shelf registration statement for the resale of the original notes. We also agreed to use our reasonable best efforts to keep the shelf registration statement effective for up to two years after its effective date. The circumstances include if:

• changes in law or applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer; or

• any initial purchaser notifies us within 20 days following consummation of the exchange offer that:

• such purchaser is prohibited by applicable law or SEC policy from participating in the exchange offer;

• such purchaser may not resell the exchange notes acquired by it in the exchange offer to the public without delivering a prospectus and that the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales by such purchaser; or

• such purchaser is a broker-dealer and holds original notes acquired directly from us or one of our affiliates.

We will pay special cash interest on the applicable original notes, subject to certain exceptions:

1) if we fail to file this registration statement with the SEC on or before the 120th day following the date of the original issuance of the original notes, or if we become obligated to file a shelf registration statement due to the circumstances described in the preceding paragraph, and we fail to file the shelf registration statement with the SEC on or before the 60th day following the date on which we are provided notice of our obligation to file a shelf registration statement arises;

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2) if this registration statement is not declared effective by the SEC on or prior to the 210th day after the original issuance of the original notes or, if we become obligated to file a shelf registration statement due to the circumstances described in the first bullet point of the preceding paragraph, a shelf registration statement is not declared effective by the SEC on or prior to the 150th day after the date on which we become obligated to file a shelf registration statement;

3) if by the 60th day after the date on which the registration statement is declared effective, the exchange offer is not consummated; or

4) after any of the registration statements required by the registration rights agreement has been declared effective but thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of the notes;

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 special interest will be U.S.$0.05 per week per U.S.$1000 principal amount of notes for the first 90-day period immediately following the occurrence of a registration default, and such rate will increase by an additional U.S.$0.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all registration defaults have been cured, up to a maximum amount of special interest of U.S.$0.25 per week per U.S.$1,000 principal amount of notes. We will pay such special interest on regular interest payment dates. This special interest will be in addition to any other interest payable from time to time with respect to the original notes and the exchange notes.

To exchange your original notes for exchange notes in the exchange offer, you will be required to make the following representations:

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

• you have no arrangement or understanding with any person to participate in the distribution of the original notes or the exchange notes;

• you are not our “affiliate,” as defined in Rule 405 under the Securities Act, or if you are our affiliate you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;

• if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the exchange notes; and

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

In addition, we may require you to provide information to be used in connection with the shelf registration statement to have your original notes included in the shelf registration statement and benefit from the provisions regarding special interest described in the preceding paragraphs. We may exclude you from such registration if you unreasonably fail to furnish the requested information to us within a reasonable time after receiving our request. A holder who sells original notes under the shelf registration statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers. Such a holder will also be subject to 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 a holder, including indemnification obligations.

The description of the registration rights agreement contained in this section is a summary only. For more information, you should review the provisions of the registration rights agreement that we filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.

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Resale of Exchange Notes

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

• you are not our “affiliate” within the meaning of Rule 405 under the Securities Act;

• such exchange notes are acquired in the ordinary course of your business; and

• you have no arrangements with any person to participate in a distribution of the exchange notes.

The SEC, however, has not considered the exchange offer for the exchange notes in the context of a no action letter, and the SEC may not make a similar determination as in the no action letters issued to these third parties.

If you tender your original notes in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes, 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.

Unless an exemption from registration is otherwise available, any security holder intending to distribute exchange notes should be covered by an effective registration statement under the Securities Act. This registration statement should contain the selling security holder’s information required by Item 507 of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other retransfer of exchange notes only as specifically described in this prospectus. Only broker-dealers that acquired the original 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 original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge by way of the letter of transmittal that it will deliver a prospectus in connection with any resale of the exchange notes. Please read “Plan of Distribution” for more details regarding the transfer of exchange notes.

Terms of the Exchange Offer

Subject to the terms and conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any original notes properly tendered and not withdrawn prior to 5:00 p.m. New York City time on the expiration date. We will issue exchange notes in principal amount equal to the principal amount of original notes surrendered under the exchange offer. Original notes may be tendered only for exchange notes and only in integral multiples of $1,000.

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

As of the date of this prospectus, $125,000,000 in aggregate principal amount of the original notes are outstanding. This prospectus is being sent to DTC, the sole registered holder of the original notes, and to all persons that we can identify as beneficial owners of the original notes. There will be no fixed record date for determining registered holders of original 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 Exchange Act and the rules and regulations of the SEC. Original notes whose holders do not tender for exchange in the exchange offer will remain outstanding and continue to accrue interest. These original notes will be entitled to the rights and benefits such holders have under the indenture relating to the notes and the registration rights agreement.

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We will be deemed to have accepted for exchange properly tendered original notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the 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 original notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the letter of transmittal, transfer taxes with respect to the exchange of original 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 “— Fees and Expenses” for more details regarding fees and expenses incurred in the exchange offer.

We will return any original notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

Expiration Date

The exchange offer will expire at 5:00 p.m., New York City time on                      2005, unless, in our sole discretion, we extend it.

Extensions, Delays in Acceptance, Termination or Amendment

We expressly reserve the right, at any time or various times, to extend the period of time during which the exchange offer is open. We may delay acceptance of any original notes by giving oral or written notice of such extension to their holders. During any such extension, all original notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange.

In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of original notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

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

• to delay accepting for exchange any original notes,

• to extend the exchange offer, or

• to terminate the exchange offer

by giving oral or written notice of such 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 as promptly as practicable by oral or written notice thereof to the registered holders of original notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement. The supplement will be distributed to the registered holders of the original 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 such period.

Conditions to the Exchange Offer

We will not be required to accept for exchange, or exchange any exchange notes for, any original notes if the exchange offer, or the making of any exchange by a holder of original notes, would violate applicable law or any applicable interpretation of the staff of the SEC. Similarly, we may terminate the exchange offer as provided in this prospectus before accepting original notes for exchange in the event of such a potential violation.

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In addition, we will not be obligated to accept for exchange the original notes of any holder that has not made to us the representations described under “—Purpose and Effect of the Exchange Offer,” “—Procedures for Tendering” and “Plan of Distribution” and such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to allow us to use an appropriate form to register the exchange notes under the Securities Act.

We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any original notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the original notes as promptly as practicable.

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 up to the expiration of the exchange offer. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any original notes tendered, and will not issue exchange notes in exchange for any such original 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.

Procedures for Tendering

In order to participate in the exchange offer, you must properly tender your original notes to the exchange agent as described below. It is your responsibility to properly tender your notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your tender.

If you have any questions or need help in exchanging your notes, please call the exchange agent whose address and phone number are set forth in “Prospectus Summary — The Exchange Offer — Exchange Agent.”

All of the original notes were issued in book-entry form, and all of the original notes are currently represented by global certificates held for the account of DTC. We have confirmed with DTC that the original notes may be tendered using the Automated Tender Offer Program (“ATOP”) instituted by DTC. The exchange agent will establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer and DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their original notes to the exchange agent using the ATOP procedures. In connection with the transfer, DTC will send an “agent’s message” to the exchange agent. The agent’s message will state that DTC has received instructions from the participant to tender original notes and that the participant agrees to be bound by the terms of the letter of transmittal.

By using the ATOP procedures to exchange original notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms just as if you had signed it.

There is no procedure for guaranteed late delivery of the notes.

Determinations Under the Exchange Offer

We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered original notes and withdrawal of tendered original notes. Our determination will be final and binding. We reserve the absolute right to reject any original notes not properly tendered or any original notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect, irregularity or condition of tender as to particular original 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

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on all parties. Unless waived, all defects or irregularities in connection with tenders of original notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of original notes, neither the exchange agent, us nor any other person will incur any liability for failure to give such notification. Tenders of original notes will not be deemed made until such defects or irregularities have been cured or waived. Any original 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 as soon as practicable following the expiration date.

When We Will Issue Exchange notes

In all cases, we will issue exchange notes for original notes that we have accepted for exchange under the exchange offer only after the exchange agent receives, prior to 5:00 p.m., New York City time, on the expiration date:

• a book-entry confirmation of such original notes into the exchange agent’s account at DTC; and

• a properly transmitted agent’s message.

Return of Original Notes Not Accepted or Exchanged

If we do not accept any tendered original notes for exchange or if original notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged original notes will be returned without expense to their tendering holder. Such non-exchanged original notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.

Your Representations to Us

By 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 of the original notes or the exchange notes;

• you are not our “affiliate,” as defined in Rule 405 of the Securities Act, or if you are our affiliate you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;

• if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the exchange notes; and

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

Withdrawal of Tenders

Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective you must comply with the appropriate procedures of DTC’s ATOP system. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn original 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. Our determination shall be final and binding on all parties. We will deem any original notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

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Any original notes that have been tendered for exchange but are not exchanged for any reason will be credited to an account maintained with DTC for the original notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn original notes by following the procedures described under “—Procedures for Tendering” above at any time prior to 5:00 p.m., New York City time, on the expiration date.

Fees and Expenses

We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by telegraph, 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 will pay the cash expenses to be incurred in connection with the exchange offer. They include:

• SEC registration fees;

• fees and expenses of the exchange agent and trustee;

• accounting and legal fees and printing costs; and

• related fees and expenses.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of original notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if a transfer tax is imposed for any reason other than the exchange of original notes under the exchange offer.

Consequences of Failure to Exchange

If you do not exchange your original notes for exchange notes under the exchange offer, you will remain subject to the existing restrictions on transfer of the original notes. In general, you may not offer or sell the original notes unless they are registered under the Securities Act, or if the offer or sale is exempt from the 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 original notes under the Securities Act.

Accounting Treatment

We will record the exchange notes in our accounting records at the same carrying value as the original notes. This carrying value is the aggregate principal amount of the original notes less any bond discount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer.

Other

Participation in the exchange offer is voluntary, and you should carefully consider whether to participate. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered original notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any original notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered original notes.

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DESCRIPTION OF THE EXCHANGE NOTES

The Company will issue the exchange notes, and previously issued the original notes, under an indenture (the “Indenture”) dated as of the Issue Date among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee (the “Trustee”). References to the “Notes” in this “Description of the Exchange Notes” include both the original notes and the exchange notes. The terms of the Notes include those provisions contained in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). The Security Documents referred to below under the caption “— Security” by and among the Company and the Guarantors, and one or more agents or trustees, contain the terms of the security arrangements that secure the Notes.

The following discussion summarizes the material provisions of the Indenture, the Notes, the Note Guarantees, and the Security Documents, and in relation to the Security Documents, certain intercreditor agreements set forth in the Collateral Agency Agreement. It does not purport to be complete, and is qualified in its entirety by reference to all of the provisions of those agreements, including the definition of certain terms, and to the TIA. We urge you to read the Indenture and the Security Documents because they, and not this description, define your rights as holders of the Notes. Copies of the Indenture and the Security Documents are filed as exhibits to the registration statement of which this prospectus forms a part. You can find the definitions of certain terms used in this description under the caption “— Certain Definitions”. In this description, the word “the Company” refers only to Secunda International Limited and does not include any of its subsidiaries. Certain other defined terms used in this description but not defined below under the caption “ — Certain Definitions” have the meanings assigned in the Indenture or otherwise assigned in this description.

Amounts in this description denominated in dollars or $ refer to amounts denominated in Canadian dollars, and amounts in this description denominated in U.S. dollars or US$ refer to amounts denominated in United States dollars.

Brief Description of the Notes

The Notes:

• are senior obligations of the Company;

• are secured, together with loans outstanding under the Credit Agreement, by a first priority Lien (subject to Permitted Collateral Liens) on Collateral described herein, subject to certain payment priorities in favor of the lenders (the “Lenders”) under the Credit Agreement;

• are effectively senior to all existing and future unsecured Senior Indebtedness of the Company to the extent of the value of Collateral securing the Notes;

• are senior in right of payment to any Subordinated Obligations of the Company;

• are unconditionally guaranteed by the Guarantors (other than Secunda Global International Inc. (“SGII”)) on a senior secured basis and will be unconditionally guaranteed by SGII on a senior basis; and

• are effectively junior (i) to any existing or future debt of the Company or any Guarantor that is secured by assets other than the Collateral to the extent of the value of any such collateral or (ii) to any existing or future liabilities of a Restricted Subsidiary that is not a Guarantor.

As of June 30, 2004, after giving pro forma effect to the offering of the Notes and the application of the net proceeds therefrom, the Company’s other Senior Indebtedness would have been approximately US$16.2 million, and the total outstanding secured Indebtedness and other secured obligations of the Company and the Guarantors would have been approximately US$141.2 million. After giving pro forma effect to the offering of the Notes and the application of the net proceeds therefrom, (i) 3013563 Nova Scotia Limited would have had total outstanding

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Indebtedness of US$16.2 million which is guaranteed by the Company and SGII and secured by the assets of SGII that do not constitute Collateral and a pledge of the preference shares of SGII and (ii) the Restricted Subsidiaries that constitute the Initial Non-Guarantors (as herein defined) will have no outstanding Indebtedness.

Principal, Maturity and Interest

The Company issued an aggregate principal amount of US$125.0 million of Notes on the Issue Date. The Company may issue additional Notes from time to time after the Issue Date (the “Additional Notes”), provided that: (i) the proceeds from each such issuance are used to acquire, by the Company or one or more Guarantors, one or more vessels of type, function, use and nature substantially similar to that of any of the Vessels included in the Collateral as of the Issue Date, or reasonably related thereto, and which are placed in use for a Related Business; (ii) contemporaneous with the acquisition of such vessel or vessels, such vessel or vessels and all related equipment, rights and other property used or to be used in connection with, or arising from the operation of, such vessel or vessels shall be encumbered by a perfected first-priority Lien (subject to Permitted Collateral Liens) in favor of the Collateral Agent, with the effect that each such vessel shall constitute a “Vessel” and together with such related equipment, rights and other property shall constitute “Vessel Assets”, and collectively shall be included in and constitute Collateral; (iii) Indebtedness incurred to acquire such vessel or vessels, including the principal amount of additional Notes issued therefor, shall not in the aggregate exceed 75% of the purchase price of such vessel or vessels and such related equipment, rights and other property or the appraised value thereof; and (iv) such inclusion of vessels as collateral shall comply with all applicable provisions and requirements of the Indenture, the Credit Agreement, the Security Documents and the TIA. Any offering of additional Notes will be subject to all of the covenants of the Indenture. The Notes initially issued and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Notes will be issued only in full registered form without coupons, in denominations of US$1,000 and integral multiples of US$1,000. The Notes will mature on September 1, 2012.

The Notes will accrue interest at a rate per annum, reset quarterly, equal to LIBOR plus 8.0%, as determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee. Interest on the Notes will be payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing on January 15, 2005 in the case of the Notes issued in this offering, to the holders of record on the immediately preceding January 1, April 1, July 1 and October 1. Principal of, and premium, if any, and interest on, the Notes held in registered form will be payable, and the Notes held in registered form will be exchangeable and transferable, at the office or agency of the Company in the United States maintained for such purposes, which initially will be at the Corporate Trust Office or agency of the Trustee in New York, New York.

Interest on the Notes will accrue from the Issue Date or, if interest has already been paid, from the date it was most recently paid. Interest on the Notes will be calculated on the basis of a 360-day year comprised of twelve 30 day months. Additionally, the Company will pay interest on overdue principal at the above rate and will pay interest on overdue installments of interest at such rate, in each case, to the extent lawful.

Set forth below is a summary of certain of the defined terms used in the Indenture relating to the calculation of interest on the Notes.

“LIBOR,” with respect to an Interest Period, will be the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the first day of such Interest Period that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in United States dollars for a three-month period beginning on

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the first day of such Interest Period. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in U.S. dollars to leading European banks for a three-month period beginning on the first day of such Interest Period. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

“Interest Period” means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include January 15, 2005.

“Determination Date,” with respect to an Interest Period, will be the second London Banking Day preceding the first day of the Interest Period.

“London Banking Day” is any day in which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

“Representative Amount” means a principal amount of not less than US$1,000,000 for a single transaction in the relevant market at the relevant time.

“Telerate Page 3750” means the display designated as “Page 3750” on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service).

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655). All calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application or the Criminal Code (Canada).

The Calculation Agent will, upon the request of the holder of any Note, provide the interest rate then in effect with respect to the Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantors and the holders of the Notes.

Special interest may accrue on the Notes in certain circumstances pursuant to the Registration Rights Agreement. Whenever there is a reference in this description to the payment of interest by the Company at any time, such reference shall include the payment of any special interest required to be paid at such time pursuant to the terms of the Registration Rights Agreement.

Solely for the purpose of providing the disclosure required by the Interest Act (Canada), the annual rate of interest that is equivalent to the rate payable on the Notes shall be the rate payable multiplied by the actual number of days in the year divided by 360.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The

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Company is not required to transfer or exchange any Note selected for redemption or repurchase (except, in the case of a Note to be redeemed or repurchased in part, the portion not to be redeemed or repurchased). Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed or between a record date and the next succeeding interest payment date.

The registered Holder of a Note will be treated as the owner of it for all purposes. Only registered Holders will have rights under the Indenture.

The Note Guarantees

Initially, all of the Company’s Subsidiaries (other than Associated Marine Limited, I.S. Atlantic Corporation Inc., I.S. Pacific Corporation Inc., Wright Cove Holding Limited, Pol-E-Mar Inc. and Polyfab International Inc. (collectively, the “Initial Non-Guarantors”)) will be Guarantors and will jointly and severally guarantee, on a senior basis, the Company’s obligations under the Notes pursuant to the Note Guarantees. In circumstances described under “— Certain Covenants — Future Guarantors”, the Indenture will require certain Restricted Subsidiaries, including, without limitation and as applicable, any one or more of the Initial Non-Guarantors, to execute supplements to the Indenture providing for them to become Guarantors. As of June 30, 2004 and after giving pro forma effect to the offering of the Notes and the consummation of the Credit Agreement, and the application of the estimated net proceeds therefrom, the Initial Non-Guarantors would have had no outstanding Indebtedness.

Each Note Guarantee:

• will be a senior obligation of the relevant Guarantor;

• will be secured, together with guarantees of loans outstanding under the Credit Agreement from the Guarantors, by a first priority Lien on the Collateral owned by such Guarantor (other than SGII), subject to certain payment priorities in favor of the Lenders;

• will effectively be senior to all existing and future unsecured Senior Indebtedness of such Guarantor, to the extent of the value of the Collateral owned by such Guarantor;

• will be senior in right of payment to the Guarantor’s Subordinated Obligations; and

• will effectively be junior to any future debt of the Guarantor (other than SGII) that is secured by assets other than the Collateral, to the extent of the value of any such collateral, and will effectively be junior to any existing or future debt of SGII that is secured by any of its assets, to the extent of the value of any such collateral.

The obligations of SGII under its Note Guarantee are effectively subordinated to Indebtedness secured by its assets that do not constitute Collateral, which totaled US$16.2 million as of June 30, 2004. See “— Brief Description of the Notes”.

The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from being rendered voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See “Risk Factors — A court could subordinate or void the obligations under the subsidiaries’ guarantees and the liens granted by our subsidiary guarantors”. Each Guarantor that makes a payment under its Note Guarantee will be entitled to seek contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

A Guarantor will be released and relieved from its obligations under the Indenture, its Note Guarantee and the Security Documents:

(1) upon the sale or other disposition (including by way of consolidation or merger) of such Guarantor or upon the sale or disposition of all or substantially all the assets of such Guarantor, in each case in

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accordance with the applicable provisions of the Indenture relating to Asset Dispositions and in each case other than to the Company or a Restricted Subsidiary;

(2) if the Company designates such Guarantor as an Unrestricted Subsidiary in accordance with the Indenture;

(3) upon the liquidation or dissolution of such Guarantor; or

(4) upon the occurrence of either Legal Defeasance or Covenant Defeasance as described below under “— Defeasance”.

See “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”.

As of the Issue Date, all the Company’s Subsidiaries were Restricted Subsidiaries. However, under the circumstances described below in the definition “Unrestricted Subsidiary” under the caption “Certain Definitions”, the Company will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries”. The Company’s Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture.

Security

General

The Indenture and the Security Documents provide that the Notes and the Note Guarantees are secured together with the loans under the Credit Agreement and the guarantees of the loans under the Credit Agreement by its guarantors, by a first priority Lien (subject to Permitted Collateral Liens) and certain payment priorities set forth in the Collateral Agency Agreement, granted to the Collateral Agent for the benefit of the holders of the Secured Obligations, in all of the following property (collectively, the “Collateral”):

(1) those certain 12 vessels owned by any one or more of the Company and its Subsidiaries as of the Issue Date, which on such date are registered under the respective names and flags:

Vessels	Flag
Agile	Barbados
J.D. Mitchell	Barbados
Mariner Sea	Canada
Panuke Sea	Canada
Cabot Sea	Canada
Ryan Leet	Canada
Thebaud Sea	Canada
Venture Sea	Canada
Burin Sea	Canada
Trinity Sea	Canada
Sable Sea	Canada*
Hebron Sea	Canada

* Canadian registry has been voluntarily suspended by us, and the vessel currently is registered on the bareboat registry of Barbados.

(together with each vessel acquired after the Issue Date with the proceeds of Additional Notes, and including any replacements or substitutions of the foregoing vessels as provided for in the Indenture or the Credit Agreement, the “Vessels”), and (A) all such Vessels’ respective boilers, engines, machinery, masts, spars, rigging, boats, anchors, cables, chains, tackle, tools, pumps and pumping equipment, apparel, furniture, fittings and equipment, spare parts, and all other appurtenances thereunto appertaining or belonging, whether now owned or hereafter acquired, whether or not on board said Vessels, and all

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additions, improvements, renewals and replacements hereafter made in or to said Vessels or any part thereof, or in or to the equipment or any said appurtenances, (B) any and all rights, privileges and benefits of the Company or any of its Subsidiaries under insurances, awards, warranties, claims, agreements or otherwise to receive monies or other property or interests in relation to, or arising from, any damage to, or liability, loss or requisition, confiscation, condemnation of title or compulsory acquisition of, the Vessels or any portion thereof and (C) all rights, privileges and benefits of the Company or any of its Subsidiaries to receive payment of monies or other property or interests in relation to the use, hire or operation of any of the Vessels, or any portion thereof, including any of same arising from, or related to, freights, passage monies, charter monies, hire monies, requisition for hire compensation, salvage, towage remuneration, demurrage detention monies and other earnings now or hereafter earned under any charter now or hereafter entered into with regard to the Vessels or as a result of any requisition for use of the Vessels (together with the Vessels, the “Vessel Assets”);

(2) all outstanding Capital Stock of each of Subsidiary of the Company which on the Issue Date or thereafter (i) owns one or more of the Vessels or other Vessel Assets or (ii) charters or arranges for the charter of one or more of the Vessels;

(3) all general intangibles owned or acquired by the Company or any of its Subsidiaries necessary, exclusively used for, and in connection with, the ownership, expansion, operation, use, maintenance or sale or other disposition of any of the Vessels or any of the other Vessel Assets;

(4) each Asset Sale Proceeds Account and all deposits therein and interest thereon and investments thereof, and all property of every type and description in which any proceeds of any Sale of Collateral or other disposition of Collateral are invested or upon which the Collateral Agent is at any time granted, or required to be granted, a Lien to secure the Secured Obligations as set forth in the covenant described under the caption “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”; and

(5) all proceeds of any of the foregoing;

provided, that no property of Company or any Subsidiary whether personalty, realty, tangible, intangible or mixed not specifically included as part of the Collateral will be Collateral.

The Company and the Guarantors entered into the Collateral Agency Agreement and other Security Documents granting the Collateral Agent a security interest on the Collateral to secure the payment and performance when due of all Secured Obligations.

Unless an Event of Default under the Indenture or the Credit Agreement shall have occurred and be continuing, the Company and its Subsidiaries will have the right to remain in possession and retain exclusive control of the Collateral (other than any cash, securities, obligations and Temporary Cash Investments constituting part of the Collateral and deposited with the Collateral Agent in the Asset Sales Proceed Account and other than as set forth in the Security Documents), to freely operate the Collateral and to collect, invest and dispose of any income thereon or therefrom.

There can be no assurance that the Collateral Agent will be able to sell the Collateral without substantial delays or that the proceeds obtained will be sufficient to pay all amounts owing to the Administrative Agent, the Lenders, Trustee and Holders and owners of Permitted Collateral Liens, if any. The Collateral release provisions of the Credit Agreement, Indenture and the Security Documents will permit the release of Collateral without substitution of collateral of equal value under certain circumstances.

Intercreditor Arrangements with Administrative Agent

If an Event of Default is continuing under the Indenture or the Credit Agreement, the Trustee and the Administrative Agent shall have the right to direct the Collateral Agent to take all actions necessary or appropriate, including, but not limited to, foreclosing upon the Collateral in accordance with the Indenture, the

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Credit Agreement, the Security Documents and applicable law, subject to the provisions of Collateral Agency Agreement described below. Only the Collateral Agent will be the secured party and entitled to enforce the Liens granted under the Security Documents. Neither the holders of the Notes nor the Lenders may enforce the Liens granted under the Security Documents.

In the Collateral Agency Agreement, the Collateral Agent, the Trustee and the Administrative Agent under the Credit Agreement will agree, each for the benefit of the other, as follows:

(1) for the initial period of 120 days following the occurrence of an Event of Default under the Credit Agreement (each such period, a “Designated Vessel Period”), the Administrative Agent shall be permitted to direct the activity of the Collateral Agent with respect to all aspects involving, and otherwise relating to, the enforcement of, and realization on, the Liens on or with respect to, (i) the Designated Vessels, or any of them, and (ii) the capital stock of the Company’s Subsidiaries that own or charter or arrange for the charter of the Designated Vessels and all other Collateral related to Designated Vessels (including, without limitation, related charter hires and insurances) which are covered by the Security Documents (collectively, such vessels, capital stock and other Collateral, the “Designated Collateral”), provided that the Trustee shall receive copies of all such notices and directions given to the Collateral Agent, in each case in reasonable detail and reasonably promptly; and during the Designated Vessel Period, the Trustee shall not have the power to direct the Collateral Agent to take any action with respect to the enforcement of, and realization on, the Liens on or with respect to, any Designated Collateral; and

(2) as to Designated Collateral as to which the Administrative Agent has commenced making directions of enforcement to the Collateral Agent during the applicable Designated Vessel Period, so long as the Event of Default giving rise to that action continues unremedied or uncured, the Administrative Agent shall be permitted to continue to direct the activity of the Collateral Agent with respect to all aspects involving, or otherwise relating to, the enforcement of, and realization on, the Liens on and with respect to such property, provided that the Trustee shall receive copies of all such directions given to the Collateral Agent, in each case in reasonable detail and reasonably promptly.

Except as provided in the preceding paragraph in relation to Designated Collateral, the Collateral Agent will be subject to the direction of the holders of a majority in principal amount of the Notes then outstanding and the loans made under the Credit Agreement then outstanding, voting as a single class, in regard to the enforcement of, and realization on, the Liens on, or with respect to, all other Collateral, including, without limitation, during the pendancy of a Designated Vessel Period.

Application of Proceeds of Collateral

The proceeds received from the sale of any Collateral that is the subject of a foreclosure or collection suit by the Collateral Agent after an event of default (such proceeds from foreclosure or collection suit, the “Realization Proceeds”) will be applied in the following priority as set forth in the Collateral Agency Agreement:

(i) first: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Collateral Agent (including the reasonable legal fees and expenses of its agents and counsel) pursuant to the Collateral Agency Agreement and Security Documents;

(ii) second: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Trustee (including the reasonable legal fees and expenses of its agents and counsel) pursuant to the Indenture and the other Security Documents;

(iii) third: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Administrative Agent (including the reasonable legal fees and expenses of its agents and counsel) pursuant to the Credit Agreement and Security Documents;

(iv) fourth: (a) if the proceeds relate to the Designated Collateral, to the payment to the Administrative Agent for the benefit of the Lenders of all accrued and unpaid interest and all fees, expenses and indemnities

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then immediately due and payable to the Lenders; provided, however that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments to all such Lenders and (b) if the proceeds do not relate to the Designated Collateral, to the payment to the Administrative Agent for the benefit of the Lenders of all accrued and unpaid interest and all fees, expenses and indemnities then immediately due and payable to the Lenders; provided further that the interest component thereof will consist of post-petition interest and any interest that accrued at a default rate in an amount equal to the product of (1) a fraction the numerator of which is the aggregate principal amount then immediately due and payable to the Lenders and the denominator of which is the sum of aggregate principal amount of the Notes then outstanding plus the aggregate principal amount then immediately due and payable to the Lenders and (2) the amount of such post-petition interest and any interest that accrued at a default rate; provided, further that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to all such Lenders;

(v) fifth: to the payment to the Administrative Agent for the benefit of the Lenders of all principal then immediately due and payable to the Lenders; provided that contemporaneous with such payments, all commitments to extend or otherwise advance credit under the Credit Agreement are permanently and irrevocably terminated; provided, further that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to all such Lenders;

(vi) sixth: to the payment of accrued and unpaid interest on the Notes payable under the Indenture which is then immediately due and payable; provided, further if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to each Holder;

(vii) seventh: to the ratable payment of the outstanding principal balance of, and, if any, premium on, the Notes which are then immediately due and payable; and if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to each Holder; and

(viii) eighth: to the payment of any such amounts remaining after payment in full of all Secured Obligations, to the Company or as a court of competent jurisdiction may otherwise direct.

The Collateral Agency Agreement also provides that if any Realization Proceeds are received by any of the Holders, the Administrative Agent, Lenders or the Trustee, such amounts shall be distributed in the priority described in the preceding paragraph.

Relative Rights

The provisions described above set forth certain relative rights, as lienholders, of the Collateral Agent, the Trustee and the Administrative Agent. Nothing in the Collateral Agency Agreement will:

(1) impair, as between the Company, any other Obligor and holders of Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of, premium and interest on the Notes in accordance with their terms or to perform any other obligation of the Company or any other Obligor under the Note Documents; or

(2) affect the relative rights of holders of Secured Obligations and other creditors of the Company or any of its Subsidiaries.

Collateral Agent

The Company has appointed Wilmington Trust Company or one of its affiliates to serve as the Collateral Agent under the Collateral Agency Agreement for the benefit of the Trustee, the holders of the Notes, the

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Administrative Agent and the Lenders from time to time. The Security Documents will provide that the Collateral Agent may not be the same institution serving as the Credit Agreement Administrative Agent or as the Trustee under the Indenture.

The Collateral Agent has the power to institute and maintain such suits and proceedings as it may deem expedient to prevent impairment of, or to preserve or protect its, the Administrative Agent’s, Trustee’s, Lenders’ and the Holders’ interest in, the Collateral.

The Security Documents provide that the Collateral Agent will be subject to such directions as may be given it by the Trustee and Administrative Agent from time to time as required or permitted by the Collateral Agency Agreement, the Indenture and the Credit Agreement. The relative rights with respect to control of the Collateral Agent will be specified in the Collateral Agency Agreement by and among the Company, the Guarantors, the Trustee, the Administrative Agent and the Collateral Agent. Except as provided for above under the caption “— Intercreditor Arrangements with Administrative Agent” and otherwise, except as directed by the holders of a majority in principal amount of the Notes then outstanding and the loans made under the Credit Agreement then outstanding, voting as a single class, the Collateral Agent will not be obligated:

(1) to act upon directions purported to be delivered to it by any other Person; or

(2) to foreclose upon or otherwise enforce any Lien or other remedy at law or pursuant to any Security Document.

Subject to the terms of the Collateral Agency Agreement, the Collateral Agent may, at the direction of the Administrative Agent, amend, supplement or modify the Security Documents without obtaining the consent or approval of the requisite holders of the Notes to the extent that such amendments, supplements or modifications (i) only effect the rights of the Lenders, (ii) are administrative or ministerial in nature or correct typographical errors or omissions, (iii) have only the effect of preserving, perfecting or establishing the priority of the Liens on the Collateral as contemplated by the Security Documents or the rights of the Collateral Agent therein or (iv) do not otherwise materially adversely affect the rights of holders of the Notes. Similarly, subject to the terms of the Collateral Agency Agreement, the Collateral Agent may, at the direction of the Trustee, amend, supplement or modify the Security Documents without obtaining the consent or approval of the requisite Lenders to the extent that such amendments, supplements or modifications (w) only effect the rights of the holders of the Notes, (x) are administrative or ministerial in nature or correct typographical errors or omissions, (y) have only the effect of preserving, perfecting or establishing the priority of the Liens on the Collateral as contemplated by the Security Documents or the rights of the Collateral Agent therein or (z) do not otherwise materially adversely affect the rights of the Lenders.

Release of Security Interests

The Security Documents provide that the Collateral will be released:

(1) in whole, upon payment in full of the Notes, the loans made under the Credit Agreement and all other Secured Obligations that are outstanding, due and payable at the time the Notes, the loans made under the Credit Agreement and such other Secured Obligations are paid in full, and in connection with such payments under the Credit Agreement, the related credit commitment is fully and completely terminated;

(2) with respect to the Note Obligations only, upon satisfaction and discharge of the Indenture as set forth under the caption “— Satisfaction and Discharge”;

(3) with respect to the Note Obligations only, upon a Legal Defeasance or Covenant Defeasance as set forth under the caption “— Legal Defeasance and Covenant Defeasance”;

(4) with respect to the Note Obligations only, upon payment in full of the Notes and all other Note Obligations that are outstanding, due and payable at the time the Notes are paid in full;

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(5) with respect to the Credit Facility Obligations only, upon payment in full of the loans made under the Credit Agreement and all other Credit Facility Obligations that are outstanding, due and payable at the time the Credit Facility Obligations are paid in full, and in connection therewith, the related credit commitment is fully and completely terminated;

(6) as to any Collateral that constitutes all or substantially all of the Collateral, with the consent of the holders of 100% in principal amount of the Notes and all of the Lenders under the Credit Agreement, (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes);

(7) subject to the provisions of Collateral Agency Agreement and under the caption “— Intercreditor Arrangements with Administrative Agent”, (i) as to any Collateral (other than the Designated Collateral), or as to any Designated Collateral as to which the Administrative Agent has not timely exercised, during an applicable Designated Vessel Period, its right to direct enforcement of Liens on Designated Collateral, in each case which constitutes less than all or substantially all of the Collateral, with the consent of the holders of a majority in principal amount of the Notes and all loans made under the Credit Agreement then outstanding (or if no loans are then outstanding but the commitment to make such loans remains then in effect, of such commitments then in effect), voting together as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes) and (ii) as to any Designated Collateral, with the consent of all of the Lenders under the Credit Agreement;

(8) as to any Collateral (i) that is sold or otherwise disposed of by the Company or any Restricted Subsidiaries in a transaction permitted by the Credit Agreement and the Indenture, at the time of such sale or disposition, to the extent of the interest sold or disposed of in accordance with the terms of the Indenture, (ii) that constitutes a portion of the Asset Sales Proceeds Account that are to be applied or distributed as described under the caption “— Certain Covenants — Limitation on Sale of Assets and Subsidiary Stock,” (iii) that constitutes Excess Proceeds from the Sale of Collateral which have been offered to, but not accepted by, the holders of Notes and loans made under the Credit Agreement and are released as set forth in the covenant described below under the caption “— Certain Covenants — Limitation on Sale of Assets and Subsidiary Stock” or (iv) that is owned or at any time acquired by a Subsidiary that has been released from its Note Guarantee and its guarantee of the loans made under the Credit Agreement, concurrently with the release thereof; or

(9) in the event there is a substitution of property for Collateral, subject to a first-priority Lien (subject to Permitted Collateral Liens) in favor of the Collateral Agent to secure the Secured Obligations being placed on such substituted property and otherwise consummated in compliance with the applicable provisions of the Indenture, the TIA and the Security Documents.

Notwithstanding the provisions described above, so long as no Event of Default under the Indenture shall have occurred and be continuing or would result therefrom, the Company or a Subsidiary may engage in ordinary course activities; provided that in connection therewith, each of the Company and its Subsidiaries, as applicable, complies with the provisions of the Indenture and Credit Agreement and other related documents which are applicable to any such activity or transactions. Such activities include the right to, among other things, the following:

(1) sell or otherwise dispose of any property subject to the Lien of the Security Documents, which may have become worn out or obsolete;

(2) abandon, terminate, cancel, release or make alterations in or substitutions of any leases or contracts subject to the Lien of the Security Documents;

(3) surrender or modify any franchise, license or permit subject to the Lien of the Security Documents which it may own or under which it may be operating;

(4) alter, repair, replace, change the location or position of and add to its structures, machinery, systems, equipment, fixtures and appurtenances;

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(5) demolish, dismantle, tear down or scrap any Collateral; and

(6) charter, lease or sub-lease any vessel.

Further Assurances

The Security Documents provide that the Company will, and will cause each of its Subsidiaries to, do or cause to be done all acts and things which may be required, or which the Collateral Agent from time to time may reasonably request, to assure and confirm that the Collateral Agent holds, for the benefit of the holders of Secured Obligations, duly created, enforceable and perfected first priority Liens (subject to Permitted Collateral Liens) upon the Collateral as contemplated by the Note Documents and the Credit Agreement and to comply with the applicable provisions of the TIA.

Additional Amounts

The Company and the Guarantors are required to make all payments under or with respect to the Notes and the Note Guarantees 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) (hereinafter “Taxes”) imposed or levied by or on behalf of Canada or any political subdivision or any authority or agency therein or thereof having power to tax, or by any other jurisdiction in which the Company or any Guarantor is organized or is otherwise resident or conducts business for tax purposes or any jurisdiction from or through which payment is made by the Company or any Guarantor or its agents (each a “Relevant Taxing Jurisdiction”), unless the Company or any Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration thereof.

If the Company or any Guarantor is required to withhold or deduct any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction (other than backup withholding Taxes imposed under the laws of the United States) from any payment made under or with respect to the Notes or any Note Guarantee, the Company or such Guarantor will be required to pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by holders of the Notes after such withholding or deduction (including any withholding or deduction attributable to Additional Amounts payable hereunder) will not be less than the amount such holders would have received if such Taxes had not been withheld or deducted; provided, however, that the foregoing obligation to pay Additional Amounts does not apply to any Taxes to the extent such Taxes would not have been so imposed:

(1) but for the existence of any present or former connection between the relevant Holder (or the beneficial owner of such Notes) and the Relevant Taxing Jurisdiction (other than the mere receipt of such payment or the mere acquisition, ownership, holding or disposition of any Note);

(2) but for the failure of the relevant Holder (or the beneficial owner of such Notes) to use its reasonable best efforts, to the extent such Holder (or beneficial owner) is legally entitled to do so, to comply with a written request by the Company or a Guarantor to satisfy any certification, identification or other reporting requirements which shall include any applicable forms or instructions whether imposed by statute, treaty, regulation, or administrative practice concerning the nationality or residence of such holder or the connection of such holder with the Relevant Taxing Jurisdiction;

(3) if the payment could have been made without such deduction or withholding if the relevant Holder had presented the Note for payment within 60 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever is later (except to the extent that the holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 60 day period);

(4) with respect to any payment of principal of (or premium, if any, on) or interest on such Note to any holder who is a fiduciary or partnership or any person other than the sole beneficial owner of such payment,

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to the extent that a beneficiary with respect to such fiduciary, a member of such a partnership or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, member or beneficial owner been the actual Holder of such Note (but only if there is no material cost or expense associated with transferring such Notes to such beneficiary, partner or beneficial owner and no restriction on such transfer that is outside the control of such beneficiary, partner or beneficial owner); or

(5) with respect to any Canadian Taxes imposed on a payment of, in lieu of, on account of, or in satisfaction of, interest (including deemed interest) made by the Company or a Guarantor which is a resident of Canada, where the beneficiary of such payment does not deal at arm’s length with the Company or such Guarantor, as the case may be, for the purposes of the Income Tax Act (Canada).

The Company and the Guarantors will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. The Company and the Guarantors will make reasonable best efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes. The Company and the Guarantors will provide to the Trustee, within a reasonable time after the date the payment of any Taxes so deducted or withheld are due pursuant to applicable law, either a certified copy of tax receipts evidencing such payment, or, if such tax receipts are not reasonably available to the Company or such Guarantor, such other documentation that provides reasonable evidence of such payment by the Company or such Guarantor.

At least 30 days prior to each date on which any payment under or with respect to the Notes is due and payable (unless such obligation to pay Additional Amounts arises shortly before or after the 30th day prior to such date, in which case it shall be promptly thereafter), if the Company will be obligated to pay Additional Amounts with respect to such payment, the Company will deliver to the Trustee an officers’ certificate stating the fact that such Additional Amounts will be payable and the amounts so payable and will set forth such other information necessary to enable the Trustee to pay such Additional Amounts to holders of Notes on the payment date. Each such officers’ certificate shall be relied upon until receipt of a further officers’ certificate addressing such matters.

Whenever in the Indenture there is mentioned, in any context:

• the payment of principal;

• purchase prices in connection with a purchase of Notes;

• interest; or

• any other amount payable on or with respect to any of the Notes or the Note Guarantees,

such reference shall be deemed to include payment of Additional Amounts as described hereunder to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

The Company 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 Relevant Taxing Jurisdiction from the execution, delivery, enforcement or registration of the Notes, the Indenture, the Security Documents or any other document or instrument in relation thereto, or the receipt of any payments with respect to the Notes.

The obligations described under this heading will survive any termination, defeasance or discharge of the Indenture and will apply mutatis mutandis to any successor Person to the Company or any Guarantor and to any jurisdiction in which the Company or any Guarantor is organized or is otherwise resident or conducts business for tax purposes or any jurisdiction from or through which payment is made by the Company or any Guarantors or their respective agents.

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Redemption for Changes in Withholding Taxes

The Company will be entitled to redeem the Notes, at its option, at any time as a whole but not in part, upon not less than 30 nor more than 60 days’ notice, at 100% of the principal amount thereof, plus accrued and unpaid interest (if any) 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 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 promulgated thereunder) of a Relevant Taxing Jurisdiction, which change or amendment is announced after the Issue Date; or

• any change in or amendment to any official position regarding the application or interpretation of such laws or regulations, which change or amendment is announced after the Issue Date;

and, in each case, the Company cannot avoid such obligation by taking reasonable measures available to it.

Before the Company publishes or mails notice of redemption of the Notes as described above, the Company will deliver to the Trustee an officers’ certificate to the effect that it cannot avoid its obligation to pay Additional Amounts by taking reasonable measures available to it and an opinion of independent legal counsel of recognized standing stating that the Company would be obligated to pay Additional Amounts as a result of a change in tax laws or regulations or the application or interpretation of such laws or regulations. No such notice of redemption may be given more than 60 days before or more than 270 days after the Company first becomes liable to pay any Additional Amounts as a result of a change or amendment described above.

Optional Redemption

Except as set forth above under “— Redemption for Changes in Withholding Taxes”, and as set forth below, the Company will not be entitled to redeem the Notes prior to September 1, 2006.

On and after September 1, 2006, the Company will be entitled at its option to redeem all or a portion of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount) set forth below, plus accrued and unpaid interest thereon, if any, to the applicable 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 September 1 in the years indicated below:

Period	Redemption Price
2006	104.000	%
2007	102.000	%
2008	101.000	%
2009 and thereafter	100.000	%

In addition, prior to September 1, 2007, the Company may, at its option, on one or more occasions redeem Notes in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes originally issued at a redemption price (expressed as a percentage of principal amount) equal to the sum of (i) 100% plus (ii) the interest rate per annum (expressed as a percentage) in effect on the date which notice is given, plus accrued and unpaid interest thereon, if any, to the redemption date, with the net cash proceeds from one or more Equity Offerings; provided that

• at least 65% of such aggregate principal amount of Notes remains outstanding immediately after the occurrence of each such redemption (other than Notes held, directly or indirectly, by the Company or its Affiliates); and

• each such redemption occurs within 90 days after the date of the related Equity Offering.

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Selection and Notice of Redemption

If the Company is redeeming less than all of the Notes at any time, the Trustee will select Notes on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate.

Notes redeemed in part will be redeemed only in principal amounts of US$1,000. The Company will cause notices of redemption to be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. The Company will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, unless the Company fails to redeem the Notes, interest ceases to accrue on Notes or portions of them called for redemption.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Company may be required to offer to purchase the Notes as described under the captions “— Change of Control”, “— Annual Reduction Offer” and “Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”. The Company may at any time and from time to time purchase Notes in the open market or otherwise.

Change of Control

Upon the occurrence of any of the following events (each a “Change of Control”), the Company will be required to offer to purchase each Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase 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):

(1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) 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 50% of the total voting power of the Voting Stock of the Company or otherwise has the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company;

(2) individuals who on the Issue Date constituted the Board of Directors of the Company (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 a majority of the directors of the Company then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office;

(3) the adoption or approval by the Board of Directors or shareholders of the Company of a plan relating to the liquidation or dissolution of the Company; or

(4) the merger or consolidation of the Company with or into another Person or the merger or consolidation of another Person with or into the Company, or the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person (other than, in all such cases, a Person that is

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controlled by one or more Permitted Holders) or group of related persons for purposes of Section 13(d) of the Exchange Act, other than a transaction following which (A) in the case of a merger or consolidation transaction, 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) constitute at least a majority of the voting power of the Voting Stock of the surviving Person (or any parent thereof) in such merger or consolidation transaction and (B) in the case of such a sale, lease, exchange or other transfer of assets transaction, the transferee Person becomes a Subsidiary of the transferor of such assets.

Within 30 days following any Change of Control, the Company will mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

(1) that a Change of Control has occurred and that the Company is making an offer, and 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 on the date of purchase, 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, in each case after giving effect to such Change of Control);

(3) the purchase 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, consistent with the covenant described hereunder, that a Holder must follow in order to have its Notes purchased.

The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

The Company will 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 as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Company will 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 of its compliance with such securities laws or regulations.

The Change of Control Offer feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company and, thus, the removal of incumbent management of the Company. The Change of Control Offer feature is a result of negotiations between the Company, and the initial purchasers. The Company does not have any 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 of the Company or otherwise affect the Company’s capital structure or credit ratings. Restrictions on the Company’s ability to Incur additional Indebtedness are contained in the covenants described under “— Certain Covenants — Limitation on Indebtedness”, “— Limitation on Liens” and “— Limitation on Sale/Leaseback Transactions”. Such restrictions can only be waived with the consent of the holders of a majority principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture will not contain any covenants or provisions that may afford holders of the Notes protection in the event of a highly leveraged transaction.

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The Credit Agreement may prohibit the Company from purchasing any Notes, and provide that the occurrence of certain change of control events with respect to the Company would constitute a default under the Credit Agreement. Future indebtedness that the Company may Incur may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such indebtedness upon a Change of Control. Moreover, the repurchase of the Notes by the Company 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 will be limited by the Company’s then existing financial resources. There can be no assurance that sufficient funds will be available to the Company 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 prior to the time the Company has become obligated to make such offer.

Annual Reduction Offer

On August 1, 2006, and on each subsequent August 1 thereafter until and including August 1, 2011 (each an “Annual Reduction Date”), the Company will be required to offer, on a pro rata basis, to purchase Notes in an aggregate principal amount of US$3.8 million at a purchase price in cash equal to 100% of the principal amount thereof on the date of purchase 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); provided that Notes held, directly or indirectly, by the Company or any of its Affiliates shall not be eligible for such offer.

On or prior to each Annual Reduction Date, the Company will mail a notice to each Holder with a copy to the Trustee (the “Annual Reduction Offer”) stating:

(1) that an Annual Reduction Date has occurred, and that the Company is making an offer, on a pro rata basis, to purchase Notes in an aggregate principal amount of US$3.8 million at a purchase price in cash equal to 100% of the principal amount thereof on the date of purchase, 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), and each Holder of Notes, other than (directly or indirectly) the Company or any Affiliate of the Company, has the right to require the Company to purchase such Holder’s pro rata share of such Notes;

(2) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(3) the instructions, consistent with the covenant described hereunder, that a Holder must follow in order to have its Notes purchased.

The Company’s ability to pay cash to the Holders of Notes following the occurrence of an Annual Reduction Date will be limited by the Company’s then existing financial resources. There can be no assurance that sufficient funds will be available to the Company when necessary to make any required repurchases.

The Company shall comply, to the extent applicable, with the requirements of Section 14(e) under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with an Annual Reduction Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described above, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the foregoing covenant by virtue of its compliance with such securities laws or regulations.

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Certain Covenants

The Indenture contains covenants including, among others, the following:

Limitation on Indebtedness

(a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided that the Company and any Guarantor may Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, no Default has occurred and is continuing, or would occur as a consequence of such Incurrence, and the Consolidated Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been or are available immediately preceding the date on which such Indebtedness is Incurred would have been at least (i) 1.75 to 1.0, if such Indebtedness is Incurred on or prior to December 31, 2005 and (ii) 2.0 to 1.0, if such Indebtedness is Incurred on or after January 1, 2006, respectively, as if such Indebtedness had been Incurred at the beginning of such four-quarter period.

(b) Notwithstanding the foregoing paragraph (a), the Company, any Guarantor or the Restricted Subsidiaries, as applicable, may Incur, to the extent provided below, the following Indebtedness:

(1) Indebtedness Incurred by the Company or any Guarantor pursuant to the Credit Agreement; provided, that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $40.0 million at the time such Indebtedness was incurred;

(2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided that (A) 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 a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon and (B) (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes or (ii) if a Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to its Notes Guarantee;

(3) Indebtedness of the Company under the Notes and of each Guarantor pursuant to its Note Guarantee;

(4) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date (but excluding Indebtedness described in clause (1), (2) or (3) of this paragraph (b));

(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Subsidiary was acquired by the Company (other than Indebtedness Incurred in connection with, 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 Subsidiary became a Subsidiary or was acquired by the Company) and excluding therefrom any of such Indebtedness that is extinguished, retired or repaid in connection with such acquisition; provided that on the date of such acquisition and after giving pro forma effect thereto, the Company would have been able to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this covenant;

(6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4), (5) or (6) of this paragraph;

(7) Hedging Obligations Incurred to protect the Company and its Restricted Subsidiaries;

(8) Indebtedness (including Capital Lease Obligations) of the Company or any Restricted Subsidiary (including any Refinancing Indebtedness with respect thereto) Incurred, in the ordinary course of business, to finance the acquisition, construction or improvement of any fixed or capital assets used or useable in a Related Business, including any Indebtedness assumed in connection with

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the acquisition of any such assets, in an aggregate principal amount which, when taken together with all other Indebtedness Incurred pursuant to this clause (8) and then outstanding, does not exceed the greater of (i) $10.0 million or (ii) 5% of Consolidated Tangible Assets (measured at the time of the original incurrence of such Indebtedness, in the case of a Refinancing);

(9) Indebtedness of the Company or any Restricted Subsidiary arising from customary agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any Restricted Subsidiary or any business or fixed or capital assets of the Company or a Restricted Subsidiary; provided, however, (A) such Indebtedness is not reflected as a liability on the balance sheet of the Company or any Restricted Subsidiary and (B) the maximum liability therefor shall not exceed the gross cash proceeds actually received by the Company or a Restricted Subsidiary in connection with such disposition;

(10) any Guarantee by the Company or a Guarantor of any Indebtedness permitted to be Incurred pursuant to paragraph (a) or pursuant to the Indenture; provided that a Guarantee of any Indebtedness of a Restricted Subsidiary that ceases to be a Restricted Subsidiary shall be deemed to be an Investment other than a Permitted Investment, and subject to compliance with related provisions of the Indenture, at the time its Restricted Subsidiary status terminates in an amount equal to the maximum principal amount as guaranteed for so long as such Guarantee remains outstanding;

(11) Indebtedness of the Company or any Restricted Subsidiary in respect of bid, performance, surety or appeal bonds issued for the account and benefit of the Company or a Restricted Subsidiary and provided in the ordinary course of business of the Company and the Restricted Subsidiaries; and

(12) in addition to the items referred to in the preceding clauses (1) through (11) above, Indebtedness of the Company and the Guarantors in an aggregate principal amount which, when taken together with all other Indebtedness Incurred pursuant to this clause (12) and then outstanding will not exceed $2.5 million at any time outstanding.

(c) Notwithstanding the foregoing, the Company will not, and will not permit any Guarantor or Restricted Subsidiary to, Incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof (or in the case of any Guarantee pursuant to the foregoing paragraph (b), if the proceeds of direct Indebtedness so Guaranteed) are used, directly or indirectly, to Incur or Refinance any Subordinated Obligations of the Company or any Guarantor or Restricted Subsidiary unless such Indebtedness shall be subordinated to the Notes or relevant Note Guarantee, as applicable, to at least the same extent as such as such Subordinated Obligations.

(d) For purposes of determining compliance with this covenant, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above in paragraph (b) or is entitled to be incurred pursuant to paragraph (a) of this covenant, the Company, in its sole discretion, will be permitted to classify such item of Indebtedness on the date of its Incurrence, or later classify or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant and (ii) at each such time, the Company will be entitled to divide, classify and reclassify an item of Indebtedness in more than one of the types of Indebtedness described above.

(e) The Company will not, and will not permit any Guarantor to, directly or indirectly, Incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Notes and the relevant Note Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Company or such Guarantor or Restricted Subsidiary, as the case may be.

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Limitation on Restricted Payments

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment and after giving effect thereto:

(1) a Default shall have occurred and be continuing (or would result therefrom);

(2) the Company would not be permitted to Incur at least an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Limitation on Indebtedness”; or

(3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed, after giving effect to adjustments in the following paragraph (b), the sum of (without duplication):

(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the fiscal quarter in which the Issue Date to the end of the most recent fiscal quarter for which financial statements are available on or prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

(B) 100% of 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) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Issue Date; plus

(C) the amount by which Indebtedness of the Company issued after the Issue Date 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); plus

(D) an amount equal to the sum of (y) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person after the Issue Date resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary, and (z) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such 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 such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made and treated as a Restricted Payment by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

(b) The preceding provisions of this covenant will not prohibit any of the following:

(1) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Guarantor made by exchange for, or out of the Net Cash 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) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided that (A) such Restricted Payment shall be excluded in the calculation of the amount

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of Restricted Payments in clause (3) of paragraph (a) above and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Guarantor made by exchange for, or out of the net cash proceeds of the substantially concurrent Incurrence of Refinancing Indebtedness; provided 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 in clause (3) of paragraph (a) above;

(3) the repurchase or other acquisition of shares of Capital Stock of the Company of 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 the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided that the aggregate amount of such repurchases and other acquisitions shall not exceed $500,000 in any calendar year; provided, further, that such repurchases and other acquisitions shall be included in the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above;

(4) the payment of a dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted by the provisions of paragraph (a) of this covenant on the date of its declaration; provided that any such dividend made in reliance on this paragraph shall be included in the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above;

(5) dividends on Disqualified Stock to the extent included in the definition of Consolidated Interest Expense; provided that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above; or

(6) so long as no Event of Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate principal amount since the Issue Date not exceeding $10.0 million; provided that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above.

The amount of all Restricted Payments (other than cash) shall be the fair market value (as determined in good faith by the Board of Directors of the Company and as evidenced by a resolution of the Board of Directors of the Company set forth in an officers’ certificate delivered to the Trustee) on the date of the transfer, incurrence or issuance of such non-cash Restricted Payment. Not later than (1) the end of any calendar quarter in which any Restricted Payment is made or (2) the making of a Restricted Payment which, when added to the sum of all previous Restricted Payments made in a calendar quarter, would cause the aggregate of all Restricted Payments made in such quarter to exceed $1.0 million, the Company shall deliver to the Trustee an officers’ certificate stating that such Restricted Payments were permitted and setting forth the basis upon which the calculations required by this covenant were computed, which calculations may be based upon the Company’s latest available financial statements.

Limitation on Restrictions on Distributions from Restricted Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, 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:

(1) with respect to clauses (a), (b) and (c),

(A) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date;

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(B) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness 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 which encumbrance or restriction does not relate to any Person other than such Restricted Subsidiary;

(C) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (A), (B), (F) or (G) of clause (1) of this covenant or this clause (C) or contained in any amendment to an agreement referred to in clause (A), (B), (F) or (G) of clause (1) of this covenant or this clause (C); provided that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment taken as a whole are no more restrictive than the encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;

(D) any such encumbrance or restriction (i) 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 or (ii) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract;

(E) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(F) the Credit Agreement in effect after the Issue Date to the extent its provisions are no more restrictive with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions, and transfer of property restrictions, than those contained in the Credit Agreement as in effect on the Issue Date;

(G) the Indenture, the Notes, the Note Guarantees and the Security Documents;

(H) any future Liens that may be permitted to be granted under, or incurred not in breach or violation of, any other provision of the Indenture;

(I) customary provisions in joint ventures and similar agreements (relating solely to the respective joint venture or similar entity); and

(J) restrictions under applicable laws, rules or regulations; and

(2) with respect to clause (c) only,

(A) 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 and such Indebtedness was Incurred not in breach or violation of any provision of the Indenture; and

(B) any encumbrance or restriction by virtue of any transfer or agreement to transfer, option or right with respect to, or Lien on, any property or assets of any Restricted Subsidiary not otherwise prohibited by the Indenture.

Limitation on Sales of Assets and Subsidiary Stock

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition (including a Sale of Collateral) unless:

(1) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value (including as to the value of all non-cash consideration),

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as determined in good faith by the Board of Directors of the Company, of the shares and assets subject to such Asset Disposition;

(2) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of, or any combination of, (i) cash or cash equivalents and (ii) Additional Assets; and

(3) in the case of a Sale of Collateral, the Collateral Agent is immediately granted a perfected first priority security interest (subject only to Permitted Collateral Liens) in the Net Sale Consideration therefor received by the Company or such Restricted Subsidiary as additional Collateral under the Security Documents to secure the Secured Obligations, and, in the case of cash or cash equivalents constituting Net Sale Consideration, such cash or cash equivalents must be deposited into a segregated account under the sole control of the Collateral Agent that includes only proceeds from the Sale of Collateral and interest earned thereon (an “Asset Sale Proceeds Account”), all on terms provided for in the Security Documents (which may include, at the Collateral Agent’s reasonable request, customary officers’ certificate and legal opinions and shall include release provisions requiring the Collateral Agent to release deposits in the Asset Sale Proceeds Account as necessary to permit the Company or such Restricted Subsidiary to apply such Net Sale Consideration in the manner described below, unless the Collateral Agent has received written notice that a Default or Event of Default has occurred and is continuing);

provided, that any Asset Disposition pursuant to any loss, destruction or damage to an asset, a condemnation, appropriation or other similar taking, including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a Lien incurred not in violation of the covenant described under the caption “Certain Covenants — Limitation Liens” or exercise by the related lienholder of rights with respect thereto, including by deed or assignment in lieu of foreclosure shall not be required to satisfy the conditions set forth in clauses (1) and (2) of this paragraph.

For the purposes of this covenant, the following are deemed to be cash or cash equivalents: (i) the assumption of all Indebtedness of the Company or any Restricted Subsidiary (other than liabilities that are Subordinated Obligations), and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness, in connection with such Asset Disposition; and (ii) securities received by the Company or any Restricted Subsidiary from the transferee which are promptly converted by the Company or such Restricted Subsidiary into cash.

(b) Within 365 days after the receipt of any Net Available Cash from an Asset Disposition, other than a Sale of Collateral, the Company or such Restricted Subsidiary, as the case may be, may apply such Net Available Cash:

(1) first, to the extent the Company elects, or is required by the terms of any Indebtedness, to prepay, repay, redeem or purchase Senior Indebtedness (other than any Disqualified Stock) of the Company or such Restricted Subsidiary (in each case other than Indebtedness owed to the Company or an Affiliate of the Company); and

(2) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (1), to the extent the Company elects, to acquire Additional Assets;

provided, however, that (i) in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (1) above, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased, and (ii) the Company or the applicable Restricted Subsidiary will be deemed to have complied with clause (2) above if, within 365 days of such Asset Disposition, the Company or such Restricted Subsidiary shall have commenced and not completed or abandoned an expenditure or Investment, or a binding agreement with respect to an expenditure or Investment, in compliance with clause (2), and that expenditure or Investment is completed within a date one year and six months after the date of such Asset Disposition. Pending application of such Net Available Cash pursuant to this covenant, such Net Available Cash shall temporarily be invested in Temporary Cash Investments or applied temporarily to reduce revolving credit

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Indebtedness. Any Net Available Cash from Asset Dispositions, other than a Sale of Collateral, described in this paragraph that is not applied or invested as provided in the paragraph (b) shall be deemed to constitute “Excess Asset Disposition Proceeds”.

When the aggregate amount of Excess Asset Disposition Proceeds exceeds $10.0 million, the Company will be required to make an offer to all Holders of Notes and holders of each other series of Indebtedness that ranks by its terms pari passu in right of payment with the Notes and the terms of which contain substantially similar requirements with respect to the application of net proceeds from asset sales as are contained in the Indenture (an “Asset Sale Offer”) to purchase on a pro rata basis (with the Excess Asset Disposition Proceeds prorated between the holders of Notes and such holders of pari passu Indebtedness based upon outstanding aggregate principal amounts) the maximum principal amount of the Notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Disposition Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Disposition Proceeds, the Company and such Restricted Subsidiary may use any remaining Excess Asset Disposition Proceeds for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Disposition Proceeds, the Company shall select the Notes and such other Indebtedness to be purchased on a pro rata basis. Upon completion of each such offer to purchase, the amount of Excess Asset Disposition Proceeds shall be reset at zero.

(c) Within 365 days after the receipt of any Net Sale Consideration from an Asset Disposition that constitutes a Sale of Collateral, the Company or such Restricted Subsidiary, as the case may be, may apply such Net Sale Consideration:

(1) first, to the extent the Company is required by the terms of the Credit Agreement, to prepay or repay Credit Facility Obligations, provided, however, that in connection with any such prepayment or repayment, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid or repaid; and

(2) second, to the extent the Company elects, to prepay or repay Credit Facility Obligations or repurchase and redeem any Notes, provided, however, that in connection with any such prepayment or repayment, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness, that in connection with the Credit Facility Obligations, shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid or repaid, and in connection with the Notes, shall otherwise comply and be in compliance with the Indenture; and

(3) third, to the extent of the balance of such Net Sale Collateral Consideration after application in accordance with clause (1), to the extent the Company elects, to acquire (or enter into a definitive contract to acquire, provided that the acquisition related thereto is completed within a date one year and six months after the date of such Asset Disposition) Additional Assets;

provided, in each such case, the Collateral Agent shall immediately be granted a perfected first priority security interest (subject to Permitted Collateral Liens) on all of the assets acquired with such Net Sale Consideration as Collateral under the Security Documents to secure the Secured Obligations, all on terms provided for in the Security Documents (which may include, at the Collateral Agent’s reasonable request, customary officers’ certificates and legal opinions). Any Net Sale Consideration from the Sale of Collateral that is not applied or invested as provided this paragraph (c) shall be deemed to constitute “Excess Proceeds from the Sale of Collateral”.

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When the aggregate amount of Excess Proceeds from the Sale of Collateral exceeds $10.0 million, the Company will be required to make an offer to all Holders of Notes (a “Collateral Proceeds Offer”) to purchase or redeem or repay, as applicable, on a pro rata basis (with such Excess Proceeds from the Sale of Collateral prorated between the Holders of the Notes and holders of Credit Agreement Indebtedness based upon outstanding aggregate principal amounts) the maximum principal amount of the Notes that may be purchased, and the Credit Agreement Indebtedness that may be prepaid, in each case, out of such Excess Proceeds from the Sale of Collateral, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and Credit Agreement Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to such Collateral Proceeds Offer is less than such Excess Proceeds from the Sale of Collateral, the Company and such Restricted Subsidiary may use any remaining Excess Proceeds from the Sale of Collateral, free and clear of any Liens created by any Security Documents or otherwise for the benefit of any holder of Secured Obligations, for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount of Notes and Credit Agreement Indebtedness surrendered by holders exceeds the amount of such prorated Excess Proceeds from the Sale of Collateral shall select the Notes to be purchased on a pro rata basis and the administrative agent for the Credit Agreement will select the Credit Agreement Indebtedness to be repaid on a pro rata basis. Upon completion of the offer to purchase, the amount of Excess Proceeds from the Sale of Collateral shall be reset at zero.

(d) The Company will 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 this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the covenant described above by virtue of its compliance with such securities laws or regulations.

Limitation on Affiliate Transactions

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1) the terms of the Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s length dealings with a Person who is not an Affiliate;

(2) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of $5.0 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the disinterested members of the Board of Directors of the Company have determined in good faith that the criteria set forth in clause (1) are satisfied and has approved the relevant Affiliate Transaction as evidenced by a resolution; and

(3) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of $10.0 million, the Board of Directors of the Company shall also have received a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries.

(b) The provisions of the preceding paragraph (a) will not prohibit:

(1) any Investment (other than a Permitted Investment) or other Restricted Payment, in each case permitted to be made pursuant to the covenant described under “— Limitation on Restricted Payments”;

(2) 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 and stock ownership plans approved by the Board of Directors of the Company;

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(3) loans or advances to employees in the ordinary course of business but in any event not to exceed $2.0 million in the aggregate outstanding at any one time;

(4) in addition to the loans and advances referred to in the preceding clause (3), loans or advances to Affiliates of the Company but in any event not to exceed $3.0 million in the aggregate outstanding at any one time;

(5) customary indemnities made in the ordinary course of business to employees or directors of the Company and the Restricted Subsidiaries;

(6) the payment of reasonable fees to directors of the Company and the Restricted Subsidiaries who are not employees of the Company or the Restricted Subsidiaries;

(7) any transaction between or among (x) the Company and the Restricted Subsidiaries and (y) the Restricted Subsidiaries;

(8) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company; and

(9) the sale by the Company or a Restricted Subsidiary of any real property (and related fixtures or appurtenances), or of the Capital Stock of the Subsidiary that owns such real property, provided that such real property is the only significant asset owned by such Subsidiary, to a Permitted Holder for consideration in an amount equal to the book value of such assets as reflected in the then recently available consolidated financial statements of the Company but not to exceed $3.0 million.

Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature whatsoever on (i) any Collateral, except pursuant to a Security Document or Permitted Collateral Liens or (ii) any of its properties that are not Collateral, other than Permitted Liens.

Limitation on Sale/Leaseback Transactions

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale/Leaseback Transaction with respect to any property unless:

(1) 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 paragraph (a) of the covenant described under “— Limitation on Indebtedness” and (B) create a Lien on such property securing such Attributable Debt pursuant to the covenant described under “— Limitation on Liens”;

(2) the gross proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair market value (as determined by the Board of Directors of the Company) of such property; and

(3) the transfer of such property is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described under “— Limitation on Sale of Assets and Subsidiary Stock.”

Merger and Consolidation

The Company will not, directly or indirectly, 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:

(1) the resulting, surviving or transferee Person (the “Successor Company”) shall be the Company or a corporation organized and existing under the laws of Canada or any province thereof or the United States of

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America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes, the Exchange Notes, the Indenture, the Security Documents and, if then in effect, the Registration Rights Agreement;

(2) immediately before and after giving pro forma 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;

(3) immediately after giving pro forma effect to such transaction had it occurred at the beginning of the applicable four-quarter period, the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Limitation on Indebtedness”;

(4) 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 all Security Documents and that all necessary actions have been taken to preserve the priority and perfection of the Liens of all Security Documents; and

(5) 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;

provided that clause (3) will not be applicable to (A) a Restricted Subsidiary consolidating with, merging into or transferring all or part of its properties and assets to the Company or (B) the Company merging with an Affiliate of the Company solely for the purpose and with the sole effect of reincorporating the Company in another jurisdiction.

Upon due and complete compliance with the foregoing, the Successor Company (if other than the Company) will 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 and the Notes, and the predecessor Company, except in the case of a conveyance, transfer or lease, shall be released from the obligations under the Notes and the Indenture.

Future Guarantors

If

(i) (A) the Company or any of the Restricted Subsidiaries forms or acquires a Restricted Subsidiary which, or (B) any Restricted Subsidiary (other than a Guarantor) that exists on the Issue Date (including, without limitation, any Initial Non-Guarantor) at any time following the Issue Date, in either case, Incurs Indebtedness other than Indebtedness owed to, or a Guarantee in favor of, the Company or a Guarantor, which in either case is Incurred in compliance with the provisions of the Indenture, then with respect to such Subsidiary, or

(ii) as of the end of any fiscal quarter, the Restricted Subsidiaries that are not then Guarantors own net assets that have an aggregate fair market value (as determined in good faith by the Board of Directors of the Company) equal to or greater than 5% of the Consolidated Tangible Assets at the end of such quarter, then the Company will designate one or more of such Restricted Subsidiaries to become Guarantors such that after giving effect to such designation or designations, as the case may be, the total net assets owned by all such remaining non-Guarantor Restricted Subsidiaries will have an aggregate fair market value (as determined in good faith by the Board of Directors of the Company) of less than 5% of the Consolidated Tangible Assets, then with respect to each such designated Restricted Subsidiary,

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within 30 days following the date on which it Incurs Indebtedness (in the case of clause (i) above) or is designated (in the case of clause (ii) above), as the case may be, and the Company will cause such Subsidiary to Guarantee the Notes and, if required by the provisions of the Indenture or the Security Documents, become a party to the Security Documents and a supplemental indenture on the terms and conditions set forth in the Indenture.

Limitation on Business Activities

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into in any material respect any line of business other than a Related Business.

Payments for Consent

The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture, the Notes, the Note Guarantee, any Security Document or any other Note Document unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

SEC Reports

The Indenture provides that whether or not required by the SEC’s rules and regulations, so long as any Notes are outstanding, the Company will furnish to the Trustee and to each holder of Notes, within the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual reports applicable to a foreign private issuer which would be required to be filed with the SEC if the Company were required to file such reports; and

(2) all current reports applicable to a foreign private issuer which would be required to be filed with the SEC if the Company were required to file such reports.

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, the Company will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request; provided that if at any time, the Company is not subject to the periodic reporting requirements of the Exchange Act for any reason, in lieu of filing such reports with the SEC, the Company may post the reports referred to in the preceding paragraph which were otherwise required to be filed with the SEC on its website within the time periods that would apply if the Company were required to file those reports with the SEC; provided, further, it shall in any event continue to provide copies of such reports to the Trustee and each holder of the Notes as above provided.

In addition, the Company and the Guarantors agree that, for so long as any Notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the SEC, they will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Defaults

Each of the following is an Event of Default:

(1) a default in the payment of interest or Additional Amounts on the Notes when due, continued for 30 days;

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(2) a default in the payment of principal of or premium, if any, on any Note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;

(3) the failure by the Company or any Guarantor to comply with its obligations under “— Change of Control”, “— Annual Reduction Offer”, “— Certain Covenants” under “— Limitation on Sales of Assets and Subsidiary Stock” or “— Merger and Consolidation” above;

(4) (i) the failure by the Company or any Guarantor, as the case may be, to comply for 30 days after notice with any of its obligations in the covenants described above or under “— Certain Covenants” under “— Limitation on Indebtedness”, “— Limitation on Restricted Payments,”, “— Limitation on Restrictions on Distributions from Restricted Subsidiaries”, “— Limitation on Affiliate Transactions”, “— Limitation on Liens”, “— Limitation on Sale/Leaseback Transactions”, “— Future Guarantors” and “— SEC Reports”;

(5) the failure by the Company or any Guarantor, to comply for 60 days after notice with its other agreements contained in the Indenture, the Notes or in any of the Security Documents;

(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness by the Company or any of the Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of the Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the date of the Indenture, if that default:

(a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or

(b) results in the acceleration of such Indebtedness prior to its Stated Maturity; and

in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $10.0 million or move; provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;

(7) certain events of bankruptcy, insolvency or reorganization of the Company, any Guarantor, any Significant Subsidiary or any group of Restricted Subsidiaries which, taken together, would constitute a Significant Subsidiary (the “bankruptcy provisions”);

(8) failure of the Company, any Guarantor, any Significant Subsidiary or any group of the Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary to pay any judgment, or judgments aggregating, in excess of $10.0 million, which judgment or judgments, as the case may be, are not discharged, waived or stayed for a period of 60 consecutive days following such judgment (the “judgment default provision”);

(9) any Note Guarantee ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and the Indenture) or any Guarantor denies or disaffirms its obligations under its Note Guarantee; or

(10) any Security Document or any Lien purported to be created or granted thereby on any one or more items of Collateral is held in any judicial proceeding to be unenforceable or invalid, in whole or part, or ceases for any reason (other than pursuant to a release that is delivered or becomes effective as set forth in the Indenture or any Security Documents) to be fully enforceable and perfected.

However, a default under clauses (4) and (5) will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the outstanding Notes notify the Company of the default, and the Company does not cure such default within the time specified after receipt of such notice.

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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 premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal, premium 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, any Significant Subsidiary or any group of Restricted Subsidiaries which, taken together, would constitute a Significant Subsidiary occurs and is continuing, the principal of and premium, if any, 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:

(1) such holder has previously given the Trustee notice that an Event of Default is continuing;

(2) holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy;

(3) such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) 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.

If a Default occurs, is continuing and is known to the Trustee, the Trustee must mail to each holder of the Notes notice of the Default within the later of 90 days after it occurs or 10 days after the Trustee learns of the Default. Except in the case of a Default in the payment of principal of or premium, if any, and 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 90 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 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.

Amendments and Waivers

Subject to certain exceptions, the Indenture, the Security Documents and the Notes 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 compliance with

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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, an amendment may not, among other things:

(1) reduce the amount of Notes whose holders must consent to an amendment;

(2) reduce the rate of or extend the time for payment of interest on any Note;

(3) reduce the principal of or extend the Stated Maturity of any Note;

(4) reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under “— Optional Redemption” or “— Redemption for Changes in Withholding Taxes”;

(5) make any Note payable in money other than that stated in the Note;

(6) impair the right of any holder of the Notes to receive payment of principal of and premium, if any, 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;

(7) make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions;

(8) make any change in the ranking or priority of any Note or any Note Guarantee, or release any Guarantor from its Note Guarantee except as provided in the Indenture;

(9) except as expressly provided in the Indenture or any Security Document, release all or substantially all of the Liens on the Collateral;

(10) make any change in the provisions of the Indenture described under “ — Additional Amounts” that adversely affects the rights of any Holder to receive Additional Amounts; or

(11) make any change to the provisions described under “ — Change of Control” after a Change of Control has occurred, or any change to the provisions under “— Annual Reduction Offer” after an Annual Reduction Date has occurred, or any change to the provisions of “ — Limitation on Sales of Assets and Subsidiary Stock” after the Company has become obligated to offer to purchase Notes.

Without the consent of any Holder of the Notes, the Company, the Trustee and the Collateral Agent, as the case may be, may amend the Indenture, the Notes or any Security Document:

(1) to cure any ambiguity, omission, defect or inconsistency;

(2) to provide for the assumption by a successor corporation of the obligations of the Company or any Guarantor under the Indenture;

(3) 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 manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);

(4) to add additional Guarantors under the Indenture or add Collateral with respect to, or to further secure, the Notes, or to release a Guarantor or Collateral (or a portion thereof) permitted by, and pursuant to the provisions of, the Indenture;

(5) to add to the covenants of the Company or any Restricted Subsidiary for the benefit of the holders of the Notes or to surrender any right or power conferred upon the Company or any Restricted Subsidiary;

(6) to make any change that does not adversely affect the rights of any holder of the Notes (and for purposes of the foregoing, any change in the Indenture, the Notes, the Note Guarantees or the Security Documents made to conform such documents to the descriptions thereof in this prospectus shall be deemed not to adversely affect the rights of any holder of Notes);

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(7) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act; or

(8) as otherwise provided in the Indenture or Security Documents, as the case may be.

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, prior to the occurrence of a Change of Control, or Asset Disposition, prior to the Company becoming obligated to make an offer to purchase Notes, may be waived or modified with the written consent of the holders of a majority in principal amount of the Notes.

The consent of the holders of the Notes is not necessary under the Indenture 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 becomes effective, the Company will be 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.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except as to rights of registration of transfer or exchange of Notes, which shall survive until all Notes have been canceled and the payment, indemnity and contribution obligations of the Company in favor of the Trustee) as to all outstanding Notes when the Company has paid all sums payable by it under the Indenture and either:

(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from this trust) have been delivered to the Trustee for cancellation; or

(2) (i) all Notes not delivered to the Trustee for cancellation otherwise have become due and payable or have been called for redemption pursuant to the provisions described under “— Optional Redemption”, and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars in an amount as will be sufficient, without consideration of reinvestment of interest, to pay and discharge the entire Indebtedness (including all principal, premium, if any, and accrued interest) on the Notes not theretofore delivered to the Trustee for cancellation, and (ii) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the date of redemption, as the case may be.

In addition, the Company must deliver an officer’s certificate and an opinion of counsel stating that all conditions precedent to satisfaction and discharge have been completed. The Collateral will be released as provided above under the caption “— Security — Release of Security Interests” upon a discharge of the Indenture in accordance with the provisions described in this section.

Defeasance

The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Note Guarantees (“Legal Defeasance”) except for:

(1) the rights of holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest, if any, on such Notes when such payments are due (but not the Change of Control Payment or the payment pursuant to an applicable offer pursuant to the applicable provisions of the Indenture relating to an Annual Reduction Date or Asset Dispositions, as the case may be) from the trust referred to below;

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(2) the Company’s obligations with respect to the Notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, the Collateral Agent and the Company’s obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligation of the Company and the Guarantors released with respect to certain covenants that are described in the Indenture (“Covenant Defeasance”), and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “— Events of Default and Remedies” will no longer constitute Events of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, and premium, if any, and interest on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, 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 holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes 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;

(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default arising from a breach of covenants due to the Incurrence of Indebtedness the proceeds of which are used to make such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91^st day after the date of deposit;

(5) such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which the Company or any of the Restricted Subsidiaries is a party or by which the Company or any of the Restricted Subsidiaries is bound, or if such breach, violation or default would occur, which is not waived as of, and for all purposes, on and after, the date of such deposit (other than a Default or an Event of Default arising from a breach of covenants due to the Incurrence of Indebtedness the proceeds of which are used to make such deposit);

(6) the Company must have delivered to the Trustee an opinion of counsel to the effect that after the 91^st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;

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(7) the Company must deliver to the Trustee an officers’ certificate stating that the deposit was not made by the Company with the intent of preferring the holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(8) the Company must deliver to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the covenant Defeasance have been complied with.

The Collateral will be released as provided above under the caption “— Security — Release of Security Interests” upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions described in this section. The Note Guarantees will be released upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions described in this section.

Concerning the Trustee

The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company or any Guarantor, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; provided, however, if it acquires any conflicting interest it must either eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

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. If an Event of Default actually known to the Trustee occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the same degree of care as a prudent person would under the circumstances 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, any Security Document or any other Note Document 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, Security Document or any other Note Document.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Restricted Subsidiary, in its capacity as such, will have any liability for any obligations of the Company or any Restricted Subsidiary under the Notes, the Note Guarantees, any Security Document, the Indenture or any other Note Document or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver and release may not be effective to waive liabilities under the U.S. federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

Enforceability of Judgments

Since most of the Company’s operating assets and the operating assets of the Company’s Subsidiaries are situated outside the United States, any judgment obtained in the United States against any of them, including judgments with respect to the payment of principal, premium, interest, Additional Amounts, redemption price and any purchase price with respect to the Notes, may not be collectible within the United States.

The Company has been informed by its Nova Scotia counsel, McInnes Cooper, that in such counsel’s opinion, the laws of the Province of Nova Scotia (the “Province”) and the federal laws of Canada applicable therein permit an action to be brought in a court of competent jurisdiction in the Province on a final and conclusive judgment in personam of a United States federal court or a court of the State of New York sitting in

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the Borough of Manhattan in The City of New York (the “New York Court”), that is subsisting and unsatisfied respecting the enforcement of the Notes, the Security Documents or the Indenture, that is not impeachable as void or voidable under the laws of the State of New York and that is for a sum certain in money if:

(a) that judgment was not obtained by fraud or in a manner contrary to “natural justice” and the enforcement of that judgment would not be inconsistent with “public policy” as such terms are applied by the courts of the Province;

(b) the New York Court did not act either without jurisdiction under the conflict of laws rules of the laws of the Province; or without authority, under the laws in force in New York, to adjudicate concerning the cause of action or subject matter that resulted in the judgment or concerning the person of that judgment debtor;

(c) the defendant was duly served with the process of the New York Court or appeared to defend such process other than only to contest the jurisdiction of the Court;

(d) the judgment is not contrary to the final and conclusive judgment of another jurisdiction;

(e) the enforcement of that judgment does not constitute, directly or indirectly, the enforcement of foreign revenue expropriatory or penal laws or similar laws;

(f) the enforcement of the judgment would not be contrary to any order made by the Attorney-General of Canada under the Foreign Extraterritorial Measures Act (Canada) or the Competition Tribunal under the Competition Act (Canada) or the Governor in Council under the United Nations Act (Canada) or the Special Economic Measures Act (Canada);

(g) there has been compliance with applicable limitations law;

(h) the judgment was not, directly or indirectly, for the payment of taxes, or other charges of a like nature or of a fine or other penalty;

(i) the judgment was not based on a clear mistake of law or fact;

(j) there has been no prior judgment in another court between the same parties concerning the same issues as are dealt with in the judgment to be enforced in the Province; and

(k) no new admissible evidence that could not have been discovered and brought to the attention of the New York Court through the exercise of reasonable diligence by the defendant or any right or defense relevant to the action accrues or is discovered prior to the rendering of the judgment by the Courts of the Province.

Under the Currency Act (Canada) a Nova Scotia court may only give judgment in Canadian dollars.

The Company has been informed by its Barbados counsel, Paula S. Lett, that in such counsel’s opinion

(a) a Court of competent jurisdiction in Barbados (a “Barbados Court”) would recognize the choice of law of the State of New York (“New York Law”) as the proper law governing the Indenture and the Exchange Notes and attached Guarantees related to the Exchange Notes, provided that such choice of law is bona fide (in the sense that it was not made with a view to avoiding the consequences of the laws of another jurisdiction), and provided that such New York law is not contrary to public policy as that term is applied by a Barbados Court;

(b) submission by the Barbados Subsidiary Guarantors to the jurisdiction of the federal or state courts located in the Borough of Manhattan in the City of New York would be recognized by a Barbados Court as a valid submission to the jurisdiction of such courts but a Barbados court may not be bound by a decision of such a foreign court in certain circumstances, i.e., if the decision of the foreign court was contrary to public policy, natural or substantial justice as such terms are applied by a Barbados Court, or was obtained by fraud;

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(c) if any Security Document is sought to be enforced in Barbados in accordance with the laws applicable thereto as chosen by the parties, namely New York Law, a Barbados Court would enforce a final and conclusive order of a New York Court for a definite sum which is not for penalties or multiple damages, against the Barbados Subsidiary Guarantors provided that such order is not contrary to public policy, natural or substantial justice as such terms are applied by a Barbados Court, and was not obtained by fraud;

(d) the laws of Barbados permit an action to be brought in a court of competent jurisdiction in Barbados to enforce a final and conclusive judgment in personam of a United States federal court or a court of the State of New York sitting in the Borough of Manhattan in The City of New York (the “New York Court”) that is subsisting and unsatisfied respecting the enforcement of the Security Documents, for a certain sum in money provided that such judgment order is not contrary to public policy, natural or substantial justice as such terms are applied by a Barbados Court, and was not obtained by fraud.

Consent to Jurisdiction and Service

The Company and each Guarantor appointed Wilmington Trust FSB, 520 Madison Avenue, 33rd Floor, New York, New York 10022 as its agent for actions relating to the Notes, the Indenture and the Security Documents or brought under U.S. Federal or state securities 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.

Governing Law

The Indenture, the Notes, the Registration Rights Agreement and the Collateral Agency Agreement are governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

“Additional Assets” means:

(1) any property, equipment or other capital assets used in a Related Business;

(2) the Capital Stock of a Person primarily engaged in a Related Business that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, in the case of a Sale of Collateral, such property, equipment or other assets shall consist solely of Replacement Vessel Assets, and the principal assets owned by any such Person shall consist of Replacement Vessel Assets.

“Affiliate” of any specified Person means:

(1) any other Person, directly or indirectly, controlling or controlled by; or

(2) 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 covenants described under “— Certain Covenants — Limitation on Restricted Payments,” “— Certain Covenants — Limitation on Affiliate Transactions” and “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 25% or more of the total voting power of the Voting Stock (on a

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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.

“Asset Disposition” means any sale, lease, transfer, exchange or other disposition (or series of related sales, leases, transfers, exchanges or dispositions) by the Company or any Restricted Subsidiary, including, without limitation, any disposition by means of a merger, consolidation or similar transaction, by the way of a sale and leaseback or pursuant to loss, destruction, damage, condemnation or similar taking, (each referred to for the purposes of this definition as a “disposition”), of:

(1) 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);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets or rights 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 clauses (1), (2) and (3) above,

(A) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary;

(B) for purposes of the covenant described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” only, (y) a disposition that constitutes a Restricted Payment permitted by the covenant described under “— Certain Covenants — Limitation on Restricted Payments” or a Permitted Investment and (z) a disposition of all or substantially all the assets of the Company or the Company and the Restricted Subsidiaries taken as a whole, by merger or otherwise, in accordance with the provisions of the Indenture described above under the covenant described under “— Certain Covenants — Merger and Consolidation”;

(C) a disposition of an asset or pursuant to a series of related dispositions, assets with a fair market value of less than $5.0 million;

(D) grants of Liens permitted by “— Certain Covenants — Limitation on Liens” or made pursuant to any Security Document and dispositions pursuant thereto;

(E) any charter of vessels of the Company or of any Restricted Subsidiary entered into in the ordinary course of business and with respect to which the Company or any Restricted Subsidiary is the lessor, except any such charter that provides for the acquisition of such vessel by the lessee during or at the end of the term thereof for an amount that is less than their fair market value at the time the right to acquire such properties or assets occur;

(F) real property or Capital Stock sold in accordance with clause (b)(9) of the covenant described under “— Certain Covenants — Limitation on Affiliate Transactions”; and

(G) sales of obsolete and not practically useable or worn-out equipment in the ordinary course of business.

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate then borne by the Notes, compounded quarterly) 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); provided that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

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“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(2) the sum of all such payments.

“Board of Directors” in respect of a Person means the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board.

“Business Day” means each day which is not a legal holiday.

“Canadian Dollar Equivalent” means, with respect to any monetary amount in a currency other than the Canadian dollar, at or as of any time for the determination thereof, the amount of Canadian dollars obtained by converting such foreign currency involved in such computation into Canadian dollars at the spot rate for the purchase of Canadian dollars with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service as is providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two business days prior to such determination.

“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. For purposes of the covenant described under “— Certain Covenants — Limitation on Liens”, a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased thereby.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral Agency Agreement” means the Collateral Agency Agreement dated the Issue Date, executed and delivered by the Company, certain Guarantors, the Trustee, the Credit Agreement administrative agent and the Collateral Agent, on terms as provided in the Indenture and otherwise on customary terms reasonably satisfactory to the Trustee and the administrative agent for the Credit Agreement, in each case, as amended, supplemented, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“Collateral Agent” means Wilmington Trust Company, in its capacity as collateral agent under the Collateral Agency Agreement, together with its successor in such capacity.

“Commodity Hedging Agreement” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in the price of any commodity, in each case, entered into in the ordinary course of business and in connection with the conduct of such Person’s business and not for speculative purposes.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which financial statements are

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available on or prior to the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided that:

(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding 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 (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be computed based on (y) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (z) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation) 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 has 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 Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to 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 Disposition 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 or improvement 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 (which for purposes of the foregoing, shall be deemed to include any vessel acquired for use in a Related 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 Disposition, 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 Disposition, Investment or acquisition occurred on the first day of such period.

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For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, 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 on 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).

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, determined in accordance with GAAP, 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:

(1) interest expense attributable to Capital Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction;

(2) amortization of debt discount, premium and debt issuance cost;

(3) capitalized interest;

(4) non-cash interest payments and expense;

(5) the interest component of any deferred payment obligations;

(6) commissions, discounts and other fees and charges Incurred in respect to letters of credit and bankers’ acceptance financing;

(7) net payments pursuant to, and other net costs associated with, Hedging Obligations (including amortization of fees);

(8) dividends in respect of all Disqualified Stock of the Company or Preferred Stock of any Restricted Subsidiary held by Persons other than the Company or a Wholly Owned Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of the issuer of such Disqualified stock or Preferred Stock);

(9) interest incurred in connection with Investments in discontinued operations; and

(10) 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;

in each case, whether paid, accrued or scheduled to be paid or accrued during such period (except to the extent accrued in a prior period).

“Consolidated Net Income” means, for any period, the consolidated net income of the Company and its consolidated Restricted Subsidiaries determined in accordance with GAAP; provided that there shall not be included in such Consolidated Net Income:

(1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary or that is accounted for by the equity method of accounting, except that:

(A) subject to the exclusion contained in clause (3) 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 (3) 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;

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(2) any net income of any Restricted Subsidiary (other than a Guarantor) 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 (3) 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 up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary 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;

(3) any gain or loss realized upon the sale or other disposition of any assets of the Company, its consolidated Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

(4) extraordinary gains or losses;

(5) the cumulative effect of a change in accounting principles; and

(6) any unrealized non-cash gains or losses in respect of currency fluctuations.

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 repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.

“Consolidated Tangible Assets” means, as of any date of determination, (i) the total assets less, (ii) to the extent otherwise included and without duplication, the sum of (a) accumulated depreciation and amortization, (b) allowances for doubtful receivables, (c) other applicable reserves and other property deductible items (for example, unamortized debt discount and expenses and other unamortized costs and charges), (d) excess of cost over fair value of assets of business acquired, as determined in good faith by the Board of Directors of the Company, (e) 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, (f) treasury stock, (g) cash set apart and held in a sinking or other analogous fund established for the redemption or other retirement of Capital Stock or Indebtedness, (h) Investments in and assets of Unrestricted Subsidiaries, (i) goodwill and other intangibles, in each case as shown on the balance sheet of the Company and the Restricted Subsidiaries for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP.

“Credit Agreement” means the Credit Agreement dated as of August 26, 2004, among the Company, as borrower, certain Subsidiaries of the Company, the other credit parties and lenders party thereto and Fortis Capital Corp., as administrative agent and lender, and Fortis Capital Corp., as arranger, together with the related documents thereto (including any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any one or more agreements (and related documents) governing Indebtedness Incurred to Refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders, and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

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“Credit Facility Obligations” means (i) the principal of (in a maximum outstanding amount of $40.0 million), and accrued interest on, such Indebtedness of the Company Incurred under the Credit Agreement and (ii) all other Obligations under the Credit Agreement and, as related to the Credit Agreement, the Security Documents.

“Currency Agreement” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, in each case, entered into in the ordinary course of business and in connection with the conduct of such Person’s business and not for speculative purpose.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Vessels” mean (i) those certain four (4) Vessels that as of the Issue Date are registered under the names the Thebaud Sea, Venture Sea, Burin Sea and Trinity Sea, respectively, and (ii) such other one or more Vessels, if any, which the Credit Agreement administrative agent and the Company jointly notify the Trustee are to be included as a Designated Vessel pursuant to compliance with the asset maintenance coverage requirements of the Credit Agreement.

“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 at the option of the holder) or upon the happening of any event:

(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the 91^st day following 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 purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 91^st day following the Stated Maturity of the Notes shall not constitute Disqualified Stock if:

(1) 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 terms applicable to the Notes and described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” and “— Change of Control”; and

(2) any such requirement only becomes operative after compliance with such terms applicable to the Notes, including the purchase of any Notes tendered pursuant thereto.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to the Indenture; provided that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

“dollars” or “$” means Canadian dollars. Whenever the covenants or default provisions or definitions in the Indenture refer to an amount in Canadian dollars, that amount will be deemed to refer to the Canadian Dollar Equivalent of the amount of any obligation denominated in any other currency or currencies, including composite currencies and, in any case, no subsequent change in the Canadian Dollar Equivalent after the applicable date of determination will cause such determination to be modified.

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“EBITDA” for any period means the sum of Consolidated Net Income, plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income:

(1) all income tax expense of the Company and its consolidated Restricted Subsidiaries;

(2) Consolidated Interest Expense;

(3) depreciation and amortization expense of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid item that was paid in cash in a prior period);

(4) all other non-cash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents an accrual of, or reserve for, cash expenditures in the future); and

(5) solely with respect to the calculation of EBITDA for each quarterly period ending on or before June 30, 2005, and without duplication of any of the amounts in the preceding clauses (1) through (4), (i) the write-off of deferred corporate transaction costs related to a previous corporate financing transaction which, in the aggregate, are not in excess of $1.2 million, (ii) breakage costs incidental to the Indebtedness and lease obligations being discharged substantially contemporaneous with the original issuance of the Notes which, in the aggregate, are not in excess of $2.0 million and (iii) the write-off of deferred finance costs incurred in relation to the Indebtedness and lease obligations described in clause (ii) which, in the aggregate, are not in excess of $2.5 million;

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 non-cash 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.

“Equity Offering” means any sale for cash of Capital Stock of the Company (excluding sales made to any Restricted Subsidiary and excluding sales of Disqualified Stock) (i) to the public pursuant to an effective registration under the Securities Act or similar laws of Canada or any province thereof or (ii) in a private placement pursuant to an exemption from registration requirements of the Securities Act or similar laws of Canada or any province thereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4) 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 Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

“Government Securities” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged; (ii) obligations of a Person controlled or supervised by

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and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clause (i) or (ii) above, are not callable or redeemable at the option of the issuers thereof; or (iii) depository receipts issued by a bank or trust company as custodian with respect to any such Government Securities or a specific payment of interest on or principal of any such Government Securities held by such custodian for the account of holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities evidenced by such depository receipt.

“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:

(1) 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

(2) 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.

“Guarantors” means (i) 3013563 Nova Scotia Limited, Secunda Marine International Incorporated, Secunda Marine Services Limited, Secunda Global Marine Incorporated, JDM Shipping Inc., International Shipping Corporation Inc., Secunda Global International Inc., Navis Shipping Incorporated, Secunda Atlantic Incorporated, Secunda Marine Atlantic Limited and Offshore Logistics Incorporated, (ii) each Restricted Subsidiary that becomes a guarantor of the Notes pursuant to the covenant described under “— Certain Covenants — Future Guarantors”, and (iii) each Restricted Subsidiary executing a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of the Indenture; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Note Guarantee is released in accordance with the terms thereof.

“Hedging Obligations” of any Person means the net obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Hedging Agreement.

“Holder” means the Person in whose name a Note is registered on the Registrar’s books.

“Incur” means create, incur, issue, assume, Guarantee, incur or otherwise become liable for or with respect to, contingently or otherwise; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with “— Certain Covenants — Limitation on Indebtedness,” (1) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security and (2) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms will not be deemed to be the Incurrence of Indebtedness.

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1) 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

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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;

(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/ Leaseback Transactions entered into by such Person;

(3) the principal component of all obligations of such Person issued or assumed as the deferred purchase price of property due more than six months after the acquisition of such property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

(4) the principal component of all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) 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);

(5) 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 Subsidiary of such Person, the liquidation preference with respect to, any Preferred Stock (but excluding, in each case, any accrued dividends);

(6) the principal component of all obligations of the type referred to in clauses (1) through (5) 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;

(7) the principal component of all obligations of the type referred to in clauses (1) through (6) 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 value of such property or assets and the amount of the obligation so secured; and

(8) to the extent not otherwise included in this definition, net 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; provided, however, that the principal amount of any noninterest bearing or other discount security at any date will be the principal amount thereof that would be shown on a balance sheet of such Person dated such date prepared in accordance with GAAP.

“Independent Qualified Party” means an independent investment banking firm, accounting firm or appraisal firm, in each case of industry recognized standing; provided that such firm is not an Affiliate of the Company.

“Interest Rate Agreement” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in interest rates accruing on Indebtedness for which it is liable, in each case, entered into in the ordinary course of business and in connection with conduct of such Person’s business and not for speculative purposes and in respect to a notional amount not in excess of the principal amount of such Indebtedness from time to time outstanding.

“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 or advances against supplies on the balance sheet of the lender) or other extension 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

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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 (in each case other than in exchange for Capital Stock (other than Disqualified Stock) of the Company). Except as otherwise provided for herein, the amount of an Investment shall be its fair value at the time the Investment is made and without giving effect to subsequent changes in value.

For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and the covenant described under “— Certain Covenants — Limitation on Restricted Payments”:

(1) “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 (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B) 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

(2) 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 of the Company.

“Issue Date” means the first date on which Notes are issued, August 26, 2004.

“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, a ship or vessel mortgage or encumbrance, any option or other agreement to sell or give a security interest in, and any filing of or agreement to give any financing statement under, the Uniform Commercial Code (or equivalent statute) of any jurisdiction).

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

“Net Available Cash” from an Asset Disposition means the aggregate cash proceeds and cash equivalents received by the Company or any Restricted Subsidiary therefrom (including 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:

(1) all accounting, investment banking, 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 paid or be accrued as a liability under GAAP, as a consequence of such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, 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 Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition; and

(4) 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 Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition;

“Net Cash Proceeds”, with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts

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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 Sale Consideration” from an Asset Disposition means the aggregate cash proceeds and cash equivalents received by the Company or any Restricted Subsidiary therefrom (including 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 respect of any Sale of Collateral, in each case net of:

(1) all accounting, investment banking, 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 paid or be accrued as a liability under GAAP, as a consequence of such Sale of Collateral;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Sale of Collateral, 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 Sale of Collateral, or by applicable law, be repaid out of the proceeds from such Sale of Collateral;

(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition; and

(4) 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 Sale of Collateral and retained by the Company or any Restricted Subsidiary after such Sale of Collateral.

“Non-Recourse Indebtedness” means Indebtedness or any other obligation:

(1) as to which neither the Company nor any Restricted Subsidiary, (a) provides any guarantee or credit support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness); or (b) is directly or indirectly liable (as a guarantor or otherwise);

(2) the Incurrence of which will not result in any recourse against any of the assets of the Company or any Restricted Subsidiary; and

(3) no default with respect to which would permit (upon notice, lapse of time or any other event or condition, or any combination of the foregoing) any holder of any other Indebtedness or other obligation of the Company or any Restricted Subsidiary to declare pursuant to the express terms governing such Indebtedness or other obligation a default on such other Indebtedness or other obligation or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

“Note Documents” means the Indenture, the Notes, the Note Guarantees and the Security Documents.

“Note Obligations” means the Notes, Note Guarantees and all other Obligations of any Obligor under the Note Documents.

“Obligations” means all principal, premium, interest, penalties, fees, indemnifications, reimbursement obligations, damages, liabilities, costs, expenses and other amounts payable under the documentation governing any Indebtedness or in respect thereto.

“Obligor” means each of the Company, the Guarantors and any other Persons that has granted to the Collateral Agent a Lien upon any of the Collateral as security for the Secured Obligations.

“Permitted Collateral Liens” means Liens described in clauses (2), (4), (6), (8), (17), (18), (19) and (20) of the definition of “Permitted Liens”.

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“Permitted Holders” means (1) Alfred A. Smithers and his spouse or their lineal descendants, (2) any trust for the benefit of (or any trustee of such trust), corporation or partnership controlled, directly or indirectly, by one or more Persons described in clause (1) above or (3) any combination of the foregoing.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1) the Company, 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 Related Business;

(2) 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 that such Person’s primary business is a Related Business;

(3) cash and Temporary Cash Investments;

(4) 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 that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(5) payroll, travel and similar advances 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;

(6) loans or advances to employees in the ordinary course of business of the Company or its Restricted Subsidiaries consistent with sound business practices, but in any event in an aggregate amount not to exceed $2.0 million in the aggregate outstanding at any one time;

(7) in addition to the loans and advances referred to in the preceding clause (6), loans or advances to Affiliates of the Company but in any event not to exceed $3.0 million in the aggregate outstanding at any one time;

(8) 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;

(9) any Person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Disposition as permitted pursuant to the covenant described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”;

(10) any Person where such Investment was acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable or other rights to payment held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or other rights to payment or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(11) Currency Agreements, Commodity Hedging Agreements and Interest Rate Agreements;

(12) one or more joint ventures or Unrestricted Subsidiaries engaged in a Related Business to the extent that the aggregate amount of all cash and cash equivalents invested by the Company and the Restricted Subsidiaries, taken as a whole, does not exceed the greater of $10.0 million or 5.0% of Consolidated Tangible Assets; and

(13) other Investments in Related Businesses which, when taken together with all other Investments made pursuant to this clause (13), do not exceed $5.0 million (with the fair market value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value);

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provided, however, for the avoidance of doubt, in no event shall the Collateral, or any portion thereof, be used, directly or indirectly, to make any Investment pursuant to clause (12) or clause (13) above.

“Permitted Liens” means, with respect to any Person:

(1) pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation or to support obligations to insurance companies in respect of deductibles, co-insurance claims or self-insured retention (and letter of credit obligations in respect thereof), 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 cash equivalents 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;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings that are being diligently contested 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;

(3) Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution, in each case, other than for the benefit of the Holders;

(4) Liens for taxes, assessments, governmental charges or claims not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings being diligently contested; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(5) Liens in favor of issuers of surety bonds or letters of credit and bankers’ acceptances 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 and bankers’ acceptances do not constitute Indebtedness;

(6) 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;

(7) Liens securing Indebtedness Incurred in accordance with the covenant described under “Certain Covenants — Limitation on Indebtedness” to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided that the Lien may not extend to any Collateral or other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property that do not constitute Collateral and that are affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;

(8) Liens to secure Indebtedness permitted under the provisions described in clause (b)(1) under “— Certain Covenants — Limitations on Indebtedness”;

(9) Liens outstanding on the Issue Date and amendments thereto that are not more restrictive, taken on a whole, than the corresponding Lien on the Issue Date;

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(10) Liens on property or shares of Capital Stock of another Person 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 a Subsidiary; provided, further, however, that any such Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(11) Liens on property at the time such Person or any of its Restricted 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 are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided, further, however, that such Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(12) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Wholly Owned Subsidiary of such Person;

(13) Liens securing obligations under Interest Rate Agreements entered into to protect against fluctuations in interest rates in the ordinary course of business, so long as such obligations relate to Indebtedness that is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such obligations;

(14) Liens securing obligations related to Currency Agreements or Commodity Hedging Agreements entered into to protect against fluctuations in exchange rates and commodity prices in the ordinary course of business, so long as such obligations are secured solely by property that is not Collateral;

(15) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien permitted under the Indenture (other than Liens in respect of Indebtedness that is retired by the Company or any Restricted Subsidiary on the Issue Date); provided that:

(A) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof);

(B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness being Refinanced at the time the original Lien became a Permitted Lien and (y) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(16) Liens representing the interest or title of a lessor in connection with any operating lease or similar contract permitted under the Indenture;

(17) precautionary filings under the UCC or equivalent statute of any applicable jurisdiction;

(18) Liens securing the Notes and Note Guarantees;

(19) Liens for salvage or general average;

(20) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary arising from vessel chartering, operations, drydocking, maintenance, the furnishing of supplies or fuel to vessels and crews wages, in each case (i) of a maritime lien nature and (ii) not involving a claim the delinquency of which (A) has resulted in the, or could reasonably result in the imminent, risk of sale, forfeiture, hindrance to operation or loss of a vessel or (B) has resulted in a matured claim for the payment of money in excess of $10.0 million, which claim has been not been discharged within 30 days following its maturity;

(21) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary which secure obligations that do not exceed $5.0 million at any one time outstanding; and

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(22) Liens on the vessel Bold Endurance securing Indebtedness not to exceed the amount of Indebtedness secured by such vessel on the Issue Date.

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 company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“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.

“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:

(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;

(2) 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;

(3) 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; and

(4) if the Indebtedness being Refinanced is subordinated in right of payment to the Notes or Note Guarantees, such Refinancing Indebtedness has a final maturity date later than the maturity of, and is subordinated in right of payment to, the Notes and Note Guarantees, as the case may be, on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that is not a Guarantor which Refinances Indebtedness of the Company or a Guarantor or (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

“Registration Rights Agreement” means the Registration Rights Agreement dated the Issue Date, among the Company, the Guarantors and RBC Capital Markets Corporation, as representative of the initial purchasers.

“Related Business” means any business in which the Company was engaged on the Issue Date and any business reasonably related, ancillary or complementary to any business in which the Company was engaged on the Issue Date, including, without limitation, the ownership, operation, maintenance, construction, conversion or management of marine vessels or performance of marine services, or the provision of logistical support and services to the marine industry, in each case as so reasonably determined by the Board of Directors of the Company in good faith.

“Replacement Vessel Assets” means a vessel or related equipment used or useful in a Related Business or on a Vessel, or additions, improvements, renewals and replacements made with respect thereto or to a Vessel.

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“Restricted Payment” with respect to any Person means:

(1) the declaration or payment of any dividends or any other payments or distributions of any sort in respect of its Capital Stock or similar payment to the direct or indirect holders of its Capital Stock (other than (i) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock), (ii) dividends or distributions payable solely to the Company or a Restricted Subsidiary, and (iii) 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));

(2) the making of any payment on, or with respect to, or 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);

(3) the making of any payment on, or with respect to, or 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 of such Person or any of its Subsidiaries; or

(4) the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

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

“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted Subsidiary 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 of Collateral” means any Asset Disposition to the extent involving assets or other rights or property that constitute Collateral under the Security Documents.

“SEC” means the Securities and Exchange Commission.

“Secured Obligations” means, collectively, the Note Obligations and the Credit Facility Obligations.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Documents” means the Collateral Agency Agreement, any one or more security agreements, pledge agreements, collateral assignments, mortgages, vessel mortgages, marine mortgages, deeds of covenants, assignments of earnings and insurances, share pledges, collateral agency agreements, deeds of trust or other grants or transfers for security executed and delivered by the Company and any other Obligor creating, or purporting to create, a Lien upon Collateral in favor of the Collateral Agent for the benefit of the holders of the Secured Obligations, subject to certain payment priorities, in each case as amended, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“Senior Indebtedness” means, with respect to any Person, Indebtedness of such Person that is not a Subordinated Obligation of such Person.

“Significant Subsidiary” means any Restricted Subsidiary that (i) owns/leases a Vessel or (ii) would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

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“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 with respect to a Person, any Indebtedness of such Person (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Notes or a Note Guarantee of such Person, as the case may be, pursuant to a written agreement to that effect.

“Subsidiary” means, with respect to any Person:

(1) any corporation, association or other business entity of which more than 50% of the Voting Stock is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (whether general or limited), limited liability company or joint venture (a) the sole general partner or the managing general partner or managing member of which is such Person or a Subsidiary of such Person, or (b) if there are more than a single general partner or member, either (i) the only general partners or managing members of which are such Person and/or one or more Subsidiaries of such Person (or any combination thereof) or (ii) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership, limited liability company or joint venture, respectively.

“Temporary Cash Investments” means any of the following:

(1) any investment in direct obligations of, or obligations guaranteed by, the United States of America or any agency thereof;

(2) 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 bank or trust company which is organized under the laws of the United States of America, any state thereof or any other country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of US$250.0 million (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;

(3) 1repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;

(4) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than the Company or an Affiliate of the Company) organized and in existence under the laws of the United States of America or any other 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 or “A-1” (or higher) according to S&P; and

(5) 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 Canada, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A2” by Moody’s.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall have been designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below, and (2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if it:

(1) has no indebtedness other than Non-Recourse Indebtedness;

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(2) is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained, in light of all the circumstances, at the time from Persons who are not Affiliates of the Company;

(3) is a Person with respect to which neither the Company nor any Restricted Subsidiary has any direct or indirect obligation (x) to subscribe for additional Capital Stock or (y) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;

(4) does not guarantee, secure with any of its assets or properties or otherwise directly or indirectly provide credit support for any Indebtedness of the Company or any Restricted Subsidiary;

(5) does not own any Capital Stock of or own or hold any Lien on any asset or property of, the Company or any Restricted Subsidiary; and

(6) would constitute an Investment which the Company could make in compliance with the covenant under the caption “— Certain Covenants — Limitation on Restricted Payments”.

If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture, and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date and subject to immediate compliance with the covenant under the caption “— Limitation on Indebtedness”, the failure with which to so comply will constitute a Default.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation (A) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “— Certain Covenants — Limitation on Indebtedness”, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period and (B) no Default shall have occurred and be continuing. Any such designation by such Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of such Board of Directors giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions.

“U.S. dollars” or “US$” means United States dollars.

“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 or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary) is owned by the Company or one or more Wholly Owned Subsidiaries.

Book-Entry, Delivery and Form of Securities

The Global Notes

The Notes will be issued in the form of one or more registered Notes in global form, without interest coupons (the “Global Notes”), as follows:

• Notes sold to qualified institutional buyers under Rule 144A will be represented by the Rule 144A Global Note; and

• Notes sold in offshore transactions to non-U.S. persons in reliance on Regulation S will be represented by the Regulation S Global Note.

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Upon issuance, each of the Global Notes will be deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee of DTC.

Ownership of beneficial interests in each Global Note will be limited to persons who have accounts with DTC (“DTC participants”) or persons who hold interests through DTC participants. The Company expects that under procedures established by DTC:

• upon deposit of each Global Note with DTC’s custodian, DTC will credit portions of the principal amount of the Global Note to the accounts of the DTC participants designated by the initial purchasers; and

• ownership of beneficial interests in each Global Note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the Global Note).

Beneficial interests in the Regulation S Global Note will initially be credited within DTC to Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme, on behalf of the owners of such interests. During the Distribution Compliance Period described below, beneficial interests in the Regulation S Global Note may be transferred only to non-U.S. persons under Regulation S, qualified institutional buyers under Rule 144A or institutional accredited investors.

Investors may hold their interests in the Regulation S Global Note directly through Euroclear or Clearstream, if they are participants in those systems, or indirectly through organizations that are participants in those systems. Each of Euroclear and Clearstream will appoint a DTC participant to act as its depositary for the interests in each Regulation S Global Note that are held within DTC for the account of each settlement system on behalf of its participants.

Beneficial interests in the Global Notes may not be exchanged for Notes in physical, certificated form except in the limited circumstances described below.

Exchanges Among the Global Notes

The Distribution Compliance Period will begin on the closing date and end 40 days after the closing date.

Beneficial interests in one Global Note may generally be exchanged for interests in another Global Note. Depending on whether the transfer is being made during or after the Distribution Compliance Period, and to which Global Note the transfer is being made, the Trustee may require the seller to provide certain written certifications in the form provided in the Indenture. A beneficial interest in a Global Note that is transferred to a person who takes delivery through another Global Note will, upon transfer, become subject to any transfer restrictions and other procedures applicable to beneficial interests in the other Global Note.

Book-Entry Procedures for the Global Notes

All interests in the Global Notes will be subject to the operations and procedures of DTC, Euroclear and Clearstream. The Company provides the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of each settlement system are controlled by that settlement system and may be changed at any time. Neither the Company nor the initial purchasers are responsible for those operations or procedures.

DTC has advised the Company that it 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 State Banking Law;

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• a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the Uniform Commercial Code; and

• a “clearing agency” registered under Section 17A of the Securities Exchange Act of 1934.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTC’s participants include securities brokers and dealers, including the initial purchasers, banks and trust companies, clearing corporations and other organizations. Indirect access to DTC’s system is also available to others such as banks, brokers, dealers and trust companies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who are not DTC participants may beneficially own securities held by or on behalf of DTC only through DTC participants or indirect participants in DTC.

So long as DTC’s nominee is the registered owner of a Global Note, that nominee will be considered the sole owner or holder of the Notes represented by that Global Note for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Note:

• will not be entitled to have Notes represented by the Global Note registered in their names;

• will not receive or be entitled to receive physical, certificated Notes; and

• will not be considered the owners or holders of the Notes under the Indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the Trustee under the Indenture.

As a result, each investor who owns a beneficial interest in a Global Note must rely on the procedures of DTC to exercise any rights of a holder of Notes under the Indenture (and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its interest).

Payments of principal, premium (if any) and interest with respect to the Notes represented by a Global Note will be made by the Trustee to DTC’s nominee as the registered holder of the Global Note. Neither the Company nor the Trustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a Global Note, for any aspect of the records relating to or payments made on account of those interests by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those interests.

Payments by participants and indirect participants in DTC to the owners of beneficial interests in a Global Note will be governed by standing instructions and customary industry practice and will be the responsibility of those participants or indirect participants and DTC.

Transfers between participants in DTC will be effected under DTC’s procedures and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream will be effected in the ordinary way under the rules and operating procedures of those systems.

Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected within DTC through the DTC participants that are acting as depositaries for Euroclear and Clearstream. To deliver or receive an interest in a Global Note held in a Euroclear or Clearstream account, an investor must send transfer instructions to Euroclear or Clearstream, as the case may be, under the rules and procedures of that system and within the established deadlines of that system. If the transaction meets its settlement requirements, Euroclear or Clearstream, as the case may be, will send instructions to its DTC depositary to take action to effect final settlement by delivering or receiving interests in the relevant Global Notes in DTC, and making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. Euroclear and Clearstream participants may not deliver instructions directly to the DTC depositaries that are acting for Euroclear or Clearstream.

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Because of time zone differences, the securities account of a Euroclear or Clearstream participant that purchases an interest in a Global Note from a DTC participant will be credited on the business day for Euroclear or Clearstream immediately following the DTC settlement date. Cash received in Euroclear or Clearstream from the sale of an interest in a Global Note to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account as of the business day for Euroclear or Clearstream following the DTC settlement date.

DTC, Euroclear and Clearstream have agreed to the above procedures to facilitate transfers of interests in the Global Notes among participants in those settlement systems. However, the settlement systems are not obligated to perform these procedures and may discontinue or change these procedures at any time. Neither the Company nor the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their participants or indirect participants of their obligations under the rules and procedures governing their operations.

Certificated Notes

Notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related Notes only if:

• DTC notifies the Company at any time that it is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days;

• DTC ceases to be registered as a clearing agency under the Securities Exchange Act of 1934 and a successor depositary is not appointed within 90 days; or

• the Company, at our option, notify the Trustee that the Company elects to cause the issuance of certificated Notes.

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TAX CONSIDERATIONS

U.S. Federal Income Tax Considerations

The following is a summary of the material U.S. federal tax consequences that may be relevant to the purchase, ownership and disposition of the notes; it does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based on the Internal Revenue Code of 1986, as amended (the Code), the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof, and all of which are subject to change, possibly on a retroactive basis. We cannot assure you that the Internal Revenue Service (the IRS) will not challenge one or more of the tax consequences described herein. Unless otherwise stated, this summary deals only with notes held as capital assets (generally, property held for investment) and does not address tax considerations applicable to investors that may be subject to special tax rules including banks, thrifts, real estate investment trusts, regulated investment companies, tax exempt organizations, insurance companies, dealers in securities or currencies, U.S. expatriates, traders in securities that elect to use the mark-to-market method of accounting for their securities holdings, persons that will hold the notes as part of a hedging transaction, “straddle,” “conversion” or other integrated transaction for tax purposes or persons that have a “functional currency” other than the U.S. dollar. If a partnership or other entity treated as a partnership for U.S. federal income tax purposes holds notes, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding notes, you should consult your tax advisor. Further, this summary does not discuss alternative minimum tax consequences, if any, or any state, local or non-U.S. tax consequences to holders of the notes.

INVESTORS CONSIDERING THE EXCHANGE OR PURCHASE OF NOTES ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME, FRANCHISE, PERSONAL PROPERTY AND ANY OTHER TAX CONSEQUENCES THAT MAY BE RELEVANT TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES.

U.S. Holders of Notes

For purposes of this summary, a “U.S. holder” means a beneficial owner of a note that for U.S. federal income tax purposes is:

(1) a citizen or resident of the United States,

(2) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia,

(3) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or

(4) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

Interest Income. Payments of interest on a note generally will be taxable to a U.S. holder as ordinary interest income at the time such payments are accrued or are received in accordance with the holder’s regular method of tax accounting.

Market Discount. A holder who purchases a note for an amount that is less than its issue price, subject to a de minimis exception, will be treated as having purchased the note at a “market discount.” In such case, the holder will be required to treat any payment on, or any gain realized on the sale, exchange or other disposition of, the note as ordinary income to the extent of the lesser of (i) the amount of such payment or realized gain or (ii) the market discount accrued on the note while held by such holder and not previously included in income; the holder also may be required to defer the deduction of all or a portion of any interest paid or accrued on

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indebtedness incurred or maintained to purchase or carry the note. Alternatively, the holder may elect (with respect to the note and all other market discount obligations) to include market discount in income currently as it accrues. Market discount is considered to accrue ratably during the period from the date of acquisition to the maturity date of the note, unless the holder elects to accrue market discount on the basis of a constant interest rate. Amounts includible in income as market discount are generally treated as ordinary interest income to a U.S. holder.

Premium. If a holder purchases a note for an amount that is greater than the sum of all amounts payable on the note after the purchase date, the holder will be treated as having purchased the note with “amortizable bond premium” equal in amount to such excess. The holder may elect (with respect to the note and all other obligations with amortizable bond premium) to amortize such premium using a constant yield method over the remaining term of the note and may offset interest income otherwise required to be included in respect of the note during any taxable year by the amortized amount of such excess for the taxable year. An election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by the holder and may be revoked only with the consent of the IRS. If the holder does not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on the disposition of the note.

Constant Yield Method. In lieu of accounting for any market discount or amortizable bond premium separately, a holder may elect to include in income all interest that accrues on the note (including market discount or as adjusted for amortizable bond premium) using a constant yield method under which the note would be treated as if issued on the holder’s purchase date for an amount equal to the holder’s adjusted basis in the note immediately after purchase. Such an election would simplify the computation and reporting of income from a note and would effectively permit a holder to report income using the accrual method and a constant yield.

Certain Payments Under Registration Rights Agreement; Upon Optional or Mandatory Redemption. As more fully described under “Description of the Exchange Notes — Principal, Maturity and Interest,” “— Optional Redemption” and “ — Change of Control,” we may be required to pay additional amounts to holders of notes. According to U.S. Treasury regulations, the possibility of a change in the interest rate will not affect the amount of interest income recognized by a U.S. holder (or the timing of such recognition) if the likelihood of the change, as of the date the notes are issued, is remote. We believe that the likelihood of a change in the interest rate on the notes is remote and do not intend to treat the possibility of a change in the interest rate as affecting the yield to maturity of any note. As a result, we intend to take the position that a holder of notes should be required to report any additional amount as ordinary income for U.S. 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, in which case the timing and amount of income may be different.

Withholding Taxes. As more fully described under “Description of the Exchange Notes — Additional Amounts,” in the event we are required to withhold taxes from payments under the notes, we may be obligated to pay additional amounts to holders so that holders receive the same amounts payable as if no taxes had been withheld. For U.S. federal income tax purposes, U.S. holders will be treated as having actually received the amounts withheld by us from payments under the notes and as then having paid over such amounts to the relevant taxing authorities. As a result, the amount of interest income included in gross income for U.S. federal income tax purposes by a U.S. holder with respect to a payment of interest may be greater than the amount of cash actually received (or receivable) by the U.S. holder from us with respect to such payment.

Subject to certain limitations, a U.S. holder generally will be entitled to a credit against its U.S. federal income tax liability, or a deduction in computing its U.S. federal taxable income (which, as described above, would include the amount of any taxes withheld by us), for the amount of any non-U.S. income taxes withheld by us. For purposes of computing the foreign tax credit under U.S. federal income tax laws, interest income on a note generally will constitute foreign source income and generally will be treated separately, together with other items of passive income. The calculation of foreign tax credits or deductions involves the application of complex rules that depend on a U.S. holder’s particular circumstances. Accordingly, you are encouraged to consult your tax advisor regarding the creditability or deductibility of such taxes.

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Sale or Exchange of Notes. Subject to the discussion below under “— The Exchange Offer,” upon the sale, exchange, redemption, retirement at maturity or other taxable disposition of a note, a holder will generally recognize taxable gain or loss equal to the difference between (A) the amount of cash proceeds and the fair market value of any property received (except to the extent that this amount is attributable to accrued but unpaid interest income or market discount, as set forth above, which is taxable as ordinary income) and (B) the holder’s adjusted tax basis in the note. A holder’s adjusted tax basis in the note generally will be the initial purchase price paid therefor, less any principal payments received by such holder. The gain or loss will be long-term capital gain or loss provided that the holder’s holding period for the note exceeds one year. In the case of a holder other than a corporation, the current maximum marginal U.S. federal income tax rate applicable to long-term capital gain recognized on the sale of a note is 15%. The deductibility of capital losses is subject to certain limitations.

The Exchange Offer. As more fully described above under “The Exchange Offer,” we are offering to exchange the original notes for exchange notes in satisfaction of our obligations under the Registration Rights Agreement. The exchange of the notes pursuant thereto will not constitute an exchange or other taxable disposition for U.S. federal income tax purposes. Therefore, a holder will have the same issue price, holding period and adjusted tax basis in the new note as in the note surrendered. In addition, each holder of notes would continue to be required to include interest on the notes in its gross income in accordance with its regular method of accounting for U.S. federal income tax purposes.

Non-U.S. Holders of Notes

For purposes of this summary, a “non-U.S. holder” means a beneficial owner of a note (other than a partnership or entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder. Interest on notes paid to a non-U.S. holder generally will not be subject to U.S. withholding or other tax if the interest is not effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and in the case of an applicable tax treaty, is not attributable to a permanent establishment of the non-U.S. holder). Gain realized by a non-U.S. holder on the disposition of notes generally will not be subject to U.S. federal income tax unless (i) the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and in the case of an applicable tax treaty, is not attributable to a permanent establishment of the non-U.S. holder) or (ii) the non-U.S. holder is an individual present in the United States for at least 183 days during the taxable year of disposition and certain other conditions are met.

Information Reporting and Backup Withholding

Under certain circumstances, the Code requires “information reporting” annually to the IRS, and to each holder, and “backup withholding” with respect to certain payments made on or with respect to the notes. Backup withholding does not apply to certain “exempt recipients,” including corporations. Backup withholding will apply to a U.S. holder if the U.S. holder (i) fails to furnish its Taxpayer Identification Number, or TIN, which, for an individual would be his or her Social Security Number, (ii) furnishes an incorrect TIN, (iii) is notified by the IRS that it has failed to properly report payments of interest and dividends, or (iv) 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.

A non-U.S. holder that receives interest on a note that is not effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S. (and in the case of an applicable tax treaty, is not attributable to a permanent establishment of the non-U.S. holder) and that provides IRS Form W-8BEN, W-8EXP or W-8IMY, as applicable, together with all appropriate attachments, signed under penalties of perjury, identifying the non-U.S. holder and stating that the non-U.S. holder is not a U.S. person will not be subject to information reporting and backup withholding.

The payment of proceeds from the disposition of a note to or through the U.S. 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.

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Backup withholding is not an additional tax and may be refunded (or credited against the holder’s U.S. federal income tax liability, if any), provided that certain required information is furnished to the IRS. Copies of the information returns reporting such interest and withholding also 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.

THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND ANY PROPOSED CHANGE IN APPLICABLE LAWS.

Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax considerations generally applicable to a person who purchased notes pursuant to the original private offering of the notes on August 26, 2004 and who, for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”), at all relevant times, is not resident or deemed to be resident in Canada, deals at arm’s length with us, holds the notes as capital property, and does not use or hold and is not deemed or considered to use or hold the notes in carrying on business in Canada (an “unconnected holder”). Special rules which are not discussed in this summary may apply to an unconnected holder that is an insurer that carries on an insurance business in Canada and elsewhere.

This summary is based on the current provisions of the Canadian Tax Act and the regulations thereunder (the “Regulations”) in force on the date hereof, all specific proposals to amend the Canadian Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and our understanding of the current published administrative and assessing policies and practices of the Canada Customs and Revenue Agency. No assurances can be given that the Tax Proposals will be enacted as proposed, or at all. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except as mentioned above, does not take into account or anticipate any other changes in law or administrative practice, whether by legislative, governmental, administrative or judicial decision or action and does not take into account provincial, territorial or foreign income tax legislation or considerations which may vary from the Canadian federal income tax considerations described herein. This summary does not apply in respect of any additional notes issued under the indenture pursuant to any subsequent offerings.

This summary is of a general nature only and is not intended to be, nor should it be interpreted as, legal or tax advice to any person and no representation is made with respect to the Canadian federal income tax consequences to any particular unconnected holder. You should therefore consult your own tax advisor with respect to the Canadian tax considerations relevant to you and your particular circumstances.

An unconnected holder will not be subject to non-resident withholding tax under the Canadian Tax Act in respect of amounts paid or credited by us on account or in lieu of payment of, or in satisfaction of, the principal of the exchange notes or the original notes or interest or premium (if any) thereon, provided that an exchange of original notes for exchange notes does not, under the commercial laws of the jurisdiction which governs the notes, constitute repayment or novation of the indebtedness evidenced by the notes.

No other taxes on income, including taxable capital gains, will be payable by an unconnected holder under the Canadian Tax Act solely as a consequence of the ownership, acquisition or disposition of notes.

119

PLAN OF DISTRIBUTION

Based on interpretations by the staff of the SEC in no action letters issued to third parties, we believe that you may transfer exchange notes issued under the exchange offer in exchange for the original notes if:

• you acquire the exchange notes in the ordinary course of your business; and

• you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such exchange notes.

You may not participate in the exchange offer if you are:

• a broker-dealer that acquired original notes directly from us.

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. To date, the staff of the SEC has taken the position that broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as this exchange offer, other than a resale of an unsold allotment from the original sale of the original notes, with the prospectus contained in this registration statement. 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 original notes where such original notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the consummation of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until such date, all dealers effecting transactions in exchange notes may be required to deliver a prospectus.

If you are an “affiliate,” as defined in Rule 405 of the Securities Act, of ours, you must comply with any applicable registration and prospectus delivery requirements of the Securities Act in connection with any resale of the notes.

If you wish to exchange your original notes for exchange notes in the exchange offer, you will be required to make representations to us as described in “Exchange Offer — Purpose and Effect of the Exchange Offer” and “— Procedures for Tendering — Your Representations to Us” in this prospectus. As indicated in the letter of transmittal, you will be deemed to have made these representations by tendering your original notes in the exchange offer. In addition, if you are a broker-dealer who receives exchange notes for your own account in exchange for original notes that were acquired by you as a result of market-making activities or other trading activities, you will be required to acknowledge, in the same manner, that you will deliver a prospectus in connection with any resale by you of such exchange notes.

We will not receive any proceeds from any sale of 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 on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, and 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 concession 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.

120

For a period of up to 180 days after the consummation of the exchange offer, 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 broker-dealers and will indemnify the holders of the original notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the issuance of the notes and related guarantees offered by this prospectus will be passed on for us by McInnes Cooper, Halifax, Nova Scotia, with respect to certain legal matters under Nova Scotia law and the federal laws of Canada, Vinson & Elkins L.L.P., Houston, Texas, with respect to certain legal matters under U.S. law and Paula S. Lett, Attorney-at-law, with respect to certain legal matters under Barbados law.

INDEPENDENT AUDITORS

The audited consolidated financial statements of Secunda International Limited, Secunda Marine Services Limited, and Secunda Marine International Incorporated as of June 30, 2004 and 2003 and for the years ended June 30, 2004, 2003 and 2002, included in this prospectus have been audited by Grant Thornton L.L.P. Chartered Accountants, independent registered public accountants, as indicated in their report with respect thereto.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Consolidated Financial Statements of Secunda International Limited
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Audited Statements of (Loss) Earnings and Retained Earnings of Secunda International Limited for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-3
Consolidated Audited Balance Sheets of Secunda International Limited as of June 30, 2004 and June 30, 2003	F-4
Consolidated Audited Statements of Cash Flows of Secunda International Limited for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-5
Notes to the Consolidated Financial Statements of Secunda International Limited	F-6
Audited Consolidated Financial Statements of Secunda Marine Services Limited
Report of Independent Registered Public Accounting Firm	F-27
Consolidated Audited Statements of (Loss) Earnings and Retained Earnings of Secunda Marine Services Limited for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-28
Consolidated Audited Balance Sheets of Secunda Marine Services Limited as of June 30, 2004 and June 30, 2003	F-29
Consolidated Audited Statements of Cash Flows of Secunda Marine Services Limited for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-30
Notes to the Consolidated Financial Statements of Secunda Marine Services Limited	F-31
Audited Consolidated Financial Statements of Secunda Marine International Incorporated
Report of Independent Registered Public Accounting Firm	F-45
Consolidated Audited Statements of (Loss) Earnings and Retained Earnings of Secunda Marine International Incorporated for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-46
Consolidated Audited Balance Sheets of Secunda Marine International Incorporated as of June 30, 2004 and June 30, 2003	F-47
Consolidated Audited Statements of Cash Flows of Secunda Marine International Incorporated for the years ended June 30, 2004, June 30, 2003 and June 30, 2002	F-48
Notes to the Consolidated Financial Statements of Secunda Marine International Incorporated	F-49

All schedules have been omitted because the information is not applicable or is not material or because the information is included in the consolidated financial statements or the notes thereto.

Item 3-16 under Regulation S-X requires that, for each of the registrant’s affiliates whose securities constitute a substantial portion of the collateral for any class of securities registered or being registered, the registrant shall file the financial statements that would be required if the affiliate were a registrant and required to file financial statements. Pursuant to the terms of our Senior Secured Floating Rate Notes due 2012, we granted security interests in the equity securities of our vessel owning subsidiaries, including Secunda Marine Services Limited and Secunda Marine International Incorporated. Because the securities for each of Secunda Marine Services Limited and Secunda Marine International Incorporated constitute a substantial portion of the collateral for our Senior Secured Floating Rate Notes due 2012, we have included in this registration statement the separate financial statements required by Item 3-16 of Regulation S-X for each of these two entities.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder of

Secunda International Limited

We have audited the consolidated balance sheets of Secunda International Limited at June 30, 2003 and 2004, and the consolidated statements of (loss) earnings and retained earnings and cash flows for each of the years in the three year period ended June 30, 2004. These consolidated 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.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatements. 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 our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2003 and 2004 and the results of its operations and cash flows for each of the years in the three year period ended June 30, 2004 in accordance with accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Chartered Accountants

Halifax, Canada

August 27, 2004

except for Note 20 and 22, as to which the date is December 6, 2004.

F-2

Secunda International Limited

Consolidated Statements of (Loss) Earnings

and Retained Earnings

Denominated in Canadian Dollars

Years Ended June 30	2002			2003			2004
Total revenues	$	72,919,192		$	69,374,217		$	66,212,749
Costs and expenses
Vessel operating		31,269,839			30,861,245			31,334,328
Cost of goods sold		4,631,240			5,453,520			4,968,453
General and administrative		6,689,588			6,817,089			5,878,599
		42,590,667			43,131,854			42,181,380
		30,328,525			26,242,363			24,031,369
Other income (Note 11)		858,971			4,800,504			763,023
Depreciation and amortization		9,578,827			10,275,340			12,001,044
Corporate transaction costs (Note 7)		—			—			1,226,063
Interest expense (Note 12)		7,381,406			7,321,102			8,563,331
Lease expense		9,993,934			9,498,083			7,673,066
		26,954,167			27,094,525			29,463,504
(Loss) earnings before taxes		4,233,329			3,948,342			(4,669,112	)
Capital taxes		368,057			444,599			473,659
Income tax recovery (Note 14)		(889,460	)		(2,063	)		(1,587,280	)
		(521,403	)		442,536			(1,113,621	)
Net (loss) earnings	$	4,754,732		$	3,505,806		$	(3,555,491	)
(Loss) earnings per share (Note 15)
Basic	$	4,750		$	3,502		$	(3,552	)
Diluted	$	4,750		$	3,502		$	(3,552	)
Retained earnings, beginning of year	$	30,352,242		$	34,706,974		$	37,812,780
Net (loss) earnings		4,754,732			3,505,806			(3,555,491	)
		35,106,974			38,212,780			34,257,289
Dividends		(400,000	)		(400,000	)		(400,000	)
Retained earnings, end of year	$	34,706,974		$	37,812,780		$	33,857,289

See accompanying notes to the consolidated financial statements.

F-3

Secunda International Limited

Consolidated Balance Sheet

Denominated in Canadian Dollars

June 30	2003		2004
Assets
Current
Cash	$	—	$	814,745
Receivables (Note 3)		11,425,621		5,406,369
Inventory		970,215		305,828
Prepaids		975,831		453,070
		13,371,667		6,980,012
Investments (Note 5)		76,650		76,650
Vessels, equipment and property (Note 6)		148,433,581		163,164,542
Other assets (Note 7)		10,142,858		8,637,402
Deferred taxes (Note 14)		—		1,301,473
	$	172,024,756	$	180,160,079
Liabilities
Current
Bank indebtedness (Note 4)	$	320,467	$	—
Payables and accruals		10,956,310		7,471,462
Accrued lease payments		1,137,359		1,142,428
Current portion of long-term debt		119,562,951		111,434,990
		131,977,087		120,048,880
Long term debt (Note 8)		325,131		24,796,213
Deferred taxes (Note 14)		397,730		—
Deferred credits (Note 9)		511,617		457,286
Redemption value of retractable preference shares (Note 10)		1,000,001		1,000,001
		134,211,566		146,302,380
Shareholder’s Equity
Capital stock (Note 10)		410		410
Retained earnings		37,812,780		33,857,289
		37,813,190		33,857,699
	$	172,024,756	$	180,160,079
Commitments (Note 17)
Subsequent events (Note 20)
Contingencies (Note 21)

See accompanying notes to the consolidated financial statements.

F-4

Secunda International Limited

Consolidated Statement of Cash Flows

Denominated in Canadian Dollars

Years Ended June 30	2002			2003			2004
Cash derived from (applied to)
Operating
Net (loss) earnings	$	4,754,732		$	3,505,806		$	(3,555,491	)
Depreciation and amortization		9,578,827			10,275,340			12,001,044
Corporate transaction costs		—			—			1,226,063
Provision for deferred taxes		(1,066,777	)		(130,122	)		(1,699,203	)
Expenditures for drydockings and maintenance capital		(2,355,920	)		(1,556,910	)		(2,761,427	)
Translation of foreign currency denominated debt		95,956			(2,253,111	)		(39,658	)
Recognition of deferred income and other		54,849			229,579			159,288
Gain on disposal of assets		(503,849	)		(2,246,806	)		(431,499	)
		10,557,818			7,823,776			4,899,117
Change in non-cash operating working capital (Note 13)		3,198,611			(2,602,707	)		3,726,623
Cash derived from operating activities		13,756,429			5,221,069			8,625,740
Financing
Proceeds from (repayment of) demand operating line of credit		1,643,591			(1,323,124	)		(320,467	)
Note receivable		—			—			(77,083	)
Proceeds from long term debt		15,988,898			19,439,887			—
Repayment of long term debt		(7,791,213	)		(8,889,101	)		(8,879,004	)
Dividends		(400,000	)		(400,000	)		(400,000	)
Cash (used for) derived from financing activities		9,441,276			8,827,662			(9,676,554	)
Investing
Advances to affiliated parties, net		(164,419	)		(8,050	)		(194,666	)
Proceeds from sale of vessels, equipment and property		1,525,604			6,287,682			2,824,144
Purchase of vessels, equipment and property and other assets		(27,544,647	)		(20,328,363	)		(763,919	)
Cash derived from (used for) investing activities		(26,183,462	)		(14,048,731	)		1,865,559
Net (decrease) increase in cash		(2,985,757	)		—			814,745
Cash
Beginning of year		2,985,757			—			—
End of year	$	—		$	—		$	814,745
Taxes paid	$	136,000		$	585,000		$	556,000
Interest paid	$	7,596,000		$	7,908,000		$	7,653,000

See accompanying notes to the consolidated financial statements.

F-5

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

1. Nature of operations

The Company is a leading provider of supply and support services primarily to the offshore oil and gas industry off the east coast of Canada providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. In addition, the Company sells assorted marine and pollution control equipment through two wholly owned subsidiary companies, one of whose assets in the business were sold effective January 31, 2004.

2. Summary of significant accounting policies

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of consolidation

The consolidated financial statements include the accounts of Secunda International Limited (the Company) and its wholly-owned subsidiaries as follows:

Subsidiaries

Associated Marine Limited

Navis Shipping Incorporated

Offshore Logistics Inc.

Pol-E-Mar Inc.

Polyfab International Inc.

Secunda Atlantic Inc.

Secunda Marine Atlantic Limited

Secunda Marine International Incorporated

Secunda Marine Services Limited

Wright Cove Holdings Ltd.

3013563 Nova Scotia Limited

JDM Shipping Inc.

Secunda Global Marine Incorporated

International Shipping Corporation Inc. and its wholly owned subsidiaries:

I.S. Atlantic Corporation Inc.

I.S. Pacific Corporation Inc.

Secunda Global International Inc.

All significant inter-company balances and transactions, including the issue of 1,010 Class C preference shares to a subsidiary, are eliminated in consolidation.

Revenue recognition

The Company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per day of service basis. As a result, marine vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally either on a term basis (average three months to five years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate, provided, however, that the term contracts at times include escalation clauses to recover specific additional costs. A “spot” contract is a short-term contract to provide offshore marine services to a customer for a specific short-term job. The “spot” contracts generally range from one day to three months. Marine vessel revenues for all contracts are recognized on a daily basis throughout the contract period.

F-6

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Depreciation

Vessels, equipment and property are recorded at cost. The costs of vessels, ancillary equipment, and buildings, are being depreciated on the straight-line method at 5%, representing the estimated useful lives of the assets. Vessels under construction are not depreciated until available for service. Office equipment is depreciated on the declining balance method at 20%.

Deferred financing costs

Financing costs are deferred and amortized over the term of the related financing.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required in the determination of cash flows and probabilities in assessing net recoverable amounts and net realizable values; tax and other provisions; and fair values for disclosure purposes.

Concentration of credit risk

The Company extends credit to various companies in the energy and sub-sea telecommunications cable maintenance industry that may be affected by changes in economic or other external conditions. The Company’s policy is to manage its exposure to credit risk through credit approvals and limits. Historically, write-offs for doubtful accounts have been insignificant.

At June 30, 2003 and 2004, the allowance for doubtful accounts was zero.

Foreign currency measurement

In accordance with SFAS No. 52 “Foreign Currency Translation” the functional and the reporting currency of the Company and its subsidiaries is the Canadian dollar. Therefore, the assets and liabilities of the Company’s foreign operations are translated into Canadian dollars using current rates of exchange for monetary assets and liabilities, historical rates of exchange for non-monetary assets and liabilities and average rate for the year for revenues and expenses, except depreciation and amortization which are translated at the rate of exchange applicable to the related assets. Gains or losses resulting from these translation adjustments are included in income.

Deferred drydocking and maintenance capital costs

Costs incurred in connection with required drydockings and other maintenance program expenditures incurred on a periodic basis are deferred and amortized over the period to the next required interval. This period varies between 24 and 60 months, depending upon external requirements.

Government assistance

The Company is eligible for certain government assistance related to the acquisition of vessels. This assistance is deducted from the cost of the related asset when it becomes receivable.

F-7

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Earnings per share

Basic earnings per common share are based on the weighted average number of common shares outstanding. There are no potentially dilutive instruments issued by the Company.

Impairment of long-lived assets

The Company assesses the impairment of long-lived assets whenever events or changes in business circumstances indicate that the carrying value of an asset may not be recoverable. When such an event occurs, management determines whether an impairment has occurred by comparing the anticipated undiscounted future cash flows of the asset to its carrying value. The amount of a recognized impairment loss is the excess of an asset’s carrying value over its fair value. The Company has not recognized any impairment losses through June 30, 2004.

Income taxes

The Company follows the tax liability method for determining income taxes. Under this method, future income tax assets and liabilities are determined according to differences between their respective carrying amounts and tax bases. Future tax assets and liabilities are measured based on enacted tax rates and bases at the date of the financial statements for the years in which these temporary differences are expected to reverse. Adjustments to these balances are recognized in earnings as they occur.

Interest capitalization

During the period of substantial modifications to or refitting of vessels, interest on the related debt is capitalized.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on the average cost basis.

Investments

Private investments are recorded at cost.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and balances with banks, net of bank indebtedness. Bank borrowings are considered to be financing activities.

Recent accounting pronouncements

In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 changes the accounting guidance for certain financial instruments that, under previous guidance, could have been classified as either a liability or equity. SFAS No. 150 now requires those instruments to be classified as liabilities (or as assets under some circumstances) in the statement of financial position. SAFS No. 150 also requires the terms of those instruments and any settlement alternatives to be disclosed. SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003. Otherwise, it is effective for all financial instruments beginning in the second quarter of 2003. The Company is in compliance with the requirements of SFAS No. 150.

F-8

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

In December 2003, the FASB published a revision to Interpretation 46 (FIN 46R) to clarify certain provisions of FASB Interpretation No, 46, “Consolidation of Variable Interest Entities”, and to exempt certain entities from its requirements. FIN 46R requires a company to consolidate a variable interest entity (VIE), as defined, when the company will absorb a majority of the variable interest entity’s expected losses, receive a majority of the variable interest entity’s expected residual return, or both. FIN 46R also requires consolidation of existing, non-controlled affiliates if the VIE is unable to finance its operations without investor support, or where the other investors do not have exposure to the significant risks and rewards of ownership. FIN 46R applies immediately to a VIE created or acquired after January 31, 2003. For a VIE acquired before February 1, 2003, FIN 46R applies in the first interim period ending after March 15, 2004. The Company completed its assessment of the impact of FIN 46R and concluded that the Interpretation does not affect the Company’s consolidated financial statements.

3. Receivables

	2003		2004
Trade	$	7,283,710	$	4,209,065
Insurance claims		1,304,667		26,852
Marine equipment		1,297,870		511,213
Investment tax credit		720,749		—
Supply base		636,727		552,067
Other		181,898		107,172
	$	11,425,621	$	5,406,369

4. Bank indebtedness

Bank indebtedness pertains to overdrafts on the Company demand operating credit. This credit is repayable upon demand and bears interest at prime plus 1.00%. This facility is secured as described in Note 8. Unutilized credit capacity at June 30, 2004 was $5.8 million.

5. Investments

	2003		2004
Private company investment, at cost which approximates market value	$	76,650	$	76,650

6. Vessels, equipment and property

	2003		2004
Cost
Vessels and ancillary equipment	$	184,174,138	$	205,989,011
Vessels under construction		2,027,999		2,059,288
Buildings		1,923,332		1,934,785
Land		692,054		692,054
Office equipment		2,026,044		1,714,473
	$	190,843,567	$	212,389,611

F-9

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	2003		2004
Accumulated depreciation
Vessels and ancillary equipment	$	40,300,017	$	47,126,326
Buildings		789,533		885,986
Office equipment		1,320,436		1,212,757
	$	42,409,986	$	49,225,069
Net book value
Vessels and ancillary equipment	$	143,874,121	$	158,862,685
Vessels under construction		2,027,999		2,059,288
Buildings		1,133,799		1,048,799
Land		692,054		692,054
Office equipment		705,608		501,716
	$	148,433,581	$	163,164,542

Additions to the cost of vessels and ancillary equipment in the years include capitalized interest of zero (2004) and $735,000 (2003).

Included in vessels and ancillary equipment is equipment under capital lease, with a cost of $27,170,000 (2004) and $526,000 (2003) less accumulated depreciation of $487,000 (2004) and zero (2003). In the year ended June 30 the Company acquired equipment under capital lease at a cost of $26,644,000 (2004) and $526,000 (2003).

During the year ended June 30, 2004, the Company renegotiated the terms of one of its operating leases. As a result of the revision to the terms the accounting for the lease changed from that of an operating lease to a capital lease and the Company recorded an asset under capital lease with a cost of $26,600,000.

The Company qualified for investment tax credits and reduced the cost of vessels acquired zero (2004) and $729,000 (2003).

7. Other assets

	2003		2004
Deferred drydocking and maintenance capital costs	$	2,628,257	$	3,486,939
Deferred financing costs		2,638,533		2,455,994
Deferred payments		1,469,497		—
Due from affiliated parties		1,413,346		1,608,012
Deferred corporate transaction costs		916,086		—
Other long term assets		1,077,139		1,086,457
	$	10,142,858	$	8,637,402

Due from affiliated parties includes amounts due from companies subject to common control, and from shareholder. Amounts are non-interest bearing with no set terms of repayment.

Deferred payments relate to a sale-lease-back transaction and are being amortized over the term of the lease expiring in 2013. As discussed in Note 6, during the year ended June 30, 2004 the Company renegotiated the terms of lease to which these payments relate. As a result, the deferral of these costs ceased, and the costs were reallocated to the capitalized cost of the leased asset.

F-10

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

In June 2004, the Company ceased its activities respecting a previous corporate finance transaction. As a result of this decision, corporate transaction costs related to this transaction in the amount of $1,226,063 were written off.

8. Long term debt and obligations under capital lease

	2003		2004
Floating rate, Canadian dollar denominated loans with interest rates ranging from commercial mortgage prime less ½% to bankers acceptance plus 4.88%. (a)	$	101,831,004	$	92,882,699
Fixed rate, US dollar denominated loan with interest at 6.696; $12,839,000 (2003) and $12,410,000 (2004), maturing 2017.		17,300,553		16,695,173
Fixed rate equipment lease obligations bearing interest at rates ranging from 7% to 10.24% per annum. Future minimum lease payments total $538,000 (2003) and $39,600,000 (2004), including interest. (b)		502,568		25,488,573
		119,634,125		135,066,445
Accrued interest		253,957		1,164,758
		119,888,082		136,231,203
Less: current portion		119,562,951		111,434,990
	$	325,131	$	24,796,213

(a) Floating rate Canadian dollar denominated debt totalled $92,882,699 and is comprised of the following:

• $25,020,626 ($25,000,000 on a demand basis), maturity 2006

• $14,964,283 maturing 2005 ($14,598,000 on a demand basis)

• $622,116 maturing 2007

• $5,120,485 maturing 2008

• $25,326,155 maturing 2010

• $21,829,034 maturing 2014

(b) Fixed rate equipment lease obligations totalled $25,488,573 and is comprised of the following:

• $226,790 maturing 2005

• $41,875 maturing 2009

• $25,219,908 maturing 2013

Long term debt and bank indebtedness are secured by mortgages over vessels, land and buildings, a general security agreement, an assignment of accounts receivable and proceeds of marine insurance and a floating charge debenture for $2,500,000.

A fixed rate US dollar denominated loan and operating lease are also secured by a guarantee of the United States Government, Maritime Administration. This guarantee is secured by a first marine mortgage against a vessel, a Title XI Reserve Fund and Financial Agreement and assignment of insurance and time charter. The Company is not in conformance with certain requirements contained in the Title XI Reserve Fund and Financial Agreements with the US Maritime Administration (“Marad”). As a result of this non-conformance, this loan and other long

F-11

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

term debt obligations have been classified as current indebtedness. The non-conformance has been in effect for five years. These Title XI Reserve Fund and Financial Agreements are related to the Marad guarantee of the financing of two vessels in the Company’s fleet, one of which is leased – see Note 17.

The net book value of the assets pledged as security for all above obligations is approximately $180,000,000.

Estimated principal requirements under normal maturities, exclusive of accelerated long term debt obligations, are as follows:

	Long Term Debt		Capital Lease Obligation
2005	$	44,402,000	$	670,000
2006		6,450,000		1,382,000
2007		7,274,000		1,530,000
2008		7,020,000		1,693,000
2009		6,336,000		1,878,000
Thereafter		38,095,000		18,336,000
	$	109,577,000	$	25,489,000

9. Deferred credits

	2003		2004
Deferred gain	$	511,617	$	457,286

Deferred gain relates to a sale-leaseback transaction. The gain is being amortized over the term of the lease, which expires in 2013.

10. Capital stock

Authorized:

100 8% non-voting, non-cumulative, non-participating Class A preference shares with par value of $0.22 each, redeemable and retractable at the option of the holder at $10,000 each.

100 8% non-voting, non-cumulative, non-participating Class B preference shares with par value of $0.01 each, redeemable and retractable at the option of the holder at par.

10,000 non-voting, non-cumulative, non-participating Class C preference shares with par value of $1,000 each, redeemable and retractable at par.

40,000 common shares without nominal or par value.

Issued and outstanding

	2003		2004
100 Class A preference shares	$	—	$	—
100 Class B preference shares		—		—
1,001 common shares		410		410
	$	410	$	410

F-12

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The Class A and Class B preference shares have been recorded at their retraction values and have been reported as a long term liability.

11. Other income, net

	2002		2003		2004
Gain on disposal of assets	$	503,849	$	2,246,806	$	431,499
Foreign exchange		247,888		2,268,047		165,306
Interest		16,260		13,438		3,705
Other		90,974		272,213		162,513
	$	858,971	$	4,800,504	$	763,023

12. Interest expense

	2002		2003		2004
Long term debt and obligations under capital lease	$	7,336,223	$	7,195,204	$	8,371,265
Other		45,183		125,898		192,066
	$	7,381,406	$	7,321,102	$	8,563,331

The Company capitalized interest in the amount of zero (2004); $735,000 (2003) and $190,000 (2002).

13. Change in non-cash operating working capital

	2002			2003			2004
Receivables	$	(498,345	)	$	(326,323	)	$	6,019,254
Inventory		(284,374	)		284,039			664,387
Prepaids		(40,583	)		(109,118	)		522,761
Payables and accruals		4,021,592			(2,302,230	)		(3,484,848	)
Accrued lease payments		321			(149,075	)		5,069
	$	3,198,611		$	(2,602,707	)	$	3,726,623

14. Income taxes

	2002			2003			2004
Current
Canada	$	—		$	—		$	—
Foreign		177,317			128,059			111,923
		177,317			128,059			111,923
Deferred
Canada		(1,066,777	)		(130,122	)		(1,699,203	)
Foreign		—			—			—
		(1,066,777	)		(130,122	)		(1,699,203	)
Income tax	$	(889,460	)	$	(2,063	)	$	(1,587,280	)

F-13

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The following reconciles the expected income tax at the various statutory income tax rates to the amounts recognized in the consolidated statements of earnings for the years ended June 30, 2002, 2003 and 2004.

	2002			2003			2004
(Loss) earnings before taxes	$	4,233,329		$	3,948,342		$	(4,669,112	)
Income taxes		42.12	%		40.12	%		39.12	%
Expected income taxes		1,783,078			1,584,075			(1,826,557	)
Statutory rate change		110,020			6,828			44,575
Rate differential in different jurisdictions		(2,641,622	)		(1,235,371	)		(189,652	)
Provincial capital tax		(70,659	)		(83,940	)		(91,971	)
Non-taxable portion of capital gains / losses		(93,809	)		14,363			11,649
Non taxable / deductible items and other		23,532			(288,018	)		464,676
Income tax	$	(889,460	)	$	(2,063	)	$	(1,587,280	)

The following table reflects the deferred tax (liability) asset as at June 30, 2003 and 2004:

	2003			2004
Taxable temporary timing differences, primarily related to capital assets	$	(10,964,897	)	$	(9,388,679	)
Non-capital losses carried forward		10,522,232			10,657,932
Capital losses carried forward		44,935			32,220
	$	(397,730	)	$	1,301,473

The Company has recorded in the financial statements the income tax benefits of prior years’ losses of $27,959,000. The Company also has investment tax credits of $6,596,000, the benefits of which have not been recorded in the financial statements. These losses and credits are available to reduce taxable income and income taxes payable in future years and, if not utilized, will expire as follows:

	Tax Losses Carried Forward		Investment Tax Credits
2005	$	546,000	$	84,000
2006		2,295,000		1,657,000
2007		8,478,000		3,775,000
2008		6,609,000		—
2009		4,348,000		—
2010		3,285,000		1,080,000
2011		2,398,000		—
	$	27,959,000	$	6,596,000

15. Earnings per share

Per share amounts are based on a weighted average number of common shares issued and outstanding during the year. The weighted average number of common shares outstanding for the years ended June 30, 2002, 2003, and 2004 were 1,001. There are no potentially dilutive securities issued by the Company.

F-14

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

16. Segmented information

The Company’s business is primarily comprised of two segments, oil and gas services and construction and maintenance services.

The oil and gas services segment charters vessels principally to owners and operators of offshore drilling rigs and production platforms both domestically and internationally. Platform supply vessels transport drill pipe, drilling fluids and construction materials as well as deck cargo, liquid mud, fuel and water. Anchor handling towing supply vessels have powerful engines and deck mounted winches and are capable of towing and positioning offshore drilling rigs, barges and performing general towing services, as well as providing supply vessel services. Standby safety vessels provide a means of evacuation and rescue for platform and rig personnel in the event of an emergency at an offshore installation.

The Company’s construction and maintenance services segment provides support services to customers requiring vessels to perform construction and maintenance services. These services have historically been provided to customers in the sub-sea telecommunications industry.

Individual customers contributed the following revenues, as percentage of total revenues in each year:

	Years Ended
	June 30 2002		June 30 2003		June 30 2004
Oil and gas services
Customer 1	22	%	27	%	37	%
Customer 2	21	%	20	%	14	%
Customer 3	8	%	3	%	14	%
Construction and maintenance services
Customer A	25	%	14	%	14	%
All others	24	%	36	%	21	%

	June 30, 2002
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	47,334,072	$	18,504,227	$	7,080,893		$	72,919,192
Inter-segment revenues	$	—	$	—	$	1,347,632		$	1,347,632
Interest expense	$	4,279,500	$	2,831,476	$	270,430		$	7,381,406
Depreciation and amortization	$	5,930,108	$	2,739,287	$	909,432		$	9,578,827
Segment earnings (loss) before taxes	$	4,991,848	$	5,448,218	$	(6,206,737	)	$	4,233,329
Segment capital asset expenditures	$	25,970,835	$	1,183,486	$	110,100		$	27,264,421

F-15

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	June 30, 2003
	Oil and Gas Services		Construction and Maintenance			Corporate and Other			Total
Revenue from external customers	$	51,058,248	$	9,951,240		$	8,364,729		$	69,374,217
Inter-segment revenues	$	—	$	—		$	1,167,769		$	1,167,769
Interest expense	$	4,384,918	$	2,653,578		$	282,607		$	7,321,103
Depreciation and amortization	$	6,513,867	$	2,866,752		$	894,721		$	10,275,340
Segment earnings (loss) before taxes	$	5,838,821	$	(35,098	)	$	(1,855,381	)	$	3,948,342
Segment assets	$	108,235,728	$	39,807,994		$	23,981,034		$	172,024,756
Segment capital asset expenditures	$	18,866,310	$	335,382		$	110,507		$	19,312,199
	June 30, 2004
	Oil and Gas Services		Construction and Maintenance			Corporate and Other			Total
Revenue from external customers	$	48,250,001	$	9,486,420		$	8,476,328		$	66,212,749
Inter-segment revenues	$	—	$	—		$	523,360		$	523,360
Interest expense	$	5,930,771	$	2,363,839		$	268,721		$	8,563,331
Depreciation and amortization	$	8,316,855	$	2,793,171		$	891,018		$	12,001,044
Segment earnings (loss) before taxes	$	1,896,410	$	(586,917	)	$	(5,978,605	)	$	(4,669,112	)
Segment assets	$	124,555,058	$	37,278,025		$	18,326,996		$	180,160,079
Segment capital asset expenditures	$	26,923,415	$	—		$	91,956		$	27,015,371

Geographic information

	Revenues
	June 30 2002		June 30 2003		June 30 2004
Canada	$	48,614,433	$	62,109,799	$	62,035,966
International		24,304,759		7,264,418		4,176,783
	$	72,919,192	$	69,374,217	$	66,212,749
	Property and Equipment
			June 30 2003		June 30 2004
Canada			$	120,021,977	$	111,157,979
International				28,411,604		52,006,563
			$	148,433,581	$	163,164,542

17. Commitments

The Company has entered into operating leases for supply vessels. One of these leases, denominated in US dollars, calls for remaining minimum annual payments aggregating CDN $54.8 million over its term translated using the Canadian dollar exchange rate of $1.3453 as at June 30, 2004. The Company’s remaining lease is denominated in Canadian currency and calls for remaining minimum aggregate payments of $61,000. The

F-16

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

approximate minimum annual lease payments over the next five years expressed in Canadian currency, translated under the assumption described above are as follows:

2005	$	4,212,000
2006		3,495,000
2007		3,495,000
2008		3,495,000
2009		3,495,000
Thereafter		36,692,000
	$	54,884,000

18. Financial instruments

a) Interest Rate Risk – The Company’s interest rate risk exposure arises from fluctuations in interest rates relating primarily to its long-term debt obligations. The Company does not use derivative instruments to reduce its exposure to interest risk. However, the Company strategically finances its assets by considering such factors as industry trends, existing and prospective charter contracts, interest rate expectations, and planned fleet composition to meet industry opportunities.

b) Foreign Currency Risk – The Company has financed CDN $16.7 million of its long-term debt and has entered into long-term vessel leases denominated in US currency, which by their nature, are subject to foreign exchange risk. However, a number of the Company’s vessel charters are denominated in US currency, which act as a natural hedge against US dollar debt service and lease payments. During the years ended June 30, 2002, 2003 and 2004, USD charter revenue exceeded US dollar debt service and lease payments. The Company does not use derivative instruments to reduce its exposure to currency fluctuation.

c) Credit Risk – The Company is subject to credit risk through the advancing of trade credit. Customers of oil and gas vessel services are primarily major and large independent oil and gas exploration and production companies. Construction and maintenance services are provided to major sub-sea maintenance companies. Management believes that the credit risk associated with these customers is minimal. Management routinely reviews its accounts receivable balances to ensure customers remain within credit terms.

d) Fair Value – Unless otherwise noted, the carrying values of cash and cash equivalents, accounts receivable, prepaids, bank indebtedness, payables and accruals approximate their fair values.

The fair value of the Company’s long-term debt financed on a floating rate basis is assumed to be the carrying value due to the variable interest rates. The fair value of the fixed rate US dollar long-term debt has been estimated at $19.3 million and $17.6 million respectively as at June 30, 2003 and 2004. The fair value of the fixed rate equipment lease obligations has been estimated at $0.5 million and $30.1 million as at June 30, 2003 and 2004 respectively.

The fair value of the amounts due to/from affiliated parties have not been estimated as it is not practicable to determine.

19. Other matters

On December 31, 2003 the Company was approached by an outside party looking to acquire a portion of the Company’s retail/wholesale activities operated under the name Associated Marine. A transaction was completed effective January 31, 2004 for the acquisition by the third party of the net operating assets resulting in a pre-tax loss of $145,000 on the transaction. This loss is recorded in the “other income” caption.

F-17

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The financial statements report the following amounts from the operations of Associated Marine in the “corporate and other operating segment”:

	June 30 2002			June 30 2003			June 30 2004
Revenues	$	3,750,969		$	4,497,812		$	1,863,262
Operating pre-tax loss	$	(253,843	)	$	(89,610	)	$	(80,633	)

20. Subsequent events

a) Subsequent to year end the Company completed a US $125.0 million senior secured floating rate note offering. These notes are non-amortizing, mature in 2012, have been issued at a price of 98.5% and bear interest at LIBOR plus 800 basis points.

The net proceeds from this offering, after deducting fees and expenses, was used to repay all of the outstanding indebtedness, except for certain indebtedness of a subsidiary company, related to one vessel, including debt prepayment costs, and for a subsidiary company to acquire one vessel currently operating under an operating lease. The remaining funds available after the above are to be used for working capital and other general corporate purposes.

Concurrent with the sale of these notes, the parent company entered into a new $40.0 million revolving senior secured bank credit facility.

As a result of this transaction, during the quarter ended September 30, 2004, deferred financing costs that pertain to the repaid indebtedness and operating lease were written off in the amount of $2.5 million and debt prepayment costs were incurred in the amount of $2.6 million.

b) Subsequent to year end the Company made payments to its Parent totaling $6,500,000. These payments were comprised of redemption of the issued Class A and Class B preference shares at their redemption value of $1,000,000 and $1, respectively, and a dividend in the amount of $5,499,999.

21. Contingencies

In May of 2004 a claim was brought against the Company and an arbitration proceeding commenced by a third party respecting negotiations resulting from an unsolicited offer to purchase one of the Company’s vessels. No amount of claim has been pleaded. The Company has appointed an arbitrator in response to commencement of the arbitration proceedings to represent its interests in this matter. The Company is of the view that the action claim is without merit.

The Company from time to time enters into agreements in the normal course of its business, such as service arrangements and leases, and in connection with business or asset acquisitions or dispositions. These agreements by their nature may provide for indemnification of counterparties. These indemnification provisions may be in connection with breaches of representation and warranty or with future claims for certain liabilities, including liabilities related to tax and environmental matters. The terms of these indemnification provisions vary in duration and may extend for an unlimited period of time. Given the nature of such indemnification provisions, the Company is unable to reasonably estimate its total maximum potential liability as certain indemnification provisions do not provide for a maximum potential amount and the amounts are dependent on the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, the Company has not made any significant payments in connection with these indemnification provisions.

F-18

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

22. Supplemental condensed consolidated financial information

As described in Note 20 to the financial statements, subsequent to year end the Company completed a US $125 million senior secured floating rate note offering. Under the terms of the indenture governing the senior secured notes, all of the subsidiaries of the Company are restricted subsidiaries, and are subject to the terms and conditions outlined in the indenture. Initially, all of the Company’s subsidiaries (other than Associated Marine Limited, I.S. Atlantic Corporation Inc., I.S. Pacific Corporation Inc., Wright Cove Holdings Limited, Pol-E-Mar Inc. and Polyfab International Inc. (collectively the “Initial Non-Guarantors”)) will be guarantors and will jointly and severally guarantee, on a senior basis, the Company’s obligations under the notes pursuant to the note guarantees.

Supplemental financial information for the Company and its initial guarantor subsidiaries and non-guarantor subsidiaries for the senior secured notes is presented below.

	Consolidating Statement of (Loss) Earnings and Retained Earnings as of June 30, 2002
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Total revenues	$	—		$	3,109,733		$	70,223,953		$	(414,494	)	$	72,919,192
Costs and expenses
Vessel operating		—			—			31,372,158			(102,319	)		31,269,839
Cost of goods sold		—			2,320,434			2,617,731			(306,925	)		4,631,240
General and administrative		—			789,691			5,909,729			(9,832	)		6,689,588
		—			3,110,125			39,899,618			(419,076	)		42,590,667
		—			(392	)		30,324,335			4,582			30,328,525
Other income		400,000			18,669			849,902			(409,600	)		858,971
Depreciation and amortization		—			21,819			9,557,008			—			9,578,827
Corporate transaction costs		—			—			—			—			—
Interest expense		—			17,414			7,363,992			—			7,381,406
Lease expense		—			—			9,993,934			—			9,993,934
		—			39,233			26,914,934			—			26,954,167
(Loss) earnings before taxes		400,000			(20,956	)		4,259,303			(405,018	)		4,233,329
Capital taxes		—			3,782			364,275			—			368,057
Income tax recovery		—			—			(889,460	)		—			(889,460	)
		—			3,782			(525,185	)		—			(521,403	)
Net (loss) earnings	$	400,000		$	(24,738	)	$	4,784,488		$	(405,018	)	$	4,754,732
Retained earnings (deficit), beginning of year	$	(1,000,025	)	$	(133,222	)	$	33,708,532		$	(2,223,043	)	$	30,352,242
Net (loss) earnings		400,000			(24,738	)		4,784,488			(405,018	)		4,754,732
		(600,025	)		(157,960	)		38,493,020			(2,628,061	)		35,106,974
Dividends		(400,000	)		—			(400,000	)		400,000			(400,000	)
Retained earnings (deficit), end of year	$	(1,000,025	)	$	(157,960	)	$	38,093,020		$	(2,228,061	)	$	34,706,974

F-19

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Statement of Cashflows as of June 30, 2002
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used for) operating activities	$	400,000		$	(83,952	)	$	13,845,398		$	(405,017	)	$	13,756,429
Financing activities
Repayment of demanding operating line of credit		—			(13,706	)		1,657,297			—			1,643,591
Note receivable		—			—			—			—			—
Proceeds from long term debt		—			—			15,988,898			—			15,988,898
Repayment of long term debt		—			—			(7,791,213	)		—			(7,791,213	)
Dividends		(400,000	)		—			(400,000	)		400,000			(400,000	)
Net cash provided by (used for) financing activities		(400,000	)		(13,706	)		9,454,982			400,000			9,441,276
Investing activities
Advances (to) from affiliated parties, net		—			3,501,915			(3,666,252	)		(82	)		(164,419	)
Proceeds from sale of vessels, equipment and property		—			400			1,525,204			—			1,525,604
Purchase of vessels, equipment, property and other assets		—			(3,358,996	)		(24,190,901	)		5,250			(27,544,647	)
Net cash (used for) provided by investing activities		—			143,319			(26,331,949	)		5,168			(26,183,462	)
Net (decrease) increase in cash		—			45,661			(3,031,569	)		151			(2,985,757	)
Cash
Beginning of year		—			(45,660	)		3,031,417			—			2,985,757
End of year	$	—		$	1		$	(152	)	$	151		$	—

F-20

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Balance Sheet as of June 30, 2003
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries		Eliminations			Consolidated Total
Assets
Current
Cash	$	—		$	—		$	—	$	—		$	—
Receivables		—			684,779			10,750,004		(9,162	)		11,425,621
Inventory		—			537,684			432,531		—			970,215
Prepaids		—			7,151			968,680		—			975,831
		—			1,229,614			12,151,215		(9,162	)		13,371,667
Investments		1,001,425			—			2,302,155		(3,226,930	)		76,650
Vessels, equipment and property		—			112,487			148,333,433		(12,339	)		148,433,581
Other assets		8,961			915,612			9,218,343		(58	)		10,142,858
Deferred taxes		—			—			—		—			—
	$	1,010,386		$	2,257,713		$	172,005,146	$	(3,248,489	)	$	172,024,756
Liabilities
Current
Bank indebtedness	$	—		$	(43,550	)	$	364,017	$	—		$	320,467
Payables and accruals		—			587,924			10,377,546		(9,160	)		10,956,310
Accrued lease payments		—			—			1,137,359		—			1,137,359
Current portion of long term debt		—			—			119,562,951		—			119,562,951
		—			544,374			131,441,873		(9,160	)		131,977,087
Long term debt		—			—			325,131		—			325,131
Deferred taxes		—			1,818			395,912		—			397,730
Deferred credits		—			—			511,617		—			511,617
Redemption value of retractable preference shares		1,000,001			—			—		—			1,000,001
		1,000,001			546,192			132,674,533		(9,160	)		134,211,566
Shareholder’s Equity
Capital stock		1,010,410			511			757		(1,011,268	)		410
Retained earnings		(1,000,025	)		1,711,010			39,329,856		(2,228,061	)		37,812,780
		10,385			1,711,521			39,330,613		(3,239,329	)		37,813,190
	$	1,010,386		$	2,257,713		$	172,005,146	$	(3,248,489	)	$	172,024,756

F-21

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Statement of (Loss) Earnings and Retained Earnings as of June 30, 2003
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Total revenues	$	—		$	3,456,572		$	66,175,055		$	(257,410	)	$	69,374,217
Costs and expenses
Vessel operating		—			—			30,964,873			(103,628	)		30,861,245
Cost of goods sold		—			2,590,471			3,016,831			(153,782	)		5,453,520
General and administrative		—			741,009			6,098,461			(22,381	)		6,817,089
		—			3,331,480			40,080,165			(279,791	)		43,131,854
		—			125,092			26,094,890			22,381			26,242,363
Other income		400,000			1,772,949			3,049,936			(422,381	)		4,800,504
Depreciation and amortization		—			17,083			10,258,257			—			10,275,340
Corporate transaction costs		—			—			—			—			—
Interest expense		—			8,819			7,312,283			—			7,321,102
Lease expense		—			—			9,498,083			—			9,498,083
		—			25,902			27,068,623			—			27,094,525
(Loss) earnings before taxes		400,000			1,872,139			2,076,203			(400,000	)		3,948,342
Capital taxes		—			3,169			441,430			—			444,599
Income tax recovery		—			—			(2,063	)		—			(2,063	)
		—			3,169			439,367			—			442,536
Net (loss) earnings	$	400,000		$	1,868,970		$	1,636,836		$	(400,000	)	$	3,505,806
Retained earnings (deficit), beginning of year	$	(1,000,025	)	$	(157,960	)	$	38,093,020		$	(2,228,061	)	$	34,706,974
Net (loss) earnings		400,000			1,868,970			1,636,836			(400,000	)		3,505,806
		(600,025	)		1,711,010			39,729,856			(2,628,061	)		38,212,780
Dividends		(400,000	)		—			(400,000	)		400,000			(400,000	)
Retained earnings (deficit), end of year	$	(1,000,025	)	$	1,711,010		$	39,329,856		$	(2,228,061	)	$	37,812,780

F-22

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Statement of Cashflows as of June 30, 2003
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used for) operating activities	$	400,000		$	(371,546	)	$	5,592,615		$	(400,000	)	$	5,221,069
Financing activities
Repayment of demanding operating line of credit		—			(29,844	)		(1,293,280	)		—			(1,323,124	)
Note receivable		—			—			—			—			—
Proceeds from long term debt		—			—			19,439,887			—			19,439,887
Repayment of long term debt		—			—			(8,889,101	)		—			(8,889,101	)
Dividends		(400,000	)		—			(400,000	)		400,000			(400,000	)
Net cash provided by (used for) financing activities		(400,000	)		(29,844	)		8,857,506			400,000			8,827,662
Investing activities
Advances (to) from affiliated parties, net		—			(5,203,029	)		5,195,605			(626	)		(8,050	)
Proceeds from sale of vessels, equipment and property		—			6,287,682			—			—			6,287,682
Purchase of vessels, equipment, property and other assets		—			(1,201,130	)		(19,645,102	)		517,869			(20,328,363	)
Net cash (used for) provided by investing activities		—			(116,477	)		(14,449,497	)		517,243			(14,048,731	)
Net (decrease) increase in cash		—			(517,867	)		624			517,243			—
Cash
Beginning of year		—			—			—			—			—
End of year	$	—		$	(517,867	)	$	624		$	517,243		$	—

F-23

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Balance Sheet as of June 30, 2004
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries		Eliminations			Consolidated Total
Assets
Current
Cash	$	—		$	304,332		$	510,413	$	—		$	814,745
Receivables		—			511,213			4,895,156		—			5,406,369
Inventory		—			305,828			—		—			305,828
Prepaids		—			270			452,800		—			453,070
		—			1,121,643			5,858,369		—			6,980,012
Investments		1,001,425			—			2,302,303		(3,227,078	)		76,650
Vessels, equipment and property		—			91,295			163,085,586		(12,339	)		163,164,542
Other assets		8,961			1,456,216			7,172,136		89			8,637,402
Deferred taxes		—			(1,818	)		1,303,291		—			1,301,473
	$	1,010,386		$	2,667,336		$	179,721,685	$	(3,239,328	)	$	180,160,079
Liabilities
Current
Bank indebtedness	$	—		$	—		$	—	$	—		$	—
Payables and accruals		—			698,973			6,772,489		—			7,471,462
Accrued lease payments		—			—			1,142,428		—			1,142,428
Current portion of long term debt		—			—			111,434,990		—			111,434,990
		—			698,973			119,349,907		—			120,048,880
Long term debt		—			—			24,796,213		—			24,796,213
Deferred taxes		—			—			—		—			—
Deferred credits		—			—			457,286		—			457,286
Redemption value of retractable preference shares		1,000,001			—			—		—			1,000,001
		1,000,001			698,973			144,603,406		—			146,302,380
Shareholder’s Equity
Capital stock		1,010,410			511			756		(1,011,267	)		410
Retained earnings		(1,000,025	)		1,967,852			35,117,523		(2,228,061	)		33,857,289
		10,385			1,968,363			35,118,279		(3,239,328	)		33,857,699
	$	1,010,386		$	2,667,336		$	179,721,685	$	(3,239,328	)	$	180,160,079

F-24

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Statement of (Loss) Earnings and Retained Earnings as of June 30, 2004
	Parent			Non Guarantor Subsidiaries		Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Total revenues	$	—		$	4,835,474	$	61,463,159		$	(85,884	)	$	66,212,749
Costs and expenses
Vessel operating		—			—		31,368,888			(34,560	)		31,334,328
Cost of goods sold		—			3,878,011		1,141,765			(51,323	)		4,968,453
General and administrative		—			738,248		5,208,606			(68,255	)		5,878,599
		—			4,616,259		37,719,259			(154,138	)		42,181,380
		—			219,215		23,743,900			68,254			24,031,369
Other income		400,000			84,438		775,668			(497,083	)		763,023
Depreciation and amortization		—			9,302		11,991,742			—			12,001,044
Corporate transaction costs		—			—		1,226,063			—			1,226,063
Interest expense		—			34,730		8,557,430			(28,829	)		8,563,331
Lease expense		—			—		7,673,066			—			7,673,066
		—			44,032		29,448,301			(28,829	)		29,463,504
(Loss) earnings before taxes		400,000			259,621		(4,928,733	)		(400,000	)		(4,669,112	)
Capital taxes		—			2,779		470,880			—			473,659
Income tax recovery		—			—		(1,587,280	)		—			(1,587,280	)
		—			2,779		(1,116,400	)		—			(1,113,621	)
Net (loss) earnings	$	400,000		$	256,842	$	(3,812,333	)	$	(400,000	)	$	(3,555,491	)
Retained earnings (deficit), beginning of year	$	(1,000,025	)	$	1,711,010	$	39,329,856		$	(2,228,061	)	$	37,812,780
Net (loss) earnings		400,000			256,842		(3,812,333	)		(400,000	)		(3,555,491	)
		(600,025	)		1,967,852		35,517,523			(2,628,061	)		34,257,289
Dividends	$	(400,000	)	$	—	$	(400,000	)	$	400,000		$	(400,000	)
Retained earnings (deficit), end of year	$	(1,000,025	)	$	1,967,852	$	35,117,523		$	(2,228,061	)	$	33,857,289

F-25

Secunda International Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	Consolidating Statement of Cashflows as of June 30, 2004
	Parent			Non Guarantor Subsidiaries			Initial Guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used for) operating activities	$	400,000		$	789,497		$	7,836,243		$	(400,000	)	$	8,625,740
Financing activities
Proceeds from (repayment of) demanding operating line of credit		—			43,550			(364,017	)		—			(320,467	)
Note receivable		—			—			(77,083	)		—			(77,083	)
Proceeds from long term debt		—			—			—			—			—
Repayment of long term debt		—			—			(8,879,004	)		—			(8,879,004	)
Dividends		(400,000	)		—			(400,000	)		400,000			(400,000	)
Net cash provided by (used for) financing activities		(400,000	)		43,550			(9,720,104	)		400,000			(9,676,554	)
Investing activities
Advances (to) from affiliated parties, net		—			(540,603	)		345,938			(1	)		(194,666	)
Proceeds from sale of vessels, equipment and property		—			9,259			2,814,885			—			2,824,144
Purchase of vessels, equipment, property and other assets		—			(1,840	)		(762,079	)		—			(763,919	)
Net cash (used for) provided by investing activities		—			(533,184	)		2,398,744			(1	)		1,865,559
Net increase (decrease) in cash		—			299,863			514,883			(1	)		814,745
Cash
Beginning of year		—			—			—			—			—
End of year	$	—		$	299,863		$	514,883		$	(1	)	$	814,745

F-26

Report of Independent Registered Public Accounting Firm

To the Shareholder of

Secunda Marine Services Limited

We have audited the consolidated balance sheets of Secunda Marine Services Limited at June 30, 2003 and 2004, and the consolidated statements of (loss) earnings and retained earnings and cash flows for each of the years in the three year period ended June 30, 2004. These consolidated 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.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatements. 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 our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2003 and 2004 and the results of its operations and cash flows for each of the years in the three year period ended June 30, 2004 in accordance with accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Chartered Accountants

Halifax, Canada

August 27, 2004

except for Note 22, as to which the date is December 6, 2004

F-27

Secunda Marine Services Limited

Consolidated Statements of (Loss) Earnings

and Retained Earnings

Denominated in Canadian Dollars

Year Ended June 30	2002			2003			2004
Total revenues	$	72,919,192		$	69,374,217		$	66,212,749
Costs and expenses
Vessel operating		31,269,839			30,861,245			31,334,328
Costs of goods sold		4,631,240			5,453,520			4,968,453
General and administrative		6,689,435			6,810,728			5,876,099
		42,590,514			43,125,493			42,178,880
		30,328,678			26,248,724			24,033,869
Other income, net (Note 13)		801,044			7,008,149			791,343
Depreciation and amortization		9,512,134			10,208,645			11,986,825
Corporate transaction costs (Note 7)		—			—			1,226,063
Interest expense (Note 12)		4,690,601			4,798,390			6,319,136
Lease expense		9,993,934			9,498,083			7,673,066
		24,196,669			24,505,118			27,205,090
(Loss) earnings before taxes		6,933,053			8,751,755			(2,379,878	)
Capital taxes		365,912			444,599			473,020
Income taxes (recovery) (Note 15)		200,977			1,026,354			(686,183	)
		566,889			1,470,953			(213,163	)
Net (loss) earnings before non-controlling interest		6,366,164			7,280,802			(2,166,715	)
Dividends on non-controlling interest in subsidiaries (Note 10)		(3,144,639	)		(2,927,744	)		(2,661,696	)
Net (loss) earnings available to common shareholders	$	3,221,525		$	4,353,058		$	(4,828,411	)
(Loss) earnings per share (Note 16)
Basic	$	2,929		$	3,957		$	(4,389	)
Diluted	$	2,929		$	3,957		$	(4,389	)
Retained earnings, beginning of year	$	7,999,279		$	10,923,395		$	14,979,044
Net (loss) earnings		3,221,525			4,353,058			(4,828,411	)
		11,220,804			15,276,453			10,150,633
Dividends		(297,409	)		(297,409	)		(297,409	)
Retained earnings, end of year	$	10,923,395		$	14,979,044		$	9,853,224

See accompanying notes to the consolidated financial statements.

F-28

Secunda Marine Services Limited

Consolidated Balance Sheet

Denominated in Canadian Dollars

June 30	2003		2004
Assets
Current
Cash	$	—	$	814,745
Receivables (Note 3)		12,987,693		6,965,891
Inventory		970,215		305,828
Prepaids		975,831		453,070
		14,933,739		8,539,534
Investments (Note 5)		1,086,650		1,086,650
Vessels, equipment and property (Note 6)		148,433,581		163,164,542
Other assets (Note 7)		9,328,621		7,393,326
	$	173,782,591	$	180,184,052
Liabilities
Current
Bank indebtedness (Note 4)	$	320,555	$	—
Payables and accruals		10,955,604		7,470,329
Accrued lease payments		1,137,359		1,142,428
Current portion of long term debt (Note 8)		83,856,717		78,374,435
		96,270,235		86,987,192
Long term debt (Note 8)		17,670,901		42,113,663
Deferred taxes (Note 15)		5,605,100		4,806,993
Deferred credits (Note 9)		511,617		457,286
Redemption value of retractable preference shares (Note 11)		1,465,584		1,465,584
		121,523,437		135,830,718
Non-controlling interest in subsidiaries (Note 10)		37,280,000		34,500,000
Shareholder’s Equity
Capital stock (Note 11)		110		110
Retained earnings		14,979,044		9,853,224
		14,979,154		9,853,334
	$	173,782,591	$	180,184,052
Commitments (Note 18)
Contingencies (Note 21)
Subsequent events (Note 22)

See accompanying notes to the consolidated financial statements.

F-29

Secunda Marine Services Limited

Consolidated Statement of Cash Flows

Denominated in Canadian Dollars

Year Ended June 30	2002			2003			2004
Cash derived from (applied to)
Operating
Net (loss) earnings	$	3,221,525		$	4,353,058		$	(4,828,411	)
Depreciation and amortization		9,512,134			10,208,645			11,986,825
Corporate transaction costs		—			—			1,226,063
Expenditures for drydocking and maintenance capital		(2,355,920	)		(1,556,910	)		(2,761,427	)
Provision for (recovery of) deferred taxes		23,660			898,295			(798,106	)
Translation of foreign currency denominated debt		153,883			(4,460,755	)		(67,978	)
Recognition of deferred income and other		54,853			228,950			159,922
Gain on disposal of assets		(503,849	)		(2,246,806	)		(431,499	)
		10,106,286			7,424,477			4,485,389
Change in non-cash operating working capital (Note 14)		3,192,369			(2,403,577	)		3,728,745
Cash derived from operating activities		13,298,655			5,020,900			8,214,134
Financing
(Repayment of) proceeds from demand operating credit line		1,643,677			(1,323,122	)		(320,555	)
Note receivable		—			—			(77,083	)
Proceeds from issue of share capital		1,300,000			—			—
Redemption of share capital		(2,760,000	)		(2,760,000	)		(2,780,000	)
Proceeds from long term debt		15,988,898			19,439,887			—
Repayment of long term debt		(4,594,013	)		(5,931,901	)		(6,233,325	)
Dividends		(297,409	)		(297,409	)		(297,409	)
Cash (used for) derived from financing activities		11,281,153			9,127,455			(9,708,372	)
Investing
Advances from (to) affiliated parties, net		(1,594,464	)		(107,674	)		248,758
Proceeds from sale of vessels, equipment and property		1,525,604			6,287,682			2,824,144
Purchase of vessels, equipment, property, and other assets		(27,497,083	)		(20,328,363	)		(763,919	)
Cash derived from (used for) investing activities		(27,565,943	)		(14,148,355	)		2,308,983
Net increase (decrease) in cash		(2,986,135	)		—			814,745
Cash
Beginning of year		2,986,135			—			—
End of year	$	—		$	—		$	814,745
Taxes paid	$	136,000		$	585,000		$	556,000
Interest paid	$	4,803,000		$	5,283,000		$	5,306,000

See accompanying notes to the consolidated financial statements.

F-30

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

1. Nature of operations

The Company is a leading provider of supply and support services primarily to the offshore oil and gas industry off the east coast of Canada providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. In addition, the Company sells assorted marine and pollution control equipment through two wholly owned subsidiary companies one of whose assets in the business were sold effective January 31, 2004.

2. Summary of significant accounting policies

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of consolidation

The consolidated financial statements include the accounts of Secunda Marine Services Limited (the Company) and its wholly-owned subsidiaries as follows:

Subsidiaries

Associated Marine Limited

Navis Shipping Incorporated

Offshore Logistics Inc.

Pol-E-Mar Inc.

Polyfab International Inc.

Secunda Atlantic Inc.

Secunda Marine Atlantic Limited

Wright Cove Holdings Ltd.

JDM Shipping Inc.

Secunda Global Marine Incorporated

International Shipping Corporation Inc. and its wholly owned subsidiaries:

I.S. Atlantic Corporation Inc.

I.S. Pacific Corporation Inc.

Secunda Global International Inc.

All significant inter-company balances and transactions are eliminated in consolidation.

Revenue recognition

The Company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per day of service basis. As a result, marine vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally either on a term basis (average three months to five years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate provided, however, that the term contracts at times include escalation clauses to recover specific additional costs. A “spot” contract is a short-term contract to provide offshore marine services to a customer for a specific short-term job. The “spot” contracts generally range from one day to three months. Marine vessel revenues for all contracts are recognized on a daily basis throughout the contract period.

F-31

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Depreciation

Vessels, equipment and property are recorded at cost. The costs of vessels, ancillary equipment, and buildings, are being depreciated on the straight-line method at 5%, representing the estimated useful lives of the assets. Vessels under construction are not depreciated until available for service. Office equipment is depreciated on the declining balance method at 20%.

Deferred financing costs

Financing costs are deferred and amortized over the term of the related financing.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required in the determination of cash flows and probabilities in assessing net recoverable amounts and net realizable values; tax and other provisions; and fair values for disclosure purposes.

Concentration of credit risk

The Company extends credit to various companies in the energy and sub-sea telecommunications cable maintenance industry that may be affected by changes in economic or other external conditions. The Company’s policy is to manage its exposure to credit risk through credit approvals and limits. Historically, write-offs for doubtful accounts have been insignificant.

At June 30, 2003 and 2004, the allowance for doubtful accounts was zero.

Foreign currency measurement

In accordance with SFAS No. 52 “Foreign Currency Translation” the functional and the reporting currency of the Company and its subsidiaries is the Canadian dollar. Therefore, the assets and liabilities of the Company’s foreign operations are translated into Canadian dollars using current rates of exchange for monetary assets and liabilities, historical rates of exchange for non-monetary assets and liabilities and average rate for the year for revenues and expenses, except depreciation and amortization which are translated at the rate of exchange applicable to the related assets. Gains or losses resulting from these translation adjustments are included in income.

Deferred drydocking and maintenance capital costs

Costs incurred in connection with required drydockings and other maintenance program expenditures incurred on a periodic basis are deferred and amortized over the period to the next required interval. This period varies between 24 and 60 months, depending upon external requirements.

Government assistance

The Company is eligible for certain government assistance related to the acquisition of vessels. This assistance is deducted from the cost of the related asset when it becomes receivable.

F-32

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003, and 2004

Earnings per share

Basic earnings per common share are based on the weighted average number of common shares outstanding. There are no potentially dilutive instruments issued by the Company.

Impairment of long-lived assets

The Company assesses the impairment of long-lived assets whenever events or changes in business circumstances indicate that the carrying value of an asset may not be recoverable. When such an event occurs, management determines whether an impairment has occurred by comparing the anticipated undiscounted future cash flows of the asset to its carrying value. The amount of a recognized impairment loss is the excess of an asset’s carrying value over its fair value. The Company has not recognized any impairment losses through June 30, 2004.

Income taxes

The Company follows the tax liability method for determining income taxes. Under this method, future income tax assets and liabilities are determined according to differences between their respective carrying amounts and tax bases. Future tax assets and liabilities are measured based on enacted tax rates and bases at the date of the financial statements for the years in which these temporary differences are expected to reverse. Adjustments to these balances are recognized in earnings as they occur.

Interest capitalization

During the period of substantial modifications to or refitting of vessels, interest on the related debt is capitalized.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on the average cost basis.

Investments

Private investments are recorded at cost.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and balances with banks, net of bank indebtedness. Bank borrowings are considered to be financing activities.

Recent accounting pronouncements

In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 changes the accounting guidance for certain financial instruments that, under previous guidance, could have been classified as either a liability or equity. SFAS No. 150 now requires those instruments to be classified as liabilities (or as assets under some circumstances) in the statement of financial position. SAFS No. 150 also requires the terms of those instruments and any settlement alternatives to be disclosed. SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003. Otherwise, it is effective for all financial instruments beginning in the second quarter of 2003. The Company is in compliance with the requirements of SFAS No. 150.

F-33

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

In December 2003, the FASB published a revision to Interpretation 46 (FIN 46R) to clarify certain provisions of FASB Interpretation No, 46, “Consolidation of Variable Interest Entities”, and to exempt certain entities from its requirements. FIN 46R requires a company to consolidate a variable interest entity (VIE), as defined, when the company will absorb a majority of the variable interest entity’s expected losses, receive a majority of the variable interest entity’s expected residual return, or both. FIN 46R also requires consolidation of existing, non-controlled affiliates if the VIE is unable to finance its operations without investor support, or where the other investors do not have exposure to the significant risks and rewards of ownership. FIN 46R applies immediately to a VIE created or acquired after January 31, 2003. For a VIE acquired before February 1, 2003, FIN 46R applies in the first interim period ending after March 15, 2004. The Company completed its assessment of the impact of FIN 46R and concluded that the Interpretation does not affect the Company’s consolidated financial statements.

3. Receivables

	2003		2004
Trade	$	7,283,710	$	4,209,065
Demand note from parent company, non-interest bearing		1,562,072		1,559,522
Insurance claims		1,304,667		26,852
Marine equipment		1,297,870		511,213
Investment tax credit		720,749		—
Supply base		636,727		552,067
Other		181,898		107,172
	$	12,987,693	$	6,965,891

4. Bank indebtedness

Bank indebtedness pertains to overdrafts on the Company demand operating credit. This credit is repayable upon demand and bears interest at prime plus 1.00%. This facility is secured as described in Note 8. The facility to which this relates is part of a larger corporate facility including certain subsidiary, parent and affiliated companies. Unutilized credit capacity on the entire facility at June 30, 2004 was $5.8 million.

5. Investments

	2003		2004
Preferred shares of affiliated company	$	1,010,000	$	1,010,000
Private company investment, at cost which approximates market value		76,650		76,650
	$	1,086,650	$	1,086,650

6. Vessels, equipment and property

	2003		2004
Cost
Vessels and ancillary equipment	$	184,174,138	$	205,989,011
Vessels under construction		2,027,999		2,059,288
Buildings		1,923,332		1,934,785
Land		692,054		692,054
Office equipment		2,026,044		1,714,473
	$	190,843,567	$	212,389,611

F-34

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	2003		2004
Accumulated depreciation
Vessels and ancillary equipment	$	40,300,017	$	47,126,326
Buildings		789,533		885,986
Office equipment		1,320,436		1,212,757
	$	42,409,986	$	49,225,069
Net book value
Vessels and ancillary equipment	$	143,874,121	$	158,862,685
Vessels under construction		2,027,999		2,059,288
Buildings		1,133,799		1,048,799
Land		692,054		692,054
Office equipment		705,608		501,716
	$	148,433,581	$	163,164,542

Additions to the cost of vessels and ancillary equipment in the years include capitalized interest of $735,000 (2003) and zero (2004).

Included in vessels and ancillary equipment is equipment under capital lease, with a cost of $526,000 (2003) and $27,170,000 (2004) less accumulated depreciation of zero (2003) and $487,000 (2004). During the year ended June 30, the Company acquired equipment under capital lease at a cost of $526,000 (2003) and $26,644,000 (2004).

During the year ended June 30, 2004, the Company renegotiated the terms of one of its operating leases. As a result of the revision to the terms the accounting for the lease changed from that of an operating lease to a capital lease and the Company recorded an asset under capital lease with a cost of $26,600,000.

The Company qualified for investment tax credits and reduced the cost of vessels acquired by $729,000 (2003) and zero (2004).

7. Other assets

	2003		2004
Deferred drydocking and maintenance capital costs	$	2,628,257	$	3,486,939
Deferred financing costs		2,489,872		2,320,918
Deferred payments		1,469,497		—
Deferred corporate transaction costs		916,086		—
Due from affiliated parties		747,906		499,012
Other long term assets		1,077,003		1,086,457
	$	9,328,621	$	7,393,326

Deferred payments relate to a sale-lease-back transaction and are being amortized over the term of the lease expiring in 2013. As discussed in Note 6, during the year ended June 30, 2004 the Company renegotiated the terms of lease to which these payments relate. As a result, the deferral of these costs ceased, and the costs were reallocated to the capitalized cost of the leased asset.

F-35

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Due from affiliated parties includes amounts due from companies subject to common control, and from shareholder. Amounts are non-interest bearing and have no set terms of repayment.

In June 2004, the Company ceased its activities respecting a previous corporate finance transaction. As a result of this decision, corporate transaction costs related to this transaction in the amount of $1,226,063 were written off.

8. Long term debt and obligations under capital lease

	2003		2004
Floating rate, Canadian dollar denominated loans with interest rates ranging from commercial mortgage prime less ½% to bankers acceptance plus 4.45%. (a)	$	66,124,770	$	59,822,143
Fixed rate, US dollar denominated loan with interest at 6.696%, $12,839,000 (2003) and $12,410,000 (2004), maturing 2017.		17,300,553		16,695,173
		83,425,323		76,517,316
Fixed rate equipment lease obligations bearing interest at rates ranging from 7.0% to 10.24% per annum. Future minimum lease payments total $538,000 (2003) and $39,600,000 (2004) including interest. (b)		502,568		25,488,573
		83,927,891		102,005,889
Fixed rate demand notes payable to parent company bearing interest at 10% (US $9,275,000, plus accrued interest of US$3,597,556). Effective December 31, 1986, interest will not accrue or be payable on the debt until the parent notifies the Company. The parent company has indicated it will not call the notes prior to July 1, 2005.		17,345,770		17,317,450
		101,273,661		119,323,339
Accrued interest		253,957		1,164,759
		101,527,618		120,488,098
Less: current portion		83,856,717		78,374,435
	$	17,670,901	$	42,113,663

(a) Floating rate Canadian dollar denominated debt totalled $59,822,143 and is comprised of the following:

• $3,732,761 ($3,366,000 on demand basis), maturing 2005

• $25,020,626 ($25,000,000 on demand basis) maturing 2006

• $622,116 maturing 2007

• $5,120,485 maturing 2008

• $25,326,155 maturing 2010

F-36

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

(b) Fixed rate equipment lease obligations totalled $25,488,573 and is comprised of the following:

• $226,790 maturing 2005

• $41,875 maturing 2009

• $25,219,908 maturing 2013

Long term debt and bank indebtedness are secured by mortgages over vessels, land and buildings, a general security agreement, an assignment of accounts receivable and proceeds of marine insurance, a floating charge debenture for $2,500,000, and guarantees from parent company.

A fixed rate US dollar denominated loan and operating lease are also secured by a guarantee of the United States Government, Maritime Administration. This guarantee is secured by a first marine mortgage against a vessel, a Title XI Reserve Fund and Financial Agreement and assignment of insurance and time charter. The Company is not in conformance with certain requirements contained in the Title XI Reserve Fund and Financial Agreements with the US Maritime Administration (“Marad”). As a result of this non-conformance, this loan and other long term debt obligations have been classified as current indebtedness. The non-conformance has been in effect for five years. These Title XI Reserve Fund and Financial Agreements are related to the Marad guarantee of the financing of two vessels in the Company’s fleet, one of which is leased - see Note 18.

The net book value of the assets pledged as security for all above obligations is approximately $180 million.

Estimated principal requirements under normal maturities, exclusive of accelerated long term debt obligations, are as follows:

	Long Term Debt		Capital Lease Obligation
2005	$	30,013,000	$	670,000
2006		3,615,000		1,382,000
2007		4,263,000		1,530,000
2008		3,815,000		1,693,000
2009		2,947,000		1,878,000
Thereafter		49,182,000		18,336,000
	$	93,835,000	$	25,489,000

9. Deferred credits

	2003		2004
Deferred gain	$	511,617	$	457,286

Deferred gain relates to a sale-lease-back transaction. The gain is being amortized over the term of the lease, which expires in 2013.

10. Non-controlling interest in subsidiaries

	2003		2004
3,450 preferred shares (2003 – 3,728) (redeemable at $10,000 each)	$	37,280,000	$	34,500,000

F-37

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

2,270 Class I preferred shares (2003 – 2,390) of Secunda Global International Inc., non-voting except at special meetings, retractable solely at the option of the Company at $10,000 each, with cumulative dividends at Bankers Acceptance rate plus basis points applied to the stated capital of such shares (rate as of June 30, 2004 of 6.94857%).

1,180 Class I preferred shares (2003 – 1,338) of Secunda Global Marine Incorporated, non-voting except at special meetings, retractable solely at the option of the Company at $10,000 each, with cumulative dividends of 7.25%

The non-controlling interest is owned by a wholly owned subsidiary of Secunda Marine Services Limited’s indirect parent company, Secunda International Limited.

11. Capital stock

	2003		2004
Authorized:
100 Class A preferred shares, $3,979.09 par value, non-voting, non-participating, redeemable, retractable, with non-cumulative dividend
400 preferred shares, $1 par value, non-voting, non-participating, redeemable, retractable at $3,663.96 per share, with cumulative dividend equal to 7% of redemption value
40,000 common shares, without par value
Issued and outstanding:
400 preference shares	$	—	$	—
1,100 common shares		110		110
	$	110	$	110

The 400 preference shares have been recorded at their retraction values and have been reported as a long term liability.

12. Interest expense

	2002		2003		2004
Long term debt and obligations under capital lease	$	4,504,746	$	4,569,901	$	6,024,479
Other		185,855		228,489		294,657
	$	4,690,601	$	4,798,390	$	6,319,136

The Company capitalized interest in the amount of $190,000 (2002); $735,000 (2003), and zero (2004).

13. Other income, net

	2002		2003		2004
Gain on disposal of assets	$	503,849	$	2,246,806	$	431,499
Foreign exchange		189,961		4,475,691		193,626
Interest		16,260		13,438		3,705
Other		90,974		272,214		162,513
	$	801,044	$	7,008,149	$	791,343

F-38

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

14. Change in non-cash operating working capital

	2002			2003			2004
Receivables	$	(503,562	)	$	(127,515	)	$	6,021,803
Inventory		(284,374	)		284,039			664,387
Prepaids		(40,583	)		(109,115	)		522,761
Payables and accruals		4,015,819			(2,301,911	)		(3,485,275	)
Accrued lease payments		5,069			(149,075	)		5,069
	$	3,192,369		$	(2,403,577	)	$	3,728,745

15. Income taxes

	2002		2003		2004
Current
Canada	$	—	$	—	$	—
Foreign		177,317		128,059		111,923
		177,317		128,059		111,923
Future
Canada		23,660		898,295		(798,106	)
Foreign		—		—		—
		23,660		898,295		(798,106	)
Income tax (recovery)	$	200,977	$	1,026,354	$	(686,183	)

The following reconciles the expected income tax at the various statutory income tax rates to the amounts recognized in the consolidated statements of earnings for the years ended June 30, 2002, 2003 and 2004:

	2002			2003			2004
(Loss) earnings before taxes	$	6,933,053		$	8,751,755		$	(2,379,878	)
Income taxes		42.12	%		40.12	%		39.12	%
		2,920,202			3,511,204			(931,008	)
Expected income taxes
Statutory rate change		(2,483	)		(47,130	)		20,937
Rate differential in different jurisdictions		(2,641,693	)		(1,235,439	)		(189,652	)
Provincial capital tax		(70,432	)		(83,791	)		(91,839	)
Non-taxable portion of capital gains / losses		(93,809	)		14,363			11,649
Non taxable / deductible items and other		89,192			(1,132,853	)		493,730
Income tax (recovery)	$	200,977		$	1,026,354		$	(686,183	)

The following table reflects the deferred tax liability as at June 30, 2003 and 2004:

	2003			2004
Taxable temporary timing differences, Primarily related to capital assets	$	(10,939,081	)	$	(9,349,993	)
Non-capital losses carried forward		5,289,046			4,510,780
Capital losses carried forward		44,935			32,220
	$	(5,605,100	)	$	(4,806,993	)

F-39

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The Company has recorded in the financial statements the income tax benefits of prior years’ losses of approximately $11,833,000. The Company also has investment tax credits of approximately $6,596,000, the benefits of which have not been recorded in the financial statements. These losses and credits are available to reduce taxable income and income taxes payable in future years and, if not utilized, will expire as follows:

	Tax Losses Carried Forward		Investment Tax Credits
2005	$	—	$	84,000
2006		1,045,000		1,657,000
2007		5,887,000		3,775,000
2008		2,807,000		—
2009		1,489,000		—
2010		605,000		1,080,000
	$	11,833,000	$	6,596,000

16. Earnings per share

Per share amounts are based on a weighted average number of common shares issued and outstanding during the year. The weighted average number of common shares outstanding for the years ended June 30, 2002, 2003 and 2004 were 1,100. There are no potentially dilutive securities issued by the Company.

17. Segmented information

The Company’s business is primarily comprised of two segments, oil and gas services and construction and maintenance services.

The oil and gas services segment charters vessels principally to owners and operators of offshore drilling rigs and production platforms both domestically and internationally. Platform supply vessels transport drill pipe, drilling fluids and construction materials as well as deck cargo, liquid mud, fuel and water. Anchor handling towing supply vessels have powerful engines and deck mounted winches and are capable of towing and positioning offshore drilling rigs, barges and performing general towing services, as well as providing supply vessel services. Standby safety vessels provide a means of evacuation and rescue for platform and rig personnel in the event of an emergency at an offshore installation.

The Company’s construction and maintenance services segment provides support services to customers requiring vessels to perform construction and maintenance services. These services have historically been provided to customers in the sub-sea telecommunications industry.

Individual customers contributed the following revenues, as percentage of total revenues in each year:

	2002		2003		2004
Oil and gas services
Customer 1	22	%	27	%	37	%
Customer 2	21	%	20	%	14	%
Customer 3	8	%	3	%	14	%
Construction and maintenance services
Customer A	25	%	14	%	14	%
All others	24	%	36	%	21	%

F-40

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	June 30, 2002
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	47,334,072	$	18,504,227	$	7,080,893		$	72,919,192
Inter-segment revenues	$	—		—	$	1,347,632		$	1,347,632
Interest expense	$	4,279,500	$	—	$	411,101		$	4,690,601
Depreciation and amortization	$	5,930,108	$	2,672,594	$	909,432		$	9,512,134
Segment earnings (loss) before taxes	$	4,991,848	$	8,346,388	$	(6,405,183	)	$	6,933,053
Segment capital asset expenditures	$	25,970,835	$	1,183,486	$	110,100		$	27,264,421
	June 30, 2003
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	51,058,248	$	9,951,240	$	8,364,729		$	69,374,217
Inter-segment revenues	$	—	$	—	$	1,167,769		$	1,167,769
Interest expense	$	4,384,918	$	10,768	$	402,704		$	4,798,390
Depreciation and amortization	$	6,513,867	$	2,799,001	$	895,777		$	10,208,645
Segment earnings (loss) before taxes	$	5,838,821	$	2,675,463	$	237,471		$	8,751,755
Segment assets	$	108,235,728	$	39,807,994	$	25,738,869		$	173,782,591
Segment capital asset expenditures	$	18,866,310	$	335,382	$	110,507		$	19,312,199
	June 30, 2004
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	48,250,001	$	9,486,420	$	8,476,328		$	66,212,749
Inter-segment revenues	$	—	$	—	$	523,360		$	523,360
Interest expense	$	5,930,771	$	17,053	$	371,312		$	6,319,136
Depreciation and amortization	$	8,316,855	$	2,778,952	$	891,018		$	11,986,825
Segment earnings (loss) before taxes	$	1,896,410	$	1,774,088	$	(6,050,376	)	$	(2,379,878	)
Segment assets	$	124,555,058	$	37,278,025	$	18,350,969		$	180,184,052
Segment capital asset expenditures	$	26,923,415	$	—	$	91,956		$	27,015,371

Geographic information

	Revenues
	2002		2003		2004
Revenues
Canada	$	48,614,433	$	62,109,799	$	62,035,966
International		24,304,759		7,264,418		4,176,783
	$	72,919,192	$	69,374,217	$	66,212,749
Property and Equipment
Canada			$	120,021,977	$	111,157,979
International				28,411,604		52,006,563
			$	148,433,581	$	163,164,542

F-41

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

18. Commitments

The Company has entered into operating leases for supply vessels. One of these leases, denominated in US dollars, calls for remaining minimum annual payments aggregating CDN $54.8 million over its term translated using the Canadian dollar exchange rate of $1.3453 as at June 30, 2004. The Company’s remaining lease is denominated in Canadian currency and calls for remaining minimum aggregate payments of $61,000. The approximate minimum annual lease payments over the next five years expressed in Canadian currency, translated under the assumption described above are as follows:

2005	$	4,212,000
2006		3,495,000
2007		3,495,000
2008		3,495,000
2009		3,495,000
Thereafter		36,692,000
	$	54,884,000

19. Financial instruments

a) Interest Rate Risk – The Company’s interest rate risk exposure arises from fluctuations in interest rates relating primarily to its long-term debt obligations. The Company does not use derivative instruments to reduce its exposure to interest risk. However, the Company strategically finances its assets by considering such factors as industry trends, existing and prospective charter contracts, interest rate expectations, and planned fleet composition to meet industry opportunities.

b) Foreign Currency Risk – The Company has financed CDN $16.7 million of its long-term debt and has entered into long-term vessel leases denominated in US currency, which by their nature, are subject to foreign exchange risk. However, a number of the Company’s vessel charters are denominated in US currency, which act as a natural hedge against US dollar debt service and lease payments. During the years ended June 30, 2002, 2003 and 2004, USD charter revenue exceeded US dollar debt service and lease payments. The Company does not use derivative instruments to reduce its exposure to currency fluctuation.

c) Credit Risk – The Company is subject to credit risk through the advancing of trade credit. Customers of oil and gas vessel services are primarily major and large independent oil and gas exploration and production companies. Construction and maintenance services are provided to major sub-sea maintenance companies. Management believes that the credit risk associated with these customers is minimal. Management routinely reviews its accounts receivable balances to ensure customers remain within credit terms.

d) Fair Value – Unless otherwise noted, the carrying values of cash and cash equivalents, accounts receivable, prepaids, bank indebtedness, payables and accruals approximate their fair values.

The fair value of the Company’s long-term debt financed on a floating rate basis is assumed to be the carrying value due to the variable interest rates. The fair value of the fixed rate US dollar long-term debt has been estimated at $19.3 million and $17.6 million respectively as at June 30, 2003 and 2004. The fair value of the fixed rate equipment lease obligations has been estimated at $0.5 million and $30.1 million as at June 30, 2003 and 2004 respectively.

The fair value of the amounts due to/from affiliated parties and demand note receivable from parent have not been estimated as it is not practicable to determine those amounts.

F-42

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

20. Other matters

On December 31, 2003, the Company was approached by an outside party looking to acquire a portion of the Company’s retail/wholesale activities operated under the name, Associated Marine. A transaction was completed effective January 31, 2004 for the acquisition by the third party of the net operating assets resulting in a pre-tax loss of $145,000 on the transaction. This loss is recorded in the “other income” caption.

The financial statements report the following amounts from the operations of Associated Marine in the “corporate and other operating segment”:

	2002			2003			2004
Revenue	$	3,750,969		$	4,497,812		$	1,863,262
Operating pre-tax loss	$	(253,843	)	$	(89,610	)	$	(80,633	)

21. Contingencies

In May of 2004 a claim was brought against the Company and an arbitration proceeding commenced by a third party respecting negotiations resulting from an unsolicited offer to purchase one of the Company’s vessels. No amount of claim has been pleaded. The Company has appointed an arbitrator in response to commencement of the arbitration proceedings to represent its interests in this matter. The Company is of the view that the action claim is without merit.

The Company, from time to time, enters into agreements in the normal course of its business, such as service arrangements and leases, and in connection with business or asset acquisitions or dispositions. These agreements, by their nature, may provide for indemnification of counterparties. These indemnification provisions may be in connection with breaches of representation and warranty or with future claims for certain liabilities, including liabilities related to tax and environmental matters. The terms of these indemnification provisions vary in duration and may extend for an unlimited period of time. Given the nature of such indemnification provisions, the Company is unable to reasonably estimate its total maximum potential liability as certain indemnification provisions do not provide for a maximum potential amount and the amounts are dependent on the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, the Company has not made any significant payments in connection with these indemnification provisions.

The Company has provided, as security for the loans of a certain affiliated company, a first marine mortgage on two of its vessels, assignment of insurance on the vessels and assignment of time charter. The net book value of the assets acting as security is $36.7 million and the balance of the loans at June 30, 2004 was approximately $33.1 million.

22. Subsequent events

a) Subsequent to year end, the Company’s parent completed a US $125.0 million senior secured floating rate note offering. These notes are non-amortizing, mature in 2012, have been issued at a price of 98.5% and bear interest at LIBOR plus 800 basis points.

The net proceeds from this offering, after deducting fees and expenses, was used to repay all of the outstanding indebtedness, except for indebtedness related to one vessel, including debt prepayment costs,

F-43

Secunda Marine Services Limited

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

and to acquire one vessel currently operating under an operating lease. The remaining funds available after the above are to be used for working capital and other general corporate purposes.

Concurrent with the sale of these notes, the parent company entered into a new $40.0 million senior secured bank credit facility.

As a result of this transaction, during the quarter ended September 30, 2004, deferred financing costs that pertain to the repaid indebtedness and operating lease were written off in the amount of $2.5 million, debt prepayment costs were incurred in the amount of $2.6 million and vessels, property and equipment increased by $25.8 million.

b) Subsequent to year end the Company paid a dividend in the amount of $6,500,000.

F-44

Report of Independent Registered Public Accounting Firm

To the Shareholder of

Secunda Marine International Incorporated

We have audited the consolidated balance sheets of Secunda Marine International Incorporated at June 30, 2003 and 2004, and the consolidated statements of (loss) earnings and retained earnings and cash flows for each of the years in the three year period ended June 30, 2004. These consolidated 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.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatements. 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 our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2003 and 2004 and the results of its operations and cash flows for each of the years in the three year period ended June 30, 2004 in accordance with accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Chartered Accountants

Halifax, Canada

August 27, 2004

except for Note 22, as to which the date is December 6, 2004.

F-45

Secunda Marine International Incorporated

Consolidated Statements of (Loss) Earnings

and Retained Earnings

Denominated in Canadian Dollars

Year Ended June 30	2002			2003			2004
Total revenues	$	72,919,192		$	69,374,217		$	66,212,749
Costs and expenses
Vessel operating		31,269,839			30,861,245			31,334,328
Costs of goods sold		4,631,240			5,453,520			4,968,453
General and administrative		6,689,435			6,810,728			5,876,099
		42,590,514			43,125,493			42,178,880
		30,328,678			26,248,724			24,033,869
Other income, net (Note 13)		858,971			4,800,505			763,023
Depreciation and amortization		9,512,134			10,208,645			11,986,825
Corporate transaction costs (Note 7)		—			—			1,226,063
Interest expense (Note 12)		4,588,010			4,695,799			6,216,545
Lease expense		9,993,934			9,498,083			7,673,066
		24,094,078			24,402,527			27,102,499
(Loss) earnings before taxes		7,093,571			6,646,702			(2,305,607	)
Capital taxes		365,912			444,599			473,020
Income taxes (recovery) (Note 15)		200,977			1,026,354			(686,183	)
		566,889			1,470,953			(213,163	)
Net (loss) earnings before non-controlling interest		6,526,682			5,175,749			(2,092,444	)
Dividends on non-controlling interest in subsidiaries (Note 10)		(3,144,639	)		(2,927,744	)		(2,661,696	)
Net (loss) earnings available to common shareholders	$	3,382,043		$	2,248,005		$	(4,754,140	)
(Loss) earnings per share (Note 16)
Basic	$	6,751		$	4,487		$	(9,489	)
Diluted	$	6,751		$	4,487		$	(9,489	)
Retained earnings, beginning of year	$	29,061,560		$	32,043,603		$	33,891,608
Net (loss) earnings		3,382,043			2,248,005			(4,754,140	)
		32,443,603			34,291,608			29,137,468
Dividends		(400,000	)		(400,000	)		(400,000	)
Retained earnings, end of year	$	32,043,603		$	33,891,608		$	28,737,468

See accompanying notes to the consolidated financial statements.

F-46

Secunda Marine International Incorporated

Consolidated Balance Sheet

Denominated in Canadian Dollars

June 30	2003		2004
Assets
Current
Cash	$	—	$	814,745
Receivables (Note 3)		12,987,693		6,965,891
Inventory		970,215		305,828
Prepaids		975,831		453,070
		14,933,739		8,539,534
Investments (Note 5)		1,086,650		1,086,650
Vessels, equipment and property (Note 6)		148,433,581		163,164,542
Other assets (Note 7)		9,430,166		7,494,871
	$	173,884,136	$	180,285,597
Liabilities
Current
Bank indebtedness (Note 4)	$	320,555	$	—
Payables and accruals		10,955,604		7,470,329
Accrued lease payments		1,137,359		1,142,428
Current portion of long term debt (Note 8)		83,856,717		78,374,435
		96,270,235		86,987,192
Long term debt (Note 8)		325,131		24,796,213
Deferred taxes (Note 15)		5,605,100		4,806,993
Deferred credits (Note 9)		511,617		457,286
		102,712,083		117,047,684
Non-controlling interest in subsidiaries (Note 10)		37,280,000		34,500,000
Shareholder’s Equity
Capital stock (Note 11)		445		445
Retained earnings		33,891,608		28,737,468
		33,892,053		28,737,913
	$	173,884,136	$	180,285,597
Commitments (Note 18)
Contingencies (Note 21)
Subsequent events (Note 22)

See accompanying notes to the consolidated financial statements.

F-47

Secunda Marine International Incorporated

Consolidated Statement of Cash Flows

Denominated in Canadian Dollars

Year Ended June 30	2002			2003			2004
Cash derived from (applied to)
Operating
Net (loss) earnings	$	3,382,043		$	2,248,005		$	(4,754,140	)
Depreciation and amortization		9,512,134			10,208,645			11,986,825
Corporate transaction costs		—			—			1,226,063
Expenditures for drydocking and maintenance capital		(2,355,920	)		(1,556,910	)		(2,761,427	)
Provision for (recovery of) deferred taxes		23,660			898,295			(798,106	)
Translation of foreign currency denominated debt		95,956			(2,253,111	)		(39,658	)
Recognition of deferred income and other		54,849			228,950			159,922
Gain on disposal of assets		(503,849	)		(2,246,806	)		(431,499	)
		10,208,873			7,527,068			4,587,980
Change in non-cash operating working capital (Note 14)		3,192,369			(2,403,577	)		3,728,745
Cash derived from operating activities		13,401,242			5,123,491			8,316,725
Financing
(Repayment of) proceeds from demand operating credit line		1,643,677			(1,323,122	)		(320,555	)
Note receivable		—			—			(77,083	)
Proceeds from issue of share capital		1,300,000			—			—
Redemption of share capital		(2,760,000	)		(2,760,000	)		(2,780,000	)
Proceeds from long term debt		15,988,898			19,439,887			—
Repayment of long term debt		(4,594,013	)		(5,931,901	)		(6,233,325	)
Dividends		(400,000	)		(400,000	)		(400,000	)
Cash (used for) derived from financing activities		11,178,562			9,024,864			(9,810,963	)
Investing
Advances from (to) affiliated parties, net		(1,594,464	)		(107,674	)		248,758
Proceeds from sale of vessels, equipment and property		1,525,608			6,287,682			2,824,144
Purchase of vessels, equipment and property and other assets		(27,497,083	)		(20,328,363	)		(763,919	)
Cash derived from (used for) investing activities		(27,565,939	)		(14,148,355	)		2,308,983
Net increase (decrease) in cash		(2,986,135	)		—			814,745
Cash
Beginning of year		2,986,135			—			—
End of year	$	—		$	—		$	814,745
Taxes paid	$	136,000		$	585,000		$	556,000
Interest paid	$	4,803,000		$	5,283,000		$	5,306,000

See accompanying notes to the consolidated financial statements.

F-48

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

1. Nature of operations

The Company is a leading provider of supply and support services primarily to the offshore oil and gas industry off the east coast of Canada providing supply, support and safety services to exploration, development and longer-term production projects as well as providing other marine services. In addition, the Company sells assorted marine and pollution control equipment through two wholly owned subsidiary companies one of whose assets in the business were sold effective January 31, 2004.

2. Summary of significant accounting policies

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of consolidation

The consolidated financial statements include the accounts of Secunda Marine International Incorporated (the Company) and its wholly-owned subsidiaries as follows:

Subsidiaries

Associated Marine Limited

Navis Shipping Incorporated

Offshore Logistics Inc.

Pol-E-Mar Inc.

Polyfab International Inc.

Secunda Atlantic Inc.

Secunda Marine Atlantic Limited

Secunda Marine Services Limited

Wright Cove Holdings Ltd.

JDM Shipping Inc.

Secunda Global Marine Incorporated

International Shipping Corporation Inc. and its wholly owned subsidiaries:

I.S. Atlantic Corporation Inc.

I.S. Pacific Corporation Inc.

Secunda Global International Inc.

All significant inter-company balances and transactions are eliminated in consolidation.

Revenue recognition

The Company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per day of service basis. As a result, marine vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally either on a term basis (average three months to five years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate, provided, however, that the term contracts at times include escalation clauses to recover specific additional costs. A “spot” contract is a short-term contract to provide offshore marine services to a customer for a specific short-term job. The “spot” contracts generally range from one day to three months. Marine vessel revenues for all contracts are recognized on a daily basis throughout the contract period.

F-49

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Depreciation

Vessels, equipment and property are recorded at cost. The costs of vessels, ancillary equipment, and buildings, are being depreciated on the straight-line method at 5%, representing the estimated useful lives of the assets. Vessels under construction are not depreciated until available for service. Office equipment is depreciated on the declining balance method at 20%.

Deferred financing costs

Financing costs are deferred and amortized over the term of the related financing.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required in the determination of cash flows and probabilities in assessing net recoverable amounts and net realizable values; tax and other provisions; and fair values for disclosure purposes.

Concentration of credit risk

The Company extends credit to various companies in the energy and sub-sea telecommunications cable maintenance industry that may be affected by changes in economic or other external conditions. The Company’s policy is to manage its exposure to credit risk through credit approvals and limits. Historically, write-offs for doubtful accounts have been insignificant.

At June 30, 2003, and 2004, the allowance for doubtful accounts was zero.

Foreign currency measurement

In accordance with SFAS No. 52 “Foreign Currency Translation” the functional and the reporting currency of the Company and its subsidiaries is the Canadian dollar. Therefore, the assets and liabilities of the Company’s foreign operations are translated into Canadian dollars using current rates of exchange for monetary assets and liabilities, historical rates of exchange for non-monetary assets and liabilities and average rate for the year for revenues and expenses, except depreciation and amortization which are translated at the rate of exchange applicable to the related assets. Gains or losses resulting from these translation adjustments are included in income.

Deferred drydocking and maintenance capital costs

Costs incurred in connection with required drydockings and other maintenance program expenditures incurred on a periodic basis are deferred and amortized over the period to the next required interval. This period varies between 24 and 60 months, depending upon external requirements.

Government assistance

The Company is eligible for certain government assistance related to the acquisition of vessels. This assistance is deducted from the cost of the related asset when it becomes receivable.

F-50

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Earnings per share

Basic earnings per common share are based on the weighted average number of common shares outstanding. There are no potentially dilutive instruments issued by the Company.

Impairment of long-lived assets

The Company assesses the impairment of long-lived assets whenever events or changes in business circumstances indicate that the carrying value of an asset may not be recoverable. When such an event occurs, management determines whether an impairment has occurred by comparing the anticipated undiscounted future cash flows of the asset to its carrying value. The amount of a recognized impairment loss is the excess of an asset’s carrying value over its fair value. The Company has not recognized any impairment losses through June 30, 2004.

Income taxes

The Company follows the tax liability method for determining income taxes. Under this method, future income tax assets and liabilities are determined according to differences between their respective carrying amounts and tax bases. Future tax assets and liabilities are measured based on enacted tax rates and bases at the date of the financial statements for the years in which these temporary differences are expected to reverse. Adjustments to these balances are recognized in earnings as they occur.

Interest capitalization

During the period of substantial modifications to or refitting of vessels, interest on the related debt is capitalized.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on the average cost basis.

Investments

Private investments are recorded at cost.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and balances with banks, net of bank indebtedness. Bank borrowings are considered to be financing activities.

Recent accounting pronouncements

In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 changes the accounting guidance for certain financial instruments that, under previous guidance, could have been classified as either a liability or equity. SFAS No. 150 now requires those instruments to be classified as liabilities (or as assets under some circumstances) in the statement of financial position. SAFS No. 150 also requires the terms of those instruments and any settlement alternatives to be disclosed. SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003. Otherwise, it is effective for all financial instruments beginning in the second quarter of 2003. The Company is in compliance with the requirements of SFAS No. 150.

F-51

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

In December 2003, the FASB published a revision to Interpretation 46 (FIN 46R) to clarify certain provisions of FASB Interpretation No. 46, “Consolidation of Variable Interest Entities”, and to exempt certain entities from its requirements. FIN 46R requires a company to consolidate a variable interest entity (VIE), as defined, when the company will absorb a majority of the variable interest entity’s expected losses, receive a majority of the variable interest entity’s expected residual return, or both. FIN 46R also requires consolidation of existing, non-controlled affiliates if the VIE is unable to finance its operations without investor support, or where the other investors do not have exposure to the significant risks and rewards of ownership. FIN 46R applies immediately to a VIE created or acquired after January 31, 2003. For a VIE acquired before February 1, 2003, FIN 46R applies in the first interim period ending after March 15, 2004. The Company completed its assessment of the impact of FIN 46R and concluded that the Interpretation does not affect the Company’s consolidated financial statements.

3. Receivables

	2003		2004
Trade	$	7,283,710	$	4,209,065
Demand note from parent company, non-interest bearing		1,562,072		1,559,522
Insurance claims		1,304,667		26,852
Marine equipment		1,297,870		511,213
Investment tax credit		720,749		—
Supply base		636,727		552,067
Other		181,898		107,172
	$	12,987,693	$	6,965,891

4. Bank indebtedness

Bank indebtedness pertains to overdrafts on the Company demand operating credit. This credit is repayable upon demand and bears interest at prime plus 1.00%. This facility is secured as described in Note 8. The facility to which this relates is part of a larger corporate facility including certain subsidiary, parent and affiliated companies. Unutilized credit capacity on the entire facility at June 30, 2004 was $5.8 million.

5. Investments

	2003		2004
Preferred shares of affiliated company	$	1,010,000	$	1,010,000
Private company investment, at cost which approximates market value		76,650		76,650
	$	1,086,650	$	1,086,650

6. Vessels, equipment and property

	2003		2004
Cost
Vessels and ancillary equipment	$	184,174,138	$	205,989,011
Vessels under construction		2,027,999		2,059,288
Buildings		1,923,332		1,934,785
Land		692,054		692,054
Office equipment		2,026,044		1,714,473
	$	190,843,567	$	212,389,611

F-52

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	2003		2004
Accumulated depreciation
Vessels and ancillary equipment	$	40,300,017	$	47,126,326
Buildings		789,533		885,986
Office equipment		1,320,436		1,212,757
	$	42,409,986	$	49,225,069
Net book value
Vessels and ancillary equipment	$	143,874,121	$	158,862,685
Vessels under construction		2,027,999		2,059,288
Buildings		1,133,799		1,048,799
Land		692,054		692,054
Office equipment		705,608		501,716
	$	148,433,581	$	163,164,542

Additions to the cost of vessels and ancillary equipment in the years include capitalized interest of $735,000 (2003) and zero (2004).

Included in vessels and ancillary equipment is equipment under capital lease, with a cost of $526,000 (2003) and $27,170,000 (2004) less accumulated depreciation of zero (2003), and $487,000 (2004). During the year ended June 30, the Company acquired equipment under capital lease at a cost of zero (2002), $526,000 (2003) and $26,644,000 (2004).

During the year ended June 30, 2004, the Company renegotiated the terms of one of its operating leases. As a result of the revision to the terms the accounting for the lease changed from that of an operating lease to a capital lease and the Company recorded an asset under capital lease with a cost of $26,600,000.

The Company qualified for investment tax credits and reduced the cost of vessels acquired by $729,000 (2003) and zero (2004).

7. Other assets

	2003		2004
Deferred drydocking and maintenance capital costs	$	2,628,257	$	3,486,939
Deferred financing costs		2,489,872		2,320,918
Deferred payments		1,469,497		—
Deferred corporate transaction costs		916,086		—
Due from affiliated parties		849,315		600,557
Other long term assets		1,077,139		1,086,457
	$	9,430,166	$	7,494,871

Deferred payments relate to a sale-lease-back transaction and are being amortized over the term of the lease expiring in 2013. As discussed in Note 6, during the year ended June 30, 2004 the Company renegotiated the terms of lease to which these payments relate. As a result, the deferral of these costs ceased, and the costs were reallocated to the capitalized cost of the leased asset.

F-53

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Due from affiliated parties includes amounts due from companies subject to common control, and from shareholder. Amounts are non-interest bearing and have no set terms of repayment.

In June 2004, the Company ceased its activities respecting a previous corporate finance transaction. As a result of this decision, corporate transaction costs related to this transaction in the amount of $1,226,063 were written off.

8. Long term debt and obligations under capital lease

	2003		2004
Floating rate, Canadian dollar denominated loans with interest rates ranging from commercial mortgage prime less ½% to bankers acceptance plus 4.45%. (a)	$	66,124,770	$	59,822,143
Fixed rate, US dollar denominated loan with interest at 6.696%, $12,839,000 (2003) and $12,410,000 (2004), maturing 2017.		17,300,553		16,695,173
		83,425,323		76,517,316
Fixed rate equipment lease obligations bearing interest at rates ranging from 7.0% to 10.24% per annum. Future minimum lease payments total $538,000 (2003) and $39,600,000 (2004) including interest. (b)		502,568		25,488,573
		83,927,891		102,005,889
Accrued interest		253,957		1,164,759
		84,181,848		103,170,648
Less: current portion		83,856,717		78,374,435
	$	325,131	$	24,796,213

(a) Floating rate Canadian dollar denominated debt totalled $59,822,143 and is comprised of the following:

• $3,732,761 ($3,366,000 on demand basis), maturing 2005

• $25,020,626 ($25,000,000 on demand basis) maturing 2006

• $622,116 maturing 2007

• $5,120,485 maturing 2008

• $25,326,155 maturing 2010

(b) Fixed rate equipment lease obligations totalled $25,488,573 and is comprised of the following:

• $226,790 maturing 2005

• $41,875 maturing 2009

• $25,219,908 maturing 2013

Long term debt and bank indebtedness are secured by mortgages over vessels, land and buildings, a general security agreement, an assignment of accounts receivable and proceeds of marine insurance, a floating charge debenture for $2,500,000, and guarantees from parent company.

A fixed rate US dollar denominated loan and operating lease are also secured by a guarantee of the United States Government, Maritime Administration. This guarantee is secured by a first marine mortgage against a vessel, a

F-54

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

Title XI Reserve Fund and Financial Agreement and assignment of insurance and time charter. The Company is not in conformance with certain requirements contained in the Title XI Reserve Fund and Financial Agreements with the US Maritime Administration (“Marad”). As a result of this non-conformance, this loan and other long term debt obligations have been classified as current indebtedness. The non-conformance has been in effect for five years. These Title XI Reserve Fund and Financial Agreements are related to the Marad guarantee of the financing of two vessels in the Company’s fleet, one of which is leased - see Note 18.

The net book value of the assets pledged as security for all above obligations is approximately $180 million.

Estimated principal requirements under normal maturities, exclusive of accelerated long term debt obligations, are as follows:

	Long Term Debt		Capital Lease Obligation
2005	$	31,744,000	$	670,000
2006		4,770,000		1,382,000
2007		5,418,000		1,530,000
2008		4,969,000		1,693,000
2009		4,101,000		1,878,000
Thereafter		25,515,000		18,336,000
	$	76,517,000	$	25,489,000

9. Deferred credits

	2003		2004
Deferred gain	$	511,617	$	457,286

Deferred gain relates to a sale-lease-back transaction. The gain is being amortized over the term of the lease, which expires in 2013.

10. Non-controlling interest in subsidiaries

	2003		2004
3,450 preferred shares (2003 – 3,728) (redeemable at $10,000 each)	$	37,280,000	$	34,500,000

2,270 Class I preferred shares (2003 – 2,390) of Secunda Global International Inc., non-voting except at special meetings, retractable solely at the option of the Company at $10,000 each, with cumulative dividends at Bankers Acceptance rate plus basis points applied to the stated capital of such shares (rate as of June 30, 2004 of 6.94857%).

1,180 Class I preferred shares (2003 – 1,338) of Secunda Global Marine Incorporated, non-voting except at special meetings, retractable solely at the option of the Company at $10,000 each, with cumulative dividends of 7.25%

The non-controlling interest is owned by a wholly owned subsidiary of Secunda Marine International Incorporated’s parent company, Secunda International Limited.

F-55

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

11. Capital stock

	2003		2004
Authorized:
100 non-voting, non-cumulative, non-participating, preference shares, with par value of $.01 each, redeemable at $10,000 per share
40,000 common shares, without par value
Issued and outstanding:
501 common shares	$	445	$	445

12. Interest expense

	2002		2003		2004
Long term debt and obligations under capital lease	$	4,504,746	$	4,569,901	$	6,024,479
Other		83,264		125,898		192,066
	$	4,588,010	$	4,695,799	$	6,216,545

The Company capitalized interest in the amount of $190,000 (2002); $735,000 (2003), and zero (2004).

13. Other income, net

	2002		2003		2004
Gain on disposal of assets	$	503,849	$	2,246,806	$	431,499
Foreign exchange		247,888		2,268,047		165,306
Interest		16,260		13,438		3,705
Other		90,974		272,214		162,513
	$	858,971	$	4,800,505	$	763,023

14. Change in non-cash operating working capital

	2002			2003			2004
Receivables	$	(503,562	)	$	(127,515	)	$	6,021,803
Inventory		(284,374	)		284,039			664,387
Prepaids		(40,583	)		(109,115	)		522,761
Payables and accruals		4,015,819			(2,301,911	)		(3,485,275	)
Accrued lease payments		5,069			(149,075	)		5,069
	$	3,192,369		$	(2,403,577	)	$	3,728,745

15. Income taxes

	2002		2003		2004
Current
Canada	$	—	$	—	$	—
Foreign		177,317		128,059		111,923
		177,317		128,059		111,923
Future
Canada		23,660		898,295		(798,106	)
Foreign		—		—		—
		23,660		898,295		(798,106	)
Income tax (recovery)	$	200,977	$	1,026,354	$	(686,183	)

F-56

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The following reconciles the expected income tax at the various statutory income tax rates to the amounts recognized in the consolidated statements of earnings for the years ended June 30, 2002, 2003 and 2004:

	2002			2003			2004
(Loss) earnings before taxes	$	7,093,571		$	6,646,702		$	(2,305,607	)
Income taxes		42.12	%		40.12	%		39.12	%
		2,987,812			2,666,657			(901,953	)
Expected income taxes
Statutory rate change		(2,483	)		(47,130	)		20,937
Rate differential in different jurisdictions		(2,641,693	)		(1,235,439	)		(189,652	)
Provincial capital tax		(70,432	)		(83,791	)		(91,839	)
Non-taxable portion of capital gains / losses		(93,809	)		14,363			11,649
Non taxable / deductible items and other		21,582			(288,306	)		464,675
Income tax (recovery)	$	200,977		$	1,026,354		$	(686,183	)

The following table reflects the deferred tax liability as at June 30, 2003 and 2004:

Taxable temporary timing differences, primarily related to capital assets	$	(10,939,081	)	$	(9,349,993	)
Non-capital losses carried forward		5,289,046			4,510,780
Capital losses carried forward		44,935			32,220
	$	(5,605,100	)	$	(4,806,993	)

The Company has recorded in the financial statements the income tax benefits of prior years’ losses of approximately $11,833,000. The Company also has investment tax credits of approximately $6,596,000, the benefits of which have not been recorded in the financial statements. These losses and credits are available to reduce taxable income and income taxes payable in future years and, if not utilized, will expire as follows:

	Tax Losses Carried Forward		Investment Tax Credits
2005	$	—	$	84,000
2006		1,045,000		1,657,000
2007		5,887,000		3,775,000
2008		2,807,000		—
2009		1,489,000		—
2010		605,000		1,080,000
	$	11,833,000	$	6,596,000

16. Earnings per share

Per share amounts are based on a weighted average number of common shares issued and outstanding during the year. The weighted average number of common shares outstanding for the years ended June 30, 2002, 2003 and 2004 were 501. There are no potentially dilutive securities issued by the Company.

17. Segmented information

The Company’s business is primarily comprised of two segments, oil and gas services and construction and maintenance services.

F-57

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

The oil and gas services segment charters vessels principally to owners and operators of offshore drilling rigs and production platforms both domestically and internationally. Platform supply vessels transport drill pipe, drilling fluids and construction materials as well as deck cargo, liquid mud, fuel and water. Anchor handling towing supply vessels have powerful engines and deck mounted winches and are capable of towing and positioning offshore drilling rigs, barges and performing general towing services, as well as providing supply vessel services. Standby safety vessels provide a means of evacuation and rescue for platform and rig personnel in the event of an emergency at an offshore installation.

The Company’s construction and maintenance services segment provides support services to customers requiring vessels to perform construction and maintenance services. These services have historically been provided to customers in the sub-sea telecommunications industry.

Individual customers contributed the following revenues, as percentage of total revenues in each year:

	2002		2003		2004
Oil and gas services
Customer 1	22	%	27	%	37	%
Customer 2	21	%	20	%	14	%
Customer 3	8	%	3	%	14	%
Construction and maintenance services
Customer A	25	%	14	%	14	%
All others	24	%	36	%	21	%

	June 30, 2002
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	47,334,072	$	18,504,227	$	7,080,893		$	72,919,192
Inter-segment revenues	$	—	$	—	$	1,347,632		$	1,347,632
Interest expense	$	4,279,500	$	—	$	308,510		$	4,588,010
Depreciation and amortization	$	5,930,108	$	2,672,594	$	909,432		$	9,512,134
Segment earnings (loss) before taxes	$	4,991,848	$	8,346,388	$	(6,244,665	)	$	7,093,571
Segment capital asset expenditures	$	25,970,835	$	1,183,486	$	110,100		$	27,264,421
	June 30, 2003
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	51,058,248	$	9,951,240	$	8,364,729		$	69,374,217
Inter-segment revenues	$	—	$	—	$	1,167,769		$	1,167,769
Interest expense	$	4,384,918	$	10,768	$	300,113		$	4,695,799
Depreciation and amortization	$	6,513,867	$	2,799,001	$	895,777		$	10,208,645
Segment earnings (loss) before taxes	$	5,838,821	$	2,675,463	$	(1,867,582	)	$	6,646,702
Segment assets	$	108,235,728	$	39,807,994	$	25,840,414		$	173,884,136
Segment capital asset expenditures	$	18,866,310	$	335,382	$	110,507		$	19,312,199

F-58

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

	June 30, 2004
	Oil and Gas Services		Construction and Maintenance		Corporate and Other			Total
Revenue from external customers	$	48,250,001	$	9,486,420	$	8,476,328		$	66,212,749
Inter-segment revenues	$	—	$	—	$	523,360		$	523,360
Interest expense	$	5,930,771	$	17,053	$	268,721		$	6,216,545
Depreciation and amortization	$	8,316,855	$	2,778,952	$	891,018		$	11,986,825
Segment earnings (loss) before taxes	$	1,896,410	$	1,774,088	$	(5,976,105	)	$	(2,305,607	)
Segment assets	$	124,555,058	$	37,278,025	$	18,452,514		$	180,285,597
Segment capital asset expenditures	$	26,923,415	$	—	$	91,956		$	27,015,371

Geographic information

	Revenues
	2002		2003		2004
Revenues
Canada	$	48,614,433	$	62,109,799	$	62,035,966
International		24,304,759		7,264,418		4,176,783
	$	72,919,192	$	69,374,217	$	66,212,749
Property and Equipment
Canada			$	120,021,977	$	111,157,979
International				28,411,604		52,006,563
			$	148,433,581	$	163,164,542

18. Commitments

The Company has entered into operating leases for supply vessels. One of these leases, denominated in US dollars, calls for remaining minimum annual payments aggregating CDN $54.8 million over its term translated using the Canadian dollar exchange rate of $1.3453 as at June 30, 2004. The Company’s remaining lease is denominated in Canadian currency and calls for remaining minimum aggregate payments of $61,000. The approximate minimum annual lease payments over the next five years expressed in Canadian currency, translated under the assumption described above are as follows:

2005	$	4,212,000
2006		3,495,000
2007		3,495,000
2008		3,495,000
2009		3,495,000
Thereafter		36,692,000
	$	54,884,000

F-59

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

19. Financial instruments

a) Interest Rate Risk – The Company’s interest rate risk exposure arises from fluctuations in interest rates relating primarily to its long-term debt obligations. The Company does not use derivative instruments to reduce its exposure to interest risk. However, the Company strategically finances its assets by considering such factors as industry trends, existing and prospective charter contracts, interest rate expectations, and planned fleet composition to meet industry opportunities.

b) Foreign Currency Risk – The Company has financed CDN $16.7 million of its long-term debt and has entered into long-term vessel leases denominated in US currency, which by their nature, are subject to foreign exchange risk. However, a number of the Company’s vessel charters are denominated in US currency, which act as a natural hedge against US dollar debt service and lease payments. During the years ended June 30, 2002, 2003 and 2004, USD charter revenue exceeded US dollar debt service and lease payments. The Company does not use derivative instruments to reduce its exposure to currency fluctuation.

c) Credit Risk – The Company is subject to credit risk through the advancing of trade credit. Customers of oil and gas vessel services are primarily major and large independent oil and gas exploration and production companies. Construction and maintenance services are provided to major sub-sea maintenance companies. Management believes that the credit risk associated with these customers is minimal. Management routinely reviews its accounts receivable balances to ensure customers remain within credit terms.

d) Fair Value – Unless otherwise noted, the carrying values of cash and cash equivalents, accounts receivable, prepaids, bank indebtedness, payables and accruals approximate their fair values.

The fair value of the Company’s long-term debt financed on a floating rate basis is assumed to be the carrying value due to the variable interest rates. The fair value of the fixed rate US dollar long-term debt has been estimated at $19.3 million and $17.6 million respectively as at June 30, 2003 and 2004. The fair value of the fixed rate equipment lease obligations has been estimated at $0.5 million and $30.1 million as at June 30, 2003 and 2004 respectively.

The fair value of the amounts due to/from affiliated parties and demand note receivable from parent have not been estimated as it is not practicable to determine those amounts.

20. Other matters

On December 31, 2003, the Company was approached by an outside party looking to acquire a portion of the Company’s retail/wholesale activities operated under the name Associated Marine. A transaction was completed effective January 31, 2004 for the acquisition by the third party of the net operating assets resulting in a pre-tax loss of $145,000 on the transaction. This loss is recorded in the “other income” caption.

The financial statements report the following amounts from the operations of Associated Marine in the “corporate and other operating segment”:

	2002			2003			2004
Revenue	$	3,750,969		$	4,497,812		$	1,863,262
Operating pre-tax loss	$	(253,843	)	$	(89,610	)	$	(80,633	)

F-60

Secunda Marine International Incorporated

Notes to the Consolidated Financial Statements

Denominated in Canadian Dollars

June 30, 2002, 2003 and 2004

21. Contingencies

In May of 2004 a claim was brought against the Company and an arbitration proceeding commenced by a third party respecting negotiations resulting from an unsolicited offer to purchase one of the Company’s vessels. No amount of claim has been pleaded. The Company has appointed an arbitrator in response to commencement of the arbitration proceedings to represent its interests in this matter. The Company is of the view that the action claim is without merit.

The Company, from time to time, enters into agreements in the normal course of its business, such as service arrangements and leases, and in connection with business or asset acquisitions or dispositions. These agreements, by their nature, may provide for indemnification of counterparties. These indemnification provisions may be in connection with breaches of representation and warranty or with future claims for certain liabilities, including liabilities related to tax and environmental matters. The terms of these indemnification provisions vary in duration and may extend for an unlimited period of time. Given the nature of such indemnification provisions, the Company is unable to reasonably estimate its total maximum potential liability as certain indemnification provisions do not provide for a maximum potential amount and the amounts are dependent on the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, the Company has not made any significant payments in connection with these indemnification provisions.

The Company has provided, as security for the loans of a certain affiliated company, a first marine mortgage on two of its vessels, assignment of insurance on the vessels and assignment of time charter. The net book value of the assets acting as security is $36.7 million and the balance of the loans at June 30, 2004 was approximately $33.1 million.

22. Subsequent events

a) Subsequent to year end, the Company’s parent completed a US $125.0 million senior secured floating rate note offering. These notes are non-amortizing, mature in 2012, have been issued at a price of 98.5% and bear interest at LIBOR plus 800 basis points.

The net proceeds from this offering, after deducting fees and expenses, was used to repay all of the outstanding indebtedness, except for indebtedness related to one vessel, including debt prepayment costs, and to acquire one vessel currently operating under an operating lease. The remaining funds available after the above are to be used for working capital and other general corporate purposes.

Concurrent with the sale of these notes, the parent company entered into a new $40.0 million senior secured bank credit facility.

As a result of this transaction, during the quarter ended September 30, 2004, deferred financing costs that pertain to the repaid indebtedness and operating lease were written off in the amount of $2.5 million, debt prepayment costs were incurred in the amount of $2.6 million and vessels property and equipment increased by $25.8 million.

b) Subsequent to year end the Company paid a dividend in the amount of $6,500,000.

F-61

GLOSSARY OF SELECTED INDUSTRY TERMS

Anchor Handling, Tug and Supply Vessels or AHTS. These vessels are used to set anchors for the rigs and to tow mobile drilling rigs and equipment from one location to another. In addition, these vessels typically can be used as supply vessels when they are not performing anchor handling and towing services.

Charter. A maritime contract for the hire of a vessel.

Classification Society. A member of the IACS (International Association of Classification Societies) generally accepted for providing classification services on behalf of governments. The societies are generally recognized as establishing that ships classified are built and maintained within certain established standards. We have ships built under DNV (Det Norske Veritas) and LR (Lloyds Register of Shipping) classification.

Cold Lay-Up. The preservation and protection of vessel systems and equipment to allow storage of the vessel without maintaining any crew aboard.

Construction Support Vessels. These vessels can be vessels used in the actual construction effort, such as pipe laying barges, or they can be specially designed vessels, such as pipe carriers, used to transport the large cargos of material and supplies required to support construction and installation of offshore platforms and pipelines.

Dayrate. Total charter revenues divided by number of days worked.

Dead Weight Tons. A measurement of the carrying capacity of a vessel, calculated as the difference between the amount of water displaced by the unloaded vessel and that displaced by the fully loaded vessel.

Drydocking. The process whereby a vessel is removed from the water to accomplish repairs and complete classification inspection requirements. Drydocks are required twice during the five-year classification cycle. The time period of a drydocking differs based on type and age of vessel and extent of survey and repairs needed.

Dynamic Positioning or DP. An enhanced maneuvering and control system that will hold a vessel on station despite sea and weather conditions.

Ice Class. Vessels certified as “Ice Class” have enhanced hull strength enabling them to operate in icy conditions.

National Energy Board Reports. The reports entitled “Canada’s Conventional Natural Gas Resources – A Status Report” and “Canada’s Energy Future – Scenarios for Supply and Demand to 2025,” published by the National Energy Board, an independent federal board that regulates several aspects of Canada’s energy industry.

Platform Supply Vessels. These vessels are used to serve drilling and production facilities and support offshore construction and maintenance work. They are utilized for their cargo handling capabilities, particularly their large capacity and versatility.

Remotely Operated Vehicle or ROV. An unmanned submersible craft which is used for underwater construction, inspection and searches. It is controlled from the launching vessel by umbilical controls and is “flown” through the water by a trained technician who utilizes thrusters and cameras.

Standby Rescue Vessels. These vessels perform safety patrol functions for an area and are equipped for all manned locations in the offshore region of the east coast of Canada. They typically remain on station to provide a safety backup to offshore rigs and production facilities and carry special equipment to rescue personnel, are equipped to provide first aid and shelter and, in some cases, also function as supply vessels.

Term Charter. A charter with an initial term of one year or more.

Time Charter. The hire of a fully operational ship for a specified period of time; the shipowner provides the ship with crew, stores and provisions, ready in all aspects to load cargo and proceed on a voyage.

Utilization. Total days for which charter hire is earned divided by calendar days in the periods adjusted for part-year availability caused by vessel additions or dispositions.

G-1

ANNEX A

LETTER OF TRANSMITTAL

To Tender

Outstanding Senior Secured Floating Rate Notes due September 1, 2012

of

SECUNDA INTERNATIONAL LIMITED

Pursuant to the Exchange Offer and Prospectus dated                     

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 200   (THE “EXPIRATION DATE”), UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY.

The Exchange Agent for the Exchange Offer is:

Wells Fargo Bank, National Association

By Overnight Courier or Mail:	By Registered or Certified Mail:	By Hand:
Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 6th & Marquette Avenue Minneapolis, MN 55479	Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480	Wells Fargo Bank, N.A. Corporate Trust Services Northstar East Bldg. – 12th Floor 608 2nd Avenue South Minneapolis, MN 55402
Attn: Reorg (if by mail, registered or certified recommended)	Attn: Reorg	Attn: Reorg

By Facsimile:	To Confirm by Telephone:
(612) 667-6282 Attn: Bondholder Communications	(800) 344-5128; or (612) 677-9764 Attn: Bondholder Communications

IF YOU WISH TO EXCHANGE CURRENTLY OUTSTANDING SENIOR SECURED FLOATING RATE NOTES DUE SEPTEMBER 1, 2012 (THE “ORIGINAL NOTES”) FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF NEW SENIOR SECURED FLOATING RATE NOTES DUE SEPTEMBER 1, 2012 PURSUANT TO THE EXCHANGE OFFER, YOU MUST VALIDLY TENDER (AND NOT WITHDRAW) ORIGINAL NOTES TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE BY CAUSING AN AGENT’S MESSAGE TO BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO SUCH TIME.

The undersigned hereby acknowledges receipt and review of the Prospectus, dated                      (the “Prospectus”), of Secunda International Limited, a corporation organized under the laws of Nova Scotia, Canada (the “Company”), and this Letter of Transmittal (the “Letter of Transmittal”), which together describe the Company’s offer (the “Exchange Offer”) to exchange its Senior Secured Floating Rate Notes due September 1, 2012 (the “Exchange Notes”) that have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for a like principal amount of its issued and outstanding Senior Secured Floating Rate Notes due September 1, 2012 (the “Original Notes”). Capitalized terms used but not defined herein have the respective meaning given to them in the Prospectus.

A-1

The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term “Expiration Date” shall mean the latest date to which the Exchange Offer is extended. The Company shall notify the Exchange Agent and each registered holder of the Original Notes of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

This Letter of Transmittal is to be used by holders of the Original Notes. Tender of Original Notes is to be made according to the Automated Tender Offer Program (“ATOP”) of the Depository Trust Company (“DTC”) pursuant to the procedures set forth in the prospectus under the caption “The Exchange Offer – Procedures for Tendering.” DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s DTC account. DTC will then send a computer generated message known as an “agent’s message” to the exchange agent for its acceptance. For you to validly tender your Original Notes in the Exchange Offer, the Exchange Agent must receive, prior to the Expiration Date, an agent’s message under the ATOP procedures that confirms that:

• DTC has received your instructions to tender your Original Notes; and

• You agree to be bound by the terms of this Letter of Transmittal.

By using the ATOP procedures to tender outstanding notes, you will not be required to deliver this Letter of Transmittal to the Exchange Agent. However, you will be bound by its terms, and you will be deemed to have made the acknowledgments and the representations and warranties it contains, just as if you had signed it.

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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

1. By tendering Original Notes in the Exchange Offer, you acknowledge receipt of the Prospectus and this Letter of Transmittal.

2. By tendering Original Notes in the Exchange Offer, you represent and warrant that you have full authority to tender the Original Notes described above and will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the tender of Original Notes.

3. You understand that the tender of the Original Notes pursuant to all of the procedures set forth in the Prospectus will constitute an agreement between and the Company as to the terms and conditions set forth in the Prospectus.

4. By tendering Original Notes in the Exchange Offer, you acknowledge that the Exchange Offer is being made in reliance upon interpretations contained in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the “SEC”), including Exxon Capital Holdings Corp., SEC No-Action Letter (available April 13, 1989), Morgan Stanley & Co., Inc., SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that the Exchange Notes issued in exchange for the Original Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than a broker-dealer who purchased Original Notes exchanged for such Exchange Notes directly from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act of 1933, as amended (the “Securities Act”) and any such holder that is an “affiliate” of the Company 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 such Exchange Notes are acquired in the ordinary course of such holders’ business and such holders are not participating in, and have no arrangement with any person to participate in, the distribution of such Exchange Notes.

5. By tendering Original Notes in the Exchange Offer, you represent and warrant that:

a. the Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of your business, whether or not you are the holder;

b. neither you nor any such other person is engaging in or intends to engage in a distribution of such Exchange Notes;

c. neither you nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes; and

d. neither the holder nor any such other person is an “affiliate,” as such term is defined under Rule 405 promulgated under the Securities Act, of the Company.

6. You may, if you are unable to make all of the representations and warranties contained in Item 5 above and as otherwise permitted in the Registration Rights Agreement (as defined below), elect to have your Original Notes registered in the shelf registration statement described in the Registration Rights Agreement, dated as of August 26, 2004 (the “Registration Rights Agreement”), by and among the Company, the Subsidiary Guarantors (as defined therein) and the Initial Purchaser (as defined therein). Such election may be made only by notifying the Company in writing at One Canal Street, Dartmouth, Nova Scotia, Canada B2Y 2W1, Attention: Chief Financial Officer. By making such election, you agree, as a holder of Original Notes participating in a shelf registration, to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who signs such shelf registration statement, each person who controls the Company within the meaning of either the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each other holder of Original Notes, from and against any and all losses, claims, damages or liabilities

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caused by any untrue statement or alleged untrue statement of a material fact contained in any shelf registration statement or prospectus, or in any supplement thereto or amendment thereof, or caused by the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; but only with respect to information relating to the undersigned furnished in writing by or on behalf of the undersigned expressly for use in a shelf registration statement, a prospectus or any amendments or supplements thereto. Any such indemnification shall be governed by the terms and subject to the conditions set forth in the Registration Rights Agreement, including, without limitation, the provisions regarding notice, retention of counsel, contribution and payment of expenses set forth therein. The above summary of the indemnification provision of the Registration Rights Agreement is not intended to be exhaustive and is qualified in its entirety by the Registration Rights Agreement.

7. If you are a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes that were acquired as a result of market-making activities or other trading activities, you acknowledge, by tendering Original Notes in the Exchange Offer, that you will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, you will not be deemed to admit that you are an “underwriter” within the meaning of the Securities Act. If you are a broker-dealer and Original Notes held for your own account were not acquired as a result of market-making or other trading activities, such Original Notes cannot be exchanged pursuant to the Exchange Offer.

8. Any of your obligations hereunder shall be binding upon your successors, assigns, executors, administrators, trustees in bankruptcy and legal and personal representatives of the undersigned.

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1) Book-Entry Confirmations.

Any confirmation of a book-entry transfer to the Exchange Agent’s account at DTC of Original Notes tendered by book-entry transfer (a “Book-Entry Confirmation”), as well as an agent’s message, 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.

2) Partial Tenders.

Tenders of Original Notes will be accepted only in integral multiples of $1,000. The entire principal amount of Original Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise communicated to the Exchange Agent. If the entire principal amount of all Original Notes is not tendered, then Original Notes for the principal amount of Original Notes not tendered and Notes issued in exchange for any Original Notes accepted will be delivered to the holder via the facilities of DTC promptly after the Original Notes are accepted for exchange.

3) Validity of Tenders.

All questions as to the validity, form, eligibility (including time of receipt), acceptance, and withdrawal of tendered Original Notes will be determined by the Company, in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of counsel for the Company, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Exchange Offer or any defect or irregularity in the tender of any Original Notes. The Company’s interpretation of the terms and conditions of the Exchange Offer (including the instructions on this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Original Notes must be cured within such time as the Company shall determine. Although the Company intends to notify holders of defects or irregularities with respect to tenders of Original Notes, neither the Company, the Exchange Agent, nor any other person shall be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give such notification. Tenders of Original Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Original 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 tendering holders via the facilities of DTC, as soon as practicable following the Expiration Date.

4) Waiver of Conditions.

The Company reserves the absolute right to waive, in whole or part, any of the conditions to the Exchange Offer set forth in the Prospectus or in this Letter of Transmittal.

5) No Conditional Tender.

No alternative, conditional, irregular or contingent tender of Original Notes will be accepted.

6) Request for Assistance or Additional Copies.

Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page 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.

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7) Withdrawal.

Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption “Exchange Offer—Withdrawal of Tenders.”

8) No Guarantee of Late Delivery.

There is no procedure for guarantee of late delivery in the Exchange Offer.

IMPORTANT: By using the ATOP procedures to tender outstanding notes, you will not be required to deliver this Letter of Transmittal to the Exchange Agent. However, you will be bound by its terms, and you will be deemed to have made the acknowledgments and the representations and warranties it contains, just as if you had signed it.

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[Back Cover]

Until                     , 2005, all dealers that effect transactions in the new notes, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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US$125,000,000

SECUNDA INTERNATIONAL LIMITED

OFFER TO EXCHANGE

all outstanding

Senior Secured Floating Rate Notes due September 1, 2012

(US$125,000,000 aggregate principal amount)

For

Senior Secured Floating Rate Notes due September 1, 2012

(US$125,000,000 aggregate principal amount)

that have been registered under the Securities Act of 1933

February     , 2005

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Articles of Association of Secunda International Limited (the “Company”), a copy of which is filed as an exhibit to this Registration Statement, provide that every director, manager, secretary, treasurer and other officer or servant of the Company shall be indemnified by the Company against, and it shall be the duty of the directors out of the funds of the Company to pay all costs, losses and expenses which any director, manager, secretary, treasurer or other officer or servant may incur or become liable to by reason of any contract entered into, or act or thing done by him as such officer or servant, or in any way in the discharge of his duties, including travelling expenses, and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the Company and have priority as against the shareholders over all other claims.

The Company’s Articles of Association also provide that no director or other officer of the Company shall be liable for acts, receipts, neglects or defaults of any other director or officer or for joining in any receipt or other act for conformity, or for any loss or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the directors for or on behalf of the Company or through the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any money, securities or effects shall be deposited, or for any loss occasioned by error of judgment or oversight on his part, or for any other loss, damage for misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto unless the same happened through his own dishonesty.

The Company has purchased and maintain insurance for the benefit of its directors and officers, former directors and officers and those individuals who become directors or officers of Secunda the during the insurance policy period. The Company’s policy for directors and officers liability insurance insures directors and officers for losses as a result of claims based upon any actual, alleged, attempted or allegedly attempted error, misstatement, misleading statement, act, omission, neglect or breach of duty by any director or officer, individually or otherwise, but only in the capacity of a director or officer for us with respect to any claim against any director or officer solely by reason of his/her serving in such capacity.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

Exhibit No.	Description
3.1	Certificate of Incorporation of Secunda International Limited.
3.2	Memorandum of Association of Secunda International Limited.
3.3	Articles of Association of Secunda International Limited.
4.1	Registration Rights Agreement dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto and RBC Capital Markets Corporation, as representative of the several initial purchasers.
4.2	Indenture dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee.
4.3	Form of Senior Secured Floating Rate Note Due 2012 (attached as Exhibit A-1 to Exhibit 4.4).
5.1	Opinion of Vinson & Elkins L.L.P. regarding United States federal and New York law.
5.2	Opinion of McInnes Cooper regarding Nova Scotia provincial and Canadian federal law.

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Exhibit No.	Description
5.3	Opinion of Paula S. Lett regarding Barbados law.
10.1	Collateral Agency Agreement dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto, Wells Fargo Bank, National Association, as Trustee, Wilmington Trust Company, as Collateral Agent, and Fortis Capital Corp, as Administrative Agent.
10.2	Pledge Agreement dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited and Wilmington Trust Company, as Collateral Agent.
10.3	Assignment of Earnings and Insurance dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited and Wilmington Trust Company, as Collateral Agent.
10.4	Control Agreement [Asset Sale Proceeds Account] dated as of August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto and Wilmington Trust Company, as Collateral Agent and Despositary Agent.
10.5	Control Agreement [Collateral Account] dated as of August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto and Wilmington Trust Company, as Collateral Agent and Despositary Agent.
10.6	Credit Agreement dated as if August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto, and Fortis Capital Corp., as Agent, Arranger, Bookrunner and Lender.
10.7	Deed of Covenants dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited.
10.8	Legal Charge Over Shares Agreement dated as of August 26, 2004 between JDM Shipping Inc. and Wilmington Trust Company, as Collateral Agent.
10.9	Legal Charge Over Shares Agreement dated as of August 26, 2004 between Secunda Global Marine Incorporated and Wilmington Trust Company, as Collateral Agent.
12.1	Computation of Ratio of Earnings to Fixed Charges.
21.1	List of Subsidiaries.
23.1	Consent of Grant Thornton L.L.P.
23.2	Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
23.3	Consent of McInnes Cooper (included in Exhibit 5.2).
23.4	Consent of Paula S. Lett (included in Exhibit 5.3).
24.1	Powers of Attorney (included in the signature page to this Registration Statement).
25.1	Statement of Eligibility on Form T-1 of Wells Fargo Bank, National Association, as Trustee under the Indenture.

(b) Financial Statement Schedules. All schedules have been omitted because the information required is included in the financial statements or the notes thereto or because they are not applicable or not required.

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ITEM 22. UNDERTAKINGS

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 of 1933, 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 that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934), 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.

5. 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 Securities and Exchange Commission 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.

6. 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.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Dartmouth, Nova Scotia, on February 4, 2005.

SECUNDA INTERNATIONAL LIMITED
By:	/s/    ALFRED A. SMITHERS
Name:	Alfred A. Smithers
Title:	President and Director

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alfred A. Smithers, P.L. Meier, P. Michael Connolly and Donald A. MacLeod, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and 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 attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/    ALFRED A. SMITHERS         Alfred A. Smithers	Chairman, President and Chief Executive Officer (Principal Executive Officer)	February 4, 2005
/s/    P.L. MEIER         P.L. Meier	Vice President—Finance and Director (Principal Financial and Accounting Officer)	February 4, 2005
/s/    P. MICHAEL CONNOLLY         P. Michael Connolly	Director	February 4, 2005
/s/    DONALD A. MACLEOD         Donald A. MacLeod	Director	February 4, 2005
/s/    J. BERNARD BOUDREAU         J. Bernard Boudreau	Director	February 4, 2005

S-1

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each Registrant named below has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Dartmouth, Nova Scotia on February 4, 2005.

301563 NOVA SCOTIA LIMITED SECUNDA MARINE INTERNATIONAL INCORPORATED SECUNDA MARINE SERVICES LIMITED NAVIS SHIPPING INCORPORATED SECUNDA ATLANTIC INCORPORATED SECUNDA MARINE ATLANTIC LIMITED
By:	/s/    ALFRED A. SMITHERS
Name:	Alfred A. Smithers
Title:	President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alfred A. Smithers and Donald A. MacLeod, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and 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, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/    ALFRED A. SMITHERS         Alfred A. Smithers	President (Principal Executive, Financial and Accounting Officer)	February 4, 2005

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Dartmouth, Nova Scotia on February 4, 2005.

OFFSHORE LOGISTICS INCORPORATED
By:	/S/    DWAYNE SMITHERS
Name:	Dwayne Smithers
Title:	President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alfred A. Smithers and Donald A. MacLeod, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and 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, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/S/    DWAYNE SMITHERS         Dwayne Smithers	President (Principal Executive, Financial and Accounting Officer)	February 4, 2005

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each Registrant named below has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Dartmouth, Nova Scotia on February 4, 2005.

SECUNDA GLOBAL MARINE INCORPORATED JDM SHIPPING INC. INTERNATIONAL SHIPPING CORPORATION INC. SECUNDA GLOBAL INTERNATIONAL INC.
By:	/S/    ALFRED A. SMITHERS
Name:	Alfred A. Smithers
Title:	Director

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alfred A. Smithers and Donald A. MacLeod, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign on his behalf individually and in each capacity stated below any and 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, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of the, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/S/    F. ALISON FROST         F. Alison Frost	Managing Director (Principal Executive, Financial and Accounting Officer)	February 4, 2005
/S/    ALFRED A. SMITHERS         Alfred A. Smithers	Director	February 4, 2005
/S/    PAULA S. LETT         Paula S. Lett	Director	February 4, 2005

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Certificate of Incorporation of Secunda International Limited.
3.2	Memorandum of Association of Secunda International Limited.
3.3	Articles of Association of Secunda International Limited.
4.1	Registration Rights Agreement dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto and RBC Capital Markets Corporation, as representative of the several initial purchasers.
4.2	Indenture dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee.
4.3	Form of Senior Secured Floating Rate Note Due 2012 (attached as Exhibit A-1 to Exhibit 4.2).
5.1	Opinion of Vinson & Elkins L.L.P. regarding United States federal and New York law.
5.2	Opinion of McInnes Cooper regarding Nova Scotia provincial and Canadian federal law.
5.3	Opinion of Paula S. Lett regarding Barbados law.
10.1	Collateral Agency Agreement dated as of August 26, 2004 by and among Secunda International Limited, the Subsidiary Guarantors party thereto, Wells Fargo Bank, National Association, as Trustee, Wilmington Trust Company, as Collateral Agent, and Fortis Capital Corp, as Administrative Agent.
10.2	Pledge Agreement dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited and Wilmington Trust Company, as Collateral Agent.
10.3	Assignment of Earnings and Insurance dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited and Wilmington Trust Company, as Collateral Agent.
10.4	Control Agreement [Asset Sale Proceeds Account] dated as of August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto and Wilmington Trust Company, as Collateral Agent and Despositary Agent.
10.5	Control Agreement [Collateral Account] dated as of August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto and Wilmington Trust Company, as Collateral Agent and Despositary Agent.
10.6	Credit Agreement dated as if August 26, 2004 by and among Secunda International Limited, as Borrower, the Subsidiary Guarantors party thereto, and Fortis Capital Corp., as Agent, Arranger, Bookrunner and Lender.
10.7	Deed of Covenants dated as of August 26, 2004 by and among certain vessel owning subsidiaries of Secunda International Limited.
10.8	Legal Charge Over Shares Agreement dated as of August 26, 2004 between JDM Shipping Inc. and Wilmington Trust Company, as Collateral Agent.
10.9	Legal Charge Over Shares Agreement dated as of August 26, 2004 between Secunda Global Marine Incorporated and Wilmington Trust Company, as Collateral Agent.
12.1	Computation of Ratio of Earnings to Fixed Charges.
21.1	List of Subsidiaries.
23.1	Consent of Grant Thornton L.L.P.
23.2	Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
23.3	Consent of McInnes Cooper (included in Exhibit 5.2).
23.4	Consent of Paula S. Lett (included in Exhibit 5.3).
24.1	Powers of Attorney (included in the signature page to this Registration Statement).
25.1	Statement of Eligibility on Form T-1 of Wells Fargo Bank, National Association, as Trustee under the Indenture.

E-1

EX-3.1

Exhibit 3.1

PROVINCE OF NOVA SCOTIA

CERTIFICATE OF INCORPORATION

Companies Act

Chapter 42, R.S.N.S.1967

1680027 NOVA SCOTIA LIMITED	1680027
Name of Company	Number

I hereby certify that the above-mentioned Company was this date incorporated under the Companies Act and that the company is limited.

	December 13, 1985
Acting Registrar of Joint Stock Companies	Date of Incorporation

RESOLUTION SIGNED BY ALL THE SHAREHOLDERS OF

THE COMPANY PURSUANT TO SECTION 92 OF THE COMPANIES ACT

BE IT RESOLVED as a Special Resolution of the Company within the meaning of the Companies Act, being Chapter 81, R.S.N.S., 1989, as amended, that the name of the Company be and is changed from 1680027 Nova Scotia Limited to Secunda International Limited, and that such change become effective immediately upon obtaining approval of the Registrar of Joint Stock Companies as required by the Companies Act.

CERTIFICATE

I, Alfred A. Smithers, Secretary of 1680027 Nova Scotia Limited, hereby certify that the foregoing is a true copy of a Resolution dated 15^th day of June, 1999 signed by all the Shareholder of Company in the manner authorized by law and that the Special Resolution is in full force and effect.

DATED this 15^th day of June, 1999.

/s/ Alfred A. Smithers

Alfred A. Smithers, Secretary

_______________ certificate

I HEREBY CERTIFY that this is a true copy of a document filed in the office of the Registrar of Joint Stock Companies on the 30 day of June, 1999

For Registrar of Joint Stock Companies

CERTIFICATE OF NAME CHANGE

Companies Act

Registry Number

1680027

Name of Company

1680027 NOVA SCOTIA LIMITED

I hereby certify that the above-mentioned company has with approval of the Registrar of Joint Stocks changed its name to:

SECUNDA INTERNATIONAL LIMITED
	June 30, 1999
Registrar of Joint Stock Companies	Date of Name Change

EX-3.2

Exhibit 3.2

COMPANIES ACT

CHAPTER 42, R.S.N.S. 1967

MEMORANDUM OF ASSOCIATION OF 1680027 Nova Scotia Limited

1	—	The name of the Company is 1680027 Nova Scotia Limited
2	—	Restrictions, if any, on the objects and powers of the Company are: (a)    none x       xxxxxxxxxxxxxxxxxxx [Delete (a) or (b)]
3	—	Pursuant to subsection (5E) of Section 24 of the Companies Act, to the Intent that subsection (5C) of Section 24 not apply to the Company, the following powers are hereby expressly conferred upon the Company: The  Company shall have power to (a)    sell or dispose of its undertaking or a substantial part thereof; (b)    subject to the provisions of the Act with respect to reduction of capital, distribute any of its property in specie among its members; and (c)    amalgamate with any company or other body of persons.
4	—	The liability of the members is limited.
5	—	The Company proposes to issue 40,000 shares without nominal or par value, with power to divide the shares in the capital for the time being into several classes and/or to attach thereto respectively any preferential, common, deferred, or qualified rights, privileges or conditions, including restrictions on voting and including redemption or purchase of such shares, subject, however, to the provisions of Companies Act and amendments thereto.
6	—	I, the undersigned, whose name and address are subscribed, am desirous of being formed into a company, in pursuance of this Memorandum of Association, and I agree to take the number and kind of shares in the capital stock of the company set opposite my name.

NAME ADDRESS AND OCCUPATION OF SUBSCRIBER	NUMBER AND KIND OF SHARES TAKEN BY THE SUBSCRIBER
Illegible	One (1) share without nominal or par value.
Margaret E. Blewett, Corporate Services Officer

TOTAL SHARES TAKEN: One (1) share without nominal or par value.

DATED the 13^th day of December, 1985. WITNESS to the above signature: Andrea Barbara _______ 1673, Bedford Raw, Halifax, Nova Acotia, Corporate Clerk

NOTE:  Each subscriber must write his name, his full post office address, and his occupation, all in his own handwriting. Each subscriber must write, in words, and in his own handwriting, the number of shares he takes.

1680027 NOVA SCOTIA LIMITED

SPECIAL RESOLUTION

BE IT RESOLVED as a Special Resolution of the Shareholders of the Company within the meaning of the Companies Act, being Chapter 81, R.S.N.S. 1989, and amendments thereto, that the Articles of Association of the Company be and are hereby repealed and that the attached Schedule “A” be and is hereby adopted as the Articles of Association of the Company.

The Secretary be and is hereby directed to file a printed copy of such Special Resolution duly certified by the Secretary under the seal of the Company with the Registrar of Joint Stock Companies.

CERTIFICATE

I, J. Donald Mitchell, Secretary of 1680027 NOVA SCOTIA LIMITED, hereby certify that the foregoing is a true copy of a Special Resolution dated the day of November, 1991, signed by all the Shareholders of the Company in the manner authorized by law and that such Special Resolution is now in full force and effect.

Date Secretary

1680027 NOVA SCOTIA LIMITED

SPECIAL RESOLUTION

WHEREAS the authorized capital of the Company is forty thousand (40,000) shares without nominal or par value;

AND WHEREAS it is desirable and in the interest of the Company that the authorized capital of the Company be increased by the creation of one hundred (100) Class “A” and one hundred (100) Class “B” preference shares;

NOW THEREFORE BE IT RESOLVED as a Special Resolution of the Company within the meaning of the Companies Act, R.S.N.S. c 42, as amended:

1. THAT the authorized capital of the Company be and it is hereby amended and increased by the creation of an additional one hundred (100) Class A preference shares of the par value of Twenty-two Cents ($0.22) each, which shares shall be subject to the rights, restrictions, terms and conditions as are set out in Schedule “A” annexed to these resolutions, and by the creation of an additional one hundred (100) Class B preference shares of the par value of One Cent ($0.01) each, which shares shall be subject to the rights, restrictions, terms and conditions as are set out in Schedule “B” annexed to these resolutions, such that the authorized capital of the Company shall be and is forty thousand (40,000) common shares without nominal or par value and one hundred (100) Class A preference shares of the par value of Twenty-two Cents ($0.22) each, subject to the rights, restrictions, terms and

conditions as are set out in Schedule “A” annexed hereto, and one hundred (100) Class B preference shares of the par value of One Cent ($0.01) each subject to the rights, restrictions, terms and conditions as are set out in Schedule “B” annexed hereto;

2. THAT the Secretary be and is hereby authorized and directed to file a printed copy of the Special Resolution with the Registrar of Joint Stock Companies.

CERTIFICATE

I hereby certify that the foregoing is a true copy of a Special Resolution signed by the Sole Shareholder of the Company in the manner authorized by Law on the 14th day of July, 1989, and that the Special Resolution is in full force and effect.

July 14 ‘89
Date	Secretary

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SCHEDULE “A”

1680027 NOVA SCOTIA LIMITED

RIGHTS, RESTRICTIONS, CONDITIONS AND LIMITATIONS

ATTACHING TO CLASS A PREFERENCE SHARES

The Class A Preference Shares shall have a par value of Twenty-Two Cents ($0.22) each and shall be non-voting, redeemable and retractable and shall bear a non-participating, non-cumulative dividend at the rate of eight percent (8%) per annum of the redemption value. The rights, restrictions, conditions and limitations attached to the Class A Preference Shares shall be as follows:

(a) The holders of the Class A Preference Shares in priority to the Common Shares shall be entitled to receive and the Company shall pay thereon if, as and when declared by the Board of Directors out of moneys of the Company properly applicable to the payment of dividends, fixed non-cumulative preferential cash dividends at the rate of eight percent (8%) per annum of the redemption value thereof. The said dividends shall be payable on such date or dates in each fiscal year of the Company as may from time to time be determined by the Board of Directors. The Board of Directors shall be entitled from time to time to declare part of the said fixed preferential dividend for any fiscal year notwithstanding that the dividend for such fiscal year shall not be declared in full. If within four (4) months after the end of any fiscal year of the Company the Board of Directors in its discretion shall not have declared the said fixed preferential dividend or any part thereof on the Class A Preference Shares for such fiscal year then the rights of the holders of the Class A Preference Shares to such

dividend or any undeclared part thereof shall be forever extinguished. The holder of the Class A Preference Shares shall not be entitled to any dividends other than or in excess of the cash dividends hereinbefore provided for.

(b) In the event of the liquidation, dissolution or winding up of the Company or other distribution of property or assets of the Company for the purpose of winding up its affairs, the holders of Class A Preference Shares shall be entitled to receive the redemption value per Class A Preference Shares together with all declared and unpaid dividends thereon before any amount shall be paid or any property or assets of the Company distributed to the holders of any Common Shares or Shares of any other class ranking junior to the Class A Preference Shares. After the payment to the holders of Class A Preference Shares of the amount so payable to them as hereinbefore provided, they shall not be entitled to share in any further distribution of the property or assets of the Company.

(c) The Company may, subject to compliance with the provisions of the Companies Act of Nova Scotia, at any time and from time to time upon ten (10) days notice to the registered holders thereof, redeem the whole or any part of the then outstanding Class A Preference Shares by paying for each Class A Preference Share to be redeemed Ten Thousand Dollars ($10,000.00) (the “redemption value”) together with all declared and unpaid dividends thereon, such sum being hereinafter referred to as the “redemption price”. In case a part only of the then outstanding Class A Preference Shares is at any time to be redeemed pursuant to this sub-paragraph (c), the Class A Preference Shares so to be

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redeemed shall be selected by lot in such manner as the Board of Directors in its discretion shall decide, or, if the Board of Directors so determines, may be redeemed pro rata, provided that the Class A Preference Shares shall not be redeemed on a fractional basis and, in calculating the shares to be redeemed, all fractional shares shall be rounded up to the next highest number.

(d) In any case of redemption of Class A Preference Shares under the provisions of sub-paragraph (c) hereof, the Company shall, at least ten (10) days before the date specified for redemption, mail to each person who, at the date of mailing, is a registered holder of Class A Preference Shares to be redeemed a notice in writing of the intention of the Company to redeem such Class A Preference Shares. Such notice shall be mailed in a prepaid envelope addressed to each such shareholder at his address as it appears on the books of the Company or, in the event of the address of any such shareholder not so appearing, then to the last known address of such shareholder, provided, however, that accidental failure to give any such notice to one (1) or more of such shareholders shall not affect the validity of such redemption as to the other holders. Such notice shall set out the redemption price and the date on which the redemption is to take place and, if part only of the shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed. On or after the date so specified for redemption, the Company shall pay or cause to be paid to or to the order of registered holders of the Class A Preference Shares to be redeemed the redemption price thereof on presentation and surrender at the head office of the Company, or any other place designated in

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such notice, of the certificates for the Class A Preference Shares called for redemption. Such Class A Preference Shares shall thereupon be and be deemed to be redeemed and shall be cancelled. If a part only of the Class A Preference Shares represented by any certificate be redeemed, a new certificate for the balance shall be issued at the expense of the Company. From and after the date specified in any such notice, the Class A Preference Shares called for redemption shall cease to be entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of shareholders in respect thereof unless payment of the redemption price shall not be made upon presentation of certificates in accordance with the foregoing provisions, in which case, the rights of the holders shall remain unaffected. The Company shall have the right, at any time after mailing of the notice of its intention to redeem any Class A Preference Shares as aforesaid, to deposit the redemption price of the Class A Preference Shares so called for redemption, or of such of the said Class A Preference Shares represented by certificates which have not at the date of such deposit been surrendered by the holders thereof in connection with such redemption, to a .special account in any chartered bank or any trust company in Canada named in such notice to be paid without interest to or to the order of the respective holders of such class A Preference Shares called for redemption upon presentation and surrender to such bank or trust company of the certificates representing the same and, upon such deposit being made, or upon the date specified for redemption in such notice, whichever is later, the Class A Preference Shares in respect whereof such deposits shall have been made shall be deemed to be redeemed and shall be cancelled and the rights of

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the holders thereof, after such deposit or such redemption date, as the case may be, shall be limited to receiving without interest their proportionate part of the total redemption price so deposited against presentation and surrender of the said certificates held by then respectively.

(e) Any holder of Class A Preference Shares may at any time and from time to time call upon the Company to redeem the whole or any portion of the then outstanding Class A Preference Shares held by him by depositing wit the Company the certificate or certificates representing the Class A Preference Shares which the holder calls upon the Company to redeem together with a notice in writing specifying the number of such Class A Preference Shares which the Company is called upon to redeem and the date for the closing of such redemption, such date being not less than thirty (30) days nor more than ninety (90) days immediately following the delivery of the said notice to the Company. Upon receipt of such notice the Company shall forthwith take all actions necessary to permit redemption of the shares in compliance with the provisions of the Companies Act of Nova Scotia and on the date so specified for the closing, of the redemption, the Company shall pay to or to the order of the holder of Class A Preference Shares which the Company has been called upon to redeem the redemption price thereof as defined in sub-paragraph (c) hereof and in the event that the Company fails to so pay the said redemption price, the redemption price shall thereupon become a debt due and owing by the Company to such holder of Class A Preference Shares. Upon the payment of the redemption price by the Company in accordance herewith the Class A Preference Shares which the Company has

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been so called upon to redeem shall be and be deemed to be redeemed and shall be cancelled. If a part only of the Class A Preference Shares represented by any certificate be so called for redemption and be so redeemed, a new certificate for the balance shall be issued at the expense of the Company. PROVIDED THAT the right of any holder of Class A Preference Shares to call upon and compel the Company to so redeem as herein provided is subject to the provisions of the Companies Act of Nova Scotia respecting redemption of shares and any insolvency or other applicable laws. If the Company may lawfully redeem some but not all of the Class A Preference Shares which it is called upon to redeem, then the Company shall redeem such number thereof as it may lawfully redeem AND IN THE EVENT that on or before the closing date more than one (1) holder of Preference Shares .. has called upon the Company to redeem and the Company may lawfully redeem only some but not all of the Preference Shares which it has been so called to redeem, then the Preference Shares so to be redeemed shall be redeemed pro rata provided that the Preference Shares shall not be redeemed on a fractional basis and in calculating the Preference Share to be so redeemed, all fractional Shares shall be rounded down to the next lowest number.

(f) The Class A Preference Shares may be redeemed as provided herein notwithstanding that shares of any other Class are outstanding at the time of such redemption and are not redeemed at such time.

(g) The holders of Class A Preference Shares shall not be entitled as such (except as hereinafter specifically provided) to receive notice of or to attend any meeting of the Shareholders, of the Company and shall not be entitled to vote at any such meeting.

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(h) The holders of Class A Preference Shares shall not be entitled as of right to subscribe for or purchase or receive any part of any issue of shares or of bonds, debentures or other securities of the Company now or hereafter authorized.

(i) The provisions hereof may be repealed, altered, modified, amended or amplified only with the approval of the holders of the Class A Preference Shares given as hereinafter specified in sub-paragraph (j), in addition to any other vote or authorization required by the Companies Act.

(j) The approval of the holders of the Class A Preference Shares as to any and all matters referred to herein may be given in writing by all the holders of outstanding Class A Preference Shares or by resolution sanctioned at a meeting of holders of Class A Preference Shares duly called and held upon at least ten (10) days notice at which the holders of at least three quarters (3/4) of the outstanding Class A Preference Shares are present or represented by proxy, and carried by the affirmative vote of the holders of not less than three quarters (3/4) of the Class A Preference Shares represented and voted at such meeting passed on a poll. If, at any such meeting the holders of three quarters (3/4) of the outstanding Class A Preference Shares are not present or represented by proxy within half an hour after the time appointed for the meeting, then the meeting shall be adjourned to such date being not less than fourteen (14) days later, and to such time and place as may be appointed by the Chairman, and at least ten (10) days notice shall be

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given of such adjourned meeting but it shall not be necessary in such notice to specify the purpose for which the meeting was originally called. At such adjourned meeting the holders of Class A Preference Shares present or represented by proxy may transact the business for which the meeting was originally convened and a resolution passed thereat by the affirmative votes of the holders of not less than three quarters (3/4) of the Class A Preference Shares represented and voted at such adjourned meeting cast on a poll shall constitute the approval of the holders of the Class A Preference Shares referred to above. The formalities to be observed with respect to the giving of notice of any such meeting or adjourned meeting and the conduct thereof shall be those from time to time prescribed in the Articles of Association of the Company with respect to meetings of shareholders. On every poll taken at every such meeting or adjourned meeting every holder of Class A Preference Shares shall be entitled to one (1) vote in respect of each Class A Preference Shares held.

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SCHEDULE “B”

1680027 NOVA SCOTIA LIMITED

RIGHTS, RESTRICTIONS, CONDITIONS AND LIMITATIONS

ATTACHING TO CLASS B PREFERENCE SHARES

The Class B Preference Shares shall have a par value of One Cent ($0.01) each and shall be non-voting, redeemable and retractable and shall bear a non-participating, non-cumulative dividend at the rate of eight percent (8%) per annum of the redemption value. The rights, restrictions, conditions and limitations attached to the Class B Preference Shares shall be as follows:

(a) The holders of the Class B Preference Shares in priority to the Common Shares shall be entitled to receive and the Company shall pay thereon if, as and when declared by the Board of Directors out of moneys of the Company properly applicable to the payment of dividends, fixed non-cumulative preferential cash dividends at the rate of eight percent (8%) per annum of the redemption value thereof. The said dividends shall be payable on such date or dates in each fiscal year of the Company as may from time to time be determined by the Board of Directors. The Board of Directors shall be entitled from time to time to declare part of the said fixed preferential dividend for any fiscal year notwithstanding that the dividend for such fiscal year shall not be declared in full. If within four (4) months after the end of any fiscal year of the Company the Board of Directors in its discretion shall not have declared the said fixed preferential dividend or any part thereof on the Class B Preference Shares for such fiscal year then the rights of the holders of the Class B Preference Shares to such

dividend or any undeclared part thereof shall be forever extinguished. The holder of the Class B Preference Shares shall not be entitled to any dividends other than or in excess of the cash dividends hereinbefore provided for.

(b) In the event of the liquidation, dissolution or winding up of the Company or other distribution of property or assets of the Company for the purpose of winding up its affairs, the holders of Class B Preference Shares shall be entitled to receive the redemption value per Class B Preference Shares together with all declared and unpaid dividends thereon before any amount shall be paid or any property or assets of the Company distributed to the holders of any Common Shares or Shares of any other class ranking junior to the Class B Preference Shares. After the payment to the holders of Class B Preference Shares of the amount so payable to them as hereinbefore provided, they shall not be entitled to share in any further distribution of the property or assets of the Company.

(c) The Company may, subject to compliance with the provisions of the Companies Act of Nova Scotia, at any time and from time to time upon ten (10) days notice to the registered holders thereof, redeem the whole or any part of the then outstanding Class B Preference Shares by paying for each Class B Preference Share to be redeemed the par value thereof (the “redemption value”) together with all declared and unpaid dividends thereon, such sum being hereinafter referred to as the redemption price”. In case a part only of the then outstanding Class B Preference Shares is at any time to be redeemed pursuant to this sub-paragraph (c), the Class B Preference Shares so to be redeemed shall be

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selected by lot in such manner as the Board of Directors in its discretion shall decide, or, if the Board of Directors so determines, may be redeemed pro rata, provided that the Class B Preference Shares shall not be redeemed on a fractional basis and, in calculating the shares to be redeemed, all fractional shares shall be rounded up to the next highest number.

(d) In any case of redemption of Class B Preference Shares under the provisions of sub-paragraph (c) hereof, the Company shall, at least ten (10) days before the date specified for redemption, mail to each person who, at the date of mailing, is a registered holder of Class B Preference Shares to be redeemed a notice in writing of the intention of the Company to redeem such Class B Preference Shares. Such notice shall be mailed in a prepaid envelope addressed to each such shareholder at his address as it appears on the books of the Company or, in the event of the address of any such shareholder not so appearing, then to the last known address of such shareholder, provided, however, that accidental failure to give any such notice to one (1) or more of such shareholders shall not affect the validity of such redemption as to the other holders. Such notice shall set out the redemption price and the date on which the redemption is to take place and, if part only of the shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed. On or after the date so specified for redemption, the Company shall pay or cause to be paid to or to the order of registered holders of the Class B Preference Shares to be redeemed the redemption price thereof on presentation and surrender at the head office of the Company, or any other place designated in

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such notice, of the certificates for the Class B Preference Shares called for redemption. Such Class B Preference Shares shall thereupon be and be deemed to be redeemed and shall be cancelled. If a part only of the Class B Preference Shares represented by any certificate be redeemed, a new certificate for the balance shall be issued at the expense of the Company. From and after the date specified in any such notice, the Class B Preference Shares called for redemption shall cease to be entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of shareholders in respect thereof unless payment of the redemption price shall not be made upon presentation of certificates in accordance with the foregoing provisions, in which case, the rights of the holders shall remain unaffected. The Company shall have the right, at any time after mailing of the notice of its intention to redeem any Class B Preference Shares as aforesaid, to deposit the redemption price of the Class B Preference Shares so called for redemption, or of such of the said Class B Preference Shares represented by certificates which have not at the date of such deposit been surrendered by the holders thereof in connection with such redemption, to a special account in any chartered bank or any trust company in Canada named in such notice to be paid without interest to or to the order of the respective holders of such Class B Preference Shares called for redemption upon presentation and surrender to such bank or trust company of the certificates representing the same and, upon such deposit being made, or upon the date specified for redemption in such notice, whichever is later, the Class B Preference Shares in respect whereof such deposits shall have been made shall be deemed to be redeemed and shall be cancelled and the rights of

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the holders thereof, after such deposit or such redemption date, as the case may be, shall be limited to receiving without interest their proportionate part of the total redemption price so deposited against presentation and surrender of the said certificates held by then respectively.

(e) Any holder of Class B Preference Shares may at any time and from time to time call upon the Company to redeem the whole or any portion of the then outstanding Class B Preference Shares held by him by depositing wit the Company the certificate or certificates representing the Class B Preference Shares which the holder calls upon the Company to redeem together with a notice in writing specifying the number of such Class B Preference Shares which the Company is called upon to redeem and the date for the closing of such redemption, such date being not less than thirty (30) days nor more than ninety (90) days immediately following the delivery of the said notice to the Company. Upon receipt of such notice the Company shall forthwith take all actions necessary to permit redemption of the shares in compliance with the provisions of the Companies Act of Nova Scotia arid on the date so specified for the closing of the redemption, the Company shall pay to or to the order of the holder of Class B Preference Shares which the Company has been called upon to redeem the redemption price thereof as defined in sub-paragraph (c) hereof and in the event that the Company fails to so pay the said redemption price, the redemption price shall thereupon become a debt due and owing by the Company to such holder of Class B Preference Shares. Upon the payment of the redemption price by the Company in accordance herewith the Class B Preference Shares which the Company has

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been so called upon to redeem shall be and be deemed to be redeemed and shall be cancelled. If a part only of the Class B Preference Shares represented by any certificate be so called for redemption and be so redeemed, a new certificate for the balance shall be issued at the expense of the Company. PROVIDED THAT the right of any holder of Class B Preference Shares to call upon and compel the Company to so redeem as herein provided is subject to the provisions of the Companies Act of Nova Scotia respecting redemption of shares and any insolvency or other applicable laws. If the Company may lawfully redeem some but not all of the Class B Preference Shares which it is called upon to redeem, then the Company shall redeem such number thereof as it may lawfully redeem AND IN THE EVENT that on or before the closing date more than one (1) holder of Preference Shares has called upon the Company to redeem and the Company may lawfully redeem only some but not all of the Preference Shares which it has been so called to redeem, then the Preference Shares so to be redeemed shall be redeemed pro rata provided that the Preference Shares shall not be redeemed on a fractional basis and in calculating the Preference Share to be so redeemed, all fractional Shares shall be rounded down to the next lowest number.

(f) The Class B Preference Shares may be redeemed as provided herein notwithstanding that shares of any other Class are outstanding at the time of such redemption and are not redeemed at such time.

(g) The holders of Class B Preference Shares shall not be entitled as such (except, as hereinafter specifically provided) to receive notice of or to attend any meeting of the Shareholders of the Company and shall not be entitled to vote at any such meeting.

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(h) The holders of Class B Preference Shares shall not be entitled as of right to subscribe for or purchase or receive any part of any issue of shares or of bonds, debentures or other securities of the Company now or hereafter authorized.

(i) The provisions hereof may be repealed, altered, modified, amended or amplified only with the approval of the holders of the Class B Preference Shares given as hereinafter specified in sub-paragraph (j), in addition to any other vote or authorization required by the Companies Act.

(j) The approval of the holders of the Class B Preference Shares as to any and all matters referred to herein may be given in writing by all the holders of outstanding Class B Preference Shares or by resolution sanctioned at a meeting of holders of Class B Preference Shares duly called and held upon at least ten (10) days notice at which the holders of at least three quarters (3/4) of the outstanding Class B Preference Shares are present or represented by proxy, and carried by the affirmative vote of the holders of not less than three quarters (3/4) of the Class B Preference Shares represented and voted at such meeting passed on a poll. If, at any such meeting the holders of three quarters (3/4) of the outstanding Class B Preference Shares are not present or represented by proxy within half an hour after the time appointed for the meeting, then the meeting shall be adjourned to such date being not less than fourteen (14) days later, and to such time and place as may be appointed by the Chairman, and at least ten (10) days notice shall be

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given of such adjourned meeting but it shall not be necessary in such notice to specify the purpose for which the meeting was originally called. At such adjourned meeting the holders of Class B Preference Shares present or represented by proxy may transact the business for which the meeting was originally convened and a resolution passed thereat by the affirmative votes of the holders of not less than three quarters (3/4) of the Class B Preference Shares represented and voted at such adjourned meeting cast on a poll shall constitute the approval of the holders of the Class B Preference Shares referred to above. The formalities to be observed with respect to the giving of notice of any such meeting or adjourned meeting and the conduct thereof shall be those from time to time prescribed in the Articles of Association of the Company with respect to meetings of shareholders. On every poll taken at every, such meeting or adjourned meeting every holder of Class B Preference Shares shall be entitled to one (1) vote in respect of each Class B Preference Shares held.

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1680027 NOVA SCOTIA LIMITED

SPECIAL RESOLUTION

WHEREAS the authorized capital of the Company is Forty Thousand (40,000.00) Common Shares without nominal or par value, One Hundred (100) class A Preference Shares of the par value of Twenty-Two Cents (.22) each, subject to the rights, restrictions, terms and conditions as are set out in Schedule “A” annexed hereto, and One Hundred (100) Class B Preference Shares of the par value of One Cent (.01) each, subject to the rights, restrictions, terms and conditions as are set out in Schedule “B” annexed hereto;

AND WHEREAS it is desirable and in the interest of the Company that the authorized capital of the Company be increased by the creation of Ten Thousand (10,000) Class C Preference Shares;

NOW THEREFORE BE IT RESOLVED as a Special Resolution of the Company, within the meaning of the Companies Act, R.S.N.S. 1989, c. 81 that:

1. the authorized capital of the Company be and it is hereby amended and increased by the creation of Ten Thousand (10,000) Class C Preference Shares of the par value of One Thousand Dollars ($1,000.00) each, which shares shall be subject to the rights, restrictions, terms and conditions as are set out in Schedule “C” annexed to this Resolution, such that the authorized capital of the Company shall be and is Forty Thousand (40,000) Common Shares without nominal or par value. One Hundred (100) Class A Preference Shares of the par value of Twenty-Two Cents (.22) each, subject to the rights, restrictions, terms and conditions as are set out in Schedule “A”

annexed hereto, One Hundred (100) Class B Preference Shares with the par value of One Cent (.01) each, subject to the rights, restrictions, terms and conditions as are set out in Schedule “B” annexed hereto and Ten Thousand (10,000) Class C Preference Shares of the par value of One Thousand Dollars ($1,000.00) each, subject to the rights, restrictions, terms and conditions as are set out in Schedule “C” annexed hereto;

2. the Secretary be and is hereby authorized and directed to file a printed copy of such Special Resolution with the Registrar of Joint Stock Companies at Halifax.

CERTIFICATE

I, J. DONALD MITCHELL, Secretary of 1680027 NOVA SCOTIA LIMITED, hereby certify that the foregoing is a true copy of a Special Resolution signed by the Shareholders of the Company in the manner authorized by law on the 17th day of June, 1991, and that the Special Resolution is now in full force and effects.

June 17, 1991	/s/ J. Donald Mitchell
Date	J. Donald Mitchell / Secretary

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SCHEDULE “C”

1680027 NOVA SCOTIA LIMITED

RIGHTS, RESTRICTIONS, CONDITIONS AND LIMITATIONS

ATTACHING TO CLASS C PREFERENCE SHARES

The Class C Preference Shares in the capital stock of 1680027 Nova Scotia Limited shall have a par value of One Thousand Dollars ($1,000.00) each and shall be non-voting, redeemable and retractable and shall bear a non-participating, noncumulative dividend at a rate equal to The Canadian Imperial Bank of Commerce’s prime interest rate in effect from time to time during the twelve (12) month period immediately preceding the declaration of the dividend plus two percent (2%) of the par value per share per annum. The rights, restrictions, conditions and limitations attached to the Class C Preference Shares shall be as follows:

(a) The holders of the Class C Preference Shares, shall be entitled to receive, and the Company shall pay thereon if, as and when declared by the Board of Directors out of monies of the Company properly applicable to the payment of dividends, fixed non-cumulative preferential cash dividends at a rate equal to The Canadian Imperial Bank of Commerce’s prime interest rate in effect from time to time during the twelve (12) month period immediately preceding the declaration of the dividend plus two percent (2%) of the par value per share per annum. The dividends shall be payable on such date or dates in each fiscal year of the Company as may from time to time be determined by the Board of Directors. The Board of Directors shall be entitled from time to time to declare part of the fixed preferential dividend for any fiscal year notwithstanding that the dividend for such fiscal year shall not be declared in full. If within four (4) months after the end of any fiscal year

of the Company the Board of Directors in its discretion shall not have declared the fixed preferential dividend or any part thereof on the Class C Preference Shares for such fiscal year then the rights of the holders of the Class C Preference Shares to such dividend or any undeclared part thereof shall be forever extinguished. The holder of any Class C Preference Shares shall not be entitled to any dividends other than or in excess of the cash dividends hereinbefore provided for. Dividends may at any time be declared or paid or set apart for payment for or on the Common Shares or the Class A Preference Shares or the Class B Preference Shares in the capital stock of the Company without declaring, paying or setting apart for payment any dividends for or on the Class C Preference Shares and dividends may at anytime be declared or paid or set apart for payment on the Class C Preference Shares without declaring and paying or setting apart for payment any dividends for or on any Common Shares or shares of any other class ranking junior to the Class C Preference Shares.

(b) In the event of the liquidation, dissolution or winding up of the Company or other distribution of property or assets of the Company for the purpose of winding up its affairs, subject to the prior payment or distribution to the holders of the Class A Preference Shares and Class B Preference Shares in the capital stock of the Company of all amounts to which they are entitled, the holders of the Class C Preference Shares shall be entitled to receive in respect of each Class C Preference Share the par value thereof together with all declared and unpaid dividends thereon before any amount shall be paid or any property or assets of the Company distributed to the holders of any Common Share or shares of any other class ranking junior to the Class C Preference Shares. After

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the payment to the holders of Class C Preference Shares of the amount so payable to them as hereinbefore provided, they shall not be entitled to share in any further distribution of the property or assets of the Company.

(c) The Company may, subject to compliance with the provisions of the Companies Act of Nova Scotia, at any time and from time to time upon ten (10) days notice to the registered holders thereof, redeem the whole or any part of the then outstanding Class C Preference Shares by paying for each Class C Preference Share to be redeemed the par value thereof together with all declared and unpaid dividends thereon, such sum being hereinafter referred to as the “redemption price”. In case a part only of the then outstanding Class C Preference Shares is at any time to be redeemed pursuant to this subparagraph (c), the Class C Preference Shares to be redeemed shall be selected by lot in such manner as the Board of Directors in its discretion shall decide, or, if the Board of Directors so determines, may be redeemed pro rata, provided that the Class C Preference Shares shall not be redeemed on a fractional basis and, in calculating the shares to be redeemed, all fractional shares shall be rounded up to the next highest number.

(d) In any case of redemption of Class C Preference Shares under the provisions of sub-paragraph (c) hereof, the Company shall, at least ten (10) days before the date specified for redemption, mail to each person who, at the date of mailing, is a registered holder of Class C Preference Shares to be redeemed a notice in writing of the intention of the Company to redeem such Class C Preference Shares, provided that the giving of such notice may be waivered by the holder of the Class C

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Preference Shares to be redeemed. Such notice shall be mailed in a prepaid envelope addressed to each such shareholder at his address as it appears on the books of the Company or, in the event of the address of any such shareholder not so appearing, then to the last known address of such shareholder, provided, however, that accidental failure to give any such notice to one (1) or more of such shareholders shall not affect the validity of such redemption as to the other holders. Such notice shall set out the redemption price and the date on which the redemption is to take place and, if all of the Class C Preference Shares held by the person to whom it is addressed are not to be redeemed, the number thereof to be redeemed. On or after the date specified for redemption, the Company shall pay or cause to be paid to or to the order of the registered holders of the Class C Preference Shares to be redeemed the redemption price thereof on presentation and surrender at the head office of the Company, or any other place designated in such notice, of the certificates for the Class C Preference Shares called for redemption. Such Class C Preference Shares shall thereupon be and be deemed to be redeemed and shall be cancelled. If all of the Class C Preference Shares represented by any certificate are not to be redeemed, a new certificate for the balance shall be issued at the expense of the Company. From and after the date specified in any such notice, the Class C Preference Shares called for redemption shall cease to be entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of shareholders in respect thereof unless payment of the redemption price shall not be made upon presentation of certificates in accordance with the foregoing provisions, in which case, the rights of the holders shall remain unaffected. The Company shall have the right, at any time after mailing of the notice of its intention to

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redeem any Class C Preference Shares as aforesaid, to deposit the redemption price of the Class C Preference Shares so called for redemption, or of such of the Class C Preference Shares represented by certificates which have not at the date of such deposit been surrendered by the holders thereof in connection with such redemption, to a special account in any chartered bank or any trust company in Canada named in such notice to be paid without interest to or to the order of the respective holders of such Class C Preference Shares called for redemption upon presentation and surrender to such bank or trust company of the certificates representing the same and, upon such deposit being made, or upon the date specified for redemption in such notice, whichever is later, the Class C Preference Shares in respect whereof such deposits shall have been made shall be deemed to be redeemed and shall be cancelled and the rights of the holders thereof, after such deposit or such redemption date, as the case may be, shall be limited to receiving without interest their proportionate part of the total redemption price so deposited against presentation and surrender of the certificates held by them respectively.

(e) Any holder of Class C Preference Shares may at any time and from time to time call upon the Company to redeem the whole or any portion of the then outstanding Class C Preference Shares held by him by depositing with the Company the certificate or certificates representing the Class C Preference Shares which the holder calls upon the Company to redeem together with a notice in writing specifying the number of such Class C Preference Shares which the Company is called upon to redeem and the date for the closing of such redemption, such date being not less than thirty (30) days nor more than ninety (90) days

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immediately following the delivery of the notice to the Company. Upon receipt of such notice the Company shall forthwith take all actions necessary to permit redemption of the shares in compliance with the provisions of the Companies Act of Nova Scotia and on the date so specified for the closing of the redemption, the Company shall pay to or to the order of the holder of Class C Preference Shares which the Company has been called upon to redeem the redemption price thereof as defined in sub-paragraph (c) hereof and in the event that the Company fails to so pay the redemption price, the redemption price shall thereupon become a debt due and owing by the Company to such holder of Class C Preference Shares. Upon the payment of the redemption price by the Company in accordance herewith the Class C Preference Shares which the Company has been so called upon to redeem shall be and be deemed to be redeemed and shall be cancelled. If all of the Class C Preference Shares represented by any certificate be so called for are not to be redeemed, a new certificate for the balance shall be issued at the expense of the Company. PROVIDED THAT the right of any holder of Class C Preference Shares to call upon and compel the Company to so redeem as herein provided is subject to the provisions of the Companies Act of Nova Scotia respecting redemption of shares and any insolvency or other applicable laws. If the Company may lawfully redeem some but not all of the Class C Preference Shares which it is called upon to redeem, then the Company shall redeem such number thereof as it may lawfully redeem AND IN THE EVENT that on or before the closing date more than one (1) holder of Preference Shares has called upon the Company to redeem and the Company may lawfully redeem only some but not all of the Preference Shares which it has been so called to redeem, then the Preference Shares so to be redeemed shall be

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redeemed pro rata provided that the Preference Shares shall not be redeemed on a fractional basis and in calculating the Preference Share to be so redeemed, all fractional Shares shall be rounded down to the next lowest number.

(f) The Class C Preference Shares may be redeemed as provided herein notwithstanding that shares of any other Class are outstanding at the time of such redemption and are not redeemed at such time.

(g) Subject to the provisions of the Companies Act, the holders of Class C Preference Shares shall not be entitled as such (except as hereinafter specifically provided) to receive notice of or to attend any meeting of the Shareholders of the Company and shall not be entitled to vote at any meeting of the Shareholders of the Company or otherwise.

(h) The holders of Class C Preference Shares shall not be entitled as of right to subscribe for or purchase or receive any part of any issue of shares or of bonds, debentures or other securities of the Company now or hereafter authorized.

(i) The provisions hereof may be repealed, altered, modified, amended or amplified only with the approval of the holders of the Class C Preference Shares given as hereinafter specified in sub-paragraph (j), in addition to any other vote or authorization required by the Companies Act.

(j) The approval of the holders of the Class C Preference Shares as

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to any and all matters referred to herein may be given in writing by all the holders of outstanding Class C Preference Shares or by resolution sanctioned at a meeting of holders of Class C Preference Shares duly called and held upon at least ten (10) days notice at which the holders of at least three quarters (3/4) of the outstanding Class C Preference Shares are present or represented by proxy, and carried by the affirmative vote of the holders of not less than three quarters (3/4) of the Class C Preference Shares represented and voted at such meeting passed on a poll. If, at any such meeting the holders of three quarters (3/4) of the outstanding Class C Preference Shares are not present or represented by proxy within half an hour after the time appointed for the meeting, then the meeting shall be adjourned to such date being not less than fourteen (14) days later, and to such time and place as may be appointed by the Chairman, and at least ten (10) days notice shall be given of such adjourned meeting but it shall not be necessary in such notice to specify the purpose for which the meeting was originally called. At such adjourned meeting the holders of Class C Preference Shares present or represented by proxy may transact the business for which the meeting was originally convened and a resolution passed thereat by the affirmative votes of the holders of not less than three quarters (3/4) of the Class C Preference Shares represented and voted at such adjourned meeting cast on a poll shall constitute the approval of the holders of the Class C Preference Shares referred to above. The formalities to be observed with respect to the giving of notice of any such meeting or adjourned meeting and the conduct thereof shall be those from time to time prescribed in the Articles of Association of the Company with respect to meetings of shareholders of the Company. On every poll taken at every such meeting or adjourned meeting every holder of Class C Preference Shares shall be entitled to one (1) vote in respect of each Class C Preference Share held.

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EX-3.3

Exhibit 3.3

COMPANIES ACT

(Nova Scotia)

COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

of

1680027 NOVA SCOTIA LIMITED

1. In these Articles unless there be something in the subject or context inconsistent therewith:

“Act” means the Companies Act (Nova Scotia) as amended;

“Company” means the Company named above;

“Directors” or “Board” means the directors of the Company for the time being;

“Dividend” includes bonus;

“Member” and “Shareholder” are used interchangeably;

“Month” means calendar month;

“Office” means the registered office for the time being of the Company;

“Proxyholder” includes an alternate proxyholder;

“Register” means the register of members to be kept pursuant to Section 42 of the Act;

“Registrar” means the Registrar of Joint Stock Companies for the time being;

“Reporting Company” and “Reporting Issuer” have the meanings given to them respectively by the Act;

“Secretary” includes any person appointed to perform the duties of Secretary temporarily;

“Special Resolution” has the meaning assigned by Section 87 of the Act;

“These Presents” and “These Articles” includes these articles of association and any modification or alteration thereof for the time being in force;

“Written” and “In Writing” mean and include words printed, lithographed, represented or reproduced in any mode in a visible form;

Words importing the singular number only, include the plural number and vice versa;

Words importing the masculine gender only, include the feminine gender;

Words importing persons include corporations.

2. The regulations contained in Table “A” in the first schedule to the Act shall not apply to the Company.

3. The directors may enter into and carry into effect or adopt and carry into effect any agreement or agreements from time to time made by or with the promoters of the Company by or on behalf of the Company with full power nevertheless from time to time to agree to any modification of the terms of such agreement or agreements either before or after execution thereof.

4. The directors may, out of any moneys of the Company for the time being in their hands, pay all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration.

5. The business of the Company may be commenced as soon after incorporation as the directors may think fit, and notwithstanding that part only of the shares may have been allotted.

SHARES

6. Subject to the provisions of the agreement or agreements mentioned in Clause 3 hereof, the shares shall be under the control of the directors who may allot or otherwise dispose of the same to such persons on such terms and conditions and either at a premium or at par and at such times as the directors may think fit and with full power to give to any person the call of any shares either at par or at a premium during such time and for such consideration as the directors think fit.

7. The directors may pay on behalf of the Company a reasonable commission to any person in consideration of his subscribing or agreeing to subscribe, (whether absolutely or conditionally), for any shares in the Company, or his procuring or agreeing to procure subscriptions for any shares in the Company. The commission may be paid or satisfied in cash or in shares, debentures or debenture stock of the Company.

8. The Company may make arrangements on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and the time of payment of such calls.

9. If, by the conditions of allotment of any shares, the whole or part of the amount or issue price thereof is payable by installments every such installment shall, when due, be paid to the Company by the person who, for the time being, and from time to time shall be registered holder of the share, or his legal personal representative.

10. Shares may be registered in the names of any number of persons not exceeding three as joint holders thereof.

11. The joint holders of a share shall be severally, as well as jointly, liable for the payment of all installments and calls due in respect to such share.

12. Save as herein otherwise provided, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and accordingly shall not, except as ordered by a Court of competent jurisdiction, or as by statute required, be bound to recognize any equitable or other claim to or interest in such share on the part of any other person.

CERTIFICATES

13. Certificates of title to shares shall be signed by the President or Vice-President or a director and either the Secretary or an Assistant Secretary or by such other person as the directors may authorize. The signature of the President or Vice-President may be engraved, lithographed or printed upon the certificates or any one or more of them, and any certificates bearing such engraved, lithographed or printed signature of the President or Vice-President, when signed by the Secretary or an Assistant Secretary or by such other persons as the directors may authorize, shall be valid and binding upon the Company.

14. Every member shall be entitled to one certificate for all his shares, or to several certificates each for one or more of such shares.

15. Where shares are registered in the names of two or more persons, the Company shall not be bound to issue more than one certificate or one set of certificates, and such certificate or set of certificates shall be delivered to the person first named on the register.

16. If any certificate be worn out or defaced, then upon production thereof to the directors, they may order the same to be cancelled, and may issue a new certificate in lieu thereof; and if any certificate is lost or destroyed, then upon proof thereof to the satisfaction of the directors, and on such indemnity as the directors deem adequate being given, a new certificate in lieu thereof shall be given to the person entitled to such lost or destroyed certificate.

17. The sum of One Dollar, or such sum as the directors determine, shall be paid to the Company for every certificate, issued in respect of any share or shares, except the first.

18. The directors may cause to be kept in any place or places either in or outside of Nova Scotia, one or more branch registers of members.

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CALLS

19. The directors may from time to time make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them respectively and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the person, and at the times and places appointed by the directors. A call may be made payable by installments.

20. A call shall be deemed to have been made at the time when the resolution of the directors authorizing such call was passed.

21. At least fourteen days’ notice of any call shall be given, and such notice shall specify the time and place at which and the person to whom such call shall be paid.

22. If the sum payable in respect of any call or installment is not paid on or before the day appointed for payment thereof the person from whom the sum is due shall pay interest for the same at the rate of ten per centum per annum from the day appointed for the payment thereof up to the time of the actual payment.

23. On the trial or hearing of any action for the recovery of any money due for any call it shall be sufficient to prove that the name of the member sued is entered on the register as the holder, or one of the holders, of the share or shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that notice of such call was duly given to the member sued in pursuance of these articles and it shall not be necessary to prove the appointment of the directors who made such call nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

24. The directors may, if they think fit, receive from any member willing to advance the same, all or any part of the moneys due upon the shares held by him beyond the sums actually called for and upon the moneys so paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate as the member paying such sum in advance and the directors agree upon, or the directors may agree with such member that a member may participate in profits upon the amounts so paid or satisfied in advance.

FORFEITURE OF SHARES

25. If any member fails to pay any call or installment on or before the day appointed for the payment of the same, the directors may at any time thereafter, during such time as the call or installment remains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that may have accrued, and all expenses that may have been incurred by the Company by reason of such non-payment.

26. The notice shall name a day (not being less than fourteen days after the date of the notice) and a place on and at which such call or installment and such interest and expenses are to be paid. The notice shall also state that in the event of nonpayment on or before the day and at the place or one of the places so named, the shares in respect of which the call was made or installment is payable will be liable to be forfeited.

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27. If the requirements of any such notice as aforesaid are not complied with, any shares in respect of which such notice has been given may, at any time thereafter, before payment of all calls or installments, interest and expenses, due in respect thereof, be forfeited by a resolution of the directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

28. When any share has been so forfeited, notice of the resolution shall be given to the member in whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof shall forthwith be made in the register.

29. Any share so forfeited shall be deemed to be the property of the Company, and the directors may sell, re-allot or otherwise dispose of the same in such manner as they think fit.

30. The directors may at any time before any share so forfeited has been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit.

31. Any member whose shares have been forfeited shall, notwithstanding be liable to pay, and shall forthwith pay to the Company all calls, installments, interest and expenses, owing upon, or in respect of such shares at the time of the forfeiture, together with interest thereon, at the rate of ten per centum per annum, from the time of forfeiture until payment, and the directors may enforce the payment thereof if they think fit, but shall be under no obligation to do so.

32. A certificate in writing, under the hands of two of the directors and countersigned by the Secretary that a share has been duly forfeited in pursuance of these articles, and stating the time when it was forfeited, shall be conclusive evidence of the facts therein stated as against all persons who would have been entitled to the share but for such forfeiture; and such certificate, together with the receipt of the Company for the price of such share, shall constitute as a good title to such share.

LIEN ON SHARES

33. The Company shall have a first and paramount lien upon all shares (other than fully paid up shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for his debts, liabilities and other engagements, solely or jointly with any other person, to or with the Company whether the period for the payment, fulfillment or discharge thereof shall have actually arrived or not, and no equitable interest in any share shall be created except upon the condition that Article 12 of these articles is to have full effect. And such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares.

34. For the purpose of enforcing such lien, the directors may sell the shares subject thereto in such manner as they think fit; but no sale shall be made until such period mentioned as aforesaid shall have arrived, and until notice in writing of the intention to sell has been given to such member, his executors or administrators and default shall have been made by him or them in the payment, fulfillment or discharge of such debts, liabilities or engagements for seven days after such notice.

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35. The net proceeds of any such sale after payment of the costs of such sale shall be applied in or towards the satisfaction of such debts, liabilities or engagement and the residue, if any, paid to such member of his executors, administrators or assigns.

VALIDITY OF SALES

36. Upon any sale, after forfeiture or for enforcing a lien, in purported exercise of the powers given by these articles, the directors may cause the purchaser’s name to be entered in the register in respect of the shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after his name has been entered in the register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

TRANSFER OF SHARES

37. The instrument of transfer of any share in the Company shall be signed by the transferor and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the register in respect thereof, and shall be entitled to receive any dividend declared thereon before the registration of transfer.

38. The instrument of transfer of any share shall be in writing in the following form, or as near thereto as circumstances will permit:

For value received                      hereby, sell, assign and transfer unto                      Shares of the Capital Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint                      attorney to transfer the said stock on the books of the within named Corporation with the full power of substitution in the premises,

Dated the          day of                 , 19

WITNESS:

39. The directors may decline to register any transfer of shares upon which the Company has a lien, and in the case of shares not fully paid up may decline to register any transfer to a transferee of whom they do not approve, without assigning any reason therefor.

40. Every instrument of transfer shall be left at the office for registration, accompanied by the certificate of the shares to be transferred, and such other evidence as the Company may require to prove the title of the transferor or his right to transfer the shares.

41. A fee not exceeding One Dollar may be charged for each transfer and shall, if required by the directors, be paid before the registration thereof.

42. Every instrument of transfer shall, after the registration thereof, remain in the custody of the Company, but any instrument of transfer which the directors decline to register shall be returned to the person depositing the same.

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43. The transfer books and register of members may be closed during such time as the directors think fit, not exceeding in the whole thirty days in each year, notice of which closed time shall be given by advertisement in a newspaper circulating in the district in which the registered office is situate.

44. Notwithstanding anything in these Articles, if the Company has only one member (not being one of several joint holders) and that member dies, the executors or administrators of the deceased member shall be entitled to register themselves in the register of members as the holders of such deceased member’s shares whereupon they shall have all the rights given by these Articles and by law to members.

TRANSMISSION OF SHARES

45. The Executors or administrators of a deceased sole holder of a share shall be the only persons recognized by the Company as having any title to the share. In the case of a share registered in the names of two or more holders, the survivor or survivors, or the executors or administrators of the deceased survivor, shall be the only persons recognized by the Company as having any title to, or interest in, the share.

46. Any person becoming entitled to a share in consequence of the death or bankruptcy of any member, or in any other way than by allotment or transfer, upon producing such evidence of his being entitled to act in the capacity claimed, or of his title, as the directors think sufficient, may, with the consent of the directors (which they shall not be under any obligation to give) be registered as a member in respect of such shares or may, without being registered, transfer such shares subject to the provisions of these articles respecting the transfer of shares. This clause is hereinafter referred to as “the transmission clause”.

SHARE WARRANTS

47. The Company, with respect to fully paid-up shares, may issue warrants (hereinafter called “Share Warrants”) stating that the bearer is entitled to the shares therein specified and may provide, by coupons or otherwise, for the payment of future dividends on the shares included in such warrants.

48. The directors may determine, and from time to time vary, the conditions upon which share warrants shall be issued, and, in particular the conditions upon which a new share warrant or coupon will be issued in the place of one worn out, defaced, lost or destroyed; or upon which the bearer of a share warrant shall be entitled to attend and vote at general meetings, or upon which a share warrant may be surrendered and the name of the bearer entered in the register in respect of the shares therein specified. Subject to such conditions, and to these presents, the bearer of a share warrant shall be a member to the full extent. The bearer of a share warrant shall be subject to the conditions for the time being in force, whether made before or after the issue of such warrant.

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INCREASE AND REDUCTION OF CAPITAL

49. Subject to the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, the Company in general meeting may, from time to time, increase the capital by the creation or issue of new shares of such amount as it thinks expedient.

50. Subject to the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, the new shares may be issued upon such terms and conditions, and with such rights and privileges annexed thereto, as the general meeting resolving upon the creation thereof, shall direct; and if no direction be given, as the directors shall determine, and in particular such shares may be issued with a preferential or qualified right to dividends and in the distribution of assets of the Company, and with a special, or without any right of voting.

51. The Company in general meeting may, before the issue of any new shares, determine that the same, or any of them shall be offered in the first instance to all the then members or to the members of any class, in proportion to the amount of the capital held by them or make any other provisions as to the issue and allotment of the new shares; but in default of any such determination, or so far as the same shall not extend, the new shares may be dealt with as if they formed part of the shares in the original capital.

52. Except so far as otherwise provided by the conditions of issue, or by these articles, any capital raised by the creation of new shares, shall be considered part of the original capital, and shall be subject to the provisions herein contained with reference to the payment of calls and installments, transfer and transmission, forfeiture, lien and otherwise.

53. Subject to the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, the Company may, from time to time, by special resolution, reduce its share capital and any capital redemption reserve fund in any way, and having done so shall in accordance with the Act seek an order of the Court confirming such reduction.

54. To the intent that the operation of Section 12(1) of the Third Schedule to the Act be restricted, it is hereby declared that any class of shares or any series of shares affected by the matter in a manner different from other shares of the same class shall not carry the right to vote separately as a class or series upon any amendment to the memorandum or articles of this Company of the kind referred to in clauses (a), (b) or (e) of subsection (2) of Section 2 of the Third Schedule to the Act.

ALTERATION OF CAPITAL

55. Subject to the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon,

(a) The Company may from time to time in general meeting consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(b) The Company may from time to time in general meeting convert all or any of its paid-up shares into stock, and reconvert that stock into paid-up shares of any denomination;

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(c) The Company may from time to time by special resolution subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum of association so, however, that in the sub-division the proportion between the amount paid and the amount if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived. The special resolution whereby any share is subdivided may determine that, as between the holders of the shares, resulting from such subdivision, one or more of such shares shall have some preference or special advantage as regards dividend, capital, voting, or otherwise, over, or as compared with, the others or other;

(d) The Company may from time to time in general meeting exchange shares of one denomination for another.

(e) The Company may from time to time in general meeting cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

(f) The Company may from time to time by special resolution convert any part of its issued or unissued share capital into preference shares redeemable or purchasable by the Company in the manner provided in the Act.

(g) The Company may from time to time by special resolution provide for the issue of shares without any nominal or par value.

(h) The Company may from time to time by special resolution, except in the case of preferred shares, convert all or any of its previously authorized unissued or issued and fully paid-up shares, with nominal or par value into the same number of shares without any nominal or par value, and reduce, maintain or increase accordingly its liability on any of its shares so converted. Provided however that the power to reduce its liability on any of its shares so converted where it results in a reduction of capital may only be exercised subject to confirmation by the Court as provided by the Act.

(i) The Company may from time to time by special resolution, convert all or any of its previously authorized unissued or issued and fully paid-up shares, without nominal or par value, into the same or a different number of shares with nominal or par value. For such purpose the shares issued without nominal or par value and replaced by shares with a nominal or par value shall be considered as fully paid, but their aggregate par value shall not exceed the value of the net assets of the Company as represented by the shares without par value issued before the conversion.

56. Subject to the provisions of the Act as from time to time in force, the Company may redeem or purchase any Common Shares and may redeem or purchase any Preference Shares that by the provisions from time to time attaching thereto may be redeemed or purchased by the Company. The directors, subject to the provisions and conditions attaching from time to time to such Preference Shares, may determine the manner in which and the terms on which such Preference Shares may be redeemed or purchased. The directors may from time to time provide for a sinking fund for the redemption or purchase of Preference Shares of any class or series on such terms as the directors determine.

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INTEREST ON SHARE CAPITAL

57. The Company may pay interest at a rate not exceeding ten per centum per annum on share capital issued for the construction and other purposes mentioned in the Act, subject to the conditions and restrictions therein mentioned.

CLASSES OF SHARES

58. Subject to the rights, if any, of the holders of shares of any class or series of shares entitled to vote separately as a class or series thereon, and subject to the provisions of the Company’s Memorandum of Association, and without prejudice to any special rights previously conferred on the holders of existing shares, any share may be issued with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividends, voting, return of share capital or otherwise, as the Company may from time to time by Special Resolution determine. Any preference shares may with the sanction of a Special Resolution of the Company be issued on the terms that they are, at the option of the Company, liable to be redeemed or purchased by the Company.

MODIFICATION OF RIGHTS OF SHAREHOLDERS

59. Subject to the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, if at any time the share capital of the Company, by reason of the issue of preference shares or otherwise, is divided into different classes of shares, in pursuance of the provisions of the next preceding article or otherwise, all or any of the rights and privileges attached to any such class may be modified, altered, varied, affected, commuted, abrogated or otherwise dealt with by agreement between the Company and any person purporting to contract on behalf of that class, provided such agreement is ratified in writing by the holders of at least three-fourths in number of the issued shares of the class or by a resolution passed and confirmed by the same majority and in the same manner as a special resolution at extraordinary general meetings of the holders of shares of that class, and all the provisions hereinafter contained as to general meetings shall, mutatis mutandis, apply to every such meeting, but so that the quorum thereof shall be members holding, or representing by proxy one-fifth in number of the issued shares of the class. This clause is not by implication to curtail the power of modification which the Company would have if this clause were omitted.

BORROWING POWERS

60. The directors on behalf of the Company may from time to time in their discretion:

(a) Raise or borrow money for the purposes of the Company or any of them;

(b) Secure the repayment of moneys so raised or borrowed in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the execution and delivery of mortgages of the Company’s real or personal property, or by the issue of bonds, debentures or debentures stock of the Company secured by mortgage or otherwise or

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charged upon all or any part of the property of the Company, both present and future, including its uncalled capital for the time being;

Provided that the power to execute mortgages of the Company’s real or personal property and the power to issue bonds or debentures or debenture stock secured by mortgage or otherwise shall not be exercised by the directors except with the sanction of a special resolution of the Company previously passed and (where confirmation is necessary) confirmed in general meeting;

(c) Sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for money borrowed or to be borrowed for the purposes aforesaid;

(d) Pledge debentures as security for loans.

61. Bonds, debentures, debenture stock and other securities may be made assignable, free from any equities between the Company and the person to whom the same may be issued.

62. Any bonds, debentures, debenture stock, and other securities may be issued at a discount, premium, or otherwise, and with any special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of directors, and otherwise.

RECORD DATES

63. (1) For the purpose of determining

(a) shareholders entitled to receive payment of a dividend, or

(b) who is a shareholder for any other purpose except the right to receive notice of, or to vote at, a meeting,

the directors may fix in advance a date as the record date for the determination of shareholders, but for the record date so fixed shall not precede by more than fifty days the particular action to be taken.

(2) For the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, the directors may fix in advance a date as the record date for the determination of shareholders, but the record date so fixed shall not precede the date on which the meeting is to be held by more than fifty days or less than twenty-one days.

(3) If no record date is fixed pursuant to subsection (1) or (2),

(a) the record date for the determination of shareholders for any purpose, other than to establish a shareholder’s right to receive notice of, or to vote at, a meeting, is the day on which the directors pass the resolution relating to the particular purpose; and

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(b) the record date for the determination of shareholders entitled to receive notice of, or to vote at, a meeting of shareholders is

(i) the day immediately preceding the day on which the notice is given, or

(ii) if no notice is given, the day on which the meeting is held.

(4) Subject to subsection (5), where a record date is fixed for a Company, notice thereof shall, not less than seven days before the record date, be given

(a) by advertisement in a newspaper in general circulation in the place where the head office of the Company is situated and in each place in Canada where the Company has a transfer agent or where a transfer of Company’s shares may be recorded; and

(b) by written notice to each stock exchange, if any, in Canada on which the shares of the Company are listed for trading.

(5) Notice of a record date fixed for a company need not be given where notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the register of members at the close of business on the date the directors fix the record date.

MEETINGS

64. The first meeting of the Company shall be held within eighteen months from the date of the registration of the memorandum of association of the Company and at such place as the directors may determine.

65. Other general meetings shall be held once at least in every calendar year, at such time and place as may be determined by the directors and not more than fifteen months after the preceding general meeting.

66. The general meetings referred to in the next preceding clause shall be called ordinary general meetings; and all other meetings of the Company shall be called special general meetings.

67. The directors, whenever they think fit, may convene a special general meeting and on the requisition of members of the Company holding not less than five percent of the shares of the Company carrying the right to vote at the meeting sought to be held, the directors shall forthwith proceed to convene a special general meeting of the Company to be held at such time and place as may be determined by the directors.

68. The requisition must state the objects of the meeting required, and must be signed by the members making the same and shall be deposited at the registered office of the Company, and may consist of several documents in like form each signed by one or more of the requisitionists.

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69. If the directors do not proceed to cause a meeting to be held, within twenty-one days from the date of the requisition being so deposited, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene the meeting, but any meeting so convened shall not be held after three months from the date of such deposit.

70. If at any such meeting a resolution requiring confirmation at another meeting is passed, the directors shall forthwith convene a further special general meeting for the purpose of considering such resolution; and if thought fit, of confirming it as a special resolution; and if the directors do not convene the meeting within seven days from the date of the passing of the first resolution, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene the meeting.

71. Any meeting convened under the foregoing provisions by the requisitionists shall be convened in the same manner as nearly as possible as that in which meetings are to be convened by directors.

72. At least twenty-one days’ notice of every general meeting specifying the place, day and hour of the meeting, and, in the case of special business, the general nature of such business, shall be sent to the members entitled to be present at such meeting by notice sent by post or otherwise served as hereinafter provided; and, with the consent in writing of all the members entitled to vote at such meeting, a meeting may be convened by shorter notice and in any manner they think fit, or if all the members are present at a meeting, either in person or by proxy, notice of time, place and purpose of the meeting may be waived.

73. Where it is proposed to pass a special resolution, the two meetings may be convened by one and the same notice, and it shall be no objection to such notice that it only convenes the second meeting contingently upon the resolution being passed by the required majority at the first meeting.

74. The accidental omission to give any such notice to any of the members or the non-receipt of any such notice by any of the members shall not invalidate any resolution passed at any such meeting.

PROCEEDINGS AT GENERAL MEETINGS

75. The business of an ordinary general meeting shall be to receive and consider the financial statements of the Company, the reports of the directors and of the auditors, if any, to elect directors in the place of those retiring and to transact any other business which under these Articles ought to be transacted at an ordinary general meeting.

76. (1) Two members (where there is more than one member) personally present or represented by proxy and entitled to vote shall be a quorum for a general meeting. A corporation which is a member of the Company and which has duly appointed a representative under the provisions of the Act who is personally present at the meeting, shall for the purposes of this clause be considered as if personally present thereat.

(2) If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon such requisition as aforesaid, shall be dissolved; but

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in any other case it shall stand adjourned, to the same day, in the next week, at the same time, and place, and if at such adjourned meeting a quorum is not present, those members entitled to vote as aforesaid who are present shall be a quorum, and may transact the business for which the meeting was called.

77. No business shall be transacted at any general meeting unless the quorum requisite be present at the commencement of the business.

78. The Chairman of the Board shall be entitled to take the chair at every general meeting, or if there be no chairman of the Board, or if at any meeting he shall not be present within fifteen minutes after the time appointed for holding such meeting, the President, or failing him a Vice-President who is a director shall be entitled to take the chair and if none of the Chairman nor the President, nor such a Vice-President shall be present within fifteen minutes after the time appointed for holding the meeting, the members present entitled to vote at the meeting shall choose another director as chairman and if no director is present or if all the directors present decline to take the chair then the members present entitled to vote shall choose one of their number to be chairman.

79. 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 on a poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member.

80. At any general meeting a resolution put to the meeting shall be decided by a show of hands, unless a poll is (before or on the declaration of the result of a show of hands) demanded by the chairman or by a member, or by a proxyholder and unless a poll is so demanded a declaration by the chairman that a resolution has been carried, or carried by a particular majority, or lost, or not carried by a particular majority, and an entry to that effect in the book of proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.

81. If a poll is demanded as aforesaid, it shall be taken in such manner, at such time and place as the chairman of the meeting directs, and either at once, or after an interval or adjournment or otherwise, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand of a poll may be withdrawn. In case of any dispute as to the admission or rejection of a vote, the chairman shall determine the same, and such determination made in good faith, shall be final and conclusive.

82. The chairman of a general meeting may, with the consent of the meeting, adjourn the same 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.

83. Any poll demanded on the election of a chairman of a meeting or any question of adjournment, shall be taken at the meeting, and without adjournment.

84. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded.

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VOTES OF MEMBERS

85. (1) Subject to the Act and the provisions applicable to any shares issued under conditions limiting or excluding the right of holders thereof to vote at general meetings, on a show of hands every member present in person and every proxyholder, subject to Section 85F(2) of the Act, shall have one vote and upon a poll every member present in person or by proxy shall have one vote for every share held by him.

(2) Where a corporation being a member is represented by a proxyholder who is not a member or by representative duly authorized under the Act, such proxyholder or representative shall be entitled to vote for such corporation either on a show of hands or at a poll.

86. Any person entitled under the transmission clause to transfer any shares may vote at any general meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight hours at least before the time of holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote, he shall satisfy the directors of his right to transfer such shares, unless the directors shall have previously admitted his right to vote in respect thereof.

87. Where there are joint registered holders of any share any one of such persons may vote at any meeting either personally or by proxy, in respect of such share as if he were solely entitled thereto; and if more than one of such joint holders is present at any meeting, personally or by proxy, that one of the said persons so present, whose name stands first on the register in respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member in whose sole name any share stands shall for the purposes of this article be deemed joint holders thereof.

88. Votes may be given either personally or by proxy or in the case of a corporation by a representative duly authorized under the Act.

89. (1) A proxy shall be in writing under the hand of the appointer or of his attorney duly authorized in writing, or, if such appointer is a corporation, under its common seal or the hand of its attorney or representative authorized in the manner referred to in Section 86(1)(a) of the Act.

(2) Holders of share warrants shall not be entitled to vote by proxy in respect of the shares included in such warrants unless otherwise expressed in such warrants.

90. A member of unsound mind, in respect of whom an order has been made by any Court of competent jurisdiction, may vote by his guardian or other person in the nature of a guardian appointed by that Court and any such guardian or other person may vote by proxy.

91. A proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the Company not less than forty-eight hours excluding Saturdays and holidays before the meeting or adjourned meeting at which it is to be voted unless the directors, by resolution, fix a shorter period of time before which such deposit may occur. Notice of the time before which proxies must be deposited shall be given in the notice calling the meeting. A proxy shall cease to be valid one year after its date.

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92. A vote given in accordance with the terms of a proxy shall be valid notwithstanding the previous death of the principal, or revocation of the proxy, or transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, revocation, or transfer shall have been received before the meeting, at the registered office of the Company or by the chairman of the meeting before the vote is given.

93. When the Company is not a reporting issuer, every form of proxy, whether for a specific meeting or otherwise shall, as nearly as circumstances will admit, be in the form or to the effect following; or in such other form complying with the regulations made pursuant to the Act as the directors may from time to time determine:

I                     of                     in the County of                     being a member of 1680027 NOVA SCOTIA LIMITED, hereby appoint                      of (or failing him                     of                      or failing him                     of                     ) as my proxy to attend and vote for me and on my behalf at the ordinary general (or special general as the case may be) meeting of the Company, to be held on the        day of                      and at any adjournment thereof, or at any meeting of the Company which may be held within months from the date thereof.

[if the proxy solicited by or on behalf of management of the Company, a statement to that effect]

As witness my hand this day of      , 19    

Witness                      Shareholder                     

If the Company becomes a reporting issuer, the directors shall adopt a form of proxy complying with the requirements of the Act as regards reporting issuer proxies.

94. Except to the extent rights are conferred by Section 12(1) of the Third Schedule to the Act, no member shall be entitled to be present or to vote on any question either personally or by proxy or as proxy, for another member, at any general meeting, or upon a poll, or be reckoned in a quorum whilst any call or other sum is due and payable to the Company in respect of any of the shares of such member.

95. Any resolution passed by the directors, notice whereof shall be given to the members in the manner in which notices are hereinafter directed to be given and which shall, within one month after it has been passed, be ratified and confirmed in writing by members entitled on a poll to three-fifths of the votes, shall be as valid and effectual as a resolution of a general meeting, but this Article shall not apply to a resolution for winding up the Company, to a resolution passed in respect of any matter which by statute or these presents ought to be dealt with by special resolution, or any action which, by virtue of subsection 12(1) of the Third Schedule to the Act, requires approval in accordance with that subsection.

96. Where the Company has only one member, all business which the Company may

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transact at annual or special meetings of members shall be transacted in the manner specified in Article 97.

97. (1) A resolution, including a special resolution, in writing and signed by every shareholder who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such shareholders at a meeting and satisfied all the requirements of the Act respecting meetings of the shareholders.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of proceedings of shareholders.

DIRECTORS

98. Unless otherwise determined by general meeting, the number of directors shall not be less than one or more than seven.

99. Notwithstanding anything herein contained, the subscribers to the Memorandum of Association of the Company shall be the first directors of the Company.

100. The directors shall have power at any time and from time to time to appoint any other person as a director either to fill a casual vacancy or as an addition but so that the total number of directors shall not at any time exceed the maximum number, fixed as above, and so that no such appointment shall be effective unless two-thirds of the directors concur therein.

101. A director is not required to hold a share in the Company to qualify as a director.

102. The directors shall be paid out of the funds of the Company by way of remuneration for their service such sums, if any, as the Company in general meeting may determine and such remuneration shall be divided among them in such proportions and manner as the directors may determine; the directors may also be paid their reasonable travelling and hotel and other expenses incurred in consequence of their attendance at board meetings and otherwise in the execution of their duties as directors.

103. The continuing directors may act notwithstanding any vacancy in their body; but if the number fall below the minimum above fixed the directors shall not, except in emergencies or for the purpose of filling up vacancies, act so long as the number is below the minimum.

104. A director may, in conjunction with the office of director, and on such terms as to remuneration and otherwise as the directors arrange or determine, hold any other office or place of profit under the Company or under any Company in which this Company shall be a shareholder or otherwise interested or under any other Company.

105. The office of a director shall ipso facto be vacated:

(a) If he becomes bankrupt or makes an authorized assignment or suspends payment, or compounds with his creditors, or

(b) If he is found to be of unsound mind by a Court of competent jurisdiction, or

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(c) If by notice in writing to the Company he resigns his office, or

(d) If he is removed by resolution of the Company as provided in Article 110 hereof.

106. No director shall be disqualified by his office from contracting with the Company either as vendor, purchaser, or otherwise, nor shall any such contract, or any contract or arrangement entered into or proposed to be entered into by or on behalf of the Company in which any director shall be in any way interested, either directly or indirectly, be avoided, nor shall any director so contracting or being so interested, be liable to account to the Company for any profit realized by any such contract or arrangement by reason only of such director holding that office or of the fiduciary relations thereby established; but it is declared that the nature of his interest must be declared by him in the manner required by the Act. No director shall as a director vote in respect of any contract or arrangement in which he is so interested as aforesaid; and if he does so vote his vote shall not be counted, but this prohibition may at any time or times be suspended or relaxed to any extent by a general meeting and such prohibition shall not apply to any contract by or on behalf of the Company to give to the directors or any of them any security for advances or by way of indemnity or to the agreement or agreements referred to in Clause 3 of these articles or to any modification of such agreement or agreements or any agreement or agreements substituted therefor or any matter arising thereout.

ELECTION OF DIRECTORS

107. At every ordinary general meeting all the directors shall retire from office, but shall hold office until the dissolution of the meeting at which their successors are elected. The Company shall at such meeting fill up the vacant offices by electing a like manner of persons to be directors, unless it is determined at such meeting to reduce or increase the number of directors. A retiring director shall be eligible for reelection.

108. If at any ordinary general meeting at which an election of directors ought to take place no such election takes place, or if no ordinary general meeting is held in any year or period of years, the retiring directors shall continue in office until their successors are elected and a general meeting for that purpose may on notice be held at any time.

109. The Company in general meeting may from time to time increase or reduce the number of directors, and may determine or alter their qualifications.

110. The Company may, by special resolution, remove any director before the expiration of his period of office and appoint another person who may be qualified or become qualified in his stead; and the person so appointed shall hold office during such time only as the director in whose place he is appointed would have held the same if he had not been removed.

MANAGING DIRECTOR

111. The directors may from time to time, appoint one or more of their body to be managing director or managing directors of the Company, either for a fixed term or without any limitation as to the period for which he is or they are to hold such office, and may, from time to

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time, remove or dismiss him or them from office and appoint another or others in his or their place or places.

112. A managing director shall, subject to the provisions of any contract between him and the Company, be subject to the same provisions as to resignation and removal as the other directors of the Company, and if he cease to hold the office of director from any cause, he shall, ipso facto, and immediately, cease to be managing director.

113. The remuneration of a managing director shall from time to time be fixed by the directors, and may be by way of salary, or commission, or participation in profits, or by any or all of these modes.

114. The directors may, from time to time, entrust to, and confer upon a managing director for the time being such of the powers exercisable under these articles by the directors as they think fit, and may confer such powers for such time, and to be exercised for such objects and purposes, and upon such terms and conditions, and with such restrictions, as they think expedient; and they may confer such powers either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers of the directors in that behalf; and may from time to time revoke, withdraw, alter or vary all or any of such powers.

THE PRESIDENT AND VICE-PRESIDENT

115. The directors shall elect one of their number to be the President of the Company and may determine the period for which he is to hold office. The President shall have general supervision of the business of the Company and shall perform such duties as may be assigned to him by the Board from time to time.

116. The directors may also appoint one or more Vice Presidents, and may determine the period for which each of them are to hold office. A Vice-President shall, at the request of the Board and subject to its directions, perform the duties of the President during the absence, illness or incapacity of the President, or during such period as the President may request him so to do.

CHAIRMAN OF THE BOARD

117. The directors may elect one of their number to be Chairman of the Board and may determine the period during which he is to hold office. He shall perform such duties and receive such special remuneration as the Board may from time to time provide.

PROCEEDINGS OF DIRECTORS

118. The directors may meet together for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings, as they think fit, and may determine the quorum necessary for the transaction of business, but until otherwise determined two directors shall constitute a quorum, if two or more directors have been appointed.

119. Meetings of directors may be held either within or without the Province of Nova Scotia and the directors may from time to time make arrangements relating to the time and place of holding directors’ meetings, the notices to be given thereof and what meetings may be held without notice. Unless otherwise provided by such arrangements;

(a) A meeting of directors may be held at the close of every ordinary general meeting of the Company without notice;

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(b) Notice of every other directors’ meeting shall be delivered or mailed or telegraphed, telephoned or telefaxed to each director at least 48 hours before the meeting is to take place;

(c) A meeting of directors may be held without formal notice if all the directors are present, or if those absent have signified their assent to such meeting or their consent to the business transacted thereat.

120. A director may, if all the directors of the Company consent, participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at that meeting.

121. The President or any director may at any time, and the secretary, upon the request of the president or a director shall convene a meeting of the directors.

122. Questions arising at any meeting of the directors shall be decided by a majority of votes; the Chairman shall have no second or casting vote. In the case of an equality of votes the question shall be deemed defeated.

123. The Chairman of the Board shall preside at the meeting of the directors. If no Chairman of the Board is elected, or if at any meeting of directors he is not present within five minutes after the time appointed for holding the same, the President shall preside and if the President is not present at the time appointed for holding the meeting, a Vice-President who is a director shall preside and if neither the President nor such a Vice-President is present at any meeting within the time aforesaid, the directors present shall choose some one of their number to be chairman of such meeting.

124. A meeting of the directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the statutes in that behalf or of the regulations of the Company for the time being vested in or exercisable by the directors generally.

125. The directors may delegate any of their powers to committees, consisting of such number of members of their body as they think fit. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on them by the directors.

126. The meetings and proceedings of any committee consisting of two or more members shall be governed by the provisions contained in these Articles for regulating the meetings and proceedings of the directors so far as the same are applicable thereto and are not superseded by any regulations made by the directors under the next preceding clause.

127. All acts done at any meeting of the directors or of a committee of directors, or by

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any person acting as a director shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of such directors or persons acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director.

128. (1) A resolution in writing and signed by every director who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such directors at a meeting.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of proceedings of the directors or committee thereof, as the case may be.

129. If any one or more of the directors are called upon to perform extra services or to make any special exertions in going or residing abroad or otherwise for any of the purposes of the Company, or the business thereof, the Company may remunerate the director or directors so doing, either by a fixed sum or by a percentage of profits or otherwise, as may be determined by the directors, and such remuneration may be either in addition to or in substitution for his share in the remuneration above provided.

130. If a resolution authorizes the entering into of an agreement or the performance of any act, that resolution shall be deemed to authorize the execution of such further documents and the doing of such further things as may be necessary or desirable in connection therewith by the persons authorized to act by the resolution.

REGISTERS

131. The directors shall cause a proper register of the members of the Company to be kept in accordance with the provisions of the Act.

132. The directors may cause to be kept in any place outside of Nova Scotia a branch register of members in accordance with the provisions of the Act.

133. The directors shall also cause to be kept a proper register, containing the names and address and occupations of its directors or managers in accordance with the provisions of the Act.

134. The directors shall cause a proper register of the holders of debentures to be kept at the registered office of the Company in accordance with the provisions of the Act.

135. The directors may cause to be kept in any place outside of Nova Scotia a branch register of the holders of debentures in accordance with the provisions of the Act.

MINUTES

136. The directors shall cause minutes to be duly entered in books for that purpose:

(1) Of all appointments of officers;

(2) Of the names of the directors present at each meeting of the directors and of any committees of directors;

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(3) Of all orders made by the directors and committees of directors;

(4) Of all resolutions and proceedings of meetings of the shareholders and of meetings of the directors;

Any such minutes of any meeting of the directors or of any committee, or of the Company if purporting to be signed by the chairman of such meeting or by the chairman of the next succeeding meeting, shall be receivable as prima facie evidence of the matters stated in such minutes.

POWERS OF DIRECTORS

137. The management of the business of the Company shall be vested in the directors, who, in addition to the powers and authorities by these articles or otherwise expressly conferred upon them, may exercise all such powers and do all such acts and things as may be exercised or done by the Company and are not hereby or by statute expressly directed or required to be exercised or done by the Company in general meeting, but subject nevertheless to the provisions of the statutes in that behalf, and of these articles and to any regulations from time to time made by the Company in general meeting; provided that no regulation so made shall invalidate any prior act of the directors, which would have been valid if such regulation had not been made.

138. Without restricting the generality of the terms of the last preceding article and without prejudice to the general powers conferred thereby, and the other powers conferred by these articles, it is hereby expressly declared that the directors shall have the following powers, that is to say power from time to time:

(1) To take such steps as they think fit to carry into effect any agreement or contract made by or on behalf of the Company;

(2) To pay the costs, charges and expenses, preliminary and incidental to the promotion, formation, establishment, and registration of the Company;

(3) To purchase, or otherwise acquire, for the Company any property, rights or privileges which the Company is authorized to acquire, and at such price and generally on such terms and conditions as they think fit;

(4) At their discretion to pay for any property, rights, or privileges acquired by, or services rendered to the Company, either wholly or partially in cash or in shares, bonds, debentures or other securities of the Company, and any such shares may be issued either as fully paid up, or with such amount credited as paid up thereon as may be agreed upon; and any such bonds, debentures, or other securities may be either specifically charged upon all or any part of the property of the Company and its uncalled capital, or not so charged;

(5) To secure the fulfillment of any contracts or engagements entered into by

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the Company, by mortgage or charge of all or any of the property of the Company and its unpaid capital for the time being, or in such other manner as they may think fit;

(6) To appoint, and at their discretion remove or suspend, such experts, managers, secretaries, treasurers, officers, clerks, agents and servants for permanent, temporary or special services, as they from time to time think fit, and to determine their powers and duties, and fix their salaries or emoluments, and to require security in such instances and to such amounts as they think fit;

(7) To accept from any member insofar as the law permits, and on such terms and conditions as shall be agreed upon, a surrender of his shares or any part thereof;

(8) To appoint any person or persons (whether incorporated or not) to accept and hold in trust for the Company and property belonging to the Company, or in which it is interested, and for any other purposes, and to execute and do all such deeds and things as may be requisite in relation to any such trust, and to provide for the remuneration of any such trustee or trustees.

(9) To institute, conduct, defend, compound, or abandon, any legal proceedings by or against the Company, or its officers, or otherwise concerning the affairs of the Company, and also to compound and allow time for payment or satisfaction of any debts due, and of any claims or demands by or against the Company;

(10) To refer any claims or demands by or against the Company to arbitration, and observe and perform the awards;

(11) To make and give receipts, releases and other discharges for money payable to the Company and for claims and demands of the Company;

(12) To determine who shall be entitled to exercise the borrowing powers of the Company and sign on the Company’s behalf bonds, debentures or other securities, bills, notes, receipts, acceptances, assignments, transfers, hypothecation, pledges, endorsements, cheques, drafts, releases, contracts, agreements and all other instruments and documents.

(13) To provide for the management of the affairs of the Company abroad in such manner as they think fit, and in particular to appoint any persons to be the attorneys or agents of the Company with such powers (including power to sub-delegate) and upon such terms as may be thought fit;

(14) To invest and deal with any of the moneys of the Company not immediately required for the purposes thereof upon such securities and in such manner as they think fit, and from time to time to vary or realize such investments;

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(15) To execute in the name and on behalf of the Company, in favour of any director or any other person who may incur or be about to incur any personal liability for the benefit of the Company, such mortgages of the Company’s property, present and future, as they think fit, and any such mortgages may contain a power of sale, and such other powers, covenants and provisions as shall be agreed on;

(16) To give any officer or other person employed by the Company a commission of the profits of any particular business or transaction, or a share in the general profits of the Company, and such commission, or share of profits, shall be treated as part of the working expenses of the Company;

(17) To set aside out of the profits of the Company before declaring any dividend, such sums as they think proper as a reserve fund to meet contingencies, or to provide for dividends, or for depreciation, or for repairing, improving and maintaining any of the property of the Company and for such other purposes as the directors shall in their absolute discretion think conducive to the interests of the Company; and to invest the several sums so set aside upon such investments other than shares of the Company as they may think fit, and from time to time to deal with and vary such investments, and to dispose of all or any part thereof for the benefit of the Company, and to divide the reserve fund into such special funds as they think fit, with full power to employ the assets constituting the reserve fund in the business of the Company; and that without being bound to keep the same separate from the other assets;

(18) From time to time to make, vary and repeal by-laws for the regulation of the business of the Company, or of its officers and servants, or the members of the Company, or any section or class thereof;

(19) To enter into all such negotiations and contracts, and rescind and vary all such contracts, and execute and do all such acts, deeds, and things in the name and on behalf of the Company as they may consider expedient for or in relation to any of the matters aforesaid; or otherwise for the purposes of the Company;

(20) To provide for the management of the affairs of the Company in such manner as they shall think fit.

SOLICITORS

139. The Company may employ or retain a solicitor or solicitors, and such solicitors may, at the request of the Board of Directors, or on instructions of the Chairman of the Board, or the President or Managing Director, attend meetings of the directors or shareholders, whether or not he, himself, is a member or director of the Company. If a Solicitor is also a director he may nevertheless charge for services rendered to the Company as a Solicitor.

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SECRETARY AND TREASURER

140. There shall be a Secretary of the Company, who shall keep the minutes of shareholders’ and directors meetings and shall perform such other duties as may be assigned to him by the Board. The Board may also appoint a Treasurer of the Company to carry out such duties as the Board may assign.

141. The secretary and treasurer of the Company shall be appointed by the directors. If the directors think fit the same person may hold both offices.

142. If the directors think fit, the same person may hold the offices of President and Secretary.

143. The directors may appoint a temporary substitute for the secretary, who shall, for the purposes of these articles, be deemed to be the secretary.

THE SEAL

144. The directors shall procure a seal for the Company and shall provide for its safe custody. The Seal of the Company shall not be affixed to any instrument, except by the authority of a resolution of the board of directors or of a committee thereof and in the presence of at least one director or the Secretary or such other person as the directors appoint for the purpose; and that one director or secretary or other person as aforesaid shall sign every instrument to which the seal of the Company is so affixed in their presence. For purposes of certification of documents or proceedings the Secretary or any director or officer appointed by the Board may affix the Seal of the Company.

DIVIDENDS

145. The profits of the Company, subject to the provisions of the Memorandum of Association, and of these presents and to the rights of persons, if any, entitled to shares with special rights as to dividends, may be divided among the members in proportion to the amount of capital paid up on the shares held by them respectively. Where capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital shall not whilst carrying interest confer a right to participate in profits.

146. The directors may from time to time declare such dividend upon the shares of the Company as they may deem proper according to the rights of the members and the respective classes thereof, and may determine the date upon which the same shall be payable, and provide that any such dividend shall be payable to the persons registered as the holders of the shares in respect of which the same is declared at the close of business upon such date as the directors may specify, and no transfer of such shares made or registered, after the date so specified, shall pass any right to the dividend so declared.

147. No dividend shall be payable except out of the profits of the Company, and no dividend shall carry interest as against the Company.

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148. The declaration of the directors as to the amount of the net profits of the Company shall be conclusive.

149. The directors may from time to time pay to the members such interim dividends as in their judgment the position of the Company justifies.

150. The directors may deduct from the dividends payable to any member all such sums of money as may be due and payable by him to the Company on account of calls, installments or otherwise, and may apply the same in or towards satisfaction of such sums of money so due and payable.

151. The directors may retain any dividends on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

152. The directors may retain the dividends payable upon shares or stock in respect of which any person is under the transmission clause entitled to become a member, or which any person under that clause is entitled to transfer, until such person has become a member in respect thereof, or has duly transferred such share.

153. The directors, on declaring a dividend, may make a call on the members of such amounts as they may fix, but so that the call on each member shall not exceed the dividend payable to him, and so that the call be made payable at the same time as the dividend, and the dividend may, if so arranged between the Company and the member, be set off against the call. The making of a call under this clause shall be deemed and be business of a directors’ meeting which declares such a dividend.

154. The directors, on declaring a dividend, may resolve that such dividend be paid wholly or in part by the distribution of specific assets, and in particular of paid up shares, debentures, bonds or debenture stock of the Company or paid up shares, debentures, bonds or debenture stock of any other Company or in any one or more of such ways.

155. The directors may resolve that any moneys, investments, or other assets forming part of the undivided profits of the Company in the hands of the Company and available for dividend, or representing premiums received on the issue of shares and standing to the credit of the share premium account, be capitalized and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalized fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares or debentures or debenture stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares or debentures or debenture stock, and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum.

156. For the purposes of giving effect to any resolution under the two last preceding articles, the directors may settle any difficulty which may arise in regard to the distribution as they think expedient, and in particular may issue fractional certificates, and may fix the value for

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distribution of any specific assets, and may determine that cash payment shall be made to any members upon the footing of the value so fixed, or that fractions of less value than $5.00 may be disregarded in order to adjust the rights of all parties, and may vest any such cash or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalized fund as may seem expedient to the directors. Where requisite, a proper memorandum shall be filed in accordance with the Act.

157. A transfer of shares shall not pass the right to any dividend declared thereon after such transfer and before the registration of the transfer.

158. Any one of several persons who is registered as the joint holder of any share may give effectual receipts for all dividends and payments on account of dividends in respect of such share.

159. Unless otherwise determined by the directors, any dividend may be paid by a cheque or warrant delivered to or sent through the post to the registered address of the member entitled, or, in the case of joint holders, to the registered address of that one whose name stands first on the register, in respect of the joint holding; and every cheque or warrant so delivered or sent shall be made payable to the order of the person to whom it is delivered or sent.

160. Notice of the declaration of any dividend, whether interim or otherwise, shall be given to the holders of registered shares in the manner hereinafter provided.

161. All dividends unclaimed for one year after having been declared may be invested or otherwise made use of by the directors for the benefit of the Company until claimed.

162. Any meeting declaring a dividend may resolve that such dividend be paid wholly or in part by the distribution of specific assets, and in particular of paid up shares, debentures, bonds or debenture stock of the Company or paid up shares, debentures, bonds, or debenture stock of any other company, or in any one or more of such ways.

ACCOUNTS

163. The directors shall cause proper books of account to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipts and expenditures take place, and of all sales and purchases of goods by the Company, and of the assets and credits and liabilities of the Company.

164. The books of account shall be kept at the registered office of the Company or such other place as the directors think fit.

165. The directors shall from time to time, determine whether, and to what extent the accounts and books of the Company, or any of them, shall be open to the inspection of the members, and no member shall have any right of inspecting any account or book or document of the Company except as conferred by statute, or authorized by the directors, or by a resolution of the Company in general meeting.

166. At the ordinary general meeting in every year the directors shall lay before the Company the financial statements required by the Act, the report of the auditor, if any, to the members and, if the Company is a reporting issuer, the report of the directors.

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167. The financial statements shall be approved by the Board and such approval shall be evidenced by the signatures of two directors to the balance sheet or by the director where there is only one.

168. The directors not less than seven days before the date of the ordinary general meeting shall send copies of the financial statements and the report of the auditor, if any, thereon to all members holding voting securities or otherwise entitled to receive notice of the general meeting.

AUDIT

169. Unless in respect of a financial year the Company is exempt from the requirements of the Act regarding the appointment and duties of an auditor, an auditor shall be appointed and his duties regulated in accordance with the Act.

170. Every account of the directors, when audited and approved by a general meeting, shall be conclusive, except as regards an error discovered therein within three months next after the approval thereof. Whenever any such error is discovered within the period, the account shall forthwith be corrected, and thenceforth shall be conclusive.

NOTICES

171. A notice may be served by the Company upon any member, either personally or by sending it through the post in a prepaid envelope or wrapper, addressed to such member at his registered place of address.

172. Members who have no registered place of address, shall not be entitled to receive any notice.

173. The holder of a share warrant shall not, unless otherwise expressed therein, be entitled in respect thereof to notice of any general meeting of the Company.

174. Any notice required to be given by the Company to the members, or any of them, and not expressly provided for by these articles, shall be sufficiently given if given by advertisement.

175. Any notice given by advertisement shall be advertised twice in a paper published in the place where the registered office of the Company is situated, or if no paper be published there, then in any newspaper published in the City of Halifax, Nova Scotia.

176. All notices shall, with respect to any registered shares to which persons are jointly entitled be given to whichever of such persons is named first in the register, and notice so given shall be sufficient notice to all the holders of such shares.

177. Any notice sent by post shall be deemed to be served on the day following that upon which the letter, envelope or wrapper containing the same is posted, and in proving such

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service, it shall be sufficient to prove that the letter, envelope or wrapper containing the notice was properly addressed and put into the post office with the postage prepaid thereon. A certificate in writing signed by any manager, secretary or other official of the Company that the letter, envelope or wrapper containing the notice was so addressed and posted shall be conclusive evidence thereof. The foregoing provisions of this clause shall not apply to a notice of a meeting of the directors.

178. Every person who by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which previously to his name and address being entered on the register shall be duly served in the manner hereinbefore provided, upon the person from whom he derived his title to such share.

179. Any notice or document so advertised or sent by post to or left at the registered address of any member, in pursuance of these articles, shall, notwithstanding such member is then deceased, and whether or not the Company has notice of his decease, be deemed to have been served in respect of any registered shares, whether held solely or jointly with other persons by such member, until some other person is registered in his stead as the holder or joint holder thereof and such service shall for all purposes of these articles be deemed a sufficient service of such notice or document on his or her heirs, executors or administrators and all persons, if any, jointly interested with him or her in any such share.

180. The signature to any notice to be given by the Company may be written or printed.

181. Where a given number of days’ notice or notice extending over any other period is required to be given, the day of service shall unless it is otherwise provided, be counted in such number of days or other period.

INDEMNITY

182. Every director, manager, secretary, treasurer, and other officer or servant of the Company shall be indemnified by the Company against, and it shall be the duty of the directors out of the funds of the Company to pay all costs, losses and expenses which any director, manager, secretary, treasurer or other officer or servant may incur or become liable to by reason of any contract entered into, or act or thing done by him as such officer or servant, or in any way in the discharge of his duties, including travelling expenses, and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the Company and have priority as against the members over all other claims.

183. No director or other officer of the Company shall be liable for acts, receipts, neglects or defaults of any other director or officer or for joining in any receipt or other act for conformity, or for any loss or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the directors for or on behalf of the Company or through the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any money, securities or effects shall be deposited, or for any loss occasioned by error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto unless the same happen through his own dishonesty.

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REMINDERS

184. The directors shall comply with all the provisions of the Act, including:

(1) Keep an up to date Register of members (Section 42).

(2) Keep a Register of directors and managers and sending to the Registrar a copy thereof and notify him of any change among its directors or managers (Section 98).

(3) Keep an up to date Register of the holders of debentures (Section 111).

(4) Send to the Registrar notice of consolidation of share capital, conversion of shares into stock and reconversion of stock into shares (Section 53).

(5) Send notice to the Registrar of any redemption or purchase of Preference Shares (Section 50).

(6) Send notice to the Registrar of increase of capital (Section 55).

(7) Call a general meeting every year within the proper time (Section 83).

(8) Send to the Registrar printed copies of special resolutions (Section 88).

(9) File with the Registrar notice of situation of its Registered Office or of any change thereof (Section 79).

(10) Keep at Registered Office proper minutes of all general meetings and directors’ meetings in books kept for this purpose (Section 89).

(11) File a contract with the Registrar when shares are issued for a consideration other than cash (Section 109).

185. The directors shall also:

(a) Obtain a certificate under the Corporations Registration Act on commencing business; and

(b) File notice of Recognized Agent with Registrar under provisions of Corporations Registration Act.

PRIVATE COMPANY

186. To the end that the Company may qualify as a private company as that term is defined by the Securities Act (Nova Scotia),

(1) In this Article 186, “prescribed securities” means the securities prescribed from time to time by the Nova Scotia Securities Commission for the purpose of the definition of private company under the Securities Act (Nova Scotia);

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(2) The right to transfer prescribed securities of the Company is restricted in that no prescribed security may be transferred without the previous consent of the Directors of the Company, expressed by a resolution passed by the Board of Directors or by a document in writing signed by a majority of the Directors;

(3) The number of holders of prescribed securities of the Company, exclusive of persons who are in its employment or the employment of an affiliate and exclusive of persons who, having been formerly in the employment of the Company or an affiliate, were, while in that employment, and have continued after termination of that employment to own at least one prescribed security of the Company, is limited to not more than fifty, two or more persons or companies who are the joint registered owners of one or more prescribed securities of the Company being counted as one holder; and

(4) The Company shall not distribute any of its prescribed securities or securities convertible into or exchangeable for prescribed securities to the public.

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SECUNDA INTERNATIONAL LIMITED

(the “Company”)

SPECIAL RESOLUTION

BE IT RESOLVED as a Special Resolution within the meaning of the Companies Act (Nova Scotia) that the Articles of Association of the Company be amended by deleting the existing Article 60 and substituting the following Article therefor:

“60. The directors on behalf of the Company may from time to time in their discretion:

(a) Raise or borrow money for the purposes of the Company or any of them;

(b) Secure the repayment of moneys so raised or borrowed in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the execution and delivery of mortgages of the Company’s real or personal property, or by the issue of bonds, debentures or debentures stock of the Company secured by mortgage or otherwise or charged upon all or any part of the property of the Company, both present and future, including its uncalled capital for the time being;

(c) Sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for money borrowed or to be borrowed for the purposes aforesaid;

(d) Pledge debentures as security for loans;

(e) Guarantee obligations of any person.”

CERTIFICATE

I, Donald MacLeod, Secretary of Secunda International Limited, hereby certify that the foregoing is a true copy of a Special Resolution dated the 17th day of August, 2004, signed by all of the Shareholders of the Company in the manner authorized by law and that such Special Resolution is now in full force and effect.

August 17, 2004
Date	Donald MacLeod, Secretary

SECUNDA INTERNATIONAL LIMITED

(the “Company”)

NOTICE PURSUANT TO SECTION 51(11)

OF THE COMPANIES ACT (NOVA SCOTIA)

TO: Registry of Joint Stock Companies

9^th Floor

1505 Barrington Street

Halifax, Nova Scotia

B3J 3K5

Re:  Redemption of One Hundred (100) Class B Preference Shares

The Company hereby gives notice pursuant to subsection 51(11) of the Companies Act (Nova Scotia) that on the date hereof, the Company redeemed One Hundred (100) of its Class B Preference Shares and paid as a redemption price therefor the sum of One ($0.01) Cent per Class B Preference Share, for an aggregate redemption price of One ($1.00) Dollar.

DATED this 3^rd day of November, 2004.

Yours very truly,

SECUNDA INTERNATIONAL LIMITED

Per:

SECUNDA INTERNATIONAL LIMITED

(the “Company”)

NOTICE PURSUANT TO SECTION 51(11)

OF THE COMPANIES ACT (NOVA SCOTIA)

TO: Registry of Joint Stock Companies

9^th Floor

1505 Barrington Street

Halifax, Nova Scotia

B3J 3K5

Re:  Redemption of One Hundred (100) Class A Preference Shares

The Company hereby gives notice pursuant to subsection 51(11) of the Companies Act (Nova Scotia) that on the date hereof, the Company redeemed One Hundred (100) of its Class A Preference Shares and paid as a redemption price therefor the sum of Ten Thousand ($10,000.00) Dollars per Class A Preference Share, for an aggregate redemption price of One Million ($1,000,000.00) Dollars.

DATED this 3^rd day of November, 2004.

Yours very truly,

SECUNDA INTERNATIONAL LIMITED

Per:

EX-4.1

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 26, 2004 by and among Secunda International Limited, a corporation organized under the laws of Nova Scotia (the “Company”), 3013563 Nova Scotia Limited, Secunda Marine International Incorporated, Secunda Marine Services Limited, Secunda Global Marine Inc., JDM Shipping Inc., International Shipping Corporation Inc., Secunda Global International Inc., Navis Shipping Incorporated, Secunda Atlantic Incorporated, Secunda Marine Atlantic Limited and Offshore Logistics Incorporated (each a “Guarantor” and collectively, the “Guarantors”), and RBC Capital Markets Corporation, as representative of the several Initial Purchasers named in Schedule II to the Purchase Agreement (the “Initial Purchasers”), who have agreed to purchase U.S.$125,000,000 aggregate amount of the Company’s Senior Secured Floating Rate Notes due 2012 (the “Initial Notes”) pursuant to and subject to the terms and conditions of a certain Purchase Agreement, dated August 17, 2004 (the “Purchase Agreement”) among the Company, the Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligation of the Initial Purchasers to purchase the Initial Notes pursuant to the Purchase Agreement.

SECTION 1. DEFINITIONS

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

Advice: As defined in Section 6(d) hereof.

Agreement: As defined in the preamble hereof.

Affiliate: With respect to any specified Person, “Affiliate” shall mean 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 “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Broker Dealer Transfer Restricted Securities: Exchange Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for Initial Notes that such Broker-Dealer acquired for its own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates).

Business Day: Any day except a Saturday, Sunday or other day in the City of New York, or in the city of the corporate trust office of the Trustee, on which banks are authorized to close.

Closing Date: The date on which the Initial Notes are initially issued.

Commission: The United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

Company: As defined in the preamble hereof.

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Consummate: An Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Trustee under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were tendered by Holders thereof pursuant to the Exchange Offer.

Damages Payment Date: With respect to the Transfer Restricted Securities, each Interest Payment Date.

Definitive Notes: As defined in the Indenture.

Effectiveness Target Date: As defined in Section 5 hereof.

Effective Time: In the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Offer Registration Statement effective or as of which the Exchange Offer Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Exchange Notes: The Company’s Senior Secured Floating Rate Notes due 2012 to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the request of any Holder of Notes covered by a Shelf Registration Statement, in exchange for such Notes. Each Note is entitled to the benefit of the guarantees provided for in the Indenture (the “Guarantees”) and, unless the context otherwise requires, any reference herein to a “Note,” an “Exchange Note” or a “Transfer Restricted Security” shall include a reference to the related Guarantees.

Exchange Offer: The registration by the Company under the Securities Act of the Exchange Notes pursuant to an Exchange Offer Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Global Note: As defined in the Indenture.

Guarantor: As defined in the preamble hereof.

Holders: As defined in Section 2(b) hereof.

indemnified party: As defined in Section 8(c) hereof.

indemnifying party: As defined in Section 8(c) hereof.

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Indenture: The Indenture, dated as of August 26, 2004, among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee (the “Trustee”), pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Notes: as defined in the preamble hereof.

Initial Purchasers: As defined in the preamble hereof.

Interest Payment Date: As defined in the Indenture and the Notes.

NASD: National Association of Securities Dealers, Inc.

Notes: The Initial Notes and the Exchange Notes.

Person: An individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust or unincorporated organization, or a government or agency or political subdivision thereof or any other entity.

Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Purchase Agreement: As defined in the preamble hereof.

Record Holder: With respect to any Damages Payment Date relating to Notes, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Company and the Guarantors relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case (i) which is filed pursuant to the provisions of this Agreement, and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer Transfer Restricted Securities.

Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Shelf Filing Deadline: As defined in Section 4 hereof.

Shelf Registration Statement: As defined in Section 4 hereof.

Special Interest: As defined in Section 5 hereof.

3

TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section 77aaa-77bbbb), as in effect on the date of the Indenture.

Transfer Restricted Securities: Each Initial Note, until the earliest to occur of (a) the date on which such Initial Note is exchanged by a Person other than a Broker-Dealer in the Exchange Offer for an Exchange Note, (b) the date on which such Initial Note has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Initial Note 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 and (d) following the exchange by the Broker-Dealer in the Exchange Offer of an Initial Note for an Exchange Note, the date on which such Exchange Note 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.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Company and the Guarantors shall (i) cause to be filed with the Commission on or prior to that date which is 120 days after the Closing Date, the Exchange Offer Registration Statement under the Securities Act relating to the Exchange Notes and the Exchange Offer, (ii) use their reasonable best efforts to have the Exchange Offer Registration Statement declared effective by the Commission on or prior to that date which is 210 days after the Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) if applicable, file a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer and (iv) promptly upon the effectiveness of such Exchange Offer Registration Statement, commence the Registered Exchange Offer and use their reasonable best efforts to issue, on or prior to 60 days after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, Exchange Notes in exchange for all Initial Notes tendered prior thereto in the Registered Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form permitting registration of the Exchange Notes to be offered in exchange for the Transfer Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted Securities by Broker-Dealers as contemplated by Section 3(c) below.

(b) The Company and the Guarantors shall use their respective reasonable best efforts to cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal,

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state and provincial securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than twenty (20) Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal, state and provincial securities laws. No securities other than the Notes shall be included in the Exchange Offer Registration Statement.

(c) The Company and the Guarantors shall include a “Plan of Distribution” (or similar provision) section in the Prospectus contained in the Exchange Offer Registration Statement and indicate that any Restricted Broker-Dealer who holds Initial Notes that are Transfer Restricted Securities and that were acquired for the account of such Restricted Broker-Dealer as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or one of its Affiliates) may exchange such Initial Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with its initial sale of the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” (or similar provision) section shall also contain all other information with respect to such resales of Broker-Dealer Transfer Restricted Securities that the Commission may require in order to permit such sales pursuant thereto but such “Plan of Distribution” (or other similar provision) section shall not name any such Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

The Company and the Guarantors shall use their respective reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Broker-Dealer Transfer Restricted Securities acquired by Restricted Broker-Dealers and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of 180 days from the date on which the Exchange Offer Registration Statement is declared effective or, if shorter, until all Broker-Dealer Transfer Restricted Securities have been sold thereunder.

The Company shall provide sufficient copies of the latest version of such Prospectus to such Restricted Broker-Dealers promptly upon request at any time during such 180 day period (or such shorter period, if applicable) in order to facilitate such sales.

SECTION 4. SHELF REGISTRATION

(a) Shelf Registration. If (i) the Company or any of the Guarantors is not permitted to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with) or (ii) any Holder of Transfer Restricted Securities shall notify the Company within twenty (20) Business Days of the Consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Notes acquired directly from the Company or one of its Affiliates, then the Company and the Guarantors shall:

(i) use their reasonable best efforts to file a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer

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Registration Statement (in either event, the “Shelf Registration Statement”), on or prior to the date that is (1) in the case of clause (i) above, the 60^th day after the date on which the Company receives notice from the Commission or determines that it is not required to file the Exchange Offer Registration Statement, or (2) in the case of clause (ii) above, the 60^th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities, (as applicable in each case, such date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

(ii) use their reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 150^th day after the Shelf Filing Deadline.

The Company and the Guarantors shall use their respective reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of two years (as extended pursuant to Section 6(c)(i)) following the date on which such Shelf Registration Statement first becomes effective under the Securities Act or such shorter period ending when all of the Transfer Restricted Securities available for sale thereunder (i) have been sold pursuant thereto or (ii)are no longer restricted securities (as defined in Rule 144 under the Securities Act).

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 30 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to Special Interest (as defined below) pursuant to Section 5 hereof unless and until such Holder shall have provided all such reasonably requested information. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

SECTION 5. SPECIAL INTEREST

If (i) any of the Registration Statements required by this Agreement are not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated within 60 Business Days after the Effectiveness Target Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 30 days by a post-effective amendment to such Registration Statement, the effectiveness of another Registration Statement or the use of the Prospectus (as amended or supplemented) is again permitted that cures such failure (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company and the Guarantors, jointly and severally, hereby agree to pay, as liquidated damages for such Registration Default, subject to the provisions of Section 12(a), special interest (“Special Interest”). Special interest shall be paid to each Holder of Transfer Restricted Securities, for the period from the occurrence of such Registration Default until such

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time as such Registration Default is no longer in effect, in an amount equal to U.S.$0.05 per week per U.S.$1,000 principal amount of Notes held by such Holder during the first 90-day period immediately following the occurrence and during the continuance of such Registration Default, increasing by an additional U.S.$0.05 per week per U.S.$1,000 principal amount of such Notes with respect to each subsequent 90-day period during which such Registration Default continues, up to a maximum amount of special interest of U.S.$0.25 per week per U.S.$1,000 principal amount of Notes. All accrued Special Interest shall be paid to the holder(s) of Global Note(s) representing Transfer Restricted Securities by the Company by wire transfer of immediately available funds or by federal funds check and to Holders of Definitive Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified on each Damages Payment Date, as provided in the Indenture. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or the Prospectus to be made usable in the case of (iv) above, the Special Interest payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.

All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all applicable provisions of Section 6(c) below, shall use their respective reasonable best efforts to effect such exchange to permit the sale of Broker-Dealer Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (which shall be in a manner consistent with the terms of this Agreement), and shall comply with all of the following provisions:

(i) If, following the date hereof and prior to the Consummation of the Exchange Offer, there has been published a change in Commission policy with respect to exchange offers such as the Exchange Offer, such that in the reasonable opinion of counsel to the Company there is a substantial question as to whether the Exchange Offer is permitted by applicable law or Commission policy, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Notes. The Company and the Guarantors hereby agree to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy.

(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any

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Person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise reasonably cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in no-action letters issued to Morgan Stanley and Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (including any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of the Exchange Notes obtained by such Holder in exchange for Initial Notes acquired by such Holder directly from the Company or an Affiliate thereof.

(iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in no-action letters issued to Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co. Incorporated (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company’s information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Company and the Guarantors will within the time periods and otherwise in accordance with the provisions hereof, prepare and file with the Commission a Shelf Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Exchange Offer Registration Statement and the related Prospectus required to permit resales of Transfer Restricted Securities by Restricted Broker-Dealers), the Company and the Guarantors shall:

(i) use their respective reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable; upon the occurrence of any event that would

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cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement, (1) in the case of clause (A), correcting any such misstatement or omission, and (2) in the case of either clause (A) or (B), use their respective reasonable best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; provided, however, in the case of a Shelf Registration Statement, if (A) the full Board of Directors of the Company determines in good faith that it is in the best interests of the Company or the Guarantors not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company or any of its subsidiaries and (B) the Company notifies the Holders, pursuant to Section 6(c)(iii)(D) hereof, within two Business Days after such Board of Directors makes such determination, the Company may allow the Shelf Registration Statement to fail to be effective and usable as a result of such nondisclosure for up to 90 days during the period of effectiveness required by Section 4 hereof, but in no event for a period in excess of 30 consecutive days;

(ii) use their respective reasonable best efforts to prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 462, as applicable, under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) in the case of a Shelf Registration Statement, advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment thereto has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue in any material respect, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the

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Company shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest practicable time;

(iv) furnish to the Initial Purchasers, and, upon written request, to each of the selling Holders and each of the underwriter(s) in connection with such sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (but excluding any documents incorporated by reference as a result of the Company’s periodic reporting requirements under the Exchange Act, if any), which documents will be subject to the review of such Initial Purchasers, Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus to which an Initial Purchaser, a selling Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s) in connection with such sale, if any, shall reasonably object within five Business Days after the receipt thereof. An Initial Purchaser, selling Holder or underwriter in connection with such sale, if any, shall be deemed to have reasonably objected to such filing (A) if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission or fails to comply with the applicable requirements of the Securities Act or (B) if any of the information furnished to the Company by such selling Holder or underwriter in connection with such sale, if any, and included in such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed is incorrect in any respect;

(v) in the case of a Shelf Registration Statement, and upon written request, promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Initial Purchasers, the selling Holders and to the underwriter(s) in connection with such sale, if any, make the Company’s representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such Initial Purchasers, selling Holders or underwriters, if any, reasonably may request;

(vi) in the case of a Shelf Registration Statement, make available at reasonable times for inspection by the selling Holders, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all relevant financial and other records, pertinent corporate documents and properties of the Company and use their reasonable best efforts to cause the Company’s officers, directors and employees to supply all information, in each case, reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; provided, however, that such Persons shall first agree in writing with the Company and/or the Guarantors that any information that is reasonably and in good faith designated by the Company and/or the Guarantors as confidential at the time of delivery of such information shall be kept confidential by such Persons, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law, (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such Person or (iv) such information becomes available to such Person from a source other than the Company or a Guarantor and such source is not bound by a confidentiality agreement; and; provided, further, that the foregoing inspection and information gathering shall be coordinated on behalf of the selling Holders, underwriters, or any representative thereof, by

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one counsel, who shall be such legal counsel as may be chosen by the Holders of a majority in principal amount of Transfer Restricted Securities;

(vii) in the case of a Shelf Registration Statement, and if requested by any selling Holders or the underwriter(s) in connection with such sale, if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) in the case of a Shelf Registration Statement, use their respective commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Notes covered thereby or the underwriter(s) in connection with such sale, if any, unless such Transfer Restricted Securities are already so rated;

(ix) in the case of a Shelf Registration Statement, furnish to each Initial Purchaser, each selling Holder and each of the underwriter(s) in connection with such sale, if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) in the case of an Underwritten Offering, enter into such agreements (including an underwriting agreement), and make such representations and warranties with respect to the business of the Company as are customarily addressed in representations and warranties made by issuers to underwriters in underwritten offerings, and take all such other commercially reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement, all to such extent as may be requested by any Holder or the managing underwriters, if any, in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, the Company and the Guarantors shall:

(A) if requested by any Holder furnish to the such Holders and each managing underwriter, if any, in such substance and scope as such Holders may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer and, if applicable, the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed on behalf of the Company and each of the Guarantors by the Chairman of the Board, President or any Vice President and Treasurer or Chief Financial Officer of the Company, confirming, as of the date thereof, the matters set forth in paragraph (k) of Section 7 of the Purchase Agreement and such other matters as such parties may reasonably request;

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(2) opinions, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel or counsels for the Company and the Guarantors, covering such matters as are customarily covered in opinions given in connection with underwritten firm commitment offerings.

(3) a customary comfort letter, dated as of the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Company’s independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters in connection with Underwritten Offerings, and affirming the matters set forth in the comfort letters delivered pursuant to paragraphs (h) and (i) of Section 7 of the Purchase Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company and the Guarantors pursuant to this clause (xi), if any.

The above shall be done at each closing under such underwriting or similar agreement, as and to the extent required thereunder, and, if at any time the representations and warranties of the Company and the Guarantors contemplated in clause (A)(1) above cease to be true and correct in any material respect, the Company and the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, each selling Holder and each Restricted Broker-Dealer promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and its counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that neither the Company nor any Guarantor shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject;

(xiii) shall issue, upon the request of any Holder of Initial Notes covered by any Shelf Registration Statement contemplated by this Agreement, Exchange Notes, having an aggregate principal amount equal to the aggregate principal amount of the Initial Notes surrendered to the

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Company by such Holder in exchange therefor or being sold by such Holder; such Exchange Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Company for cancellation;

(xiv) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s);

(xv) use their respective commercially reasonable efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above;

(xvi) subject to Section 6(c)(i), if any fact or event contemplated by clause 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an 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;

(xvii) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of the Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depositary Trust Company;

(xviii) in the case of a Shelf Registration, cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of the NASD), and use their respective reasonable best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities;

(xix) otherwise use their respective commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) qualify the Indenture under the TIA (at or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be);

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(xxi) use their reasonable best efforts to cause all Transfer Restricted Securities covered by the Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of the Initial Notes or the managing underwriter(s), if any; and

(xxii) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15(d) of the Exchange Act.

(d) Restrictions on Holders.

(i) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice.

(ii) The Company may require a Holder of Transfer Restricted Securities to be included in a Registration Statement to furnish to the Company such information as required by law to be disclosed by such Holder in such Registration Statement, and the Company may exclude from such Registration Statement the Transfer Restricted Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.

SECTION 7. REGISTRATION EXPENSES

All expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holder with the NASD (and, if applicable, the fees and expenses of any “qualified independent underwriter”) that may be required by the rules and regulations of the NASD); (ii) all fees and expenses of compliance with federal securities, state Blue Sky or securities laws and provincial securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel for the Company; (v) all messenger and delivery services and telephone expenses of the Company and the Guarantors; (vi) all application and filing fees in connection with listing Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vii) all fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance).

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The Company and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of any of their officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors. The Company and the Guarantors shall not be responsible for any commissions, fees and discounts of underwriters, brokers, dealers and agents.

SECTION 8. INDEMNIFICATION

(a) The Company and each Guarantor, jointly and severally, shall indemnify and hold harmless each Holder, its directors, officers and each Person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, judgments and actions, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability, judgment or action relating to purchases and sales of Notes), to which that Holder, its directors, officers or controlling Persons may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, judgment or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Preliminary Prospectus or Prospectus or in any amendment or supplement thereto or (ii) the omission or alleged omission to state in any Registration Statement, Preliminary Prospectus or Prospectus, or in any amendment or supplement thereto, any 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, and shall reimburse such Holder and each such director, officer or controlling Person promptly upon demand for any legal or other expenses reasonably incurred by such Holder, director, officer or controlling Person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, judgment or action as such expenses are incurred; provided, however, that the Company and the Guarantors shall not be liable in any such case to the extent that any such loss, claim, damage, liability, judgment or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Statement, Preliminary Prospectus or Prospectus, or in any such amendment or supplement thereto, in reliance upon and in conformity with written information concerning such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion therein. The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to any Holder or to any director, officer or controlling Person of such Holder.

(b) Each Holder, severally and not jointly, shall indemnify and hold harmless the Company, the Guarantors and their respective directors, officers and each Person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, judgments or actions, joint or several, or any action in respect thereof, to which the Company, any Guarantor or any such director, officer or controlling Person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, judgment or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Preliminary Prospectus or Prospectus or in any amendment or supplement thereto or (ii) the omission or alleged omission to state in any Registration Statement, Preliminary Prospectus or Prospectus, or in any amendment or supplement thereto, any 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, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion therein, and shall reimburse the Company, the Guarantors and any such director, officer or controlling Person

15

promptly upon demand for any legal or other expenses reasonably incurred by the Company, any Guarantor or any such director, officer or controlling Person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, judgment or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Holder may otherwise have to the Company, any Guarantor or any such director, officer or controlling Person.

(c) Promptly after receipt by any Person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the “indemnified party”) of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against any Person against whom indemnity may be sought pursuant to Section 8(a) or 8(b) (the “indemnifying party”), notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel shall be the responsibility of the indemnifying party. After notice from the indemnifying party to the indemnified party of the indemnifying party’s election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation. In addition, any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) of all indemnified parties, and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by RBC Capital Markets Corporation in the case of the parties indemnified pursuant to Section 8(a), and by the Company in the case of parties indemnified pursuant to Section 8(b). No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the

16

indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 shall for any reason be unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage, liability, judgment or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage, liability, judgment or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other, from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other, with respect to the statements or omissions which resulted in such loss, claim, damage, liability, judgment or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other, with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Initial Notes purchased under the Purchase Agreement (before deducting expenses) received by the Company on the one hand, and the total net proceeds received by such Holder upon its resale of Notes less the amount paid by such Holder for such Notes, on the other hand, bear to the total sum of such amounts. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or such Holder, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. Solely for the purposes of the preceding two sentences, the net proceeds received by the Company shall be deemed also to be indirectly for the benefit of the Guarantors and the information supplied by the Company shall also be deemed to have been supplied by the Guarantors. The Company and the Guarantors and the Holders agree that it would not be just and equitable if contributions pursuant to this Section 8(d) were to be determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage, liability, judgment or action in respect thereof, referred to above in this Section 8(d), shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Holder, and none of its directors, officers or controlling Persons, shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total net proceeds received by such Holder upon its resale of Notes exceeds the sum of the amount paid by such Holder for such Notes and the amount of any damages which such Holder has otherwise paid or become liable to pay by reason of any 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. The Holders’ obligations to contribute as provided in this Section 8(d) are several in proportion to the respective principal amount of Notes held by each of the Holders hereunder and not joint.

SECTION 9. RULE 144A

The Company and the Guarantors hereby agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Company and the Guarantors are subject to Section 13 or 15(d) of the Exchange Act, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective

17

purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATION

No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 11. SELECTION OF UNDERWRITERS

For any Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, that such investment bankers and managers must be reasonably satisfactory to the Company. Such investment bankers and managers are referred to herein as the “underwriters.”

SECTION 12. MISCELLANEOUS

(a) Remedies. The Company and the Guarantors agree that (i) monetary damages (including the Special Interest contemplated hereby) would not be adequate compensation for any loss incurred by reason of a breach by them of the provisions of this Agreement, (ii) each Holder will be entitled to specific performance of its rights under Sections 3 and 4 of this Agreement and (iii) they hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. Neither the Company nor any Guarantor will on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor any Guarantor is currently bound by any agreement granting registration rights with respect to its securities that conflicts with the registration rights set forth herein.

(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 12(d), the Company has obtained the written consent of the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered.

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(d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), fax, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

With a copy to:

RBC Capital Markets Corporation

5700 Williams Tower

2800 Post Oak Blvd.

Houston, Texas 77056

Facsimile: (713) 403-5627

Attention: Shauvik Kundagrami

(ii) if to the Initial Purchasers to:

RBC Capital Markets Corporation

5700 Williams Tower

2800 Post Oak Blvd.

Houston, Texas 77056

Facsimile: (713) 403-5627

Attention: Shauvik Kundagrami

With a copy to:

Fulbright & Jaworski L.L.P.

1301 McKinney, Suite 5100

Houston, Texas 77010

Facsimile: 713-651-5246

Attention: Charles L. Strauss

(iii) if to the Company or any Guarantor:

Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia B2Y 2W1 Canada

Facsimile: (902) 465-2578

Attention: Don MacLeod

With a copy to:

Vinson & Elkins L.L.P.

2300 First City Tower

1001 Fannin Street

Houston, Texas 77002

Facsimile: (713) 615-5531

Attention: T. Mark Kelly

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 acknowledged, if faxed; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

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

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

(f) 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.

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

(h) Governing Law, Jurisdiction and Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the non-exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum. In addition to the foregoing, the Company and each of the Guarantors irrevocably appoints Wilmington Trust Company with offices at the date of this Agreement at 520 Madison Avenue, 33^rd Floor, New York, New York 10022, USA, as its authorized agent on which any and all legal process may be served in any such action, suit or proceeding brought in the Specified Courts. The Company and each Guarantor agrees that service of process in respect of it upon such agent, together with written notice of such service given to it in the manner provided in Section 12 hereof, shall be deemed to be effective service of process upon it in any such action, suit or proceeding. The Company and each Guarantor agrees that the failure of such agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any such action, suit or proceeding based thereon. If for any reason such agent shall cease to be available to act as such, the Company and each Guarantor agrees to irrevocably appoint another such agent in New York City, as its authorized agent for service of process, on the terms and for the purposes of this Section 12(h). Nothing herein shall in any way be deemed to limit the ability of the Initial Purchasers, any Holder or any other

20

Person to serve any such legal process in any other manner permitted by applicable law or to obtain jurisdiction over the Company or any Guarantor or bring actions, suits or proceedings against it in such other jurisdiction, and in such matter, as may be permitted by applicable law.

(i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable by a court of competent jurisdiction, 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.

(j) Entire Agreement. This Agreement and the other writings referred to herein (including the Purchase Agreement, the Indenture and the form of Notes) are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement and the other writings referred to herein (including the Purchase Agreement, the Indenture and the form of Notes) supersede all prior agreements and understandings between the parties with respect to such subject matter.

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

SECUNDA INTERNATIONAL LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
3013563 NOVA SCOTIA LIMITED
SECUNDA MARINE INTERNATIONAL INCORPORATED
SECUNDA MARINE SERVICES LIMITED
SECUNDA GLOBAL MARINE INC.
JDM SHIPPING INC.
INTERNATIONAL SHIPPING CORPORATION INC.
SECUNDA GLOBAL INTERNATIONAL INC.
NAVIS SHIPPING INCORPORATED
SECUNDA ATLANTIC INCORPORATED
SECUNDA MARINE ATLANTIC LIMITED
OFFSHORE LOGISTICS INCORPORATED
	By:	/s/ Alfred A. Smithers
		Name: Alfred A. Smithers
		Title: President

Accepted as of the date hereof:
RBC CAPITAL MARKETS CORPORATION On behalf of each of the Initial Purchasers
By:	/s/ William H. Cook
	Name: William H. Cook
	Title: Managing Director

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EX-4.2

Exhibit 4.2

SECUNDA INTERNATIONAL LIMITED

SENIOR SECURED FLOATING RATE NOTES DUE 2012

INDENTURE

Dated as of August 26, 2004

WELLS FARGO BANK, NATIONAL ASSOCIATION

Trustee

Table of Contents

		Page
ARTICLE I	DEFINITIONS AND INCORPORATION BY REFERENCE	1
SECTION 1.01.	Definitions	1
SECTION 1.02.	Other Definitions	31
SECTION 1.03.	Incorporation by Reference of Trust Indenture Act	31
SECTION 1.04.	Rules of Construction	32
ARTICLE II	THE NOTES	33
SECTION 2.01.	Form and Dating	33
SECTION 2.02.	Execution and Authentication	33
SECTION 2.03.	Registrar, Paying Agent and Calculation Agent	35
SECTION 2.04.	Paying Agent to Hold Money in Trust	36
SECTION 2.05.	Holder Lists	36
SECTION 2.06.	Transfer and Exchange	36
SECTION 2.07.	Replacement Notes	44
SECTION 2.08.	Outstanding Notes	45
SECTION 2.09.	Treasury Notes	45
SECTION 2.10.	Temporary Notes	45
SECTION 2.11.	Cancellation	46
SECTION 2.12.	Calculation of Interest; Computation of Interest	46
SECTION 2.13.	Interest Act (Canada)	46
SECTION 2.14.	Defaulted Interest	46
SECTION 2.15.	CUSIP, Common Code and ISIN Numbers	46
ARTICLE III	REDEMPTION AND PREPAYMENT	47
SECTION 3.01.	Notices to Trustee	47
SECTION 3.02.	Selection of Notes to be Redeemed	47
SECTION 3.03.	Notice of Redemption	47
SECTION 3.04.	Effect of Notice of Redemption	48
SECTION 3.05.	Deposit of Redemption Price	48
SECTION 3.06.	Notes Redeemed in Part	49
SECTION 3.07.	Optional Redemption	49
SECTION 3.08.	Mandatory Redemption	50
SECTION 3.09.	Offer to Purchase by Application of Excess Asset Disposition Proceeds and Excess Proceeds from the Sale of Collateral	50
SECTION 3.10.	Redemption for Changes in Withholding Tax	51
SECTION 3.11.	Annual Reduction Offer	52
ARTICLE IV	COVENANTS	54
SECTION 4.01.	Payment of Notes	54
SECTION 4.02.	Maintenance of Office or Agency	54
SECTION 4.03.	Reports	55
SECTION 4.04.	Compliance Certificate	56
SECTION 4.05.	Taxes	56
SECTION 4.06.	Waiver of Stay, Extension and Usury Laws	56
SECTION 4.07.	Limitation on Indebtedness	56
SECTION 4.08.	Limitation on Restricted Payments	59

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SECTION 4.09.	Limitation on Restrictions on Distributions from Restricted Subsidiaries	61
SECTION 4.10.	Limitation on Sales of Assets and Subsidiary Stock	63
SECTION 4.11.	Limitation on Affiliate Transactions	66
SECTION 4.12.	Limitation on Liens	67
SECTION 4.13.	Limitation on Sale/Leaseback Transactions	67
SECTION 4.14.	Future Guarantors	67
SECTION 4.15.	Limitation on Business Activities	68
SECTION 4.16.	Payments for Consent	68
SECTION 4.17.	Offer to Repurchase upon Change of Control	68
SECTION 4.18.	Payment of Additional Amounts	70
SECTION 4.19.	Corporate Existence	72
ARTICLE V	SUCCESSORS	72
SECTION 5.01.	Merger, Consolidation, or Sale of Assets	72
SECTION 5.02.	Successor Corporation Substituted	73
ARTICLE VI	DEFAULTS AND REMEDIES	74
SECTION 6.01.	Events of Default	74
SECTION 6.02.	Acceleration	75
SECTION 6.03.	Other Remedies	76
SECTION 6.04.	Waiver of Past Defaults	76
SECTION 6.05.	Control by Majority	76
SECTION 6.06.	Limitation on Suits	77
SECTION 6.07.	Rights of Holders of Notes to Receive Payment	77
SECTION 6.08.	Collection Suit by Trustee	77
SECTION 6.09.	Trustee May File Proofs of Claim	77
SECTION 6.10.	Priorities	78
SECTION 6.11.	Undertaking for Costs	78
ARTICLE VII	TRUSTEE	79
SECTION 7.01.	Duties of Trustee	79
SECTION 7.02.	Rights of Trustee	80
SECTION 7.03.	Individual Rights of Trustee	81
SECTION 7.04.	Trustee’s Disclaimer	81
SECTION 7.05.	Notice of Defaults	81
SECTION 7.06.	Reports by Trustee to Holders of the Notes	82
SECTION 7.07.	Compensation and Indemnity	82
SECTION 7.08.	Replacement of Trustee	83
SECTION 7.09.	Successor Trustee by Merger, Etc.	84
SECTION 7.10.	Eligibility; Disqualification	84
SECTION 7.11.	Preferential Collection of Claims Against Company	84
ARTICLE VIII	SATISFACTION AND DISCHARGE; DEFEASANCE	84
SECTION 8.01.	Satisfaction and Discharge of Indenture	84
SECTION 8.02.	Application of Trust Money	85
SECTION 8.03.	Option to Effect Legal Defeasance or Covenant Defeasance	85
SECTION 8.04.	Legal Defeasance	85
SECTION 8.05.	Covenant Defeasance	86
SECTION 8.06.	Conditions to Legal or Covenant Defeasance	86

ii

SECTION 8.07.	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	87
SECTION 8.08.	Repayment to Company	88
SECTION 8.09.	Reinstatement	88
ARTICLE IX	AMENDMENT, SUPPLEMENT AND WAIVER	89
SECTION 9.01.	Without Consent of Holders of Notes	89
SECTION 9.02.	With Consent of Holders of Notes	90
SECTION 9.03.	Compliance with Trust Indenture Act	91
SECTION 9.04.	Revocation and Effect of Consents	91
SECTION 9.05.	Notation on or Exchange of Notes	91
SECTION 9.06.	Trustee to Sign Amendments, Etc.	92
ARTICLE X	COLLATERAL AND SECURITY	92
SECTION 10.01.	Security Documents	92
SECTION 10.02.	Further Assurances; Opinions	92
SECTION 10.03.	Collateral Agent	94
SECTION 10.04.	Security Documents and Note Guarantees	95
SECTION 10.05.	[This Section Left Intentionally Blank]	96
SECTION 10.06.	Release of Collateral Agent’s Lien	96
SECTION 10.07.	Trustee to Sign Releases	98
ARTICLE XI	[THIS ARTICLE INTENTIONALLY LEFT BLANK]	98
ARTICLE XII	[THIS ARTICLE INTENTIONALLY LEFT BLANK]	98
ARTICLE XIII	GUARANTEES	98
SECTION 13.01.	Subsidiary Guarantees	98
SECTION 13.02.	Execution and Delivery of Additional Note Guarantee or Supplemental Indenture; Notation of Note Guarantee	101
SECTION 13.03.	[THIS SECTION INTENTIONALLY LEFT BLANK]	102
SECTION 13.04.	Termination, Release and Discharge	102
SECTION 13.05.	Limitation on Guarantor Liability; Contribution	103
SECTION 13.06.	Trustee to Include Paying Agent	103
ARTICLE XIV	MISCELLANEOUS	104
SECTION 14.01.	Trust Indenture Act Controls	104
SECTION 14.02.	Notices	104
SECTION 14.03.	Communication by Holders of Notes with Other Holders of Notes	105
SECTION 14.04.	Certificate and Opinion as to Conditions Precedent	105
SECTION 14.05.	Statements Required in Certificate or Opinion	105
SECTION 14.06.	Rules by Trustee and Agents	106
SECTION 14.07.	No Personal Liability of Directors, Officers, Employees and Stockholders	106
SECTION 14.08.	Governing Law	106
SECTION 14.09.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities	106
SECTION 14.10.	Judgment Currency	107
SECTION 14.11.	No Adverse Interpretation of Other Agreements	107
SECTION 14.12.	Successors	107
SECTION 14.13.	Severability	108

iii

SECTION 14.14.	Counterpart Originals	108
SECTION 14.15.	Table of Contents, Headings, Etc.	108
SECTION 14.16.	Language of Notices, Etc	108

iv

EXHIBIT A	Form of Note	A-1
EXHIBIT B	Form of Certificate of Transfer	B-1
EXHIBIT C	Form of Certificate of Exchange	C-1
EXHIBIT D	Form of Certificate from Acquiring Institutional Accredited Investor	D-1
EXHIBIT E	Form of Supplemental Indenture – Additional Note Guarantees	E-1

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CROSS-REFERENCE TABLE

Trust Indenture Act Section	Indenture Section
310 (a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.10
(c)	N.A.
311 (a)	7.11
(b)	7.11
(c)	N.A.
312 (a)	2.05
(b)	14.03
(c)	14.03
313 (a)	7.06
(b)(1)	7.06
(b)(2)	7.06, 7.07
(c)	7.06, 14.02
(d)	7.06
314 (a)	4.03
(a)(4)	14.04
(b)	10.02
(c)(1)	N.A.
(c)(2)	N.A.
(c)(3)	N.A.
(d)	10.02
(e)	14.05
(f)	N.A.
315 (a)	7.01
(b)	7.05
(c)	7.01
(d)	7.01
(e)	6.11
316 (a)(last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N.A.
(b)	6.07
(c)	2.12
317 (a)(1)	6.09
(a)(2)	6.09
(b)	2.04
318 (a)	14.01
(b)	14.01
(c)	14.01

N.A. means not applicable.

This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

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INDENTURE dated as of August 26, 2004 among SECUNDA INTERNATIONAL LIMITED, a Nova Scotia corporation (the “Company”), the GUARANTORS (as defined), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national bank association, as trustee (the “Trustee”).

The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of (i) the Company’s Senior Secured Floating Rate Notes due 2012 (such notes as issued hereunder for original issuance on the Issue Date and, if and when issued hereunder, such additional notes as issued for original issuance after the Issue Date, collectively the “Initial Notes”) and (ii) if and when issued, each series of the Company’s Senior Secured Floating Rate Notes due 2012 issued in exchange for any Initial Notes in an Exchange Offer or upon transfer pursuant to a Shelf Registration Statement (the “Exchange Notes” and, together with the Initial Notes, the “Notes”):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

“Additional Assets” means:

(1) any property, equipment or other capital assets used in a Related Business;

(2) the Capital Stock of a Person primarily engaged in a Related Business that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, in the case of a Sale of Collateral, such property, equipment or other assets shall consist solely of Replacement Vessel Assets, and the principal assets owned by any such Person shall consist of Replacement Vessel Assets.

“Administrative Agent” means Fortis Capital Corp., as administrative agent under the Credit Agreement, and each successor and replacement thereto in such capacity.

“Affiliate” of any specified Person means:

(1) any other Person, directly or indirectly, controlling or controlled by; or

(2) 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 Sections 4.08, 4.10 and 4.11 only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 25% 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.

“Agent” means any Registrar, Paying Agent or Authenticating Agent.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“Asset Disposition” means any sale, lease, transfer, exchange or other disposition (or series of related sales, leases, transfers, exchanges or dispositions) by the Company or any Restricted Subsidiary, including, without limitation, any disposition by means of a merger, consolidation or similar transaction, by the way of a sale and leaseback or pursuant to loss, destruction, damage, condemnation or similar taking, (each referred to for the purposes of this definition as a “disposition”), of:

(1) 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);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets or rights 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 clauses (1), (2) and (3) above,

(A) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary;

(B) for purposes of Section 4.10 only, (y) a disposition that constitutes a Restricted Payment permitted by the Section 4.08 or a Permitted Investment and (z) a disposition of all or substantially all the assets of the Company or the Company and the Restricted Subsidiaries taken as a whole, by merger or otherwise, in accordance with the provisions of Section 5.01;

(C) a disposition of an asset or pursuant to a series of related dispositions, assets with a fair market value of less than $5,000,000;

(D) grants of Liens permitted by Section 4.12 or made pursuant to any Security Documents and dispositions pursuant thereto;

(E) any charter of vessels of the Company or of any Restricted Subsidiary entered into in the ordinary course of business and with respect to which the Company or any Restricted Subsidiary is the lessor, except any such charter that provides for the acquisition of such vessel by the lessee during or at the end of the term thereof for an amount that is less than their fair market value at the time the right to acquire such properties or assets occur;

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(F) real property or Capital Stock sold in accordance with clause (b)(9) Section 4.11; and

(G) sales of obsolete and not practically useable or worn-out equipment in the ordinary course of business.

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate then borne by the Notes, compounded quarterly) 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); provided that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(2) the sum of all such payments.

“Bankruptcy Code” means Title 11, U.S. Code, as amended, or any similar federal or state law, or any similar law of any jurisdiction foreign to the United States of America or to any state thereof, including political subdivision thereof, in each case for the relief of debtors.

“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 any day other than a Legal Holiday.

“Calculation Agent” has the meaning set forth in the form of Note attached hereto as Exhibit A.

“Canadian Dollar Equivalent” means, with respect to any monetary amount in a currency other than the Canadian dollar, at or as of any time for the determination thereof, the amount of Canadian dollars obtained by converting such foreign currency involved in such computation into Canadian dollars at the spot rate for the purchase of Canadian dollars with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service as is providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two business days prior to such determination.

“Capital Lease Obligations” 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. For

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purposes of Section 4.12, a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased thereby.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“cash equivalents”, means, if at the relevant time of determination, it is not defined by GAAP, short-term, highly-liquid investments that are (i) readily convertible to known amounts of cash and (ii) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

“Change of Control” means the occurrence of one or more of the following events:

(1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) 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 50% of the total voting power of the Voting Stock of the Company or otherwise has the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company;

(2) individuals who on the Issue Date constituted the Board of Directors of the Company (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 a majority of the directors of the Company then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office;

(3) the adoption or approval by the Board of Directors or shareholders of the Company, of a plan relating to the liquidation or dissolution of the Company; or

(4) the merger or consolidation of the Company with or into another Person or the merger or consolidation of another Person with or into the Company, or the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person (other than, in all such cases, a Person that is controlled by one or more Permitted Holders) or group of related persons for purposes of Section 13(d) of the Exchange Act, other than a transaction following which (A) in the case of a merger or consolidation transaction, 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) constitute at least a majority of the voting power of the Voting Stock of the surviving Person (or any parent thereof) in such merger or consolidation transaction and (B) in the case of such a sale, lease, exchange or other transfer of assets transaction, the transferee Person becomes a Subsidiary of the transferor of such assets.

“Clearstream” means Clearstream Banking, societe anonyme.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Collateral” means all of the following property, as more particularly described in the Security Documents:

(1) those certain 12 vessels owned by any one or more of the Company and its Subsidiaries as of the Issue Date, which on such date are registered under the respective names and flags:

Vessel	Flag
Agile	Barbados
J.D. Mitchell	Barbados
Mariner Sea	Canada
Panuke Sea	Canada
Cabot Sea	Canada
Ryan Leet	Canada
Thebaud Sea	Canada
Venture Sea	Canada
Burin Sea	Canada
Trinity Sea	Canada
Sable Sea	Canada*
Hebron Sea	Canada

* Canadian registry has been voluntarily suspended by the Company, and the Vessel currently is registered on the bareboat registry of Barbados.

(together with each vessel acquired after the Issue Date with the proceeds of Additional Notes, and including any replacements or substitutions of the foregoing vessels as provided for in this Indenture or the Credit Agreement, the “Vessels”), and (A) all such Vessels’ respective boilers, engines, machinery, masts, spars, rigging, boats, anchors, cables, chains, tackle, tools, pumps and pumping equipment, apparel, furniture, fittings and equipment, spare parts, and all other appurtenances thereunto appertaining or belonging, whether now owned or hereafter acquired, whether or not on board said Vessels, and all additions, improvements, renewals and replacements hereafter made in or to said Vessels or any part thereof, or in or to the equipment or any said appurtenances, (B) any and all rights, privileges and benefits of the Company or any of its Subsidiaries under insurances, awards, warranties, claims, agreements or otherwise to receive monies or other property or interests in relation to, or arising from, any damage to, or liability, loss or requisition, confiscation, condemnation of title or compulsory acquisition of, the Vessels or any portion thereof and (C) all rights, privileges and benefits of the Company or any of its Subsidiaries to receive payment of monies or other property or interests in relation to the use, hire or operation of any of the Vessels, or any portion thereof, including any of same arising from, or related to, freights, passage monies, charter monies, hire monies, requisition for hire compensation, salvage, towage remuneration, demurrage detention monies and other earnings now or hereafter earned under any charter now or hereafter entered into with regard to the Vessels or as a result of any requisition for use of the Vessels (together with the Vessels, the “Vessel Assets”);

(2) all outstanding Capital Stock of each of Subsidiary of the Company which on the Issue Date or thereafter (i) owns one or more of the Vessels or other Vessel Assets or (ii) charters or arranges for the charter of one or more of the Vessels;

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(3) all general intangibles owned or acquired by the Company or any of its Subsidiaries necessary, exclusively used for, and in connection with, the ownership, expansion, operation, use, maintenance or sale or other disposition of any of the Vessels or any of the other Vessel Assets;

(4) each Asset Sale Proceeds Account and all deposits therein and interest thereon and investments thereof, and all property of every type and description in which any proceeds of any Sale of Collateral or other disposition of Collateral are invested or upon which the Collateral Agent is at any time granted, or required to be granted, a Lien to secure the Secured Obligations as set forth in Section 4.10; and

(5) all proceeds of any of the foregoing;

provided, that no property of Company or any of its Subsidiaries whether personalty, realty, tangible, intangible or mixed not specifically included as part of the Collateral will be Collateral.

“Collateral Agency Agreement” means the Collateral Agency Agreement dated the Issue Date, executed and delivered by the Company, certain Guarantors, the Trustee, the Administrative Agent and the Collateral Agent, on terms as provided in this Indenture and otherwise on customary terms reasonably satisfactory to the Trustee and the Administrative Agent, in each case, as amended, supplemented, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“Collateral Agent” means Wilmington Trust Company, in its capacity as collateral agent under the Collateral Agency Agreement, together with its successors in such capacity.

“Collateral Agent’s Lien” means a Lien granted to the Collateral Agent as security for Secured Obligations.

“Commodity Hedging Agreements” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in the price of any commodity, in each case, entered into in the ordinary course of business and in connection with the conduct of such Person’s business and not for speculative purposes.

“Company” means the Person named as the “Company” in the introductory paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, the term “Company” shall mean such successor Person and each successive successor Person.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which financial statements are available on or prior to the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided that:

(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding 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 (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be computed based on (y) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter

6

period for which such facility was outstanding or (z) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation) 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 has 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 Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to 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 Disposition 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 or improvement 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 (which for purposes of the foregoing, shall be deemed to include any vessel acquired for use in a Related 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 Disposition, 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 Disposition, 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, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro

7

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 on 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).

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, determined in accordance with GAAP, 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:

(1) interest expense attributable to Capital Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction;

(2) amortization of debt discount, premium and debt issuance cost;

(3) capitalized interest;

(4) non-cash interest payments and expense;

(5) the interest component of any deferred payment obligations;

(6) commissions, discounts and other fees and charges Incurred in respect to letters of credit and bankers’ acceptance financing;

(7) net payments pursuant to, and other net costs associated with, Hedging Obligations (including amortization of fees);

(8) dividends in respect of all Disqualified Stock of the Company or Preferred Stock of any Restricted Subsidiary held by Persons other than the Company or a Wholly Owned Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of the issuer of such Disqualified stock or Preferred Stock);

(9) interest incurred in connection with Investments in discontinued operations; and

(10) 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;

in each case, whether paid, accrued or scheduled to be paid or accrued during such period (except to the extent accrued in a prior period).

“Consolidated Net Income” means, for any period, the consolidated net income of the Company and its consolidated Restricted Subsidiaries determined in accordance with GAAP; provided that there shall not be included in such Consolidated Net Income:

(1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary or that is accounted for by the equity method of accounting, except that:

(A) subject to the exclusion contained in clause (3) 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 (3) below); and

8

(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;

(2) any net income of any Restricted Subsidiary (other than a Guarantor) 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 (3) 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 up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary 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;

(3) any gain or loss realized upon the sale or other disposition of any assets of the Company, its consolidated Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

(4) extraordinary gains or losses;

(5) the cumulative effect of a change in accounting principles; and

(6) any unrealized non-cash gains or losses in respect of currency fluctuations.

Notwithstanding the foregoing, for the purposes of Section 4.08 only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.

“Consolidated Tangible Assets” means, as of any date of determination, (i) the total assets less, (ii) to the extent otherwise included and without duplication, the sum of (a) accumulated depreciation and amortization, (b) allowances for doubtful receivables, (c) other applicable reserves and other property deductible items (for example, unamortized debt discount and expenses and other unamortized costs and charges), (d) excess of cost over fair value of assets of business acquired, as determined in good faith by the Board of Directors of the Company, (e) any revaluation or other write-up in book value of assets subsequent to the Issue

9

Date as a result of a change in the method of valuation in accordance with GAAP consistently applied, (f) treasury stock, (g) cash set apart and held in a sinking or other analogous fund established for the redemption or other retirement of Capital Stock or Indebtedness, (h) Investments in and assets of Unrestricted Subsidiaries, (i) goodwill and other intangibles, in each case as shown on the balance sheet of the Company and the Restricted Subsidiaries for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP.

“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 14.02 hereof or such other address as to which the Trustee may give notice to the Company.

“Credit Agreement” means the Credit Agreement dated as August 26, 2004, among the Company, as borrower, certain Subsidiaries of the Company, the other credit parties and lenders party thereto and Fortis Capital Corp., as administrative agent and lender, and Fortis Capital Corp., as arranger, together with the related documents thereto (including any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any one or more agreements (and related documents) governing Indebtedness Incurred to Refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders, and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Credit Facility Obligations” means (i) the principal of (in a maximum outstanding amount of $40,000,000), and accrued interest on, such Indebtedness of the Company Incurred under the Credit Agreement and (ii) all other Obligations under the Credit Agreement and, as related to the Credit Agreement, the Security Documents.

“Currency Agreement” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, in each case, entered into in the ordinary course of business and in connection with the conduct of such Person’s business and not for speculative purpose.

“Custodian” means any receiver, trustee, assignee, liquidator, sequester or similar official under the Bankruptcy Code.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

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“Depositary Agent” means a commercial bank designated by the Company and reasonably satisfactory to the Collateral Agent, in its capacity as depositary agent under the Collateral Agency Agreement, together with its successors in such capacity.

“Designated Collateral” has the meaning set forth in Section 6.1 of the Collateral Agency Agreement.

“Designated Vessel Period” has the meaning set forth in Section 6.1 of the Collateral Agency Agreement.

“Designated Vessels” mean (i) those certain four (4) Vessels that as of the Issue Date are registered under the names the Thebaud Sea, Venture Sea, Burin Sea and Trinity Sea, respectively, and (ii) such other one or more Vessels, if any, which the Administrative Agent and the Company jointly notify in writing the Trustee are to be included as a Designated Vessel pursuant to compliance with the asset maintenance coverage requirements of the Credit Agreement.

“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 at the option of the holder) or upon the happening of any event:

(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the 91^st day following 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 purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 91^st day following the Stated Maturity of the Notes shall not constitute Disqualified Stock if:

(1) 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 terms applicable to the Notes and described in Sections 4.10 and 4.17; and

(2) any such requirement only becomes operative after compliance with such terms applicable to the Notes, including the purchase of any Notes tendered pursuant thereto.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to the Indenture; provided that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

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“dollars” or “$” means Canadian dollars. Whenever the covenants or default provisions or definitions in this Indenture refer to an amount in Canadian dollars, that amount will be deemed to refer to the Canadian Dollar Equivalent of the amount of any obligation denominated in any other currency or currencies, including composite currencies and, in any case, no subsequent change in the Canadian Dollar Equivalent after the applicable date of determination will cause such determination to be modified.

“EBITDA” for any period means the sum of Consolidated Net Income, plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income:

(1) all income tax expense of the Company and its consolidated Restricted Subsidiaries;

(2) Consolidated Interest Expense;

(3) depreciation and amortization expense of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid item that was paid in cash in a prior period);

(4) all other non-cash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents an accrual of, or reserve for, cash expenditures in the future); and

(5) solely with respect to the calculation of EBITDA for each quarterly period ending on or before June 30, 2005, and without duplication of any of the amounts in the preceding clauses (1) through (4), (i) the write-off of deferred corporate transaction costs related to a previous corporate financing transaction which, in the aggregate, are not in excess of $1,200,000, (ii) breakage costs incidental to the Indebtedness and lease obligations being discharged substantially contemporaneous with the original issuance of the Notes which, in the aggregate, are not in excess of $2,000,000 and (iii) the write-off of deferred finance costs incurred in relation to the Indebtedness and lease obligations described in clause (ii) which, in the aggregate, are not in excess of $2,500,000;

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 non-cash 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.

“Equity Offering” means any sale for cash of Capital Stock of the Company (excluding sales made to any Restricted Subsidiary and excluding sales of Disqualified Stock) (i) to the public pursuant to an effective registration under the Securities Act or similar laws of Canada or any province thereof or (ii) in a private placement pursuant to an exemption from registration requirements of the Securities Act or similar laws of Canada or any province thereof.

“Euroclear” means Euroclear Bank S.A./N.V.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

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“Exchange Notes” has the meaning set forth in the preamble of this Indenture.

“Exchange Offer” has the meaning set forth in a corresponding Registration Rights Agreement.

“Exchange Offer Registration Statement” has the meaning set forth in a corresponding Registration Rights Agreement.

“fair market value” means, with respect to consideration received or to be received, or given or to be given, pursuant to any transaction by the Company or any Restricted Subsidiary, the fair market value of such consideration as determined in good faith by the Board of Directors of the Company.

“foreign private issuer” has the meaning set forth in Rule 3b-4 of the Exchange Act or any successor rule or regulation thereto.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4) 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 Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

“Global Note Legend” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

“Global Notes” means, individually and collectively, each of the Notes (which may be either Restricted Global Notes or Unrestricted Global Notes) issued or issuable in the global form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv) or 2.06(f) hereof.

“Government Securities” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged; (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clause (i) or (ii) above, are not callable or redeemable at the option of the issuers thereof; or (iii) depository receipts issued by a bank or trust company as custodian with respect to any such Government Securities or a specific payment of interest on or principal of any such Government Securities held by such custodian for the account of holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities evidenced by such depository receipt.

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“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:

(1) 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

(2) 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.

“Guarantors” means (i) 3013563 Nova Scotia Limited, Secunda Marine International Incorporated, Secunda Marine Services Limited, Secunda Global Marine Inc., JDM Shipping Inc., International Shipping Corporation Inc., Secunda Global International Inc., Navis Shipping Incorporated, Secunda Atlantic Incorporated, Secunda Marine Atlantic Limited and Offshore Logistics Incorporated, (ii) each Restricted Subsidiary that becomes a guarantor of the Notes pursuant to Section 4.14, and (iii) each Restricted Subsidiary executing a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of the Indenture; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Note Guarantee is released in accordance with the terms of this Indenture.

“Hedging Obligations” of any Person means the net obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Hedging Agreement.

“Holder” means the Person in whose name a Note is registered on the Registrar’s books.

“IAI Global Note” means, if any hereafter issued, Notes resold to an Institutional Accredited Investor in the United States of America which shall be in a permanent global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend, the Private Placement Legend, deposited with or on behalf of and registered in the name of the Depositary or its nominee, and authenticated by the Trustee as herein provided.

“Incur” means create, incur, issue, assume, Guarantee, incur or otherwise become liable for or with respect to, contingently or otherwise; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with Section 4.07, (1) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security and (2) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms will not be deemed to be the Incurrence of Indebtedness.

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“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1) 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;

(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/ Leaseback Transactions entered into by such Person;

(3) the principal component of all obligations of such Person issued or assumed as the deferred purchase price of property due more than six months after the acquisition of such property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

(4) the principal component of all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) 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);

(5) 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 Subsidiary of such Person, the liquidation preference with respect to, any Preferred Stock (but excluding, in each case, any accrued dividends);

(6) the principal component of all obligations of the type referred to in clauses (1) through (5) 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;

(7) the principal component of all obligations of the type referred to in clauses (1) through (6) 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 value of such property or assets and the amount of the obligation so secured; and

(8) to the extent not otherwise included in this definition, net 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; provided, however, that the principal amount of any noninterest bearing or other discount security at any date will be the principal amount thereof that would be shown on a balance sheet of such Person dated such date prepared in accordance with GAAP.

“Indenture” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.

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“Independent Qualified Party” means an independent investment banking firm, accounting firm or appraisal firm, in each case of industry recognized standing; provided that such firm is not an Affiliate of the Company.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

“Initial Notes” has the meaning set forth in the preamble of this Indenture.

“Initial Purchaser” has the meaning set forth in the respective Purchase Agreement.

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“Interest Rate Agreement” means, in respect of a Person, any agreements or arrangements designed to protect such Person against fluctuations in interest rates accruing on Indebtedness for which it is liable, in each case, entered into in the ordinary course of business and in connection with conduct of such Person’s business and not for speculative purposes and in respect to a notional amount not in excess of the principal amount of such Indebtedness from time to time outstanding.

“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 or advances against supplies on the balance sheet of the lender) or other extension 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 (in each case other than in exchange for Capital Stock (other than Disqualified Stock) of the Company). Except as otherwise provided for herein, the amount of an Investment shall be its fair value at the time the Investment is made and without giving effect to subsequent changes in value.

For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and Section 4.08:

(1) “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 (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B) 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

(2) 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 of the Company.

“Issue Date” means the first date on which the Notes are originally issued, authenticated and delivered under this Indenture.

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“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or Halifax, Nova Scotia or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

“Lenders” mean the lender parties from time to time under the Credit Agreement.

“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of Initial Notes for use by such Holders in connection with an Exchange Offer.

“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, a ship or vessel mortgage or encumbrance, any option or other agreement to sell or give a security interest in, and any filing of or agreement to give any financing statement under, the Uniform Commercial Code (or equivalent statute) of any jurisdiction).

“Loans” made loans from time to time made under and pursuant to the terms of the Credit Agreement.

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

“Net Available Cash” from an Asset Disposition means the aggregate cash proceeds and cash equivalents received by the Company or any Restricted Subsidiary therefrom (including 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:

(1) all accounting, investment banking, 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 paid or be accrued as a liability under GAAP, as a consequence of such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, 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 Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition; and

(4) 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 Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

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“Net Cash Proceeds”, with respect to any issuance or sale of Capital Stock, means 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 Sale Consideration” from an Asset Disposition means the aggregate cash proceeds and cash equivalents received by the Company or any Restricted Subsidiary therefrom (including 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 respect of any Sale of Collateral, in each case net of:

(1) all accounting, investment banking, 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 paid or be accrued as a liability under GAAP, as a consequence of such Sale of Collateral;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Sale of Collateral, 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 Sale of Collateral, or by applicable law, be repaid out of the proceeds from such Sale of Collateral;

(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition; and

(4) 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 Sale of Collateral and retained by the Company or any Restricted Subsidiary after such Sale of Collateral.

“Non-Recourse Indebtedness” means Indebtedness or any other obligation:

(1) as to which neither the Company nor any Restricted Subsidiary, (a) provides any guarantee or credit support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness); or (b) is directly or indirectly liable (as a guarantor or otherwise);

(2) the Incurrence of which will not result in any recourse against any of the assets of the Company or any Restricted Subsidiary; and

(3) no default with respect to which would permit (upon notice, lapse of time or any other event or condition, or any combination of the foregoing) any holder of any other Indebtedness or other obligation of the Company or any Restricted Subsidiary to declare pursuant to the express terms governing such Indebtedness or other obligation a default on such other Indebtedness or other obligation or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

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“Non-U.S. Person” means a person who is not a U.S. Person.

“Note Custodian” means the Trustee, as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto.

“Note Documents” means this Indenture, the Notes, the Exchange Notes, the Note Guarantees and the Security Documents.

“Note Guarantee” means the guarantee of the Notes (including any Exchange Notes) by each of the Guarantors pursuant to Article XIII hereof and any additional guarantee of the Notes (including any Exchange Notes) to be executed by any Restricted Subsidiary of the Company pursuant to Section 4.14 or Section 13.02.

“Note Obligations” means the Notes (including all additional Notes and all Exchange Notes therefor), the Note Guarantees and all other Obligations of any Obligor under the Note Documents.

“Notes” has the meaning assigned to it in the preamble to this Indenture.

“Obligations” means any principal, premium, interest (including Special Interest, if any, and interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or its Restricted Subsidiaries whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, indemnifications, reimbursement obligations, damages, liabilities, costs, expenses and other amounts payable under the documentation governing any Indebtedness or in respect thereof.

“Obligor” means each of the Company, the Guarantors and any other Persons that has granted to the Collateral Agent a Lien upon any of the Collateral as security for the Secured Obligations.

“Offering” means the offering of the Original Notes by the Company on the Issue Date.

“Offering Memorandum” means (i) the Offering Memorandum of the Company dated August 17, 2004 with respect to the Offering, and (ii) any similar document of the Company dated subsequent to the Issue Date with respect to the offering of Initial Notes other than the Original Notes.

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President or Director of such Person.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Sections 14.04 and 14.05 hereof.

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Sections 14.04 and 14.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

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Any Opinion of Counsel may be based, as to matter of fact, upon certificates of Officers of the Company or others, as the case may be.

“Participant” means, with respect to DTC, Euroclear or Clearstream, a Person who has an account with DTC, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“Participating Broker-Dealer” has the meaning set forth in a Registration Rights Agreement.

“Permitted Collateral Liens” means Liens described in clauses (2), (4), (6), (8), (17), (18), (19) and (20) of the definition of “Permitted Liens.

“Permitted Holders” means (1) Alfred A. Smithers and his spouse or their lineal descendants, (2) any trust for the benefit of (or any trustee of such trust), corporation or partnership controlled, directly or indirectly, by one or more Persons described in clause (1) above or (3) any combination of the foregoing.

“Permitted Investments” means an Investment by the Company or any Restricted Subsidiary in:

(1) the Company, 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 Related Business;

(2) 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 that such Person’s primary business is a Related Business;

(3) cash and Temporary Cash Investments;

(4) 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 that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(5) payroll, travel and similar advances 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;

(6) loans or advances to employees in the ordinary course of business of the Company or its Restricted Subsidiaries consistent with sound business practices, but in any event in an aggregate amount not to exceed $2,000,000 in the aggregate outstanding at any one time;

(7) in addition to the loans and advances referred to in the preceding clause (6), loans or advances to Affiliates of the Company but in any event not to exceed $3,000,000 in the aggregate outstanding at any one time;

(8) 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;

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(9) any Person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Disposition as permitted pursuant to Section 4.10;

(10) any Person where such Investment was acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable or other rights to payment held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or other rights to payment or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(11) Currency Agreements, Commodity Hedging Agreements and Interest Rate Agreements;

(12) one or more joint ventures or Unrestricted Subsidiaries engaged in a Related Business to the extent that the aggregate amount of all cash and cash equivalents invested by the Company and the Restricted Subsidiaries, taken as a whole, does not exceed the greater of $10,000,000 or 5.0% of Consolidated Tangible Assets; and

(13) other Investments in Related Businesses which, when taken together with all other Investments made pursuant to this clause (13), do not exceed $5,000,000 (with the fair market value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value);

provided, however, for the avoidance of doubt, in no event shall the Collateral, or any portion thereof, be used, directly or indirectly, to make any Investment pursuant to clause (12) or clause (13) above.

“Permitted Liens” means, with respect to any Person:

(1) pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation or to support obligations to insurance companies in respect of deductibles, co-insurance claims or self-insured retention (and letter of credit obligations in respect thereof), 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 cash equivalents 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;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings that are being diligently contested 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;

(3) Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve

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Board and (B) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution, in each case, other than for the benefit of the Holders;

(4) Liens for taxes, assessments, governmental charges or claims not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings being diligently contested; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(5) Liens in favor of issuers of surety bonds or letters of credit and bankers’ acceptances 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 and bankers’ acceptances do not constitute Indebtedness;

(6) 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;

(7) Liens securing Indebtedness Incurred in accordance with Section 4.07 to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided that the Lien may not extend to any Collateral or other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property that do not constitute Collateral and that are affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;

(8) Liens to secure Indebtedness permitted under the provisions described in clause (b)(1) of Section 4.07;

(9) Liens outstanding on the Issue Date and amendments thereto that are not more restrictive, taken on a whole, than the corresponding Lien on the Issue Date;

(10) Liens on property or shares of Capital Stock of another Person 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 a Subsidiary; provided, further, however, that any such Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(11) Liens on property at the time such Person or any of its Restricted 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 are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided, further, however, that such Liens may not extend to any other property owned by such

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Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(12) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Wholly Owned Subsidiary of such Person;

(13) Liens securing obligations under Interest Rate Agreements entered into to protect against fluctuations in interest rates in the ordinary course of business, so long as such obligations relate to Indebtedness that is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such obligations;

(14) Liens securing obligations related to Currency Agreements or Commodity Hedging Agreements entered into to protect against fluctuations in exchange rates and commodity prices in the ordinary course of business, so long as such obligations are secured solely by property that is not Collateral;

(15) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien permitted under the Indenture (other than Liens in respect of Indebtedness that is retired by the Company or any Restricted Subsidiary on the Issue Date); provided that:

(A) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof);

(B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness being Refinanced at the time the original Lien became a Permitted Lien and (y) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(16) Liens representing the interest or title of a lessor in connection with any operating lease or similar contract permitted under the Indenture;

(17) precautionary filings under the UCC or equivalent statute of any applicable jurisdiction;

(18) Liens securing the Notes and Note Guarantees;

(19) Liens for salvage or general average;

(20) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary arising from vessel chartering, operations, drydocking, maintenance, the furnishing of supplies or fuel to vessels and crews wages, in each case (i) of a maritime lien nature and (ii) not involving a claim the delinquency of which (A) has resulted in the, or could reasonably result in the imminent, risk of sale, forfeiture, hindrance to operation or loss of a vessel or (B) has resulted in a matured claim for the payment of money in excess of $10,000,000, which claim has been not been discharged within 30 days following its maturity;

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(21) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary which secure obligations that do not exceed $5,000,000 at any one time outstanding; and

(22) Liens on the vessel Bold Endurance securing Indebtedness not to exceed the amount of Indebtedness secured by such vessel on the Issue Date.

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 company, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“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.

“Private Placement Legend” means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

“Purchase Agreement” means (i) the Purchase Agreement dated August 17, 2004, among the Company, the Guarantors, RBC Capital Markets Corporation, as representative of the Initial Purchasers relating to the Offering, and (ii) any similar agreement dated subsequent to the Issue Date among the Company, the Guarantors and each Initial Purchaser relating to the offering of Initial Notes other than the Original Notes, in each case as such agreement may be amended, modified or supplemented from time to time.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Rating Agency” means each of S&P and Moody’s, or if S&P or Moody’s or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Moody’s, or both, as the case may be.

“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:

(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;

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(2) 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;

(3) 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; and

(4) if the Indebtedness being Refinanced is subordinated in right of payment to the Notes or Note Guarantees, such Refinancing Indebtedness has a final maturity date later than the maturity of, and is subordinated in right of payment to, the Notes and Note Guarantees, as the case may be, on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that is not a Guarantor which Refinances Indebtedness of the Company or a Guarantor or (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

“Registration Rights Agreement” means (i) the Registration Rights Agreement, dated as of the Issue Date, by and among the Company, the Guarantors and RBC Capital Markets Corporation, as representative of the initial Purchasers relating to the Offering, and (ii) any similar agreement that the Company and other parties may enter into in relation to any other Initial Notes, in each case as such agreement may be amended, modified or supplemented from time to time.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.

“Related Business” means any business in which the Company was engaged on the Issue Date and any business reasonably related, ancillary or complementary to any business in which the Company was engaged on the Issue Date, including, without limitation, the ownership, operation, maintenance, construction, conversion or management of marine vessels or performance of marine services, or the provision of logistical support and services to the marine industry, in each case as so reasonably determined by the Board of Directors of the Company in good faith.

“Replacement Vessel Assets” means a vessel or related equipment used or useful in a Related Business or on a Vessel, or additions, improvements, renewals and replacements made with respect thereto or to a Vessel.

“Responsible Officer”, when used with respect to the Trustee or the Collateral Agent, as the case may be, means any officer, including, without limitation, any vice president, assistant vice president, assistant treasurer or secretary within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or the corporate trust office of the Collateral

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Agent, as the case may be, or any other officer of the Trustee or the Collateral Agent, as the case may be, customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to particular corporate trust matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

“Restricted Payment” with respect to any Person means:

(1) the declaration or payment of any dividends or any other payments or distributions of any sort in respect of its Capital Stock or similar payment to the direct or indirect holders of its Capital Stock (other than (i) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock), (ii) dividends or distributions payable solely to the Company or a Restricted Subsidiary, and (iii) 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));

(2) the making of any payment on, or with respect to, or 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);

(3) the making of any payment on, or with respect to, or 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 of such Person or any of its Subsidiaries; or

(4) the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Period” means the 40-day distribution compliance period as set forth in Regulation S.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 144A Global Note” means the Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

“Rule 903” means Rule 903 promulgated under the Securities Act.

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“Rule 904” means Rule 904 promulgated under the Securities Act.

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

“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted Subsidiary 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 of Collateral” means any Asset Disposition to the extent involving assets or other rights or property that constitutes Collateral under the Security Documents.

“SEC” means the Securities and Exchange Commission.

“Secured Obligations” means, collectively, the Note Obligations and the Credit Facility Obligations.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Documents” means the Collateral Agency Agreement, any one or more security agreements, pledge agreements, collateral assignments, mortgages, vessel mortgages, marine mortgages, deeds of covenants, assignments of earnings and insurances, share pledges, collateral agency agreements, deeds of trust or other grants or transfers for security executed and delivered by the Company and any other Obligor creating, or purporting to create, a Lien upon Collateral in favor of the Collateral Agent for the benefit of the holders of the Secured Obligations, subject to certain payment priorities, in each case as amended, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“Senior Indebtedness” means, with respect to any Person, Indebtedness of such Person that is not a Subordinated Obligation of such Person.

“Shelf Registration Statement” has the meaning set forth in a corresponding Registration Rights Agreement.

“Significant Subsidiary” means any Restricted Subsidiary that (i) owns/leases a Vessel or (ii) would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Special Interest” means all special interest then owing pursuant to Section 5 of the Registration Rights Agreement.

“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 with respect to a Person, any Indebtedness of such Person (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or

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junior in right of payment to the Notes or a Note Guarantee of such Person, as the case may be, pursuant to a written agreement to that effect.

“Subsidiary” means, with respect to any Person:

(1) any corporation, association or other business entity of which more than 50% of the Voting Stock is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (whether general or limited), limited liability company or joint venture (a) the sole general partner or the managing general partner or managing member of which is such Person or a Subsidiary of such Person, or (b) if there are more than a single general partner or member, either (i) the only general partners or managing members of which are such Person and/or one or more Subsidiaries of such Person (or any combination thereof) or (ii) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership, limited liability company or joint venture, respectively.

“Temporary Cash Investments” means any of the following (which, to the extent not in conflict with the TIA, may include investments for which the Collateral Agent or any of its Affiliates serves as investment manager or adviser):

(1) any investment in direct obligations of, or obligations guaranteed by, the United States of America or any agency thereof;

(2) 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 bank or trust company which is organized under the laws of the United States of America, any state thereof or any other country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of US$250,000,000 (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;

(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;

(4) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than the Company or an Affiliate of the Company) organized and in existence under the laws of the United States of America or any other 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 or “A-1” (or higher) according to S&P; and

(5) 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 Canada, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A2” by Moody’s.

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“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended, as in effect on the date on which this Indenture is qualified under the TIA, except as otherwise provided in Section 9.03.

“Trustee” means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

“Unrestricted Global Note” means a permanent Global Note in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall have been designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below, and (2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if it:

(1) has no indebtedness other than Non-Recourse Indebtedness;

(2) is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained, in light of all the circumstances, at the time from Persons who are not Affiliates of the Company;

(3) is a Person with respect to which neither the Company nor any Restricted Subsidiary has any direct or indirect obligation (x) to subscribe for additional Capital Stock or (y) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;

(4) does not guarantee, secure with any of its assets or properties or otherwise directly or indirectly provide credit support for any Indebtedness of the Company or any Restricted Subsidiary;

(5) does not own any Capital Stock of or own or hold any Lien on any asset or property of, the Company or any Restricted Subsidiary; and

(6) would constitute an Investment which the Company could make in compliance with Section 4.08.

If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture, and any Indebtedness of such Subsidiary shall be deemed to be

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Incurred as of such date and subject to immediate compliance with Section 4.07, the failure with which to so comply will constitute a Default.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation (A) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of Section 4.07, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period and (B) no Default shall have occurred and be continuing. Any such designation by such Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of such Board of Directors giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions.

“U.S. dollars” or “US$” means United States dollars.

“U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.

“Vessel Assets” has the meaning set forth in the definition of the term “Collateral”.

“Vessels” has the meaning set forth in the definition of the term “Collateral”.

“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 or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary) is owned by the Company or one or more Wholly Owned Subsidiaries.

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SECTION 1.02. Other Definitions.

Term	Defined in Section
“Additional Amounts”	4.18
“Additional Notes”	2.02
“Affiliate Transaction”	4.11
“Annual Reduction Date”	3.11
“Annual Reduction Offer”	3.11
“Annual Reduction Offer Purchase Date”	3.11
“Asset Disposition Purchase Offer”	3.09
“Asset Sale Offer”	4.10
“Asset Sale Proceeds Account”	4.10
“Canadian Private Placement Legend”	2.06(g)(iii)
“Change of Control Offer”	4.17
“Change of Control Payment”	4.17
“Change of Control Payment Date”	4.17
“Collateral Proceeds Offer”	4.10
“Control Accounts”	10.03(e)
“Covenant Defeasance”	8.05
“DTC”	2.03
“Event of Default”	6.01
“Excess Asset Disposition Proceeds”	4.10
“Excess Proceeds from the Sale of Collateral”	4.10
“Funding Guarantor”	13.05
“Indemnitee”	10.07
“Judgment Currency”	14.10
“Legal Defeasance”	8.04
“Offer Amount”	3.09
“Offer Period”	3.09
“Original Notes”	2.02
“Paying Agent”	2.03
“Payment Default”	6.01
“Purchase Date”	3.09
“Registrar”	2.03
“Relevant Taxing Jurisdiction”	4.18
“Successor Company”	5.01
“Taxes”	4.18

SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

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“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes means the Company and any successor obligor upon the Notes.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

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, and “including” means “including without limitation,” “including but not limited to” or words of similar import;

(4) the word “will” shall be construed to have the same meaning and effect as the word “shall;”

(5) words in the singular include the plural, and in the plural include the singular;

(6) provisions apply to successive events and transactions;

(7) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time;

(8) references to “Sections,” “clauses,” “Articles,” “Exhibits” and “Schedules” shall be to Sections, clauses, Articles, Exhibits and Schedules, respectively, of this Indenture unless otherwise specifically provided;

(9) the use in this Indenture of the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Indenture in its entirety and not to any particular provision hereof; and

(10) this Indenture, the other Note Documents, the Security Documents and any documents or instruments delivered pursuant hereto shall be construed without regard to the identity of the party who drafted the various provisions of the same. Each and every provision of this Indenture, the other Note Documents, the Security Documents and instruments and documents entered into and delivered in connection therewith shall be construed as though the parties participated equally in the drafting of the same. Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party shall not be applicable either to this Indenture, the other Note Documents or the Security Documents and instruments and documents entered into and delivered in connection therewith.

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ARTICLE II

THE NOTES

SECTION 2.01. Form and Dating.

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of US$1,000 and integral multiples thereof. Subject to Section 4.14 and 13.02 hereof, the Notes may bear notations of Note Guarantees.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture, and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note or any notation of Note Guarantees thereon conflicts with the express provisions of this Indenture, the provisions of this Indenture shall, to the extent not prohibited by applicable law, govern and be controlling.

Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend and the “Schedule of Exchanges in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such aggregate principal amount of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee, the Depositary or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Bank” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in Regulation S Global Notes that are held by members of, or Participants, in DTC through Euroclear or Clearstream.

SECTION 2.02. Execution and Authentication.

One Officer shall sign the Notes for the Company by manual or facsimile signature.

If an Officer of the Company whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

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The Trustee shall authenticate (i) the Initial Notes for original issue on the Issue Date in the aggregate principal amount of US$125,000,000 (the “Original Notes”), (ii) additional Initial Notes for original issue from time to time after the Issue Date which are issued in accordance with the provisions of this Indenture (such additional Initial Notes, the “Additional Notes”), and (iii) any Exchange Notes from time to time for issue only in exchange for a like principal amount of Initial Notes, in each case, upon a written order of the Company signed by one Officer, which written order shall specify (a) the amount of Notes to be authenticated and the date of original issue thereof, (b) whether the Notes are Initial Notes or Exchange Notes and (c) the amount of Notes to be issued in global form or definitive form. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

Notwithstanding anything to the contrary contained herein, the Company may not issue any Additional Notes, unless:

(1) immediately after giving effect to such issuance, no Event of Default shall have occurred and be continuing;

(2) such issuance complies with Section 4.07; and

(3) (i) the proceeds from each such issuance shall be deposited into a Control Account and withdrawn therefrom solely for the purpose to acquire, by the Company or one or more Guarantors, one or more vessels of type, function, use and nature substantially similar to that of any of the Vessels included in the Collateral as of the Issue Date, or reasonably related thereto, and which are placed in use for a Related Business; (ii) contemporaneous with the acquisition of such vessel or vessels, such vessel or vessels and all related equipment, rights and other property used or to be used in connection with, or arising from the operation of, such vessel or vessels shall be encumbered by a perfected first-priority Lien in favor of the Collateral Agent (subject to Permitted Collateral Liens), with the effect that each such vessel shall constitute a “Vessel” and together with such related equipment, rights and other property shall constitute “Vessel Assets”, and collectively shall be included in and constitute Collateral; (iii) the Indebtedness incurred to acquire such vessel or vessels, including the principal amount of Additional Notes issued therefor, shall not in the aggregate exceed 75% of the purchase price of such vessel or vessels and such related equipment, rights and other property or the appraised value thereof (as determined by an Independent Qualified Party); and (iv) such inclusion of vessels as Collateral shall comply with all applicable provisions and requirements of the Indenture, the Credit Agreement, the Security Documents and the TIA;

provided, however, that as a condition to the Company’s use of any such proceeds for any such acquisition (and any related withdrawal from the corresponding Control Account), the Company shall have delivered to the Trustee (y) an Officers’ Certificate stating that funds to be withdrawn from the corresponding Control Account will be used solely in compliance with above clause (3) and (z) an Officer’s Certificate and an Opinion of Counsel, as applicable, stating that all conditions precedent provided for in this Indenture and applicable Security Documents, and by the TIA, for such withdrawal and use have been complied with or contemporaneously therewith, will be complied with.

In addition, no Additional Notes may be issued if the Stated Maturity thereof is within five years of the date of original issuance thereof.

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With respect to any Additional Notes, the Company shall set forth in (i) a Board Resolution and an accompanying Officers’ Certificate or (ii) one or more indentures supplemental hereto, the following information:

(1) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;

(2) the issue price and the issue date of such Additional Notes, and the date of first payment of interest; and

(3) whether such Additional Notes shall be Notes that bear the Private Placement Legend, Global Note Legend and/or be issued as a Definitive Note.

In authenticating and delivering Additional Notes, the Trustee shall be entitled to receive and shall be fully protected in relying upon, in addition to the Opinion of Counsel and Officers’ Certificate required by Section 14.04, an Opinion of Counsel as to the due authorization, execution, delivery, validity and enforceability of such Additional Notes, including any Note guarantees relating thereto.

The Initial Notes (and for the avoidance of doubt, both as to Original Notes and Additional Notes) and the Exchange Notes shall be considered collectively as a single class for all purposes of this Indenture. Holders of the Initial Notes and the Exchange Notes will vote and consent together on all matters to which such Holders are entitled to vote or consent as one class, and none of the Holders of the Initial Notes or the Exchange Notes shall have the right to vote or consent as a separate class on any matter to which such Holders are entitled to vote or consent.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes 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 an agent to deal with Holders or an Affiliate of the Company.

SECTION 2.03. Registrar, Paying Agent and Calculation Agent.

The Company shall maintain an office or agency within the United States of America where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company shall also appoint a Calculation Agent for purposes specified in the Notes. The Company may change any Paying Agent, Registrar or Calculation Agent without notice to any Holder. The Company shall notify the Trustee in writing in advance of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes. The Trustee has been appointed by DTC to act as Note Custodian with respect to the Global Notes.

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The Company initially appoints the Trustee to act as the Registrar, Paying Agent and Calculation Agent.

The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture which agreement shall incorporate the provisions of the TIA and implement the provisions of this Indenture that relate to that Agent.

SECTION 2.04. Paying Agent to Hold Money in Trust.

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, or premium or Special Interest, if any, or interest on, the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or an Affiliate of the Company (including any Subsidiary) acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05. Holder 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 all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall provide to a Responsible Officer of the Trustee at least seven 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 the Holders of Notes, which list may be conclusively relied upon by the Trustee, and the Company shall otherwise comply with TIA § 312(a).

SECTION 2.06. Transfer and Exchange.

(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Global Notes will be exchanged by the Company for Definitive Notes only if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary for the Global Notes or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion notifies the Trustee in writing that it elects to cause issuance of the Notes in certificated form. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than

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as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests (other than a transfer of a beneficial interest in a Global Note to a Person who takes delivery thereof in the form of a beneficial interest in the same Global Note), the transferor of such beneficial interest must deliver to the Registrar (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon notification from the Registrar that all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture, the Notes and otherwise applicable under the Securities Act have been satisfied, the Trustee shall adjust the principal amount of the relevant Global Notes pursuant to Section 2.06(h) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person

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who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of clause (ii) above and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the Rule 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in Item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in Item (2) thereof; and

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by (3) thereof, in each case, if applicable.

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of clause (ii) above and:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the corresponding Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the corresponding Registration Rights Agreement;

(C) any such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the corresponding Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in Item (1)(a) thereof;

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(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and

(3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Trustee and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]

(d) [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 2.06(e).

(i) Restricted Definitive Notes may be transferred to and registered in the name of Persons who take delivery thereof if the Registrar receives the following:

(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in Item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904 of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in Item (2) thereof; and

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(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by Item (3) thereof, if applicable.

(ii) Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the corresponding Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the corresponding Registration Rights Agreement;

(C) any such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the corresponding Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in Item (1)(b) thereof;

(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and

(3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Trustee and the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Definitive Note is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States.

(iii) A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive

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Note. Upon receipt of a request for such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. Unrestricted Definitive Notes cannot be exchanged for or transferred to Persons who take delivery thereof in the form of a Restricted Definitive Note.

(f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the corresponding Registration Rights Agreement, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that are not (1) broker-dealers, (2) Persons participating in the distribution of the Exchange Notes or (3) Persons who are affiliates (as defined in Rule 144) of the Company and accepted for exchange in such Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in such Exchange Offer without the Private Placement Legend in the appropriate principal amount. Concurrent with the issuance of such Unrestricted Global Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount.

(g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

(i) Private Placement Legend.

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON WHO IS ACQUIRING THIS SECURITY IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 903 OR RULE 904 OF REGULATION S, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) AND THE LAST DATE ON WHICH SECUNDA INTERNATIONAL LIMITED (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY, OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR

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RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING IN THE INDENTURE IS COMPLETED AND DELIVERED BY THE TRANSFER TO THE TRUSTEE.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form:

“THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREIN REFERRED TO AND IS REGISTERED IN THE NAME OF, AND IS HELD BY, THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO ARTICLE II OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF SECUNDA INTERNATIONAL LIMITED OR ANY SUCCESSOR THERETO.”

Additionally, for so long as DTC is the Depositary with respect to any Global Note, each such Global Note shall also bear a legend in substantially the following form:

“UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE), TO SECUNDA INTERNATIONAL LIMITED OR ANY SUCCESSOR THERETO OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE

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DEPOSITARY), 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.”

(iii) Canadian Private Placement Legend. So long as the Company is not a reporting issuer in Canada, the following legend is prescribed by applicable Canadian securities legislation and applies to trades in the notes involving Persons in Canada (the immediately following legend, the “Canadian Private Placement Legend”):

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (i) AUGUST     , 2004, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.

(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or by the Depositary at the direction of the Trustee, to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges.

(i) To permit registrations of transfers and exchanges, subject to Section 2.06, the Company shall execute and, upon the Company’s written order, signed by one or more officers of the Company, the Trustee shall authenticate Global Notes and Definitive Notes at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.10, 4.17 and 9.05 hereof).

(iii) The Registrar shall not be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits

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under this Indenture and the Note Guarantees, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Company and the Registrar shall not be required (A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date or (D) to register the transfer of a Note other than in denominations of US$1,000 or multiple integrals thereof.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

(viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a transfer or exchange may be submitted by facsimile.

(ix) The Trustee and the Registrar shall have no obligation or duty to monitor, determine or inquire as (i) to whether any Person is or is not a Person described in clauses (1), (2) and (3) of each of Sections 2.06(b)(iv)(A), 2.06(e)(ii)(A) and 2.06(f) hereof or (ii) as to whether any Person is or is not a Person, and whether a transfer is made pursuant to the exemptions from the Securities Act described in Sections 2.06(e)(i)(A) and 2.06(e)(i)(B), or otherwise under applicable law (other than the TIA) with respect to any transfer of any interest in any Note (including any transfers between or among Participants or beneficial owners of interests in any Global Note) 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.

SECTION 2.07. Replacement Notes.

If any mutilated Note is surrendered to the Trustee or the Company, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by one Officer of the Company, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee and any Agent from any loss that any of them may suffer if a Note is replaced. The Company and the Trustee may charge for their respective expenses in replacing a Note. If, after the delivery of such replacement Note, a bona fide purchaser of the original Note in lieu of which

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such replacement Note was issued presents for payment or registration such original Note, the Trustee shall be entitled to recover such replacement Note from the Person to whom it was delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company, the Trustee and any Agent in connection therewith.

Subject to the provisions of the final sentence of the preceding paragraph of this Section 2.07, every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

SECTION 2.08. Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest and Special Interest, if any, on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest and Special Interest, if any.

SECTION 2.09. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes 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 considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the Company or an Affiliate of the Company offers to purchase or acquires pursuant to an offer, exchange offer, tender offer or otherwise shall not be deemed to be owned by the Company, such Subsidiary or such Affiliate until legal title to such Notes passes to the Company, such Subsidiary or such Affiliate, as the case may be.

SECTION 2.10. Temporary Notes.

Until Definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Company signed by one Officer of the Company. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be

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reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes.

Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.

SECTION 2.11. Cancellation.

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall return such canceled Notes to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation other than as contemplated by an Exchange Offer.

SECTION 2.12. Calculation of Interest; Computation of Interest.

Interest on the Notes shall be calculated by the Calculation Agent in accordance with the provisions set forth in the Note, and the initial Calculation Agent shall be the Trustee. In addition, interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months, and interest on the Notes for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the number of days elapsed in any partial month.

SECTION 2.13. Interest Act (Canada)

Solely for the purpose of providing the disclosure required by the Interest Act (Canada), the annual rate of interest that is equivalent to the rate payable on the Notes shall be the rate payable multiplied by the actual number of days in the year divided by 360.

SECTION 2.14. Defaulted Interest.

If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall promptly notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

SECTION 2.15. CUSIP, Common Code and ISIN Numbers.

The Company in issuing the Notes may use “CUSIP”, “Common Code” and “ISIN” numbers (if then generally in use) in addition to the other identification numbers printed on the Notes, and, if so, the Trustee shall use “CUSIP”, “Common Code” and “ISIN” numbers in notices of redemption or repurchase, as the case may be, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption or repurchase, as the case

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may be, and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption or repurchase, as the case may be, shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “Common Code” and “ISIN” numbers.

ARTICLE III

REDEMPTION AND PREPAYMENT

SECTION 3.01. Notices to Trustee.

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 or Section 3.10 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price (or method for calculating it) and (v) that the redemption price will be deposited with the Trustee in immediately available funds no later than 10:00 a.m., New York City time, on the redemption date.

SECTION 3.02. Selection of Notes to be Redeemed.

If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate, and which may provide for the selection for redemption of portions of the principal of the Notes in denominations of US$1,000 or integral multiples thereof. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of US$1,000 or whole multiples of US$1,000. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.

SECTION 3.03. Notice of Redemption.

Subject to the provisions of Sections 3.09 and 3.11 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

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The notice shall identify the Notes (including CUSIP numbers) to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price (or the method for calculating it);

(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment, interest and Special Interest, if any, on Notes called for redemption cease to accrue on and after the redemption date;

(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

(h) 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 Notes.

If any of the Notes to be redeemed is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to such redemption.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

SECTION 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional.

SECTION 3.05. Deposit of Redemption Price.

No later than 10:00 a.m. New York City Time on the redemption date, the Company shall deposit with the Trustee or with the Paying Agent immediately available funds sufficient to pay the redemption price of and accrued interest and Special Interest, if any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the

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amounts necessary to pay the redemption price of, and accrued interest and Special Interest, if any, on, all Notes to be redeemed.

If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest (including Special Interest), if any, shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest (including Special Interest), if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

SECTION 3.06. Notes Redeemed in Part.

Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company’s written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

SECTION 3.07. Optional Redemption.

(a) Except as set forth in clause (b) of this Section 3.07 and in Section 3.10, the Notes shall not be redeemable at the Company’s option prior to September 1, 2006. On or after September 1, 2006, the Notes will be subject to redemption at any time or from time to time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest (including Special Interest), if any, thereon, to the applicable 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 twelve-month period commencing on September 1 of the years indicated below:

Year	Percentage
2006	104.00	%
2007	102.00	%
2008	101.00	%
2009 and thereafter	100.00	%

(b) In addition, prior to September 1, 2007, the Company may, at it option, on one or more occasions redeem Notes in an aggregate principal amount not to exceed 35% of the aggregate principal amount of Notes originally issued under this Indenture at a redemption price (expressed as a percentage of the principal amount) equal to the sum of (i) 100% plus (ii) the interest rate per annum (expressed as a percentage) in effect on the date which notice is given, plus accrued and unpaid interest (including Special Interest), if any, thereon, to the redemption date, with the net cash proceeds of any one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Notes remain outstanding immediately after the occurrence of each such redemption (other than Notes held, directly or indirectly, by the Company or its Affiliates); and provided, further, that each such redemption occurs within 90 days after the date of such Equity Offering.

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(c) Any redemption pursuant to this Section 3.07 or Section 3.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

SECTION 3.08. Mandatory Redemption.

The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. However, pursuant to Sections 3.09, 3.11, 4.10 and 4.17 hereof, under certain circumstances, the Company may be required to offer to purchase the Notes.

SECTION 3.09. Offer to Purchase by Application of Excess Asset Disposition Proceeds and Excess Proceeds from the Sale of Collateral.

In the event that, pursuant to Section 4.10 hereof, the Company shall commence an offer to all Holders to purchase Notes (an “Asset Disposition Purchase Offer”), it shall follow the procedures specified below.

The Asset Disposition Purchase Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the “Offer Amount”) or, if less than the Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Special Interest, if any, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest or Special Interest shall be payable to Holders who tender Notes pursuant to the Asset Disposition Purchase Offer.

Upon the commencement of an Asset Disposition Purchase Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Disposition Purchase Offer. The Asset Disposition Purchase Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Disposition Purchase Offer, shall state:

(a) that the Asset Disposition Purchase Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Disposition Purchase Offer shall remain open;

(b) the Offer Amount, the purchase price and the Purchase Date;

(c) that any Note not tendered or accepted for payment shall continue to accrete or accrue interest and Special Interest, if any;

(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Disposition Purchase Offer shall cease to accrete or accrue interest and Special Interest, if any, on the Purchase Date;

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(e) that Holders electing to have a Note purchased pursuant to an Asset Disposition Purchase Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;

(f) that Holders electing to have a Note purchased pursuant to any Asset Disposition Purchase Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed to the Company, the Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(g) that Holders shall be entitled to withdraw their election if the Company, such depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of US$1,000, or integral multiples thereof, shall be purchased); and

(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

If any of the Notes subject to an Asset Disposition Purchase Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to such repurchases.

On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Disposition Purchase Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the depositary (if any, and as referred to in clause (f) above of this Section 3.09) or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company, shall authenticate and make available for delivery such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Disposition Purchase Offer on the Purchase Date.

SECTION 3.10. Redemption for Changes in Withholding Tax.

(a) The Company will be entitled to redeem the Notes, at its option, at any time as a whole but not in part, upon not less than 30 nor more than 60 days’ notice, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest (including Special Interest), if any, thereon to the date of redemption (subject to the right of Holders of

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record on the relevant record date to receive interest due on the relevant interest payment date), in the event the Company 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:

(1) a change in or an amendment to the laws (including any regulations promulgated thereunder) of a Relevant Taxing Jurisdiction, which change or amendment is announced after the Issue Date; or

(2) any change in or amendment to any official position regarding the application or interpretation of such laws or regulations, which change or amendment is announced after the Issue date;

and, in each case the Company cannot avoid such obligation by taking reasonable measures available to it.

(b) Before the Company publishes or mails notice of redemption of the Notes as described above, the Company will deliver to the Trustee an Officers’ Certificate to the effect that it cannot avoid its obligation to pay Additional Amounts by taking reasonable measures available to it and an opinion of independent legal counsel of recognized standing stating that the Company would be obligated to pay Additional Amounts as a result of a change in tax laws or regulations or the application or interpretation of such laws or regulations. No such notice of redemption may be given more than 60 days before or more than 270 days after the Company first becomes liable to pay any Additional Amounts as a result of a change or amendment described above.

SECTION 3.11. Annual Reduction Offer

On August 1, 2006, and on each subsequent August 1 thereafter until and including August 1, 2011 (each an “Annual Reduction Date”), the Company shall offer, on a pro rata basis, to purchase Notes in an aggregate principal amount of US$3,800,000 at a purchase price in cash equal to 100% of the principal amount thereof on the date of purchase 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); provided that Notes held, directly or indirectly, by the Company or any of its Affiliates shall not be eligible for such offer. For purposes of this Section 3.11, the phrase “pro rata basis” shall refer to the ratio of the aggregate principal amount of Notes tendered by a Holder pursuant to an Annual Reduction Offer to the aggregate principal amounts of Notes tendered by all Holders pursuant to such Annual Reduction Offer; provided, however, if Notes tendered pursuant to an Annual Reduction Offer are in an aggregate principal amount equal to or less than US$3,800,000, then each tendering Holder shall receive the full principal amount of the Notes tendered by it.

On or prior to each Annual Reduction Date, the Company will mail a notice (containing all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Annual Reduction Offer) to each Holder with a copy to the Trustee (the “Annual Reduction Offer”) stating:

(1) that an Annual Reduction Date has occurred, and that the Company is making an offer, on a pro rata basis, to purchase Notes in an aggregate principal amount of US$3,800,000 at a purchase price in cash equal to 100% of the principal amount thereof on the date of purchase, 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), and

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each Holder of Notes, other than (directly or indirectly) the Company or any Affiliate of the Company, has the right to require the Company to purchase such Holder’s pro rata share of such Notes;

(2) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Annual Reduction Offer Purchase Date”); and

(3) that any Note not tendered or accepted for payment shall continue to accrete or accrue interest and Special Interest, if any;

(4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Annual Reduction Offer shall cease to accrete or accrue interest and Special Interest, if any, on the Annual Reduction Offer Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Annual Reduction Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;

(6) that Holders electing to have a Note purchased pursuant to any Annual Reduction Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed to the Company, the Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three Business Days before the Annual Reduction Offer Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Company, such Depositary or the Paying Agent, as the case may be, receives, not later than three Business Days prior to the Annual Reduction Offer Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes surrendered by Holders exceeds US$3,800,000, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of US$1,000, or integral multiples thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

If any of the Notes subject to an Annual Reduction Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to such repurchases.

On or before the Annual Reduction Offer Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, US$3,800,000 of Notes or portions thereof tendered pursuant to the Annual Reduction Offer, or if less than US$3,800,000 has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.11. The Company, the Depositary (if any, and as referred to in clause (6) above of this Section 3.11) or the Paying Agent, as the case may be, shall

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promptly (but in any case not later than five days after the Annual Reduction Offer Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company, shall authenticate and make available for delivery such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Annual Reduction Offer on the Annual Reduction Offer Purchase Date.

In addition, the Company shall comply, to the extent applicable, with the requirements of Section 14(e) under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with an Annual Reduction Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described above, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 3.11 by virtue of its compliance with such securities laws or regulations.

ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Notes.

The Company shall pay or cause to be paid the principal of, and premium, if any, interest and Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, interest and Special Interest, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, interest and Special Interest, if any, then due. The Company shall pay all Special Interest, if any, in the same manner on the dates and in the amounts set forth in the corresponding Registration Rights Agreement.

The Company shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue principal at the rate borne on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest and Special Interest, if any, (without regard to any applicable grace period) at the same rate to the extent lawful.

SECTION 4.02. Maintenance of Office or Agency.

The Company shall maintain in the United States of America, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

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The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the United States of America for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby designates the corporate trust office or agency of the Trustee at Wells Fargo Corporate Trust, c/o Depository Trust Company, 1^st Floor, Street Level, TADS Department, 55 Water Street, New York, New York, 10041, as one such office or agency of the Company in accordance with Section 2.03.

SECTION 4.03. Reports.

(a) Whether or not required by the SEC’s rules and regulations, so long as any Notes are outstanding, the Company shall furnish to each of the Holders of Notes, within the time periods specified in the SEC’s rules and regulations, beginning with annual financial information for the annual period ended June 30, 2004, (i) all quarterly and annual reports applicable to a foreign private issuer which would be required to be filed with the SEC if the Company were required to file such reports, and (ii) all current reports applicable to a foreign private issuer which would be required to be filed with the SEC if the Company were required to file such reports.

(b) All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, the Company will file a copy of each of the reports referred to in clauses (a)(i) and (a)(ii) of this Section 4.03 with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request.

(c) If at any time, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, in lieu of filing such reports with the SEC, the Company may post the reports referred to in clauses (a)(i) and (a)(ii) of this Section 4.03 on its website within the time periods that would apply if the Company were required to file those reports with the SEC; provided, further, it shall in any event continue to provide copies of such reports to the Trustee and each Holder of the Notes as above provided.

(d) The Company and the Guarantors agree that, for so long as any Notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the SEC, they will furnish to the Holders of the Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d) (4) under the Securities Act.

(e) Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

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SECTION 4.04. Compliance Certificate.

(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture and the other Note Documents, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge no Default or Event of Default has occurred during such year (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she has knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or premium or interest (including any Special Interest), if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

(b) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, within 30 days after the occurrence thereof, an Officer’s Certificate providing notice that an event or circumstance that constitutes a Default or an Event of Default has occurred and is existing and specifying such Default or Event of Default, the status thereof and what action the Company is taking or proposes to take with respect thereto.

SECTION 4.05. Taxes.

The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, charges, assessments, and governmental levies except such as are contested in good faith and, if required, by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

SECTION 4.06. Waiver of Stay, Extension and Usury Laws.

Each of the Company and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture or any other Note Document; and each of the Company and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, 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.

SECTION 4.07. Limitation on Indebtedness.

(a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided that the Company and any Guarantor may Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, no Default has occurred and is continuing, or would occur as a consequence of such Incurrence, and the Consolidated Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been or are available immediately preceding the date on which such Indebtedness is Incurred would have been at least (i) 1.75 to 1.0, if such Indebtedness is Incurred on or prior to December 31, 2005 and (ii) 2.0 to 1.0, if such

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Indebtedness is Incurred on or after January 1, 2006, respectively, as if such Indebtedness had been Incurred at the beginning of such four-quarter period.

(b) Notwithstanding the foregoing paragraph (a), the Company, any Guarantor or the Restricted Subsidiaries, as applicable, may Incur, to the extent provided below, the following Indebtedness:

(1) Indebtedness Incurred by the Company or any Guarantor pursuant to the Credit Agreement; provided, that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $40,000,000 at the time such Indebtedness was incurred;

(2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided that (A) 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 a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon and (B) (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes or (ii) if a Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to its Notes Guarantee;

(3) Indebtedness of the Company under the Notes and of each Guarantor pursuant to its Note Guarantee;

(4) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date (but excluding Indebtedness described in clause (1), (2) or (3) of this paragraph (b));

(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Subsidiary was acquired by the Company (other than Indebtedness Incurred in connection with, 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 Subsidiary became a Subsidiary or was acquired by the Company) and excluding therefrom any of such Indebtedness that is extinguished, retired or repaid in connection with such acquisition; provided that on the date of such acquisition and after giving pro forma effect thereto, the Company would have been able to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this covenant;

(6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4), (5) or (6) of this paragraph;

(7) Hedging Obligations Incurred to protect the Company and its Restricted Subsidiaries;

(8) Indebtedness (including Capital Lease Obligations) of the Company or any Restricted Subsidiary (including any Refinancing Indebtedness with respect thereto) Incurred, in the ordinary course of business, to finance the acquisition,

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construction or improvement of any fixed or capital assets used or useable in a Related Business, including any Indebtedness assumed in connection with the acquisition of any such assets, in an aggregate principal amount which, when taken together with all other Indebtedness Incurred pursuant to this clause (8) and then outstanding, does not exceed the greater of (i) $10,000,000 or (ii) 5% of Consolidated Tangible Assets (measured at the time of the original incurrence of such Indebtedness, in the case of a Refinancing);

(9) Indebtedness of the Company or any Restricted Subsidiary arising from customary agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any Restricted Subsidiary or any business or fixed or capital assets of the Company or a Restricted Subsidiary; provided, however, (A) such Indebtedness is not reflected as a liability on the balance sheet of the Company or any Restricted Subsidiary and (B) the maximum liability therefor shall not exceed the gross cash proceeds actually received by the Company or a Restricted Subsidiary in connection with such disposition;

(10) any Guarantee by the Company or a Guarantor of any Indebtedness permitted to be Incurred pursuant to paragraph (a) or pursuant to the Indenture; provided that a Guarantee of any Indebtedness of a Restricted Subsidiary that ceases to be a Restricted Subsidiary shall be deemed to be an Investment other than a Permitted Investment, and subject to compliance with related provisions of the Indenture, at the time its Restricted Subsidiary status terminates in an amount equal to the maximum principal amount as guaranteed for so long as such Guarantee remains outstanding;

(11) Indebtedness of the Company or any Restricted Subsidiary in respect of bid, performance, surety or appeal bonds issued for the account and benefit of the Company or a Restricted Subsidiary and provided in the ordinary course of business of the Company and the Restricted Subsidiaries; and

(12) in addition to the items referred to in the preceding clauses (1) through (11) above, Indebtedness of the Company and the Guarantors in an aggregate principal amount which, when taken together with all other Indebtedness Incurred pursuant to this clause (12) and then outstanding will not exceed $2,500,000 at any time outstanding.

(c) Notwithstanding the foregoing, the Company will not, and will not permit any Guarantor or Restricted Subsidiary to, Incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof (or in the case of any Guarantee pursuant to the foregoing paragraph (b), if the proceeds of direct Indebtedness so Guaranteed) are used, directly or indirectly, to Incur or Refinance any Subordinated Obligations of the Company or any Guarantor or Restricted Subsidiary unless such Indebtedness shall be subordinated to the Notes or relevant Note Guarantee, as applicable, to at least the same extent as such as such Subordinated Obligations.

(d) For purposes of determining compliance with this covenant, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above in paragraph (b) or is entitled to be incurred pursuant to paragraph (a) of this covenant, the Company, in its sole discretion, will be permitted to classify such item of Indebtedness on the date of its Incurrence, or later classify or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant and (ii) at each such time,

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the Company will be entitled to divide, classify and reclassify an item of Indebtedness in more than one of the types of Indebtedness described above.

(e) The Company will not, and will not permit any Guarantor to, directly or indirectly, Incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Notes and the relevant Note Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Company or such Guarantor or Restricted Subsidiary, as the case may be.

SECTION 4.08. Limitation on Restricted Payments.

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment and after giving effect thereto:

(1) a Default shall have occurred and be continuing (or would result therefrom);

(2) the Company would not be permitted to Incur at least an additional $1.00 of Indebtedness pursuant to paragraph (a) of Section 4.07; or

(3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed, after giving effect to adjustments in the following paragraph (b), the sum of (without duplication):

(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the fiscal quarter in which the Issue Date to the end of the most recent fiscal quarter for which financial statements are available on or prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

(B) 100% of 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) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Issue Date; plus

(C) the amount by which Indebtedness of the Company issued after the Issue Date 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

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(less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange); plus

(D) an amount equal to the sum of (y) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person after the Issue Date resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary, and (z) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such 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 such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made and treated as a Restricted Payment by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

(b) The preceding provisions of this covenant will not prohibit any of the following:

(1) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Guarantor made by exchange for, or out of the Net Cash 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) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided that (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Guarantor made by exchange for, or out of the net cash proceeds of the substantially concurrent Incurrence of Refinancing Indebtedness; provided 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 in clause (3) of paragraph (a) above;

(3) the repurchase or other acquisition of shares of Capital Stock of the Company of 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 the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided that the aggregate amount of such repurchases and other acquisitions

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shall not exceed $500,000 in any calendar year; provided, further, that such repurchases and other acquisitions shall be included in the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above;

(4) the payment of a dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted by the provisions of paragraph (a) of this covenant on the date of its declaration; provided that any such dividend made in reliance on this paragraph shall be included in the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above;

(5) dividends on Disqualified Stock to the extent included in the definition of Consolidated Interest Expense; provided that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above; or

(6) so long as no Event of Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate principal amount since the Issue Date not exceeding $10,000,000; provided that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments in clause (3) of paragraph (a) above.

The amount of all Restricted Payments (other than cash) shall be the fair market value (as determined in good faith by the Board of Directors of the Company and as evidenced by a resolution of the Board of Directors of the Company set forth in an Officers’ Certificate delivered to the Trustee) on the date of the transfer, incurrence or issuance of such non-cash Restricted Payment. Not later than (1) the end of any calendar quarter in which any Restricted Payment is made or (2) the making of a Restricted Payment which, when added to the sum of all previous Restricted Payments made in a calendar quarter, would cause the aggregate of all Restricted Payments made in such quarter to exceed $1,000,000, the Company shall deliver to the Trustee an officers’ certificate stating that such Restricted Payments were permitted and setting forth the basis upon which the calculations required by this covenant were computed, which calculations may be based upon the Company’s latest available financial statements.

SECTION 4.09. Limitation on Restrictions on Distributions from Restricted Subsidiaries.

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, 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:

(1) with respect to clauses (a), (b) and (c),

(A) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date;

(B) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness

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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 which encumbrance or restriction does not relate to any Person other than such Restricted Subsidiary;

(C) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (A), (B), (F) or (G) of clause (1) of this covenant or this clause (C) or contained in any amendment to an agreement referred to in clause (A), (B), (F) or (G) of clause (1) of this covenant or this clause (C); provided that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment taken as a whole are no more restrictive than the encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;

(D) any such encumbrance or restriction (i) 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 or (ii) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract;

(E) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(F) the Credit Agreement in effect after the Issue Date to the extent its provisions are no more restrictive with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions, and transfer of property restrictions, than those contained in the Credit Agreement as in effect on the Issue Date;

(G) this Indenture, the Notes, the Note Guarantees and the Security Documents;

(H) any future Liens that may be permitted to be granted under, or incurred not in breach or violation of, any other provision of the Indenture;

(I) customary provisions in joint ventures and similar agreements (relating solely to the respective joint venture or similar entity); and

(J) restrictions under applicable laws, rules or regulations; and

(2) with respect to clause (c) only,

(A) restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such

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restrictions restrict the transfer of the property subject to such security agreements or mortgages and such Indebtedness was Incurred not in breach or violation of any provision of the Indenture; and

(B) any encumbrance or restriction by virtue of any transfer or agreement to transfer, option or right with respect to, or Lien on, any property or assets of any Restricted Subsidiary not otherwise prohibited by the Indenture.

SECTION 4.10. Limitation on Sales of Assets and Subsidiary Stock.

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition (including a Sale of Collateral) unless:

(1) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value (including as to the value of all non-cash consideration), as determined in good faith by the Board of Directors of the Company, of the shares and assets subject to such Asset Disposition;

(2) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of, or any combination of, (i) cash or cash equivalents and (ii) Additional Assets; and

(3) in the case of a Sale of Collateral, the Collateral Agent is immediately granted a perfected first priority security interest (subject only to Permitted Collateral Liens) in the Net Sale Consideration therefor received by the Company or such Restricted Subsidiary as additional Collateral under the Security Documents to secure the Secured Obligations, and, in the case of cash or cash equivalents constituting Net Sale Consideration, such cash or cash equivalents must be deposited into a segregated account under the sole control of the Collateral Agent (an “Asset Sale Proceeds Account”), all on terms provided for in the applicable Security Documents;

provided, that any Asset Disposition pursuant to any loss, destruction or damage to an asset, a condemnation, appropriation or other similar taking, including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a Lien incurred not in violation of Section 4.12 or exercise by the related lienholder of rights with respect thereto, including by deed or assignment in lieu of foreclosure shall not be required to satisfy the conditions set forth in clauses (1) and (2) of this paragraph.

For the purposes of this covenant, the following are deemed to be cash or cash equivalents: (i) the assumption of all Indebtedness of the Company or any Restricted Subsidiary (other than liabilities that are Subordinated Obligations), and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness, in connection with such Asset Disposition; and (ii) securities received by the Company or any Restricted Subsidiary from the transferee which are promptly converted by the Company or such Restricted Subsidiary into cash.

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(b) Within 365 days after the receipt of any Net Available Cash from an Asset Disposition, other than a Sale of Collateral, the Company or such Restricted Subsidiary, as the case may be, may apply such Net Available Cash:

(1) first, to the extent the Company elects, or is required by the terms of any Indebtedness, to prepay, repay, redeem or purchase Senior Indebtedness (other than any Disqualified Stock) of the Company or such Restricted Subsidiary (in each case other than Indebtedness owed to the Company or an Affiliate of the Company); and

(2) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (1), to the extent the Company elects, to acquire Additional Assets;

provided, however, that (i) in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (1) above, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased, and (ii) the Company or the applicable Restricted Subsidiary will be deemed to have complied with clause (2) above if, within 365 days of such Asset Disposition, the Company or such Restricted Subsidiary shall have commenced and not completed or abandoned an expenditure or Investment, or a binding agreement with respect to an expenditure or Investment, in compliance with clause (2), and that expenditure or Investment is completed within a date one year and six months after the date of such Asset Disposition. Pending application of such Net Available Cash pursuant to this covenant, such Net Available Cash shall temporarily be invested in Temporary Cash Investments or applied temporarily to reduce revolving credit Indebtedness. Any Net Available Cash from Asset Dispositions, other than a Sale of Collateral, described in this paragraph that is not applied or invested as provided in the paragraph (b) shall be deemed to constitute “Excess Asset Disposition Proceeds”.

When the aggregate amount of Excess Asset Disposition Proceeds exceeds $10,000,000, the Company will be required to make an offer (in accordance with Section 3.09) to all Holders of Notes and holders of each other series of Indebtedness that ranks by its terms pari passu in right of payment with the Notes and the terms of which contain substantially similar requirements with respect to the application of net proceeds from asset sales as are contained in the Indenture (an “Asset Sale Offer”) to purchase on a pro rata basis (with the Excess Asset Disposition Proceeds prorated between the holders of Notes and such holders of pari passu Indebtedness based upon outstanding aggregate principal amounts) the maximum principal amount of the Notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Disposition Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Disposition Proceeds, the Company and such Restricted Subsidiary may use any remaining Excess Asset Disposition Proceeds for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Disposition Proceeds, the Company shall select the Notes and such other Indebtedness to be purchased on a pro rata basis. Upon completion of each such offer to purchase, the amount of Excess Asset Disposition Proceeds shall be reset at zero.

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(c) Within 365 days after the receipt of any Net Sale Consideration from an Asset Disposition that constitutes a Sale of Collateral, the Company or such Restricted Subsidiary, as the case may be, may apply such Net Sale Consideration:

(1) first, to the extent the Company is required by the terms of the Credit Agreement, to prepay or repay Credit Facility Obligations, provided, however, that in connection with any such prepayment or repayment, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid or repaid; and

(2) second, to the extent the Company elects, to prepay or repay Credit Facility Obligations or repurchase and redeem any Notes, provided, however, that in connection with any such prepayment or repayment, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness, that in connection with the Credit Facility Obligations, shall cause the related loan commitment, if any, to be permanently reduced in an amount equal to the principal amount so prepaid or repaid, and in connection with the Notes, shall otherwise comply and be in compliance with the Indenture; and

(3) third, to the extent of the balance of such Net Sale Collateral Consideration after application in accordance with clause (1), to the extent the Company elects, to acquire (or enter into a definitive contract to acquire, provided that the acquisition related thereto is completed within a date one year and six months after the date of such Asset Disposition) Additional Assets;

provided, in each such case, the Collateral Agent shall immediately be granted a perfected first priority security interest (subject to Permitted Collateral Liens) on all of the assets acquired with such Net Sale Consideration as Collateral under the Security Documents to secure the Secured Obligations, all on terms provided for in the applicable Security Documents. Any Net Sale Consideration from the Sale of Collateral that is not applied or invested as provided this paragraph (c) shall be deemed to constitute “Excess Proceeds from the Sale of Collateral”.

When the aggregate amount of Excess Proceeds from the Sale of Collateral exceeds $10,000,000, the Company will be required to make an offer (in accordance with Section 3.09) to all Holders of Notes (a “Collateral Proceeds Offer”) to purchase or redeem or repay, as applicable, on a pro rata basis (with such Excess Proceeds from the Sale of Collateral prorated between the Holders of the Notes and holders of Credit Agreement Indebtedness based upon outstanding aggregate principal amounts) the maximum principal amount of the Notes that may be purchased, and the Credit Agreement Indebtedness that may be prepaid, in each case, out of such Excess Proceeds from the Sale of Collateral, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and Credit Agreement Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to such Collateral Proceeds Offer is less than such Excess Proceeds from the Sale of Collateral, the Company and such Restricted Subsidiary may use any remaining Excess Proceeds from the Sale of Collateral, free and clear of any Liens created by any Security Documents or otherwise for the benefit of any holder of Secured Obligations, for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount of Notes and Credit Agreement Indebtedness surrendered by holders exceeds the amount of such prorated Excess Proceeds from the Sale of Collateral shall select the Notes to be purchased on a pro rata basis and the administrative agent for the Credit Agreement will select the Credit Agreement Indebtedness to be repaid on a pro rata basis. Upon completion of the offer to purchase, the amount of Excess Proceeds from the Sale of Collateral shall be reset at zero.

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(d) The Company will 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 this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the covenant described above by virtue of its compliance with such securities laws or regulations.

SECTION 4.11. Limitation on Affiliate Transactions.

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1) the terms of the Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s length dealings with a Person who is not an Affiliate;

(2) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of $5,000,000, the terms of the Affiliate Transaction are set forth in writing and a majority of the disinterested members of the Board of Directors of the Company have determined in good faith that the criteria set forth in clause (1) are satisfied and has approved the relevant Affiliate Transaction as evidenced by a resolution; and

(3) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of $10,000,000, the Board of Directors of the Company shall also have received a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries.

(b) The provisions of the preceding paragraph (a) will not prohibit:

(1) any Investment (other than a Permitted Investment) or other Restricted Payment, in each case permitted to be made pursuant to Section 4.08;

(2) 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 and stock ownership plans approved by the Board of Directors of the Company;

(3) loans or advances to employees in the ordinary course of business but in any event not to exceed $2,000,000 in the aggregate outstanding at any one time;

(4) in addition to the loans and advances referred to in the preceding clause (3), loans or advances to Affiliates of the Company but in any event not to exceed $3,000,000 in the aggregate outstanding at any one time;

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(5) customary indemnities made in the ordinary course of business to employees or directors of the Company and the Restricted Subsidiaries;

(6) the payment of reasonable fees to directors of the Company and the Restricted Subsidiaries who are not employees of the Company or the Restricted Subsidiaries;

(7) any transaction between or among (x) the Company and the Restricted Subsidiaries and (y) the Restricted Subsidiaries;

(8) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company; and

(9) the sale by the Company or a Restricted Subsidiary of any real property (and related fixtures or appurtenances), or of the Capital Stock of the Subsidiary that owns such real property, provided that such real property is the only significant asset owned by such Subsidiary, to a Permitted Holder for consideration in an amount equal to the book value of such assets as reflected in the then recently available consolidated financial statements of the Company but not to exceed $3,000,000.

SECTION 4.12. Limitation on Liens.

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature whatsoever on (i) any Collateral, except pursuant to a Security Document or Permitted Collateral Liens or (ii) any of its properties that are not Collateral, other than Permitted Liens.

SECTION 4.13. Limitation on Sale/Leaseback Transactions.

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale/Leaseback Transaction with respect to any property unless:

(1) 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 paragraph (a) of Section 4.07 and (B) create a Lien on such property securing such Attributable Debt pursuant to Section 4.12;

(2) the gross proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair market value (as determined by the Board of Directors of the Company) of such property; and

(3) the transfer of such property is permitted by, and the Company applies the proceeds of such transaction in compliance with, Section 4.10.

SECTION 4.14. Future Guarantors

If

(i) (A) the Company or any of the Restricted Subsidiaries forms or acquires a Restricted Subsidiary which, or (B) any Restricted Subsidiary (other than a Guarantor)

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that exists on the Issue Date (including, without limitation, any Initial Non-Guarantor) at any time following the Issue Date, in either case, Incurs Indebtedness other than Indebtedness owed to, or a Guarantee in favor of, the Company or a Guarantor, which in either case is Incurred in compliance with the provisions of the Indenture, then with respect to such Subsidiary, or

(ii) as of the end of any fiscal quarter, the Restricted Subsidiaries that are not then Guarantors own net assets that have an aggregate fair market value (as determined in good faith by the Board of Directors of the Company) equal to or greater than 5% of the Consolidated Tangible Assets at the end of such quarter, then the Company will designate one or more of such Restricted Subsidiaries to become Guarantors such that after giving effect to such designation or designations, as the case may be, the total net assets owned by all such remaining non-Guarantor Restricted Subsidiaries will have an aggregate fair market value (as determined in good faith by the Board of Directors of the Company) of less than 5% of the Consolidated Tangible Assets, then with respect to each such designated Restricted Subsidiary,

within 30 days following the date on which it Incurs Indebtedness (in the case of clause (i) above) or is designated (in the case of clause (ii) above), as the case may be, and the Company will cause such Subsidiary to Guarantee the Notes and, if required by the provisions of this Indenture or the Security Documents, become a party to the Security Documents and a supplemental indenture in accordance with Section 13.02.

SECTION 4.15. Limitation on Business Activities.

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into in any material respect any line of business other than a Related Business.

SECTION 4.16. Payments for Consent

The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture, the Notes, the Note Guarantee, any Security Document or any other Note Document unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

SECTION 4.17. Offer to Repurchase upon Change of Control.

(a) Upon the occurrence of a Change of Control, the Company will offer to purchase each Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest (including Special Interest), if any, thereon, to the date of purchase (the “Change of Control Payment”) (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Within 30 days following any Change of Control, the Company will mail a notice to each Holder, with a copy to the Trustee, stating: (i) the description of the transaction or transactions that constitute the Change of Control, and the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow

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and capitalization, in each case after giving effect to such Change of Control); (ii) that the Change of Control Offer is being made pursuant to this Section 4.17, and that all Notes validly tendered and not withdrawn will be accepted for payment; (iii) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”); (iv) that any Note not tendered will continue to accrue interest and Special Interest, if any; (v) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest and Special Interest, if any, after the Change of Control Payment Date; (vi) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes properly endorsed, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes properly completed, together with other customary documents as the Company may reasonably request, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (vii) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and (viii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to US$1,000 in principal amount or an integral multiple thereof. If any of the Notes subject to a Change of Control Offer are in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to repurchases.

In addition, the Company shall comply, to the extent applicable, with the requirements of Rule 14(e) under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.17 by virtue of its compliance with such securities laws or regulations.

(b) On the Change of Control Payment Date, the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) by no later than 10:00 a.m., New York time, deposit with the Paying Agent in immediately available funds an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of US$1,000 or an integral multiple thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(c) The Change of Control provisions described above will be applicable whether or not any other provisions of this Indenture are applicable, except as set forth in Article VIII hereof.

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(d) The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth herein applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

SECTION 4.18. Payment of Additional Amounts.

(a) The Company and the Guarantors will make all payments under or with respect to the Notes and the Note Guarantees 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) (hereinafter “Taxes”) imposed or levied by or on behalf of Canada or any political subdivision or any authority or agency therein or thereof having power to tax, or by any other jurisdiction in which the Company or any Guarantor is organized or is otherwise resident or conducts business for tax purposes or any jurisdiction from or through which payment is made by the Company or any Guarantor or its agents (each a “Relevant Taxing Jurisdiction”), unless the Company or any Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration thereof.

(b) If the Company or any Guarantor is required to withhold or deduct any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction (other than backup withholding Taxes imposed under the laws of the United States) from any payment made under or with respect to the Notes or any Note Guarantee, the Company or such Guarantor will be required to pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by Holders of the Notes after such withholding or deduction (including any withholding or deduction attributable to Additional Amounts payable hereunder) will not be less than the amount such Holders would have received if such Taxes had not been withheld or deducted; provided, however, that the foregoing obligation to pay Additional Amounts does not apply to any Taxes to the extent such Taxes would not have been so imposed:

(i) but for the existence of any present or former connection between the relevant Holder (or the beneficial owner of such Notes) and the Relevant Taxing Jurisdiction (other than the mere receipt of such payment or the mere acquisition, ownership, holding or disposition of any Note);

(ii) but for the failure of the relevant Holder (or the beneficial owner of such Notes) to use its reasonable best efforts, to the extent such Holder (or beneficial owner) is legally entitled to do so, to comply with a written request by the Company or a Guarantor to satisfy any certification, identification or other reporting requirements which shall include any applicable forms or instructions whether imposed by statute, treaty, regulation, or administrative practice concerning the nationality or residence of such holder or the connection of such holder with the Relevant Taxing Jurisdiction;

(iii) if the payment could have been made without such deduction or withholding if the relevant Holder had presented the Note for payment within 60 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever is later (except to the extent that the holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 60 day period);

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(iv) with respect to any payment of principal of (or premium, if any, on) or interest on such Note to any Holder who is a fiduciary or partnership or any Person other than the sole beneficial owner of such payment, to the extent that a beneficiary with respect to such fiduciary, a member of such a partnership or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, member or beneficial owner been the actual Holder of such Note (but only if there is no material cost or expense associated with transferring such Notes to such beneficiary, partner or beneficial owner and no restriction on such transfer that is outside the control of such beneficiary, partner or beneficial owner); or

(v) with respect to any Canadian Taxes imposed on a payment of, in lieu of, on account of, or in satisfaction of, interest (including deemed interest) made by the Company or a Guarantor which is a resident of Canada, where the beneficiary of such payment does not deal at arm’s length with the Company or such Guarantor, as the case may be, for the purposes of the Income Tax Act (Canada).

(c) The Company and the Guarantors will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. The Company and the Guarantors will make reasonable best efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes. The Company and the Guarantors will provide to the Trustee, within a reasonable time after the date the payment of any Taxes so deducted or withheld are due pursuant to applicable law, either a certified copy of tax receipts evidencing such payment, or, if such tax receipts are not reasonably available to the Company or such Guarantor, such other documentation that provides reasonable evidence of such payment by the Company or such Guarantor.

(d) At least 30 days prior to each date on which any payment under or with respect to the Notes is due and payable (unless such obligation to pay Additional Amounts arises shortly before or after the 30th day prior to such date, in which case it shall be promptly thereafter), if the Company will be obligated to pay Additional Amounts with respect to such payment, the Company will deliver to the Trustee an officers’ certificate stating the fact that such Additional Amounts will be payable and the amounts so payable and will set forth such other information necessary to enable the Trustee to pay such Additional Amounts to holders of Notes on the payment date. Each such officers’ certificate shall be relied upon until receipt of a further officers’ certificate addressing such matters.

(e) Whenever in this Indenture there is mentioned, in any context:

(i) the payment of principal;

(ii) purchase prices in connection with a purchase of Notes;

(iii) interest; or

(iv) any other amount payable on or with respect to any of the Notes or the Note Guarantees,

such reference shall be deemed to include payment of Additional Amounts as described hereunder to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

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(f) The Company 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 Relevant Taxing Jurisdiction from the execution, delivery, enforcement or registration of the Notes, the Indenture, the Security Documents or any other document or instrument in relation thereto, or the receipt of any payments with respect to the Notes.

(g) The obligations described in this Section 4.18 will survive any termination, defeasance or discharge of the Indenture and will apply mutatis mutandis to any successor Person to the Company or any Guarantor and to any jurisdiction in which the Company or any Guarantor is organized or is otherwise resident or conducts business for tax purposes or any jurisdiction from or through which payment is made by the Company or any Guarantors or their respective agents.

SECTION 4.19. Corporate Existence.

Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; provided, however, that the Company shall not be required to preserve the existence of any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.

ARTICLE V

SUCCESSORS

SECTION 5.01. Merger, Consolidation, or Sale of Assets.

The Company will not, directly or indirectly, 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 of its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the “Successor Company”) shall be the Company or a corporation organized or existing under the laws of Canada or any province thereof or the United States, any State thereof or the District of Columbia; (ii) the Successor Company (if not the Company) shall expressly assume by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes, this Indenture, all Security Documents and, if then in effect, the Registration Rights Agreement, pursuant to a supplemental indenture and other appropriate documentation (including a joinder to the Collateral Agency Agreement) in form and substance reasonably satisfactory to the Trustee; (iii) immediately before and after giving pro forma 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; (iv) except in the case of a merger or consolidation of the Company with or into a Restricted Subsidiary, or a Restricted Subsidiary transferring all or part of its properties and assets to the Company, or the Company merging with an Affiliate of the Company solely for the purpose and with the sole effect of reincorporating the Company in another jurisdiction, the Successor Company will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the

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Consolidated Coverage Ratio test set forth in Section 4.07(a) hereof; (v) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each starting that such consolidation, merger or transfer and such supplemental indenture and other appropriate documentation (if any) comply with this Indenture and all Security Documents and that all necessary actions have been taken to preserve the priority and perfection of the Liens of all Security Documents; 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 United States Federal income tax purposes as a result of such transaction and will be subject to United States 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.

SECTION 5.02. Successor Corporation Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the Successor Company (if other than the Company) shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, lease, transfer, conveyance or other disposition, the provisions of this Indenture referring to the “Company” shall refer instead to such Successor Company and not to the Person previously defined as Company), and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such Successor Company originally had been named as the Company herein; and when such Successor Company duly assumes all of the obligations and covenants of the Company pursuant to the Notes and hereto, the predecessor Person shall be relieved of all such obligations; provided, however, in the case of a lease of all or substantially all of its assets, the predecessor Company will not be released from the obligation to pay the principal of, and premium, if any, and interest on, the Notes. The Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the predecessor Person, any or all the Notes issuable hereunder which theretofore shall not have been signed by the predecessor Person and delivered to the Trustee; and, upon the order of the Successor Company, instead of the predecessor Person, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes which previously shall have been signed and delivered by the officers of the predecessor Person to the Trustee for authentication, and any Notes which the Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all such Notes had been issued at the date of the execution hereof.

In case of such consolidation, merger, sale, assignment, lease, transfer, conveyance or other disposition, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

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ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default.

An “Event of Default” occurs if:

(a) the Company defaults in the payment when due of interest on, Special Interest, if any, on, or Additional Amounts with respect to, the Notes, and such default continues for a period of 30 days;

(b) the Company defaults in the payment when due (whether at the Stated Maturity, upon optional redemption, upon required purchases, upon declaration of acceleration or otherwise) of principal of or premium, if any, on any Note;

(c) the Company or any Guarantor fails to comply with its obligations under Section 3.11, 4.10, 4.17 or 5.01 hereof;

(d) the failure by the Company or any Guarantor, as the case may be, to comply with any of the provisions of Section 4.03, 4.07, 4.08, 4.09, 4.11, 4.12, 4.13 or 4.14 for 30 days after written notice of such failure to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

(e) the Company or any Guarantor fails to observe or perform any covenant or other agreement in this Indenture, the Notes or the Security Documents (other than the provisions expressly set forth in clauses (a), (b), (c) or (d) above) for 60 days after written notice of such failure to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

(f) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness by the Company or any of the Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of the Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default: (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or (ii) results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $10,000,000 or more; provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of ten days following the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;

(g) the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company, pursuant to or within the meaning of the Bankruptcy Code:

(i) commences a voluntary case,

(ii) consents to the entry of an order for relief against it in an involuntary case,

(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property,

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(iv) makes a general assignment for the benefit of its creditors, or

(v) generally is not paying its debts as they become due;

(h) a court of competent jurisdiction enters an order or decree under the Bankruptcy Code that:

(i) is for relief against the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company, in an involuntary case;

(ii) appoints a Custodian of the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company, or for all or substantially all of the property of the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company; or

(iii) orders the liquidation of the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(i) failure of the Company, any Guarantor, any of the Company’s Significant Subsidiaries or any group of Restricted Subsidiaries which, when taken together, would constitute a Significant Subsidiary of the Company, to pay any judgment, or judgments aggregating, in excess of $10,000,000, which judgment or judgments, as the case may be, are not discharged, waived or stayed for a period of 60 consecutive days following such judgment;

(j) any Note Guarantee ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and the Indenture) or any Guarantor denies or disaffirms its obligations under its Note Guarantee; or

(k) any Security Document or any Lien purported to be granted thereby on any one or more items of Collateral is held in any judicial proceeding to be unenforceable or invalid, in whole or in part, or ceases for any reason (other than pursuant to a release that is delivered or becomes effective as set forth in this Indenture or any Security Document) to be fully enforceable and perfected.

SECTION 6.02. Acceleration.

If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of, and premium, if any, and accrued but unpaid interest (and Special Interest, if any) on, all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become so due and payable immediately without further action or notice, and the Collateral Agent shall immediately become unconditionally entitled to foreclose upon any or all of the Collateral, exercise and enforce its other rights and remedies in respect of the Collateral, subject to the provisions of this Indenture and the Security Documents, as applicable. Notwithstanding the foregoing, if an Event

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of Default specified in clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company, any Significant Subsidiary of the Company or any group of Restricted Subsidiaries which, taken together, would constitute a Significant Subsidiary, the principal of, and premium, if any, and accrued but unpaid interest (and Special Interest, if any) on, all outstanding Notes shall be due and payable immediately without further action or notice, and the Collateral Agent shall immediately become unconditionally entitled to foreclose upon any or all of the Collateral, exercise and enforce its other rights and remedies in respect of the Collateral, subject to the provisions of this Indenture and the Security Documents, as applicable. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes by verifiable notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal or premium, interest (including Special Interest) that has become due solely because of the acceleration) have been cured or waived.

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, premium, interest and Special Interest, if any, on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by verifiable notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of interest (including Special Interest), if any, on, or the principal of, or premium on, the Notes including in connection with an offer to purchase. Upon any such waiver, such Default or Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

SECTION 6.05. Control by Majority.

Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

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SECTION 6.06. Limitation on Suits.

A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:

(a) the Holder of a Note has previously given to the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(c) such Holder of a Note or Holders of Notes have offered to the Trustee reasonable security or indemnity against any loss, liability or expense to be incurred in compliance with such request;

(d) the Trustee has not complied with the request within 60 days after receipt of the request and the offer of security or indemnity; and

(e) during such 60-day period, the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

SECTION 6.07. Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Special Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase or redemption), 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(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Special Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09. Trustee May File Proofs of Claim.

The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled

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and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10. Priorities.

Except as expressly provided in the Collateral Agency Agreement, if the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense, and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Special Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Special Interest, if any and interest, respectively; and

Third: to the Company or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

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 a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the cost of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, 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 of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

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ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its 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:

(i) The Trustee need perform only those duties that are specifically set forth in this Indenture and the TIA and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee. To the extent of any conflict between the duties of the Trustee hereunder and under the TIA, the TIA shall control.

(ii) 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. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) 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 6.02, 6.04 or 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section.

(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to the Trustee against any loss, liability or expense.

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(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

SECTION 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely upon any document (whether in its original or facsimile form) 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 both which shall conform to Sections 14.04 and 14.05. The Trustee shall not be liable for, and shall be fully protected in respect of, any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and 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 that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) that might be incurred by it in compliance with such request or direction.

(g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.

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(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

(k) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty.

SECTION 7.03. Individual Rights of Trustee.

The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

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 Notes or the Security Documents, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

SECTION 7.05. Notice of Defaults.

If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within the later of (i) 90 days after the date such Default or Event of Default shall have occurred and (ii) 10 days after the date such Responsible Officer first had such actual knowledge. Except in the case of a Default or Event of Default in payment of principal of, or premium, if any, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is not opposed to the interest of the Holders of the Notes. The Trustee shall not be deemed to have knowledge of a Default or Event of Default other than (A) any Event of Default occurring pursuant to Section 6.01(a) or 6.01(b); or (B) any Default or Event of Default of which a Responsible Officer shall have received written notification or obtained actual knowledge. As used herein, the term “actual knowledge” means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto.

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SECTION 7.06. Reports by Trustee to Holders of the Notes.

Within 60 days after each April 15 beginning with the April 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no event described in TIA §313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA §§313(b)(1) and (b)(2). The Trustee shall also transmit by mail all reports as required by TIA §313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA §313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or delisted therefrom.

SECTION 7.07. Compensation and Indemnity.

The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as such parties shall agree in writing from time to time. 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 promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Company and the Guarantors, jointly and severally, shall indemnify each of the Trustee and each predecessor Trustee, and their respective agents, employees, officers, stockholders and directors, against any and all losses, liabilities, claims, damages or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture and the Note Obligations against the Company and/or the Guarantors (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability, claim, damage or expense may be attributable to its gross negligence, bad faith or willful misconduct. 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 and the Guarantors shall defend the claim, and the Trustee shall cooperate in the defense. The Trustee and its agents, employees, officers, stockholders and directors may have separate counsel, and the Company and the Guarantors shall pay the reasonable fees and expenses of such counsel. The Company and the Guarantors need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld, conditioned or delayed.

The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.

To secure the Company’s and the Guarantors’ payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

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When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under the Bankruptcy Code.

The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

SECTION 7.08. Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under the Bankruptcy Code;

(c) a Custodian takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the expense of the Company), the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction (in the case of the Trustee, at the expense of the Company) for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of 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 Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of

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the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

SECTION 7.09. Successor Trustee by Merger, Etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. As soon as practicable, the successor Trustee shall mail a notice of its succession to the Company and the Holders of the Notes.

SECTION 7.10. Eligibility; Disqualification.

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least US$100,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA §310(a)(1), (2) and (5). The Trustee is subject to TIA §310(b).

SECTION 7.11. Preferential Collection of Claims Against Company.

The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA §311(b). A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated therein.

ARTICLE VIII

SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.01. Satisfaction and Discharge of Indenture.

This Indenture shall upon delivery of a written request of an Officer of the Company to the Trustee cease to be of further effect with respect to the Notes (except as to any surviving rights of registration of transfer or exchange of Notes herein expressly provided for and the payment, indemnity and contribution obligations of the Company in favor of the Trustee), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when the Company has paid all sums payable by it under the Indenture and either:

(a) all such Notes theretofore authenticated and delivered (other than (i) such Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 hereof and (ii) such Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 8.08 hereof) have been delivered to the Trustee for cancellation; or

(b) all such Notes not theretofore delivered to the Trustee for cancellation or otherwise have become due and payable by reason of the making of a notice of redemption, and (i) the Company has irrevocably deposited or caused to be deposited with the Trustee as trust

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funds, in trust solely for the purpose and the benefit of the Holders of such Notes, cash in U.S. dollars in an amount as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness (including all principal, premium, if any, and accrued interest) on such Notes not theretofore delivered to the Trustee for cancellation, and (ii) the Company has delivered to the Trustee irrevocable instructions under this Indenture to apply the deposited funds toward the payment of such Notes at their Stated Maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture with respect to the Notes, the obligations of the Company and the Guarantors to the Trustee under Section 7.07 hereof, and, if U.S. dollars shall have been deposited with the Trustee pursuant to clause (b) of this Section, the obligations of the Company or Trustee under Section 8.02 hereof and Section 8.08 hereof shall survive.

SECTION 8.02. Application of Trust Money.

Subject to the provisions of Section 8.08 hereof, all money deposited with the Trustee pursuant to Section 8.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, any Special Interest, and any premium and interest for whose payment such money has been deposited with the Trustee.

SECTION 8.03. Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, at any time, exercise its right under either Section 8.04 or 8.05 hereof with respect to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII.

SECTION 8.04. Legal Defeasance.

Upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.04, each of the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, be deemed to have discharged its obligations with respect to all outstanding Notes and, as applicable, its Note Guarantee on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that each of the Company and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, and to the extent applicable, represented by the Note Guarantees, which in each case shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.07 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes or Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.07 hereof, and as more fully set forth in such Section, payments in respect of the

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principal of, and premium, if any, and interest (including Special Interest), if any, on, such Notes when such payments are due (but not the Change of Control Payment or the payment pursuant to an Annual Reduction Offer or an Asset Disposition Purchase Offer), (b) the Company’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.07, 2.10 and 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith and (d) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.04 notwithstanding the prior exercise of its option under Section 8.05 hereof.

SECTION 8.05. Covenant Defeasance.

Upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.05, each of the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, be released from its obligations under the covenants contained in Article IV hereof (other than those in Sections 4.01, 4.02, 4.05, 4.06, 4.18 and 4.19), clauses (iii) and (iv) of Section 5.01 hereof and Section 13.03 hereof on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenants, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.05 hereof, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, neither Sections 6.01(f), 6.01(i), 6.01(j) and 6.01(k) hereof nor, with respect to any Person other than the Company, Sections 6.01(g) and 6.01(h) hereof shall constitute Events of Default.

SECTION 8.06. Conditions to Legal or Covenant Defeasance.

The following shall be the conditions to the application of either Section 8.04 or 8.05 hereof in order to exercise either Legal Defeasance or Covenant Defeasance with respect to the outstanding Notes:

(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, and premium, if any, and interest (including Special Interest), if any, on, the outstanding Notes on the stated maturity or on the applicable repurchase or redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular repurchase or redemption date;

(b) in the case of an election under Section 8.04 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a

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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 Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;

(c) in the case of an election under Section 8.05 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes 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;

(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default arising from a breach of covenants due to the incurrence of Indebtedness the proceeds of which are used to make such deposit) or insofar as Section 6.01(g) or 6.01(h) hereof is concerned, at any time in the period ending on the 91^st day after the date of deposit;

(e) such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound, or if such breach, violation or default would occur, which is not waived as of, and for all purposes, on and after, the date of such deposit (other than a Default or an Event of Default arising from a breach of covenants due to the incurrence of Indebtedness the proceeds of which are used to make such deposit);

(f) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91^st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;

(g) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(h) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

SECTION 8.07. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.08 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.07, the “Trustee”) pursuant to Section 8.06 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest

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and Special Interest, if any, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay, and the Company and the Guarantors shall jointly and severally indemnify, the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.06 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company any money or Government Securities held by it as provided in Section 8.06 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee and reasonably acceptable to the Trustee (which may be the opinion delivered under Section 8.06(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.08. Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, or premium, if any, or interest and Special Interest, if any, on, any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest and Special Interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 8.09. Reinstatement.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with this Article VIII by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, or if at any time any amounts or securities deposited in accordance with this Article VIII, or amounts or securities paid or otherwise disbursed therefrom, are revoked, terminated, rescinded or reduced or must otherwise be restored or returned upon any event, including the insolvency, bankruptcy or reorganization of the Company or any Restricted Subsidiary, then the Company’s and each Guarantor’s obligations under this Indenture, the Notes, the Note Guarantees and the Security Documents, as the case may be, shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with this Article VIII, or as if such deposit or payment or disbursement had not been made, as the case may be; provided, however, that, if the Company makes any payment of principal of, or premium, if any, or interest and Special Interest, if any, on, any Note following the reinstatement of its obligations, the Company shall be subrogated to the

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rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders of Notes.

Notwithstanding Sections 9.02 and 12.03 hereof, the Company, the Trustee and the Collateral Agent, as the case may be, may amend or supplement this Indenture, the Notes, the Note Guarantees or the Security Documents without the consent of any Holder of a Note:

(a) to cure any ambiguity, omission, defect or inconsistency;

(b) to provide for the assumption of the Company’s or any Guarantor’s obligations to the Holders of the Notes by a Successor Company;

(c) 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 manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);

(d) to add additional Guarantors under the Indenture or add Collateral with respect to, or to further secure, the Notes, or to release a Guarantor or Collateral (or a portion thereof) permitted by, and pursuant to the provisions of the Indenture;

(e) to add to the covenants of the Company or any Restricted Subsidiary for the benefit of the Holders of the Notes or to surrender any right or power confirmed upon the Company or any Restricted Subsidiary;

(f) to make any change that does not adversely affect the rights of any holder of the Notes (and for purposes of the foregoing, any change in the Indenture, the Notes, the Note Guarantees or the Security Documents made to conform such documents to the description thereof in a related offering circular or memorandum shall be deemed not to adversely affect the rights of any holder of Notes);

(g) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or

(h) as otherwise provided in the Indenture or Security Documents, as the case may be.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by a Responsible Officer of the Trustee (and, if applicable, the Collateral Agent) of an Officers’ Certificate and an Opinion of Counsel, the Trustee shall join with the Company in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties, liabilities or immunities under this Indenture or otherwise.

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SECTION 9.02. With Consent of Holders of Notes.

Except as provided below in this Section 9.02 and in Section 12.03 hereof, the Company and the Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10 and 4.17 hereof), the Notes, the Note Guarantees or any Security Documents with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including consents obtained in connection with the purchase of, or a tender offer or exchange offer for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture, the Notes, the Note Guarantees or any Security Documents may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes).

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by a Responsible Officer of the Trustee (and, if applicable, the Collateral Agent) of an Officers’ Certificate and an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture, the Notes, the Subsidiary Guarantees or the Security Documents. However, without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(a) reduce the amount of Notes whose Holders must consent to an amendment;

(b) reduce the rate of or extend the time for payment of interest on any Note;

(c) reduce the principal of or extend the Stated Maturity of any Note;

(d) reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under Section 3.07 or 3.10;

(e) make any Note payable in money other than that stated in the Note;

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(f) impair the right of any holder of the Notes to receive payment of principal of and premium, if any, 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;

(g) make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions;

(h) make any change in the ranking or priority of any Note or any Note Guarantee, or release any Guarantor from its Note Guarantee except as provided in this Indenture;

(i) except as specifically permitted by this Indenture or any Security Documents, release all or substantially all of the Liens on the Collateral;

(j) make any change in the provisions of Section 4.18 that adversely affects the rights of any Noteholder to receive Additional Amounts; or

(k) make any change to Section 4.17 after a Change of Control has occurred, or any change to Section 3.11 after an Annual Reduction Date has occurred, or any change to the provisions of Section 4.10 at any time that the Company has become obligated to offer to purchase Notes.

SECTION 9.03. Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture, the Notes or the Note Guarantees shall be set forth in a amended or supplemental indenture that complies with the TIA as then in effect.

SECTION 9.04. Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

SECTION 9.05. Notation on or Exchange of Notes.

The Trustee may but shall not be obligated to place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company, in exchange for all Notes, may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

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SECTION 9.06. Trustee to Sign Amendments, Etc.

The Trustee shall sign any amended or supplemental indenture (or other amendment of the Security Documents) authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise. Furthermore, no amendment or supplement to the provisions of the Security Documents will impose any obligation on the Trustee or adversely affect the rights of the Trustee in its individual capacity. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture or amendment, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture or amendment is authorized or permitted by this Indenture.

ARTICLE X

COLLATERAL AND SECURITY

SECTION 10.01. Security Documents.

The payment of principal of, and premium and interest (including Special Interest), if any, on the Notes, the Loans and all other Secured Obligations, when due, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Company pursuant to the Notes or the Loans or by any Guarantor pursuant to the Note Guarantees or the guarantees of the Loans, and the performance of all other obligations of the Company and its Restricted Subsidiaries under the Note Documents are secured as provided in the Security Documents.

SECTION 10.02. Further Assurances; Opinions.

(a) The Company will, and will cause each of its Subsidiaries to, do or cause to be done all acts and things which may be required, or which the Collateral Agent or Trustee from time to time may reasonably request, to assure and confirm that the Collateral Agent at all times holds, for the benefit of the holders of Secured Obligations, duly created, enforceable and perfected first priority Liens (subject to Permitted Collateral Liens) upon the Collateral as contemplated by the Note Documents and the Credit Agreement.

(b) The Company shall furnish or cause to be addressed and furnished to the Trustee:

(1) at the time of execution and delivery of this Indenture, Opinions of Counsel substantially in the form of the opinions of counsel delivered on the Issue Date to the Administrative Agent, Collateral Agent and the Initial Purchasers relating to (i) any of the Collateral and/or the Security Documents, (ii) the due authorization, execution and delivery of the Notes, the Indenture, the Note Guarantees and the Security Documents, and the enforceability of such documents, (iii) exemption from the Securities Act, and (iv) the absence of the then need to qualify the indenture and the Note guarantees under the TIA, in each case, to the extent covered by such opinions; and

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(2) at the time of delivery thereof after the Issue Date, Opinions of Counsel substantially in the form of any opinions of counsel delivered after the Issue Date to the Administrative Agent or any Collateral Agent relating to any of the Collateral and/or the Security Documents.

(c) If the Company or any of its Subsidiaries at any time owns or acquires any property, right or interests described in the definition of Collateral that is not subject to a valid, enforceable perfected first priority Lien (subject to Permitted Collateral Liens) in favor of the Collateral Agent as security for the Secured Obligations, then the Company will, or will cause such Subsidiary to, concurrently:

(1) execute and deliver to the Collateral Agent a Security Document upon substantially the same terms as the Security Documents delivered in connection with the issuance of the Notes, granting a Lien upon such Collateral in favor of the Collateral Agent for the benefit of the holders of Secured Obligations; and

(2) cause the Lien granted in such Security Document to be duly perfected in any manner permitted by law and cause each other Lien upon such Collateral to be released, unless it is a Permitted Collateral Lien.

(d) At any time and from time to time, the Company will, and will cause each Restricted Subsidiary to, promptly execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents and take such other actions as shall be required or which the Collateral Agent may reasonably request to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred as contemplated by this Indenture and the Credit Agreement for the benefit of the holders of the Secured Obligations.

(e) The Company and the Guarantors will at all times comply with the provisions of TIA §314(b).

(f) To the extent required, the Company will cause TIA §313(b), relating to reports, and TIA §314(d), relating to the release of property or securities or relating to the substitution therefore of any property or securities to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA §314(d) may be made by an officer of the Company except in cases where TIA §314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected by or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this paragraph, the Company will not be required to comply with all or any portion of TIA §314(d) if it determines, in good faith based on advice of counsel, that under the terms of TIA §314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or any portion of TIA §314(d) is inapplicable to one or a series of released Collateral.

(g) To the extent required, the Company will furnish to the Trustee, prior to each proposed release of Collateral pursuant to the Security Documents:

(i) all documents required by TIA §314(d); and

(ii) an Opinion of Counsel to the effect that such accompanying documents constitute all documents required by TIA §314(d).

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(h) If any Collateral is released in accordance with this Indenture or any Security Document and if the Company has delivered the certificates and documents required by the Security Documents and this Section 10.02, the Trustee will determine whether it has received all documentation required by TIA §314(d) in connection with such release and, based on such determination and the Opinion of Counsel delivered pursuant to this Indenture, will deliver a certificate to the Collateral Agent setting forth such determination.

SECTION 10.03. Collateral Agent.

(a) Wilmington Trust Company will serve as the Collateral Agent for the benefit of the holders of the Notes and Loans and other Secured Obligations from time to time. The Collateral Agent may not be the same institution serving as the Administrative Agent or as the Trustee.

(b) The Collateral Agent is authorized and empowered to appoint one or more co-Collateral Agents or sub-agents or bailees to hold Collateral or to take such other action as it deems necessary or appropriate.

(c) Neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Collateral Agent’s Lien, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Collateral Agent’s Liens or Security Documents or any delay in doing so.

(d) The Collateral Agent will be subject to such directions as may be given it by the Trustee and by the Administrative Agent from time to time as required or permitted by this Indenture, the Collateral Agency Agreement and the Credit Agreement. The relative rights with respect to control of the Collateral Agent will be specified in the Collateral Agency Agreement by and among the Company, the Guarantors, the Trustee, the Administrative Agent and the Collateral Agent. Except as provided in the Collateral Agency Agreement and otherwise, except as directed by the holders of a majority in principal amount of the Notes and the Loans then outstanding, voting together as a single class, the Collateral Agent will not be obligated:

(i) to act upon directions purported to be delivered to it by any other Person; or

(ii) to foreclose upon or otherwise enforce any Lien or other remedy at law or pursuant to any Security Document.

(e) The Collateral Agent is authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture and the Security Documents, as the case may be. The Collateral Agent is further authorized to establish one or more control accounts (the “Control Accounts”) to receive, maintain and from which to distribute funds in accordance with the applicable provisions of this Indenture or the Security Documents, as the case may be, which shall at all times hereafter until this Indenture shall have terminated, be maintained with, and under the sole control of, the Collateral Agent.

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(f) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the Collateral Agent’s Lien or Security Documents.

(g) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each co-Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits as set forth in the Collateral Agency Agreement.

(h) The Company will deliver to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all documents delivered to the Collateral Agent pursuant to the Security Documents.

SECTION 10.04. Security Documents and Note Guarantees.

(a) Each Holder hereby authorizes the Trustee and the Collateral Agent, as applicable, on behalf of and for the benefit such Holder of Notes, to be the agent for and representative of such Holder with respect to the Note Guarantees, the Collateral and the Security Documents.

(b) Each Holder, by its acceptance of any Notes and the Note Guarantees, consents and agrees to the terms of the Security Documents, as the same may be in effect or may be amended from time to time in accordance with their terms, and authorizes and directs each of the Collateral Agent and Trustee to perform its respective obligations and exercise its respective rights under the Security Documents in accordance therewith.

(c) Anything contained in any of the Note Documents to the contrary notwithstanding, each Holder hereby agrees that no Holder shall have any right individually to realize upon any of the Collateral, it being understood and agreed that all powers, rights and remedies of the Trustee hereunder may be exercised solely by the Trustee in accordance with the terms hereof and all powers, rights and remedies in respect of the Collateral under the Security Documents may be exercised solely by the Collateral Agent.

(d) Subject to the provisions of the Security Documents, the Trustee may, in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (i) enforce any of its rights or any of the rights of the Holders under the Security Documents and (ii) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Company and the Guarantors hereunder and thereunder. Subject to the provisions of the Security Documents, the Trustee shall have the power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Security Documents or this Indenture, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interest and the interests of the Holders in the 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, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).

(e) Where any provision of this Indenture or any Security Document requires that additional property or assets be added to the Collateral, the Company shall deliver to the Trustee and the Collateral Agent the following:

(i) a request from the Company that such Collateral be added;

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(ii) the form of instrument adding such Collateral, which, based on the type and location of the property subject thereto, shall be in substantially the form of the applicable Security Documents entered into on the date of this Indenture, with such changes thereto as the Company shall consider appropriate, or in such other form as the Company shall deem proper, provided that any such changes or such form are administratively satisfactory to the Collateral Agent;

(iii) an Officers’ Certificate to the effect that the Collateral being added is in the form, consists of the assets and is in the amount or otherwise has the fair market value required by this Indenture;

(iv) an Officers’ Certificate and Opinion of Counsel to the effect that all conditions precedent provided for in this Indenture to the addition of such Collateral have been complied with, which Opinion of Counsel shall also opine as to the creation and perfection of the Collateral Agent’s Lien on such Collateral and as to the due authorization, execution, delivery, validity and enforceability of the Security Document being entered into; and

(v) such financing statements or other filings or recording instruments, if any, as the Company shall deem necessary to perfect the Collateral Agent’s Lien in such Collateral.

SECTION 10.05. [THIS SECTION LEFT INTENTIONALLY BLANK]

SECTION 10.06. Release of Collateral Agent’s Lien.

Subject to the conditions and provisions of the Security Documents, the Collateral Agent shall cause the Collateral to be released from the Collateral Agent’s Lien with respect to the Note Obligations:

(a) upon satisfaction and discharge of this Indenture as set forth in Section 8.01 hereof;

(b) upon a Legal Defeasance or Covenant Defeasance as set forth in Sections 8.04, 8.05 and 8.06 hereof, as the case may be;

(c) upon payment in full of the Notes and all other Note Obligations that are outstanding, due and payable at the time the Notes are paid in full;

(d) as to any Collateral that constitutes all or substantially all of the Collateral, with the consent of the holders of 100% in principal amount of the Notes (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes);

(e) subject to the provisions of Collateral Agency Agreement, (A) as to any Collateral (other than the Designated Collateral), or as to any Designated Collateral as to which the Administrative Agent has not timely exercised, during an applicable Designated Vessel Period, its right to direct enforcement of Liens on Designated Collateral, in each case which constitutes less than all or substantially all of the Collateral, with the consent of the holders of a

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majority in principal amount of the Notes then outstanding and all Loans then outstanding (or if no Loans are then outstanding but the commitments to make such Loans remains then in effect, of such commitments then in effect), voting together as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes ), and (B) as to any Designated Collateral, (i) with the consent of all the Lenders if such release is incidental to the Lender’s right to direct the activity of the Collateral Agent with respect to the enforcement of, and realization on, the Liens on or with respect to a Designated Vessel, as provided in Section 6.1 of the Collateral Agency Agreement, or (ii) with the consent of (x) all of the Lenders and (y) the holders of a majority in principal amount of the Notes then outstanding, if otherwise;

(f) as to any Collateral (A) that is sold or otherwise disposed of by the Company or any of its Restricted Subsidiaries in a transaction permitted by this Indenture, at the time of such sale or disposition, to the extent of the interest sold or disposed of is not in breach of the terms of Section 4.10 hereof, (B) that constitutes a portion of the Asset Sales Proceeds Account that are to be applied or distributed as described in Section 4.10, (C) that constitutes Excess Proceeds from the Sale of Collateral which have been offered to, but not accepted by, the holders of Notes and Loans and are released as set forth in Section 4.10(c) hereof, or (D) that is owned or at any time acquired by a Subsidiary of the Company that has been released from its Note Guarantee; or

(g) in the event there is a substitution of property for Collateral, subject to a first-priority Lien (subject to Permitted Collateral Liens) in favor of the Collateral Agent to secure the Secured Obligations being placed on such substituted property and otherwise consummated in compliance with the applicable provisions of the Indenture, the TIA and the Security Documents.

Notwithstanding the provisions described above so long as no Event of Default under the Indenture shall have occurred and be continuing or would result therefrom, the Company or a Subsidiary may, without any release or consent required on the part of the Trustee, engage in ordinary course activities; provided that in connection therewith, each of the Company and its Subsidiaries, as applicable, complies with the provisions of the Indenture and Credit Agreement and other related documents which are applicable to any such activity or transactions. Such activities include the right to, among other things, the following:

(1) sell or otherwise dispose of any property subject to the Lien of the Security Documents, which may have become worn out or obsolete;

(2) abandon, terminate, cancel, release or make alterations in or substitutions of any leases or contracts subject to the Lien of the Security Documents;

(3) surrender or modify any franchise, license or permit subject to the Lien of the Security Documents which it may own or under which it may be operating;

(4) alter, repair, replace, change the location or position of and add to its structures, machinery, systems, equipment, fixtures and appurtenances;

(5) demolish, dismantle, tear down or scrap any Collateral; and

(6) charter, lease or sub-lease any vessel.

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SECTION 10.07. Trustee to Sign Releases.

The Trustee shall or shall instruct the Collateral Agent to execute any release, quitclaim, termination, supplement or waiver authorized pursuant to and adopted in accordance with this Article X and the provisions of any applicable Security Document. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel and an Officers’ Certificate, copies of which shall be provided to the Collateral Agent, each stating that the execution of any release, quitclaim, termination, supplement or waiver authorized pursuant to this Article X is authorized or permitted by this Indenture and such Security Documents. For the avoidance of doubt, such Opinion of Counsel shall not be an expense of the Trustee.

ARTICLE XI

[THIS ARTICLE INTENTIONALLY LEFT BLANK]

ARTICLE XII

[THIS ARTICLE INTENTIONALLY LEFT BLANK]

ARTICLE XIII

GUARANTEES

SECTION 13.01. Subsidiary Guarantees.

Subject to Section 13.05 hereof, each of the Guarantors hereby, jointly and severally, unconditionally guarantees, and each Person who in the future becomes a Guarantor by executing a supplemental indenture in the form attached to this Indenture as Exhibit E shall, jointly and severally, unconditionally guarantee, on a senior basis to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Notes and the Obligations of the Company hereunder and thereunder, that:

(a) the principal of, and premium, if any, and interest (including Special Interest), if any, on, the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, and premium, if any, and (to the extent permitted by law) interest (including Special Interest), if any, on, the Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and

(b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise.

Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the Obligations of the Guarantors hereunder and under the Notes in the same manner and to the same extent as the Obligations of the Company hereunder and under the Notes. This is a guarantee of

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payment and not of collection, and, to the maximum extent permitted by applicable law, each Guarantor hereby waives and agrees not to assert or take advantage of, and each Guarantor’s liability under its Subsidiary Guarantee shall be absolute and unconditional irrespective of:

(i) any right to require the Trustee to proceed against the Company or any other Person or to resort to, proceed against or exhaust any security held by it at any time or to pursue any other remedy in its power before proceeding against such Guarantor;

(ii) the defense of the statute of limitations in any action hereunder or for the collection or performance of any of the obligations guaranteed hereunder;

(iii) any defense that may arise by reason of the incapacity, lack of authority, death or disability of, or revocation hereof by such Guarantor or the revocation or repudiation of any of the Note Documents by the Company, any other Guarantor or any other Person or the failure of any Guarantor to file or enforce a claim against the estate (either in administration, bankruptcy, or any other proceeding) of the Company or any other Person;

(iv) the unenforceability in whole or in part of any of the Note Documents or any other instrument, document or agreement;

(v) any election, in any proceeding by or against the Company or any other Person under the Bankruptcy Code, of the application of Section 1111(b)(2) of such Code;

(vi) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code;

(vii) demand, presentment, protest and notice of any kind, and notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of the Company, a Guarantor or any other Person under this or any other instrument, in connection with any of the obligations guaranteed hereunder or any collateral now or hereafter given for any of such obligations;

(viii) any defense based upon an election of remedies by the Trustee, including, without limitation, an election to proceed by non-judicial rather than judicial foreclosure, which destroys or otherwise impairs the subrogation rights of such Guarantor or any other Guarantor, or the right of such Guarantor, any other Guarantor or any other Person to proceed against the Company for reimbursement, or both;

(ix) any suretyship defense or right of any nature otherwise available to such Guarantor under the laws of any state, including, without limitations, provisions to the effect that:

(A) the obligation of a surety must not be either larger in amount or in other respects more burdensome than that of the principal;

(B) a surety is not liable if for any reason other than the mere personal disability of the principal, there is no liability upon the part of the

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principal at the time of execution of the contract, or the liability of the principal thereafter ceases;

(C) a surety is exonerated if the creditor alters the original obligation of the principal without the consent of the surety;

(D) a surety is exonerated to the extent that the creditor fails to proceed against the principal, or to pursue any other remedy in the creditor’s power which the surety cannot pursue and which would lighten the surety’s burden;

(E) a surety may compel its principal to perform the obligation when due;

(F) if a surety satisfies the principal obligation, or any part thereof, the principal is obligated to reimburse the surety for the amounts paid by the surety;

(G) a surety, upon satisfaction of the obligation of the principal, is entitled to enforce remedies which the creditor then has against the principal;

(H) a surety is entitled to the benefit of security held by the creditor for the performance of the principal obligation held by the creditor;

(I) whenever the property of a surety is hypothecated with property of the principal, the surety is entitled to have the property of the principal first applied to the discharge of the obligation; and

(J) the principal may designate the portion of any obligation to be satisfied by the surety in the event that the principal provides partial satisfaction of such obligation; and

(x) any rights to direct the manner in which, or the order in which, the Trustee must proceed to recover against any collateral given by such Guarantor, any other Guarantor or any other Person to secure the obligations secured hereunder, including, without limitation, any prohibition against obtaining a deficiency judgment and any requirement that any deficiency judgment be obtained only through judicial proceedings.

The Company and the Guarantors are obligated and fully liable for all amounts due under the Note Obligations. The Collateral Agent (and the Trustee) has the right to sue on the Note Obligations and obtain a judgment against the undersigned Obligors for satisfaction of all amounts due under the Note Obligations either before, after or without a judicial foreclosure of any Lien on any Collateral. Each Guarantor hereby acknowledges that none of the Trustee, any Holder and any other Person have a duty to disclose to such Guarantor any facts such Person may now or hereafter know about the Company, regardless of whether such Person has reason to believe that any such facts materially increase the risk beyond that which such Guarantor intends to assume or has reason to believe that such facts are unknown to such Guarantor or has a reasonable opportunity to communicate such facts to such Guarantor, it being understood and agreed that each Guarantor is fully responsible for being and keeping informed of the financial

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condition of the Company and of all circumstances bearing on the risk of nonpayment or nonperformance of any obligations hereby guaranteed. Each Guarantor further acknowledges that the suretyship defenses and rights waived hereunder may provide partial or complete defenses to the recovery by the Trustee from such Guarantor and/or grant such Guarantor certain rights, the enforcement or realization of which could reduce or eliminate such Guarantor’s liability hereunder to the Company.

If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Note Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to, and hereby waives, any right to exercise any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby, until all Obligations are paid in full. Each Guarantor further agrees that, as between the Guarantors, 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 VI hereof for the purposes of its Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article VI hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of its Note Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor pursuant to Section 13.05 hereof after the Notes and the Obligations hereunder shall have been paid in full to the Holders under the Subsidiary Guarantees.

SECTION 13.02. Execution and Delivery of Additional Note Guarantee or Supplemental Indenture; Notation of Note Guarantee.

To effect any additional Note Guarantee set forth in Section 13.01 hereof, any future Guarantor shall execute and deliver a supplemental indenture substantially in the form of Exhibit E hereto, which supplemental indenture shall be executed on behalf of such Guarantor, by manual or facsimile signature, by an Officer of such Guarantor.

To evidence its Note Guarantee set forth in Section 13.01 hereof, each Guarantor of a Note hereby agrees that a notation of such Note Guarantee substantially in the form set forth on Exhibit A hereof shall be endorsed by manual or facsimile signature of an Officer or other authorized representative of such Guarantor or of an Officer of the Company as attorney-in fact for such Guarantor on each such Note authenticated and delivered by the Trustee, and that this Indenture shall be executed on behalf of such Guarantor, by manual or facsimile signature, by an Officer or other authorized representative of such Guarantor. For so long as a Note Guarantee of such Guarantor remains in full force and effect, each Guarantor hereby irrevocably appoints the Company as its attorney-in-fact for the purpose of executing in the name and on behalf of such Guarantor any endorsement of a notation of a Subsidiary Guarantee on any Note, any supplemental indenture to this Indenture, or consent to any such supplemental indenture, which the Company and the Trustee are authorized to enter into pursuant to Sections 9.01 or 9.02 of this Indenture. If an Officer of the Company whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, such Note Guarantee shall be valid nevertheless.

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Each Guarantor hereby agrees that its Note Guarantee set forth in Section 13.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each or any Note a notation of such Note Guarantee.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

SECTION 13.03. [THIS SECTION INTENTIONALLY LEFT BLANK].

SECTION 13.04. Termination, Release and Discharge.

(a) Upon the sale or disposition of a Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets), and whether or not the Guarantor is the surviving corporation in such transaction, to a Person which, after giving effect to such transaction, is not the Company or a Restricted Subsidiary, and which sale or disposition is otherwise in compliance with this Indenture (and for the avoidance of doubt, without regard to the application of Section 13.04(b)), then (i) such Guarantor will be automatically released from all its Obligations under this Indenture and its Note Guarantee, the Registration Rights Agreement and the Security Documents to which it is a party, (ii) such Note Guarantee will terminate and (iii) the Liens, if any, on the Collateral encumbered by such Guarantor pursuant to the Security Documents shall be released with respect to the Notes. For the avoidance of doubt, the provisions of Section 13.04(b) will have no application to any sale or disposition of a Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets) described in this Section 13.04(a).

(b) Except as provided in a transaction covered by Section 13.04(a), the Company will not permit any Guarantor to, directly or indirectly, consolidate with or merge with or into any Person (other than the Company or another Guarantor), unless:

(1) (i) the resulting, surviving or transferee Person will expressly assume, by supplemental indenture substantially in the form of Exhibit E hereto, executed and delivered to the Trustee, all the obligations of such Guarantor under its Note Guarantee, this Indenture, the Registration Rights Agreement and the Security Documents to which it is a party and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Liens on the Collateral owned by or transferred to the surviving entity, together with such financing statements or other filings as may be required to perfect any Liens in such Collateral which may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant states or such other filing under similar statutes; and (ii) the Company will 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 this Indenture; or

(2) the transaction is made in compliance with Section 4.10.

(c) Each Guarantor will be deemed released from all its Obligations under this Indenture, its Security Documents, its Note Guarantee and the Registration Rights Agreement, and such Note Guarantee will terminate, upon (i) the Legal Defeasance or Covenant

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Defeasance of the Notes pursuant to the provisions of Article VIII hereof or (ii) the liquidation or dissolution of such Guarantor.

(d) Each Guarantor will be released from its Obligations under this Indenture, its Security Documents, its Note Guarantee and the Registration Rights Agreement if the Company designates such Guarantor as an Unrestricted Subsidiary, and such designation complies with the other applicable provisions of this Indenture.

(e) Upon delivery by the Company to the Trustee of an Officer’s Certificate and an Opinion of Counsel to the effect that any of the foregoing has occurred, the Trustee shall execute any documents reasonably required in order to evidence the applicable release and termination.

SECTION 13.05. Limitation on Guarantor Liability; Contribution.

For purposes hereof, and notwithstanding any term or provision of this Indenture to the contrary, the obligations of each Guarantor hereunder will be limited to the lesser of (i) the aggregate amount of the Obligations of the Company under the Notes and the Indenture and (ii) the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any guarantees under the Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the Obligations of such other Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the Obligations of such Guarantor under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally; provided that, it will be a presumption in any lawsuit or other proceeding in which a Guarantor is a party that the amount guaranteed pursuant to its Note Guarantee is the amount set forth in clause (i) above unless any creditor, representative of creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise proves in such a lawsuit that the aggregate liability of such Guarantor is the amount set forth in clause (ii) above. In making any determination as to solvency or sufficiency of capital of a Guarantor in accordance with the previous sentence, the right of such Guarantor to contribution from other Guarantors as set forth below, and any other rights such Guarantor may have, contractual or otherwise, shall be taken into account.

In order to provide for just and equitable contribution among the Guarantors, the Guarantors shall agree, inter se, that in the event any payment or distribution is made by any Guarantor (a “Funding Guarantor”) under its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from all other Guarantors in a pro rata amount based on the net assets (determined in accordance with GAAP) of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company’s obligations with respect to the Notes or any other Guarantor’s Obligations with respect to its Subsidiary Guarantee.

SECTION 13.06. Trustee to Include Paying Agent.

In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article XIII shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article XIII in place of the Trustee.

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ARTICLE XIV

MISCELLANEOUS

SECTION 14.01. Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties shall control.

SECTION 14.02. Notices.

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered to the others’ address as follows:

If to the Company, any Guarantor, any other Obligor or any Subsidiary of the Company:

Secunda International Limited

One Canal Street

Darthmouth, Nova Scotia

B2Y 2W1 Canada

Attention: Corporate Secretary

If to the Trustee:

Wells Fargo Bank, National Association

Corporate Trust

Sixth Street and Marquette Avenue

MACN 9303-120

Minneapolis, Minnesota 55489

Fax No.: (612) 667-9825

Attention: Secunda Administrator

If to the Collateral Agent:

Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890

Fax No.: (302) 636-4145

Attention: Corporate Trust

Ref: Secunda Collateral Agency

The Company, any Guarantor, the Trustee or the Collateral Agent, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: (i) at the time delivered by hand, if personally delivered; (ii) five Business Days after being deposited in the mail, postage prepaid, if mailed; (iii) when answered back, if telexed; (iv) when receipt acknowledged, if faxed; and (v) the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

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Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee, the Collateral Agent and each Agent at the same time.

SECTION 14.03. Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 14.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

SECTION 14.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

(a) a statement that the Person making such certificate or opinion has read such covenant or condition;

(b) 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;

(c) a statement that, in the opinion of such Person, he or she 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 satisfied; and

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(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

SECTION 14.06. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders.

No past, present or future director, officer, employee, manager, incorporator, partner, member or stockholder or other owner of Capital Stock of the Company or any of its Subsidiaries, or of any member, partner or stockholder of any such entity, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, this Indenture, the Note Guarantees or the Security Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 14.08. Governing Law.

THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

SECTION 14.09. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.

By the execution and delivery of this Indenture, each of the Company and each Guarantor (i) acknowledges that it has, by separate written instrument, designated and appointed Wilmington Trust Company as its authorized agent upon which process may be served in any suit, action or proceeding arising out of or relating to the Notes, this Indenture, the Note Guarantees and the Security Documents that may be instituted in any Federal or State court in the State of New York, Borough of Manhattan, or brought under United States Federal or State securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder), and acknowledges that Wilmington Trust Company has accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit, action or proceeding, and (iii) agrees that service of process upon Wilmington Trust Company at 520 Madison Avenue, 33^rd Floor, New York, New York 10022 and written notice of said service to the Company (mailed or delivered to the Company’s Corporate Secretary at its principal office as specified in Section 14.02 hereof), shall be deemed in every respect effective service of process upon it in any such suit or proceeding. The Company and each Guarantor 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 Wilmington Trust Company, in full force and effect so long as this Indenture shall be in full force and effect; provided that the Company may and shall (to the extent Wilmington Trust Company ceases to be able to be served on the basis contemplated herein), by written notice to the Trustee, designate such additional or alternative agent for service of process under this Section 14.09 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) is either (x) counsel for the Company or (y) a corporate service company which acts as agent for service of process for other Persons in the ordinary course of its business and

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(iii) agrees to act as agent for service of process in accordance with this Section 14.09, but in any event, there shall, at all times, be at least one agent for service of process for the Company and any Guarantors, if any, appointed and acting in accordance with this Section 14.09. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any Holder, the Trustee shall deliver such information to such Holder. Notwithstanding the foregoing, any action against the Company or any Guarantor arising out, or based on, this Indenture or any Note may also instituted by the Holder of such Note in any court in the jurisdiction of organization of the Company or any Guarantor, as the case may be, and each of them accepts jurisdiction of such court in any such action.

To the extent that the Company or any Guarantor, or any of its properties, assets or revenues, may have or may hereafter become entitled to, or have attributed to it or such properties, assets or revenue, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any thereof, from set-off or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Indenture, the Notes or any Security Documents, each of the Company and the Guarantors, to the maximum extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

SECTION 14.10. Judgment Currency.

The Company agrees to indemnify the Trustee, the Collateral Agent and each Holder against any loss incurred by it as a result of any judgment or order being given or made and expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the spot rate of exchange in The City of New York at which the Trustee, the Collateral Agent or such Holder on the date of payment of such judgment or order is able to purchase United States dollars with the amount of the Judgment Currency actually received by the Trustee, the Collateral Agent or such Holder. The foregoing indemnity shall constitute a separate and independent obligation of the Company and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “spot rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, United States dollars.

SECTION 14.11. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 14.12. Successors.

Except as expressly provided in this Indenture, all agreements of the Company in this Indenture and the Notes shall bind its successors. Except as expressly provided in this Indenture,

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all agreements of each Guarantor in this Indenture and the Note Guarantees shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 14.13. Severability.

In case any provision in this Indenture or in the Notes 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 14.14. Counterpart Originals.

The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

SECTION 14.15. Table of Contents, Headings, Etc.

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

SECTION 14.16. Language of Notices, Etc.

Any request, demand, authorization, direction, notice, consent, waiver or Act required or permitted under this Indenture, the Notes or the Security Documents shall be in the English language.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed and delivered all as of the date and year first written above.

SIGNATURES

Dated as of August 26, 2004

SECUNDA INTERNATIONAL LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
GUARANTORS
3013563 NOVA SCOTIA LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE INTERNATIONAL INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE SERVICES LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA GLOBAL MARINE INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
JDM SHIPPING INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
INTERNATIONAL SHIPPING CORPORATION INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA GLOBAL INTERNATIONAL INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
NAVIS SHIPPING INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA ATLANTIC INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE ATLANTIC LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
OFFSHORE LOGISTICS INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:	/s/ Frank McDonald
	Name: Frank McDonald
	Title: Vice President

EXHIBITS

Exhibit A	FORM OF NOTE
Exhibit B	FORM OF CERTIFICATE OF TRANSFER
Exhibit C	FORM OF CERTIFICATE OF EXCHANGE
Exhibit D	FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E	FORM OF SUPPLEMENTAL INDENTURE – ADDITIONAL NOTE GUARANTEES

EXHIBIT A

(Face of Note)

CUSIP/ISIN ________

Senior Secured Floating Rate Notes due 2012

No. [__] US$__________

SECUNDA INTERNATIONAL LIMITED

For value received, Secunda International Limited, a Nova Scotia corporation, promises to pay to _____________________________

or registered assigns,

the principal sum of _____________________________

U.S. dollars [in Global Note -, as revised by the Schedule of Exchanges of Interests in the Global Note attached hereto] on __________ __, 2012.

Interest Payment Dates: January 15, April 15, July 15 and October 15.

Record Dates: January 1, April 1, July 1 and October 1.

Additional provisions of this Note are set forth in the other side of this Note.

IN WITNESS WHEREOF, Secunda International Limited has caused this Note to be duly signed and delivered by its duly authorized office.

SECUNDA INTERNATIONAL LIMITED

By:

Name:

Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Senior Secured

Floating Rate Notes due 2012

referred to in the within-

mentioned Indenture:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:		Dated:
	Authorized Signatory

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(Back of Note)

Senior Secured Floating Rate Notes due 2012

[Insert the Global Note Legend, if applicable, pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable, pursuant to the provisions of the Indenture]

[Insert the Canadian Private Placement Legend, if applicable, pursuant to the provisions of the Indenture]

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest. Secunda International Limited, a Nova Scotia corporation (the “Company”), promises to pay interest on the principal amount of this Note at a rate of LIBOR (determined as set forth below) plus 8.00% per annum (reset quarterly). The Company will pay interest and Special Interest, if any, quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”), and at maturity. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that the first Interest Payment Date shall be January 15, 2005. The Company shall pay interest (including postpetition interest in any proceeding under the Bankruptcy Code) on overdue principal and premium, if any, from time to time on demand at the rate borne on the Notes; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest and Special Interest, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate, in each case, to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

LIBOR shall be determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee. Set forth below is a summary of certain of the defined terms used in the calculation of interest on the Notes.

“LIBOR,” with respect to an Interest Period, will be the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the first day of such Interest Period that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in United States dollars for a three-month period beginning on the first day of such Interest Period. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in U.S. dollars to leading European banks for a three-month period beginning on the first day of such

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Interest Period. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

“Interest Period” means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include January 14, 2005.

“Determination Date,” with respect to an Interest Period, will be the second London Banking Day preceding the first day of the Interest Period.

“London Banking Day” is any day in which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

“Representative Amount” means a principal amount of not less than US$1,000,000 for a single transaction in the relevant market at the relevant time.

“Telerate Page 3750” means the display designated as “Page 3750” on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service).

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655). All calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application or the Criminal Code (Canada).

The Calculation Agent will, upon the request of the holder of any Note, provide the interest rate then in effect with respect to the Notes. All calculation made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantors and the Holders of the Notes.

Solely for the purpose of providing the disclosure required by the Interest Act (Canada), the annual rate of interest that is equivalent to the rate payable on the Notes shall be the rate payable multiplied by the actual number of days in the year divided by 360.

2. Method of Payment. The Company will pay interest on the Notes (except defaulted interest) and Special Interest to the Persons who are registered Holders of Notes at the close of business on the January 1, April 1, July 1 and October 1 next preceding the Interest Payment Date, even if such Notes are canceled on registration of transfer or exchange after such record date and on or before such Interest Payment Date, except as provided in Section 2.14 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Special Interest, if any, and interest at the office or agency of the Company maintained for such purpose within the United States of America, or, at the option of the Company, payment of interest and Special Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer

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of immediately available funds will be required with respect to principal of, and interest, premium and Special Interest on, all Global Notes. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. Paying Agent and Registrar. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. Indenture. The Company issued the Notes under an Indenture dated as of August 26, 2004 (“Indenture”) among the Company, the Guarantors and the Trustee, as the same may be amended, modified or supplemented from time to time. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling to the extent not prohibited by applicable law.

5. Optional Redemption. The Notes may be redeemed at the Company’s option to the extent and at the prices set forth in Article III of the Indenture.

6. 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 whose Notes are to be redeemed at its registered address. Notes in denominations larger than US$1,000 may be redeemed in part but only in whole multiples of US$1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest and Special Interest, if any, cease to accrue on Notes or portions thereof called for redemption.

7. Mandatory Redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes.

8. Collateral and Security. The Notes and the Note Guarantees will be secured together with the Loans and the guarantees of the Loans by the Guarantors, by first priority Liens (subject to Permitted Collateral Liens), granted to the Collateral Agent for the benefit of the holders of the Secured Obligations, in all of the Collateral. Holders of the Notes shall have the rights set forth in the Security Documents with respect to such Collateral.

9. Repurchase at Option of Holder.

(a) The Indenture provides that upon the occurrence of a Change of Control, an Annual Reduction Date or an Asset Disposition and subject to further limitations contained therein, the Company shall make an offer to purchase outstanding Notes in accordance with the procedures set forth in the Indenture.

(b) Holders of Notes that are the subject of an offer to purchase will receive a Change of Control Offer, a notice of an Annual Reduction Offer, an Asset Disposition Purchase Offer or a Collateral Proceeds Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

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10. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of US$1,000 and integral multiples of US$1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

11. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

12. Amendment, Supplement and Waiver. Without the consent of any Holder of a Note, the Indenture, the Notes and the Security Documents may be amended or supplemented by the Company, Guarantors and the Trustee for certain specified purposes, including among other things, to cure any ambiguity, omission, defect or inconsistency, to maintain the qualification of the Indenture under the TIA, and to make changes that do not adversely affect the rights of any Holder. Subject to certain exceptions requiring the consent of all Holders of the particular Notes to be affected, the Indenture, the Notes and the Security Documents may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes.

13. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company, the Guarantors and the Restrictive Subsidiaries to, among other things, Incur additional Indebtedness, make payments in respect to their Capital Stock or certain Indebtedness, make certain Investments, create or incur Liens, engage in certain activities, enter into transactions with Affiliates, enter into agreements restricting the ability of Restricted Subsidiaries to pay dividends or make distributions, merge or consolidate with other Persons or transfer assets. Such limitations are subject to a number of important qualifications and exceptions. Pursuant to Section 4.04 of the Indenture, the Company must annually report to the Trustee on compliance with such limitations.

14. Defaults and Remedies. Events of Default are set forth in the Indenture. Subject to certain limitations, if an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, if an Event of Default arises from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Under certain circumstances, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a

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statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

15. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for, the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

16. No Recourse Against Others. A director, officer, employee, manager, incorporator, partner, member or stockholder of the Company or any Subsidiary of the Company or any Guarantor, as such, shall not have any liability for any obligations of the Company or Guarantors under the Notes, the Note Guarantees, the Indenture or the Security Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

17. Note Guarantees. The Notes are entitled to the benefits of certain Note Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

18. Authentication. This Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee or an authenticating agent.

19. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

20. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes. In addition to the rights provided to Holders of Initial Notes shall have all the rights set forth in the Registration Rights Agreement dated as of August 26, 2004, among the Company, the Guarantors and the parties named on the signature pages thereof or, in the case of Initial Notes other than Original Notes, Holders of such Restricted Global Notes and Restricted Global Notes shall have the rights set forth in one or more similar agreements that the Company and other parties may enter into in relation to such other Initial Notes, in each case as such agreement may be amended, modified or supplemented from time to time (collectively, the “Registration Rights Agreement”).

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 Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

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The Company will furnish to any Holder upon written request and without charge a copy of the Indenture, the Registration Rights Agreement and/or the Security Documents. Requests may be made to:

Secunda International Limited

One Canal Street

Darthmouth, Nova Scotia B2Y 2W1 Canada

Attention: Corporate Secretary

22. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE.

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NOTATION OF NOTE GUARANTEES

Payment of principal of, and premium, if any, interest and Special Interest, if any, on, this Note is jointly, severally, and unconditionally guaranteed on a senior basis to the extent and in the manner set forth in the Indenture by the Guarantors who have become parties to the Indenture, including the Guarantors duly endorsing this notation. Note Guarantees are subject to release under circumstances set forth in the Indenture.

GUARANTORS 3013563 NOVA SCOTIA LIMITED
By:
	Name:

	Title:
SECUNDA MARINE INTERNATIONAL INCORPORATED
By:
	Name:

	Title:
SECUNDA MARINE SERVICES LIMITED
By:
	Name:

	Title:
SECUNDA GLOBAL MARINE INC.
By:
	Name:

Title:

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JDM SHIPPING INC.
By:
	Name:

	Title:
INTERNATIONAL SHIPPING CORPORATION INC.
By:
	Name:

	Title:
SECUNDA GLOBAL INTERNATIONAL INC.
By:
	Name:

	Title:
NAVIS SHIPPING INCORPORATED
By:
	Name:

	Title:
SECUNDA ATLANTIC INCORPORATED
By:
	Name:

Title:

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SECUNDA MARINE ATLANTIC LIMITED
By:
	Name:

	Title:
OFFSHORE LOGISTICS INCORPORATED
By:
	Name:

Title:

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Assignment Form

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint ________________________________________________________________________________________

to transfer this Note 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 face of this Note)

SIGNATURE GUARANTEE

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.

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Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Company pursuant to Section 3.11, 4.10 or 4.17 of the Indenture, check the box below:

¨ Section 3.11 ¨ Section 4.10 ¨ Section 4.17

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 3.11, Section 4.10 or Section 4.17 of the Indenture, state the amount you elect to have purchased:

$ ______________________________

Date:

Your Signature: ________________________________________________________________

(Sign exactly as your name appears on the face of the Note)

Tax Identification No.: _______________________________________________________________________________________

SIGNATURE GUARANTEE

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.

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE***

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of decrease in
Principal Amount of this
Global Note Amount of increase in
Principal Amount of this
Global Note Principal Amount of this
Global Note following
such decrease (or
increase)
Signature of authorized
signatory of Trustee or
Note Custodian

*** This should be included only if the Note is issued in global form.

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EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Secunda International Limited

One Canal Street

Darthmouth, Nova Scotia B2Y 2W1 Canada

Attention:                     

Wells Fargo Bank, National Association

______________________

                    ,                                  

Attention: Corporate Trust Administration

Re: Secunda International Limited Senior Secured Floating Rate Notes due 2012

Reference is hereby made to the Indenture, dated as of August 26, 2004 (the “Indenture”), among Secunda International Limited, as issuer (the “Company”), the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “Transferor”), owns and proposes to transfer the Note[s] or interest in such in such Note[s] specified in Annex A hereto, in the principal amount of US$                     in such Note[s] or interests (the “Transfer”), to                          (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the

B-1

transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof;

or

(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or

(d) ¨ such Transfer is being effected to an accredited investor within the meaning of Rule (501)(a)(1), (2), (3) or (7) under the Securities Act (“Institutional Accredited Investor”) or pursuant to another exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby certifies that the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by, if the Transfer is to an Institutional Accredited Investor, a certificate executed by the Transferee in the form of Exhibit D to the Indenture. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act.

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4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

(a) ¨ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) ¨ Check if Transfer is Pursuant to Regulation S. (i) The transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) ¨ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:
Dated:

B-3

ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a) ¨ a beneficial interest in the:

(i) ¨ 144A Global Note (CUSIP                     ), or

(ii) ¨ Regulation S Global Note (CUSIP                     ); or

(iii) ¨ IAI Global Note (CUSIP                     ); or

(b) ¨ a Restricted Definitive Note.

2. After the Transfer the Transferee will hold:

[CHECK ONE]

(a) ¨ a beneficial interest in the:

(i) ¨ 144A Global Note (CUSIP                     ), or

(ii) ¨ Regulation S Global Note (CUSIP                     ), or

(iii) ¨ IAI Global Note (CUSIP                     ); or

(iv) ¨ Unrestricted Global Note (CUSIP                     ); or

(b) ¨ a Restricted Definitive Note.

(c) ¨ an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

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EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Secunda International Limited

One Canal Street

Darthmouth, Nova Scotia B2Y 2W1 Canada

Attention:                     

Wells Fargo Bank, National Association

______________________

                    ,                                  

Attention: Corporate Trust Administration

Re: Secunda International Limited Senior Secured Floating Rate Notes due 2012

(CUSIP/ISIN)

Reference is hereby made to the Indenture, dated as of August 26, 2004 (the “Indenture”), among Secunda International Limited, as issuer (the “Company”), the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of US$             in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not

C-1

required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Owner]
By:
	Name:
	Title:

Dated:                                         

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EXHIBIT D

FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL

ACCREDITED INVESTOR

[Note: As of the Issue Date, no CUSIP or ISIN number has been obtained for an IAI Note, and, among other conditions, the Note contemplated in this Form will require the issuance of a separate CUSIP/ISIN number]

Secunda International Limited

One Canal Street

Darthmouth, Nova Scotia B2Y 2W1 Canada

Attention:                     

Wells Fargo Bank, National Association

_______________

                ,                          

Attention: Corporate Trust Administration

Re: Secunda International Limited Senior Secured Floating Rate Notes due 2012

Reference is hereby made to the Indenture, dated as of August 26, 2004 (the “Indenture”), among Secunda International Limited, as issuer (the “Company”), the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

In connection with our proposed purchase of US$                     aggregate principal amount of:

(a) ¨ a beneficial interest in a Global Note, or

(b) ¨ a Definitive Note,

we confirm that:

1. we are an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”), or an entity in which all of the equity owners are accredited investors within the meaning of Rule (501)(a)(1), (2), (3) or (7) under the Securities Act (an “institutional accredited investor”);

2. (A) any purchase of the Notes by us will be for our own account or for the account of one or more other institutional accredited investors or as fiduciary for the account of one or more trusts, each of which is an “accredited investor” within the meaning of Rule 501(a)(7) under the Securities Act and for each of which we exercise sole investment discretion or (B) we are a “bank,” within the meaning of Section 3(a)(2) of the Securities Act, or a “savings and loan association” or other institution described in Section 3(a)(5)(A) of the Securities Act that is acquiring Notes as fiduciary for the account of one or more institutions for which we exercise sole investment discretion;

D-1

3. we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of purchasing Notes;

4. we are not acquiring the Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdictions, provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary shall remain at all times within our control;

5. we have received a copy of the Offering Memorandum relating to the offering of the Notes and acknowledge that we have had access to such financial and other information, and have been afforded the opportunity to ask such questions of representatives of the Company and receive answers thereto, as we deem necessary in connection with our decision to purchase the Notes; and

6. (A) we are not an employee benefit plan or other arrangement that is subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, or an entity whose underlying assets include assets of such a plan or arrangement (pursuant to 29 C.F.R. Section 2510.3-101 or otherwise), and we are not purchasing (and will not hold) the Notes on behalf of, or with the assets of, any such plan, arrangement or entity; or (B) our purchase and holding of the Notes are completely covered by the full exemptive relief provided by U.S. Department of Labor Prohibited Transaction Class Exemption 96-23, 95-60, 91-38, 90-1 or 84-14.

We understand that the Notes were offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act and that the Notes have not been registered under the Securities Act or any state securities laws, and they were offered for resale in transactions not requiring registration under the Securities Act. We agree, on our own behalf, and on behalf of each account for which we acquire any Notes, that if in the future we decide to offer, resell, pledge or otherwise transfer such Notes, such Notes may be offered, resold, pledged or otherwise transferred only (a) to the Company or a subsidiary thereof, (b) pursuant to an effective registration statement under the Securities Act, (c) inside the United States to a person who is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (d) inside the United States, to an institutional accredited investor that, prior to such transfer, furnishes to the trustee, a signed letter similar to this letter containing certain representations relating to restrictions on transfer of the note evidenced hereby, (e) pursuant to offers and sales to Non-U.S. Persons that occur outside the United States within the meaning of Regulation S under the Securities Act, or (f) pursuant to another available exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of any State or any other applicable jurisdiction and in accordance with the legends set forth on the Notes. We further agree to provide any person purchasing any of the Notes other than pursuant to clause (b) above from us a notice advising such purchaser that resales of such securities are restricted as stated herein. We understand that the registrar and transfer agent for the Notes will not be required to accept for registration of transfer any Notes, except upon presentation of evidence satisfactory to the Company that the foregoing restrictions on transfer have been complied with. We further understand that any Notes we receive will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of this paragraph.

THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

D-2

We acknowledge that you and the Company will rely upon the truth and accuracy of our acknowledgments, confirmations and agreements in this letter. Further, we acknowledge and agree that you and the Company are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or, official inquiry with respect to the matters covered hereby.

[Insert Name of Accredited Investor]
By:
	Name:
	Title:

Dated:_______________________

D-3

EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE

ADDITIONAL NOTE GUARANTEES

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                     , 20         among Secunda International Limited, a Nova Scotia corporation (the “Company”), [name of New Guarantor] (the “New Guarantor”), and Wells Fargo Bank, National Association, as trustee under the indenture referred to below (the “Trustee”). Capitalized terms used herein and not defined herein shall have the meaning ascribed to them in the Indenture (as defined below).

W I T N E S S E T H

WHEREAS, the Company and the existing Guarantors have heretofore executed and delivered to the Trustee an indenture (as amended, supplemented and in effect, the “Indenture”), dated as of August 26, 2004, providing for the issuance of its Senior Secured Floating Rate Notes due 2012;

WHEREAS, Article XIII of the Indenture provides that under certain circumstances the Company may or must cause certain of its Subsidiaries to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiaries shall unconditionally guarantee all of the Company’s Obligations under the Notes pursuant to a Note Guarantee on the terms and conditions set forth herein; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the New Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to unconditionally guarantee the Company’s Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XIII of the Indenture and to be bound by all of the provisions of the Indenture applicable to a Guarantor thereunder and to perform all of the obligations and agreements of a Guarantor under the Indenture.

3. No Recourse Against Others. No past, present or future director, officer, employee, manager, incorporator, partner, member, agent, shareholder or other owner of Capital Stock of any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

E-1

4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

5. Severability Clause. In case any provision of 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 and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

6. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of the Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

7. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

9. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the correctness of the recitals of fact contained herein, all of which recitals are made solely by the New Guarantor.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and delivered, all as of the date first above written.

Dated:

SECUNDA INTERNATIONAL LIMITED
By:
	Name:
	Title:
[New Guarantor]
By:
	Name:
	Title:

E-2

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:
	Name:
	Title:

E-3

EX-5.1

Exhibit 5.1

VINSON & ELKINS L.L.P.

2300 FIRST CITY TOWER

1001 FANNIN STREET

HOUSTON, TEXAS 77002-6760

TELEPHONE (713) 758-2222

FAX (713) 758-2346

www.velaw.com

February 3, 2005

Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia

Canada B2Y 2W1

Ladies and Gentlemen:

We have acted as United States counsel for Secunda International Limited, a Nova Scotia corporation (the “Company”) and certain of its subsidiaries with respect to the preparation of the Registration Statement on Form F-4 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) in connection with the registration by the Company under the Securities Act of 1933, as amended (the “Securities Act”) of (i) the offer and exchange by the Company (the “Exchange Offer”) of $125,000,000 aggregate principal amount of its Senior Secured Floating Rate Notes due 2012 (the “Original Notes”), for a new series of notes bearing substantially identical terms and in like principal amount (the “Exchange Notes”) and (ii) the guarantees (the “Guarantees”) of certain subsidiaries of the Company listed in the Registration Statement as guarantors (the “Subsidiary Guarantors”) of the Original Notes and the Exchange Notes. The Original Notes and the Exchange Notes are collectively referred to herein as the “Notes.” The Original Notes were issued, and the Exchange Notes will be issued, under an Indenture dated as of August 26, 2004 among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as Trustee (the “Indenture”). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement to which this opinion is an exhibit.

We have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the Indenture and (iii) such other certificates, statutes and other instruments and documents as we considered appropriate for purposes of the opinions hereafter expressed. In connection with this opinion, we have assumed that the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and the Exchange Notes will be issued and sold in compliance with applicable foreign, federal and state securities laws and in the manner described in the Registration Statement.

Based on the foregoing, we are of the opinion that when the Exchange Notes have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture, (i) such Exchange Notes will be legally issued and will constitute valid and binding

Secunda International Limited

Page 2

February 3, 2005

obligations of the Company enforceable against the Company in accordance with their terms, except as such enforcement is subject to any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors’ rights generally and general principles of equity, and (ii) the Guarantees of the Subsidiary Guarantors remain valid and binding obligations of such subsidiaries, enforceable against each such Subsidiary Guarantor in accordance with their terms, except as such enforcement is subject to any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors’ rights generally and general principles of equity.

We express no opinions concerning (a) the validity or enforceability of any provisions contained in the Indenture that purport to waive or not give effect to rights to notices, defenses, subrogation or other rights or benefits that cannot be effectively waived under applicable law; or (b) the enforceability of indemnification provisions to the extent they purport to relate to liabilities resulting from or based upon negligence or any violation of foreign, federal or state securities or blue sky laws.

We are members of the bar of the state of New York. We have relied as to matters of the laws of the Province of Nova Scotia and the federal laws of Canada on the opinion of McInnes Cooper dated the date hereof and as to matters of the laws of Barbados on the opinion of Paula S. Lett, Attorney-at-Law dated the date hereof, which opinions are also filed as exhibits to the Registration Statement. The opinions expressed herein are limited exclusively to the federal laws of the United States of America, the laws of the State of New York, and, in reliance on the opinion of McInnes Cooper dated the date hereof, the laws of the Province of Nova Scotia and the federal laws of Canada, and, in reliance on the opinion of Paula S. Lett, Attorney-at-Law dated the date hereof, the laws of Barbados, and we are expressing no opinion as to the effect of the laws of any other jurisdiction, domestic or foreign.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm name in the prospectus forming a part of the Registration Statement under the caption “Legal Matters.” By giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission issued thereunder.

Very truly yours,

/s/ Vinson & Elkins L.L.P.

Vinson & Elkins L.L.P.

EX-5.2

Exhibit 5.2

[LETTERHEAD OF McINNES COOPER]

	Summit Place
	1601 Lower Water Street
Our File: FS-1858	Post Office Box 730
February 3, 2005	Halifax, Nova Scotia
	Canada B3J 2V1
	T. 902 425 6500
	F. 902 425 6350
	www.mcinnescooper.com

Secunda International Limited

One Canal Street

Dartmouth, NS B2Y 2W1

Dear Sirs/Mesdames:

Re: Exchange of US $125,000,000 Senior Secured Floating Rate Notes

Due 2012 by Secunda International Limited

We have acted as Nova Scotia counsel to Secunda International Limited (the “Company”) in connection with the proposed issue by the Company of US $125,000,000 principal amount of Senior Secured Floating Rate Notes due 2012 (the “Exchange Notes”). The Exchange Notes will be issued in exchange for a like principal amount of the Company’s outstanding Senior Secured Floating Rate Notes due 2012 (the “Original Notes”) pursuant to an Indenture dated as of August 26, 2004 between the Company, certain subsidiary guarantors, including 3013563 Nova Scotia Limited, Secunda Marine International Incorporated, Secunda Marine Services Limited, Navis Shipping Incorporated, Secunda Atlantic Incorporated, Secunda Marine Atlantic Limited and Offshore Logistics Incorporated (collectively, the “Nova Scotia Obligors”) and Wells Fargo Bank, National Association, as trustee. Payment of the Exchange Notes is to be guaranteed by the Nova Scotia Obligors pursuant to Article 13 of the Indenture and evidenced by a notation of guarantee attached to the Exchange Notes. We understand that the Original Notes were not offered in the Province of Nova Scotia.

Documentation

As Nova Scotia counsel to the Company, we have reviewed copies of the form of Exchange Notes, the Indenture and the form of notation of subsidiary guarantee to be executed by the Nova Scotia Obligors (collectively, the “Documents”).

MCINNES COOPER	Page 2
	FS-1858
	February 3, 2005

Jurisdiction and Scope of Opinion

We are solicitors qualified to practice law in the Province of Nova Scotia and we express no opinion as to any laws or any matters governed by any laws other than the laws of the Province of Nova Scotia and the federal laws of Canada applicable therein.

Scope of Examinations

In connection with the opinions expressed in this letter, we have considered such questions of law and examined such public and corporate records, certificates and other documents and conducted such other examinations as we have considered necessary for the purposes of the opinions expressed in this letter.

In addition to our examination of the Documents as described above, we have examined originals or photostatic copies certified or otherwise identified to our satisfaction, of the following:

(a) Certificates of Status (collectively, the “Certificates of Status”) pertaining to the Company and each of the Nova Scotia Obligors issued on behalf of the Registrar of Joint Stock Companies for the Province of Nova Scotia dated January 31, 2005, which we assume continue to be accurate as of the date hereof;

(b) the Memorandum of Association, Articles of Association, records of corporate proceedings, written resolutions and registers of the Company and each of the Nova Scotia Obligors contained in the minute book of the Company and each of the Nova Scotia Obligors, respectively;

(c) resolutions of the directors of the Company and each of the Nova Scotia Obligors, each dated August 17, 2004, authorizing the execution and delivery by the Company and the Nova Scotia Obligors of each of the Documents to which they are a party, respectively; and

(d) a Certificate of an Officer of the Company and of each of the Nova Scotia Obligors dated the date hereof (collectively, the “Officers’ Certificates”).

Assumptions, Qualifications and Reliances

We have assumed the legal capacity of all individuals, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed, photostatic or facsimile copies.

In expressing the opinions in paragraph 1 below, we have relied solely upon the Certificates of Status.

MCINNES COOPER	Page 3
	FS-1858
	February 3, 2005

For the purposes of the opinions expressed in this letter, we have assumed that all facts set forth in all certificates supplied, or otherwise conveyed to us, by public officials and in the Officers’ Certificates are true.

Opinions

On the basis of the foregoing, we are of the opinion that:

1. The Company and each of the Nova Scotia Obligors is duly incorporated and existing under the laws of the Province of Nova Scotia.

2. The execution and delivery by the Company, and the performance by the Company of its obligations under, the Exchange Notes have been duly authorized by all necessary corporate action on the part of the Company.

3. The execution and delivery by each of the Nova Scotia Obligors, and the performance by each of them of their respective obligations under the guarantee to be endorsed by them on the notation of guarantee attached to the Exchange Notes as contemplated by the Indenture, have been duly authorized by all necessary corporate action on the part of each of the Nova Scotia Obligors.

Vinson & Elkins L.L.P. may rely on the opinion in this letter in delivering an opinion in connection with the issue of the Exchange Notes. We consent to the filing of this opinion with the registration statement of the Company and the Nova Scotia Obligors with the United States Securities and Exchange Commission under SEC File No. 333- and the inclusion of our name under the caption “Legal Matters” in any prospectus included therein.

Yours truly,

/s/ McInnes Cooper

EX-5.3

EXHIBIT 5.3

PAULA S. LETT, LL.B. (Hons.)

ATTORNEY-AT-LAW

SUITE 102 WARRENS COURT,	TEL: (246) 425-3447
WARRENS, ST. MICHAEL,	TEL: (246) 425-0930
BARBADOS	FAX: (246) 425-2949

E-mail: lettlaw@caribsurf.com

February 3, 2005

Secunda International Limited

One Canal Street

Dartmouth

Nova Scotia

Canada

B2Y 2W1

Dear Sirs,

Re: Secunda Global Marine Incorporated; Secunda Global International Inc.; JDM Shipping Inc.; and International Shipping Corporation Inc.

This letter is furnished to you in connection with the Registration Statement on Form F-4 (the “Registration Statement”) filed by Secunda International Limited (the “Company”), Secunda Global Marine Incorporated; Secunda Global International Inc.; JDM Shipping Inc.; and International Shipping Corporation Inc. (collectively, the “Guaranteeing Subsidiaries”), and the other subsidiary guarantors of the Company referred to therein with the U.S. Securities and Exchange Commission.

The Registration Statement relates to the issuance by the Company in an exchange offer of $125,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due August 1, 2012 (the “Exchange Notes”). Payment of the Exchange Notes will be guaranteed by the Guaranteeing Subsidiary pursuant to the Indenture, dated as of August 26, 2004 (the “Indenture”), among the Guaranteeing Subsidiaries, the Company and the other guarantor subsidiaries of the Company and U.S. Bank National Association, as trustee (the “Trustee”). All capitalised terms not otherwise defined herein have the meanings assigned to them in the Indenture.

In connection with this opinion, I have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents:

(i) the Indenture;

(ii) the Registration Statement and the prospectus contained therein;

(iii) the form of Notation of Guarantee to be endorsed on the Exchange Notes (the “Exchange Guarantee”) and;

(iv) the certificate and articles of incorporation and the by-Laws of the Guaranteeing Subsidiaries as in effect at the date hereof, and such other corporate records as I have deemed necessary for a basis for this opinion.

In my examination of the foregoing documents, I have assumed the genuineness of all signatures, the authenticity and completeness of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as notarial, true, certified, conformed, photostatic or telecopied copies thereof; and the completeness and accuracy of all facts set forth in official public records and certificates and other documents issued by public officials. Further all assumptions made in respect of the Original Opinion are incorporated herein.

I am qualified to practice law only in Barbados and have made no investigation of laws of any jurisdiction other than the laws of Barbados. This opinion is limited to the laws of Barbados as applied by the courts of Barbados and is limited to and is given on the basis of the current law and practice in Barbados.

Based upon the foregoing and subject to the limitations, qualifications and assumptions set forth herein, it is my opinion that:

(i) the Guaranteeing Subsidiaries are bodies corporate duly organized, validly existing and in good standing under the Laws of Barbados;

(ii) the Exchange Guarantee has been duly authorized by all necessary corporate action of the Guaranteeing Subsidiaries.

This opinion may be relied upon, quoted and referred to by Vinson Elkins L.L.P., and McInnes Cooper, for the purpose of their rendering of legal opinions in connection with the transactions contemplated by the Indenture and the filing of any registration statement in accordance with the Registration Rights Agreement filed by the Company. I consent to the filing of this opinion with the Registration Statement and the inclusion of my name under “Legal Matters” in any prospectus included therein.

Yours faithfully,

/s/ Paula S. Lett

Paula S. Lett

PL

2

EX-10.1

Exhibit 10.1

SECUNDA INTERNATIONAL LIMITED

AND

SUBSIDIARY GUARANTORS

SENIOR SECURED FLOATING RATE NOTES DUE 2012

CREDIT AGREEMENT

COLLATERAL AGENCY AGREEMENT

Dated as of August 26, 2004

Collateral Agency Agreement

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION		2
SECTION 1.1	Defined Terms	2
SECTION 1.2	Rules of Construction	6
ARTICLE II. OBLIGATIONS AND POWERS OF COLLATERAL AGENT		7
SECTION 2.1	Undertaking of the Collateral Agent	7
SECTION 2.2	Documents and Communications	8
SECTION 2.3	Release or Subordination of Liens	9
SECTION 2.4	Enforcement of Liens	9
SECTION 2.5	Priority of Liens; Additional Collateral	9
SECTION 2.6	Application of Proceeds	10
SECTION 2.7	Credit Bid Rights	14
SECTION 2.8	Appointment and Powers of the Collateral Agent	14
SECTION 2.9	For Sole and Exclusive Benefit of Holders of Secured Obligations	15
ARTICLE III. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND GUARANTORS		15
SECTION 3.1	Release of Liens on Collateral	15
SECTION 3.2	Delivery of Copies to the Administrative Agent and Trustee	18
SECTION 3.3	Sufficiency of Release	19
SECTION 3.4	Purchaser Protected	19
SECTION 3.5	Collateral Agent not Required to Serve, File or Record	19
SECTION 3.6	Trustee Notices	19
ARTICLE IV. IMMUNITIES OF THE COLLATERAL AGENT		19
SECTION 4.1	No Implied Duty	19
SECTION 4.2	Appointment of Co-Agents and Sub-Agents	20
SECTION 4.3	Other Agreements	20
SECTION 4.4	Solicitation of Instructions	20
SECTION 4.5	Limitation of Liability	20
SECTION 4.6	Documents in Satisfactory Form	20
SECTION 4.7	Entitled to Rely	20
SECTION 4.8	Defaults and Events of Default	21
SECTION 4.9	Actions by Collateral Agent	21
SECTION 4.10	Security or Indemnity in favor of the Collateral Agent	21

-i- Collateral Agency Agreement

TABLE OF CONTENTS

(continued)

		Page
SECTION 4.11	Rights of the Collateral Agent	21
SECTION 4.12	Limitations on Duty of Collateral Agent in Respect of Collateral	21
SECTION 4.13	Assumption of Rights, Not Assumption of Duties	22
SECTION 4.14	No Liability for Clean Up of Hazardous Materials	22
SECTION 4.15	Not Responsible for Recitals; Other Matters	23
ARTICLE V. RESIGNATION AND REMOVAL OF THE COLLATERAL AGENT		23
SECTION 5.1	Resignation or Removal of Collateral Agent	23
SECTION 5.2	Appointment of Successor Collateral Agent	24
SECTION 5.3	Succession	24
SECTION 5.4	Merger, Conversion or Consolidation of Collateral Trustee	24
SECTION 5.5	Limitation	25
ARTICLE VI. SPECIAL AGREEMENTS REGARDING COLLATERAL		25
SECTION 6.1	Enforcement Directions	25
SECTION 6.2	Effect of Not Timely Action	25
SECTION 6.3	No Other Lien Enforcement Affected	26
SECTION 6.4	No Alteration on Shared Lien Priority	26
SECTION 6.5	Notice of Remedial Action	26
SECTION 6.6	Other Requests	26
SECTION 6.7	No Responsibility	26
ARTICLE VII. MISCELLANEOUS PROVISIONS		27
SECTION 7.1	Amendment	27
SECTION 7.2	Further Assurances	28
SECTION 7.3	Successors and Assigns	29
SECTION 7.4	Delay and Waiver	29
SECTION 7.5	Notices	29
SECTION 7.6	Compensation; Expenses	30
SECTION 7.7	Indemnity	31
SECTION 7.8	Severability	32
SECTION 7.9	Headings	32
SECTION 7.10	Obligations Secured	32
SECTION 7.11	Applicable Law	32

-ii- Collateral Agency Agreement

TABLE OF CONTENTS

(continued)

		Page
SECTION 7.12	Consent to Jurisdiction	32
SECTION 7.13	Agent for Service	33
SECTION 7.14	Waiver of Jury Trial	33
SECTION 7.15	Counterparts	33
SECTION 7.16	Effectiveness	33
SECTION 7.17	Additional Obligors	34
SECTION 7.18	Insolvency	34
SECTION 7.19	Rights and Immunities of the Administrative Agent and the Trustee	34

-iii- Collateral Agency Agreement

COLLATERAL AGENCY AGREEMENT

This COLLATERAL AGENCY AGREEMENT, dated as of August 26, 2004 (as amended, supplemented or otherwise modified this “Agreement”), is entered into by and among SECUNDA INTERNATIONAL LIMITED, a Nova Scotia corporation (the “Company”), the SUBSIDIARIES OF THE COMPANY from time to time party hereto (the “Subsidiary Guarantors”), FORTIS CAPITAL CORP. (“Fortis”), as the Administrative Agent under the Initial Credit Agreement (each, as herein defined), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee under the Indenture (each, as herein defined), and WILMINGTON TRUST COMPANY, as Collateral Agent (together with its successors in such capacity, the “Collateral Agent”).

RECITALS

1. Simultaneously herewith, the Company and the Subsidiary Guarantors are entering into the Credit Agreement dated as of August 26, 2004 (as amended, supplemented or otherwise modified, the “Initial Credit Agreement”), by and among the Company, as borrower, the Subsidiary Guarantors, as guarantors, Fortis, as arranger and book runner, the lenders from time to time party thereto (the “Initial Lenders”), and the Administrative Agent named therein (together with its successors in such capacity, the “Administrative Agent”), pursuant to which, and subject to the terms and conditions thereof, the Company may obtain Revolving Loans and Letters of Credit (each, as defined in the Credit Agreement) in an outstanding principal amount not to exceed, together with the principal amount of all Reimbursement Obligations (as defined in the Credit Agreement) C$40,000,000 at any one time outstanding. All Revolving Loans and Reimbursement Obligations at the expiration of the Revolving Period will be repaid pursuant to the provisions of the Initial Credit Agreement.

2. The Company intends to issue US$125,000,000 in principal amount of its Senior Secured Floating Rate Notes due                                  , 2012 (the “Initial Notes”) pursuant to the Indenture dated as of August 26, 2004 (as amended, supplemented or otherwise modified, the “Indenture”), by and among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as Trustee (together with its successors in such capacity, the “Trustee”).

3. Pursuant to the Indenture, the Subsidiary Guarantors guarantee payment of the Notes and all other Note Obligations (each, as herein defined) and pursuant to the Credit Agreement, the Subsidiary Guarantors guarantee the Credit Facility Obligations (as herein defined).

4. The Initial Credit Agreement and Indenture require the Company and the Subsidiary Guarantors to secure payment of the Revolving Loans, the L/C Obligations (as herein defined) and the Notes and other Secured Obligations by Liens in the Collateral (each, as herein defined).

5. The Initial Credit Agreement and Indenture further require that such Liens in the Collateral be granted pursuant to the Security Documents to a collateral agent acting for the benefit of the Lenders and the holders of the Notes and other Secured Obligations. This Agreement sets forth the terms on which the Collateral Agent has undertaken to accept, hold and enforce such Liens and all related rights, interests and powers as agent for, and for the benefit exclusively of, the present and future holders of the Notes and other Secured Obligations.

1 Collateral Agency Agreement

NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

SECTION 1.1 Defined Terms.

(a) Capitalized terms used in this Agreement that are defined in the Indenture and not otherwise defined herein shall have the meanings set forth in the Indenture.

(b) All capitalized terms used in this Agreement that are defined in Article 9 of the UCC (as herein defined), as in effect on the date of this Agreement in the State of New York, and not otherwise defined herein shall have the meanings therein set forth.

(c) The following terms shall have the following meanings:

“Account Pledge Agreements” means the control agreements relating to, respectively, the Asset Sale Proceeds Account and the Collateral Account, dated as of August 26, 2004, among the Obligors identified therein and the Collateral Agent, as amended, supplemented or otherwise modified and in effect.

“Act of the Administrative Agent” means a direction in writing delivered to the Collateral Agent by or with the written consent of the Administrative Agent accompanied by written confirmation from the Administrative Agent (in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent) as to the principal amount of outstanding Revolving Loans and L/C Obligations registered by the Administrative Agent as outstanding in the name of any consenting Secured Debtholder who is a Lender under the Credit Agreement, or if no such Revolving Loans or L/C Obligations are outstanding, certifying the outstanding amount of the Commitments pursuant to the terms of the Credit Agreement, and stating that it is being delivered in relation to Designated Collateral.

“Act of the Secured Debtholders” means a direction in writing delivered to the Collateral Agent by or with the written consent of the Required Secured Debtholders accompanied by written confirmation (i) from the Administrative Agent (in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent) as to the principal amount of outstanding Revolving Loans and L/C Obligations registered by the Administrative Agent as outstanding in the name of any consenting Secured Debtholder who is a Lender under the Credit Agreement, or if no such Revolving Loans or L/C Obligations are outstanding, certifying the outstanding amount of the Commitments pursuant to the terms of the Credit Agreement, and (ii) from the Trustee (in a form reasonably satisfactory to the Trustee and the Collateral Agent) as to the principal amount of outstanding Notes registered by the Trustee as outstanding in the name of any consenting Holder.

“Administrative Agent” has the meaning given in paragraph (1) of the Recitals.

“Agreement” has the meaning given in the introductory paragraph.

“Asset Sale Proceeds Account” has the meaning given in Section 2.6(f).

2 Collateral Agency Agreement

“Assignment of Earnings and Insurance” means the Assignment of Earnings and Insurance dated as of August 26, 2004 between certain of the Subsidiary Guarantors and the Collateral Agent, as amended, supplemented or otherwise modified and in effect.

“Assignments of Contracts” means, collectively, the Assignments of Contract dated as of August 26, 2004 between the applicable Subsidiary Guarantor identified therein and the Collateral Agent, as amended, supplemented or otherwise modified and in effect.

“Closing Date” means August 26, 2004.

“Collateral” means, however defined, all collateral, pledged assets and other property in which a security interest is granted under the Security Documents.

“Collateral Account” has the meaning given in Section 2.6(e).

“Collateral Agent” has the meaning given in the introductory paragraph.

“Commitment” has the meaning given in the Initial Credit Agreement.

“Company” has the meaning given in the introductory paragraph.

“Control Agreements” has the same meaning as Account Pledge Agreements.

“Credit Agreement” means the Initial Credit Agreement, together with the related documents thereto (including any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any one or more agreements (and related documents) governing Indebtedness incurred to Refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders, and whether involving the same or different group of the Company and Restricted Subsidiaries as principal obligors or guarantors.

“Credit Facility Obligations” means (i) the principal of (in a maximum outstanding amount of C$40,000,000), and accrued interest on, such Indebtedness of the Company incurred under the Credit Agreement and (ii) all other Obligations (as defined in the Initial Credit Agreement) of any Obligor arising under or related to the Credit Agreement, the Subsidiary Guarantee Agreements and, as related to the Credit Agreement or Subsidiary Guarantee Agreements, the Security Documents.

“C$” means Canadian dollars.

“Deed of Covenants” means the Deed of Covenants dated as of August 26, 2004 among certain of the Subsidiary Guarantors and the Collateral Agent, as the same may be amended, modified or supplemented from time to time pursuant to the terms thereof.

“Default” means a “Default” as defined in the Credit Agreement or a “Default” as defined in the Indenture.

“Designated Collateral” has the meaning given in clause (i) of Section 6.1.

3 Collateral Agency Agreement

“Designated Vessel Period” has the meaning given in clause (i) of Section 6.1.

“Designated Vessels” means as of the Closing Date, the Thebaud Sea, Venture Sea, Burin Sea and Trinity Sea; and thereafter any Vessel of equal or greater Fair Market Value owned by a Subsidiary Guarantor free and clear of any Liens other than Permitted Liens that is designated by the Administrative Agent and the Borrower as a “Designated Vessel” from time to time pursuant to the Credit Agreement and this Agreement.

“Event of Default” means an “Event of Default” as defined in the Credit Agreement or an “Event of Default” as defined in the Indenture.

“Holders” means the Person in whose name a Note is registered.

“Indemnified Liabilities” means any and all other liabilities (including all environmental liabilities), obligations, losses, damages, penalties, actions, judgments, suits, costs, taxes, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or any of the other Transaction Documents or any other document in connection herewith or therewith, including any of the foregoing relating to the use of proceeds of the Revolving Loans, the Letters of Credit, or the Notes or the violation of, noncompliance with or liability under, any law (including environmental laws) applicable to or enforceable against the Company or any of its Subsidiaries or any of the Collateral and all reasonable fees, costs and expenses (including reasonable fees and expenses of legal counsel) incurred by any Indemnitee in connection with any claim, action or proceeding in any respect relating to any of the foregoing, whether or not suit is brought.

“Indemnitee” has the meaning given in Section 7.7(a).

“Indenture” has the meaning given in paragraph 2 of the Recitals.

“Initial Credit Agreement” has the meaning given in paragraph 1 of the Recitals.

“Initial Lenders” has the meaning given in paragraph 1 of the Recitals.

“Joinder Agreement” means an agreement substantially in the form of Exhibit A.

“L/C Obligations” has the meaning given in the Initial Credit Agreement.

“Lenders” means the Initial Lenders, and hereafter any lender party to the Credit Agreement.

“Letter of Credit” has the meaning given in the Initial Credit Agreement.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, preference, priority, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof, a ship or vessel mortgage or encumbrance, any option or other agreement to sell or give a security interest in, and any filing of or agreement to give any financing statement under, the Uniform Commercial Code (or equivalent statute) of any jurisdiction).

“Mortgages” means, with respect to the Vessels, the statutory form mortgages executed and delivered by the applicable Subsidiary Guarantor.

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“Notes” means the Initial Notes and the Additional Notes, as identified in the Indenture, and each note issued in exchange therefor, and in connection with each of the foregoing, each replacement, amendment, supplement or modification as in effect from time to time.

“Notice of Event of Default” means written notice given to the Collateral Agent by the Administrative Agent, the Trustee or the Required Secured Debtholders, stating that an Event of Default has occurred and is continuing.

“Obligations” means all principal, premium, interest, penalties, fees, indemnifications, reimbursement obligations, damages, liabilities, costs, expenses and other amounts payable under the documentation governing any Indebtedness or in respect thereto.

“Obligor” means each of the Company, the Subsidiary Guarantors and any other Persons that has granted to the Collateral Agent a Lien upon any of the Collateral as security for the Secured Obligations.

“Officer’s Certificate” has the meaning given in the Indenture and shall be for the benefit of the Collateral Agent, the Administrative Agent and the Trustee.

“Opinion of Counsel” means a written opinion from legal counsel addressed to the Collateral Agent, the Administrative Agent and the Trustee who is reasonably acceptable to the Collateral Agent that meets the requirements of Section 14.05 of the Indenture. The opinion may include exceptions and qualifications consistent with customary practice for written third party legal opinions relating to the subject matter of the opinion.

“Pledge Agreement” means the Pledge Agreement dated as of August 26, 2004 between the Pledgors identified therein and the Collateral Agent, as amended, supplemented or otherwise modified and in effect.

“Required Secured Debtholders” means, at any time, Secured Debtholders then holding a majority in aggregate outstanding principal amount of Revolving Loans, L/C Obligations and Notes then outstanding, voting as a single class. For this purpose only, Revolving Loans and Notes registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company shall be deemed not to be outstanding. For purposes of calculating the aggregate outstanding principal amount of Revolving Loans, L/C Obligations and Notes, the Administrative Agent shall convert the outstanding principal amount of Revolving Loans and L/C Obligations from C$ to US$ using the conversion rate published in The Wall Street Journal under the heading “Key Currency Cross Rates” (for the previous Business Day) on the day on which the Administrative Agent makes such calculation. If such conversion rate shall not be published in The Wall Street Journal, the Administrative Agent shall use any other generally accepted source for such conversion rate, as determined by it acting reasonably.

“Responsible Officer”, when used with respect to the Collateral Agent, means any officer, including, without limitation, any vice president, assistant vice president, assistant treasurer or secretary within the Corporate Trust Administration of the Collateral Agent (or any successor group of the Collateral Agent) or any other officer of the Collateral Agent customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to particular corporate trust matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“Revolving Loans” has the meaning given in the Initial Credit Agreement.

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“Secured Debtholder” means, at any time, a Person which then is a Lender, as defined in the Credit Agreement, or a Holder, as defined in the Indenture.

“Secured Obligations” means, collectively, the Note Obligations and the Credit Facility Obligations.

“Security Documents” means this Agreement, the Deed of Covenants, the Account Pledge Agreements, the Pledge Agreement, Assignment Earnings and Insurances, the Assignments of Contracts, the Mortgages, any one or more security agreements, pledge agreements, collateral assignments, account pledge agreements, mortgages, vessel mortgages, marine mortgages, share pledges, collateral agency agreements, deeds of covenant, deeds of trust or other grants or transfers for security executed and delivered by the Company and any other Obligor creating, or purporting to create, a Lien upon any collateral in favor of the Collateral Agent for the benefit of the holders of the Secured Obligations, subject to certain payment priorities, in each case as amended, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“Subsidiary Guarantee Agreement” has the meaning given in the Initial Credit Agreement.

“Subsidiary Guarantors” has the meaning given in the introductory paragraph.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. § 77aaa-77bbb), as in effect on the date the Indenture is qualified under such Act.

“Transaction Documents” means collectively the Note Documents, the Credit Agreement and the Security Documents.

“Trustee” has the meaning given in paragraph 2 of the Recitals.

“UCC” means the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

“US$” means United States dollars.

“Vessels” has the meaning given in the Deed of Covenants.

SECTION 1.2 Rules of Construction. Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “including” means “including without limitation,” “including but not limited to” or words of similar import;

(d) the word “will” shall be construed to have the same meaning and effect as the word “shall;”

(e) words in the singular include the plural, and in the plural include the singular;

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(f) provisions apply to successive events and transactions;

(g) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time;

(h) references to “Sections,” “clauses,” “Articles,” “Exhibits” and “Schedules” shall be to Sections, clauses, Articles, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically provided; and

(i) the use in this Agreement of the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof.

ARTICLE II.

OBLIGATIONS AND POWERS OF COLLATERAL AGENT

SECTION 2.1 Undertaking of the Collateral Agent.

(a) The Collateral Agent hereby irrevocably undertakes and agrees, on the terms and conditions set forth in this Agreement, to act as agent and as representative for the benefit solely and exclusively of the present and future Lenders and holders of Notes and other Secured Obligations and in such capacity to, and shall:

(i) accept, enter into, hold, administer, maintain and enforce all Security Documents, including all Collateral subject thereto, and all Liens created or granted to it thereunder, perform its obligations thereunder and protect, exercise and enforce the interests, rights, powers and remedies granted or available to it thereunder or pursuant thereto or in connection therewith or applicable laws;

(ii) take all lawful and commercially reasonably actions that it may deem necessary or advisable to protect or preserve its interest in the Collateral and such interests, rights, powers and remedies, including, to institute and maintain such suits and proceedings as it may deem expedient to prevent the impairment of, or to preserve or protect its, the Administrative Agent’s, the Trustee’s, the Lenders’ and the Holders’ interests in the Collateral, subject to the terms of the Security Documents;

(iii) establish the Collateral Account, and Asset Sale Proceeds Account and maintain control over such accounts and all deposits therein and investments thereof pursuant to one or more control agreements;

(iv) deliver and receive notices pursuant to the Security Documents;

(v) sell, assign, collect, assemble, foreclose on, institute legal proceedings with respect to, or otherwise exercise or enforce the rights and remedies of a secured party (including a mortgagee, vessel mortgagee, marine mortgagee, stock pledgee, share pledgee, security agreement, trust deed beneficiary and insurance beneficiary or loss payee) with respect to the Collateral and its other interests, rights, powers and remedies, subject to the terms of the Security Documents;

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(vi) remit to the Trustee, the Administrative Agent or the Company, as provided in Section 2.6 all cash proceeds received by the Collateral Agent from the collection, foreclosure or enforcement of its interest in the Collateral under the Security Documents or any of its other interests, rights, powers or remedies;

(vii) amend the Security Documents from time to time in accordance with Section 7.1;

(viii) enter into currency conversion transactions as required pursuant to Section 2.6(i);

(ix) release any Lien granted to it by any Security Document upon any Collateral if and as required by Section 3.1;

(x) direct the disbursement of funds as expressly provided for in the Control Agreements;

(xi) amend Annex A or Schedule 1 to each of the Pledge Agreement, Assignment of Earnings, and Deed of Covenants, as applicable, in each case as a result of any release as provided for in Section 3.1, any additions of Collateral as provided in Section 2.5 or as a result of any actions taken in connection with Section 2.12 of the Deed of Covenants or as permitted by the terms thereof;

(xii) take any actions required to be taken under the Security Documents subject to the provisions of this Agreement; and

(xiii) provide instructions from time to time as required by the terms of the Security Documents, subject to the terms of this Agreement.

(b) Each party to this Agreement acknowledges and consents to the undertaking of the Collateral Agent set forth in Section 2.1(a) and agrees to each of the other provisions of this Agreement applicable to Collateral Agent.

(c) Upon receipt of any Act of the Administrative Agent or any Act of the Secured Debtholders, as the case may be, given in accordance with the terms of this Agreement, with indemnities satisfactory to the Collateral Agent as provided in Section 4.15(e), the Collateral Agent shall take or direct any action provided for in such direction. Such action may include, but is not limited to (x) the giving of any release, notice, approval, consent or waiver which may be called for hereunder or under the Security Documents that the Collateral Agent is expressly authorized to give, (y) the requiring of the execution and delivery of additional Security Documents, or (z) employing agents or directing trustees in order to accomplish the actions requested.

(d) Notwithstanding the preceding, nothing shall impair the ability of the Trustee or the Collateral Agent to take any action necessary to comply with any obligations imposed under any applicable law, including, without limitation, the TIA.

SECTION 2.2 Documents and Communications. The Collateral Agent will permit, upon prior written notice, the Administrative Agent, the Trustee or any Secured Debtholder at any time or from time to time, during normal business hours, to inspect at its office and copy any and all Security Documents and other documents, notices, certificates, instructions or communications received by the Collateral Agent in its capacity as such.

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SECTION 2.3 Release or Subordination of Liens. The Collateral Agent will not release or subordinate any Lien created or granted by any Security Document, or consent to the release or subordination of any Lien created or granted by any Security Document, except as follows: (i) as required by Article 3; and (ii) as ordered pursuant to applicable law under a final and nonappealable order of a court of competent jurisdiction.

SECTION 2.4 Enforcement of Liens. If the Collateral Agent at any time receives a written notice of the occurrence and continuance (as of the date of such notice) of any Event of Default or a Responsible Officer of the Collateral Agent has actual knowledge that an Event of Default has occurred and is continuing, it will promptly deliver written notice thereof to the Administrative Agent and the Trustee. Thereafter, subject to Article 4 and Article 6, the Collateral Agent shall act, or decline to act, as directed by Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be, in the exercise and enforcement the Collateral Agent’s interests, rights, powers and remedies in respect of the Collateral or under the Security Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Agent will act, or decline to act, with respect to the manner of such exercise of remedies as directed by an Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be. Unless it has been directed to the contrary by Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be, the Collateral Agent may (but shall not be obligated to) take or refrain from taking such action with respect to such Event of Default as it may deem advisable and in the best interest of the holders of Secured Obligations.

SECTION 2.5 Priority of Liens; Additional Collateral. (a) Notwithstanding (i) anything to the contrary contained in the Note Documents or the Credit Agreement Documents, (ii) the time, order or method of attachment of the Collateral Agent’s Liens, (iii) the time or order of filing or recording of financing statements, vessel mortgage, marine mortgage or other documents filed or recorded to create or perfect any Lien upon any Collateral, (iv) the time of taking possession or control over any Collateral or (v) the rules for determining priority under the UCC or any other law governing relative priorities of secured creditors, all Liens at any time granted to secure any Secured Obligations will secure all of the Notes, all other present and future Note Obligations, all of the Revolving Loans and all other present and future Credit Facility Obligations, subject to certain payment priorities set forth in Section 2.6.

(b) The Administrative Agent on behalf of the Lenders and the Trustee on behalf of the Holders hereby agrees that if any such Secured Debtholder takes any additional Collateral in respect of any Obligations, such Secured Debtholder shall take or cause to be taken by the Company or any other appropriate Person any and all action necessary to create and perfect first priority Liens on any such Collateral in favor of the other Secured Debtholders subject to the payment priorities as provided in this Agreement, including, without limitation, executing and delivering mortgages, security agreements, financing statements, amendments to financing statements, and any other agreements, documents, certificates or instruments necessary to accomplish the foregoing.

(c) The Administrative Agent on behalf of the Lenders and the Trustee on behalf of the Holders hereby agrees to take or cause to be taken by the Company or any other appropriate Person any and all action necessary to cause the Collateral Agent to be designated as the sole secured party in respect of any Lien on any Collateral securing the Secured Obligations, including, without limitation, executing and delivering mortgages, security agreements, financing statements, amendments to financing statements, and any other agreements, documents, certificates or instruments evidencing or required or permitted to be filed to create or perfect a Lien on any Collateral.

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(d) The Administrative Agent, Trustee and each Obligor may from time to time direct the Collateral Agent to execute, either alone or with Trustee, Administrative Agent or any Obligor, financing statements, security agreements, documents, certificates or instruments pertaining to the Collateral, or any part thereof; procure any agreements, documents, certificates or instruments as may be necessary to perfect a Lien on any Collateral and Collateral Agent, Trustee and each Obligor hereby authorizes the Administrative Agent or the Company (at the direction of the Administrative Agent) to file such documents; and take all further action that may be necessary or desirable, to confirm, perfect, preserve and protect the security interests intended to be granted under the Security Documents, and in addition, each of the Administrative Agent, Trustee and each Obligor hereby authorizes the Collateral Agent to execute and deliver on behalf of such Person and to file such other financing statements, security agreements and other agreements, documents, certificates or instruments without the signature of such Person either in the Collateral Agent’s name or in the name of such Person and as agent and attorney in fact for such Person. Subject to the terms of Section 7.19, the Administrative Agent, Trustee and each Obligor shall do all such additional and further acts or things, give such assurances and execute such agreements, documents, certificates or instruments as to vest more completely in and assure to the Collateral Agent and the Secured Debtholders their rights under this Agreement (including this Section 2.5) with respect to the Security Documents.

SECTION 2.6 Application of Proceeds.

(a) After an Event of Default, the proceeds received from the sale of any Collateral that is the subject of a foreclosure or collection suit by the Collateral Agent, or any other amounts or proceeds held or received by the Collateral Agent as a result of any other realization of any lien on any Collateral under any Security Document, shall be applied by the Collateral Agent in the following order of priority:

(i) first: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Collateral Agent (including the reasonable legal fees and expenses of its agents and counsel) pursuant to this Agreement and the other Transaction Documents;

(ii) second: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Trustee (including the reasonable legal fees and expenses of its agents and counsel) pursuant to the Indenture and Security Documents;

(iii) third: to the payment and reimbursement of all fees, expenses, indemnities and other amounts owed to the Administrative Agent (including the reasonable legal fees and expenses of its agents and counsel) pursuant to the Credit Agreement and Security Documents;

(iv) fourth: (a) if the proceeds relate to the Designated Collateral, to the payment to the Administrative Agent for the benefit of the Lenders of all accrued and unpaid interest and all fees, expenses and indemnities then immediately due and payable to the Lenders; provided, however that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable then to make pro rata payments to all such Lenders and (b) if the proceeds do not relate to the Designated Collateral, to the payment to the Administrative Agent for the benefit of the Lenders of all accrued and unpaid interest and all fees, expenses and indemnities then immediately due and payable to the Lenders; provided, in the case of clause (b), the interest component thereof consisting of post-petition interest and interest that accrued at a default rate will be limited to an amount equal to the product of (1) a fraction the numerator of which is the aggregate principal amount then immediately due and payable to the Lenders and the denominator of which is the sum of aggregate principal amount of the Notes then immediately

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due and payable plus the aggregate principal amount then immediately due and payable to the Lenders and (2) the amount of such post-petition interest and any interest that accrued at a default rate; provided, further that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to all such Lenders;

(v) fifth: to the payment to the Administrative Agent for the benefit of the Lenders of all principal then immediately due and payable to the Lenders; provided that contemporaneous with such payments, all commitments to extend or otherwise advance credit under the Credit Agreement are permanently and irrevocably terminated; provided, further that if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to all such Lenders;

(vi) sixth: to the payment of accrued and unpaid interest on the Notes payable under the Indenture which is then immediately due and payable; provided, further if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to each Holder;

(vii) seventh: to the ratable payment of the payable principal balance of, and, if any, premium on, the Notes which are then immediately due and payable; and if such moneys shall not be sufficient to pay in full the entire amount then immediately due and payable, then to make pro rata payments, without any preference or priority, to each Holder; and

(viii) eighth: to the payment of any such amounts remaining after payment in full of all Secured Obligations, to the Company or as a court of competent jurisdiction may otherwise direct.

For this purpose, “proceeds” of Collateral includes any and all cash, securities and other property received or realized from foreclosure, sale, collection suit or other means of realization of the Collateral Agent’s Liens upon any Collateral (including distributions of Collateral in satisfaction of any Secured Obligations) or distributed in any bankruptcy case or insolvency or liquidation proceeding in respect of any claim upon any Secured Obligation that is allowed or enforceable therein as a claim secured by any Collateral pursuant to the Security Documents.

(b) If any of the Holders, the Administrative Agent, the Lenders, the Trustee or any other party hereto collects or receives any proceeds of such foreclosure, sale, collection suit or other means of realization of the Collateral Agent’s Liens upon any Collateral which should have been applied in accordance with Section 2.6(a), whether after the commencement of an insolvency or liquidation proceeding or otherwise, such Person will forthwith deliver the same to the Collateral Agent for application in accordance with Section 2.6(a). Until so delivered, such proceeds will be held by that Person for the benefit of the holders the Secured Obligations, pending application as provided in Section 2.6(a).

(c) Any amounts received or held by the Collateral Agent which are not either (x) applied by the Collateral Agent pursuant to Section 2.6(a) or (y) provided for under any other provision of the Credit Facility Agreements or the Note Documents, shall be distributed in respect of amounts then immediately due and payable ratably by the Collateral Agent upon written direction of the Administrative Agent, the Trustee, or, so long as no Event of Default has occurred and is continuing, the Company, to the Administrative Agent, for the benefit of the Lenders, and to the Trustee, for the benefit of the Noteholders, in the proportion that the aggregate unpaid principal and interest then due to the Lenders, in the case of the Administrative Agent, or the unpaid

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principal amount of all Notes plus premium, if any, and accrued but unpaid interest thereon, in the case of the Trustee, bears to the aggregate of all outstanding principal due to the Lenders and under the Notes, plus premium, if any, and accrued but unpaid interest thereon. Notwithstanding anything to the contrary in this Section 2.6, in no event shall any amounts be distributed that are not then immediately due and payable.

(d) This Section 2.6 sets forth relative rights, as lienholders, of the Collateral Agent, the Trustee, the Trustee for the benefit of the holders of the Notes, the Administrative Agent, and the Administrative Agent for the benefit of the Lenders. Neither this Section 2.6 nor any other provision of this Agreement will:

(1) impair, as between the Company, any other Obligor and holders of the Secured Obligations, the obligation of the Company, which is absolute and unconditional, to pay principal of, and premium (if any) and interest on the Secured Obligations, and the obligation of each Subsidiary Guarantor, which is absolute and unconditional, to pay its guarantee obligation with respect thereto, in accordance with their terms or to perform any obligation of the Company or any other Obligor under the Note Documents or the Credit Facility Documents, as applicable; or

(2) affect the relative rights of holders of Secured Obligations and other creditors of the Company, the Subsidiary Guarantors or any of their Subsidiaries.

This Section 2.6 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Secured Obligations.

(e) Until the date that the Collateral Agent applies all proceeds pursuant to Section 2.6(a), a non-interest bearing segregated trust account (the “Collateral Account”) on behalf of the Trustee and the Administrative Agent for the benefit of the respective holders of the Secured Obligations shall be maintained by the Collateral Agent at its corporate trust department in accordance with the terms of this Agreement. The Collateral Account shall be, at all times, under control of the Collateral Agent. All moneys that are received by the Collateral Agent from any foreclosure, collection suit or other realization of the Collateral Agent’s Liens upon any Collateral shall be deposited in the Collateral Account and, thereafter, shall be held and applied by the Collateral Agent all in accordance with the terms of this Agreement.

(f) The Collateral Agent shall establish, in addition to the Collateral Account provided for in Section 2.6(e) above, a non-interest bearing segregated trust account on behalf of the Company in the event of any issuance of Additional Notes or any Sale of Collateral that results in Net Sale Proceeds. All cash and cash equivalents received by the Collateral Agent from issuances of Additional Notes or any Sale of Collateral that results in Net Sale Proceeds, shall be deposited in such account (“Asset Sale Proceeds Account”) and thereafter shall be held, applied and/or disbursed by the Collateral Agent in accordance with the terms of the applicable Control Agreement. Such Asset Sale Proceeds Account shall be maintained by the Collateral Agent at its corporate trust department in accordance with the terms of the applicable Control Agreement. The Asset Sale Proceeds Account shall be, at all times, under the sole control of the Collateral Agent. Proceeds from (i) any foreclosure or collection suit related to the Collateral shall only be deposited in a Collateral Account, (ii) the issuance of any Additional Notes and from a Sale of Collateral that relate to Net Proceeds shall only be deposited in an Asset Sale Proceeds Account.

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(g) Pending the distribution of funds in the Collateral Account or Asset Sale Proceeds Account in accordance with the provisions of the applicable Control Agreement, such Collateral Account and Asset Sale Proceeds Account will be maintained as provided below:

(1) the Collateral Agent shall, subject to the provisions of Article 3 and Article 6, and the other provisions of this Article 2, from time to time (i) invest amounts on deposit in the Collateral Account and the Asset Sale Proceeds Account in Temporary Cash Investments and (ii) invest interest paid on such Temporary Cash Investments and reinvest other proceeds of any such Temporary Cash Investments that may mature or be sold, in additional Temporary Cash Investments, in each case at the written direction of the Company so long as no Event of Default of which a Responsible Officer of the Collateral Agent has actual knowledge shall have occurred and be continuing and in Temporary Cash Investments described in clause (2) of the definition of such term if such an Event of Default shall have occurred and be continuing, with interest and proceeds that are not invested or reinvested in Temporary Cash Investments deposited and held in the Collateral Account or the Asset Sale Proceeds Account, as applicable; notwithstanding the foregoing, the Company shall to the extent possible, ensure that the Collateral Agent is directed to invest (and in the case of investments made while an Event of Default of which a Responsible Officer of the Collateral Agent has actual knowledge, the Collateral Agent shall, to the extent possible, invest) any funds to be distributed on a date intended for the distribution of any amounts or proceeds therefrom in Temporary Cash Investment that shall mature or become liquid on or prior to such date;

(2) all Temporary Cash Investments in respect of the Collateral Account and the Asset Sale Proceeds Account and all interest and income received thereon and therefrom and the net proceeds realized on the maturity or sale thereof shall be held in the Collateral Account or the Asset Sale Proceeds Account, as applicable, as a part of the Collateral pursuant to the terms hereof; and

(3) the Collateral Account and the Asset Sale Proceeds Account shall each be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or regulatory authority, as are in effect from time to time.

(h) In connection with the application of proceeds pursuant to Section 2.6(a) or (c), except as otherwise directed in writing by an Act of the Secured Debtholders or an Act of Administrative Agent, as the case may be, the Collateral Agent may sell any non-cash proceeds for cash prior to the application of the proceeds thereof.

(i) In connection with the application of proceeds pursuant to Section 2.6(a) or (c), the Collateral Agent may be required, and is hereby authorized by the Trustee and the Administrative Agent, to convert C$ to US$ or US$ to C$, as may be required to satisfy the respective Secured Obligations in the currency in which such Secured Obligations are denominated. The Collateral Agent shall make any such conversion in accordance with its own banking procedures in a timely fashion so as to allow the distribution of proceeds pursuant to Section 2.6(a) or (c) on the date otherwise specified for such payment.

(j) Except as provided in Section 2.6(g)(1) in the case of an Event of Default of which a Responsible Officer of the Collateral Agent has actual knowledge, the Collateral Agent shall have no obligation to invest and reinvest any cash held in the absence of timely and specific investment direction from the Company. The Collateral Agent shall have no liability for the selection of

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investments or for any loss incurred in connection with any investment or any sale, liquidation or redemption.

(k) In the event the Collateral Agent receives proceeds of the disposition of any Collateral in circumstances in which the terms of the Security Documents do not direct the Collateral Agent as to the application of such proceeds, the Collateral Agent may request that the Trustee and the Administrative Agent instruct the Collateral Agent as to the proper application of such proceeds. If the Collateral Agent receives such instructions from the Trustee and the Administrative Agent, the Collateral Agent shall act on such instructions without regard to any contradictory instructions from any other Person; provided that so long as no Event of Default of which a Responsible Officer of the Collateral Agent has actual knowledge has occurred and is continuing, the Collateral Agent shall not act on such instructions from the Trustee and the Administrative Agent unless it has also obtained the consent thereto from the Company. Prior to the receipt of such instructions and, if required as aforesaid such consent thereto contemplated by the terms of this Section 2.6(j), the Collateral Agent shall deposit such proceeds in the Asset Sale Proceeds Account. Neither the Trustee nor the Administrative Agent shall give instructions to the Collateral Agent to make payment to any holder of a Note or any to Lender under the Indenture or Credit Agreement, respectively, except to pay such amounts as are then immediately due and payable to such Person under such agreement.

SECTION 2.7 Credit Bid Rights.

(a) If, during the continuance of an Event of Default, the Collateral Agent forecloses any of its Liens upon any Collateral, whether by public sale or private sale or judicial foreclosure or otherwise, and if directed in writing by an Act of the Secured Debtholders or an Act of the Administrative Agent, as the case may be, to exercise its credit bid rights as provided in this Section 2.7(a), the Collateral Agent, acting for and on behalf of the Secured Debtholders and other holders of Secured Obligations, shall be entitled (to the fullest extent it may lawfully do so) to use and apply then matured Secured Obligations as a credit on account of the purchase price payable by the Collateral Agent for any Collateral sold to the Collateral Agent at the corresponding foreclosure sale, for all purposes related to bidding and making settlement or payment of the purchase price at such foreclosure sale.

(b) Each of the Company, Subsidiary Guarantors and other Obligors hereby grants, confirms and agrees to cooperate with and permit the exercise and enforcement of the rights set forth in this Section 2.7.

SECTION 2.8 Appointment and Powers of the Collateral Agent.

(a) Reserved.

(b) The Collateral Agent is irrevocably authorized and empowered to enter into and perform its obligations and protect, perfect, exercise and enforce its interest, rights, powers and remedies, in each case pursuant to the Security Documents and applicable law and to act as set forth in this Article 2 or as requested in any lawful directions given to it from time to time in respect of any matter by Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be.

(c) Subject to Article 4, the Collateral Agent shall take direction only pursuant to an Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be, or, as may be expressly provided for in the definition of “Approved Jurisdiction” in the Deed of Covenants or Section 2.10(a) or 2.13(a) of the Deed of Covenants or Sections 7.1 or 5.2 of this Agreement,

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pursuant to the direction of the Administrative Agent or the Trustee, as applicable or the Company pursuant to Article V or Section 3.1 of this Agreement or as provided in the Control Agreements.

(d) No direction given to the Collateral Agent (whether given by Act of the Secured Debtholders or by the Administrative Agent or Trustee, as the case may be, or otherwise by any Person) which imposes, or purports to impose, upon the Collateral Agent any obligation not set forth in or arising under this Agreement or any other Security Document accepted by the Collateral Agent shall be binding upon the Collateral Agent unless the Collateral Agent elects, at its sole option, to accept direction pursuant to an Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be.

(e) Except as specifically provided herein, the Administrative Agent and the Trustee are party to this Agreement solely to confirm their acknowledgement of the undertaking of the Collateral Agent set forth in Section 2.1(a) and their acceptance of the rights granted to them by this Agreement. Neither the Administrative Agent nor the Trustee nor any Secured Debtholder nor any other holder of Secured Obligations shall have (i) any obligation or liability under this Agreement or under any Act of the Secured Debtholders or any Act of the Administrative Agent, as the case may be, to which it is not a signatory party, (ii) any responsibility or duty whatsoever in respect of the Collateral or the Security Documents or any other interest, right, power or remedy granted to or enforceable by the Collateral Agent, it being understood and agreed by the Collateral Agent and by the Company and the Subsidiary Guarantors that only the Collateral Agent shall be bound by, or liable for breach of, the obligations of the Collateral Agent set forth in or arising under the Security Documents, including all obligations imposed by law upon a secured party relating to the protection, maintenance, release or enforcement of any security interest in any Collateral or any other interest, right, power or remedy of the Collateral Agent, or (iii) any liability whatsoever for any act or omission of the Collateral Agent, whether or not constituting a breach of the Collateral Agent’s undertaking and obligations under this Agreement or otherwise constituting wrongful conduct.

SECTION 2.9 For Sole and Exclusive Benefit of Holders of Secured Obligations. The Collateral Agent will accept, hold, administer and enforce all Liens on the Collateral, and all Collateral, at any time transferred or delivered to it and all other interests, rights, powers and remedies at any time granted to or enforceable by the Collateral Agent and all property included in the Collateral solely and exclusively for the benefit of the holders of the Secured Obligations, as herein provided, and will distribute all proceeds received by it in realization thereon or from enforcement thereof solely and exclusively as provided in Section 2.6.

ARTICLE III.

OBLIGATIONS ENFORCEABLE BY THE COMPANY AND GUARANTORS

SECTION 3.1 Release of Liens on Collateral.

(a) The Collateral Agent shall release the Liens upon the Collateral as provided in the following clauses:

(1) in whole, upon receipt of written notification from the Trustee and the Administrative Agent, as the case may be, of the payment in full of the Notes, the loans made under the Credit Agreement and all other Secured Obligations that are outstanding, due and payable at the time the Notes, the loans made under the Credit Agreement and such other Secured

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Obligations are paid in full, and in connection with such payments under the Credit Agreement, the related credit commitment is fully and completely terminated;

(2) with respect to the Note Obligations only, upon receipt of written notice from the Trustee of satisfaction and discharge of the Indenture as set forth under the caption in Section 8.01 of the Indenture;

(3) with respect to the Note Obligations only, upon receipt of written notice from the Trustee of a Legal Defeasance or Covenant Defeasance as set forth in Sections 8.04, 8.05 and 8.06, as the case may be, of the Indenture;

(4) with respect to the Note Obligations only, upon receipt of written notice from the Trustee of payment in full of the Notes and all other Note Obligations that are outstanding, due and payable at the time the Notes are paid in full;

(5) with respect to the Credit Facility Obligations only, upon receipt of written notice from the Administrative Agent of payment in full of the loans made under the Credit Agreement and all other Credit Facility Obligations that are outstanding, due and payable at the time the Credit Facility Obligations are paid in full, and in connection therewith, the related credit commitment is fully and completely terminated;

(6) as to any Collateral that constitutes all or substantially all of the Collateral, with the written consent of the holders of 100% in principal amount of the Notes and all of the Lenders under the Credit Agreement (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes);

(7) subject to the provisions of this Agreement and under Section 6.1, (i) as to any Collateral (other than the Designated Collateral), or as to any Designated Collateral as to which the Administrative Agent has not timely exercised, during an applicable Designated Vessel Period, its right to direct enforcement of Liens on Designated Collateral, in each case which constitutes less than all or substantially all of the Collateral, with the written consent of the holders of a majority in principal amount of the Notes then outstanding and all Revolving Loans and L/C Obligations made under the Credit Agreement then outstanding (or if no Revolving Loans or L/C Obligations are then outstanding but the Commitment to make such Revolving Loans and Letters of Credit remains then in effect, of such Commitments then in effect), voting together as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes) and (ii) as to any Designated Collateral, (A) with the written consent of all the Lenders if such release is incidental to the Lender’s right to direct the activity of the Collateral Agent with respect to the enforcement of, and realization on, the Liens on or with respect to a Designated Vessel, as provided in Section 6.1 of this Agreement, or (B) with the consent of (x) all of the Lenders and (y) the holders of a majority in principal amount of the Notes then outstanding, if otherwise.

(8) as to any Collateral (i) that is sold or otherwise disposed of by the Company or any Restricted Subsidiaries in a transaction permitted by the Credit Agreement and the Indenture, at the time of such sale or disposition, to the extent of the interest sold or disposed of that is not in breach of the terms of Section 4.10 of the Indenture, (ii) that constitutes a portion of the Asset Sale Proceeds Account that are to be applied or distributed as described in Section 2.02(3) or 4.10 of the Indenture, (iii) that constitutes Excess Proceeds from the Sale of Collateral which have been offered to, but not accepted by, the Lenders and the holders of

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Notes and are released as set forth in Section 4.10 of the Indenture or (iv) that is owned or at any time acquired by a Subsidiary that has been released from its Note Guarantee and its Subsidiary Guarantee Agreement, concurrently with the release thereof; or

(9) upon receipt of written notice from the Company of the substitution of property for Collateral, confirming that a first-priority Lien in favor of the Collateral Agent to secure the Secured Obligations being placed on such substituted property and that substitution has been consummated in compliance with the applicable provisions of the Indenture, the TIA and the Security Documents.

To the extent that any proceeds of the Asset Sales Proceeds Account are being released pursuant to the foregoing provisions of this Section 3.1 in order to allow the Company to acquire Additional Assets, in addition to any other requirements imposed on the Company in connection with such release under this Agreement, the Indenture or any Security Document, such release is expressly conditioned upon compliance by the Company with the provisions of clause (3) of the fifth paragraph of Section 2.02 of the Indenture and the proviso immediately following clause (3), Sections 4.10(a)(3) and 4.10(c) of the Indenture and Section 10.04(e) of the Indenture, as the case may be.

Notwithstanding the provisions described above, so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Company or a Subsidiary may engage in ordinary course activities; provided that in connection therewith, each of the Company and its Subsidiaries, as applicable, complies with the provisions of the Indenture and Credit Agreement and the Security Documents which are applicable to any such activity or transactions. Such activities include the right to, among other things, the following:

(i) sell or otherwise dispose of any property subject to the Lien of the Security Documents, which may have become worn out or obsolete;

(ii) abandon, terminate, cancel, release or make alterations in or substitutions of any leases or contracts subject to the Lien of the Security Documents:

(iii) surrender or modify any franchise, license or permit subject to the Lien of the Security Documents which it may own or under which it may be operating;

(iv) alter, repair, replace, change the location or position of and add to its structures, machinery, systems, equipment, fixtures and appurtenances;

(v) demolish, dismantle, tear down or scrap any Collateral; and

(vi) charter, lease or sub-lease any Vessel.

(b) The Collateral Agent agrees for the benefit of the Company, the Subsidiary Guarantors and the other Obligors that if the Collateral Agent at any time receives:

(1) an Officer’s Certificate stating that (i) the signing officer has read Article 3 of this Agreement and understands the provisions and the definitions relating hereto, (ii) such officer has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not the conditions precedent in this Agreement, all other Security Documents, the Indenture and the Credit Agreement, if any, relating to the release of the Collateral have been complied with, (iii) the Collateral Agent is permitted by the Credit

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Agreement, the Indenture and this Agreement to release any property of the Company or a Subsidiary Guarantor described in such Officers’ Certificate from any Lien granted by a Security Document specified in such Officers’ Certificate, (iv) if such release is required as a result of a Sale of Collateral, the proceeds thereof will be applied in accordance with the Credit Agreement Documents and the Note Documents, as the case may be, and such sale has been consummated in compliance with all other applicable requirements of the Credit Agreement and the Indenture, as the case may be, (v) no Default or Event of Default will result from the release of such Lien, and (vi) in the opinion of such officer, all conditions precedent (including any required substitution of Collateral), if any, applicable to the foregoing (as the case may be) have been complied with;

(2) the proposed instrument or instruments releasing such Lien as to such property in recordable form, if applicable;

(3) an accompanying Opinion of Counsel for the Company to the effect that the release of such Lien as to such property is permitted by this Agreement, the Credit Agreement and the Indenture, and that such proposed releasing instrument is effective solely to release such Lien as to such property, without requiring the Collateral Agent to make any representation or warranty in respect thereto, without releasing or satisfying any obligation secured by such Lien, and without imposing any obligation or liability upon the Collateral Agent or any other Person;

then the Collateral Agent shall execute (with such acknowledgements and notarizations as are required) and deliver such release to the Company or other applicable Obligor on or before the later of (x) the date specified in such request for such release and (y) the tenth Business Day after the date of receipt of the items required by this Section 3.1(b) by the Collateral Agent.

The release of any Collateral from the terms of the Security Documents shall not be deemed to impair the security under the Security Documents in contravention of the provisions thereof if and to the extent the Collateral is released pursuant to this Agreement and the Security Documents. To the extent applicable, the Company shall cause TIA § 314(d) relating to the release of property from the Lien of the Security Documents and relating to the substitution therefore of any property to be subjected to the Lien of the Security Documents to be complied with. Any certificate or opinion required by TIA § 314(d) may be made by an Officer of the Company, except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company in the exercise of reasonable care. For purposes of this Section 3.1, a Person is “independent” if such Person (a) is in fact independent, (b) does not have any direct financial interest or any material indirect financial interest in any Obligor and (c) is not an officer, employee, promoter, underwriter, trustee, partner or director or person performing similar functions to any of the foregoing for any Obligor. The Collateral Agent shall be entitled to receive and conclusively rely upon a certificate provided by any such Person confirming that such Person is independent within the foregoing definition.

SECTION 3.2 Delivery of Copies to the Administrative Agent and Trustee. The Company shall deliver to the Administrative Agent and the Trustee a copy of each Officers’ Certificate and Opinion of Counsel delivered to the Collateral Agent pursuant to Section 3.1, together with copies of all other opinions and documents delivered to the Collateral Agent with such Officers’ Certificate. The Administrative Agent and the Trustee shall not be obligated to take notice thereof or to act thereon.

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SECTION 3.3 Sufficiency of Release. All purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Collateral Agent hereunder as sufficient for the purpose of constituting a good and valid release of the property therein described from the Lien of the Security Documents.

SECTION 3.4 Purchaser Protected. No purchaser or grantee of any property or rights purporting to be released herefrom shall be bound to ascertain the authority of the Collateral Agent to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by the Security Documents to be sold or otherwise disposed of by any Obligor be under any obligation to ascertain or inquire into the authority of such Obligor to make such sale or other disposition.

SECTION 3.5 Collateral Agent not Required to Serve, File or Record. The Collateral Agent is not required to serve, file, register or record any instrument releasing its Liens in any Collateral. Anything herein or in the Security Documents to the contrary notwithstanding, except if otherwise instructed and indemnified in accordance with the terms of this Agreement, the Collateral Agent shall be under no obligation to file or prepare any financing statement or continuation statement or to take any action or to execute any further documents or instruments in order to create, preserve or perfect the security interest granted herein and in the Security Documents, such obligations being otherwise the obligations of the Company.

SECTION 3.6 Trustee Notices. In the event that the Company delivers an Officers’ Certificate to the Trustee certifying that its obligations under the Indenture and the Notes have been satisfied and discharged by complying with the provisions of Article Eight of the Indenture, and such other documents and/or funds as are required to be delivered or paid pursuant to Article Eight of the Indenture have been delivered and paid, the Trustee shall notify the Collateral Agent in writing that such obligations have been satisfied and discharged in accordance with the terms of the Indenture, and shall take such other actions in connection therewith as may be required or contemplated by the Security Documents to be taken by the Trustee.

SECTION 3.7 Delivery of Certain Notices to the Collateral Agent. The Company agrees promptly to furnish to the Collateral Agent a copy of each notice it delivers to the Administrative Agent or the Trustee pursuant to the requirements of the TIA.

ARTICLE IV.

IMMUNITIES OF THE COLLATERAL AGENT

SECTION 4.1 No Implied Duty. The Collateral Agent shall not have any duties or responsibilities except those expressly assumed by it in this Agreement and the other Security Documents and no implied duties or obligations shall be read into this Agreement and the other Security Documents against the Collateral Agent. The Collateral Agent shall not be required to take any action which is contrary to applicable law or any provision of this Agreement or the other Security Documents. The Collateral Agent makes no representation as to the validity, value, genuineness or the collectability of any security or other document or other instrument held by or delivered to the Collateral Agent. The Collateral Agent shall not be called upon to advise any party as to the wisdom in taking or refraining to take any action with respect to the Collateral or be a trustee for or have any fiduciary obligation to any party.

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SECTION 4.2 Appointment of Co-Agents and Sub-Agents. The Collateral Agent may employ agents and appoint sub-agents, attorneys, custodians, nominees or co-collateral agents as it determines appropriate in the performance of its duties hereunder. The Collateral Agent will exercise reasonable care in selecting any such agent, sub-agent, attorneys, custodians, nominees or co-collateral agent and in supervising the performance of any duties delegated to any such agent, sub-agent, attorneys, custodians, nominees or co-collateral agent but shall not otherwise be responsible or liable for any act or omission of any such agent, sub-agent or co-collateral agent.

SECTION 4.3 Other Agreements. The Collateral Agent has accepted and is bound by the Security Document delivered to it as of the date of this Agreement and, subject to this Article 4, shall accept and be bound by all Security Documents delivered to it at any time after the date of this Agreement. The Collateral Agent shall not otherwise be bound by, or obligated to take cognizance of the provisions of, any agreement to which it is not a party, including the Credit Agreement and the Indenture.

SECTION 4.4 Solicitation of Instructions.

(a) The Collateral Agent may at any time solicit written confirmatory instructions, including an Act of the Secured Debtholders or an Act of the Administrative Agent, as the case may be, or, as expressly provided in the definition of “Approved Jurisdiction” in the Deed of Covenants or in Section 2.10(a) or 2.13(a) of the Deed of Covenants or Section 7.1 or 5.2 of this Agreement, a direction of the Administrative Agent or the Trustee or the Company pursuant to Article V or Section 3.1 of this Agreement or as provided in the Control Agreements, or an order of a court of competent jurisdiction, as to any action that it may be requested or required to take, or which it may propose to take, in the performance of any of its obligations under this Agreement or the other Security Documents and shall be fully justified in failing or refusing to act whether under this Agreement or any other Security Document until it shall have received such requisite instruction.

(b) No written direction given to the Collateral Agent by an Act of the Secured Debtholders or an Act of the Administrative Agent, as the case may be, that in the sole judgment of the Collateral Agent imposes, purports to impose or might reasonably be expected to impose upon the Collateral Agent any obligation or liability not set forth in or arising under this Agreement and the other Security Documents will be binding upon the Collateral Agent unless the Collateral Agent elects, at its sole option, to accept such direction.

SECTION 4.5 Limitation of Liability. The Collateral Agent shall not be responsible or liable for any action taken or omitted to be taken by it hereunder or under any Security Document, except for its own gross negligence, bad faith, willful misconduct or simple negligence in the handling of funds.

SECTION 4.6 Documents in Satisfactory Form. The Collateral Agent shall be entitled to require that all agreements, certificates, opinions, instruments and other documents at any time submitted to it, including those expressly provided for in this Agreement, be delivered to it in a form and upon substantive provisions reasonably satisfactory to it.

SECTION 4.7 Entitled to Rely. The Collateral Agent may rely conclusively upon any certificate, notice or other document (including any teletransmission) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons and need not investigate any fact or matter stated in any such document. The Collateral Agent may seek and rely upon any judicial order or judgment, upon any advice, opinion or

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statement of legal counsel, independent consultants and other experts selected by it in good faith and upon any certification, instruction, notice or other writing delivered to it by the Company in compliance with the provisions of this Agreement or delivered to it by the Administrative Agent or the Trustee as to the Secured Debtholders whose action or consent is required for an Act of the Secured Debtholders or an Act of the Administrative Agent, as the case may be, without being required to determine the authenticity thereof or the correctness of any fact stated therein or the propriety or validity of service thereof. The Collateral Agent may act in reliance upon any instrument comporting with the provisions of this Agreement or any signature reasonably believed by it to be genuine and may assume that any Person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. To the extent an Officers’ Certificate or an Opinion of Counsel is required or permitted under this Agreement to be delivered to the Collateral Agent in respect of any matter, the Collateral Agent may rely conclusively on such Officers’ Certificate or Opinion of Counsel as to such matter.

SECTION 4.8 Defaults and Events of Default. The Collateral Agent shall not be required to inquire as to the occurrence or absence of any Default or Event of Default and shall not be affected by or required to act upon any notice or knowledge as to the occurrence of any Default or Event of Default unless and until it receives a Notice of an Event of Default or a Responsible Officer of the Collateral Agent has actual knowledge that an Event of Default has occurred and is continuing.

SECTION 4.9 Actions by Collateral Agent. As to any matter not expressly provided for by this Agreement or the other Security Documents, the Collateral Agent will act or refrain from acting as directed by an Act of the Secured Debtholders or Act of the Administrative Agent, as the case may be, and will be fully protected in doing so, and any action taken, suffered or omitted pursuant hereto or thereto shall be binding on the holders of the Secured Obligations.

SECTION 4.10 Security or Indemnity in favor of the Collateral Agent. The Collateral Agent shall not be required to advance or expend any funds or otherwise incur any liability, financial or otherwise, in the performance of its duties or the exercise of its powers or rights hereunder unless it has been provided with security or indemnity which it, in its discretion, deems sufficient against any and all liability or expense which may be incurred by it by reason of taking or continuing to take such action.

SECTION 4.11 Rights of the Collateral Agent. In the event of any conflict between any terms and provisions set forth in this Agreement and those set forth in any other Security Document, the terms and provisions of this Agreement shall supersede and control the terms and provisions of such other Security Document. In the event there is any bona fide, good faith disagreement between the other parties to this Agreement or any of the other Security Documents resulting in adverse claims being made in connection with Collateral held by the Collateral Agent and the terms of this Agreement or any of the other Security Documents do not unambiguously mandate the action the Collateral Agent is to take or not to take in connection therewith under the circumstances then existing, or the Collateral Agent is in doubt as to what action it is required to take or not to take hereunder or under the other Security Documents, it will be entitled to refrain from taking any action (and will incur no liability for doing so) until directed otherwise in writing by a request signed jointly by the parties hereto entitled to give such direction or by order of a court of competent jurisdiction.

SECTION 4.12 Limitations on Duty of Collateral Agent in Respect of Collateral.

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(a) Beyond the exercise of reasonable care in the custody of Collateral in its possession, the Collateral Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent will not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral. The Collateral Agent will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords similar property, and the Collateral Agent will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Collateral Agent in good faith.

(b) The Collateral Agent will not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence (or simple negligence in the banking of funds), bad faith or willful misconduct on the part of the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of any Obligor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Collateral Agent hereby disclaims any representation or warranty to the present and future holders of the Secured Obligations concerning the perfection of the Liens granted hereunder or in the value of any of the Collateral.

SECTION 4.13 Assumption of Rights, Not Assumption of Duties. Notwithstanding anything to the contrary contained herein:

(1) each of the parties thereto will remain liable under each of the Security Documents (other than this Agreement) to the extent set forth therein to perform all of their respective duties and obligations thereunder to the same extent as if this Agreement had not be executed;

(2) the exercise by the Collateral Agent of any of its rights, remedies or powers hereunder will not release such parties from any of their respective duties or obligations under the other Security Documents; and

(3) the Collateral Agent will not be obligated to perform any of the obligations or duties of any of the parties thereunder other than the Collateral Agent.

SECTION 4.14 No Liability for Clean Up of Hazardous Materials. In the event that the Collateral Agent is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Collateral Agent’s sole discretion may cause the Collateral Agent to be considered an “owner or operator” under any environmental laws or otherwise cause the Collateral Agent to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Collateral Agent reserves the right, instead of taking such action, either to resign as Collateral Agent or to arrange for the transfer of the title or control of the asset to a court appointed receiver. The Collateral Agent will not be liable to any Person for any environmental liability or any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Collateral Agent’s actions and

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conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

SECTION 4.15 Not Responsible for Recitals; Other Matters.

(a) The recitals contained herein shall be taken as statements of the Company and the Subsidiary Guarantors, and the Collateral Agent assumes no responsibility for their correctness. The Collateral Agent makes no representation as to the validity or sufficiency of this Agreement.

(b) In the absence of bad faith on the part of the Collateral Agent, the Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Collateral Agent which conform to the requirements of this Agreement or the Security Documents.

(c) The Collateral Agent shall not be liable for any error of judgment made in good faith by an officer or officers of the Collateral Agent, unless it shall be conclusively determined by a court of competent jurisdiction that the Collateral Agent was grossly negligent in ascertaining the pertinent facts.

(d) Whenever in the administration of the provisions of this Agreement or the Security Documents the Collateral Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken, such matter may, in the absence of gross negligence or bad faith on the part of the Collateral Agent, be deemed to be conclusively proved and established by an Officers’ Certificate or an Opinion of Counsel, which shall be full warrant to the Collateral Agent for any action taken, suffered or omitted by it under the provisions of the Agreement or the Security Documents upon the faith thereof.

(e) The Collateral Agent shall be under no obligation to exercise any of the rights vested in it by this Agreement or the Security Documents or to enforce any remedy or realize upon any of the Collateral unless (i) it has been directed to take such action pursuant to the terms of Section 2.1(c) herein, and (ii) it has been offered security or indemnity satisfactory to it against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) that might be incurred by it in compliance with such request or direction.

ARTICLE V.

RESIGNATION AND REMOVAL OF THE COLLATERAL AGENT

SECTION 5.1 Resignation or Removal of Collateral Agent. Subject to the appointment of a successor Collateral Agent as provided in Section 5.2 and the acceptance of such appointment by the successor Collateral Agent, (i) the Collateral Agent may resign at any time by giving not less than 30 days’ notice of resignation to the Administrative Agent, the Trustee and the Company and (ii) the Collateral Agent may be removed at any time, with or without cause, by an Act of the Secured Debtholders. So long as no Event of Default has occurred and is continuing, the Company may remove the Collateral Agent if:

(i) the Collateral Agent fails to comply with the terms of the second sentence of Section 5.2 hereof;

(ii) the Collateral Agent is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Collateral Agent under the Bankruptcy Code;

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(iii) a custodian takes charge of the Collateral Agent or its property; or

(iv) the Collateral Agent becomes incapable of acting or fails to act in accordance with the terms of this Agreement. The Trustee and the Administrative Agent may exercise such power if an Event of Default has occurred and is continuing.

SECTION 5.2 Appointment of Successor Collateral Agent. Upon any such resignation or removal, a successor Collateral Agent may be appointed by the Company acting reasonably, provided such successor Collateral Agent meets the requirements of a successor Collateral Agent set forth in this Section 5.2; provided further, that if an Event of Default has occurred, such appointment shall be made by the Trustee and the Administrative Agent, acting jointly. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within 30 days after the predecessor Collateral Agent gave notice of resignation or was removed, the retiring Collateral Agent may (at the expense of the Company), petition a court of competent jurisdiction for appointment of a successor Collateral Agent, which shall be a bank or trust company (i) authorized to exercise corporate trust powers, (ii) having a combined capital and surplus of at least US$250,000,000, and (iii) maintaining an office in New York, New York. The Collateral Agent will fulfill its obligations hereunder until a successor Collateral Agent meeting the requirements of this Section 5.2 has accepted its appointment as Collateral Agent and the provisions of Section 5.3 have been satisfied.

SECTION 5.3 Succession. When the Person so appointed as successor Collateral Agent accepts such appointment:

(i) such Person shall succeed to and become vested with all the rights, powers, privileges and duties of the predecessor Collateral Agent, and the predecessor Collateral Agent shall be discharged from its duties and obligations hereunder, and

(ii) the predecessor Collateral Agent, upon payment of all amounts owed to it, shall promptly transfer all Collateral within its possession or control to the possession or control of the successor Collateral Agent and shall execute and deliver such notices, instructions and assignments as may be necessary or desirable or reasonably requested by the successor Collateral Agent to transfer to the successor Collateral Agent all Liens, interests, rights, powers and remedies of the predecessor Collateral Agent in respect of the Collateral or under the Security Documents.

Thereafter the predecessor Collateral Agent shall remain entitled to enforce the immunities granted to it in Article 4 and the provisions of Sections 7.6 and 7.7.

SECTION 5.4 Merger, Conversion or Consolidation of Collateral Trustee. Any Person into which the Collateral Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Collateral Agent shall be a party, or any Person succeeding to the business of the Collateral Agent shall be the successor of the Collateral Agent pursuant to Section 5.3, provided that (i) without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto, except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding, such Person satisfies the eligibility requirements specified in clauses (i) through (iii) of Section 5.2 and (ii) the Collateral Agent shall have notified the Company, and each of the Trustee and the Administrative Agent in writing.

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SECTION 5.5 Limitation. The Collateral Agent shall not be the same Person as, or an Affiliate of, the Administrative Agent or the Trustee. If the Collateral Agent at any time becomes an Affiliate of the Administrative Agent or the Trustee, it shall promptly resign subject to appointment of a successor Collateral Agent and acceptance of such appointment as provided in this Article 5.

ARTICLE VI.

SPECIAL AGREEMENTS REGARDING COLLATERAL

SECTION 6.1 Enforcement Directions. So long as any of the Credit Facility Obligations are outstanding, and subject to clauses (1) and (2) of the concluding proviso of this Section 6.1, the Collateral Agent, the Trustee and the Administrative Agent agree, for the benefit of the others, as follows:

(i) for the initial period of 120 days following the occurrence of an Event of Default under the Credit Agreement (each such period, a “Designated Vessel Period”), the Administrative Agent shall be permitted to direct the activity of the Collateral Agent with respect to all aspects involving, and otherwise relating to, the enforcement of, and realization on, the Liens on or with respect to, (i) the Designated Vessels, or any of them, and (ii) the Pledge Shares (as defined in the Pledge Agreement) related to the related Subsidiary Guarantors and all other Collateral related to Designated Vessels (including, without limitation, the related Earnings and Insurances) which are covered by the Security Documents (collectively, such Vessels, Pledged Shares and other Collateral, the “Designated Collateral”), provided that the Collateral Agent shall promptly deliver to the Trustee copies of all such notices and directions given to the Collateral Agent by the Administrative Agent, in each case prepared by the Administrative Agent in reasonable detail; and during the Designated Vessel Period, the Trustee shall not have the power to direct the Collateral Agent to take any action with respect to the enforcement of, and realization on, the Liens on or with respect to, any Designated Collateral; and

(ii) as to Designated Collateral as to which the Administrative Agent has commenced making directions of enforcement to the Collateral Agent during the applicable Designated Vessel Period, so long as the Event of Default giving rise to that action continues unremedied or uncured, the Administrative Agent shall be permitted to continue to direct the activity of the Collateral Agent with respect to all aspects involving, or otherwise relating to, the enforcement of, and realization on, the Liens on and with respect to such property, provided that the Collateral Agent shall promptly provide to the Trustee copies of all such directions given to the Collateral Agent by the Administrative Agent, in each case prepared by the Administrative Agent in reasonable detail.

provided, however, notwithstanding the foregoing, the Trustee may direct the Collateral Agent:

(1) as necessary to perfect or establish the priority of the Liens upon any Collateral; or

(2) as necessary to create, prove, preserve or protect (but, with respect to the Designated Collateral, not enforce) such Liens upon any Collateral.

SECTION 6.2 Effect of Not Timely Action. If the Administrative Agent has not provided written direction to the Collateral Agent to act with respect to the Designated Collateral on or prior to the 120^th day following the occurrence of any Event of Default under the Credit Agreement, then with respect to such Event Default, and until it is cured or waived, the direction of the Collateral

25 Collateral Agency Agreement

Agent’s enforcement of Liens against any Collateral, whether or not Designated Collateral, will be pursuant to an Act of the Secured Debtholders.

SECTION 6.3 No Other Lien Enforcement Affected. Except as provided in Section 6.1 in relation to Designated Collateral, the Collateral Agent will act as directed by an Act of the Secured Debtholders in regard to the enforcement of, and realization on, the Liens on, or with respect to, all other Collateral, including, without limitation, during the pendancy of a Designated Vessel Period. In furtherance of the foregoing, and with respect to enforcement of and realization on the Liens on the Collateral, the Administrative Agent acknowledges and agrees that (i) its authority to deliver an Act of the Administrative Agent is solely in relation to Designated Collateral as to which it has timely acted pursuant to Section 6.1 and (ii) that it will only deliver an Act of the Administrative Agent in such circumstances and in relation to its rights provided therefor.

SECTION 6.4 No Alteration on Shared Lien Priority. Neither the provisions of Section 6.1 nor any other provision of this Agreement or any other Note Document or Credit Agreement shall alter, modify, prejudice or otherwise adversely affect the first priority Lien for the benefit of the Note Obligations and the Credit Facility Obligations.

SECTION 6.5 Notice of Remedial Action. The Administrative Agent agrees to provide prompt notice to the Trustee and the Collateral Agent in the event that an Event of Default has occurred with respect to the Credit Facility Obligations and the Administrative Agent has commenced or has been instructed to commence the exercise of any remedies as a result thereof pursuant to Section 9.03 of the Credit Agreement. The Trustee agrees to provide prompt notice to the Administrative Agent and the Collateral Agent in the event that an Event of Default has occurred with respect to the Note Obligations and the Trustee has commenced or has been instructed to commence the exercise of any remedies as a result thereof pursuant to Article VI of the Indenture.

SECTION 6.6 Other Requests. To the extent that the Collateral Agent receives a request to take any other action on any matter not expressly set forth in this Article VI or otherwise in the Agreement, the Collateral Agent will do so only at the direction of an Act of the Secured Debtholders, an Act of the Administrative Agent, or as may be expressly provided for in the definition of “Approved Jurisdiction” in the Deed of Covenants or in Section 2.10(a) or 2.13(a) of the Deed of Covenants or Section 7.1 or 5.2 of this Agreement, pursuant to the direction of the Administrative Agent or the Trustee, as applicable or the Company as provided in Section 3.1, Article V or the Control Agreements.

SECTION 6.7 No Responsibility. The Administrative Agent shall owe no responsibility to the Trustee or the holders of any Notes, and shall incur no liability thereto, as a result of any direction given by the Administrative Agent to the Collateral Agent pursuant to the terms of the definition of “Approved Jurisdiction” in the Deed of Covenants or of Section 2.10(a) or 2.13(a) of the Deed of Covenants or Section 7.1 or 5.2 of this Agreement. The Trustee shall owe no responsibility to the Administrative Agent or the Lenders, and shall incur no liability thereto, as a result of any direction given by the Trustee to the Collateral Agent pursuant to the terms of the definition of “Approved Jurisdiction” in the Deed of Covenants or of Section 2.10(a) or 2.13(a) of the Deed of Covenants.

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ARTICLE VII.

MISCELLANEOUS PROVISIONS

SECTION 7.1 Amendment.

(a) This Agreement may be amended or supplemented from time to time by written agreement of the Company, the Subsidiary Guarantors, the Administrative Agent, the Trustee and the Collateral Agent, acting pursuant to an Act of the Secured Debtholders.

(b) The Collateral Agent shall not amend or supplement any of the provisions of the Security Documents without the consent or direction by an Act of the Secured Debtholders; provided that:

(i) the Collateral Agent may, at the written direction of the Administrative Agent, amend, supplement or modify the Security Documents without obtaining the consent or approval requisite to the delivery of an Act of the Secured Debtholders to the extent that such amendments, supplements or modifications (A) only effect the rights of the Lenders, (B) are administrative or ministerial in nature or correct typographical errors or omissions, (C) have only the effect of preserving, perfecting or establishing the priority of the Liens on the Collateral as contemplated by the Security Documents or the rights of the Collateral Agent therein or (D) do not otherwise materially adversely affect the rights of holders of the Notes;

(ii) the Collateral Agent may, at the written direction of the Trustee, amend, supplement or modify the Security Documents without obtaining the consent or approval requisite to the delivery of a Act of the Secured Debtholders to the extent that such amendments, supplements or modifications (A) only affect the rights of the holders of the Notes, (B) are administrative or ministerial in nature or correct typographical errors or omission, (C) have the only effect of preserving, perfecting or establishing the priority of the Liens on the Collateral as contemplated by the Security Documents or the rights of the Collateral Agent therein or (D) do not otherwise materially adversely affect the rights of the Lenders; and

(iii) no amendment or supplement to the provisions of the Security Documents that adversely affects the right of any holder of Secured Obligations to share in the Collateral as herein provided will become effective without the consent of such holder.

(c) The Collateral Agent will not enter into any amendment or supplement unless it has received an Officer’s Certificate to the effect that such amendment or supplement will not result in a breach of any provision or covenant contained in any of the Credit Agreement, the Indenture or any Security Documents. Prior to executing any amendment or supplement pursuant to this Section 7.1, the Collateral Agent will be entitled to receive an Opinion of Counsel of the Company to the effect that the execution of such document is authorized or permitted hereunder, and with respect to amendments adding Collateral, an Opinion of Counsel of the Company addressing customary Lien creation and perfection (or other comparable concepts applicable to the enforceability of Liens against the grantor thereof and the property covered thereby, and such enforceability against third parties), and if such additional Collateral consists of equity interests of any Person, priority matters with respect to such additional Collateral.

(d) Any amendment or supplement to any Security Document that imposes any obligation upon the Collateral Agent or adversely affects the rights of the Collateral Agent in its individual capacity will become effective only with the prior written consent of the Collateral Agent in its individual capacity.

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(e) Promptly following the full and final discharge of the Credit Facility Obligations, the Administrative Agent shall so notify the Collateral Agent and the Trustee, and promptly following the full and final discharge of the Note Obligations, the Trustee shall so notify the Collateral Agent and the Administrative Agent.

SECTION 7.2 Further Assurances.

(a) At any time or from time to time, each of the Company and Subsidiary Guarantors will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as may be necessary or appropriate, or as the Collateral Agent, the Administrative Agent or the Trustee may reasonably request, in order to assure and confirm that each Subsidiary required by the Credit Agreement or the Indenture to guarantee payment of the Secured Obligations has duly guaranteed payment of all the Secured Obligations and that the Collateral Agent holds, for the exclusive benefit of all present and future holders of Secured Obligations, duly created, enforceable and perfected first priority Liens (subject only to Permitted Collateral Liens) upon all interest in Collateral at any time owned or acquired by the Company or the Subsidiary Guarantors or as the Collateral Agent, the Administrative Agent or the Trustee otherwise may reasonably request in order to carry out and give full effect to the intents and purposes of the Credit Agreement Documents and the Note Documents.

(b) At any time and from time to time, the Company will, and will cause each of the Subsidiary Guarantors to, promptly execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents and take such other actions as shall be required or which the Collateral Agent may reasonably request to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, as contemplated by the Indenture, the Credit Agreement and the Security Documents, upon the Collateral Agent for the exclusive benefit of the holders of the Secured Obligations. If the Company or such Subsidiary fails to do so, the Collateral Agent is hereby irrevocably authorized and empowered, with full power of substitution, to execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents and, subject to the provisions of the Note Documents and the Credit Agreement Documents, take such other actions in the name, place and stead of the Company or such Subsidiary, but the Collateral Agent will have no obligation to do so and no liability for any action taken or omitted by it in good faith in connection therewith. Without limitation of the preceding terms of this Section 7.2, the Company agrees to file or cause to be filed any continuation statements or similar instruments that may be necessary to maintain the effectiveness of the Uniform Commercial Code and PPSA financing statements to be filed on or about the Closing Date pursuant to the terms of the Transaction Documents, and each of the Company and the Subsidiary Guarantors authorizes the Collateral Agent to make any such filing on its behalf, and to execute on its behalf any such instruments and take any other action required in connection therewith.

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SECTION 7.3 Successors and Assigns.

(a) This Agreement is legally binding upon and enforceable against the Collateral Agent. Except as provided in Sections 4.2 and 5.4, the Person acting as Collateral Agent may not, in its individual capacity, delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights shall be void. All obligations of the Collateral Agent hereunder shall inure to the benefit of, and be enforceable by, the Administrative Agent, the Trustee and each present and future holder of Secured Obligations, each of whom shall be entitled to enforce this Agreement as a third party beneficiary hereof, and all of their respective successors and assigns.

(b) This Agreement is further binding upon each of the Company and the Subsidiary Guarantors and their respective successors. Neither the Company nor any Subsidiary Guarantor may delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights shall be void. All obligations of the Company and Subsidiary Guarantors hereunder shall inure to the benefit of, and be enforceable by, the Collateral Agent, the Administrative Agent, the Trustee and each present and future holder of Secured Obligations, each of whom shall be entitled to enforce this Agreement as a third party beneficiary hereof, and all of their respective successors and assigns.

(c) The obligations of the Collateral Agent set forth in Section 3.1 of this Agreement shall also be enforceable by the Company and any Subsidiary Guarantor directly affected by any breach thereof and their respective successors and assigns.

SECTION 7.4 Delay and Waiver. No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Security Documents shall impair any such right, power or remedy or operate as a waiver thereof. No single or partial exercise of any such right, power or remedy shall preclude any other or future exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

SECTION 7.5 Notices. Any communications, including notices and instructions, between the parties hereto or notices herein to be given may be given to the following addresses:

If to the Collateral Agent: Wilmington Trust Company, as Collateral Agent 1100 North Market Street Rodney Square North Wilmington, Delaware 19890 Attn: Corporate Trust Phone: 302-636-6453 Fax: 302-636-4145

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If to the Trustee:	Wells Fargo Bank, National Association, as Trustee Corporate Trust Sixth Street and Marquette Avenue MAC N 9303-120 Minneapolis, MN 55479 Attn: Secunda Administrator Phone:                          Fax: (612) 667-9825
If to the Administrative Agent:	Fortis Capital Corp., as the Administrative Agent Three Stamford Plaza 301 Tressor Boulevard Stamford, CT 06901 Phone: 203-705-5700 Fax:     203-705-5900
If to the Company, any Subsidiary Guarantor or any other Obligor	Secunda International Limited One Canal Street Dartmouth Nova Scotia B2Y 241 Canada Attn:                              Phone:                           Fax:

Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States or Canadian, as the case may be, mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States or Canadian, as the case may be, mail with postage prepaid and properly addressed; provided, no notice to the Collateral Agent, Administrative Agent or Trustee shall be effective unless and until received by its officer responsible for the administration of the transaction contemplated hereby. Each party may change its address for notice hereunder to any other location within the continental United States or Canada, as the case may be, by giving written notice thereof to the other parties as set forth in this Section 7.5.

SECTION 7.6 Compensation; Expenses. Whether or not the transactions contemplated hereby shall be consummated, each of the Company and Subsidiary Guarantors jointly and severally agrees to pay, promptly upon demand:

(a) reasonable compensation to the Collateral Agent as agreed to in a separate fee letter and its agents, co-agents and sub-agents;

(b) all reasonable costs and expenses incurred in the preparation, execution, delivery, filing, recordation, administration or enforcement of this Agreement or any other Security Document or any consent, amendment, waiver or other modification relating thereto;

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(c) all reasonable fees, expenses and disbursements of legal counsel and any auditors, accountants, consultants or appraisers or other professional advisors and agents engaged by the Collateral Agent in connection with the negotiation, preparation, closing, administration, performance or enforcement of this Agreement and the other Security Documents or any consent, amendment, waiver or other modification relating thereto and any other document or matter requested by the Company;

(d) all reasonable costs and expenses of creating, perfecting, releasing or enforcing the Collateral Agent’s security interests in the Collateral, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums;

(e) all reasonable costs of any Opinion of Counsel required hereby to be delivered to the Collateral Agent;

(f) all other reasonably costs and expenses incurred by the Collateral Agent in connection with the negotiation, preparation and execution of the Security Documents and any consents, amendments, waivers or other modifications thereto and the transactions contemplated thereby or the exercise of its rights or performance of its obligations by the Collateral Agent thereunder; and

(g) after the occurrence and during the continuance of an Event of Default, all reasonable costs and expenses incurred by the Collateral Agent, the Administrative Agent or the Trustee in connection with the preservation, collection, foreclosure or enforcement of the Liens granted by the Security Documents or any interest, right, power or remedy of the Collateral Agent or in connection with the collection or enforcement of any of the Secured Obligations or the proof, protection, administration or resolution of any claim based upon the Secured Obligations in any bankruptcy case or insolvency or liquidation proceedings, including all reasonable fees and disbursements of attorneys, accountants, auditors, consultants, appraisers and other professionals engaged by the Collateral Agent, the Administrative Agent or the Trustee.

(h) The agreements in this Section 7.6 shall survive repayment of the Notes and Credit Facility Obligations and all other amounts payable hereunder and the resignation or removal of the Collateral Agent.

SECTION 7.7 Indemnity.

(a) In addition to the payment of costs and expenses pursuant to Section 7.6, whether or not the transactions contemplated hereby shall be consummated, each of the Company and the Subsidiary Guarantors jointly and severally agrees to defend (subject to each Indemnitee selection of counsel), indemnify, pay and hold harmless, the Collateral Agent, the Administrative Agent and the Trustee and each of their respective Affiliates and each and all of the directors, officers, partners, trustees, employees, attorneys and agents, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “Indemnitee”) from and against any and all Indemnified Liabilities; provided, no Indemnitee shall be entitled to indemnification hereunder with respect to any Indemnified Liability to the extent such Indemnified Liability is found by a final and nonappealable decision of a court of competent jurisdiction to have resulted directly and primarily from the gross negligence or willful misconduct of such Indemnitee.

(b) All amounts due under Section 7.7(a) shall be payable not later than 10 days after written demand therefor.

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(c) To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in Section 7.7(a) may be unenforceable in whole or in part because they are violative of any law or public policy, each of the Company and Subsidiary Guarantors shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

(d) Neither the Company nor any Subsidiary Guarantor shall ever assert any claim against any Indemnitee, on any theory of liability, for any lost profits or special, indirect or consequential damages or (to the fullest extent lawful) any punitive damages arising out of, in connection with, or as a result of, this Agreement or any other Credit Agreement Document, Note Document or Security Document or any agreement or instrument or transaction contemplated hereby or relating in any respect to any Indemnified Liability, and each of the Company and Subsidiary Guarantors hereby forever waives, releases and agrees not to sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

(e) The agreements in this Section 7.7 shall survive repayment of the Notes and Revolving Loans and all other amounts payable hereunder and the resignation or renewal of the Collateral Agent.

SECTION 7.8 Severability. If any provision of this Agreement is invalid, illegal or unenforceable in any respect or in any jurisdiction, the validity, legality and enforceability of such provision in all other respects and of all remaining provisions, and of such provision in all other jurisdictions, shall not in any way be affected or impaired thereby.

SECTION 7.9 Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

SECTION 7.10 Obligations Secured. All obligations of the Company or any Subsidiary Guarantor set forth in or arising under this Agreement shall be Secured Obligations and are secured by all Liens granted by the Security Documents.

SECTION 7.11 Applicable Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York.

SECTION 7.12 Consent to Jurisdiction. All judicial proceedings brought against any party hereto arising out of or relating to this Agreement or any of the other Security Documents may be brought in any state or federal court of competent jurisdiction in the State, County and City of New York. By executing and delivering this Agreement, each party hereto, for itself and in connection with its properties, irrevocably (a) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts; (b) waives any defense of forum non conveniens; (c) agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to such party at its address provided in accordance with Section 7.5; (d) agrees that service as provided in clause (c) above is sufficient to confer personal jurisdiction over such party in any such proceeding in any such court and otherwise constitutes effective and binding service in every respect; and (e) agrees each party hereto retain the right to serve process in any other manner permitted by law or to bring proceedings against any party in the courts of any other jurisdiction.

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SECTION 7.13 Agent for Service. The Company and each Subsidiary Guarantor hereby irrevocably appoints and designates Wilmington Trust Company, having an address at 520 Madison Avenue, 33^rd Floor, New York, New York 10022, its true and lawful attorney-in-fact and duly authorized agent for the limited purposes of accepting servicing of legal process and the Company and each Subsidiary Guarantor agrees that service of process upon such party shall constitute personal service of such process on such Person. The Company and each Subsidiary Guarantor shall maintain the designation and appointment of such authorized agent until all Secured Obligations shall have been paid in full. If such agent shall cease to so act, the Company and each Subsidiary Guarantor shall immediately designate and appoint another such agent satisfactory to the Collateral Agent and shall promptly deliver to the Collateral Agent evidence in writing of such other agent’s acceptance of such appointment.

SECTION 7.14 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR THE INTENTS AND PURPOSES OF THE OTHER SECURITY DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HERETO HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH PARTY HERETO WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 7.14 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF OR TO THIS AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING THERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

SECTION 7.15 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. The delivery of an executed signature page of this Agreement, or any Joinder Agreement in connection herewith, by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 7.16 Effectiveness. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by each party of written or telephonic notification of such execution and authorization of delivery hereof.

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SECTION 7.17 Additional Obligors. The Company will cause each Subsidiary of the Company that becomes an Obligor or is required to become a party to this Agreement under Section 6.17 of the Credit Agreement and Section 4.14 of the Indenture to become party to this Agreement, for all purposes of this Agreement on the terms set forth herein applicable to a Subsidiary Guarantor, by causing such Subsidiary to execute and deliver to the parties hereto a Joinder Agreement, whereupon such Subsidiary shall be bound by the terms hereof to the same extent as if it had executed and delivered this Agreement as a Subsidiary Guarantor as of the date hereof. No Joinder Agreement executed in connection with this Section 7.17 requires the signature of any Secured Debtholder or the Collateral Agent.

SECTION 7.18 Insolvency. This Agreement will be applicable both before and after the commencement of any insolvency or liquidation proceeding by or against the Company or any Obligor. The relative rights, as provided for in this Agreement, will continue after the commencement of any such insolvency or liquidation proceeding on the same basis as prior to the date of the commencement of any such case, as provided in this Agreement.

SECTION 7.19 Rights and Immunities of the Administrative Agent and the Trustee. The Administrative Agent will be entitled to all of the rights, protections, immunities and indemnities set forth in the Credit Agreement, and the Trustee will be entitled to all of the rights, protections, immunities and indemnities set forth in the Indenture. In no event will the Administrative Agent or the Trustee be liable for any act or omission on the part of the Company, any Obligor or the Collateral Agent hereunder.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers or representatives hereunto duly authorized as of the day and year first above written.

COMPANY
SECUNDA INTERNATIONAL LIMITED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

35 Collateral Agency Agreement

SUBSIDIARY GUARANTORS
3013563 NOVA SCOTIA LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE INTERNATIONAL INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE SERVICES LIMITED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA GLOBAL MARINE INC.
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
JDM SHIPPING INC.
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
INTERNATIONAL SHIPPING CORPORATION INC.
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA GLOBAL INTERNATIONAL INC.
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

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NAVIS SHIPPING INCORPORATED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA ATLANTIC INCORPORATED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE ATLANTIC LIMITED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
OFFSHORE LOGISTICS INCORPORATED
By	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

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WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By	/s/ Frank McDonald
	Name: Frank McDonald
	Title: Vice President

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WILMINGTON TRUST COMPANY, as Collateral Agent
By	/s/ James J. McGinley
	Name: James J. McGinley
	Title: Authorized Signer

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FORTIS CAPITAL CORP., as Administrative Agent
By	/s/ John C. Preneta
	Name: John C. Preneta
	Title: Executive Vice President

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Exhibit A

Wilmington Trust Company,

as Collateral Agent

_______________________________

_______________________________

_______________________________

_______________________________

Wells Fargo Bank, National Association,

as Trustee

_______________________________

_______________________________

_______________________________

_______________________________

Fortis Capital Corp.,

as Administrative Agent

_______________________________

_______________________________

_______________________________

_______________________________

JOINDER AGREEMENT

The undersigned, [INSERT OBLIGOR’S NAME], a [INSERT DESCRIPTION OF OBLIGOR], hereby agrees to become party to the Collateral Agency Agreement dated as of August     , 2004, as amended, supplemented or otherwise modified and in effect, by and among Secunda International Limited, a Nova Scotia corporation, the subsidiaries of the Company party thereto, Fortis Capital Corp., as Administrative Agent under the Credit Agreement (as defined therein), Wells Fargo Bank, National Association, as Trustee under the Indenture (as defined therein), and Wilmington Trust Company, as Collateral Agent, for all purposes thereof on the terms set forth therein applicable to a “Subsidiary Guarantor”, as defined therein, and to be bound by the terms of said Collateral Agency Agreement as fully as if the undersigned had executed and delivered said Collateral Agency Agreement as a Subsidiary Guarantor thereunder as of the date thereof.

The provisions of Article VII of said Collateral Agency Agreement shall apply with like effect to this Joinder Agreement.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Joinder Agreement as of                     , 20            .

[                                                                         ]

Name:

Title:

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EX-10.2

Exhibit 10.2

WILMINGTON TRUST COMPANY,

AS COLLATERAL AGENT FOR THE COLLATERAL AGENT, THE AGENT, THE

LENDERS, THE TRUSTEE AND THE NOTEHOLDERS

and

SECUNDA MARINE SERVICES LIMITED

3013563 NOVA SCOTIA LIMITED

and

SECUNDA MARINE INTERNATIONAL INCORPORATED

as Pledgors

PLEDGE AGREEMENT

Dated as of August 26, 2004

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT, dated as of August 26, 2004 (this “Pledge Agreement”) made by each of the undersigned pledgors (each, a “Pledgor” and, collectively, the “Pledgors”), to Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”), under the Collateral Agency Agreement, dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among Secunda International Limited (“Secunda” or the “Borrower”) and certain of its subsidiaries, Fortis Capital Corp. (the “Agent”) in its capacity as Agent for the benefit of the Lenders and Wells Fargo Bank, National Association (the “Trustee”) in its capacity as Trustee for the benefit of the Noteholders and the Collateral Agent.

Preliminary Statement

Pursuant to the terms of the Credit Agreement, each of the Lenders agreed to make the Facility available to the Borrower in accordance with and subject to the terms and conditions of the Credit Agreement. As a condition to providing such Facility (as defined in the Credit Agreement), each of the Lenders has requested that each of the Pledgors enter into this Pledge Agreement and pledge the Pledged Collateral to the Collateral Agent, on behalf of the Agent and the Lenders. Pursuant to the terms of the Indenture, the Borrower issued the Notes. As a condition to the purchase of such Notes by the initial purchasers thereof, each of such initial purchasers has requested that each of the Pledgors enter into this Pledge Agreement and pledge the Pledged Collateral to the Collateral Agent, on behalf of the Trustee and the Noteholders.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and of other valuable consideration, receipt of which is hereby acknowledged, the Pledgors and the Collateral Agent hereby agree as follows:

SECTION 1. Pledge. Each of the Pledgors hereby pledges to the Collateral Agent, and grants to the Collateral Agent a continuing security interest in, to and under the following (the “Pledged Collateral”):

(a) all of the Pledged Interests and the certificates and instruments representing the Pledged Interests, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Interests; and

(b) all additional Share Capital of each Vessel Owner from time to time acquired by a Pledgor in any manner, and the certificates or instruments representing such additional Share Capital, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Share Capital.

SECTION 2. Security for Obligations. This Pledge Agreement secures the payment of all of the Secured Obligations.

SECTION 3. Delivery of Pledged Collateral; Financing Statements. (a) All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto 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 reasonably satisfactory to the Collateral Agent. Each of the Pledgors shall promptly deliver to the Collateral Agent, certificates or other instruments representing or evidencing the Pledged Collateral acquired or received after the date of this Pledge Agreement (including without limitation, the share certificates (if any) of any Subsidiary which becomes a Vessel Owner after the Closing Date) with a stock or bond power or such other instrument of transfer or assignment in blank duly executed by the relevant Pledgor. If at any time the Collateral Agent notifies a Pledgor that, in its reasonable determination, it requires additional stock powers or such other instruments of transfer endorsed in blank, such Pledgor shall promptly execute in blank and deliver the requested stock power or transfer instrument to the Collateral Agent.

(b) Each of the Pledgors shall at such Pledgor’s expense, execute and deliver to the Collateral Agent such financing statements under the Uniform Commercial Code or the equivalent in other jurisdictions as may be necessary or as the Collateral Agent may otherwise request in order, upon the filing thereof, to perfect or continue the perfection of the security interest in the Pledged Collateral created hereby. The Collateral Agent shall have the right, but not the obligation, at any time following the occurrence and during the continuation of an Event of Default, in its discretion and without prior notice to the Pledgors except as may be required by applicable law, to transfer to or to register in the name of the Collateral Agent or any of its nominees any or all of the Pledged Collateral, subject only to the revocable rights specified in Section 6(a). In any event, the Collateral Agent shall notify the Pledgors of such transfer to or registration in the name of the Collateral Agent or its nominee promptly thereafter, provided, however, that failure to provide such notice shall not invalidate or otherwise affect such transfer or registration nor shall the Collateral Agent have any liability to the Pledgors for failure to give any such notice. The Collateral Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations.

(c) The Collateral Agent and any Pledgor may, from time to time, pursuant to the provisions of the Collateral Agency Agreement, agree to replace Annex A to add descriptions of additional Pledged Interests or make other modifications thereto as may be required, without the consent of the other Pledgors.

SECTION 4. Representations and Warranties. Each of the Pledgors represents and warrants as follows as of the date hereof:

(a) The Equity Interests of the Vessel Owners are validly issued, fully paid for and non-assessable.

(b) Each Pledgor is the legal and beneficial owner of the Pledged Collateral indicated as owned by it on Annex A free and clear of any lien, security

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interest, option or other charge or encumbrance other than by virtue of Permitted Pledge Liens.

(c) No options, warrants or other agreements with respect to the Pledged Collateral are outstanding.

(d) Upon (a) the delivery to the Collateral Agent of the certificates or other instruments evidencing the Pledged Interests or (b) in the case of Pledged Interests that are not evidenced by such certificates or instruments, the completion of any other actions required to perfect the Collateral Agent’s security interest (including, without limitation, the filing of any necessary Uniform Commercial Code financing statements or the equivalent in other jurisdictions in the appropriate filing offices), the Collateral Agent will have a valid, perfected first priority Lien on the Pledged Collateral, enforceable as such against all creditors of the Pledgor other than the holders of the Permitted Pledge Liens and against all Persons purporting to purchase any of the Pledged Collateral from the Pledgor.

SECTION 5. Reserved.

SECTION 6. Voting Rights; Dividends; Etc.

(a) So long as no Event of Default has occurred and is continuing:

(i) Each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to its Pledged Collateral or any part thereof for any purpose not inconsistent with the express terms of this Pledge Agreement or the Credit Agreement.

(ii) Each Pledgor shall be entitled to receive and retain, free and clear of all liens hereunder, any and all dividends permitted under the Credit Agreement paid in respect of its Pledged Collateral, provided, however, that any and all (A) dividends and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Pledged Collateral, shall be Pledged Collateral and shall be forthwith delivered to the Collateral Agent to hold as Pledged Collateral and shall, if received by a Pledgor, be received in trust for the benefit of the Collateral Agent and be forthwith delivered to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

(iii) The Collateral Agent shall, at the expense of a Pledgor, execute and deliver (or cause to be executed and delivered) to such Pledgor all such proxies and other instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor to exercise the voting and other rights which

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such Pledgor is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) All rights of such Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and, all such rights shall thereupon become vested in the Collateral Agent who shall thereupon have the sole right to exercise such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends and interest payments.

(ii) All dividends and interest payments which are received by the Pledgor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Collateral Agent, and shall be forthwith paid over to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary indorsement) and shall be held and disbursed by the Collateral Agent pursuant to the Collateral Agency Agreement or the applicable Account Pledge Agreement, as the case may be.

SECTION 7. Transfers and Other Liens.

(a) Each of the Pledgors agrees that it will not, except as expressly permitted in the Transaction Documents, (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, or other charge or encumbrance upon or with respect to any of the Pledged Collateral, except for Permitted Pledge Liens.

(b) Each of the Pledgors agrees that it will pledge hereunder, promptly upon such Pledgor’s acquisition thereof, any and all additional Share Capital of each Vessel Owner.

Section 8. Collateral Agent Appointed Attorney-in Fact. Each of the Pledgors hereby appoints the Collateral Agent such Pledgor’s attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time upon the happening of any Event of Default, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation (but in each case in accordance with the terms of this Pledge Agreement), to receive, indorse and collect all instruments made payable to such Pledgor 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.

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SECTION 9. Collateral Agent May Perform. If a Pledgor fails to perform any agreement contained herein, the Collateral Agent may (but shall have no obligation to) itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by such Pledgor.

SECTION 10. Reasonable Care. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords similar property of the same type, or if it appoints an agent to hold the Pledged Collateral on its behalf and such agent agrees to be bound by a similar standard of care, it being understood that neither the Collateral Agent nor such agent shall have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Collateral Agent or such agent has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.

SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing to the extent permitted by applicable law:

(a) The Collateral Agent may (i) 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 of a secured party on default under the Uniform Commercial Code, Personal Property Security Act of Nova Scotia or the equivalent in other jurisdictions, and all regulations thereunder, as amended from time to time, to the extent applicable, (ii) upon notice 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 Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and (iii) may appoint by instrument a receiver, receiver and manager or receiver-manager (the person so appointed is hereafter called the “Receiver”) of the Pledge Collateral with or without bond as the Collateral Agent may determine, and from time to time remove such Receiver and appoint another in its stead. Each of the Pledgors agrees that, to the extent notice of sale shall be required by law, at least 20 days’ notice to the Pledgors of the time and place of any public sale or the time after which any private sale may be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of the Pledged Collateral regardless of notice of sale having been given. The Collateral 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. Each of the Pledgors acknowledges that if and to the extent that the Pledged Collateral consisting of securities is not registered under the Securities Act of 1933 (as amended and in effect from time to time, the “Securities Act”), the best price obtainable for such securities in an arm’s length transaction may reflect a substantial discount from the book value of such securities.

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(b) Any cash held by the Collateral Agent as Pledged Collateral and all cash proceeds received by the Collateral Agent in respect of any sale of, or other realization upon all or any part of the Pledged Collateral shall be disbursed in accordance with the Collateral Agency Agreement.

SECTION 12. Security Interest Valid. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Pledgors hereunder, shall be valid and subsisting irrespective of to the extent permitted by applicable law:

(a) any lack of validity or enforceability of any of the Transaction Documents or any other agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from any of the Transaction Document or any extension of the maturity date of the Secured Obligations;

(c) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations; or

(d) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Pledger in respect of the Secured Obligations or any Pledgor in respect of this Pledge Agreement or otherwise.

SECTION 13. Amendments, Etc. No amendment or waiver of any provision of this Pledge Agreement nor consent to any departure by any Pledgor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent (in accordance with Section 7.1 of the Collateral Agency Agreement) and the affected Pledgor(s) with respect to any amendment and by the Collateral Agent with respect to any waiver or consent. With respect to any waiver or consent, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 14. Notices. Any notice or other communication to be given pursuant hereto shall be in the manner provided in the Collateral Agency Agreement and addressed as follows:

If to the Collateral Agent, to

Wilmington Trust Company,

as Collateral Agent

1100 North Market Street

Rodney Square North

Wilmington, DE 19890

Attn: Corporate Trust

Telephone: (302) 636-6453

Fax: (302) 636-4145

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If to the Pledgors, to

c/o Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia B2Y 2W1 Canada

Attention: Mr. Don MacLeod

Telephone: 902-465-3400

Fax: 902-465-2578

or at such other address as either party may notify to the other in writing.

SECTION 15. Continuing Security Interest. This Pledge Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until the Secured Obligations have been paid in full or until such security interest is released pursuant to the provisions of the Collateral Agency Agreement, (ii) be binding upon and inure to the benefit of each of the Pledgors, each of the Pledgors’ executors, administrators, successors and assigns, and (iii) inure to the benefit of and be binding upon the Collateral Agent and its successors, transferees and assigns. Upon the payment in full of the Secured Obligations or compliance with the provisions of the Collateral Agency Agreement, the Pledgors shall be entitled to the return, upon its request and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof.

SECTION 16. Governing Law; Terms. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by mandatory provisions of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Pledged Collateral are governed by the laws of a jurisdiction other than the State of New York.

SECTION 17. Defined Terms. Capitalized terms used herein, but not otherwise defined herein shall have the meanings assigned to such terms in the Collateral Agency Agreement.

SECTION 18. Rights of the Collateral Agent. The Collateral Agent shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

“Equity Interests” means Share Capital and all warrants, options or other rights to acquire Share Capital (but excluding any debt security that is convertible into, or exchangeable for, Share Capital).

“Pledged Interests” means, collectively, (a) the Equity Interests described in Annex A hereto and (b) each Equity Interest hereafter pledged pursuant to Section 1(b) hereof.

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“Permitted Pledge Liens” means Liens created by this Pledge Agreement and the other Transaction Documents.

“Share Capital” means:

(A) in the case of a corporation or a company, any and all shares, interest, participations, or other equivalent (however designated and whether or not voting) of share capital or corporate stock;

(B) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of share capital or corporate stock;

(C) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(D) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuer of such share capital.

“Transaction Document” when used in the singular and “Transaction Documents” when used in the plural means any and all of the Credit Agreement, the Revolving Loan Notes, the Collateral Agency Agreement, the Subsidiary Guarantee Agreements, the Assignment of Earnings and Insurances, the Assignments of Contract, the Hedging Agreements (if any), the Mortgages, the Deed of Covenant, the Pledge Agreement, the Account Pledge Agreements, the Indenture, the Notes, the Note Guarantees and each other Security Document, each as the same may from time to time be amended, restated, modified, supplemented or renewed.

“Vessel Owner” means any Subsidiary of the Borrower that (i) owns one or more Vessels or other Vessel Assets (as defined in the Indenture) or (ii) charters or arranges for the charter of one or more of the Vessels.

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IN WITNESS WHEREOF, each of the Pledgors and the Collateral Agent by its duly authorized officers have or have caused this Pledge Agreement to be duly executed and delivered under seal as of the date first above written.

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Collateral Agent
By:	/s/ James J. McGinley
Its:	Authorized Signer
SECUNDA MARINE SERVICES LIMITED
By:	/s/ P.L. Meier
Its:	V.P. Finance
SECUNDA MARINE INTERNATIONAL INCORPORATED
By:	/s/ P.L. Meier
Its:	V.P. Finance
3013563 NOVA SCOTIA LIMITED
By:	/s/ P.L. Meier
Its:	V.P. Finance

ANNEX A TO PLEDGE AGREEMENT

LIST OF PLEDGED INTERESTS OF VESSELS OWNERS

Issuer	Record Owner	Percentage of Outstanding Securities Pledged	Number of Securities Pledged	Certificate Number	Class of Securities or Other Equity Interest	Number of Authorized Securities or Other Equity Interest	Number of Issued Securities or Other Equity Interest	Number of Outstanding Securities or Other Equity Interest	Par or Liquidation Value
JDM Shipping Inc. (Barbados)	Secunda Marine Services Limited	100%	100	#1 for 100	Common	unlimited	100	100	CDN$1 par value
Navis Shipping Incorporated (Nova Scotia)	Secunda Marine Services Limited	100%	1	#2 for 1	Common	40,000	1	1	no par value
Secunda Atlantic Incorporated (Nova Scotia)	Secunda Marine Services Limited	100%	3712	#2 for 1, #3 for 3711	Common	100,000	3712	3712	no par value
Secunda Global Marine Incorporated (Barbados)	Secunda Marine Services Limited	100%	25	#1 for 25 common	Common	unlimited	25	25	US$100 par value
	3013563 Nova Scotia Limited	100%	1180	#PF2 for 423 Class I, #PF3 for 500 Class I, #PF10 for 120 Class I, #PF11 for 120 Class I, #PF 17 for 17 Class I	Preferred	1180	1180	1180	no par value
Secunda Marine Atlantic Limited (Nova Scotia)	Secunda Marine Services Limited	100%	1	#2 for 1	Common	100,000	1	1	no par value
Secunda Marine Services Limited (Nova Scotia)	Secunda Marine International Incorporated	100%	1100	#3 for 100, #4 for 1000	Common	40,000	1100	1100	no par value
		100%	400	#P-4 for 400 Preference	Preference	400	400	400	CDN$1 par value

ANNEX A TO PLEDGE AGREEMENT

LIST OF PLEDGED PARTNERSHIP INTERESTS OF VESSEL OWNERS

Issuer Record
Owner
Percentage of
Outstanding
Securities
Pledged
Number of
Securities
Pledged
Certificate
Number Class of
Securities or
Other Equity
Interest
Number of
Authorized
Securities or Other Equity
Interest Number of
Issued
Securities or
Other Equity
Interest
Number of
Outstanding
Securities or
Other Equity
Interest
Par Value

EX-10.3

Exhibit 10.3

WILMINGTON TRUST COMPANY,

AS COLLATERAL AGENT FOR THE COLLATERAL AGENT, THE AGENT, THE

LENDERS, THE TRUSTEE AND THE NOTEHOLDERS

and

THE ASSIGNORS,

as set forth on the signature page hereto

ASSIGNMENT OF EARNINGS AND INSURANCES

Dated as of August 26, 2004

Assignment of Earnings and Insurances, dated as of August 26, 2004 (the “Assignment”), by and between each of the undersigned assignors (each, an “Assignor” and, collectively, the “Assignors”) and Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”), under the Collateral Agency Agreement, dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among Secunda International Limited (“Secunda” or the “Borrower”) and certain of its subsidiaries, Fortis Capital Corp. (the “Agent”) in its capacity as Agent for the benefit of the Lenders and Wells Fargo Bank, National Association (the “Trustee”) in its capacity as Trustee for the benefit of the Noteholders and the Collateral Agent.

PRELIMINARY STATEMENT

Pursuant to the terms of the Credit Agreement, each of the Lenders agreed to make the Facility available to the Borrower in accordance with and subject to the terms and conditions of the Credit Agreement. As a condition to providing such Facility (as defined in the Credit Agreement), each of the Lenders has requested that the Subsidiary Guarantors, jointly and severally, guarantee the Obligations of the Borrower under the Credit Agreement by entering into the Revolving Credit Guarantee Agreement and securing the Subsidiary Guarantors’ obligations thereunder by granting to the Collateral Agent, on behalf of the Agent and the Lenders, a lien in, to and under the Collateral. Pursuant to the terms of the Indenture the Borrower issued the Notes. As a condition to the purchase of such Notes by the initial purchasers thereof, each of such initial purchasers has requested that the Subsidiary Guarantors, jointly and severally, guarantee the Obligations of the Borrower under the Indenture by entering into the Note Guarantee Agreement and securing the Subsidiary Guarantors’ obligations thereunder by granting to the Collateral Agent, on behalf of the Trustee and the Noteholders, a lien in, to and under the Collateral. In consideration for the Lenders making the Facility available to the Borrower and the Initial Purchasers purchasing the Notes, each of the Assignors has agreed to enter into this Assignment

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and of other valuable consideration, receipt of which is hereby acknowledged, the Assignors and the Collateral Agent hereby agree as follows:

ARTICLE I

DEFINITIONS

Unless otherwise defined in this Assignment, capitalized terms used in this Assignment shall have the meanings assigned to such terms in the Collateral Agency Agreement.

“Assignment of Contracts” means, with respect to a Vessel, the assignment between the related Assignor and the Collateral Agent, as amended from time to time in accordance with the terms thereof, pursuant to which such Assignor assigns to the Collateral Agent, on behalf of the Collateral Agent, the Agent, the Lenders, the Trustee and the Noteholders, all of its right, title and interest in, to and under any charter or contract in respect of the services of the Vessel having a term of greater than twelve (12) months (each, a “Charter”).

“Compulsory Acquisition” means, with respect to a Vessel, the requisition for title or other compulsory acquisition of such Vessel (otherwise than by requisition for hire), capture, seizure, detention or confiscation of such Vessel by any government or by Persons acting or purporting to act on behalf of any government or Governmental Authority.

“Earnings” means and includes all present and future moneys and claims which are earned by or become payable to or for the account of the Assignors in connection with the operation or ownership of the Vessels, including but not limited to freights, passage and hire moneys, remuneration for salvage and towage services, demurrage and detention moneys, all present and future moneys and claims payable to or for the account of the Assignors in respect of any breach or variation of any charterparty or contract of affreightment in respect of the Vessels, and all moneys and claims payable to or for the account of the Assignors in respect of the requisition for hire of the Vessels for a period not in excess of 180 days.

“Governmental Authority” means any government, parliament, legislature, regulatory authority, agency, commission, tribunal, department, commission, board, instrumentality, court, arbitration board or arbitrator or other law, regulation or rule making entity (including a Minister of the Crown) having or purporting to have jurisdiction on behalf of, or pursuant to the laws of, any country in which any Assignor is organized, continued, amalgamated, merged or otherwise created or established or in which any Assignor carries on business or holds property, or any province, territory, state, municipality, district or political subdivision of any such country or of any such state, province or territory of such country.

“Total Loss” means, with respect to a Vessel, (a) an actual or constructive or compromised or arranged total loss of such Vessel, (b) a Compulsory Acquisition of such Vessel or (c) a requisition for hire of such Vessel for a period in excess of 180 days.

“Vessel” means each of the Vessels listed on Schedule I attached hereto and includes any share or interest therein and its boilers, engines, machinery, masts, spars, boats, anchors, cables, chains, rigging, tackle, capstans, outfit, tools, pumps and pumping equipment, apparel, furniture, fittings, equipment, spare parts, and all other appurtenances thereunto appertaining or belonging, whether now owned or hereafter acquired, whether or not on board such Vessel, and also any and all additions, improvements, renewals and replacements hereafter made in or to such Vessel or any part thereof, provided, however, for greater certainty “Vessel” shall not include any of the following assets: (a) all fast rescue craft now owned or hereafter acquired and any substitutions, renewals and replacements thereof and accretions thereto; and (b) all portable fire fighting sets now owned or hereafter acquired and any substitutions, renewals and replacements thereof and accretions thereto.

ARTICLE II

ASSIGNMENT

Section 2.01 Security Interest. This Assignment is made and delivered as security for the Secured Obligations.

Section 2.02 Assignment of Earnings. In order to provide for the payment of and as security for the Secured Obligations, each Assignor has granted, bargained, assigned,

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transferred, conveyed, mortgaged, pledged and granted a security interest in and confirmed, and does hereby grant, bargain, assign, transfer, convey, mortgage, pledge and grant a security interest in and confirm, to the Collateral Agent, its successors and assigns, for its and their respective successors’ and assigns’ own proper use and benefit, all of such Assignor’s right, title and interest in and to any Earnings from its Vessel(s); provided that, unless an Event of Default shall have occurred and be continuing, all Earnings shall be paid to the related Assignors. If an Event of Default shall have occurred and be continuing, all Earnings shall be paid to the Collateral Agent in accordance with the instructions set forth in the Notice (as defined in Appendix II) and shall be applied as provided in the Collateral Agency Agreement or the applicable Account Pledge Agreement, as the case may be. To the extent an Assignor has executed and delivered an Assignment of Contracts and the terms thereof conflict with any of the terms hereof, the terms of the Assignment of Contracts shall govern.

Section 2.03 Assignment of Insurances. In addition to the foregoing, in order to provide for the payment of and as security for the Secured Obligations, each of the Assignors has granted, bargained, assigned, transferred, conveyed, mortgaged, pledged and granted a security interest in and confirmed, and does hereby grant, bargain, assign, transfer, convey, mortgage, pledge and grant a security interest in and confirm, to the Collateral Agent, its successors and assigns, for its and their respective successors’ and assigns’ own proper use and benefit, all of such Assignor’s right, title and interest in and to (a) all moneys and claims for moneys due and to become due to such Assignor with respect to the Total Loss of its Vessel(s), and all claims for damages or compensation with respect thereto, and (b) all policies and contracts of insurance of whatsoever nature and all entries with protection and indemnity clubs or societies (to the extent that the rules of the relevant insurance company, club or society allow such assignment) that have been or may hereafter during the subsistence of this Assignment be taken out in respect of such Assignor’s interests in its Vessel(s), including all machinery, materials, equipment, appurtenances and outfits thereon, including without being limited to hull and machinery, off hire, loss of hire, war risks, protection and indemnity and requisition or otherwise howsoever (but excluding insurance and entries with protection and indemnity clubs or societies covering such Assignor’s liability to third parties) and all the benefits thereof, including all claims of whatsoever nature and return of premiums, together with the income and proceeds of any and all of the foregoing (all such right, title and interest herein called the “Insurances”). The foregoing assignment is in addition to, and not in substitution for, the provisions with respect to insurance on the Vessel(s) contained in the Deed of Covenants. To the extent of any conflict between the Deed of Covenants and this Assignment regarding the assignment of Insurances, the provisions of this Assignment shall control. The proceeds of insurance assigned hereby shall be held, applied and disbursed in accordance with the provisions of Section 2.13 of the Deed of Covenants.

Section 2.04 Assignment of Proceeds of Requisition of Use. If, as a result of a requisition of use during the continuance of this Assignment, the requisitioner shall pay or become liable to pay any amount by reason of the loss of or injury to or depreciation of a Vessel, any such amount shall be payable pursuant to Section 2.13 of the Deed of Covenants.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE ASSIGNORS

Each of the Assignors hereby represents and warrants to the Collateral Agent as follows as of the date hereof:

Section 3.01 No Prior Assignment. No Assignor has assigned nor pledged the Earnings or Insurances or any part of the rights, titles and interests hereby assigned, to anyone other than the Collateral Agent, or its successors or assigns.

ARTICLE IV

COVENANTS OF THE ASSIGNORS

Each of the Assignors hereby covenants and agrees that so long as any of the Secured Obligations remains outstanding:

Section 4.01 Covenants of Assignors. (a) Each Assignor covenants (i) that it shall forthwith (A) give, or cause its broker to give, in the form attached as Appendix I hereto, notice of this Assignment to all insurers, underwriters, clubs and associations, with respect to all Insurances that are assigned pursuant to the terms hereof, (B) cause its broker to acknowledge the notice delivered pursuant to subsection (A) and return such notice to the Collateral Agent and (C) cause its interest in all Insurances and moneys hereby assigned to be paid over promptly to the Collateral Agent in accordance with Section 2.13 of the Deed of Covenants, (ii) that upon the occurrence and continuance of an Event of Default it shall cause all Earnings hereby assigned to be paid promptly to an account designated by the Collateral Agent and that it shall deliver to any charterer, under a charter, a Notice in the form annexed hereto as Appendix II and (iii) that it shall promptly execute and deliver to the Collateral Agent such documents, if any, and shall do and perform such acts, if any, to facilitate or expedite the collection by the Collateral Agent of such claims arising out of any requisition of use. If an Assignor fails to perform any of its obligations under this Section 4.01(a), the Collateral Agent shall have the right (but not the obligation) to do so.

(b) After the occurrence and continuance of an Event of Default, all Earnings received by the Collateral Agent under this Assignment shall be treated and applied as provided in the Collateral Agency Agreement. All Insurances received by the Collateral Agent under this Assignment shall be treated and applied as provided in Section 2.13 of the Deed of Covenants.

(c) Each Assignor covenants that it will not assign or pledge, so long as this Assignment shall remain in effect, the Earnings or Insurances or any part of the rights, titles and interests hereby assigned, to anyone other than the Collateral Agent, or its successors or assigns.

Section 4.02 Assignors to Remain Liable. Anything in this Assignment contained to the contrary notwithstanding, each Assignor shall remain liable under any existing charters, and any future charter parties, bills of lading, contracts and other engagements of affreightment or other carriage or transportation of cargo and other operations of every kind whatsoever of its Vessel(s) and any such policies of insurance, and shall be solely responsible for the observation, performance and fulfillment of all of the conditions and obligations to be observed, performed and fulfilled by them thereunder, and the Collateral Agent shall have no

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obligation or liability thereunder or by reason of or arising out of this Assignment, nor shall the Collateral Agent be required or obligated in any manner to observe, perform or fulfill any of the conditions or obligations of an Assignor thereunder or pursuant thereto, or to make any payment or to make any inquiry as to the nature or sufficiency of any payment or to make any inquiry as to the nature or sufficiency of any payment received by an Assignor, or 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 the Collateral Agent or to which the Collateral Agent may be entitled hereunder at any time or times. The obligations of the Assignors under any policies of insurance may (at the election of the Collateral Agent) be performed by the Collateral Agent or its nominee, without releasing the Assignors therefrom, but the Collateral Agent or its nominee shall be under no duty whatsoever to perform or incur any such obligations.

Section 4.03 Reserved.

Section 4.04 Collateral Agent as Attorney-in-Fact of Assignors. Each of the Assignors hereby constitutes the Collateral Agent, and its successors and assigns, effective at any time an Event of Default has occurred and is continuing, its true and lawful attorney-in-fact, irrevocably, with full power in its own name, in the name of its agents or nominees or in the name of such Assignor or otherwise, to ask, require, demand, receive, enforce and give acquittance for, any and all moneys and claims for moneys due and to become due and payable under or arising out of any Earnings, Insurances or requisition of its Vessel(s), 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 to the Collateral Agent acting reasonably may seem to be necessary or advisable under this Assignment. After the occurrence and during the continuance of an Event of Default, any action or proceeding brought by the Collateral Agent pursuant to any of the provisions of this Assignment or otherwise and any claim made by the Collateral Agent hereunder may be compromised, withdrawn or otherwise dealt with by the Collateral Agent without any notice to or approval of any of the Assignors.

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Amendment. This Assignment may be amended from time to time by written agreement signed by the parties hereto.

Section 5.02 Severability. If any provision of this Assignment is held to be in conflict with any applicable statute or rule of law or is otherwise held to be unenforceable for any reason whatsoever, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences, clauses or Sections of this Assignment contained, shall not affect the remaining portions of this Assignment, or any part thereof.

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Section 5.03 Notices. Any notice or other communication to be given pursuant hereto shall be in the manner provided in the Collateral Agency Agreement and addressed as follows:

If to the Collateral Agent, to

Wilmington Trust Company,

as Collateral Agent

1100 North Market Street

Rodney Square North

Wilmington, DE 19890

Attn: Corporate Trust

Telephone: (302) 636-6453

Fax: (302) 636-4145

If to the Assignors, to

c/o Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia B2Y 2W1 Canada

Telephone: 902-465-3400

Fax: 902-465-2578

or at such other address as either party may notify to the other in writing.

Section 5.04 Captions. The captions or headings in this Assignment are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Assignment.

Section 5.05 Governing Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of New York, except to the extent the laws of another jurisdiction mandatorily apply to issues, including the validity, creation, attachment and perfection (or non-perfection and the effect thereof), and enforcement of remedies and Liens granted hereby.

Section 5.06 No Partnership. Nothing herein contained shall be deemed or construed to create a partnership or joint venture among the parties hereto, and the services of each party shall be rendered as an independent contractor and not as agent for any other party.

Section 5.07 Counterparts. This Assignment may be executed in any number of counterparts and by different parties hereto on separate counterpart, each of which shall be deemed to be an original. Such counterparts shall constitute one and the same agreement.

Section 5.08 Survival. The representations, covenants and agreements contained in or made pursuant to this Assignment in respect of either party hereto shall survive the execution and delivery of this Assignment and shall continue in effect so long as such party’s obligations hereunder remain outstanding.

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Section 5.09 Integration. This Assignment and the Schedule, Exhibits and Appendices hereto (if any) constitute the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements, understandings or representations pertaining to the subject matter hereof, whether oral or written. There are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth or incorporated herein.

Section 5.10 Successors and Assigns: Assignment. This Assignment shall be binding upon and inure to the benefit of each of the Assignors and the Collateral Agent and their respective successors and assigns.

Section 5.11 General Interpretive Principles. For purposes of this Assignment except as otherwise expressly provided or unless the context otherwise requires:

(a) the defined terms in this Assignment shall include the plural as well as the singular, and the use of any gender herein shall be deemed to include any other gender;

(b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date hereof;

(c) references herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, paragraphs and other subdivisions of this Assignment;

(d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions;

(e) the words “herein”, “hereof’, “hereunder” and other words of similar import refer to this Assignment as a whole and not to any particular provision; and

(f) the term “include” or “including” shall mean without limitation by reason of enumeration.

Section 5.12 Rights of the Collateral Agent. The Collateral Agent shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

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IN WITNESS WHEREOF, each of the Assignors and the Collateral Agent have caused this Assignment to be duly executed and delivered by their respective officers thereunto duly authorized all as of the day and year first above written.

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Collateral Agent
By:	/s/ James J. McGinley
Its:	Authorized Signer
JDM SHIPPING INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA ATLANTIC INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA GLOBAL MARINE INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA MARINE ATLANTIC LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE SERVICES LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SCHEDULE 1

Assignor	Vessel Name	Jurisdiction of Incorporation	Jurisdiction of Vessel Registry	Official #	Year Built / Rebuilt	Call Sign	Classification Society	Gross Tonnage	Net Tonnage
Secunda Global Marine Inc. (Barbados)	AGILE	Barbados	Barbados	725439	1978/1998	8POC	DNV	9402	2821
JDM Shipping Inc. (Barbados)	J.D. MITCHELL	Barbados	Barbados	355811	1975 /-	8PMU	Lloyds	12522	5936
Secunda Marine Services Limited (Nova Scotia)	MARINER SEA	Nova Scotia	Canada	817120	1979/2003	VAAB	Lloyds	2904	871
Secunda Marine Services Limited (Nova Scotia)	PANUKE SEA	Nova Scotia	Canada	823801	1984/2003	VOCT	DNV	2704	813
Secunda Marine Services Limited (Nova Scotia)	CABOT SEA	Nova Scotia	Canada	329550	1975 /-	CFD8024	Lloyds	849	266
Secunda Marine Services Limited (Nova Scotia)	RYAN LEET	Nova Scotia	Canada	811492	1978/1993	VOQY	DNV	1473	442
Secunda Marine Atlantic Limited (Nova Scotia)	THEBAUD SEA	Nova Scotia	Canada	821340	1999 /-	VCXR	DNV	2594	778
Secunda Atlantic Incorporated (Nova Scotia)	VENTURE SEA	Nova Scotia	Canada	820661	1998/-	VCVZ	DNV	2235	670
Secunda Marine Services Limited (Nova Scotia)	BURIN SEA	Nova Scotia	Canada	820679	1984/1999	VCXN	DNV	2372.11	675.18
Secunda Marine Services Limited (Nova Scotia)	TRINITY SEA	Nova Scotia	Canada	820678	1984/1999	VCXJ	DNV	2372.11	675.18
Secunda Marine Services Limited (Nova Scotia)	SABLE SEA	Nova Scotia	Canada *	733413	1977/2001	8PPU	DNV	2341	702
Secunda Marine Services Limited (Nova Scotia)	HEBRON SEA	Nova Scotia	Canada	363608	1975/1994	VORM	Lloyds	1963	589

* The Canadian Registry has been voluntarily suspended to have this Vessel registered on the Bareboat Registry of Barbados.

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APPENDIX I

NOTICE OF ASSIGNMENT

To: Marsh Canada Limited

Attention:                         

PLEASE TAKE NOTICE that, pursuant to the Assignment of Earnings and Insurances, dated as of August 26, 2004 (the “Assignment”) by and between                      (the “Assignor), certain of its affiliates and Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”) under the Collateral Agency Agreement, dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among Secunda International Limited and certain of its subsidiaries, Fortis Capital Corp. (the “Agent”) as Agent and in its capacity as Agent for the benefit of the Lenders and Wells Fargo Bank, National Association (the “Trustee”) as Trustee and in its capacity as Trustee for the benefit of the Noteholders and the Collateral Agent, all of the Assignor’s right, title and interest in, to (a) all moneys and claims for moneys due and to become due to the Assignor with respect to the Total Loss, or requisition for title, seizure, condemnation, confiscation, sequestration or compulsory acquisition or otherwise of its Vessel(s) (but not including proceeds of insurance against requisition for or other loss of hire or use of its Vessel(s)) by act of any country or any governmental authority or otherwise, of its Vessel(s), and all claims for damages or compensation with respect thereto, and (b) all policies and contracts of insurance of whatsoever nature and all entries with protection and indemnity clubs or societies (to the extent that the rules of the relevant insurance company, club or society allow such assignment) that have been or may hereafter during the subsistence of the Assignment be taken out in respect of the Assignor’s interests in its Vessel(s), including all machinery, materials, equipment, appurtenances and outfits thereon, including without being limited to hull and machinery, off hire, loss of hire, war risks, protection and indemnity and title requisition or otherwise howsoever (but excluding insurance covering the Assignor’s liability to third parties) and all the benefits thereof, including all claims of whatsoever nature and return of premiums, together with the income and proceeds of any and all of the foregoing have been assigned by the Assignor to the Collateral Agent, as security for the Secured Obligations as defined in the Collateral Agency Agreement. The undersigned hereby directs that all moneys otherwise payable to the Assignor under the insurance mentioned above shall be paid to the Collateral Agent at such account as shall be designated in writing by notice to you by the Collateral Agent.

Dated: August     , 2004

[Name of Assignor]

By:

Its:

Acknowledged and Agreed on this day of August     , 2004

MARSH CANADA LIMITED

By:

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APPENDIX II

NOTICE OF ASSIGNMENT

Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent under the Intercreditor and Collateral Agency Agreement, dated as of August     , 2004 (the “Collateral Agency Agreement”) by and among Secunda International Limited and certain of its subsidiaries, Fortis Capital Corp. (the “Agent”) as Agent and in its capacity as Agent for the benefit of the Lenders and Wells Fargo Bank, National Association (the “Trustee”) as Trustee and in its capacity as Trustee for the benefit of the Noteholders (the “Collateral Agent”) and                                          (the “Assignor”), owner of the [list all vessels] (the “Vessel(s)”), hereby give notice that by an assignment contained in an Assignment of Earnings and Insurances, dated as of August 26, 2004 (the “Assignment”) by and between the Assignor, certain of its affiliates and the Collateral Agent, the Assignor assigned to the Collateral Agent all of its right, title and interest under, to and in all present and future moneys and claims which are earned by or become payable to or for the account of the Assignor in connection with the operation or ownership of the Vessel(s), including but not limited to freights, passage and hire moneys, remuneration for salvage and towage services, demurrage and detention moneys, all present and future moneys and claims payable to the Assignor in respect of any breach or variation of any charterparty or contract of affreightment in respect of the Vessel(s), and all moneys and claims payable to the Assignor in respect of the requisition for hire of the Vessel(s) (all such right, title and interest herein called the “Earnings”).

So long as the Assignment remains effective upon receiving notice (the “Notice”) from the Collateral Agent that an Event of Default has occurred and is continuing under the Collateral Agency Agreement, please pay any and all sums under your charter with the Assignor directly to the account designated by the Collateral Agent pursuant to the account instructions in the Notice.

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EX-10.4

Exhibit 10.4

SECUNDA INTERNATIONAL LIMITED

SENIOR SECURED FLOATING RATE NOTES DUE 2012

CREDIT AGREEMENT

CONTROL AGREEMENT

[ASSET SALE PROCEEDS ACCOUNT]

Dated as of August 26, 2004

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		1
SECTION 1.01.	Definitions	1
ARTICLE II ASSET SALE PROCEEDS ACCOUNT		2
SECTION 2.01.	Asset Sale Proceeds Account	2
SECTION 2.02.	Permitted Investments	4
SECTION 2.03.	Monies Received by the Company	5
SECTION 2.04.	Books of Asset Sale Proceeds Account; Statements	6
ARTICLE III SECURITY AND RELATED PROVISIONS; SECURITIES INTERMEDIARY		6
SECTION 3.01.	Securities Asset Sale Proceeds Account	6
SECTION 3.02.	Certain Rights and Powers in Respect of Asset Sale Proceeds Account and Funds	7
SECTION 3.03.	Security Interest	9
SECTION 3.04.	Duties and Certain Rights of Depositary Agent	10
SECTION 3.05.	Remedies	16
ARTICLE IV TERMINATION OF AGREEMENT		17
SECTION 4.01.	Secured Obligations	17
SECTION 4.02.	Rights and Obligations of Collateral Agent and Depositary Agent	17
ARTICLE V MISCELLANEOUS		18
SECTION 5.01.	Notices	18
SECTION 5.02.	Benefit of Agreement	18
SECTION 5.03.	No Waiver; Remedies Cumulative	19
SECTION 5.04.	Severability	19
SECTION 5.05.	Amendments	19
SECTION 5.06.	Headings	19
SECTION 5.07.	Governing Law	19
SECTION 5.08.	CONSENT TO JURISDICTION	19
SECTION 5.09.	WAIVER OF JURY TRIAL	20
SECTION 5.10.	Successors and Assigns	21
SECTION 5.11.	Entire Agreement	21
SECTION 5.12.	Survival of Agreements	21
SECTION 5.13.	Further Information	21
SECTION 5.14.	Additional Depositary Agent Provisions	21
SECTION 5.15.	Counterparts	22
SECTION 5.16.	Effectiveness	22
SECTION 5.17.	Collateral Agent’s Obligations	22

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EXHIBIT A: Remittance Instruction Form

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This CONTROL AGREEMENT [ASSET SALE PROCEEDS ACCOUNT], dated as of August 26, 2004 (this “Agreement”), is entered into by and among Secunda International Limited (the “Company”) each of the undersigned Subsidiaries of the Company (each, a “Guarantor” and, collectively, the “Guarantors”), Wilmington Trust Company, as Depositary Agent (the “Depositary Agent”) and Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”) under the Collateral Agency Agreement dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among the Company and certain of its subsidiaries; Fortis Capital Corp. (the “Agent”), in its capacity as Agent for the benefit of the Lenders; Wells Fargo Bank, National Association (the “Trustee”) in its capacity as Trustee for the benefit of the Noteholders; and the Collateral Agent.

RECITALS:

Pursuant to the terms of the Initial Credit Agreement, each of the Lenders agreed to make the Facility available to the Company in accordance with and subject to the terms and conditions of the Initial Credit Agreement. As a condition to providing such Facility (as defined in the Credit Agreement), each of the Lenders has requested that each of the Company and the Guarantors enter into this Agreement and pledge the Collateral specified herein to the Collateral Agent, on behalf of the Agent and the Lenders. Pursuant to the terms of the Indenture, the Borrower issued the Notes. As a condition to the purchase of such Notes by the initial purchasers thereof, each of such initial purchasers has requested that each of the Company and the Guarantors enter into this Agreement and pledge the Collateral specified herein to the Collateral Agent, on behalf of the Trustee and the Noteholders.

The Initial Credit Agreement and Initial Purchase Agreement further require that such security interests in the Collateral identified herein be subject to the control of the Collateral Agent. This Agreement sets forth the terms on which the Collateral Agent has undertaken to accept, hold and enforce such security interests and all related rights, interests and powers as agent for, and for the benefit of, the present and future Lender and the holders of the Notes and other Secured Obligations.

The Depositary Agent has agreed to act as depositary agent and, with respect to any securities entitlements held by it pursuant to this Agreement, as securities intermediary pursuant to the terms of this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions. Capitalized terms used in this Agreement that are defined in Collateral Agency Agreement or the Indenture and not otherwise defined herein shall have the meanings set forth in the Collateral Agency Agreement or the Indenture, as applicable. All

capitalized terms used in this Agreement that are defined in Article 9 of the UCC, as in effect on the date of this Agreement in the State of New York, and not otherwise defined herein shall have the meanings therein set forth.

ARTICLE II

ASSET SALE PROCEEDS ACCOUNT

SECTION 2.01. Asset Sale Proceeds Account.

(a) Establishment of Asset Sale Proceeds Account. The Company hereby directs the Depositary Agent to establish and maintain at its corporate trust office an account in the name of the Company (as the entitlement holder) entitled “Asset Sale Proceeds Blocked Account Subject to the Security Interest of Wilmington Trust Company, as Collateral Agent” and numbered 067492-001 (the “Asset Sale Proceeds Account”). The Asset Sale Proceeds Account shall at all times be under the sole and exclusive control of the Collateral Agent.

(b) Deposits of Net Sale Consideration. The Collateral Agent and the Company shall, and the Company shall cause each Guarantor to, promptly deposit or cause directly to be deposited into the Asset Sale Proceeds Account all Net Sale Consideration from a Sale of Collateral (including all amounts and proceeds (including instruments) received or receivable by the Company, any Guarantor or the Collateral Agent (as loss payee or additional insured) under any insurance policy maintained by the Company or any Guarantor or any Person in respect of Collateral (the “Insurance Proceeds”) or any amounts and proceeds (including instruments) received or receivable by the Company or any Guarantor by reason of any means any compulsory transfer or taking by condemnation, eminent domain or exercise of a similar power, or transfer under threat of such compulsory transfer or taking, of any part of the Collateral, other than an immaterial portion thereof, by any agency, department, authority, commission, board, instrumentality or political subdivision of the state in which such Collateral is located, the United States or another Governmental Authority having jurisdiction (the “Eminent Domain Proceeds” and, together with the Insurance Proceeds, the “Loss Proceeds”)).

(c) Deposits of Proceeds of Additional Note Offerings. The Company shall promptly deposit or cause directly to be deposited into the Asset Sale Proceeds Account, all proceeds from any issuance of Additional Notes.

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(d) Withdrawals.

(i) General Provisions Regarding Release of Net Sale Consideration and Proceeds of Additional Notes. Deposits of Net Sale Consideration from a Sale of Collateral and the proceeds of any issuance of Additional Notes (“Additional Note Proceeds”) in the Asset Sale Proceeds Account, and income therefrom, may be withdrawn only upon order of the Collateral Agent. Upon the Collateral Agent’s receipt of an Officer’s Certificate from the Company stating that (i) no Default or Event of Default has occurred and is continuing and (ii) a specified amount of the funds on deposit in the Asset Sale Proceeds Account:

(1) with respect to Additional Note Proceeds, will be used, promptly upon withdrawal from the Asset Sale Proceeds Account, to acquire additional Vessel Assets as contemplated by Section 2.02(3) of the Indenture;

(2) with respect to Net Sales Consideration, will be applied, promptly upon withdrawal from the Asset Sale Proceeds Account, to fund payments required to be made by the Company in respect of the repayment or prepayment of Credit Facility Obligations as contemplated by Section 4.10(c)(1) of the Indenture;

(3) with respect to Net Sales Consideration, will be applied, promptly upon withdrawal from the Asset Sale Proceeds Account, to fund payments which the Company elects to make in respect of the prepayment or repayment of Credit Facility Obligations or the repurchase or redemption of any Note, as contemplated by Section 4.10(c)(2) of the Indenture;

(4) with respect to Net Sales Consideration, will be used, promptly upon withdrawal from the Asset Sale Proceeds Account, to acquire Additional Assets as contemplated by Section 4.10(c)(3) of the Indenture;

(5) with respect to Net Sales Consideration, will be applied, promptly upon withdrawal from the Asset Sale Proceeds Account, to fund payments due to the Holders of Notes and the Lenders under accepted Collateral Proceeds Offers made pursuant to Section 4.10(c) of the Indenture; or

(6) with respect to Net Sales Consideration, have been offered to the Holders of Notes and the Lenders in compliance with the provisions of Section 4.10(c) of the Indenture with respect to Collateral Proceeds Offers that were not accepted and have been released from the Collateral Agent’s Liens and are required to be released to the Company pursuant to such provisions;

then, if the conditions set forth in Section 3.1 of the Collateral Agency Agreement are satisfied as evidenced by such Officer’s Certificate (including without limitation, in the case of clauses (1) and (4), the satisfaction of those conditions set forth in Section 3.1 of the Collateral Agency Agreement relating to the creation and perfection of the first-priority Lien to be granted in such

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acquired Additional Assets in favor of the Collateral Agent), the Collateral Agent promptly shall instruct the Depositary Agent in writing using the form attached hereto as Exhibit A, to remit such amount to the Company as directed in any remittance instruction delivered to the Collateral Agent by the Company. The Depositary Agent shall comply with such instructions.

(ii) General Provisions Regarding a Loss that is a Sale of Collateral. If there shall occur any damage, destruction, condemnation or other similar taking of Collateral or other event that would be characterized as a Sale of Collateral, any related Loss Proceeds, and related income, shall be released by the Collateral Agent to the Company upon receipt by the Collateral Agent of the Officer’s Certificate described in Section 2.01(d)(i).

(iii) General Provisions Regarding a Loss that is not a Sale of Collateral. If any Loss Proceeds result from any event that that would not be characterized as a Sale of Collateral, upon the Collateral Agent’s receipt of an Officer’s Certificate from the Company

(1) certifying that the Company has determined in its good faith judgment the Loss Proceeds for such single loss are less than $5,000,000; and

(2) stating that no Default or Event of Default has occurred and is continuing;

then, (1) such Loss Proceeds shall be released by the Collateral Agent to the written order of the Company, or (2) Collateral Agent shall endorse any check, draft or other instrument that it has in its possession with respect to Loss Proceeds from such event and deliver such check, draft or other instrument without representation, warranty, or recourse directly to the written order of the Company against a receipt of the Company acknowledging delivery of the same, or (3) if the Person that is required to pay such Loss Proceeds to the Company has not remitted such amounts to the Company or the Collateral Agent, the Collateral Agent shall instruct such Person to pay any such Loss Proceeds directly to the Company (provided that in connection with the Officer’s Certificate to be given above, the Company provides the form of authorization letter that the Company wishes the Collateral Agent to use to direct such Person to pay any Loss Proceeds directly to the Company and authorizes the Collateral Agent to deliver such authorization).

SECTION 2.02. Permitted Investments.

(a) Application of Permitted Investments. Permitted Investments, if any, purchased upon the written direction of the Company under the provisions of this Agreement shall be deemed at all times to be a part of the Asset Sale Proceeds Account from which funds were withdrawn in order to acquire the Permitted Investment and shall be deemed to constitute funds on deposit in and credited to the Asset Sale Proceeds Account, and the income or interest

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earned and gains realized in excess of losses suffered by the Asset Sale Proceeds Account due to the investment of funds deposited therein shall be credited and retained in the Asset Sale Proceeds Account, with net losses deducted from the Asset Sale Proceeds Account, except as otherwise expressly provided by the terms hereof.

(b) Earnings. All earnings, if any, on funds in the Asset Sale Proceeds Account maintained hereunder shall be credited to the Company for tax reporting purposes. The Depositary Agent shall provide to the Company a statement with respect to all interest earned on the Asset Sale Proceeds Account as of the close of each calendar year for which income is earned on the Asset Sale Proceeds Account. The Company shall provide the Depositary Agent with its taxpayer identification number, documented, to the extent necessary, by an appropriate executed Form W-9, upon execution of this Agreement. This form shall, to the extent necessary, be renewed as required by the Internal Revenue Service and provided to the Depositary Agent. The Depositary Agent shall be entitled to conclusively rely on an opinion of legal counsel (which may be counsel to the Company) in connection with the reporting of any earnings with respect hereto.

(c) Liquidation of Investments for Distributions. The Collateral Agent is hereby authorized to direct the Depositary Agent, in writing using the form attached hereto as Exhibit A, to liquidate or direct the liquidation of any Permitted Investment (without regard to maturity) in order to make or cause to be made any application required by any Section of this Article 2. In furtherance, and not in limitation, of any other indemnity or limitation of liability with respect to the Collateral Agent contained herein or in the Credit Agreement or any Note Document, the Collateral Agent and the Depositary Agent shall in no way be liable for any losses suffered by the Company, including losses due to early liquidation or market risk, which are a result of the Collateral Agent’s exercise of its authority under this provision. The Depositary Agent shall have no obligation to invest and reinvest any cash held in the absence of timely and specific written investment direction from the Company. The Depositary Agent shall have no liability for the selection of investments, for any loss incurred in connection with any investment or any sale, liquidation or redemption thereof.

(d) Value of Permitted Investments. Permitted Investments, if any, credited to the Asset Sale Proceeds Account shall be valued at their current market value.

SECTION 2.03. Monies Received by the Company. In the event that the Company or any Guarantor receives any cash or Cash Equivalents constituting Net Sale Consideration (including any Loss Proceeds) or other amounts required by the terms hereof to be deposited into the Asset Sale Proceeds Account, the Company shall, or shall cause such Guarantor to, hold the same in precisely the form received in trust for and on behalf of the Collateral Agent (on behalf of the Agent and the Trustee for the benefit of the holders of the Secured Obligations), segregated from other funds of the Company or such Guarantor, and without any notice or demand whatsoever, shall promptly deliver the same to the Depositary Agent for application in accordance with the terms of this Agreement. No balance in, or financial asset or other asset credited to, the Asset Sale Proceeds Account maintained hereunder shall be disbursed or transferred by the Depositary Agent, except in accordance with the provisions hereof.

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SECTION 2.04. Books of Asset Sale Proceeds Account; Statements. The Depositary Agent shall maintain books of account on a cash basis and record therein all deposits into and transfers to and from the Asset Sale Proceeds Account and all investment transactions effected by the Depositary Agent pursuant to the terms hereof, and any such recordation shall constitute prima facie evidence of the information recorded. Not later than the tenth Business Day of each month or as soon as practicable thereof, but in no event later than the twentieth calendar day of each month, commencing with the first month to occur after the earliest of the receipt of Net Sale Consideration into the Asset Sale Proceeds Account in accordance with the terms hereof, the Depositary Agent shall deliver to the Company a statement setting forth the transactions in the Asset Sale Proceeds Account during the preceding month (including deposits, withdrawals and transfers from and to the Asset Sale Proceeds Account) and specifying the Net Sale Consideration, Permitted Investments and other amounts held in or credited to the Asset Sale Proceeds Account at the close of business on the last Business Day of the preceding month. In addition, the Depositary Agent shall promptly respond (during normal business hours) to written requests by the Company for information regarding deposits, investments and transfers into, in respect of the Asset Sale Proceeds Account.

ARTICLE III

SECURITY AND RELATED PROVISIONS; SECURITIES INTERMEDIARY

SECTION 3.01. Securities Asset Sale Proceeds Account.

(a) Acknowledgement. The Depositary Agent hereby agrees and confirms that the Depositary Agent has established the Asset Sale Proceeds Account as set forth and defined in this Agreement.

(b) Agreement. Each of the parties hereto agrees that:

(i) the Asset Sale Proceeds Account will be maintained, to the extent that “financial assets” (within the meaning of Section 8-102(a)(9) of the UCC, and as so defined the term financial asset is so used throughout this Agreement) are deposited therein or credited thereto, as a “securities account” (within the meaning of Section 8-501 of the UCC), and, to the extent that credit balances not constituting financial assets are credited thereto, as a “deposit account” (within the meaning of Section 9-102(a)(29) of the UCC);

(ii) the Company is an “entitlement holder” (within the meaning of Section 8-102(a)(7) of the UCC) in respect of any “financial assets” credited to the Asset Sale Proceeds Account and is the Depositary Agent’s “customer” within the meaning of Section 4-104 of the UCC to the extent the account is a deposit account;

(iii) all property (including a security, security entitlement, investment property, instrument or obligation, share, participation, interest, cash or other property whatsoever) delivered to the Depositary Agent will be promptly credited by the

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Depositary Agent to the Asset Sale Proceeds Account by an appropriate entry in its records in accordance with this Agreement and shall maintain all such property to the extent permitted by applicable law, as financial assets;

(iv) all financial assets and other assets in registered form or payable to or to order and credited to the Asset Sale Proceeds Account shall be registered in the name of, payable to or to the order of, or specially endorsed to, the Depositary Agent or in blank, or credited to another securities account maintained in the name of the Depositary Agent, and in no case will any such financial asset or other asset be credited to the Asset Sale Proceeds Account at any time, if, at such time, such asset is registered in the name of, payable to or to the order of, or endorsed to, the Collateral Agent (in such capacity) or the Company, except to the extent the foregoing have been subsequently endorsed by the Collateral Agent (in such capacity) or the Company to the Depositary Agent or in blank;

(v) the Depositary Agent is acting as “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) with respect to the Asset Sale Proceeds Account and financial assets deposited therein or credited thereto and as a “bank” (within the meaning of Section 9-304 of the UCC) with respect to the Asset Sale Proceeds Account and credit balances not constituting financial assets credited thereto; and

(vi) the Depositary Agent shall not change the name or account number of the Asset Sale Proceeds Account without the prior consent of the Collateral Agent.

SECTION 3.02. Certain Rights and Powers in Respect of Asset Sale Proceeds Account and Funds.

(a) Rights to Asset Sale Proceeds Account. The Company shall not make, attempt to make or consent to the making of any withdrawal or transfer from the Asset Sale Proceeds Account except in strict adherence to the terms and conditions of this Agreement. The Company shall not have any rights or powers with respect to the remittance of amounts credited to, the disbursement of credited amounts out of, or the investment of credited amounts in, the Asset Sale Proceeds Account, except to have amounts credited thereto applied in accordance with this Agreement; provided, however, that the parties hereto acknowledge and agree that the foregoing provisions of this Section 3.02(a) shall not be deemed to divest the Company of its interest as an “entitlement holder” under the UCC, as provided in this Agreement.

(b) Certain Powers of the Collateral Agent and the Depositary Agent. The Collateral Agent and, where appropriate, the Depositary Agent will have the right, but not the obligation, to (i) refuse any item for credit to the Asset Sale Proceeds Account except as required by the terms of this Agreement and (ii) refuse to honor any request for transfer on the Asset Sale Proceeds Account which is not consistent with this Agreement. If the Company fails to perform any agreement contained herein and such failure to perform is continuing for a period of 30 days, the Collateral Agent may itself (but shall have no obligation to) perform, or cause the performance of, such agreement, and the expenses of the Collateral Agent incurred in connection

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therewith shall be payable by the Company upon written demand. The Company hereby irrevocably appoints the Collateral 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, if an Event of Default shall have occurred and be continuing, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including:

(i) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Asset Sale Proceeds Account or the proceeds of financial assets or other assets held therein or credited thereto;

(ii) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection with clause (i) above;

(iii) to file any claims or take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any of the Asset Sale Proceeds Account or the proceeds of financial assets or other assets held therein or credited thereto or otherwise to enforce the rights of the Collateral Agent with respect to the Asset Sale Proceeds Account or the proceeds of financial assets or other assets held therein or credited thereto, provided that, with respect to this clause (iii), such rights shall be exercised in accordance with Section 3.06; and

(iv) to perform the affirmative obligations of the Company hereunder if, and to the extent that, the Company fails to perform such obligations and such failure to perform is continuing for a period of 30 days.

The Company hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section 3.02(b) is irrevocable and coupled with an interest. The powers conferred on the Collateral Agent hereunder are solely to protect its interest (on behalf of the applicable Secured Parties) in the Asset Sale Proceeds Account and the proceeds of financial assets and other assets held therein or credited thereto and shall not impose any duty on the Collateral Agent to exercise any such powers. Except for the reasonable care of the Asset Sale Proceeds Account in its possession or under its control (as the case may be) and the accounting for moneys actually received by it hereunder, neither the Depositary Agent nor the Collateral Agent shall have any duty as to the Asset Sale Proceeds Account or the proceeds of financial assets or other assets held therein or credited thereto, or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to the Asset Sale Proceeds Account or proceeds. Each of the Depositary Agent and the Collateral Agent is required to exercise reasonable care in the custody and preservation of the Asset Sale Proceeds Account and the financial assets and other assets held therein or credited thereto in its possession or under its control (as the case may be); provided, however, that the Collateral Agent in any event shall be deemed to have exercised reasonable care in the custody and preservation of the Asset Sale Proceeds Account if it takes such action for that purpose as the Company reasonably requests in writing at times other than upon the occurrence and during the continuance of any Event of

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Default, but, notwithstanding the foregoing, the failure of the Collateral Agent to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care.

SECTION 3.03. Security Interest.

(a) Grant. To secure the timely payment in full in cash and performance in full of the Secured Obligations, the Company and each of the Guarantors does hereby assign, grant, hypothecate and pledge to, and grant a first priority security interest (subject to Permitted Liens) in favor of the Collateral Agent, on behalf of and for the sole and exclusive benefit of the Agent and the Trustee, on behalf of holders of the Secured Obligations, on all the estate, right, title, interest and security entitlements of the Company and each of the Guarantors, whether now owned or hereafter acquired, in the Asset Sale Proceeds Account and in all cash, cash equivalents, instruments, investments, other securities, financial assets and other assets held therein or credited thereto and all proceeds thereof, including all rights of the Company and each of the Guarantors to receive moneys due in respect of such Asset Sale Proceeds Account, all claims with respect to such Asset Sale Proceeds Account, all income or gain earned in respect of the financial assets and other assets held in or credited to such Asset Sale Proceeds Account, and all proceeds receivable or received when any financial asset or other asset held in or credited to an Asset Sale Proceeds Account is collected, exchanged or otherwise disposed of, whether voluntarily or involuntarily (collectively, the “Collateral”).

(b) Acknowledgment. The Depositary Agent hereby acknowledges the first priority security interest in, and the pledge by the Company and the Guarantor to the Collateral Agent for the benefit of the holders of the Secured Obligations of all of the Company’s and the Guarantors’ assets held in or credited to the Asset Sale Proceeds Account and all proceeds thereof, and will so indicate on the records maintained by the Depositary Agent with respect to the Asset Sale Proceeds Account. The Depositary Agent agrees to hold all such assets for the purposes of, and on the terms set forth in, this Agreement.

(c) Other Liens; Adverse Claim.

(i) The Company and each of the Guarantors represents and warrants that:

(A) it has not assigned any of its rights under the Asset Sale Proceeds Account;

(B) it has not executed and is not aware of any effective financing statement, security agreement, control agreement or other instrument similar in effect covering all or any part of the Asset Sale Proceeds Account except in favor of the Collateral Agent; and

(C) it has full power and authority to grant a security interest in and assign its right, title and interest in the Asset Sale Proceeds Account and all financial assets and other assets held therein or credited thereto and all proceeds thereof hereunder.

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(ii) The Company and each of the Guarantors represents, warrants and covenants that it has not granted, and shall not grant, to any Person other than the Collateral Agent any interest in Asset Sale Proceeds Account and that it has kept, and shall keep, the Asset Sale Proceeds Account free from all Liens other than Permitted Liens.

(iii) The Depositary Agent represents and warrants that it has no actual knowledge (without having conducted an independent investigation or inquiry) of any Lien on the Asset Sale Proceeds Account other than the claims and interest of the parties hereto as provided herein. In the event that the Depositary Agent has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Asset Sale Proceeds Account or any financial asset or other asset credited thereto, the Depositary Agent hereby agrees that such security interest shall be subordinate to the security interest of the Collateral Agent for the benefit of the holders of the Secured Obligations.

(iv) Each of the Collateral Agent and the Depositary Agent represents and warrants that it has no written notice (without having conducted an independent investigation or inquiry) of any adverse claim to the financial assets or other assets deposited in or credited to the Asset Sale Proceeds Account or to security entitlements with respect thereto.

(v) The financial assets and other assets credited to the Asset Sale Proceeds Account shall not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Collateral Agent.

SECTION 3.04. Duties and Certain Rights of Depositary Agent.

(a) General. The duties of the Depositary Agent shall be determined solely by the express provisions of this Agreement and by applicable law and no duties, implied covenants or obligations shall be read into this Agreement against the Depositary Agent as depositary agent, securities intermediary and bank.

(b) Acceptance of Appointment. The Depositary Agent hereby agrees to act as depositary agent and securities intermediary with respect to the Asset Sale Proceeds Account and pursuant to this Agreement. The other parties hereto hereby acknowledge that the Depositary Agent shall act as depositary agent, securities intermediary and bank with respect to the Asset Sale Proceeds Account and pursuant to this Agreement.

(c) Financial Assets Election. The Depositary Agent hereby agrees that each item of property (including a security, security entitlement, investment property, instrument or obligation, share or participation) credited to the Asset Sale Proceeds Account shall be treated as a financial asset under Article 8 of the UCC and at any time deposited in the Asset Sale Proceeds Account, and interest accrued or paid thereon.

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(d) Negative Pledge. Subject to the terms of this Agreement, the Depositary Agent hereby agrees that it shall not grant any Lien in the financial assets and other assets that it is obligated to maintain under this Agreement.

(e) Entitlement Orders, Instructions. If at any time the Depositary Agent shall receive any entitlement order, instruction or any other order from the Collateral Agent directing the transfer or redemption of any financial asset or other asset relating to the Asset Sale Proceeds Account, or directing the disposition of any funds in the Asset Sale Proceeds Account, the Depositary Agent shall comply with such entitlement order, instruction or other order without further consent by the Company or any other Person. The parties hereto agree that until the Depositary Agent’s obligations under this Agreement shall terminate in accordance with the terms hereof, the Collateral Agent shall have control of each of the Company’s security entitlements with respect to the financial assets and other assets credited to the Asset Sale Proceeds Account; provided, however, that the Company, as the entitlement holder with respect to the financial assets credited to the Asset Sale Proceeds Account and the Person for whom the Asset Sale Proceeds Account are maintained, is entitled, subject to Section 2.02 and the other provisions of this Agreement, to make substitutions for the security entitlements with respect to the financial assets credited to the Asset Sale Proceeds Account. The Depositary Agent hereby represents that it has not entered into, and agrees that, until the termination of this Agreement and the other Term Loan Documents or Note Documents in accordance their terms, it will not enter into, any agreement with any other Person in respect such Asset Sale Proceeds Account pursuant to which it would agree to comply with entitlement orders made by such Person.

(f) Degree of Care. The Depositary Agent shall exercise due care in accordance with reasonable commercial standards in administering the Asset Sale Proceeds Account, accounting for assets credited to the Asset Sale Proceeds Account and performing its duties as a bank with respect to the Asset Sale Proceeds Account, and to the extent that any “investment property” is on deposit, accounting for financial assets and other assets credited to the Asset Sale Proceeds Account and performing its duties as securities intermediary with respect to the Asset Sale Proceeds Account and, in each case, such assets deposited therein or credited thereto and the credit balances credited thereto under this Agreement.

(g) Action Upon Notices; Exercise of Judgment. The Depositary Agent shall be permitted to conclusively rely and act upon any notice, entitlement order, instruction, request, waiver, consent, receipt or other paper or document whether in its original or facsimile form reasonably believed by the Depositary Agent to be signed by the Collateral Agent, the Company or any other authorized Person. The Depositary Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith or for any mistake of fact or law or for anything which the Depositary Agent may do or refrain from doing in connection herewith, except its own gross negligence or willful misconduct. The Depositary Agent shall have duties only to the Collateral Agent (on behalf of the holders of the Secured Obligations).

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(h) Indemnification and Liability. In consideration of the appointment of Depositary Agent, each of the Company and the Guarantors agree jointly and severally:

(i) to defend, indemnify, pay and hold harmless, the Depositary Agent and each of its Affiliates and each and all of the directors, officers, partners, trustees, employees, attorneys and agents thereof, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “Indemnified Person”) from and against any and all Indemnified Liabilities; and

(ii) to reimburse each Indemnified Person for all its expenses, including reasonable fees and expenses of counsel and court costs incurred by reason of any position or action taken by the Indemnified Person pursuant to this Agreement or in connection with any action brought to interpret or enforce the provisions of this Agreement or any part thereof;

except, with respect to each of clauses (i) and (ii), to the extent that any such claim, loss, liability, damage, cost or expense is determined by a court of competent jurisdiction in a final non-appealable judgment to have been caused by the Indemnified Person’s gross negligence or willful misconduct. The parties hereto hereby agree that no Indemnified Person shall be liable to such parties for any actions taken by any Indemnified Person pursuant to and in compliance with the terms hereof except in respect of any liability or expenses incurred by the Indemnified Person arising from its gross negligence or willful misconduct. Any Indemnified Person may consult with legal counsel of its selection in connection with this Agreement or the Indemnified Person’s duties hereunder, and the Indemnified Person shall incur no liability and shall be fully protected in acting in accordance with the opinion and advice of such counsel.

The obligations of the Company and the Guarantors under this Section shall survive the termination of this Agreement and the earlier resignation or removal of the Depositary Agent.

(i) Court Orders. The Depositary Agent is hereby authorized, in its exclusive discretion, to obey and comply with all writs, orders, judgments or decrees issued by any court or administrative agency affecting the Asset Sale Proceeds Account or any financial asset credited to the Asset Sale Proceeds Account. The Depositary Agent shall not be liable to any of the parties hereto, their successors or assigns by reason of the Depositary Agent’s compliance with such writs, orders, judgments or decrees, notwithstanding that such writ, order, judgment or decree may later be reversed, modified, set aside or vacated.

(j) Resignation and Termination.

The Depositary Agent may at any time resign by giving notice to each other party to this Agreement, such resignation to be effective upon the appointment of a successor Depositary Agent as provided below. So long as no Event of Default shall have occurred and be continuing, the Company may remove the Depositary Agent at any time by giving notice to each other party to this Agreement, such removal to be effective upon the appointment of a successor Depositary Agent as provided below.

In the event of any removal of the Depositary Agent pursuant to the terms of the preceding paragraph, a successor Depositary Agent, which shall be a bank or trust

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company organized under the laws of the United States of America or of the State of New York capable of acting as a “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) and a “bank” (within the meaning of Section 9-102(a)(8) of the UCC), having a corporate trust office in New York, New York and a capital and surplus of not less than $250,000,000, shall be appointed by the Company, and such appointment shall not be unreasonably delayed. If a successor Depositary Agent shall not have been appointed and accepted its appointment as Depositary Agent within 45 days after such notice of removal of the Depositary Agent, the Depositary Agent, the Collateral Agent or the Company may apply to any court of competent jurisdiction at the expense of the Company to appoint a successor Depositary Agent to act until such time, if any, as a successor Depositary Agent shall have accepted its appointment as provided above. Any such successor Depositary Agent shall deliver to each party to this Agreement a written instrument accepting such appointment and thereupon:

(i) the Company or the Collateral Agent shall deliver an entitlement order, instruction or any other order to the predecessor Depositary Agent directing it to transfer to the successor Depositary Agent all balances deposited in and all financial assets and other assets credited to, the Asset Sale Proceeds Account;

(ii) the successor Depositary Agent shall establish and maintain at its New York office the Asset Sale Proceeds Account and deposit in and credit to the Asset Sale Proceeds Account all financial assets and other assets from the Asset Sale Proceeds Account maintained by the predecessor Depositary Agent transferred by the predecessor Depositary Agent to the successor Depositary Agent; and

(iii) the successor Depositary Agent shall succeed to all the rights and duties of the Depositary Agent under this Agreement and under applicable law.

In the event of any resignation of the Depositary Agent, a successor Depositary Agent, which shall be a bank or trust company organized under the laws of the United States of America or of any state thereof capable of acting as a “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) and a “bank” (within the meaning of Section 9-102(a)(8) of the UCC) and having a capital and surplus of not less than $250,000,000, shall be appointed by the Collateral Agent upon agreement by the Company, and such agreement shall not be unreasonably withheld or delayed. Any such successor Depositary Agent shall deliver to each party to this Agreement a written instrument accepting such appointment and thereupon:

(i) the Company or the Collateral Agent shall deliver an entitlement order, instruction or any other order to the predecessor Depositary Agent directing it to transfer to the Collateral Agent all balances deposited in and all financial assets credited to, the Asset Sale Proceeds Account;

(ii) the successor Depositary Agent shall establish and maintain at its New York office the Asset Sale Proceeds Account and deposit in and credit to the Asset

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Sale Proceeds Account all financial assets and other assets from the Asset Sale Proceeds Account maintained by the predecessor Depositary Agent transferred by the predecessor Depositary Agent to the successor Depositary Agent; and

(iii) the successor Depositary Agent, unless the Collateral Agent is acting in such capacity, shall succeed to all the rights and duties of the Depositary Agent under this Agreement and under applicable law.

In the event that a successor Depositary Agent is not appointed within 30 Business Days after such notice of resignation of the Depositary Agent, the resigning Depositary Agent may, at the expense of the Company, petition a court of competent jurisdiction for appointment of successor.

In the event of the resignation or termination of the Depositary Agent, the Depositary Agent shall be entitled to its fees and expenses in accordance with the terms hereof up to the time such resignation becomes effective in accordance with this Section 3.04(j).

(k) General.

(i) No provision of this Agreement shall require the Depositary Agent to expend or risk its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(ii) All written directions and instructions (which may be provided by facsimile transmission) by the Company or the Collateral Agent to the Depositary Agent pursuant to this Agreement shall be executed by an authorized signatory of the Company or the Collateral Agent, as applicable.

(iii) The Depositary Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, or any other evidence of indebtedness or other paper or document.

(iv) The Depositary Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement.

(v) The Depositary Agent shall not be deemed to have notice of any Default or Event of Default unless written notice thereof is received by the Depositary Agent.

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(vi) The Depositary Agent shall be under no obligation to notify the Collateral Agent of any Event of Default or any other event except for those events for which this Agreement specifically provides that such notice is required.

(vii) If any checks, drafts or other items deposited in the Asset Sale Proceeds Account are returned or unpaid or otherwise dishonored, the Depositary Agent shall have the right to charge any and all such returned or dishonored items against the Asset Sale Proceeds Account or to demand reimbursement therefor directly from the Company.

(viii) In no event shall the Depositary Agent be liable for losses or delays resulting from computer malfunction, interruption of communication facilities, labor difficulties, in each case, that are beyond the Depositary Agent’s reasonable control or other causes beyond the Depositary Agent’s reasonable control or for indirect, special or consequential damages (including, but not limited to, lost profits)

(ix) In the absence of bad faith on the part of the Depositary Agent, the Depositary Agent may conclusively rely, as to the truth of statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Depositary Agent which conform to the requirements of this Agreement or the Security Documents.

(x) Whenever in the administration of the provisions of this Agreement or the Security Documents the Depositary Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken, such matter may, in the absence of gross negligence or bad faith on the part of the Depositary Agent, be deemed to be conclusively proved and established by an Officer’s Certificate or an Opinion of Counsel, which shall be full warrant to the Depositary Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or the Security Documents upon the faith thereof.

(xi) The Depositary Agent shall be under no obligation to exercise any of the rights vested in it by this Agreement or the Security Documents or to enforce any remedy or realize upon any of the Collateral unless it has been offered security or indemnity satisfactory to it against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) that might be incurred by it in compliance with such request or direction.

(xii) The Depositary Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

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(xiii) Any corporation into which the Depositary Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Depositary Agent shall be a party, or any corporation succeeding to the business of the Depositary Agent shall be successor of the Depositary Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

(xiv) In the event the Collateral Agent receives proceeds of the disposition of any Collateral in circumstances in which the terms of the Security Documents do not direct the Collateral Agent as to the application of such proceeds, the Collateral Agent may request that the Trustee and the Administrative Agent instruct the Collateral Agent as to the proper application of such proceeds. If the Collateral Agent receives such instructions from the Trustee and the Administrative Agent, the Collateral Agent shall act on such instructions without regard to any contradictory instructions from any other Person; provided that so long as no Event of Default of which a Responsible Officer of the Collateral Agent has actual knowledge has occurred and is continuing, the Collateral Agent shall not act on such instructions from the Trustee and the Administrative Agent unless it has also obtained the consent thereto from the Company. Prior to the receipt of such instructions and, if required as aforesaid such consent thereto contemplated by the terms of this Section 3.04(k)(xiv), the Collateral Agent shall deposit the applicable proceeds in the Asset Sale Proceeds Account. Neither the Trustee nor the Administrative Agent shall give instructions to the Collateral Agent to make payment to any holder of a Note or any to Lender under the Indenture or Credit Agreement, respectively, except to pay such amounts as are then immediately due and payable to such Person under such agreement.

SECTION 3.05. Remedies. If an Event of Default shall have occurred and be continuing:

(i) the Collateral Agent may exercise in respect of the Asset Sale Proceeds Account in accordance with the terms of the Collateral Agency Agreement, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC at that time and consistent with the provisions of the Credit Agreement or the Note Documents, including the right to proceed to protect and enforce the rights vested in it by this Agreement, to sell, liquidate or otherwise dispose of the Asset Sale Proceeds Account, and to cause the Asset Sale Proceeds Account to be sold, liquidated or otherwise disposed of; and

(ii) the proceeds of any financial assets and other assets credited to or held in the Asset Sale Proceeds Account and all cash proceeds received by the Collateral Agent in respect of any sale of, collection from or other realization upon all or any part of the Asset Sale Proceeds Account may, then or at any time thereafter, be applied (after payment of any amounts payable to the Depositary Agent pursuant to the terms hereof) in

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whole or in part by the Collateral Agent against all or any part of the Secured Obligations of the Company in accordance with Section 2.6 of the Collateral Agency Agreement.

No right, power or remedy herein conferred upon or reserved to the Collateral Agent is intended to be exclusive of any other right, power or remedy and every such right, power and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right, power and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder or otherwise shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Resort to any or all security now or hereafter held by the Collateral Agent may be taken concurrently or successively and in one or several consolidated or independent judicial actions or lawfully taken nonjudicial proceedings, or both.

ARTICLE IV

TERMINATION OF AGREEMENT

SECTION 4.01. Secured Obligations. When each of the Credit Agreement and the Indenture has expired or has otherwise terminated and all Secured Obligations have been paid in full, all commitments thereunder have terminated, all right, title and interest of the Collateral Agent in the Asset Sale Proceeds Account shall be released in accordance with the terms of the Collateral Agency Agreement. At such time, the Collateral Agent shall notify the Depositary Agent in writing using the form attached hereto as Exhibit A to, and upon such notification the Depositary Agent shall, pay any amounts (including Permitted Investments) then remaining in the applicable Asset Sale Proceeds Account to the Company. No termination of any interest of a Secured Party hereunder shall affect the rights of any other Secured Party hereunder.

SECTION 4.02. Rights and Obligations of Collateral Agent and Depositary Agent. The rights and powers granted herein to the Collateral Agent have been granted in order, among other things, to perfect its security interests in the Asset Sale Proceeds Account, are powers coupled with an interest, and will neither be affected by the bankruptcy of the Company nor by the lapse of time. Except as otherwise provided herein, the obligations of the Depositary Agent hereunder shall continue in effect until the security interests of the Collateral Agent in the Asset Sale Proceeds Account have been terminated pursuant to the terms of this Agreement, the other Term Loan Documents and Note Documents and the Collateral Agent has notified the Depositary Agent of such termination in writing.

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ARTICLE V

MISCELLANEOUS

SECTION 5.01. Notices. Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses:

If to the Collateral Agent:	Wilmington Trust Company Attention: Corporate Trust 1100 North Market Street Rodney Square North Wilmington, DE 19890 Phone: 302-636-6453 Fax:     302-636-4145
If to the Company or any Guarantor:	Secunda International Limited One Canal Street Dartmouth Nova Scotia B2Y 241 Canada Attention:                                                                                                           Phone:                                                                                                                  Fax:
If to the Depositary Agent:	Wilmington Trust Company Attention: Corporate Trust 1100 North Market Street Rodney Square North Wilmington, DE 19890 Phone: 302-636-6453 Fax:     302-636-4145

Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided that no notice to either the Collateral Agent or the Depositary Agent shall be effective until received by such agent. Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving of 30 days’ notice to the other parties in the manner set forth hereinabove.

SECTION 5.02. Benefit of Agreement. Nothing in this Agreement, expressed or implied, shall give or be construed to give to any Person other than the parties hereto, the holders of the Secured Obligations, any legal or equitable right, remedy or claim under this Agreement, or under any covenants and provisions of this Agreement, each such covenant and provision being for the sole benefit of the parties hereto and the Secured Parties.

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SECTION 5.03. No Waiver; Remedies Cumulative. No failure or delay on the part of the Collateral Agent or the Depositary Agent in the exercise of any power, right or privilege hereunder or under any other Transaction Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to the Collateral Agent and the Depositary Agent hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the Transaction Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

SECTION 5.04. Severability. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

SECTION 5.05. Amendments. This Agreement may not be amended, modified or supplemented, except in a writing signed by each of the parties hereto and in accordance with the Collateral Agency Agreement.

SECTION 5.06. Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

SECTION 5.07. Governing Law. This Agreement, including all matters of construction, validity, performance and the creation, validity, enforcement or priority of the lien of, and security interests created by, this Agreement in or upon the Asset Sale Proceeds Account shall be governed by the laws of the State of New York, without reference to conflicts of law (other than Section 5-1401 of the New York General Obligations Law), except as required by mandatory provisions of law and except to the extent that the validity or perfection of the lien and security interest hereunder, or remedies hereunder, in respect of the Asset Sale Proceeds Account are governed by the laws of a jurisdiction other than the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, the jurisdiction of the Depositary Agent as securities intermediary (under Section 8-110(e) of the UCC) and as bank (under Section 9-304(b) of the UCC) with respect to the Asset Sale Proceeds Account is the State of New York.

SECTION 5.08. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING HERETO OR ANY OTHER TERM LOAN DOCUMENT OR NOTE DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH

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PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY WITHOUT LIMITATION BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE OBLIGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 5.01 OR AS PROVIDED IN SECTION 7.13 OF THE COLLATERAL AGENCY AGREEMENT; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE OBLIGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES AGENTS AND SECURED PARTIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY OBLIGOR IN THE COURTS OF ANY OTHER JURISDICTION.

SECTION 5.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TERM LOAN DOCUMENTS OR NOTE DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS CONTROL AGREEMENT OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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SECTION 5.10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, provided that (a) the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (which consent may be withheld in its sole discretion) and (b) the Depositary Agent may only assign or otherwise transfer any of its rights or obligations hereunder in accordance with the terms of this Agreement.

SECTION 5.11. Entire Agreement. This Agreement and any agreement, document or instrument attached hereto or referred to herein among the parties hereto integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect of the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Agreement and any such agreement, document or instrument, the terms, conditions and provisions of this Agreement shall prevail.

SECTION 5.12. Survival of Agreements. The provisions regarding the payment of expenses and indemnification obligations, including Section 3.04(h) and the provisions set forth in Sections 3.04(j) and 5.14, and in the event that the Depositary Agent resigns in accordance with Section 3.04(j)(iii) or 3.04(j)(iv), Article 2 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the expiration or termination of the Credit Agreement or the Indenture, the payment in full of all Secured Obligations, the termination of any commitments thereunder, or the termination of this Agreement or any provision hereof.

SECTION 5.13. Further Information. The Depositary Agent shall promptly provide the Collateral Agent and the Company with any information reasonably requested by the Collateral Agent or the Company concerning balances in the Asset Sale Proceeds Account and payments from the Asset Sale Proceeds Account.

SECTION 5.14. Additional Depositary Agent Provisions. The Depositary Agent may engage or be interested in any financial or other transactions with any party to this Agreement and may act on, or as depositary, trustee or agent for, any committee or body of holders of obligations of such Persons as freely as if it were not the Depositary Agent hereunder. The Depositary Agent shall not be obligated to take any action which in its reasonable judgment would involve it in expense or liability unless it has been furnished with an indemnity satisfactory to it. The Depositary Agent shall act as a Bank that maintains a Depositary Account and a Securities Intermediary that maintains a security account, and shall not be responsible or liable in any manner for soliciting any funds or for the sufficiency, correctness, genuineness or validity of any funds or securities deposited with or held by it in any other capacity, except in the case of its gross negligence or willful misconduct. The Depositary Agent shall be fully protected in acting or refraining from acting upon any written notice, certificate, instruction, request or other paper or document, (whether in its original or facsimile form) as to the due execution thereof and the validity and effectiveness of the provisions thereof and as to the truth of any information contained therein, which the Depositary Agent in good faith believes to be genuine. The Depositary Agent shall not be liable for any error of judgment or for any act done or step

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taken or omitted except in the case of its gross negligence or willful misconduct. In the event of any dispute as to the construction or interpretation of any provision of this Agreement, the Depositary Agent may consult with counsel of its own selection and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken suffered or omitted by it hereunder in good faith and reliance thereon.

SECTION 5.15. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. The delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 5.16. Effectiveness. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by the Company, the Depositary Agent and the Collateral Agent of written or telephonic notification of such execution and authorization of delivery thereof.

SECTION 5.17. Collateral Agent’s Obligations. The performance by the Collateral Agent of its obligations under this Agreement and the exercise of its rights hereunder is subject in all respects to the provisions of the Collateral Agency Agreement. The Collateral Agent shall be entitled to all of the rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, intending to be legally bound, have caused this Depositary Agreement to be duly executed and delivered as of the date first above written.

SECUNDA INTERNATIONAL LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

3013563 NOVA SCOTIA LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE INTERNATIONAL INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE SERVICES LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA GLOBAL MARINE INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

[Control Agreement Signature Page]

JDM SHIPPING INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

INTERNATIONAL SHIPPING CORPORATION INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

SECUNDA GLOBAL INTERNATIONAL INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

NAVIS SHIPPING INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA ATLANTIC INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE ATLANTIC LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

OFFSHORE LOGISTICS INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

WILMINGTON TRUST COMPANY, as the Collateral Agent
By:	/s/ James J. McGinley
	Name: James J. McGinley
	Title: Authorized Signer

WILMINGTON TRUST COMPANY, as Depositary Agent
By:	/s/ James J. McGinley
	Name: James J. McGinley
	Title: Authorized Signer

EXHIBIT A

Date:                                 

Wilmington Trust Company

Attention: Corporate Trust

1100 North Market Street

Rodney Square North

Wilmington, DE 19890

Phone: 302-636-6453

Fax: 302-636-4145

Re: Control Agreement dated August     , 2004;

Asset Sale Proceeds Account

Ladies and Gentlemen:

Reference is made to the Control Agreement dated August     , 2004 (the “Agreement”; capitalized terms used herein shall have the meanings assigned thereto in the Agreement) among Secunda International Limited and certain of its subsidiaries, Wilmington Trust Company, as Collateral Agent (in such capacity the “Collateral Agent”), Wilmington Trust Company, as Depositary Agent (in such capacity the “Depositary Agent”). This letter constitutes an instruction under the Agreement.

You are hereby instructed and authorized to remit:		Written $ Amount US
		Numeric $ Amount	$
Via wire transfer to:	Account #:	_________________ ABA #_______________________________________________________________
	Account Name:
	Attention:
From the Asset Sale Proceeds Account #			Maintained at Wilmington Trust Company

The undersigned represents and warrants to Wilmington Trust Company that the undersigned is an authorized signatory of Collateral Agent.

COLLATERAL AGENT

By:

Name:

Title:

EX-10.5

Exhibit 10.5

SECUNDA INTERNATIONAL LIMITED

SENIOR SECURED FLOATING RATE NOTES DUE 2012

CREDIT AGREEMENT

CONTROL AGREEMENT

[COLLATERAL ACCOUNT]

Dated as of August 26, 2004

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		1
SECTION 1.01.	Definitions	1
ARTICLE II COLLATERAL ACCOUNT		2
SECTION 2.01.	Collateral Account	2
SECTION 2.02.	Permitted Investments	2
SECTION 2.03.	Monies Received by the Company	3
SECTION 2.04.	Books of Collateral Account; Statements	3
ARTICLE III SECURITY AND RELATED PROVISIONS; SECURITIES INTERMEDIARY		3
SECTION 3.01.	Securities Collateral Account	3
SECTION 3.02.	Certain Rights and Powers in Respect of Collateral Account and Funds	4
SECTION 3.03.	Security Interest	6
SECTION 3.04.	Duties and Certain Rights of Depositary Agent	7
SECTION 3.05.	Remedies	13
ARTICLE IV TERMINATION OF AGREEMENT		14
SECTION 4.01.	Secured Obligations	14
SECTION 4.02.	Rights and Obligations of Collateral Agent and Depositary Agent	14
ARTICLE V MISCELLANEOUS		14
SECTION 5.01.	Notices	14
SECTION 5.02.	Benefit of Agreement	15
SECTION 5.03.	No Waiver; Remedies Cumulative	15
SECTION 5.04.	Severability	16
SECTION 5.05.	Amendments	16
SECTION 5.06.	Headings	16
SECTION 5.07.	Governing Law	16
SECTION 5.08.	CONSENT TO JURISDICTION	16
SECTION 5.09.	WAIVER OF JURY TRIAL	17
SECTION 5.10.	Successors and Assigns	17

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SECTION 5.11.	Entire Agreement	17
SECTION 5.12.	Survival of Agreements	18
SECTION 5.13.	Further Information	18
SECTION 5.14.	Additional Depositary Agent Provisions	18
SECTION 5.15.	Counterparts	18
SECTION 5.16.	Effectiveness	19
SECTION 5.17.	Collateral Agent’s Obligations	19

EXHIBIT A: Remittance Instruction Form

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This CONTROL AGREEMENT [COLLATERAL ACCOUNT], dated as of August 26, 2004 (this “Agreement”), is entered into by and among Secunda International Limited (the “Company”) each of the undersigned Subsidiaries of the Company (each, a “Guarantor” and, collectively, the “Guarantors”), Wilmington Trust Company, as Depositary Agent (the “Depositary Agent”) and Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”) under the Collateral Agency Agreement dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among the Company and certain of its subsidiaries; Fortis Capital Corp. (the “Agent”), in its capacity as Agent for the benefit of the Lenders; Wells Fargo Bank, National Association (the “Trustee”) in its capacity as Trustee for the benefit of the Noteholders; and the Collateral Agent.

RECITALS:

Pursuant to the terms of the Initial Credit Agreement, each of the Lenders agreed to make the Facility available to the Company in accordance with and subject to the terms and conditions of the Initial Credit Agreement. As a condition to providing such Facility (as defined in the Credit Agreement), each of the Lenders has requested that each of the Company and the Guarantors enter into this Agreement and pledge the Collateral specified herein to the Collateral Agent, on behalf of the Agent and the Lenders. Pursuant to the terms of the Indenture, the Borrower issued the Notes. As a condition to the purchase of such Notes by the initial purchasers thereof, each of such initial purchasers has requested that each of the Company and the Guarantors enter into this Agreement and pledge the Collateral specified herein to the Collateral Agent, on behalf of the Trustee and the Noteholders.

The Initial Credit Agreement and Initial Purchase Agreement further require that such security interests in the Collateral identified herein be subject to the control of the Collateral Agent. This Agreement sets forth the terms on which the Collateral Agent has undertaken to accept, hold and enforce such security interests and all related rights, interests and powers as agent for, and for the benefit of, the present and future Lender and the holders of the Notes and other Secured Obligations.

The Depositary Agent has agreed to act as depositary agent and, with respect to any securities entitlements held by it pursuant to this Agreement, as securities intermediary pursuant to the terms of this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions. Capitalized terms used in this Agreement that are defined in Collateral Agency Agreement or the Indenture and not otherwise defined herein shall have the meanings set forth in the Collateral Agency Agreement or the Indenture, as applicable. All

capitalized terms used in this Agreement that are defined in Article 9 of the UCC, as in effect on the date of this Agreement in the State of New York, and not otherwise defined herein shall have the meanings therein set forth.

ARTICLE II

COLLATERAL ACCOUNT

SECTION 2.01. Collateral Account.

(a) Establishment of Collateral Account. The Company hereby directs the Depositary Agent to establish and maintain at its corporate trust office an account in the name of the Company (as the entitlement holder) entitled “Collateral Blocked Account Subject to the Security Interest of Wilmington Trust Company, as Collateral Agent” and numbered 067492-000 (the “Collateral Account”). The Collateral Account shall at all times be under the sole and exclusive control of the Collateral Agent.

(b) Deposit of Moneys into Collateral Account; Application of Proceeds in Collateral Account. The deposit of moneys into the Collateral Account and the application of such moneys shall be governed by the terms of Section 2.6 of the Collateral Agency Agreement and Section 3.05 hereof.

SECTION 2.02. Permitted Investments.

(a) Application of Permitted Investments. Permitted Investments, if any, shall be deemed at all times to be a part of the Collateral Account from which funds were withdrawn in order to acquire the Permitted Investment and shall be deemed to constitute funds on deposit in and credited to the Collateral Account, and the income or interest earned and gains realized in excess of losses suffered by the Collateral Account due to the investment of funds deposited therein shall be credited and retained in the Collateral Account, with net losses deducted from the Collateral Account, except as otherwise expressly provided by the terms hereof.

(b) Earnings. All earnings, if any, on funds in the Collateral Account maintained hereunder shall be credited to the Company for tax reporting purposes. The Depositary Agent shall provide to the Company a statement with respect to all interest earned on the Collateral Account as of the close of each calendar year for which income is earned on the Collateral Account. The Company shall provide the Depositary Agent with its taxpayer identification number, documented, to the extent necessary, by an appropriate executed Form W-9, upon execution of this Agreement. This form shall, to the extent necessary, be renewed as required by the Internal Revenue Service and provided to the Depositary Agent. The Depositary Agent shall be entitled to conclusively rely on an opinion of legal counsel (which may be counsel to the Company) in connection with the reporting of any earnings with respect hereto.

(c) Liquidation of Investments for Distributions. The Collateral Agent is hereby authorized to direct the Depositary Agent, in writing using the form attached hereto as

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Exhibit A, to liquidate or direct the liquidation of any Permitted Investment (without regard to maturity) in order to make or cause to be made any application required by Section 2.6 of the Collateral Agency Agreement. In furtherance, and not in limitation, of any other indemnity or limitation of liability with respect to the Collateral Agent contained herein or in the Credit Agreement or any Note Document, the Collateral Agent and the Depositary Agent shall in no way be liable for any losses suffered by the Company, including losses due to early liquidation or market risk, which are a result of the Collateral Agent’s exercise of its authority under this provision. The Depositary Agent shall invest and reinvest any cash in the Collateral Account in Temporary Cash Investments described in clause (2) of the definition of such term to the extent practicable. The Depositary Agent shall have no liability for the selection of investments, for any loss incurred in connection with any investment or any sale, liquidation or redemption thereof.

SECTION 2.03. Monies Received by the Company. In the event that the Company or any Guarantor receives any amounts required by the terms hereof and of Section 2.6 of the Collateral Agency Agreement to be deposited into the Collateral Account, the Company shall, or shall cause such Guarantor to, hold the same in precisely the form received in trust for and on behalf of the Collateral Agent (on behalf of the Agent and the Trustee for the benefit of the holders of the Secured Obligations), segregated from other funds of the Company or such Guarantor, and without any notice or demand whatsoever, shall promptly deliver the same to the Depositary Agent for application in accordance with the terms of this Agreement. No balance in, or financial asset or other asset credited to, the Collateral Account maintained hereunder shall be disbursed or transferred by the Depositary Agent, except in accordance with the provisions hereof.

SECTION 2.04. Books of Collateral Account; Statements. The Depositary Agent shall maintain books of account on a cash basis and record therein all deposits into and transfers to and from the Collateral Account and all investment transactions effected by the Depositary Agent pursuant to the terms hereof, and any such recordation shall constitute prima facie evidence of the information recorded.

ARTICLE III

SECURITY AND RELATED PROVISIONS; SECURITIES INTERMEDIARY

SECTION 3.01. Securities Collateral Account.

(a) Acknowledgement. The Depositary Agent hereby agrees and confirms that the Depositary Agent has established the Collateral Account as set forth and defined in this Agreement.

(b) Agreement. Each of the parties hereto agrees that:

(i) the Collateral Account will be maintained, to the extent that “financial assets” (within the meaning of Section 8-102(a)(9) of the UCC, and as so

3

defined the term financial asset is so used throughout this Agreement) are deposited therein or credited thereto, as a “securities account” (within the meaning of Section 8-501 of the UCC), and, to the extent that credit balances not constituting financial assets are credited thereto, as a “deposit account” (within the meaning of Section 9-102(a)(29) of the UCC);

(ii) the Company is an “entitlement holder” (within the meaning of Section 8-102(a)(7) of the UCC) in respect of any “financial assets” credited to the Collateral Account and is the Depositary Agent’s “customer” within the meaning of Section 4-104 of the UCC to the extent the account is a deposit account;

(iii) all property (including a security, security entitlement, investment property, instrument or obligation, share, participation, interest, cash or other property whatsoever) delivered to the Depositary Agent will be promptly credited by the Depositary Agent to the Collateral Account by an appropriate entry in its records in accordance with this Agreement and shall maintain all such property to the extent permitted by applicable law, as financial assets;

(iv) all financial assets and other assets in registered form or payable to or to order and credited to the Collateral Account shall be registered in the name of, payable to or to the order of, or specially endorsed to, the Depositary Agent or in blank, or credited to another securities account maintained in the name of the Depositary Agent, and in no case will any such financial asset or other asset be credited to the Collateral Account at any time, if, at such time, such asset is registered in the name of, payable to or to the order of, or endorsed to, the Collateral Agent (in such capacity) or the Company, except to the extent the foregoing have been subsequently endorsed by the Collateral Agent (in such capacity) or the Company to the Depositary Agent or in blank;

(v) the Depositary Agent is acting as “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) with respect to the Collateral Account and financial assets deposited therein or credited thereto and as a “bank” (within the meaning of Section 9-304 of the UCC) with respect to the Collateral Account and credit balances not constituting financial assets credited thereto; and

(vi) the Depositary Agent shall not change the name or account number of the Collateral Account without the prior consent of the Collateral Agent.

SECTION 3.02. Certain Rights and Powers in Respect of Collateral Account and Funds.

(a) Rights to Collateral Account. The Company shall not make, attempt to make or consent to the making of any withdrawal or transfer from the Collateral Account except in strict adherence to the terms and conditions of this Agreement. The Company shall not have any rights or powers with respect to the remittance of amounts credited to, the disbursement of credited amounts out of, or the investment of credited amounts in, the Collateral Account, except

4

to have amounts credited thereto applied in accordance with this Agreement; provided, however, that the parties hereto acknowledge and agree that the foregoing provisions of this Section 3.02(a) shall not be deemed to divest the Company of its interest as an “entitlement holder” under the UCC, as provided in this Agreement.

(b) Certain Powers of the Collateral Agent and the Depositary Agent. The Collateral Agent and, where appropriate, the Depositary Agent will have the right, but not the obligation, to (i) refuse any item for credit to the Collateral Account except as required by the terms of this Agreement and (ii) refuse to honor any request for transfer on the Collateral Account which is not consistent with this Agreement. If the Company fails to perform any agreement contained herein and such failure to perform is continuing for a period of 30 days, the Collateral Agent may itself (but shall have no obligation to) perform, or cause the performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by the Company upon written demand. The Company hereby irrevocably appoints the Collateral 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, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including:

(i) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral Account or the proceeds of financial assets or other assets held therein or credited thereto;

(ii) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection with clause (i) above;

(iii) to file any claims or take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any of the Collateral Account or the proceeds of financial assets or other assets held therein or credited thereto or otherwise to enforce the rights of the Collateral Agent with respect to the Collateral Account or the proceeds of financial assets or other assets held therein or credited thereto, provided that, with respect to this clause (iii), such rights shall be exercised in accordance with Section 3.06; and

(iv) to perform the affirmative obligations of the Company hereunder if, and to the extent that, the Company fails to perform such obligations and such failure to perform is continuing for a period of 30 days.

The Company hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section 3.02(b) is irrevocable and coupled with an interest. The powers conferred on the Collateral Agent hereunder are solely to protect its interest (on behalf of the applicable Secured Parties) in the Collateral Account and the proceeds of financial assets and other assets held therein or credited thereto and shall not impose any duty on the Collateral Agent to exercise any such powers. Except for the reasonable care of the Collateral Account in

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its possession or under its control (as the case may be) and the accounting for moneys actually received by it hereunder, neither the Depositary Agent nor the Collateral Agent shall have any duty as to the Collateral Account or the proceeds of financial assets or other assets held therein or credited thereto, or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to the Collateral Account or proceeds. Each of the Depositary Agent and the Collateral Agent is required to exercise reasonable care in the custody and preservation of the Collateral Account and the financial assets and other assets held therein or credited thereto in its possession or under its control (as the case may be); provided, however, that the Collateral Agent in any event shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral Account if it takes such action for that purpose as the Company reasonably requests in writing at times other than upon the occurrence and during the continuance of any Event of Default, but, notwithstanding the foregoing, the failure of the Collateral Agent to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care.

SECTION 3.03. Security Interest.

(a) Grant. To secure the timely payment in full in cash and performance in full of the Secured Obligations, the Company and each of the Guarantors does hereby assign, grant, hypothecate and pledge to, and grant a first priority security interest (subject to Permitted Liens) in favor of the Collateral Agent, on behalf of and for the sole and exclusive benefit of the Agent and the Trustee, on behalf of holders of the Secured Obligations, on all the estate, right, title, interest and security entitlements of the Company and each of the Guarantors, whether now owned or hereafter acquired, in the Collateral Account and in all cash, cash equivalents, instruments, investments, other securities, financial assets and other assets held therein or credited thereto and all proceeds thereof, including all rights of the Company and each of the Guarantors to receive moneys due in respect of such Collateral Account, all claims with respect to such Collateral Account, all income or gain earned in respect of the financial assets and other assets held in or credited to such Collateral Account, and all proceeds receivable or received when any financial asset or other asset held in or credited to an Collateral Account is collected, exchanged or otherwise disposed of, whether voluntarily or involuntarily (collectively, the “Collateral”).

(b) Acknowledgment. The Depositary Agent hereby acknowledges the first priority security interest in, and the pledge by the Company and the Guarantor to the Collateral Agent for the benefit of the holders of the Secured Obligations of all of the Company’s and the Guarantors’ assets held in or credited to the Collateral Account and all proceeds thereof, and will so indicate on the records maintained by the Depositary Agent with respect to the Collateral Account. The Depositary Agent agrees to hold all such assets for the purposes of, and on the terms set forth in, this Agreement.

(c) Other Liens; Adverse Claim.

(i) The Company and each of the Guarantors represents and warrants that:

(A) it has not assigned any of its rights under the Collateral Account;

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(B) it has not executed and is not aware of any effective financing statement, security agreement, control agreement or other instrument similar in effect covering all or any part of the Collateral Account except in favor of the Collateral Agent; and

(C) it has full power and authority to grant a security interest in and assign its right, title and interest in the Collateral Account and all financial assets and other assets held therein or credited thereto and all proceeds thereof hereunder.

(ii) The Company and each of the Guarantors represents, warrants and covenants that it has not granted, and shall not grant, to any Person other than the Collateral Agent any interest in Collateral Account and that it has kept, and shall keep, the Collateral Account free from all Liens other than Permitted Liens.

(iii) The Depositary Agent represents and warrants that it has no actual knowledge (without having conducted an independent investigation or inquiry) of any Lien on the Collateral Account other than the claims and interest of the parties hereto as provided herein. In the event that the Depositary Agent has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Collateral Account or any financial asset or other asset credited thereto, the Depositary Agent hereby agrees that such security interest shall be subordinate to the security interest of the Collateral Agent for the benefit of the holders of the Secured Obligations.

(iv) Each of the Collateral Agent and the Depositary Agent represents and warrants that it has no written notice (without having conducted an independent investigation or inquiry) of any adverse claim to the financial assets or other assets deposited in or credited to the Collateral Account or to security entitlements with respect thereto.

(v) The financial assets and other assets credited to the Collateral Account shall not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Collateral Agent.

SECTION 3.04. Duties and Certain Rights of Depositary Agent.

(a) General. The duties of the Depositary Agent shall be determined solely by the express provisions of this Agreement and by applicable law and no duties, implied covenants or obligations shall be read into this Agreement against the Depositary Agent as depositary agent, securities intermediary and bank.

(b) Acceptance of Appointment. The Depositary Agent hereby agrees to act as depositary agent and securities intermediary with respect to the Collateral Account and

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pursuant to this Agreement. The other parties hereto hereby acknowledge that the Depositary Agent shall act as depositary agent, securities intermediary and bank with respect to the Collateral Account and pursuant to this Agreement.

(c) Financial Assets Election. The Depositary Agent hereby agrees that each item of property (including a security, security entitlement, investment property, instrument or obligation, share or participation) credited to the Collateral Account shall be treated as a financial asset under Article 8 of the UCC and at any time deposited in the Collateral Account, and interest accrued or paid thereon.

(d) Negative Pledge. Subject to the terms of this Agreement, the Depositary Agent hereby agrees that it shall not grant any Lien in the financial assets and other assets that it is obligated to maintain under this Agreement.

(e) Entitlement Orders, Instructions. If at any time the Depositary Agent shall receive any entitlement order, instruction or any other order from the Collateral Agent directing the transfer or redemption of any financial asset or other asset relating to the Collateral Account, or directing the disposition of any funds in the Collateral Account, the Depositary Agent shall comply with such entitlement order, instruction or other order without further consent by the Company or any other Person. The parties hereto agree that until the Depositary Agent’s obligations under this Agreement shall terminate in accordance with the terms hereof, the Collateral Agent shall have control of each of the Company’s security entitlements with respect to the financial assets and other assets credited to the Collateral Account. The Depositary Agent hereby represents that it has not entered into, and agrees that, until the termination of this Agreement and the other Term Loan Documents or Note Documents in accordance their terms, it will not enter into, any agreement with any other Person in respect such Collateral Account pursuant to which it would agree to comply with entitlement orders made by such Person.

(f) Degree of Care. The Depositary Agent shall exercise due care in accordance with reasonable commercial standards in administering the Collateral Account, accounting for assets credited to the Collateral Account and performing its duties as a bank with respect to the Collateral Account, and to the extent that any “investment property” is on deposit, accounting for financial assets and other assets credited to the Collateral Account and performing its duties as securities intermediary with respect to the Collateral Account and, in each case, such assets deposited therein or credited thereto and the credit balances credited thereto under this Agreement.

(g) Action Upon Notices; Exercise of Judgment. The Depositary Agent shall be permitted to conclusively rely and act upon any notice, entitlement order, instruction, request, waiver, consent, receipt or other paper or document whether in its original or facsimile form reasonably believed by the Depositary Agent to be signed by the Collateral Agent or any other authorized Person. The Depositary Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith or for any mistake of fact or law or for anything which the Depositary Agent may do or refrain from doing in connection herewith,

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except its own gross negligence or willful misconduct. The Depositary Agent shall have duties only to the Collateral Agent (on behalf of the holders of the Secured Obligations).

(h) Indemnification and Liability. In consideration of the appointment of Depositary Agent, each of the Company and the Guarantors agree jointly and severally:

(i) to defend, indemnify, pay and hold harmless, the Depositary Agent and each of its Affiliates and each and all of the directors, officers, partners, trustees, employees, attorneys and agents thereof, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “Indemnified Person”) from and against any and all Indemnified Liabilities; and

(ii) to reimburse each Indemnified Person for all its expenses, including reasonable fees and expenses of counsel and court costs incurred by reason of any position or action taken by the Indemnified Person pursuant to this Agreement or in connection with any action brought to interpret or enforce the provisions of this Agreement or any part thereof;

except, with respect to each of clauses (i) and (ii), to the extent that any such claim, loss, liability, damage, cost or expense is determined by a court of competent jurisdiction in a final non-appealable judgment to have been caused by the Indemnified Person’s gross negligence or willful misconduct. The parties hereto hereby agree that no Indemnified Person shall be liable to such parties for any actions taken by any Indemnified Person pursuant to and in compliance with the terms hereof except in respect of any liability or expenses incurred by the Indemnified Person arising from its gross negligence or willful misconduct. Any Indemnified Person may consult with legal counsel of its selection in connection with this Agreement or the Indemnified Person’s duties hereunder, and the Indemnified Person shall incur no liability and shall be fully protected in acting in accordance with the opinion and advice of such counsel.

The obligations of the Company and the Guarantors under this Section shall survive the termination of this Agreement and the earlier resignation or removal of the Depositary Agent.

(i) Court Orders. The Depositary Agent is hereby authorized, in its exclusive discretion, to obey and comply with all writs, orders, judgments or decrees issued by any court or administrative agency affecting the Collateral Account or any financial asset credited to the Collateral Account. The Depositary Agent shall not be liable to any of the parties hereto, their successors or assigns by reason of the Depositary Agent’s compliance with such writs, orders, judgments or decrees, notwithstanding that such writ, order, judgment or decree may later be reversed, modified, set aside or vacated.

(j) Resignation and Termination.

The Depositary Agent may at any time resign by giving notice to each other party to this Agreement, such resignation to be effective upon the appointment of a successor Depositary Agent as provided below. The Collateral Agent may remove the Depositary Agent at any time by giving notice to each other party to this Agreement, such

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removal to be effective upon the appointment of a successor Depositary Agent as provided below.

In the event of any removal of the Depositary Agent pursuant to the terms of the preceding paragraph, a successor Depositary Agent, which shall be a bank or trust company organized under the laws of the United States of America or of the State of New York capable of acting as a “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) and a “bank” (within the meaning of Section 9-102(a)(8) of the UCC), having a corporate trust office in New York, New York and a capital and surplus of not less than $250,000,000, shall be appointed by the Collateral Agent, and such appointment shall not be unreasonably delayed. If a successor Depositary Agent shall not have been appointed and accepted its appointment as Depositary Agent within 45 days after such notice of removal of the Depositary Agent, the Depositary Agent or the Collateral Agent may apply to any court of competent jurisdiction at the expense of the Company to appoint a successor Depositary Agent to act until such time, if any, as a successor Depositary Agent shall have accepted its appointment as provided above. Any such successor Depositary Agent shall deliver to each party to this Agreement a written instrument accepting such appointment and thereupon:

(i) the Collateral Agent shall deliver an entitlement order, instruction or any other order to the predecessor Depositary Agent directing it to transfer to the successor Depositary Agent all balances deposited in and all financial assets and other assets credited to, the Collateral Account;

(ii) the successor Depositary Agent shall establish and maintain at its New York office the Collateral Account and deposit in and credit to the Collateral Account all financial assets and other assets from the Collateral Account maintained by the predecessor Depositary Agent transferred by the predecessor Depositary Agent to the successor Depositary Agent; and

(iii) the successor Depositary Agent shall succeed to all the rights and duties of the Depositary Agent under this Agreement and under applicable law.

In the event of any resignation of the Depositary Agent, a successor Depositary Agent, which shall be a bank or trust company organized under the laws of the United States of America or of any state thereof capable of acting as a “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) and a “bank” (within the meaning of Section 9-102(a)(8) of the UCC) and having a capital and surplus of not less than $250,000,000, shall be appointed by the Collateral Agent, and such agreement shall not be unreasonably withheld or delayed. Any such successor Depositary Agent shall deliver to each party to this Agreement a written instrument accepting such appointment and thereupon:

(i) the Collateral Agent shall deliver an entitlement order, instruction or any other order to the predecessor Depositary Agent directing it to transfer to the

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Collateral Agent all balances deposited in and all financial assets credited to, the Collateral Account;

(ii) the successor Depositary Agent shall establish and maintain at its New York office the Collateral Account and deposit in and credit to the Collateral Account all financial assets and other assets from the Collateral Account maintained by the predecessor Depositary Agent transferred by the predecessor Depositary Agent to the successor Depositary Agent; and

(iii) the successor Depositary Agent, unless the Collateral Agent is acting in such capacity, shall succeed to all the rights and duties of the Depositary Agent under this Agreement and under applicable law.

In the event that a successor Depositary Agent is not appointed within 30 Business Days after such notice of resignation of the Depositary Agent, the resigning Depositary Agent may, at the expense of the Company, petition a court of competent jurisdiction for appointment of successor.

In the event of the resignation or termination of the Depositary Agent, the Depositary Agent shall be entitled to its fees and expenses in accordance with the terms hereof up to the time such resignation becomes effective in accordance with this Section 3.04(j).

(k) General.

(i) No provision of this Agreement shall require the Depositary Agent to expend or risk its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(ii) All written directions and instructions (which may be provided by facsimile transmission) by the Collateral Agent to the Depositary Agent pursuant to this Agreement shall be executed by an authorized signatory of the Collateral Agent.

(iii) The Depositary Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, or any other evidence of indebtedness or other paper or document.

(iv) The Depositary Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement.

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(v) The Depositary Agent shall not be deemed to have notice of any Default or Event of Default unless written notice thereof is received by the Depositary Agent.

(vi) The Depositary Agent shall be under no obligation to notify the Collateral Agent of any Event of Default or any other event except for those events for which this Agreement specifically provides that such notice is required.

(vii) If any checks, drafts or other items deposited in the Collateral Account are returned or unpaid or otherwise dishonored, the Depositary Agent shall have the right to charge any and all such returned or dishonored items against the Collateral Account or to demand reimbursement therefor directly from the Company.

(viii) In no event shall the Depositary Agent be liable for losses or delays resulting from computer malfunction, interruption of communication facilities, labor difficulties, in each case, that are beyond the Depositary Agent’s reasonable control or other causes beyond the Depositary Agent’s reasonable control or for indirect, special or consequential damages (including, but not limited to, lost profits)

(ix) In the absence of bad faith on the part of the Depositary Agent, the Depositary Agent may conclusively rely, as to the truth of statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Depositary Agent which conform to the requirements of this Agreement or the Security Documents.

(x) Whenever in the administration of the provisions of this Agreement or the Security Documents the Depositary Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken, such matter may, in the absence of gross negligence or bad faith on the part of the Depositary Agent, be deemed to be conclusively proved and established by an Officer’s Certificate or an Opinion of Counsel, which shall be full warrant to the Depositary Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or the Security Documents upon the faith thereof.

(xi) The Depositary Agent shall be under no obligation to exercise any of the rights vested in it by this Agreement or the Security Documents or to enforce any remedy or realize upon any of the Collateral unless it has been offered security or indemnity satisfactory to it against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) that might be incurred by it in compliance with such request or direction.

(xii) The Depositary Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any

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misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

(xiii) Any corporation into which the Depositary Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Depositary Agent shall be a party, or any corporation succeeding to the business of the Depositary Agent shall be successor of the Depositary Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

SECTION 3.05. Remedies. If an Event of Default shall have occurred and be continuing:

(i) the Collateral Agent may exercise in respect of the Collateral Account in accordance with the terms of the Collateral Agency Agreement, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC at that time and consistent with the provisions of the Credit Agreement or the Note Documents, including the right to proceed to protect and enforce the rights vested in it by this Agreement, to sell, liquidate or otherwise dispose of the Collateral Account, and to cause the Collateral Account to be sold, liquidated or otherwise disposed of; and

(ii) the proceeds of any financial assets and other assets credited to or held in the Collateral Account and all cash proceeds received by the Collateral Agent in respect of any sale of, collection from or other realization upon all or any part of the Collateral Account may, then or at any time thereafter, be applied (after payment of any amounts payable to the Depositary Agent pursuant to the terms hereof) in whole or in part by the Collateral Agent against all or any part of the Secured Obligations of the Company in accordance with Section 2.6 of the Collateral Agency Agreement.

No right, power or remedy herein conferred upon or reserved to the Collateral Agent is intended to be exclusive of any other right, power or remedy and every such right, power and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right, power and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder or otherwise shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Resort to any or all security now or hereafter held by the Collateral Agent may be taken concurrently or successively and in one or several consolidated or independent judicial actions or lawfully taken nonjudicial proceedings, or both.

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ARTICLE IV

TERMINATION OF AGREEMENT

SECTION 4.01. Secured Obligations. When each of the Credit Agreement and the Indenture has expired or has otherwise terminated and all Secured Obligations have been paid in full, all commitments thereunder have terminated, all right, title and interest of the Collateral Agent in the Collateral Account shall be released in accordance with the terms of the Collateral Agency Agreement. At such time, the Collateral Agent shall notify the Depositary Agent in writing using the form attached hereto as Exhibit A to, and upon such notification the Depositary Agent shall, pay any amounts (including Permitted Investments) then remaining in the Collateral Account to the Company. No termination of any interest of a Secured Party hereunder shall affect the rights of any other Secured Party hereunder.

SECTION 4.02. Rights and Obligations of Collateral Agent and Depositary Agent. The rights and powers granted herein to the Collateral Agent have been granted in order, among other things, to perfect its security interests in the Collateral Account, are powers coupled with an interest, and will neither be affected by the bankruptcy of the Company nor by the lapse of time. Except as otherwise provided herein, the obligations of the Depositary Agent hereunder shall continue in effect until the security interests of the Collateral Agent in the Collateral Account have been terminated pursuant to the terms of this Agreement, the other Term Loan Documents and Note Documents and the Collateral Agent has notified the Depositary Agent of such termination in writing.

ARTICLE V

MISCELLANEOUS

SECTION 5.01. Notices. Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses:

                    If to the Collateral Agent: Wilmington Trust Company Attention: Corporate Trust 1100 North Market Street Rodney Square North Wilmington, DE 19890 Phone:  302-636-6453 Fax:      302-636-4145

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If to the Company or any Guarantor:	Secunda International Limited One Canal Street Dartmouth Nova Scotia B2Y 241 Canada Attention:                                                               Phone:                                                                     Fax:
If to the Depositary Agent:	Wilmington Trust Company Attention: Corporate Trust 1100 North Market Street Rodney Square North Wilmington, DE 19890 Phone:  302-636-6453 Fax:      302-636-4145

Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided that no notice to either the Collateral Agent or the Depositary Agent shall be effective until received by such agent. Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving of 30 days’ notice to the other parties in the manner set forth hereinabove.

SECTION 5.02. Benefit of Agreement. Nothing in this Agreement, expressed or implied, shall give or be construed to give to any Person other than the parties hereto, the holders of the Secured Obligations, any legal or equitable right, remedy or claim under this Agreement, or under any covenants and provisions of this Agreement, each such covenant and provision being for the sole benefit of the parties hereto and the Secured Parties.

SECTION 5.03. No Waiver; Remedies Cumulative. No failure or delay on the part of the Collateral Agent or the Depositary Agent in the exercise of any power, right or privilege hereunder or under any other Transaction Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to the Collateral Agent and the Depositary Agent hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the Transaction Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

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SECTION 5.04. Severability. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

SECTION 5.05. Amendments. This Agreement may not be amended, modified or supplemented, except in a writing signed by each of the parties hereto and in accordance with the Collateral Agency Agreement.

SECTION 5.06. Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

SECTION 5.07. Governing Law. This Agreement, including all matters of construction, validity, performance and the creation, validity, enforcement or priority of the lien of, and security interests created by, this Agreement in or upon the Collateral Account shall be governed by the laws of the State of New York, without reference to conflicts of law (other than Section 5-1401 of the New York General Obligations Law), except as required by mandatory provisions of law and except to the extent that the validity or perfection of the lien and security interest hereunder, or remedies hereunder, in respect of the Collateral Account are governed by the laws of a jurisdiction other than the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, the jurisdiction of the Depositary Agent as securities intermediary (under Section 8-110(e) of the UCC) and as bank (under Section 9-304(b) of the UCC) with respect to the Collateral Account is the State of New York.

SECTION 5.08. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING HERETO OR ANY OTHER TERM LOAN DOCUMENT OR NOTE DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY WITHOUT LIMITATION BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE OBLIGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 5.01 OR AS PROVIDED IN SECTION 7.13 OF THE COLLATERAL AGENCY AGREEMENT; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE OBLIGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES AGENTS AND SECURED PARTIES RETAIN THE RIGHT TO SERVE PROCESS IN

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ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY OBLIGOR IN THE COURTS OF ANY OTHER JURISDICTION.

SECTION 5.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TERM LOAN DOCUMENTS OR NOTE DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS CONTROL AGREEMENT OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

SECTION 5.10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, provided that (a) the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (which consent may be withheld in its sole discretion) and (b) the Depositary Agent may only assign or otherwise transfer any of its rights or obligations hereunder in accordance with the terms of this Agreement.

SECTION 5.11. Entire Agreement. This Agreement and any agreement, document or instrument attached hereto or referred to herein among the parties hereto integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect of the subject matter hereof. In the event of any conflict between the

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terms, conditions and provisions of this Agreement and any such agreement, document or instrument, the terms, conditions and provisions of this Agreement shall prevail.

SECTION 5.12. Survival of Agreements. The provisions regarding the payment of expenses and indemnification obligations, including Section 3.04(h) and the provisions set forth in Sections 3.04(j) and 5.14, and in the event that the Depositary Agent resigns in accordance with Section 3.04(j)(iii) or 3.04(j)(iv), Article 2 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the expiration or termination of the Credit Agreement or the Indenture, the payment in full of all Secured Obligations, the termination of any commitments thereunder, or the termination of this Agreement or any provision hereof.

SECTION 5.13. Further Information. The Depositary Agent shall promptly provide the Collateral Agent and the Company with any information reasonably requested by the Collateral Agent or the Company concerning balances in the Collateral Account and payments from the Collateral Account.

SECTION 5.14. Additional Depositary Agent Provisions. The Depositary Agent may engage or be interested in any financial or other transactions with any party to this Agreement and may act on, or as depositary, trustee or agent for, any committee or body of holders of obligations of such Persons as freely as if it were not the Depositary Agent hereunder. The Depositary Agent shall not be obligated to take any action which in its reasonable judgment would involve it in expense or liability unless it has been furnished with an indemnity satisfactory to it. The Depositary Agent shall act as a Bank that maintains a Depositary Account and a Securities Intermediary that maintains a security account, and shall not be responsible or liable in any manner for soliciting any funds or for the sufficiency, correctness, genuineness or validity of any funds or securities deposited with or held by it in any other capacity, except in the case of its gross negligence or willful misconduct. The Depositary Agent shall be fully protected in acting or refraining from acting upon any written notice, certificate, instruction, request or other paper or document, (whether in its original or facsimile form) as to the due execution thereof and the validity and effectiveness of the provisions thereof and as to the truth of any information contained therein, which the Depositary Agent in good faith believes to be genuine. The Depositary Agent shall not be liable for any error of judgment or for any act done or step taken or omitted except in the case of its gross negligence or willful misconduct. In the event of any dispute as to the construction or interpretation of any provision of this Agreement, the Depositary Agent may consult with counsel of its own selection and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken suffered or omitted by it hereunder in good faith and reliance thereon.

SECTION 5.15. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. The delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

18

SECTION 5.16. Effectiveness. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by the Company, the Depositary Agent and the Collateral Agent of written or telephonic notification of such execution and authorization of delivery thereof.

SECTION 5.17. Collateral Agent’s Obligations. The performance by the Collateral Agent of its obligations under this Agreement and the exercise of its rights hereunder is subject in all respects to the provisions of the Collateral Agency Agreement. The Collateral Agent shall be entitled to all of the rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, intending to be legally bound, have caused this Depositary Agreement to be duly executed and delivered as of the date first above written.

SECUNDA INTERNATIONAL LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

3013563 NOVA SCOTIA LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE INTERNATIONAL INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE SERVICES LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA GLOBAL MARINE INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

[Control Agreement Signature Page]

JDM SHIPPING INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

INTERNATIONAL SHIPPING CORPORATION INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

SECUNDA GLOBAL INTERNATIONAL INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person

NAVIS SHIPPING INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA ATLANTIC INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

SECUNDA MARINE ATLANTIC LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

OFFSHORE LOGISTICS INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

WILMINGTON TRUST COMPANY, as the Collateral Agent
By:	/s/ James J. McGinley
	Name: James J. McGinley
	Title: Authorized Person

WILMINGTON TRUST COMPANY, as Depositary Agent
By:	/s/ James J. McGinley
	Name: James J. McGinley
	Title: Authorized Person

EXHIBIT A

Date:                         

Wilmington Trust Company

Attention: Corporate Trust

1100 North Market Street

Rodney Square North

Wilmington, DE 19890

Phone: 302-636-6453

Fax: 302-636-4145

Re: Control Agreement dated August     , 2004;

Collateral Account

Ladies and Gentlemen:

Reference is made to the Control Agreement dated August     , 2004 (the “Agreement”; capitalized terms used herein shall have the meanings assigned thereto in the Agreement) among Secunda International Limited and certain of its subsidiaries, Wilmington Trust Company, as Collateral Agent (in such capacity the “Collateral Agent”), Wilmington Trust Company, as Depositary Agent (in such capacity the “Depositary Agent”). This letter constitutes an instruction under the Agreement.

You are hereby instructed and authorized to remit:		Written $ Amount US
		Numeric $ Amount	$
Via wire transfer to:	Account #:	ABA #
	Account Name:
	Attention:
From the Collateral Account #		Maintained at Wilmington Trust                                 Company

The undersigned represents and warrants to Wilmington Trust Company that the undersigned is an authorized signatory of Collateral Agent.

COLLATERAL AGENT

By:

Name:

Title:

EX-10.6

Exhibit 10.6

FORTIS CAPITAL CORP.,

AS AGENT FOR THE LENDERS

FORTIS CAPITAL CORP.,

AS ARRANGER AND BOOK RUNNER

SECUNDA INTERNATIONAL LIMITED

AS BORROWER

THE LENDERS FROM TIME TO TIME A PARTY HERETO

and

THE SUBSIDIARY GUARANTORS NAMED HEREIN

CREDIT AGREEMENT

Dated as of August 26, 2004

THACHER PROFFITT & WOOD

TABLE OF CONTENTS

ARTICLE I    DEFINITIONS		1
Section 1.01	Definitions	1
Section 1.02	Interpretation	1
Section 1.03	Accounting Terms	1
ARTICLE II    REVOLVING LOANS		2
Section 2.01	Revolving Loans	2
Section 2.02	Interest on the Revolving Loans	3
Section 2.03	Maximum Interest Rate	4
Section 2.04	Repayment of Revolving Loans	4
Section 2.05	Reserved	4
Section 2.06	Application of Payments	4
Section 2.07	Manner of Payments	5
Section 2.08	Register of Revolving Loan Notes; Lost and Mutilated Revolving Loan Notes	5
Section 2.09	Change in Circumstances	7
Section 2.10	Illegality	8
Section 2.11	Taxes	8
Section 2.12	Break Funding Payments	10
Section 2.13	Alternate Rate of Interest	10
Section 2.14	Fees	10
ARTICLE III    LETTERS OF CREDIT		11
Section 3.01	Issuing the Letters of Credit	11
Section 3.02	Drawings under Letters of Credit	11
Section 3.03	Reimbursement on Demand	11
Section 3.04	Obligations Absolute	12
Section 3.05	Action in Respect of the Letters of Credit	12
Section 3.06	Indemnification	13
Section 3.07	Deemed Disbursements.	13
Section 3.08	L/C Participations	14
Section 3.09	Lenders Not Required to Make Revolving Loans or Issue Letters of Credit	15
ARTICLE IV    REPRESENTATIONS, WARRANTIES AND AGREEMENTS		15
Section 4.01	Company Status	15
Section 4.02	Company Power and Authority	15
Section 4.03	No Violation	15
Section 4.04	Governmental Approvals	16
Section 4.05	Financial Statement; Financial Condition; Undisclosed Liabilities; etc	16
Section 4.06	Litigation	16
Section 4.07	No Default	16

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Section 4.08	Use of Proceeds; Margin Regulations	17
Section 4.09	Tax Returns and Payments	17
Section 4.10	Compliance with Pension Laws	17
Section 4.11	Ownership; Subsidiaries	17
Section 4.12	Compliance with Statutes, etc	17
Section 4.13	Investment Company Act	17
Section 4.14	Environmental Matters	18
Section 4.15	Labor Relations	18
Section 4.16	Patents, Licenses, Franchises and Formulas	19
Section 4.17	Security Interests	19
Section 4.18	Indebtedness	19
Section 4.19	Concerning the Vessels	19
Section 4.20	Citizenship	19
Section 4.21	Vessel Classification	20
Section 4.22	Insurance	20
ARTICLE V    CONDITIONS OF LENDING		20
Section 5.01	Conditions Precedent to Drawdown of the Initial Revolving Loan	20
Section 5.02	Further Conditions Precedent	23
ARTICLE VI    AFFIRMATIVE COVENANTS		23
Section 6.01	Existence	23
Section 6.02	Payment of Debts	23
Section 6.03	Accounts and Records	23
Section 6.04	Payment of Taxes and Claims	23
Section 6.05	Financing Statements	24
Section 6.06	Compliance with Law	24
Section 6.07	Financial Statements	24
Section 6.08	Access to Books and Records	25
Section 6.09	Notifications	25
Section 6.10	Reserved	25
Section 6.11	Environmental Matters	25
Section 6.12	Transaction Document Obligations	26
Section 6.13	Reserved	26
Section 6.14	Minimum EBITDA	26
Section 6.15	Minimum Current Ratio	27
Section 6.16	Maximum Funded Senior Debt Ratio	27
Section 6.17	Minimum Fair Market Value of the Designated Vessels; Age of Designated Vessels; Substitution of Vessels	27
Section 6.18	Ownership of Subsidiary Guarantors	28
Section 6.19	Reimbursement for Expenses	28
ARTICLE VII    NEGATIVE COVENANTS		29
Section 7.01	Indebtedness	29
Section 7.02	Liens	29
Section 7.03	Asset Sales	29
Section 7.04	Assignment of Insurances	30

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Section 7.05	Sale of Notes or Accounts Receivable	30
Section 7.06	Sale and Leaseback	30
Section 7.07	Restricted Payments	30
Section 7.08	Investments	30
Section 7.09	Restriction on Payment Restrictions Affecting Subsidiary Guarantors	30
Section 7.10	Change in Business	31
Section 7.11	Transactions with Affiliates	31
Section 7.12	Changes in Offices or Names	31
Section 7.13	Reserved	32
Section 7.14	Other Indebtedness	32
Section 7.15	Guarantees	32
Section 7.16	Consolidation, Merger and Sale of Assets	32
ARTICLE VIII    AGREEMENT TO GUARANTEE		33
Section 8.01	Obligations Guaranteed	33
Section 8.02	Subsidiary Guarantee Obligations of Subsidiary Guarantors Unconditional	34
Section 8.03	Waiver of Notice	36
Section 8.04	Other Security	36
Section 8.05	No Set-off by the Subsidiary Guarantors	37
Section 8.06	Joint and Several Obligation	37
Section 8.07	Limitation on Liability	38
Section 8.08	Release of Subsidiary Guarantors	39
ARTICLE IX    EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS		39
Section 9.01	Events of Default	39
Section 9.02	Waiver of Default	41
Section 9.03	Remedies	41
Section 9.04	Rights of Set-Off	42
Section 9.05	Rights and Remedies Cumulative	42
Section 9.06	Specific Remedies	42
Section 9.07	Restoration of Rights and Remedies	43
Section 9.08	Cure of Defaults	43
ARTICLE X    RELATIONSHIP AMONG THE LENDERS		44
Section 10.01	Appointment and Authorization	44
Section 10.02	Delegation of Duties	44
Section 10.03	Liability of Agent	44
Section 10.04	Reliance by the Agent	45
Section 10.05	Notice of Default	45
Section 10.06	Credit Decision	45
Section 10.07	Indemnification	46
Section 10.08	Agent in Individual Capacity	46
Section 10.09	Successor Agent	47
Section 10.10	Collateral Matters	47
Section 10.11	Assignments, Participations, Etc	47
Section 10.12	Collateral Agency Agreement	50

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ARTICLE XI    MISCELLANEOUS		50
Section 11.01	Notices	50
Section 11.02	Survival of Agreement	51
Section 11.03	Governing Law	51
Section 11.04	Modification of Agreement	51
Section 11.05	Costs and Expenses	52
Section 11.06	Waivers	52
Section 11.07	Indemnification	53
Section 11.08	Separability of Provisions; Obligations Several	53
Section 11.09	Counterparts	54
Section 11.10	Entire Agreement	54
Section 11.11	Headings	54
Section 11.12	Successors and Assigns	54
Section 11.13	Gender and Number	54
Section 11.14	Exhibits	54
Section 11.15	Notification of Addresses, Lending Offices, Etc	54
Section 11.16	No Third Parties Benefited	54
Section 11.17	Reserved	55
Section 11.18	Reserved	55
Section 11.19	Waiver of Punitive Damages	55
Section 11.20	Consent to Jurisdiction	55
Section 11.21	Waiver of Jury Trial	55
Section 11.22	Currency Indemnity	55

APPENDIX A	Definitions
EXHIBITS
EXHIBIT A	Revolving Loan Note
EXHIBIT B	Drawdown Request
EXHIBIT C	Issuance Request
EXHIBIT D	Subsidiary Guarantee Agreement
EXHIBIT E	Assignment and Acceptance
EXHIBIT F	Collateral Agency Agreement
SCHEDULES
SCHEDULE 2.01	Commitments
SCHEDULE 4.07	Certain Disclosures
SCHEDULE 4.11	Subsidiary Ownership/Equity Interests
SCHEDULE 4.18	Indebtedness
SCHEDULE 4.19	Vessel Information/Noncompliance with Maritime Rules and Regulations
SCHEDULE 7.01	Other Indebtedness

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CREDIT AGREEMENT (this “Agreement”) dated as of August 26, 2004, among Secunda International Limited, a corporation existing under the laws of Nova Scotia, Canada, as borrower (the “Borrower”), each Subsidiary Guarantor, Fortis Capital Corp. (“Fortis”) and each other financial institution which may hereafter execute and deliver an Assignment and Acceptance with respect to this Agreement pursuant to Section 10.11 (any one individually, a “Lender”, and collectively, the “Lenders”), Fortis, as administrative agent on behalf of the Lenders (when acting in its capacity as administrative agent under this Agreement or under any other Transaction Document, herein referred to, together with any successor administrative agent, as the “Agent”), and as book runner and as an arranger (when acting in such capacity, an “Arranger”).

PRELIMINARY STATEMENT

The Borrower desires to obtain Revolving Loans and Letters of Credit from the Lenders in an aggregate amount, together with all Reimbursement Obligations, up to the Aggregate Loan Commitment to refinance the Existing Indebtedness, to post Letters of Credit for use in the Borrower’s ordinary course of business, to acquire vessels and make Vessel-Related Upgrades and to have access to funds for working capital for general corporate purposes. In order to induce the Lenders to make the Revolving Loans to the Borrower and issue Letters of Credit on behalf of the Borrower and its Subsidiaries, the Subsidiary Guarantors have agreed to jointly and severally guarantee the Obligations of the Borrower hereunder. The Borrower and the Subsidiary Guarantors have agreed to grant to the Collateral Agent on behalf of the Lenders and the Indenture Trustee, a first priority, perfected security interest in the Collateral to secure such Obligations. The Lenders are willing to make the Revolving Loans and issue Letters of Credit in an amount, together with all Reimbursement Obligations, up to the Aggregate Loan Commitment pursuant to this Agreement and upon the terms and subject to the conditions set forth herein and in reliance on the representations, warranties and covenants set forth herein.

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

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used herein, but not otherwise defined herein shall have the meanings assigned to such terms in Appendix A hereto.

Section 1.02 Interpretation. Words importing the singular number only shall include the plural and vice versa. Words importing persons shall include companies, firms, corporations, partnerships, unincorporated associations and their respective successors and assigns.

Section 1.03 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all financial statements submitted pursuant to this Agreement shall be prepared in accordance with, and all financial data submitted pursuant hereto shall be derived from financial statements prepared in accordance with, GAAP.

ARTICLE II

REVOLVING LOANS

Section 2.01 Revolving Loans.

(a) During the Revolving Period, the Lenders shall make the Revolving Loans available to the Borrower and issue Letters of Credit for the purpose of (i) refinancing the Existing Indebtedness, (ii) posting Letters of Credit for use in the Borrower’s and its Subsidiaries’ ordinary course of business, (iii) acquiring vessels and Vessel-Related Upgrades and (iv) obtaining working capital for general corporate uses; provided, however, during the Revolving Period the Borrower shall not be entitled to use more than 50% of the Aggregate Loan Commitment for general corporate purposes.

(b) Each of the Lenders, relying upon each of the representations, warranties and covenants of the Borrower set forth herein, hereby severally and not jointly agrees with the Borrower that, upon satisfaction or waiver of the conditions precedent set forth in Article V and subject to and upon the terms of this Agreement, it will on each Drawdown Date, make the Revolving Loans available to the Borrower through the Agent in an amount not to exceed its Commitment. The maximum aggregate amount of all Revolving Loans, together with all L/C Obligations, which may be outstanding at any time under this Agreement is the Aggregate Loan Commitment, as may be reduced pursuant to Section 2.01(f). Each Revolving Loan shall be drawn in a Minimum Borrowing Amount.

(c) The maximum number of Revolving Loans that may be outstanding at any time under this Agreement shall be eight (8). Subject to the remaining provisions of this Section 2.01, during the Revolving Period, the Borrower may obtain Revolving Loans, repay or prepay such Revolving Loans, and reborrow such Revolving Loans.

(d) The Borrower shall, (i) in the case of a CAD LIBOR Loan, at least four (4) Business Days prior to a Drawdown Date and (ii) in the case of a Base Rate Loan, at least one (1) Business Day prior to a Drawdown Date, deliver a Drawdown Request to the Agent in writing addressed to the Agent. Each Drawdown Request shall be effective on receipt by the Agent and shall be irrevocable

(e) Each Drawdown Request shall be deemed to constitute a warranty by the Borrower (i) that the representations and warranties stated in Article IV are true and correct on and as of the date of such Drawdown Request and will be true and correct on and as of the relevant Drawdown Date as if made on such date (unless, in each case, such representation and warranty is expressly limited to an earlier date or is no longer true and correct solely as a result of transactions not prohibited by the Transaction Documents), (ii) that after giving effect to the borrowing made pursuant to such Drawdown Request, the sum of the outstanding L/C Obligations and the aggregate principal amount of all outstanding Revolving Loans will not exceed the Aggregate Loan Commitment and (iii) that no Default or Event of Default has occurred and is continuing. The Revolving Loans made by the Lenders to the Borrower shall be evidenced by one or more promissory notes substantially in the form of Exhibit A attached hereto (each, as the same from time to time may be amended, restated, modified, supplemented or renewed, a “Revolving Loan Note”), duly executed by the Borrower and dated as of the Closing Date or such later date on which an Assignment and Acceptance has been executed.

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Each Lender (or the Agent if only one Revolving Loan Note shall be issued to the Agent for the benefit of the Lenders) shall, and is hereby authorized by the Borrower to, record on the schedule attached to its Revolving Loan Note (or on a continuation of such schedule attached to such Revolving Loan Note) and make a part thereof, an appropriate notation evidencing the date and amount of each such Lender’s Pro Rata Share of such Revolving Loan; provided that the failure to make any such notation shall not affect the obligation of the Borrower to repay the Revolving Loans.

(f) During the Revolving Period, the Borrower shall have the right, at any time and from time to time, to require, without penalty, a permanent reduction of the Aggregate Loan Commitment so long as the Agent receives five (5) Business Days prior written notice of such request and so long as such reduction does not cause the Aggregate Loan Commitment to be less than the Facility Utilization Amount. Each such partial permanent reduction shall be in an amount at least equal to CAD 3,000,000 and integral multiples of CAD 1,000,000 thereafter.

Section 2.02 Interest on the Revolving Loans.

(a) Interest on the outstanding principal amount of each (i) CAD LIBOR Loan shall be payable on each Interest Payment Date, unless the Interest Period exceeds three months in which case it shall be paid quarterly, at a rate per annum equal to the Interest Rate for the related Interest Period from the date when made and continued until paid in full and (ii) Base Rate Loan shall be payable on the last Business Day of each calendar quarter at a rate per annum equal to the daily average Interest Rate for the period from the date when made and continued until paid in full.

(b) The duration of each Interest Period for each CAD LIBOR Loan shall be one month; provided, however, that (i) the Borrower may direct that the duration of an Interest Period for a CAD LIBOR Loan be three or six months (or any other period agreed to by the Agent and all of the Lenders) by giving the Agent written notice thereof at least three (3) Business Days before the first day of such Interest Period. The Agent shall deliver a copy of such notice on the same day to the Lenders.

(c) Each Revolving Loan will bear interest at the Overdue Rate on any part of the principal amount and interest and other amounts due thereunder not paid when due (whether at stated maturity, by acceleration or otherwise), for any period during which the same will be overdue.

(d) The Borrower may elect to extend the Interest Period of all or any part of any borrowing of any CAD LIBOR Loan beyond the expiration of the then current Interest Period relating thereto by giving a Drawdown Request (which shall be irrevocable) to the Agent of such election, specifying the CAD LIBOR Loan or CAD LIBOR Loans or portion thereof for which the Interest Period is to be so extended and the Interest Period therefor.

(e) The Interest Period for all or part of any CAD LIBOR Loans may be extended as provided herein, provided that the CAD LIBOR Loans or part thereof in respect of which the Interest Period is so extended shall not be less than CAD 100,000 and shall be in an integral multiples of CAD 100,000.

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(f) For the purpose of disclosure pursuant to the Interest Act (Canada), the yearly rate of interest to which any rate of interest payable under this Agreement, which is to be calculated on any basis other than a full calendar year, is equivalent, may be determined by multiplying such rate by a fraction, the numerator of which is the actual number of days in the calendar year in which the period for which interest at such rate is payable ends and the denominator of which is the number of days of such other basis.

Section 2.03 Maximum Interest Rate. In no event shall the interest charged with respect to a Revolving Loan exceed the maximum amount permitted by applicable law. If at any time the Interest Rate exceeds the maximum rate permitted by applicable law, the rate of interest to accrue pursuant to this Agreement and such Revolving Loan shall be limited to the maximum rate permitted by applicable law, but, to the extent permitted by applicable law, any subsequent reductions in CAD LIBOR shall not reduce the interest to accrue on such Revolving Loan below the maximum amount permitted by applicable law until the total amount of interest accrued on such Revolving Loan equals the amount of interest that would have accrued if a varying rate per annum equal to the Interest Rate had at all times been in effect. If the total amount of interest paid or accrued on a Revolving Loan under the foregoing provisions is less than the total amount of interest that would have accrued if the Interest Rate had at all times been in effect, the Borrower, agrees to pay to the Lenders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by applicable law had at all times been in effect or (ii) the amount of interest that would have accrued if the Interest Rate had at all times been in effect, and (b) the amount of interest accrued in accordance with the other provisions of this Agreement.

Section 2.04 Repayment of Revolving Loans.

(a) Commencing on the First Principal Payment Date and continuing on each Principal Payment Date thereafter, the Borrower shall make principal payments in an amount equal to the Principal Payment Amount. The unpaid principal amount of the Revolving Loans shall be due and payable on the Maturity Date, together with all unpaid interest, fees, expenses, costs and other amounts payable by the Borrower pursuant to the terms of the Transaction Documents.

(b) On any Business Day after the expiration of the Revolving Period, upon at least five (5) Business Days prior written notice to the Agent, the Borrower may prepay the Revolving Loans, in whole or in part in minimum amounts of CAD 3,000,000 and CAD 1,000,000 multiples thereof, together with an amount equal to the Interest Differential and all interest and fees accrued and unpaid thereon. After the end of the Revolving Period, any amounts prepaid by the Borrower may not be re-borrowed by the Borrower. All prepayments of a Revolving Loan in part shall be applied by the Agent to the respective Revolving Note in inverse order of maturity. Each notice of prepayment in whole or in part shall be effective on receipt by the Agent and shall be irrevocable.

Section 2.05 Reserved.

Section 2.06 Application of Payments. Unless otherwise expressly provided herein, each payment made on a Revolving Loan Note will be applied, first to the payment of all fees and expenses due to the Agent or the Lenders under this Agreement, second, to the payment of

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interest on overdue interest at the Overdue Rate on such Revolving Loan Note to the date of such payment, third, to the payment of interest on overdue principal at the Overdue Rate on such Revolving Loan Note to the date of such payment, fourth, to the payment of accrued interest on such Revolving Loan Note to the date of such payment, fifth, to the payment of principal past due on such Revolving Loan Note and sixth, to the payment of the principal amount of such Revolving Loan Note then due.

Section 2.07 Manner of Payments.

(a) All payments made pursuant to this Agreement shall be made without set-off or counterclaim but subject to deduction for, and net of, applicable Excluded Taxes and shall be made in immediately available funds by the Borrower to the Agent for the account of the Lenders in accordance with their Pro Rata Share. All such payments shall be made to the Agent, prior to 11:00 a.m., New York City time, on the date due to the Agent’s account at Royal Bank of Canada, Toronto, Ontario, M5J 1J1, Swift Code: MEES NL 2A, For Credit To: Fortis Bank (AKA) Meespierson Amsterdam Account of Fortis Capital Corp., Account # 21 39 22 959, Reference: Secunda, or at such place in New York as may be designated by the Agent to the Borrower in writing. Any payments received after 11:00 a.m., New York City time, shall be deemed received on the next Business Day. The Agent shall promptly remit to each Lender, in the same type of funds as payment was received, each Lender’s Pro Rata Share according to its respective interest of all such payments received by the Agent for the account of such Lender. Subject to the definition of “Interest Period”, whenever any payment to be made hereunder shall be stated to be due on a date other than a Business Day, such payment may be made on the next succeeding Business Day with the same effect as if made on the due date but interest shall continue to accrue until the date of payment.

(b) If any Lender or other holder of a Revolving Loan Note shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset, set-off, banker’s lien, counterclaim or otherwise) on account of principal of or interest on any Revolving Loan Note or Reimbursement Obligation in excess of its Pro Rata Share of payments and other recoveries obtained by all Lenders or other holders, such Lender or other holder shall purchase from the other Lenders or holders such participation in the Revolving Loan Notes and Reimbursement Obligations held by them as shall be necessary to cause such purchasing Lender or other holder to share the excess payment or other recovery with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing holder, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. The Borrower agrees that the Lender so purchasing a participation from the other Lenders under this Section 2.07(b) may exercise all its rights of payment, including the right of set-off, with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of the participation.

Section 2.08 Register of Revolving Loan Notes; Lost and Mutilated Revolving Loan Notes.

(a) The Agent will maintain at its principal office a register (the “Register”) for the purpose of registering the Revolving Loan Notes and registering transfers and exchanges of Revolving Loan Notes pursuant to Section 10.11. The Person in whose name a Revolving

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Loan Note is registered in accordance with this Section 2.08(a) shall for all purposes hereof be deemed a Lender. Upon surrender for transfer or exchange pursuant to Section 10.11 of any Revolving Loan Note at the principal office of the Agent, the Borrower will execute and deliver (in the case of any such transfer, in the name of the designated transferee or transferees or, in the case of an exchange, in the name of the holder thereof), one or more new Revolving Loan Notes of the same series of a like aggregate principal amount. The Agent will not be required to register or exchange any surrendered Revolving Loan Note as above provided during the 15-day period preceding any Interest Payment Date. Every Revolving Loan Note presented or surrendered for transfer or exchange pursuant to an Assignment and Acceptance will be duly endorsed (or be accompanied by a written instrument of transfer pursuant to an Assignment and Acceptance) and duly executed by the holder thereof or his attorney duly authorized in writing. Any such Revolving Loan Note issued in a registration of transfer or exchange will carry the same rights to interest (unpaid and to accrue) carried by the Revolving Loan Note so transferred or exchanged so that there will not be any loss or gain of interest on such Revolving Loan Note. The Agent shall mark on each new Revolving Loan Note (i) the dates to which principal and interest have been paid on the old Revolving Loan Note and (ii) all payments and prepayments of principal previously made on such old Revolving Loan Note which are allocable to such new Revolving Loan Note.

(b) If any Revolving Loan Note has been mutilated, lost, stolen or destroyed, the Borrower will execute and deliver a new Revolving Loan Note of like date and tenor in exchange and substitution for, and upon cancellation of, such mutilated Revolving Loan Note or in lieu of and in substitution for such lost, stolen or destroyed Revolving Loan Note; provided, however, that the Borrower will so execute and deliver such new Revolving Loan Note only if the applicable holder has paid the reasonable expenses and charges of the Borrower in connection therewith and, in the case of a lost, stolen or destroyed Revolving Loan Note, (i) has filed with the Borrower evidence satisfactory to it that such Revolving Loan Note was lost, stolen or destroyed, and (ii) has furnished to the Borrower indemnity satisfactory to it. Neither the Borrower nor the Agent shall have any obligation to indemnify or reimburse such holder for any losses, expenses or charges that it may suffer or incur in connection with the previous sentence, such costs to be borne entirely by such holder. If any such Revolving Loan Note has matured or is otherwise subject to payment, instead of issuing a new Revolving Loan Note the Borrower may pay the same without surrender thereof. Any Revolving Loan Note issued in exchange for a lost, stolen, destroyed or mutilated Revolving Loan Note will carry the same rights to interest (unpaid and to accrue) carried by the Revolving Loan Note lost, stolen, destroyed or mutilated so that there will not be any loss or gain of interest on such Revolving Loan Note. The Agent shall mark on each new Revolving Loan Note (A) the dates to which interest has been paid on the old Revolving Loan Note and (B) all payments and prepayments of principal previously made on such old Revolving Loan Note which are allocable to such new Revolving Loan Note.

(c) Upon the issuance of a new Revolving Loan Note or Revolving Loan Notes pursuant to Section 2.08(a), 2.08(b) or 10.11 hereof, each of the Borrower and the Agent may require from the party requesting such new Revolving Loan Note or Revolving Loan Notes payment of a sum to reimburse the Borrower for, or to provide funds for, the payment of any tax or other governmental charge in connection therewith or any charges and expenses connected with such tax or other governmental charge paid or payable by the Borrower.

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Section 2.09 Change in Circumstances.

(a) If after the date of this Agreement, there shall have occurred the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency, that a Lender has reasonably determined has or would have the effect of reducing the rate of return on the Lender’s capital or the capital of its direct or indirect holding company as a consequence of its obligations hereunder to a level below that which such Lender or its holding company would have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or its holding company’s policies with respect to capital adequacy) by an amount which such Lender, in its reasonable judgment, shall deem material, then from time to time, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or its holding company for such reduction. A certificate as to such amounts submitted to the Borrower by such Lender shall be conclusive and binding for such purposes, absent manifest error; provided, however, that the determination of such additional amount or amounts shall be made in good faith in a manner generally consistent with such Lender’s standard practice applicable to the similar loans and similarly situated borrowers.

(b) If after the date of this Agreement, there shall have occurred the adoption of any applicable law, rule or regulation regarding the maintenance of reserves, special deposits, compulsory loans or similar requirements against assets held by, deposits or liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Interest Rate hereunder, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency, that a Lender has reasonably determined has or would have the effect of increasing the cost to such Lender or such Lender’s direct or indirect holding company, by an amount which such Lender deems to be material, with respect to issuing the Letters of Credit or making, continuing or maintaining the CAD LIBOR Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amount or amounts as will compensate such Lender or holding company for such increased cost or reduced amount receivable. A certificate as to such amounts submitted to the Borrower by such Lender shall be conclusive and binding for such purposes, absent manifest error; provided, however, that the determination of such additional amount or amounts shall be made in good faith in a manner generally consistent with such Lender’s standard practice.

(c) Upon the occurrence of any event giving rise to the operation of this Section 2.09, the affected Lender shall use reasonable efforts to designate or cause its direct or indirect holding company to designate a different lending office for funding or booking its obligations hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to this Section 2.09 in the future, (ii) would not subject such Lender to any economic, legal or regulatory disadvantage or to any unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by such Lender in connection with such designation or assignment. If the affected Lender does not so designate or

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cause its direct or indirect holding company to designate a different lending office, then the Borrower shall have the right to require such Lender to assign its interest to an Eligible Assignee pursuant to Section 10.11 hereof.

(d) The Borrower shall not be required to compensate a Lender pursuant to this Section 2.09 for any amounts pursuant to the immediately preceding clauses (a) and/or (b) of this Section 2.09 to the extent that such amounts were incurred more than 180 days prior to the date that such Lender notifies the Borrower of the circumstances giving rise to such amounts and of such Lender’s intention to claim compensation therefor; provided, however, that, if the circumstances giving rise to such amounts are retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

Section 2.10 Illegality. Notwithstanding any other provision herein, if any Change in Law shall make it unlawful for any Lender to make or maintain any portion of a Revolving Loan, such Lender shall so notify the Borrower and the Agent in writing and interest on such portion of such Revolving Loan shall thereafter be calculated by reference to the Base Rate. If any such change in the method of calculating interest is required, pursuant to such change in law, to be made on a day which is not the last day of an Interest Period, the Borrower shall pay to such Lender the amounts, if any, as may be required pursuant to Section 2.12.

Section 2.11 Taxes.

(a) Any and all payments on account of any Obligations shall be made free and clear of and without deduction for any Taxes (other than, and excluding, Excluded Taxes); provided, however, that if the Borrower shall be required to withhold or deduct any Indemnified Taxes from any such payment, the amount of such payment shall be increased as necessary so that after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section 2.11) the Lenders receive an amount equal to the sum that they would have received had no such deductions been made. The Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, without duplication of amounts paid in respect of Other Taxes pursuant to Section 2.11(a), the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify each Indemnified Party (provided, however, that for purposes of this Section 2.11, Indemnified Party shall mean the Agent, any Issuing Lender, the Arranger, each Lender, and any Affiliate of any of the foregoing) within twenty (20) days after written demand therefor for the full amount of any Indemnified Taxes payable with respect to or on account of any Obligation (including Taxes imposed on or attributable to amounts payable under this Section 2.11) and any penalties, interest, and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. In the case of Indemnified Taxes paid by an Indemnified Party, a certificate as to the amount of such payment or liability delivered to the Borrower by such Indemnified Party shall be conclusive absent manifest error. The agreements in this Section shall survive the termination of this Agreement

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and the Transaction Documents and the payment of all amounts payable hereunder and thereunder.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to such Indemnified Party the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory, to such Indemnified Party.

(e) Each Indemnified Party, if entitled to an exemption from or reduction of an Indemnified Tax or Other Tax with respect to payments made under any of the Transaction Documents shall (to the extent legally able to do so) deliver to the Borrower or complete and file with the correct Governmental Authority such properly completed and executed forms, certificates, documents, information or other documentation prescribed by applicable law or treaty as reasonably requested by the Borrower on the later of (i) 30 days after such request is made and the applicable forms, certificates, documents, or other documentation is or are provided to such Lender or (ii) 30 days before prescribed by applicable law as will permit such payments to be made without withholding or with an exemption from or reduction of Indemnified Taxes or Other Taxes. The Borrower shall not be obligated to pay any Indemnified Party any amounts pursuant to this Section 2.11 in respect of Taxes that would not have been imposed but for failure of the Indemnified Party to comply with this section 2.11(e).

(f) Notwithstanding the foregoing, if the Borrower incurs any liability pursuant to this Section 2.11 to make a payment (or pay an increased amount) to a Lender with respect to a Revolving Loan or otherwise, the Lender in respect of whose Pro Rata Share of such Revolving Loan such liability arises shall use reasonable efforts to designate a different lending office for funding or booking its obligations hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to this Section 2.11 in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by such Lender in connection with such designation or assignment.

(g) If a Lender, the Issuing Lender, the Agent or the Arranger shall become aware that it is entitled to claim a refund from a Governmental Authority in respect of Taxes or Other Taxes as to which it has been paid or indemnified by the Borrower, or with respect to which the Borrower has paid additional amounts, pursuant to this Section 2.11, it shall promptly notify the Borrower of the availability of such claim and shall, within thirty (30) days after receipt of a request by the Borrower, make a claim to such Governmental Authority for such refund at the Borrower’s expense. If a Lender, the Issuing Lender, the Agent or the Arranger receives a refund in respect of any Taxes or Other Taxes with respect to which the Borrower has paid additional amounts pursuant to this Section 2.11, it shall within thirty (30) days from the date of such receipt pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.11 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Lender, the Issuing Lender, the Agent or the Arranger and without interest (other than

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interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that the Borrower, upon the request of such Lender, the Issuing Lender, the Agent or the Arranger, agrees to repay the amount paid over to the Borrower (plus penalties, interest or other charges payable to the relevant Governmental Authority) to such Lender, the Issuing Lender, the Agent or the Arranger in the event such Lender, the Issuing Lender, the Agent or the Arranger is required to repay such refund to such Governmental Authority.

(h) The Borrower shall not be required to indemnify a Lender pursuant to this Section for any Taxes to the extent that such amounts were incurred more than 180 days prior to the date that such Lender notifies the Borrower of the circumstances giving rise to such amounts and of such Lender’s intention to claim indemnification therefore; provided, however, that, if the circumstances giving rise to such amounts are retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

Section 2.12 Break Funding Payments. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any Interest Differential which such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of a Revolving Loan after the Borrower has given irrevocable notice requesting such borrowing or (b) a prepayment of a Revolving Loan on any day other than the last day of the Interest Period applicable to such Revolving Loan. The provisions of this Section 2.12 shall survive the termination of the Transaction Documents and the payment of all amounts payable hereunder and thereunder. A certificate as to any additional amounts payable pursuant to this Section 2.12 submitted by such Lender to the Borrower shall (i) set forth the basis for requesting such amounts and (ii) be conclusive absent manifest error.

Section 2.13 Alternate Rate of Interest. If prior to the commencement of any Interest Period: (a) the Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining Adjusted CAD LIBOR for such Interest Period, or (b) the Agent is advised by any Lender that the Adjusted CAD LIBOR for such Interest Period will not adequately and fairly reflect the cost to such Lender of making or maintaining such Lender’s Pro Rata Share portion of the Revolving Loans during such Interest Period, then the Agent shall promptly give notice thereof to the Borrower, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such notice no longer exist, the interest on the Revolving Loans shall not be calculated by reference to CAD LIBOR and shall be calculated by reference to the Base Rate (in the case of clause (a) above) or such Lender’s Pro Rata Share portion of the Revolving Loans (in the case of clause (b) above) shall not be calculated by reference to CAD LIBOR and shall be calculated by reference to the Base Rate.

Section 2.14 Fees.

(a) The Borrower shall pay the Commitment Fee to the Agent on each Commitment Fee Payment Date.

(b) In consideration of the Arranger implementing and syndicating the Facility, the Borrower shall pay the Arrangement Fee to the Arranger on the Closing Date.

(c) The Borrower shall pay (i) to the Agent for pro rata distribution to each L/C Participant (based upon each L/C Participant’s Pro Rata Share) a fee in respect of each

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Letter of Credit (the “Letter of Credit Fee”) for the period from and including the date of issuance of such Letter of Credit through the Termination Date of such Letter of Credit, computed at a rate equal to the Applicable Margin for Revolving Loans maintained as Revolving Loans per annum on the average daily Stated Amount of such Letter of Credit, (ii) to the Issuing Lender in respect of each Letter of Credit issued by it, a fee (the “Fronting Fee”), for the period from and including the date of issuance of such Letter of Credit through the Termination Date of such Letter of Credit, computed at a rate equal to 0.125% per annum on the daily Stated Amount of such Letter of Credit and (iii) to the Issuing Lender the Issuing Fee for each Letter of Credit issued hereunder payable on the date such Letter of Credit is to be issued. Accrued Letter of Credit and Fronting Fees shall be due and payable quarterly in arrears on each Commitment Fee Payment Date and on the first date on and after the Revolving Period on which no Letters of Credit remain outstanding. In addition, the Borrower shall pay, upon each payment under, issuance of, or amendment to, any Letter of Credit, such amount as shall at the time of such event be the administrative charge which the Issuing Lender is generally imposing in connection with such occurrence with respect to letters of credit.

ARTICLE III

LETTERS OF CREDIT

Section 3.01 Issuing the Letters of Credit. The Borrower shall, at least five (5) Business Days prior to an Issuance Date, deliver an Issuance Request to the Agent in writing addressed to the Agent. Each Issuance Request shall be effective on receipt by the Agent and shall be irrevocable. On the Issuance Date and upon fulfillment of the applicable conditions set forth in Article V, the Letter of Credit shall be issued. Notwithstanding anything to the contrary contained herein, the Issuing Lender shall have no obligation to issue a Letter of Credit if (a) a Default or Event of Default has occurred and is continuing or (b) after giving effect to the issuance of such Letter of Credit, the sum of the outstanding L/C Obligations and the aggregate principal amount of all outstanding Revolving Loans would exceed the Aggregate Loan Commitment. Each Letter of Credit shall be in an amount not less than the Minimum Borrowing Amount and no Letter of Credit shall have a Termination Date later than thirty (30) days prior to the termination of the Revolving Period.

Section 3.02 Drawings under Letters of Credit. In the event that there occurs one or more drawings under any Letter of Credit, and such drawing(s) are made in accordance with the terms and conditions thereof, the Issuing Lender shall, on the Business Day on which such drawing is required to be honored pursuant to such Letter of Credit (the “Disbursement Date”), make available to the beneficiary under such Letter of Credit, in same day funds, the amount of such drawing.

Section 3.03 Reimbursement on Demand. On (or promptly after) each Disbursement Date, the Issuing Lender shall notify the Borrower of a drawing under a Letter of Credit, and the Issuing Lender will promptly thereafter furnish to the Borrower copies of (i) each draft drawn under such Letter of Credit and (ii) each certificate and each other document (if any) accompanying any such draft. The Borrower will, as reimbursement for such payment by the Issuing Lender either (i) immediately and unconditionally repay the amount drawn under a Letter of Credit to the Issuing Lender, or (ii) if the Borrower does not effect such repayment by 5:00 p.m., New York time, on the Disbursement Date, the amount drawn under such Letter of Credit

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shall automatically convert into a Revolving Loan (without regard to the minimum prior notice provisions of Section 2.01(d) and the Minimum Borrowing Amount) on the following day, provided that if a Default or an Event of Default shall have occurred and be continuing as of the Disbursement Date, the amount drawn under such Letter of Credit shall not convert into a Revolving Loan and, instead, shall be immediately due and payable hereunder, as of the Disbursement Date.

Section 3.04 Obligations Absolute. The obligation of the Borrower to reimburse the Issuing Lender with respect to each payment under each Letter of Credit (its “Reimbursement Obligation”) shall, to the extent permitted by applicable New York law, be unconditional and irrevocable, and shall to such extent be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, to the extent permitted by applicable New York law, the following circumstances:

(a) any lack of validity or enforceability of any Letter of Credit or any related contract, instrument or other agreement in support of which the Letter of Credit has been issued (collectively referred to as a “Contract”);

(b) any amendment or waiver of or any consent to departure from all or any of the Letters of Credit or any Contract in each case agreed to by the Borrower;

(c) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against any beneficiary of any Letter of Credit (or any Person for whom any such beneficiary may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or in such Letter of Credit or any Contract or any unrelated transaction;

(d) any certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent or insufficient in any respect or any statement therein being untrue or inaccurate in any respect due to circumstances not known to the Issuing Lender; or

(e) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing;

provided, however, that such circumstances do not result directly from the gross negligence, willful misconduct or bad faith of the Issuing Lender.

Section 3.05 Action in Respect of the Letters of Credit. To the extent permitted by applicable New York law, the Borrower assumes all risks of the acts or omissions of the beneficiaries under the Letters of Credit with respect to their use of the Letters of Credit. Neither the Issuing Lender nor any of its officers, employees, agents or directors shall be liable or responsible for:

(a) the use which may be made of any Letter of Credit;

(b) the form, sufficiency, accuracy or genuineness of certificates or other documents delivered under or in connection with any Letter of Credit, even if such certificates or other documents should prove to be insufficient, fraudulent or forged;

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(c) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, email, cable, telex, telecopy, telegraph, wireless or otherwise; or

(d) errors in translation or for errors in interpretation of technical terms;

provided, however, that such circumstances do not result directly from the gross negligence, willful misconduct or bad faith of the Issuing Lender. The Issuing Lender may accept certificates or other documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. In furtherance and not in limitation of the foregoing provisions, the Borrower agrees that, except for the Issuing Lender’s gross negligence, willful misconduct or bad faith, and except as otherwise required by applicable New York law, any action, inaction or omission taken or suffered by the Issuing Lender in good faith in connection with any Letter of Credit, or the relative drafts, certificates or other documents, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.

Section 3.06 Indemnification. The Borrower hereby agrees to protect, indemnify, defend and hold harmless the Issuing Lender and each of its directors, officers, employees and agents and any person who controls any of them within the meaning of the federal, state and foreign securities laws from and against any and all liabilities, losses, obligations, damages, penalties, expenses or costs of any kind or nature and from any suits, judgments, claims or demands (including in respect of or for reasonable and customary attorney costs and other fees and other disbursements of counsel for and consultants of such party in connection with any investigative, administrative or judicial proceeding, whether or not such party shall be designated a party thereto) (collectively, the “Indemnified Liabilities”) incurred by reason of or in connection with the execution and delivery of, or payment or failure to make payment under, any Letter of Credit; provided, however, that the Borrower shall not be required to indemnify pursuant to this Section 3.06 for any Indemnified Liabilities to the extent caused by (i) the Issuing Lender’s gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit comply with the terms of such Letter of Credit or (ii) the Issuing Lender’s gross negligence or willful misconduct in failing to make lawful payment under any Letter of Credit after presentation to it by a beneficiary of a draft and certificate strictly complying with the terms and conditions of such Letter of Credit. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

Section 3.07 Deemed Disbursements. Upon the occurrence and during the continuation of an Event of Default and upon notification by the Issuing Lender to the Borrower of its obligations under this Section 3.07, the Borrower shall be immediately obligated to deliver to the Issuing Lender cash collateral for the Issuing Lender’s unfunded obligations under all issued and outstanding Letters of Credit in an amount equal to the then aggregate amount of each Letter of Credit which is undrawn and available under all issued and outstanding Letters of Credit. Any amounts so payable by the Borrower pursuant to this Section 3.07 shall be deposited in immediately available funds in an interest bearing collateral account maintained with the Issuing

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Lender, and held as collateral security for the Reimbursement Obligations. At such time when all Events of Default shall have been cured or waived, the Issuing Lender shall return to the Borrower all amounts then on deposit with the Issuing Lender pursuant to this Section 3.07 which have not been applied towards satisfaction of all amounts owing to the Issuing Lender.

Section 3.08 L/C Participations.

(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Pro Rata Share in the Issuing Lender’s obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand, at the Issuing Lender’s address for notices specified herein, an amount equal to such L/C Participant’s Pro Rata Share of the amount of such draft, or any part thereof, which is not so reimbursed and whether or not such amount is converted into a Revolving Loan pursuant to Section 3.03.

(b) Upon becoming aware of any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.08(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each L/C Participant in writing of the amount and due date of such required payment and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due date. If any such amount is paid to the Issuing Lender after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the Issuing Lender during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapsed during such period and the denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing under this Section 3.08(b) shall be conclusive in the absence of manifest error. With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.08(b), if the L/C Participants receive written notice that any such payment is due (A) prior to 1:00 p.m. (New York time) on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. (New York time) on any Business Day, such payment shall be due on the following Business Day.

(c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant such L/C Participant’s Pro Rata Share of such payment in accordance with this Section 3.08, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of interest on account thereof, the Issuing Lender will promptly distribute to such L/C Participant its Pro Rata Share thereof; provided, however, that in the event any such

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payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

Section 3.09 Lenders Not Required to Make Revolving Loans or Issue Letters of Credit. Notwithstanding anything to the contrary contained in this Agreement, neither the Lenders nor the Issuing Lender shall be obligated in any manner to make any Revolving Loan or issue any Letter of Credit in a principal amount which, together with the aggregate principal amount of all Revolving Loans outstanding and all L/C Obligations outstanding on the proposed date of making such Revolving Loan or issuance of a Letter of Credit, would exceed the Aggregate Loan Commitment.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND AGREEMENTS

In order to induce the Agent, the Arranger and the Lenders to enter into this Agreement and to induce the Lenders to make the Facility available, each Credit Party hereby represents and warrants to the Agent, the Arranger and the Lenders (which representations and warranties shall survive the execution and delivery of this Agreement, the Revolving Loan Notes and the other Transaction Documents and the drawdown of the Revolving Loans and the issuances of any Letters of Credit hereunder) that:

Section 4.01 Company Status. Each Credit Party (i) is duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) has the organizational power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualifications, except where the failure to be so qualified is not reasonably expected to result in a Material Adverse Change.

Section 4.02 Company Power and Authority. Each Credit Party has the requisite power and authority to execute, deliver and perform the terms and provisions of each of the Transaction Documents to which it is party and has taken all necessary action to authorize the execution, delivery and performance by it of each of such Transaction Documents. Each Credit Party has duly executed and delivered each of the Transaction Documents to which it is party, and each of such Transaction Documents constitutes the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, except to the extent that such enforceability may be limited by any applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditor’s rights and by general principles of equity.

Section 4.03 No Violation. Neither the execution, delivery or performance by any Credit Party of the Transaction Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality, other than any such contravention that could not reasonably be expected to result in a Material Adverse Change, (ii) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security

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Documents) upon any of the material properties or assets of the Borrower or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the Certificate of Incorporation or other formation documents of any Credit Party.

Section 4.04 Governmental Approvals. Except for filings and recordings in connection with the Security Documents (which filings shall be made on or before the Closing Date with respect to the Collateral delivered as of the Closing Date) and except as have been obtained and are in effect, no order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (i) the consummation and performance by any Credit Party of any Transaction Document to which it is a party or (ii) the legality, validity, binding effect or enforceability of any Transaction Document.

Section 4.05 Financial Statement; Financial Condition; Undisclosed Liabilities; etc. Except as otherwise disclosed in writing to the Lenders on or prior to the date hereof, the financial information regarding the Borrower and its Subsidiaries for the years ended June 30, 2003, June 30, 2002 and June 30, 2001 and for the nine months ended March 31, 2004 and March 31, 2003 delivered to the Agent has been prepared in accordance with GAAP and accurately and fairly present in all material respects the financial condition of the parties covered thereby as of the respective dates thereof and the results of the operations thereof for the period or respective periods covered by such financial statements. Since the date of the most recent of such statements, there has been no Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole) and there are no contingent obligations, liabilities for Taxes or other outstanding financial obligations which are material in the aggregate except as disclosed in such statements. No written information, exhibit, schedule or report prepared by or on behalf of the Borrower and furnished to the Agent or the Lenders by or at the direction of the Borrower or any of its Subsidiaries in connection with the negotiation of this Agreement contained any material misstatement of fact or, when such statement is considered with all other written statements furnished to the Agent or the Lenders in that connection, omitted to state a material fact or any fact necessary to make the statement contained therein not misleading.

Section 4.06 Litigation. There is no action, suit, proceeding or investigation pending or, to the best knowledge of each Credit Party, threatened, before any court or administrative agency that might: (i) adversely affect its ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party, (ii) reasonably be expected to result in any judgment or liability which would result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole) or (iii) adversely affect the enforceability of this Agreement, any Revolving Loan Note or any other Transaction Document.

Section 4.07 No Default. Except as disclosed in Schedule 4.07, no Credit Party is in default under any agreement by which it is bound, or is in default in respect of any financial commitment or obligation.

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Section 4.08 Use of Proceeds; Margin Regulations.

(a) The proceeds received with respect to the Revolving Loans shall be used by the Borrower for (i) refinancing a portion of the Existing Indebtedness, (ii) posting Letters of Credit for use in the Borrower’s and its Subsidiaries’ ordinary course of business, (iii) acquiring vessels and Vessel-Related Upgrades and (iv) obtaining working capital for general corporate uses; provided, however, during the Revolving Period, the Borrower shall not be entitled to use more than 50% of the Aggregate Loan Commitment for general corporate purposes.

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

Section 4.09 Tax Returns and Payments. The Borrower and each of its Subsidiaries has filed or caused to be filed, with the appropriate taxing authority, all federal, state, provincial and other returns, statements, forms and reports for Taxes (the “Returns”) required to be filed by or with respect to the income, properties or operations of the Borrower and/or its Subsidiaries except where the failure to so file or cause to be filed could not reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole). The Borrower and its Subsidiaries have paid all Taxes payable by them as shown on the Returns other than (a) Taxes which are not delinquent, (b) Taxes contested in good faith for which adequate reserves have been established in accordance with GAAP and (c) foreign Taxes as to which the failure to pay such foreign Taxes could not reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

Section 4.10 Compliance with Pension Laws. The Borrower and its Subsidiaries have no Registered Pension Plans and have not, and have not had in the five (5) years prior to the Closing Date, maintained or contributed to, any Plan.

Section 4.11 Ownership; Subsidiaries. Schedule 4.11 correctly (a) lists each of the Borrower’s direct and indirect Subsidiaries as of the Closing Date and (b) describes the Equity Interests owned by the Borrower (directly or indirectly) in each of its Subsidiaries as of the Closing Date.

Section 4.12 Compliance with Statutes, etc. Each Credit Party is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its businesses and the ownership of its property, except such noncompliances as could not (in the event such noncompliance were asserted by any Person through appropriate action), individually or in the aggregate, reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

Section 4.13 Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an “investment company” or a company controlled by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

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Section 4.14 Environmental Matters.

(a) To the actual knowledge of each Responsible Officer of each Credit Party who executes any Transaction Document on behalf of any Credit Party and without independent investigation: (i) the Borrower and each of its Subsidiaries have complied with, and on the date of each Credit Event will be in compliance with, all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws, except if such failure results in or could reasonably be expected to result in penalties or fines to the Borrower and its Subsidiaries in an aggregate amount at any time outstanding less than CAD 5,000,000, (ii) there are no pending or threatened Environmental Claims against the Borrower or any of its Subsidiaries or any Real Property owned or operated by the Borrower or any of its Subsidiaries in excess of CAD 5,000,000, (iii) there are no facts, circumstances, conditions or occurrences with respect to the business or operations of the Borrower or any Real Property at any time owned or operated by the Borrower or any of its Subsidiaries that could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property in excess of CAD 5,000,000, or to cause any such currently owned Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability of such Real Property by the Borrower or any of its Subsidiaries under any applicable Environmental Law if such restriction could reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

(b) To the actual knowledge of each Responsible Officer of each Credit Party who executes any Transaction Document on behalf of any Credit Party and without independent investigation: (i) Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, any Real Property owned or operated by the Borrower or any of its Subsidiaries where such generation, use, treatment or storage has violated or could reasonably be expected to violate any Environmental Law in such a manner so as to cause the representation in Section 4.14(a) to be untrue; or (ii) Hazardous Materials have not at any time been Released on or from any Real Property owned or operated by the Borrower or any of its Subsidiaries where such Release has violated or could reasonably be expected to violate any applicable Environmental Law in such a manner so as to cause the representation in Section 4.14(a) to be untrue.

Section 4.15 Labor Relations. (a) Except as could not reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole), neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice; (b) except (in each case) as could not reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole), there is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries, or, to the knowledge of the Borrower, threatened against any of them, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries and (iii) no union representation proceeding pending with respect to the employees of the Borrower or any of its

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Subsidiaries; and (c) except (in each case) as could not reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole), hours worked by and payments made to any employee of the Borrower, any Subsidiary Guarantor or any ERISA Affiliate have not been in violation of any applicable law dealing with such matters.

Section 4.16 Patents, Licenses, Franchises and Formulas. Each Credit Party owns or is licensed to use all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, or rights with respect to the foregoing, and has obtained assignments of all material leases and other rights of whatever nature, reasonably necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to obtain or so own which, as the case may be, has had, or could reasonably be expected to result in, a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

Section 4.17 Security Interests. On and after the Closing Date, each of the Security Documents creates (or after the execution and delivery thereof, will create), as security for the Obligations purported to be secured thereby, a valid and enforceable, first priority security interest in and Lien on all of the Collateral subject thereto, which shall be perfected upon the taking of possession thereof or completion of filings with respect thereto, in each case as required by this Agreement or the other Transaction Documents, subject to no other Liens (except for Permitted Encumbrances with respect to the Vessels, Permitted Pledge Liens with respect to the Equity Interests and Customary Permitted Liens with respect to other assets). All filings or recordings required to perfect the security interests created under any Security Document have been made substantially contemporaneously with the execution and delivery thereof.

Section 4.18 Indebtedness. Schedule 4.18 sets forth a true and complete list of all (i) Indebtedness for borrowed money of each Credit Party outstanding as of the Closing Date after giving effect to the application of the proceeds of the Senior Secured Notes and (ii) agreements existing on the Closing Date pursuant to which each Credit Party is entitled to incur Indebtedness, in each case showing the aggregate principal amount thereof and the name of the borrower and any other entity which directly or indirectly guaranteed such debt.

Section 4.19 Concerning the Vessels. The name, official number, registered owner, and jurisdiction of registration of each Vessel is set forth on Schedule 4.19 hereto. Each Vessel, other than those in lay-up as permitted pursuant to the terms and conditions of the Deed of Covenants, is operated in compliance with all applicable maritime rules and regulations except where the failure to so comply could not reasonably be expected to result in a Material Adverse Change. Each Vessel, other than those in lay-up as permitted pursuant to the terms and conditions of the Deed of Covenants, is maintained and operated in compliance with all applicable Environmental Laws except where the failure to so comply could not reasonably be expected to result in a Material Adverse Change.

Section 4.20 Citizenship. The Borrower and each Subsidiary Guarantor which owns or operates one or more Vessels is qualified to own and operate such Vessels under the laws of the relevant Approved Jurisdiction.

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Section 4.21 Vessel Classification. Each Vessel is classified in the classification and rating for vessels of the same age and type with the respective classification society set forth in Schedule 4.19, free of notices, recommendations or qualifications which negatively affect such classification other than as disclosed to the Agent.

Section 4.22 Insurance. Each of the Credit Parties has insured its properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses.

ARTICLE V

CONDITIONS OF LENDING

Section 5.01 Conditions Precedent to Drawdown of the Initial Revolving Loan. The obligation of the Lenders to make the Initial Revolving Loan available to the Borrower and/or issue a Letter of Credit (if the Initial Revolving Loan has not yet been made) under this Agreement shall be expressly subject to the following conditions precedent:

(a) The Agent shall have received the following documents in form and substance satisfactory to the Arranger and its legal advisor:

(i) copies, certified as true and complete by an officer of each Credit Party, of the resolutions of such Credit Party evidencing approval of this Agreement, the Revolving Loan Notes and the other Transaction Documents to which it is a party and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals and authorizations;

(ii) copies, certified as true and complete by an officer of each Credit Party, of all documents evidencing any other necessary action (including actions by such parties thereto other than the Credit Parties as may be required by the Arranger), approvals or consents with respect to the Transaction Documents;

(iii) copies, certified as true and complete by an officer of each Credit Party of the certificate of incorporation and bylaws or the certificate of formation and operating agreement (or equivalent instruments) thereof;

(iv) certificate of the Secretary of the Borrower certifying that it legally and beneficially owns, directly or indirectly, all of the issued and outstanding Equity Interests of each of the Subsidiary Guarantors and that, except for Permitted Pledge Liens, such Equity Interests are free and clear of any liens, claims, pledges or other encumbrances whatsoever;

(v) certificate of the Secretary of each Pledgor certifying that it legally and beneficially owns, directly or indirectly, all of the issued and outstanding Equity Interests of each of the Subsidiary Guarantors that owns a Vessel or that charters or arranges the charter of a Vessel and that, except for Permitted Pledge Liens, such Equity Interests are free and clear of any liens, claims, pledges or other encumbrances whatsoever; and

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(vi) certificates of the jurisdiction of formation of each Credit Party as to the good standing thereof.

(b) The Agent shall have received evidence satisfactory to the Arranger and its legal advisor that:

(i) the Vessels are in the sole and absolute ownership of the relevant Subsidiary Guarantor as set forth in Schedule 4.19 and duly registered in such Subsidiary Guarantor’s name under the flag of an Approved Jurisdiction, unencumbered, save and except for the Mortgage recorded against it and Permitted Encumbrances;

(ii) the Mortgage on each Vessel has been properly recorded under the laws of the jurisdiction of registration and constitutes a first priority mortgage, subject only to Permitted Encumbrances;

(iii) the Vessels are classed in the classification and rating for vessels of the same age and type with the respective classification society as set forth in Schedule 4.19, free of notices, recommendations or qualifications which negatively affect such classification except as disclosed to the Agent;

(iv) except as otherwise disclosed to the Agent in writing, each Vessel is operationally seaworthy and in every way fit for its intended service;

(v) all necessary governmental or regulatory approvals, licenses and authorities which are necessary to the operation of each Vessel have been obtained from each applicable Governmental Authority;

(vi) each Vessel is insured in accordance with the provisions of the related Mortgage or Deed of Covenants and the requirements thereof in respect of such insurances have been complied with; and

(vii) a desk appraisal from Barry Rogliano Salles conducted in accordance with customary industry standards and practice with respect to each Vessel dated no earlier than March 31, 2004, satisfactory in form and scope to the Agent.

(c) The Borrower shall have duly executed and delivered this Agreement, the Revolving Loan Notes, the Pledge Agreement and the other Transaction Documents to which it is a Party and each Subsidiary Guarantor shall have duly executed and delivered this Agreement, the Security Documents and the other Transaction Documents to which it is a party.

(d) The Borrower and the Subsidiary Guarantors shall have delivered the Equity Interests subject to the Pledge Agreement to the Collateral Agent, together with executed and undated stock powers with respect thereto, and all other documents required to be delivered pursuant to the Pledge Agreement.

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(e) The Borrower and the Subsidiary Guarantors shall each have duly executed and delivered the following documents:

(i) the Mortgage with respect to its Vessel(s);

(ii) an Assignment of Earnings and Insurances with respect to its Vessel(s); and

(iii) an Assignment of Charter, together with the executed Letter of Acknowledgement of Assignment of Contract from the related Charterer relating to the following Vessels: Panuke Sea, Burin Sea, Mariner Sea, Thebaud Sea, Venture Sea and Trinity Sea.

(f) The Agent shall have received a certificate from the Borrower to the effect that the Borrower is in compliance with the conditions precedent set forth in this Article V.

(g) The Agent shall have received a certificate from a Responsible Officer of the Borrower that neither the Borrower nor any of its Subsidiaries is subject to any Environmental Claim in excess of CAD 5,000,000.

(h) The Agent shall have received payment in full of all fees and expenses due on or before the Closing Date to the Agent, the Arranger and the Lenders under Section 2.14, or such fees and expenses shall be paid directly from the Initial Revolving Loan proceeds on the Closing Date.

(i) The Agent shall have received evidence satisfactory to the Agent and to its legal advisor that, save for the Liens created by the Mortgages and the Assignments of Earnings and Insurances, there are no Liens, charges or encumbrances of any kind whatsoever on any of the Vessels or on their respective earnings except for Permitted Encumbrances.

(j) The Agent shall have received the favorable written opinions of counsel to the Borrower and the Subsidiary Guarantors, dated the Closing Date and in form and substance reasonably satisfactory to the Agent and its legal advisors.

(k) The Borrower shall have completed the successful offering of the Senior Secured Notes, the gross proceeds of which shall at least equal US$120,000,000.

(l) There shall have occurred no event that could result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole) since the Closing Date.

(m) The Agent shall have received evidence that the Uniform Commercial Code and PPSA financing statements have been filed with the appropriate jurisdictions necessary to perfect the security interest of the Collateral Agent in and to the Collateral.

(n) The Agent shall have received any additional documents, affidavits or certificates of the Borrower, the Subsidiary Guarantors or any other Person as it may reasonably require.

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Section 5.02 Further Conditions Precedent. The obligation of the Lenders to make any Revolving Loan available to the Borrower under this Agreement or to issue any Letter of Credit shall be expressly and separately subject to the following further conditions precedent on the relevant Drawdown Date or Issuance Date, as the case may be:

(a) The Agent shall have received a Drawdown Request or Issuance Request, as the case may be, in accordance with the terms of Section 2.01(d) or Section 3.01, as the case may be.

(b) The representations and warranties set forth in Article IV hereof shall be true and correct in all material respects with the same effect as though each such representation and warranty had been made on and as of such date, except to the extent that any of such representations and warranties expressly relate to earlier dates, or are no longer true as a result of transactions not prohibited by the Transaction Documents.

(c) No Default or Event of Default shall have occurred and be continuing.

(d) No change in any applicable laws, regulations, rules or in the interpretation thereof shall have occurred which make it unlawful for any Credit Party to make any payment as required under the terms of the Transaction Documents.

(e) The Asset Coverage Ratio shall be at equal to or greater than 2.0 to 1.0.

ARTICLE VI

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that, so long as this Agreement shall remain in effect or any of the Obligations shall be outstanding, it shall, and shall cause each of the Subsidiary Guarantors to unless the Borrower shall have received the prior written consent of the Requisite Lenders or, in the case of Section 6.17, all of the Lenders:

Section 6.01 Existence. Do or cause to be done all things necessary to preserve and keep in full force and effect its existence (except as permitted by Section 7.16), rights and franchises and comply with all laws applicable to it and at all times be qualified to do business in the jurisdictions where failure to qualify could reasonably be expected to result in a Material Adverse Change.

Section 6.02 Payment of Debts. Pay its debts, liabilities and obligations when due, after giving effect to all applicable grace periods except any such debts, liabilities and obligations that are being contested in good faith by appropriate proceedings.

Section 6.03 Accounts and Records. Keep and maintain full and accurate accounts and records in accordance with GAAP consistently applied.

Section 6.04 Payment of Taxes and Claims. Prepare and timely file all tax returns required to be filed by it and pay and discharge all Taxes imposed upon it or in respect of any of its property and assets before the same shall become in default, as well as all lawful claims (including, without limitation, claims for labor, materials and supplies) which, if unpaid, might

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become a lien or charge upon the Collateral or any part thereof, except in each case, for any such Taxes as are being contested in good faith by appropriate proceedings.

Section 6.05 Financing Statements. In the case of the Collateral, execute, financing statements or other documents deemed necessary or desirable to perfect, maintain or preserve any security interest granted pursuant to the Transaction Documents and pay the filing costs pursuant to law. Without limiting the generality of the foregoing, each of the Credit Parties will execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary or desirable, or that the Agent may reasonably request, to protect and preserve the Liens granted or purported to be granted hereby and by the other Transaction Documents. Each of the Credit Parties hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of such Credit Party, where permitted by law. The Agent agrees to promptly provide, or cause to be provided, to the Borrower or the appropriate Credit Party a copy of any financing statement or other similar registration it has filed, which notice shall specify the jurisdiction or jurisdictions in which such filing was made.

Section 6.06 Compliance with Law. Comply in all material respects with all applicable federal, state, local and foreign laws, ordinances, rules, orders and regulations now in force or hereafter enacted, including, without limitation all laws and regulations relating to environmental laws and employee benefit plans, failure to comply with which could reasonably be expected to result in a Material Adverse Change.

Section 6.07 Financial Statements. Furnish to the Agent the following financial statements:

(a) as soon as available but not later than one hundred and twenty (120) days after the end of each fiscal year of the Borrower, complete copies of the consolidated financial reports of the Borrower and its Subsidiaries, all in reasonable detail, which shall include at least the consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be audited reports prepared by independent chartered accountants of international standing;

(b) as soon as available but not less than sixty (60) days after the end of each of the first three quarters of each fiscal year of the Borrower, a quarterly interim consolidated balance sheet of the Borrower and its Subsidiaries and the related consolidated profit and loss statements and sources and uses of funds, all in reasonable detail, unaudited, but certified to accurately reflect in all material respects the financial condition of the Borrower and its Subsidiaries by the chief financial officer of the Borrower;

(c) within ten (10) days of the filing thereof, copies of all registration statements and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and other material filings which the Borrower shall have filed with the SEC or any similar governmental authority; and

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(d) promptly upon the mailing thereof to the shareholders of the Borrower, copies of all financial statements, reports, proxy statements, notices and other communications transmitted to all of the Borrower’s shareholders;

(e) at such time as the financial statements described in Sections 6.07(a), 6.07(b) and 6.07(c) are delivered, a certificate of the Borrower’s Chief Financial Officer (i) certifying the Borrower’s compliance with each of its covenants contained herein and showing the calculations thereof (with respect to the covenants in Sections 6.14, 6.15, 6.16 and 6.17 hereof) in reasonable detail and (ii) stating that the financial statements delivered in accordance with Sections 6.07(a), 6.07(b) and 6.07(c) are complete and correct in all material respects and present fairly the financial condition and results of operations of the Borrower and its Subsidiaries as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied (subject as to interim statements to normal year-end adjustments); and

(f) any other information regarding the Borrower that is material to the Transaction Documents or, the Revolving Loans or the Letters of Credit as any Lender, through the Agent, may reasonably request.

Upon receipt the Agent shall promptly deliver the above referenced financial statements to the Lenders.

Section 6.08 Access to Books and Records. Permit the Agent and each Lender, and their respective duly authorized agents and officers, during normal business hours and upon reasonable notice to (a) examine the books and records of the Borrower and to make copies and extracts therefrom, and (b) discuss the affairs, finances and accounts of the Borrower, and be advised as to the same by, the officers of the Borrower as shall be relevant to the performance or observance of the terms, covenants or conditions of this Agreement, the other Transaction Documents or the financial condition of the Borrower.

Section 6.09 Notifications. Give prompt written notice to the Agent of (a) any Default of which the Borrower has actual knowledge or an Event of Default specifying the same and the steps being taken to remedy the same, (b) any litigation or governmental proceeding pending or, to the best knowledge of the Borrower, threatened against the Borrower or against any of the Subsidiaries which could reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole), (c) the withdrawal of any Vessel’s rating by its classification society or the issuance by such classification society of any material recommendation or notation affecting class and (d) any other event or condition which could reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

Section 6.10 Reserved.

Section 6.11 Environmental Matters. Promptly, and in any event within five (5) Business Days after a Responsible Officer of the Borrower or any of its Subsidiaries obtains actual knowledge thereof, give written notice to the Agent of one or more of the following environmental matters, unless, in each case, such environmental matters could not, individually

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or when aggregated with all other such environmental matters, be reasonably expected to result in an Environmental Claim in excess of CAD 5,000,000:

(a) any pending or threatened in writing Environmental Claim against the Borrower or any of its Subsidiaries or any Vessel or Real Property owned or operated by the Borrower or any of its Subsidiaries;

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

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

(d) the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned or operated by the Borrower or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall deliver to each Lender all material notices received after the date hereof by them or any of its Subsidiaries from any Governmental Authority under, or pursuant to, CERCLA.

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower or such Subsidiary’s response thereto. In addition, upon the request of the Agent, the Borrower will provide the Lenders with copies of all material communications with any Governmental Authority relating to Environmental Laws, all material communications with any Person (other than their attorneys) relating to any Environmental Claim of which notice is required to be given pursuant to this Section 6.11, and such detailed reports of any such Environmental Claim as may reasonably be requested by the Agent on behalf of the Lenders.

Section 6.12 Transaction Document Obligations. Pay the Revolving Loan Notes according to the reading, tenor and effect thereof, and do and perform every act and discharge all of the obligations provided to be performed by the Borrower under the Transaction Documents, including this Agreement, at the time or times and in the manner specified, and cause the Subsidiary Guarantors to take such action with respect to their obligations to be performed and discharged under the Transaction Documents to which they respectively are parties.

Section 6.13 Reserved.

Section 6.14 Minimum EBITDA. With respect to the Borrower, maintain a minimum aggregate EBITDA for the immediately preceding four fiscal quarters determined as of the last

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day of each of the Borrower’s fiscal quarters commencing December 31, 2004 of CAD 23,280,000; provided, however, (a) for the purpose of calculating EBITDA on December 31, 2004, EBITDA shall be an amount equal to the product of (i) the sum of EBITDA for the fiscal quarters ended December 31, 2004 and September 30, 2004 and (ii) 2 and (b) for the purpose of calculating EBITDA on March 31, 2005, EBITDA shall be an amount equal to the product of (i) the sum of EBITDA for the fiscal quarters ended March 31, 2005, December 31, 2004 and September 30, 2004 and (ii) 1.33.

Section 6.15 Minimum Current Ratio. With respect to the Borrower, maintain a Current Ratio determined as of the last day of each of the Borrower’s fiscal quarters commencing September 30, 2004 of 1.0 to 1.0 during the Revolving Period and 1.25 to 1.0 thereafter.

Section 6.16 Maximum Funded Senior Debt Ratio. With respect to the Borrower, maintain a Funded Senior Debt Ratio determined as of the last day of each of the Borrower’s fiscal quarters commencing September 30, 2004 of not more than 2.50 to 1.00.

Section 6.17 Minimum Fair Market Value of the Designated Vessels; Age of Designated Vessels; Substitution of Vessels.

(a) Maintain an Asset Coverage Ratio at all times equal to or greater than (i) for the period commencing on the Closing Date up to the fifth anniversary thereof, 2.00 to 1.00, (ii) for the period commencing on the fifth anniversary of the Closing Date up to the sixth anniversary thereof, 2.10 to 1.00, (iii) for the period commencing on the sixth anniversary of the Closing Date up to the seventh anniversary thereof, 2.25 to 1.00 and (iv) at all times thereafter, 2.50 to 1.00.

(b) To the extent the Asset Coverage Ratio is less than the amount set forth in Section 6.17(a), the Borrower will be required to either (i) prepay the Revolving Loans, together with an amount equal to the Interest Differential and all interest and fees accrued and unpaid on the amount so prepaid, not later than 60 days after request to that effect is received from the Agent (and the Agent shall make such request if instructed by all of the Lenders), in an amount so that the Asset Coverage Ratio set forth in Section 6.17(a) is re-attained or (ii) (A) provide additional collateral in form and amount satisfactory to all of the Lenders, which may include the designation by the Borrower (with the prior written approval of the Agent such approval to not be unreasonably withheld or delayed) of one or more Vessels that are not then Designated Vessels as Designated Vessels so that the Asset Coverage Ratio set forth in Section 6.17(a) is re-attained and (B) give written notice to the Collateral Agent and the Trustee of the additional Vessels that the Borrower and the Agent agreed to be included in the pool of Designated Vessels (which notice shall include a desk appraisal from an Appraiser of such Vessel or Vessels dated no earlier than 30 days prior to the date of such notice). The Borrower shall obtain at its expense and provide to the Agent desk appraisals of each such Vessel or Vessels from an Appraiser dated no earlier than 30 days prior to the date of any proposed designation described in Section 6.17(b)(ii)(A).

(c) If requested in writing by the Agent, the Borrower shall obtain at its expense and provide to the Agent on each February 1 and August 1, commencing on

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February 1, 2005, a desk appraisal performed by an Appraiser dated no earlier than 30 days prior to such date which indicates the Appraised Value of each Designated Vessel. The Agent shall deliver copies of all such appraisals to the Lenders.

(d) The Designated Vessels shall at all times include at least two Vessels built or rebuilt on or after 1998.

(e) At any time and from time to time, the Borrower, with the prior written approval of the Agent (such approval not to be unreasonably withheld or delayed), shall have the right to designate a Vessel or another ship documented or registered in an Approved Jurisdiction not then constituting a “Vessel” or a “Designated Vessel” as a Designated Vessel and have one or more Vessels then constituting a “Designated Vessel” removed from such categorization subject to the prior satisfaction of the following conditions:

(i) no Default or Event of Default has then occurred and is continuing;

(ii) after giving effect to such designations no Default or Event of Default would exist;

(iii) after giving effect to such designations, the Borrower is in compliance with Section 6.17(a) and Section 6.17(d);

(iv) the Borrower delivers a desk appraisal from an Appraiser dated not more than 30 days prior to the proposed date of designation and a certificate of a Responsible Officer of the Borrower certifying (together with calculations demonstrating) (A) the Fair Market Value of the ship to become a Designated Vessel, (B) that the Borrower is in compliance with Section 6.17(a) and 6.17(d) and (C) that such ship is of a similar type and classification as the Designated Vessel for which it is being substituted, and

(v) the Borrower delivers, or causes the appropriate Subsidiary Guarantor to deliver, a Subsidiary Guarantee Agreement (to the extent not previously delivered) and appropriate Security Documents to create a first priority, perfected Lien on such new Designated Vessels, together with the related items of Collateral, as contemplated by the terms of this Agreement and the Collateral Agency Agreement and one or more opinions of counsel.

Section 6.18 Ownership of Subsidiary Guarantors. Except as permitted by Sections 7.03 and 7.16, with respect to the Borrower, own, directly or indirectly, the percentage of the Equity Interests of each Subsidiary Guarantor shown on Schedule 4.11 hereto.

Section 6.19 Reimbursement for Expenses. Reimburse the Agent, or cause the Subsidiary Guarantors to reimburse the Agent, promptly, with interest at the interest rate applicable to the Revolving Loan Notes, for any and all expenditures which the Agent may from time to time make in providing protection in respect of insurance, discharge or purchase of liens, taxes, dues, assessments, governmental charges, fines and penalties lawfully imposed, repairs, attorneys’ fees, necessary translation fees for documents made in a language other than English

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and other matters, in each case in respect of which the Borrower has Defaulted in its obligation hereunder with respect to such matters, or the Subsidiary Guarantors have Defaulted in their Subsidiary Guarantee Obligation hereunder with respect to such matters or under a Subsidiary Guarantee Agreement with respect to such matters, to provide. Such obligation of the Borrower and the Subsidiary Guarantors to reimburse the Agent shall be an additional indebtedness due from the Borrower and the Subsidiary Guarantors, secured by the Collateral and the Transaction Documents, and shall be payable by the Borrower and the Subsidiary Guarantors on demand. The Agent, though privileged to do so, shall be under no obligation to the Borrower or the Subsidiary Guarantors to make any such expenditures, nor shall the making thereof relieve the Borrower or the Subsidiary Guarantors of any default in that respect.

ARTICLE VII

NEGATIVE COVENANTS

The Borrower covenants and agrees that, so long as this Agreement shall remain in effect or any of the Obligations shall be outstanding, it shall not, and shall not permit any of the Subsidiary Guarantors to, without the prior written consent of the Requisite Lenders:

Section 7.01 Indebtedness. Contract for, create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness contemplated by this Agreement or any of the other Transaction Documents;

(b) the Senior Secured Notes;

(c) Indebtedness existing on the Closing Date described in Schedule 7.01 and refinancing thereof; and

(d) any Indebtedness (and any extensions, renewals and replacements of such Indebtedness), to the extent that, at the time such Indebtedness is contracted for, created, assumed or incurred, and both before and after giving effect to such Indebtedness, no Default or Event of Default exists or would exist hereunder.

Section 7.02 Liens. Create, assume, permit or suffer to exist any mortgage, pledge, encumbrance, security interest or other Lien securing an obligation on any Vessel or on any other asset constituting Collateral, whether now owned or hereafter acquired, except Permitted Encumbrances with respect to the Vessels and Customary Permitted Liens with respect to such other assets or disclosed on Schedule 7.01 and except as permitted by Section 7.01(c).

Section 7.03 Asset Sales. Sell, lease, transfer, assign or otherwise dispose of any Vessel; provided, however, the Borrower or a Subsidiary Guarantor may sell any Vessel other than a Designated Vessel upon providing 10 days written notice to the Agent so long as (a) no Default or Event of Default has then occurred and is continuing, (b) after giving effect to such sale, lease, transfer, assignment or disposition, no Default or Event of Default would exist and (c) after giving effect to such sale, lease, transfer, assignment or disposition, the Borrower is in compliance with Section 6.17(a) and Section 6.17(d).

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Section 7.04 Assignment of Insurances. Grant an assignment or permit or suffer to exist any mortgage, pledge, encumbrance, security interest or other Lien on the Insurances.

Section 7.05 Sale of Notes or Accounts Receivable. Sell, lease, transfer, assign or otherwise dispose of any notes, accounts receivable or other obligations owed to any Credit Party by any Person, except for the purpose of collection in the ordinary course of its business except as permitted by Section 7.01(c).

Section 7.06 Sale and Leaseback. Except to the extent a Credit Party did not incur the Attributable Debt under Section 7.01 and Liens under Section 7.02, enter into any arrangements, directly or indirectly, with any Person whereby it shall sell or transfer any property, whether real or personal, and used and useful in its business, whether now owned or hereafter acquired, if it, at the time of such sale or disposition, intends to lease or otherwise acquire the right to use or possess (except by purchase) such property or like property for a substantially similar purpose.

Section 7.07 Restricted Payments. With respect to the Borrower, declare or pay any dividend or make any distribution on its Equity Interests or purchase, redeem, acquire or otherwise retire any Equity Interests for value (in each case, a “Restricted Payment”); provided, however, that the Borrower may make a Restricted Payment so long as, at the time of, and after giving effect to, the proposed Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing and (b) the aggregate amount expended for all Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors) after the Closing Date would not exceed the sum of (1) CAD 6,500,000 and (2) fifty percent (50%) of the aggregate amount of the Consolidated Net Income of the Borrower and its consolidated Subsidiaries from June 30, 2004 to the date of such Restricted Payment in accordance with GAAP; and provided further that the Borrower may purchase, repurchase, redeem, defease or otherwise acquire or retire for value of any Equity Interests made by exchange for, or out of the net cash proceeds of the substantially concurrent sale of, Equity Interests of the Borrower (other than Disqualified Shares) or a substantially concurrent cash capital contribution received by the Borrower from its shareholders; provided that the net cash proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (b) of the preceding proviso.

Section 7.08 Investments. Make any Investment unless at the time of, and after giving effect to, the making of any proposed Investment, no Default or Event of Default has occurred and is continuing or would occur as a consequence of the making of such Investment.

Section 7.09 Restriction on Payment Restrictions Affecting Subsidiary Guarantors. Create or otherwise cause or suffer to exist or become effective any encumbrance or restriction (other than pursuant to this Agreement) on the ability of the Subsidiary Guarantors to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits or pay any Indebtedness owed to the Borrower, (b) make advances or loans to the Borrower or (c) transfer any of its properties or assets to the Borrower, except (i) with respect to clauses (a) and (b) of this Section 7.09, for such encumbrances or restrictions existing (1) under or by reason of applicable law and (2) the other Transaction Documents, the Senior Secured Note Documents and any other document evidencing Indebtedness incurred in

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compliance with Section 7.01 or Liens not violating Section 7.02 and (ii) except with respect to clause (c) of this Section 7.09, for such encumbrances or restrictions existing (1) under or by reason of applicable law, (2) the other Transaction Documents, the Senior Secured Note Documents and any other document evidencing Indebtedness incurred in compliance with Section 7.01 or Liens not violating Section 7.02, (3) other customary non-assignment provisions in leases, licenses or similar contracts, (4) customary restrictions in joint ventures and similar agreements, and (5) on assets in a purchase and sale agreement pending closing of the disposition.

Section 7.10 Change in Business Engage (directly or indirectly) in any business other than a Related Business.

Section 7.11 Transactions with Affiliates. Enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate, other than on terms and conditions substantially as favorable to such Person as would be obtainable by such Person at the time in a comparable arm’s-length transaction with a Person other than an Affiliate. Notwithstanding the foregoing, the restrictions set forth in this Section 7.11 shall not apply to (a) the payment of reasonable and customary fees to directors of the Borrower who are not employees of the Borrower, (b) any other transaction with any employee, officer or director of the Borrower or any of its Subsidiaries pursuant to employee benefit plans and compensation arrangements in amounts customary for corporations similarly situated to the Borrower or any such Subsidiary and entered into the ordinary course of business and approved by the Board of Directors of the Borrower or any committee thereof or the Board of Directors of such Subsidiary, (c) transactions between or among the Borrower and its Subsidiaries who are Subsidiary Guarantors and not involving any other Affiliate, (d) 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 and stock ownership plans approved by the Board of Directors of the Borrower, (e) loans or advances to employees in the ordinary course of business but in any event not to exceed CAD 2,000,000 in the aggregate outstanding at any one time, (f) in addition to the loans and advances referred to in the preceding clause (e), loans or advances to Affiliates of the Borrower but in any event not to exceed CAD 3,000,000 in the aggregate outstanding at any one time, (g) customary indemnities made in the ordinary course of business to employees or directors of the Borrower and its Subsidiaries, (h) the sale by the Borrower or a Subsidiary of any real property and related fixtures or appurtenances), or of the Equity Interests of the Subsidiaries that owns such real property, provided that such real property is the only significant asset owned by such Subsidiary, to a Permitted Holder for consideration in an amount equal to the book value of such assets as reflected in the then recently available consolidated financial statements of the Borrower but not to exceed CAD 3,000,000, and (i) any Restricted Payment permitted by Section 7.07.

Section 7.12 Changes in Offices or Names. Change the location of the chief executive office of any Credit Party, the office of the chief place of business any such parties, the office of the Credit Parties in which the records relating to the earnings or insurances of the Vessels are kept unless the Agent shall have received thirty (30) days prior written notice of such change.

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Section 7.13 Reserved.

Section 7.14 Other Indebtedness. For a period, which shall be the lesser of (a) sixty (60) days following the Closing Date and (b) completion of the syndication by the Arranger, engage in any offering, placement or arrangement of any Indebtedness of the Credit Parties or their Affiliates, other than the transaction described in this Agreement.

Section 7.15 Guarantees. Guarantee, endorse, become surety for, or otherwise in any way become or be responsible for, the obligations of any other Person not a Subsidiary, including, without limitation, by agreement to maintain net worth or working capital of any other Person or agreement for the furnishing of funds to any other Person, directly or indirectly, through the purchase of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) or for the purpose of paying or discharging the liabilities of any other Person, or otherwise, or enter into or be a party to any contract for the purchase of merchandise, materials, supplies or other property if such contract provides that payment for such merchandise, materials, supplies or other property shall be made regardless of whether delivery of such merchandise, materials, supplies or other property is ever made or tendered, or obtain upon its credit the issuance of any letter or letter of credit for the discharge of the obligations of any other Person.

Section 7.16 Consolidation, Merger and Sale of Assets. Consolidate with, or merge with or into, any other Person or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or substantially all of its property or assets, unless each of the following conditions is satisfied:

(a) The entity formed by such consolidation or into which such Credit Party is merged or the Person which acquires by conveyance or transfer substantially all of the assets of such Credit Party as an entirety shall expressly assume all of the obligations of such Credit Party under this Agreement and the other Transaction Documents to which such Credit Party is a party pursuant to a written supplement to this Agreement executed in accordance with Section 11.04.

(b) Immediately prior to and after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing and the Agent shall have received a certificate from an Executive Officer to such effect.

(c) The Agent shall have received an opinion of counsel regarding the merged or consolidated entity, the legality, validity and enforceability of this Agreement and the other Transaction Documents, the title to the related Vessels and the priority of the Mortgages, as applicable.

Upon any consolidation or merger, or any conveyance or transfer of substantially all of the assets of such Credit Party as an entirety in accordance with this Section 7.16, the successor entity formed by such consolidation or into which such Credit Party is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, such Credit Party under this Agreement and the other Transaction Documents with the same effect as if such successor entity had been named as a Credit Party herein. No such conveyance or transfer of substantially all of the assets of such Credit Party as an entirety shall have the effect of releasing such Credit Party or any successor entity which shall theretofore have become such in the manner prescribed in this Section 7.16 from its liability

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hereunder. Nothing in this Section 7.16 shall restrict the Subsidiary Guarantors from chartering the Vessels so long as such charters are not bareboat charters for a period in excess of ten (10) years.

ARTICLE VIII

AGREEMENT TO GUARANTEE

Section 8.01 Obligations Guaranteed.

(a) The Subsidiary Guarantors, jointly and severally, hereby unconditionally guarantee to each of the Agent and the Lenders (i) the full and prompt payment of the principal of the Revolving Loan Notes and the indebtedness represented thereby and the L/C Obligations when and as the same shall become due and payable, whether at the stated maturity thereof, by acceleration, or otherwise; (ii) the full and prompt payment of interest on the Revolving Loan Notes and the L/C Obligations when and as the same shall become due and payable (including interest at the Overdue Rate on any part of the principal amount, interest amount or other amount due under this Agreement and not paid when due); (iii) the full and prompt payment of an amount equal to each and all of the payments and other sums when and as the same shall become due, required to be paid by the Borrower under the terms of this Agreement and under each of the other Transaction Documents to which it is a party and (iv) the full and prompt performance and observance by the Borrower of the obligations, covenants and agreements required to be performed and observed by the Borrower under the terms of this Agreement and under each of the other Transaction Documents to which the Borrower is a party (items (i) through (iv), the “Subsidiary Guarantee Obligations”). The Subsidiary Guarantors hereby irrevocably and unconditionally agree that upon any default by the Borrower in the payment, when due, of any principal of, interest on or other amounts (including amounts in respect of fees and indemnification owing to the Agent or the Lenders) due under the Revolving Loan Notes, this Agreement or any other Transaction Document, the Subsidiary Guarantors will pay the same within ten (10) days after receipt of written demand therefor from the Agent or any Lender. The Subsidiary Guarantors further hereby irrevocably and unconditionally agree that upon any default by the Borrower in any of its obligations, covenants and agreements required to be performed and observed by the Borrower under this Agreement and under each of the other Transaction Documents to which the Borrower is a party, the Subsidiary Guarantors will effect the observance of such obligations, covenants and agreements within ten (10) days after receipt of written demand therefor from the Agent or any Lender.

(b) All payments by the Subsidiary Guarantors shall be paid in the lawful currency of Canada. Each and every default (i) in the payment of the principal of, premium, if any, interest on or other amounts due under the Revolving Loan Notes or L/C Obligations, (ii) in the payment of any sum required to be paid by the Borrower under the terms of this Agreement or the other Transaction Documents, or (iii) in the prompt performance and observance by the Borrower of all of the obligations, covenants and agreements required to be performed and observed by the Borrower under the terms of the Transaction Documents, shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises.

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(c) The Subsidiary Guarantors further agree that the Subsidiary Guarantee Obligations constitute an absolute, unconditional, present and continuing guarantee of performance and payment and not of collection, and waives any right to require that any resort be had by the Agent and the Lenders to (i) any Collateral, (ii) the Agent’s and Lenders’ right against any other Person, or (iii) any other right or remedy available to the Agent and the Lenders by contract, applicable law or otherwise. The Subsidiary Guarantee Obligations are direct, unconditional and completely independent of the obligations of any other Person or entity, and a separate cause of action or separate causes of action may be brought and prosecuted against the Subsidiary Guarantors without the necessity of any other party or previous proceeding with or exhausting any other remedy against any other Person who might have become liable for the indebtedness or of realizing upon any security held by or for the benefit of the Agent and the Lenders.

Section 8.02 Subsidiary Guarantee Obligations of Subsidiary Guarantors Unconditional. The Subsidiary Guarantee Obligations shall be absolute and unconditional and shall remain in full force and effect until (1) the entire principal of, premium, if any, interest on and other amounts due under the Revolving Loan Notes and the L/C Obligations shall have been paid and (2) all other sums payable by the Borrower and the Subsidiary Guarantors under this Agreement and the other Transaction Documents have been paid in full (including, without limitation, Section 8.01 hereof) and, to the extent permitted by law, such Subsidiary Guarantee Obligations shall not be affected, modified, released or impaired by any state of facts or the happening from time to time of any event, including, without limitation, any of the following, whether or not with notice to or the consent of the Subsidiary Guarantors:

(a) the invalidity, irregularity, illegality, frustration or unenforceability of, or any defect in, (i) any Transaction Document or (ii) any collateral security given in connection therewith;

(b) any present or future law or order of any Governmental Authority or of any agency thereof purporting to reduce, amend or otherwise affect the Revolving Loan Notes, the L/C Obligations or any other obligation of the Borrower or any other obligor or to vary any terms of payment;

(c) any claim of immunity on behalf of the Borrower or any other obligor or with respect to any property of the Borrower or any other obligor;

(d) the waiver, compromise, settlement, release, extension, change, modification or termination of any or all of the obligations, covenants or agreements of (i) the Borrower under this Agreement or any other Transaction Document (except by payment in full of all its Obligations under this Agreement) or (ii) the Subsidiary Guarantors with respect to the Subsidiary Guarantee Obligations (except by payment in full of all the Subsidiary Guarantee Obligations hereunder);

(e) the failure to give notice to the Subsidiary Guarantors of the occurrence of a Default or an Event of Default hereunder or under any other Transaction Document;

(f) the transfer, assignment, sublease or mortgaging, or the purported or attempted transfer, assignment, sublease or mortgaging, of all or any part of the interest

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of the Borrower in any of its properties, or any failure of or defect in the title with respect to the Borrower’s interest in any of its properties;

(g) the release, sale, exchange, surrender or other change in any collateral security for payment of the Borrower’s Obligations;

(h) the extension of the time for payment of any amounts payable on the Revolving Loan Notes, the L/C Obligations or any part thereof or of the time for performance of any other obligations, covenants or agreements under or arising out of this Agreement, any other Transaction Document or the extension or the renewal of any thereof;

(i) the modification or amendment (whether material or otherwise) of any Subsidiary Guarantee Obligation, covenant or agreement set forth in any Transaction Document;

(j) the taking of, or the omission to take, any of the actions referred to in this Agreement or any Transaction Document;

(k) any failure, omission, delay, or lack on the part of the Agent or the Lenders or any other Person to enforce, assert or exercise any right, power or remedy conferred on the Agent and the Lenders or such other Person in this Agreement or any other Transaction Document;

(l) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement or composition with creditors or readjustment of, or other similar proceedings affecting the Subsidiary Guarantors or any of their assets, or any allegation or contest of the validity of this Agreement, or any other Transaction Document, or the disaffirmance or attempted disaffirmance of this Agreement or any other Transaction Document, in any such proceedings;

(m) any event or action that would, in the absence of this Section, result in the release or discharge of the Subsidiary Guarantors from the performance or observance of any Subsidiary Guarantee Obligation, covenant or agreement contained in this Section, other than the performance thereof;

(n) the default or failure of any Subsidiary Guarantor to fully perform any of its Subsidiary Guarantee Obligations;

(o) any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or a guarantor;

(p) the actual or purported assignment of any of the Subsidiary Guarantee Obligations;

(q) the receipt and acceptance by the Agent or the Lenders of notes, checks or

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other instruments for the payment of money made by the Subsidiary Guarantors and any extensions and renewals thereof (other than the payment in full of the entire principal of, premium, if any, interest on and other amounts due under the Revolving Loan Notes and the L/C Obligations and all other sums payable by the Borrower and the Subsidiary Guarantors under this Agreement and the other Transaction Documents);

(r) to the extent permitted by law, the release or discharge of the Subsidiary Guarantors from the performance or observance of any guaranteed obligation, covenant or agreement contained herein by operation of law;

(s) any release or impairment of the Collateral pledged under this Agreement or any other Transaction Document;

(t) the release, substitution or replacement in accordance with the terms of any Transaction Document of any property subject thereto or any redelivery, repossession, surrender or destruction of any such property, in whole or in part;

(u) any limitation on the liability or obligations of the Borrower under this Agreement or any other Transaction Document or any termination, cancellation, frustration, invalidity or unenforceability, in whole or in part, of this Agreement or any other Transaction Document, or any term thereof;

(v) the merger or consolidation or any sale, lease or transfer of any or all of the assets of the Borrower or any Subsidiary Guarantor to any Person; or

(w) any other occurrence whatsoever, whether similar or dissimilar to the foregoing.

Section 8.03 Waiver of Notice. The Subsidiary Guarantors each hereby expressly waive notice from the Agent and the Lenders of its acceptance and reliance on the Subsidiary Guarantor’s Guarantee or of any action taken or omitted in reliance hereon. The Subsidiary Guarantors further expressly waive diligence, presentment, demand for payment, protest, any requirement that any right or power be exhausted or any action be taken against the Borrower or against any other obligor under any of the Transaction Documents or against the Collateral or any other collateral security for the Obligations. The Subsidiary Guarantors jointly and severally agree to pay all costs, fees, commissions and expenses (including, without limitation, all court costs and reasonable attorneys’ fees) which may be incurred by the Agent or the Lenders in enforcing or attempting to enforce the Subsidiary Guarantee Obligations following any default on the part of any or all of the Subsidiary Guarantors hereunder, whether the same shall be enforced by suit or otherwise.

Section 8.04 Other Security. The Agent and Lenders may pursue their rights and remedies against the Subsidiary Guarantors notwithstanding (a) any other Guarantee of or security for the Obligations and (b) any action taken or omitted to be taken by the Agent, the Lenders or any other Person to enforce any of the rights or remedies under such other guarantee or with respect to any other security.

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Section 8.05 No Set-off by the Subsidiary Guarantors. No set-off, abatement, recoupment, counterclaim, reduction or diminution of an obligation, or any defense of any kind or nature (other than performance by the Subsidiary Guarantors of the Subsidiary Guarantee Obligations hereunder) which the Subsidiary Guarantors have or may have with respect to a claim hereunder, shall be available hereunder to the Subsidiary Guarantors against the Agent or the Lenders.

Section 8.06 Joint and Several Obligation. Each of the Subsidiary Guarantors hereby agrees that it is jointly and severally liable for each of the Subsidiary Guarantee Obligations hereunder and under each of the other Transaction Documents. Each of the Subsidiary Guarantors accepts joint and several liability for all Subsidiary Guarantee Obligations hereunder in consideration of the financial accommodation to be provided by the Lenders to the Borrower under this Agreement, and in turn, the Borrower to the Subsidiary Guarantors, for the mutual benefit, directly and indirectly, of each of the Subsidiary Guarantors and in consideration of the undertakings by each of the Subsidiary Guarantors to accept joint and several liability for each of their Subsidiary Guarantee Obligations.

Each of the Subsidiary Guarantors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Subsidiary Guarantors with respect to the payment and performance of all of the Subsidiary Guarantee Obligations, it being the intention of the parties hereto that all the Subsidiary Guarantee Obligations shall be the joint and several obligations of each of the Subsidiary Guarantors without preferences or distinction among them.

If and to the extent that any Subsidiary Guarantor shall fail to make any payment with respect to any of the Subsidiary Guarantee Obligations as and when due or to perform any of the Subsidiary Guarantee Obligations in accordance with the terms thereof, then in each such event, the other Subsidiary Guarantor will make such payment with respect to, or perform, such Subsidiary Guarantee Obligations.

The obligations of each Subsidiary Guarantor under the provisions of this Section 8.06 constitute full recourse obligations of such Subsidiary Guarantor, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other Transaction Document against another Subsidiary Guarantor or any other circumstances whatsoever that under applicable law might constitute a defense to the joint and several Subsidiary Guarantee Obligations of such other Subsidiary Guarantor.

Except as otherwise expressly provided herein, each Subsidiary Guarantor hereby waives notice of acceptance of its joint and several liability, notice of any and all Subsidiary Guarantee Obligations incurred hereunder or under any other Transaction Document, notice of the occurrence of any Default or Event of Default, or of any demand for any payment hereunder or any other Transaction Document, notice of any action at any time taken or omitted by the Agent or any Lender under or in respect of any of the Subsidiary Guarantee Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with the Subsidiary Guarantee Obligations, this Agreement or any other Transaction Document. Each Subsidiary Guarantor hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Subsidiary Guarantee

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Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Agent or any Lender at any time or times in respect of any default by any Subsidiary Guarantor in the performance or satisfaction of any term, covenant, condition or provision hereunder or under this Agreement or any other Transaction Document, any and all other indulgences whatsoever by the Agent or any Lender in respect of any of the Subsidiary Guarantee Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Subsidiary Guarantee Obligations or the addition, substitution or release, in whole or in part, of any Subsidiary Guarantor. Without limiting the generality of the foregoing, each Subsidiary Guarantor assents to any other action or delay in acting or failure to act on the part of the Agent or any Lender, including, without limitation, any failure to assert strictly or diligently any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder which might, but for the provisions of this Section 8.06, afford grounds for terminating, discharging or relieving such Subsidiary Guarantor, in whole or in part, from any of its obligations under this Section 8.06, it being the intention of each Subsidiary Guarantor that, so long as any of the Subsidiary Guarantee Obligations remain unsatisfied, the obligations of such Subsidiary Guarantor shall not be discharged except by performance and then only to the extent of such performance. The Subsidiary Guarantee Obligations of each Subsidiary Guarantor shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to the Borrower or the other Subsidiary Guarantors or any Lender. The joint and several liability of the Subsidiary Guarantors hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of the Borrower, any Subsidiary Guarantor or any Lender.

The provisions of this Section 8.06 are made for the benefit of the Agent and each Lender and their successors and assigns, and may be enforced by such party from time to time against any of the Subsidiary Guarantors as often as occasion therefore may arise and without requirement on the part of the Agent or any Lender first to marshal any of its claims or to exercise any of its rights against the other Subsidiary Guarantor or to exhaust any remedies available to it against the other Subsidiary Guarantor or to resort to any other source or means of obtaining payment of any of the Subsidiary Guarantee Obligations or to elect any other remedy. The provisions of this Section 8.06 shall remain in effect until all the Subsidiary Guarantee Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Subsidiary Guarantee Obligations, is rescinded or must otherwise be restored or returned by the Agent or any Lender upon the insolvency, bankruptcy or reorganization of either of the Subsidiary Guarantors, or otherwise, the provisions of this Section 8.06 will forthwith be reinstated in effect, as though such payment had not been made.

Section 8.07 Limitation on Liability. Any term or provision of this Agreement or any other Transaction Document 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 Agreement or any other Transaction Document, 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.

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Section 8.08 Release of Subsidiary Guarantors. If either (a) all of the issued and outstanding Equity Interests of a Subsidiary Guarantor are sold or otherwise disposed of or (b) all or substantially all the assets of such Subsidiary Guarantor are sold or disposed of, in each case, in a transaction expressly permitted by this Agreement, then such Subsidiary Guarantor will be released and relieved from its obligations under its Subsidiary Guarantee and the Security Documents to which it is a party without further action by the parties immediately upon the completion of such sale or disposition. The Agent is hereby authorized by the Lenders to either (i) execute and deliver, at the sole expense of the Borrower, all instruments reasonably requested by the Borrower to evidence the foregoing or (ii) direct the Collateral Agent to do so.

ARTICLE IX

EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS

Section 9.01 Events of Default. Any one or more of the following events shall constitute an Event of Default:

(a) if any payment of any Principal Payment Amount, interest, fees, charge or any other amounts due to the Agent or the Lenders under the Revolving Loan Notes, this Agreement, the Mortgages, or any Transaction Document, whether at the stated maturity thereof or at any date fixed for payment by acceleration, by notice of prepayment or otherwise, shall not be made on the due date thereof and if such failure to pay shall remain unremedied for five (5) Business Days;

(b) if the Borrower shall default in the performance or observance of any covenant contained in Sections 6.14, 6.15, 6.16, 6.17(b), 6.18 or in Article VII of this Agreement, Sections 4.01 and 4.02 of the Assignment(s) of Earnings and Insurances, Section 7(a) of the Pledge Agreement(s) and Sections 2.03, 2.04(a)(ii), 2.08, 2.09, 2.12 and 2.13 of the Deed of Covenant;

(c) if the Borrower shall default in any material respect in the performance or observance of any covenant contained in Article VI of this Agreement or any other covenant, agreement or condition (other than those set forth in (a) or (b) above) contained in this Agreement or in any other Transaction Document and such default shall not be cured by the earlier of (i) thirty (30) days after a Responsible Officer of the Borrower had actual knowledge of such default and (ii) thirty (30) days after receipt by the Borrower of notice thereof from the Agent;

(d) if any representation or warranty made by a Credit Party herein or in any other Transaction Document shall prove to have been false, incorrect or misleading in any material respect on the date as of which made and uncured at the time discovered and shall not have been cured by the earlier of (i) 30 days after a Responsible Officer of a Credit Party obtains actual knowledge thereof and (ii) 30 days after receipt by the Borrower of notice thereof from the Agent;

(e) if a Credit Party shall (i) generally not be paying its debts as they come due, (ii) file a petition in bankruptcy or a petition to take advantage of any insolvency act, (iii) become insolvent or make an assignment for the benefit of its creditors, (iv) consent to the appointment of a custodian or receiver of itself or of the whole or any substantial

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part of its property, (v) on a petition in bankruptcy filed against it, have an order for relief entered against it or (vi) file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law;

(f) if a petition in bankruptcy shall be filed against a Credit Party and not be dismissed within 60 days from the date of the filing;

(g) if a court of competent jurisdiction shall enter an order, judgment or decree appointing, without the consent of an affected entity, a custodian or receiver of a Credit Party, or of the whole or any substantial part of its property, or approving a petition filed against such entity seeking reorganization or arrangement of such entity under applicable law, and such order, judgment or decree shall not be set aside or stayed within 60 days from the date of its entry;

(h) if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of a Credit Party or of the whole or any substantial part of such entity’s property and such custody or control shall not be terminated or stayed within 60 days from the date of assumption of custody or control;

(i) if a final judgment, a fine or other order for the payment of money in excess of CAD 5,000,000 or the equivalent thereof in another currency shall be rendered by a court or administrative agency against a Credit Party and such entity shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 30 days from the date of its entry and within the 30-day period, or any longer period during which execution of such judgment, fine or other order shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during the appeal;

(j) if a Credit Party shall default (as principal or guarantor or other surety) in any payment of principal or interest on any obligation for money borrowed beyond any period of grace provided with respect thereto, or if any other default under any agreement under which any such obligation is created or under any instrument securing or evidencing such obligation, shall have occurred and be continuing, if the effect of such other default is to cause, or permit the holder of such obligation to cause, such obligation to become due prior to its stated maturity; provided, however, in the case of any such obligation for money borrowed as to which any such default in any payment of principal or interest or any such other default has occurred, it shall not constitute an Event of Default under this clause (j) unless (i) with respect to any such obligation for borrowed money evidenced by common loan documents (such as a single credit agreement or a single series of notes), the principal amount of such obligation exceeds CAD 5,000,000, or (ii) the principal amount of all such obligations for money borrowed (including, without limitation, any such obligations described in the immediately preceding clause (i)) as to which any such default then exists exceeds CAD 5,000,000 in aggregate;

(k) if an Event of Default has occurred and is continuing under the Indenture, a Security Document or any other Transaction Document or if the Indenture, any Security Document or any Transaction Document shall for any reason other than the satisfaction

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in full of the Obligations cease to be, or be asserted by a Credit Party not to be, a legal, valid and binding obligation of such Credit Party, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by any applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditor’s rights or by general principles of equity;

(l) if the Borrower shall breach or default under any Hedging Agreement or any interest rate or currency hedging agreement if the effect of such default is to cause the designation of an early termination date in respect of the obligations of such Credit Party under such hedging agreement; provided, however, it shall not constitute an Event of Default under this clause (l) unless the termination payment owed by such Credit Party in respect of terminated hedging agreements would exceed CAD 5,000,000 in the aggregate; or

(m) except as expressly permitted by the Agreement, if a Subsidiary Guarantor ceases to be a direct or indirect wholly-owned subsidiary of the Borrower without the written consent of the Requisite Lenders which consent shall not be unreasonably withheld.

Section 9.02 Waiver of Default. Any Event of Default may be waived only with the written consent of the Requisite Lenders. Any Event of Default so waived shall be deemed to have been cured and not to be continuing, but no such waiver shall be deemed a continuing waiver or shall extend to or affect any subsequent like default or impair any rights arising therefrom.

Section 9.03 Remedies. Upon the occurrence and continuance of any Default or Event of Default, the Lenders shall have no further obligation to advance money or extend any additional credit to or for the benefit of the Borrower, whether in the form of Revolving Loans, Letters of Credit or otherwise. In addition, upon the occurrence and during the continuance of an Event of Default, the Requisite Lenders or the Agent, on behalf and for the ratable benefit of the Lenders, may, at the direction of the Requisite Lenders, do any one or more of the following, all of which are hereby authorized by the Borrower:

(a) declare (i) all or any of the Revolving Loan Notes, the L/C Obligations, the Obligations of the Borrower under this Agreement, the other Transaction Documents and any other instrument executed by the Borrower pursuant to the Transaction Documents to be immediately due and payable and, upon such declaration, such obligations so declared due and payable shall immediately become due and payable; provided, however, that if such Event of Default is under either Sections 9.01(e), (f), (g) or (h), then all of the Obligations shall become immediately due and payable forthwith without the requirement of any notice or other action by the Lenders or the Agent;

(b) declare the Commitments and other lending obligations under the Transaction Documents, if any, terminated, whereupon the Commitments and such other lending obligations, if any, of each Lender shall immediately terminate;

(c) exercise any or all of the rights and powers and pursue any and all of the remedies pursuant to this Article and any of the other Transaction Documents, to the extent permitted by applicable law; and

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(d) bring suit at law or in equity, to collect the payments due under each of the Transaction Documents and to recover judgment for the Obligations hereby secured, and collect the same out of any and all of the Collateral.

Section 9.04 Rights of Set-Off. Regardless of the adequacy of any Collateral, during the continuance of an Event of Default, any deposits or other sums credited by or due from any Lender to the Borrower may be set-off against the Obligations and any and all other liabilities, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower to the Lenders. Any Lender that exercises any such set-off right shall use reasonable diligence to notify the Borrower of any such exercise, provided that the failure of such Lender to provide any such notice shall not affect the validity of such Lender’s exercise of such set-off right.

Section 9.05 Rights and Remedies Cumulative. The Lenders’ and the Agent’s rights and remedies under this Agreement shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in admiralty, in equity or by statute, and each and every right, power and remedy whether specifically 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 Agent or the Lenders, 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 right, power or remedy. The Lenders and the Agent shall have all other rights and remedies not inconsistent herewith as provided by law or in equity. No exercise by any Lender or the Agent of one right or remedy shall be deemed an election. No delay or omission by any Lender or the Agent shall constitute a waiver, election or acquiescence by such party.

Section 9.06 Specific Remedies. Upon the occurrence and during the continuance of an Event of Default:

(a) At the request of the Agent, each Credit Party shall promptly execute and deliver such instruments and other documents as the Agent may deem necessary or advisable to enable the Agent to obtain possession of all or any part of the Collateral to which possession the Lenders shall at the time be entitled hereunder. If a Credit Party shall for any reason fail to execute and deliver such instruments and documents after such request by the Agent, the Agent may obtain a judgment conferring on the Agent the right to such possession on behalf of the Lenders immediately and requiring such Credit Party to deliver such instruments and documents to the Agent, to the entry of which judgment such Credit Party hereby specifically consents.

(b) The Agent, on behalf of the Lenders, may proceed to enforce the rights of the Lenders by directing payment to it of all monies payable under any agreement or undertaking constituting a part of the Collateral, by proceedings in any court of competent jurisdiction for the appointment of a receiver or for sale of all or any part of the Collateral possession to which the Lenders shall at the time be entitled hereunder or for foreclosure of such Collateral, and by any other action, suit, remedy or proceeding authorized or permitted by this Agreement or by law or by equity, and may file such

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proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Lenders asserted or upheld in any bankruptcy, receivership or other judicial proceedings.

(c) The Agent shall be entitled to set-off against and withdraw all amounts constituting a part of the Collateral and to apply the same as follows:

First: To the payment of all reasonable expenses and charges, including the expenses of any taking, operating, attorney’s fees, court costs and other expenses or advances made or incurred by the Agent in connection with the ascertainment or protection of its rights and the pursuance of its remedies hereunder or under any of the Transaction Documents (including, without limitation, the reasonable fees and disbursements of counsel);

Second: To the payment of interest on the Revolving Loan Notes and L/C Obligations;

Third: To the payment of principal on the Revolving Loan Notes and the L/C Obligations;

Fourth: To the payment of all amounts due to the Agent and the Lenders in respect of taxes, indemnities, fees, expenses, premiums, purchase of liens or otherwise under the provisions hereof or under any of the Transaction Documents;

Fifth: To the payment of the Obligations, other than those referred to in First through Fourth above; and

Sixth: To the payment of any surplus thereafter remaining to the Borrower or whomever may be lawfully entitled thereto.

(d) Without limiting the foregoing, the Agent and the Lenders, their respective assigns and legal representatives shall have all the remedies of a secured party under applicable law and such further remedies as from time to time may hereafter be provided pursuant to such law for a secured party. In exercising its power of sale, the Agent shall be entitled to add to the Revolving Loans any and all of the Agent’s or Lenders’ expenses incurred in connection therewith.

Section 9.07 Restoration of Rights and Remedies. In case the Agent or a Lender shall have proceeded to enforce any right, power or remedy under this Agreement or any other Transaction Document by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Agent or such Lender, then and in every such case the Borrower, the Agent and the Lenders shall be restored to their former positions and rights hereunder with respect to this Agreement, the Transaction Documents, the Collateral, and all rights, remedies and powers of the Agent and the Lenders shall continue as if no such proceedings had been taken.

Section 9.08 Cure of Defaults. Subject to the terms of this Agreement, if at any time after an Event of Default, the Borrower offers completely to cure all Events of Default and to pay

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all expenses, advances and damages to the Agent and the Lenders related to such Events of Default, with interest with respect to the Borrower’s obligations as provided herein, then the Agent may, but shall not be required to, accept such offer and payment and restore the Borrower to its former position, but such action, if taken, shall not affect any subsequent Event of Default or impair any rights consequent thereon.

ARTICLE X

RELATIONSHIP AMONG THE LENDERS

Section 10.01 Appointment and Authorization. Each Lender hereby irrevocably appoints, designates and authorizes Fortis as the Agent under this Agreement and under each of the other Transaction Documents and irrevocably authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Transaction Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Agent.

Section 10.02 Delegation of Duties. The Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the gross negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care or for any action it takes on the advice of counsel.

Section 10.03 Liability of Agent. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Transaction Document (except for its own gross negligence or willful misconduct), (b) be liable as a consequence of any failure or delay in performance by, or any breach by, any other Lender or any other Person, of its obligations under this Agreement or any other Transaction Document or (c) be responsible in any manner to any Lender for any recital, statement, representation or warranty made by a Credit Party, or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Transaction Document, or for the value of any Collateral or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of a Credit Party or any other party to this Agreement or any other Transaction Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of any Credit Party.

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Section 10.04 Reliance by the Agent.

(a) The Agent shall be entitled to rely, and shall be fully protected in relying, upon (i) any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and (ii) any advice or statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Requisite Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Requisite Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

(b) For purposes of determining compliance with the conditions precedent specified in Article V, each Lender that has executed this Agreement or shall hereafter execute and deliver an Assignment and Acceptance in accordance with Section 10.11 shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by the Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender, unless an officer of the Agent responsible for the transactions contemplated by the Transaction Documents shall have received notice from the Lender prior to the borrowing specifying its objection thereto and either such objection shall not have been withdrawn by notice to the Agent to that effect or the Lender shall not have made available to the Agent the Lender’s Pro Rata Share of such borrowing.

Section 10.05 Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of any Principal Payment Amount, interest and fees required to be paid to the Agent on behalf and for the benefit of the Lenders, unless the Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Lenders. The Agent shall take such action with respect to such Default or Event of Default as shall be requested by the Requisite Lenders in accordance with this Agreement; provided, however, that unless and until the Agent shall have received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best commercial interest of the Lenders.

Section 10.06 Credit Decision. Each Lender expressly acknowledges that none of the Agent-Related Persons has made any representation or warranty to it and that no act by the Agent hereinafter taken, including any review of the affairs of a Credit Party, shall be deemed to

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constitute any representation or warranty by the Agent to any Lender. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Credit Parties, and all applicable Lender regulatory laws relating to the transactions contemplated thereby, and made its own decision to enter into this Agreement and extend credit to the Borrower under and pursuant to this Agreement. Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower, which may come into the possession of any of the Agent-Related Persons.

Section 10.07 Indemnification. Whether or not the transactions contemplated hereby shall be consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), ratably from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever which may at any time (including at any time following the repayment of the Revolving Loan Notes and the L/C Obligations and the termination or resignation of the related Agent) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement, the Transaction Documents or any document contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any such Person under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent-Related Person’s gross negligence or willful misconduct. Without limiting the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including reasonable attorney fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under this Agreement, any other Transaction Document, or any document contemplated by or referred to herein to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrower. The obligation of the Lenders in this Section 10.07 shall survive the payment of the Obligations.

Section 10.08 Agent in Individual Capacity. Fortis and its affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower and any of its affiliates as though Fortis were not the Agent hereunder and without notice to or consent of the Lenders. With respect to its Pro Rata Share, Fortis shall have the

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same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent, and the terms “Lender” and “Lenders” shall include Fortis in its individual capacity.

Section 10.09 Successor Agent. The Agent may resign as Agent upon thirty (30) days’ notice to the Lenders. If the Agent shall resign as Agent under this Agreement, the Requisite Lenders in consultation with the Borrower shall appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Lenders and the Borrower, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such successor agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Requisite Lenders appoint a successor agent as provided for above. Any successor Agent appointed under this Section 10.09 shall be reasonably acceptable to Borrower.

Section 10.10 Collateral Matters.

(a) The Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to the Collateral which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant thereto.

(b) The Lenders irrevocably authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent upon any Collateral (i) upon payment in full of all of the Revolving Loan Notes, the L/C Obligations and all other Obligations then payable under this Agreement and under any other Transaction Document; (ii) consisting of an instrument evidencing Indebtedness or other debt instrument, if the indebtedness evidenced thereby has been paid in full; (iii) if approved, authorized or ratified in writing by all of the Lenders or (iv) upon any sale, transfer, assignment or other disposition of any Collateral, to the extent that the same is expressly permitted by the terms of this Agreement and the other Transaction Documents. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.10(b).

Section 10.11 Assignments, Participations, Etc.

(a) Any Lender may, with the written consent of the Borrower (other than during the existence of a Default or Event of Default in which event the Borrower’s consent shall not be required) and the Agent, which consent, in each case, shall not be unreasonably withheld (which consent of the Borrower and the Agent shall not be required if the Eligible Assignee is an Affiliate of such Lender or is another Lender), provided that such assignment shall not result in

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increased costs to the Borrower pursuant to Section 2.11, at any time assign and delegate to one or more Eligible Lender (each an “Assignee”) all, or any ratable part of all, of the Revolving Loan Notes, L/C Obligations and the other rights and obligations of such Lender hereunder. In the event of a partial assignment (other than to another Lender or an Affiliate of a Lender), such assignment shall be in a minimum amount of not less than CAD 5,000,000 and, after giving effect to such assignment, the assigning Lender’s or selling Lender’s Pro Rata Share of the Revolving Loan Notes and L/C Obligations shall equal an amount that it not less than CAD 10,000,000, in each case, unless otherwise agreed in writing by the Borrower and the Agent; provided, however, that the Borrower and the Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to the Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered to the Borrower and the Agent an Assignment and Acceptance in the form of Exhibit E (“Assignment and Acceptance”) together with any Revolving Loan Note subject to such assignment; and (iii) the assignor Lender or the Assignee has paid to the Agent a processing fee in the amount of CAD 4,000.

(b) From and after the date that the Agent notifies the assigning Lender that it has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Transaction Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Transaction Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Transaction Documents other than its obligations to maintain confidential information set forth in 10.11(e).

(c) Within five (5) Business Days after its receipt of notice by the Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, the Borrower shall execute and deliver to the Agent, a new Revolving Loan Note evidencing such Assignee’s assigned Pro Rata Share of the related Loans and, if the assignor Lender has retained a portion thereof, a replacement Revolving Loan Note in the principal amount of the Pro Rata Share of the Revolving Loans retained by the assignor Lender (such Revolving Loan Note to be in exchange for, but not in payment of, the Revolving Loan Note held by such Lender). Immediately upon each Assignee’s making its processing fee payment under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the adjustment of the Pro Rata Share of the Revolving Loans.

(d) Any Lender may at any time sell to one or more commercial banks or other Persons not affiliates of the Borrower (a “Participant”) participating interests in the Revolving Loans, the L/C Obligations and the other interests of that Lender (the “Originating Lender”) hereunder and under the other Transaction Documents; provided, however, that (i) the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrower and the Agent shall continue to deal solely and directly with the Originating

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Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Transaction Documents and (iv) no Lender shall transfer or grant any participating interest under which the Participant shall have rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Transaction Documents other than those that pursuant to the terms of this Agreement require the consent of the affected Lender; and provided further that, and it is hereby agreed that, the Borrower shall not be obligated to make any greater payment or otherwise incur any greater cost or liability under Section 2.09, 2.10 or 2.11 than had no such sale of a participating interest occurred.

(e) Each Lender agrees to maintain the confidentiality of all information identified as “confidential” by the Borrower and provided to it by the Borrower, or by the Agent on the Borrower’s behalf, in connection with this Agreement or any other Transaction Document, and neither it nor any of its Affiliates shall use any such information for any purpose or in any manner other than pursuant to the terms contemplated by this Agreement; except to the extent such information (i) was or becomes generally available to the public other than as a result of a disclosure by the Lender, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or one of its Affiliates not in violation of any confidentiality agreement; provided, however, that any Lender may disclose such information (A) at the request or pursuant to any requirement of any Governmental Authority to which the Lender is subject or in connection with an examination of such Lender by any such authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable law or requirement of law; and (D) to such Lender’s independent auditors and other professional advisors. If the Agent or any Lender discloses any such confidential information pursuant to the provisions of the immediately proceeding proviso, the Agent or such Lender shall seek to obtain assurance that confidential treatment will be accorded to such confidential information; provided, however, that neither the Agent nor any Lender shall have any liability for the failure to obtain such confidential treatment. Notwithstanding the foregoing, the Borrower authorizes each Lender to disclose to any Participant or Assignee and to any prospective Participant or Assignee, such financial and other information in such Lender’s possession concerning the Borrower or a Subsidiary Guarantor which has been delivered to the Agent or the Lenders pursuant to this Agreement or which has been delivered to the Agent or the Lenders by the Borrower or a Subsidiary Guarantor in connection with the Lenders’ credit evaluation of the Borrower and the Subsidiary Guarantors prior to entering into this Agreement, provided that such participant or assignee (or prospective participant or assignee) agrees in writing to be bound by a confidentiality agreement similar to the provisions of this Section 10.11(e).

(f) Notwithstanding any other provision contained in this Agreement or any other Transaction Document to the contrary, any Lender may assign all or any portion of its Pro Rata Share of the Revolving Loan Notes and the L/C Obligations held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.

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Section 10.12 Collateral Agency Agreement.

(a) Each Lender hereby authorizes the Agent and the Collateral Agent, as applicable, on behalf of and for the benefit of the Lenders, to be the agent for and representative of the Lenders with respect to the Collateral and the Security Documents.

(b) Each Lender, by its execution of this Agreement or the execution and delivery of the Assignment and Acceptance, as the case may be, consents and agrees to the terms of the Security Documents, as the same may be in effect or may be amended from time to time in accordance with their terms, and authorizes and directs the Collateral Agent and the Agent to perform its obligations and exercise its rights under the Security Documents in accordance therewith.

(c) Anything contained in this Agreement or in any other Transaction Document to the contrary notwithstanding, each Lender hereby agrees that no Lender shall have any right individually to realize upon any of the Collateral, it being understood and agreed that all powers, rights and remedies of the Agent and the Lenders hereunder may be exercised solely by the Agent in accordance with the terms hereof and all powers, rights and remedies in respect of the Collateral under the Security Documents may be exercised solely by the Collateral Agent.

(d) Any amounts payable pursuant to the Collateral Agency Agreement to the Agent for the benefit of the Lenders, shall be distributed by the Agent pursuant to Section 2.07.

ARTICLE XI

MISCELLANEOUS

Section 11.01 Notices.

(a) All notices, requests, approvals and other communications provided for hereunder shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Borrower or a Subsidiary Guarantor by facsimile (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on the applicable signature page hereof, and (ii) shall be followed promptly by a hard copy original thereof) and faxed, sent for overnight (next day) delivery or delivered, to the address or facsimile number specified for notices on the applicable signature page hereof or, as directed to the Borrower or the Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as directed to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Agent.

(b) All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next day) delivery, or transmitted by facsimile machine, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II, V, VI and IX shall not be effective until actually received by the Agent.

(c) The Borrower acknowledges and agrees that any agreement of the Agent and the Lenders to receive certain notices by telephone and facsimile is solely for the convenience and at the request of the Borrower; provided, however, in no event shall a Drawdown Request or Issuance Request be given telephonically. The Agent and the Lenders

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shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Agent and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower and the Subsidiary Guarantors to repay the Obligations shall not be affected in any way or to any extent by any failure by the Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Agent and the Lenders of a confirmation which is at variance with the terms understood by the Agent and the Lenders to be contained in the telephonic or facsimile notice.

Section 11.02 Survival of Agreement. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making of the Revolving Loans and the issuance of the Letters of Credit and the execution and delivery of the Revolving Loan Notes and shall continue in full force and effect so long as the Obligations remain outstanding.

Section 11.03 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law.

Section 11.04 Modification of Agreement.

(a) No amendment, modification or waiver of any provision of this Agreement or any other Transaction Document, and no consent with respect to any departure by the Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Requisite Lenders (with a copy thereof provided to the Agent), and then such waiver shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by each Lender affected thereby (with a copy thereof provided to the Agent), do any of the following:

(i) increase or extend the Commitment or Pro Rata Share of any Lender, decrease the Applicable Margin, change the Aggregate Loan Commitment, (other than as provided in Article II) or subject any Lender to any additional obligations;

(ii) postpone or delay any date fixed for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any Transaction Document;

(iii) reduce the principal of, or the rate of interest specified herein on any Revolving Loan or L/C Obligation, or of any fees or other amounts payable hereunder or under any Transaction Document;

(iv) amend this Section 11.04; or;

(v) amend Section 2.07(b) or any other provision with respect to pro rata payments or sharing of recoveries among the Lenders;

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and, provided further that no amendment, modification, waiver or consent shall, unless in writing and signed by the Agent in addition to the Requisite Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Transaction Document.

(b) Notwithstanding the provisions of Section 11.04(a), in order for a Subsidiary of the Borrower to become a Subsidiary Guarantor, this Agreement may be supplemented for the purpose of adding such Subsidiary as a party hereto with the consent of the Borrower and the Agent but without the consent of the other Subsidiary Guarantors or the Lenders

Section 11.05 Costs and Expenses. The Borrower agrees whether or not the transactions contemplated hereby shall be consummated, to:

(a) pay or reimburse the Arranger and the Agent within five (5) Business Days after demand for all costs and expenses incurred by the Agent or the Arranger in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any other Transaction Document and any other documents prepared in connection herewith (including any commitment letter and related documents preceding this Agreement) or therewith, and the consummation of the transactions contemplated hereby and thereby, including the reasonable and customary attorney costs incurred by the Arranger and the Agent with respect hereto and thereto;

(b) pay or reimburse the Agent and each Lender within five (5) Business Days after demand for all costs and expenses incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies (including in connection with any “workout” or restructuring regarding the Revolving Loans and/or the L/C Obligations, and including in any insolvency proceedings or appellate proceeding) under this Agreement, any other Transaction Document, and any such other documents, including attorney costs incurred by the Agent and any Lender; and

(c) pay or reimburse the Arranger and the Agent within five (5) Business Days after demand for all reasonable audit, environmental inspection and review, search and filing, registration and recording costs, fees and expenses, incurred or sustained in connection with the matters referred to under Section 11.05(a) and Section 11.05(b).

Section 11.06 Waivers. No waiver of any of the provisions of this Agreement (a) shall be deemed or shall constitute a waiver of any other provision of this Agreement or any other provisions hereof (whether or not similar), or (b) shall constitute a continuing waiver unless otherwise expressly provided. No delay on the part of the Agent or any Lender in exercising any right or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any power or right or remedy preclude other or further exercise thereof or the exercise of any other right or remedy. No notice to or demand on the Borrower or a Subsidiary Guarantor in any case shall entitle it to any other or further notice or demand in the same or similar circumstances.

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Section 11.07 Indemnification. To the fullest extent permitted by law, the Borrower agrees to protect, indemnify, defend and hold harmless each Indemnified Party from and against any and all liabilities, losses, obligations, damages, penalties, expenses or costs of any kind or nature and from any suits, judgments, claims or demands (including in respect of or for reasonable and customary attorney costs and other fees and other disbursements of counsel for and consultants of any Indemnified Party in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnified Party shall be designated a party thereto) based on any federal, state, local or foreign law or other statutory regulation, including securities, environmental and commercial law or other statutory regulation, which arises under common law or at equitable cause or on contract or otherwise on account of or in connection with any matter or thing or any action or failure to act by the Indemnified Parties, or any of them, arising out of or relating to the Transaction Documents or any agreement or instrument contemplated by the Transaction Documents, but excluding those arising (x) with respect to an Indemnified Party, by reason of gross negligence or willful misconduct of such Indemnified Party or (y) in respect of Taxes (as to which indemnification shall be applicable only as and to the extent set forth in Section 2.11). Upon receiving knowledge of any suit, claim or demand asserted by any Person that an Indemnified Party believes is covered by this indemnity, such Indemnified Party shall give the Borrower notice thereof and an opportunity to defend it, at the Borrower’s sole cost and expense, with legal counsel reasonably satisfactory to such Indemnified Party. Such Indemnified Party may also require the Borrower to defend the matter. The obligations of the Borrower under this Section 11.07 shall survive the payment and performance of the Obligations and the termination of this Agreement. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 11.07 may be unenforceable because it violates any law or public policy, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of its obligations set forth in this Section 11.07.

Section 11.08 Separability of Provisions; Obligations Several.

(a) If any provision of this Agreement or other Transaction Document should be deemed invalid under any applicable law, such provision shall be void and of no effect and shall cease to be a part of this Agreement or other Transaction Document without affecting the remaining provisions, which shall remain in full force and effect.

(b) In the event that this Agreement, the Revolving Loan Notes, any Transaction Document or any of the documents or instruments which may from time to time be delivered hereunder or thereunder or any provision hereof or thereof shall be deemed invalidated by present or future law of any nation or by decision of any court, or if any third party shall fail or refuse to recognize any of the powers granted to the Agent hereunder when it is sought to exercise them, this shall not affect the validity and/or enforceability of all or any other parts of this Agreement, the Revolving Loan Notes, any Transaction Document or such documents or instruments and, in any such case, the Borrower covenants and agrees that, on demand, they will execute and deliver such other and further agreements and/or documents and/or instruments and do such things as the Agent in its reasonable discretion may deem to be necessary to carry out the true intent of this Agreement and of the obligations secured hereby.

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Section 11.09 Counterparts. This Agreement and any amendment, waivers, consents or supplements hereto may be executed in two or more counterparts, any by different parties hereto in different counterparts, each of which when so executed shall constitute an original, but all of which, when taken together, shall constitute but one Agreement.

Section 11.10 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth or incorporated herein.

Section 11.11 Headings. Section and paragraph headings and the table of contents are not to be considered part of this Agreement, are included solely for convenience and are not intended to be full or accurate descriptions of the contents thereof. Sections and paragraphs mentioned by number only are the respective sections and paragraphs of this Agreement. The use of the terms “herein”, “hereunder”, “hereof”, and like terms shall be deemed to refer to this entire Agreement and not merely to the particular provision in which the term is contained, unless the context clearly indicates otherwise.

Section 11.12 Successors and Assigns. All Persons shall be deemed to include the successors or assigns thereof. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective transferees, legal representatives, heirs, successors and assigns; provided, however, that (a) the Borrower may not assign its rights or obligations hereunder without the prior written consent of the Agent and each Lender and (b) the Lenders may assign their respective rights and obligations hereunder only in accordance with Section 10.11 hereof.

Section 11.13 Gender and Number. Words importing a particular gender mean and include every other gender and words importing the singular number mean and include the plural number and vice-versa.

Section 11.14 Exhibits. Exhibits to this Agreement are an integral part of this Agreement.

Section 11.15 Notification of Addresses, Lending Offices, Etc. Each Lender shall notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request.

Section 11.16 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Subsidiary Guarantors, the Lenders, the Arranger and the Agent, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Transaction Documents. None of the Agent, the Arranger nor any Lenders shall have any obligation to any Person not a party to this Agreement or other Transaction Documents.

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Section 11.17 Reserved.

Section 11.18 Reserved.

Section 11.19 Waiver of Punitive Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EACH PARTY HERETO HEREBY AGREES THAT IT SHALL NOT SEEK FROM ANY OTHER PARTY HERETO, UNDER ANY THEORY OF LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

Section 11.20 Consent to Jurisdiction. (a) Any legal suit, action or proceeding against a Credit Party arising out of or relating to this Agreement or any other Transaction Document, or any transaction contemplated hereby or thereby, may be instituted in any federal or state court of competent jurisdiction in The City of New York, State of New York, and each Credit Party hereby irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding. Each Credit Party hereby waives, to the fullest extent permitted by applicable law, any defense which it may now or hereafter have based upon lack of personal jurisdiction or venue or forum non conveniens. Each Credit Party hereby irrevocably appoints and designates Wilmington Trust Company, having an address at 520 Madison Avenue, 33^rd Floor, New York, New York 10022, as its true and lawful attorney-in-fact and duly authorized agent for the limited purpose of accepting service of legal process and each Credit Party agrees that service of process upon such party shall constitute personal service of such process such Credit Party. Each Credit Party shall maintain the designation and appointment of such authorized agent until all Obligations shall have been paid in full. If such agent shall cease to so act, the Credit Parties shall immediately designate and appoint another such agent satisfactory to the Agent and shall promptly deliver to the Agent evidence in writing of such other agent’s acceptance of such appointment.

Section 11.21 Waiver of Jury Trial. THE BORROWER, EACH SUBSIDIARY GUARANTOR, THE ARRANGER, EACH LENDER AND THE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER TRANSACTION DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

Section 11.22 Currency Indemnity. Any payment or payments made to or for the account of the Agent, the Arranger or any Lender in a currency other than the currency in which such payment is required to be made hereunder or under any other Transaction Document (the “Required Currency”) for any reason (pursuant to a judgment or order of a court or tribunal of any jurisdiction) shall only constitute a discharge to the Borrower to the extent of the amount of the Required Currency which the Agent, the Arranger or such Lender is, acting in good faith and exercising reasonable and customary diligence, able to purchase in New York City with the amount or amounts so received on the date or dates of receipt by the Agent, the Arranger or such Lender of such payment or payments (or if such date is not a Business Day on the next succeeding Business Day). If the amount of the Required Currency which the Agent, the

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Arranger or such Lender is so able to purchase falls short of the amount of the Required Currency due to the Agent, the Arranger or such Lender, the Borrower shall indemnify and hold the Agent, the Arranger or such Lender harmless against any loss or damage arising as a result. This indemnity shall constitute a separate and independent obligation from the other obligations contained in this Agreement, shall give rise to an independent cause or causes of action, shall apply irrespective of any indulgence granted by the Agent, the Arranger or such Lender from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum or sums in respect of the amount due hereunder or under any such judgment or order.

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

FORTIS CAPITAL CORP. as Agent, Arranger, Bookrunner and Lender
By:	/s/ Svein Engh
By:	/s/ Chr. Tobias Backer
	Address: Three Stamford Plaza                 301 Tresser Boulevard                 Stamford, CT 06901-3239
	Phone: (203) 705-5700
	Fax: (203) 705-5900

SECUNDA INTERNATIONAL LIMITED, the Borrower,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                 Dartmouth, Nova Scotia                 B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

3013563 NOVA SCOTIA LIMITED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                 Dartmouth, Nova Scotia                 B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA MARINE INTERNATIONAL INCORPORATED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                 Dartmouth, Nova Scotia                 B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA MARINE SERVICES LIMITED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                 Dartmouth, Nova Scotia                 B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA GLOBAL MARINE, INC., as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

JDM SHIPPING INC., as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

INTERNATIONAL SHIPPING CORPORATION INC., as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA GLOBAL INTERNATIONAL INC., as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

NAVIS SHIPPING INCORPORATED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA ATLANTIC INCORPORATED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

SECUNDA MARINE ATLANTIC LIMITED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

OFFSHORE LOGISTICS INCORPORATED, as Subsidiary Guarantor,
By:	/s/ Alfred A. Smithers
	Address: One Canal Street                  Dartmouth, Nova Scotia                  B2Y 2W1 CANADA
	Phone: (902) 465-3400
	Fax: (902) 465-2578

EXHIBIT A

FORM OF REVOLVING LOAN NOTE

EXHIBIT B

FORM OF DRAWDOWN REQUEST

EXHIBIT C

FORM OF ISSUANCE REQUEST

EXHIBIT D

FORM OF SUBSIDIARY GUARANTEE AGREEMENT

EXHIBIT E

FORM OF ASSIGNMENT AND ACCEPTANCE

EXHIBIT F

COLLATERAL AGENCY AGREEMENT

SCHEDULE 2.01

COMMITMENTS

Lender	Commitment
Fortis Capital Corp.	CAD $	40,000,000

SCHEDULE 4.07

CERTAIN DISCLOSURES

MARAD obligation non-conformance. Of our existing long-term debt and leases as of March 31, 2004, one $16.2 million loan and one vessel operating lease are each secured by a MARAD guarantee. Each guarantee is secured by a first marine mortgage against a vessel, a Title XI Reserve Fund and Financial Agreement and an assignment of insurance and time charter. We are not in conformance with certain requirements contained in the Title XI Reserve Fund and Financial Arrangements with MARAD. As a result of this non-conformance and the effect of certain cross-default provisions in other obligations, this loan and $54.0 million of our other debt obligations as of March 31, 2004 have been classified as current indebtedness. The non-conformance has been in effect for five years. These Title XI Reserve Fund and Financial Agreements are related to the MARAD guarantee of the financing of two vessels in our fleet, the Venture Sea, which is owned by us, and the Thebaud Sea, which we lease under an operating lease. We are otherwise in compliance with covenants applicable to our other outstanding debt. There has been no indication that MARAD intends to accelerate this debt as a result of the non-conformance under the arrangements and we intend to repay our MARAD guaranteed obligations with the proceeds from this offering.

SCHEDULE 4.11

SUBSIDIARY OWNERSHIP/EQUITY INTERESTS

Subsidiary	Equity Interest
3013563 Nova Scotia Limited	100	%
Secunda Marine International Incorporated	100	%
Secunda Marine Services Limited	100	%
Secunda Global Marine, Inc.	100	%
Navis Shipping Incorporated	100	%
JDM Shipping Inc.	100	%
Secunda Atlantic Incorporated	100	%
International Shipping Corporation Inc.	100	%
Secunda Marine Atlantic Limited	100	%
L.S. Atlantic Corporation Inc.	100	%
L.S. Pacific Corporation Inc.	100	%
Secunda Global International Inc.	100	%
Offshore Logistics Incorporated	100	%
Wright Cove Holding Limited	100	%
Pol-E-Mar Inc.	100	%
Polyfab International Inc.	100	%

SCHEDULE 4.18

INDEBTEDNESS

Following the issuance of the notes, we expect that the indebtedness related to our vessel, the Bold Endurance, will remain outstanding. Pursuant to the Bold Endurance term loan facility between GATX Capital Corporation as lender and our subsidiary 3013563 Nova Scotia Limited as borrower, indebtedness equal to $22.2 million remained outstanding as of March 31, 2004. The Bold Endurance facility provides for an interest rate equal to Canadian Bankers Acceptance rate plus 4.88%, and has a term which expires in July 2013. The interest rate on this facility as of March 31, 2004 was 7.29%. 3013563 Nova Scotia Limited’s obligations under the Bold Endurance facility are guaranteed by both our subsidiary Secunda Global International Inc. and us. The guarantee of Secunda Global International Inc. is collateralized by a first marine mortgage on the Bold Endurance, an assignment of the Bold Endurance charter and a pledge of the preference shares of Secunda Global International Inc.

SCHEDULE 4.19

VESSEL INFORMATION/NONCOMPLIANCE

WITH MARITIME RULES AND REGULATIONS

	Vessel Name	Official Number	Flag	Owner
1.	Agile	725439	Barbados	Secunda Global Marine Inc. (Barbados)
2.	J.D. Mitchell	355811	Barbados	JDM Shipping Inc. (Barbados)
3.	Hebron Sea	363608	Canada	Secunda Marine Services Limited (Nova Scotia)
4.	Mariner Sea	817120	Canada	Secunda Marine Services Limited (Nova Scotia)
5.	Panuke Sea	823801	Canada	Secunda Marine Services Limited (Nova Scotia)
6.	Cabot Sea	329550	Canada	Secunda Marine Services Limited (Nova Scotia)
7.	Ryan Leet	811492	Canada	Secunda Marine Services Limited (Nova Scotia)
8.	Thebaud Sea	821340	Canada	Secunda Marine Atlantic Limited (Nova Scotia)
9.	Venture Sea	820661	Canada	Secunda Atlantic Incorporated (Nova Scotia)
10.	Burin Sea	820679	Canada	Secunda Marine Services Limited (Nova Scotia)
11.	Trinity Sea	820678	Canada	Secunda Marine Services Limited (Nova Scotia)
12.	Sable Sea	733413	Canada - Suspended and Registered on the Bareboat Registry of Barbados	Secunda Marine Services Limited (Nova Scotia)

SCHEDULE 7.01

OTHER INDEBTEDNESS

See Schedule 4.18

EX-10.7

Exhibit 10.7

DEED OF COVENANTS

GRANTED BY THE SHIPOWNERS,

as set forth on the signature page hereto

IN FAVOR OF

WILMINGTON TRUST COMPANY,

as Collateral Agent for the Collateral Agent, the Agent, the Lenders, the Trustee and the

Noteholders

August 26, 2004

DEED OF COVENANTS

THIS DEED OF COVENANTS (“Deed”) is made the 26th day of August, 2004 between by those Persons executing this Deed on the signature pages hereto as Shipowner (each, a “Shipowner” and collectively, the “Shipowners”) in favor of Wilmington Trust Company, not in its individual capacity but solely as Collateral Agent (the “Mortgagee”), under the Collateral Agency Agreement, dated as of August 26, 2004 (the “Collateral Agency Agreement”) by and among Secunda International Limited (the “Borrower”) and certain of its subsidiaries, Fortis Capital Corp. (the “Agent”) in its capacity as Agent for the benefit of the Lenders and Wells Fargo Bank, National Association (the “Trustee”) in its capacity as Trustee for the benefit of the Noteholders and the Mortgagee.

WHEREAS:

A. Each Shipowner is the sole owner of the whole of the Vessel or Vessels listed and described beside its name on Schedule I attached hereto and incorporated by reference herein with the same force and effect as if fully set forth herein.

B. Pursuant to the terms of the Credit Agreement, each of the Lenders agreed to make the Facility (as defined in the Credit Agreement) available to the Borrower in accordance with and subject to the terms and conditions of the Credit Agreement. As a condition to providing such Facility, each of the Lenders has requested that the Subsidiary Guarantors, jointly and severally, guarantee the Obligations of the Borrower under the Credit Agreement by entering into the Subsidiary Guarantee Agreements (as defined in the Credit Agreement) and securing the Subsidiary Guarantors’ obligations thereunder by granting to the Mortgagee, on behalf of the Agent and the Lenders, a lien in, to and under the Collateral.

C. Pursuant to the terms of the Indenture, the Borrower issued the Notes. As a condition to the purchase of such Notes by the initial purchasers thereof, each of such initial purchasers has requested that the Subsidiary Guarantors, jointly and severally, guarantee the Obligations of the Borrower under the Indenture by entering into the Note Guarantees and securing the Subsidiary Guarantors’ obligations thereunder by granting to the Mortgagee, on behalf of the Trustee and the Noteholders, a lien in, to and under the Collateral.

D. In consideration for the Lenders making the Facility available to the Borrower and the Initial Purchasers purchasing the Notes, each Shipowner has, contemporaneously with the execution of this Deed, executed a statutory mortgage (each, a “Mortgage” and, collectively, the “Mortgages”) in account current form constituting a first registered mortgage of such Shipowner’s 64 shares in its respective Vessel or Vessels.

E. This Deed is supplemental to the Mortgages and to the security thereby created and, except as otherwise defined herein, terms defined in the executed Collateral Agency Agreement are used herein as defined therein.

NOW, THEREFORE, THIS DEED WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:

That, in consideration of the premises and of the additional covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and in order to secure the payment of the Secured Obligations and all other fees, expenses and other sums due or otherwise secured under each Transaction Document or hereunder (collectively, the “Indebtedness hereby secured”), and to secure the due performance and observance of all the agreements and covenants in each Transaction Document and herein contained, each SHIPOWNER HEREBY ASSIGNS AND MORTGAGES AND CHARGES, AND GRANTS A SECURITY INTEREST IN, AND AGREES TO ASSIGN AND MORTGAGE AND CHARGE, AND GRANT A SECURITY INTEREST IN, to and in favor of the Mortgagee all its interest, present and future, in its respective Vessel or Vessels, in each case to secure the Indebtedness hereby secured:

IT IS HEREBY DECLARED AND AGREED that the security created by this Deed attaches upon the execution of this Deed or, in the case of after acquired property, upon the acquisition thereof, that value has been given, that each Shipowner has, or in the case of any after acquired property will have upon its acquisition, rights in the Collateral secured hereby, that the security created by this Deed and the Mortgages shall be held by the Mortgagee as a continuing security for the payment of the Indebtedness hereby secured and the security so created shall not be affected in any way by any time or indulgence granted to any Shipowner or by any variation, compromise or release of any other Shipowner’s obligations under this Deed and the related Mortgage and shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby 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 Mortgagee for all or any party of the moneys hereby and thereby secured and that every power and remedy given to the Mortgagee hereunder shall be in addition to and not a limitation of any and every power or remedy vested in the Mortgagee under this Deed and the Mortgage and that all powers so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient.

ARTICLE I

DEFINITIONS

Unless otherwise defined in this Deed, capitalized terms used in this Deed shall have the meanings assigned to such terms in the Collateral Agency Agreement.

“Approved Jurisdiction” means, with respect to a Vessel, Canada, Barbados, United States of America, Republic of Liberia, Marshall Islands, Panama or such other jurisdiction as may be acceptable to the Mortgagee (acting at the written direction of the Agent or the Trustee) that imposes maintenance, manning and insurance requirements no less stringent than the foregoing jurisdictions and which does not adversely affect the Mortgagee’s rights in and to such Vessel.

“Assignment of Contract” means, with respect to a Vessel, the assignment between the related Shipowner and the Mortgagee, as amended from time to time in accordance

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with the terms thereof, pursuant to which such Shipowner assigns to the Mortgagee, on behalf of the Collateral Agent, the Agent, the Lenders, the Trustee and the Noteholders, all of its right, title and interest in, to and under any charter or contract in respect of the services of a Vessel having a term greater than twelve (12) months (each, a “Charter”).

“Assignment of Earnings and Insurances” means, with respect to a Vessel, an assignment between the Shipowners and the Mortgagee, as the same from time to time may be amended, restated, modified, supplemented or renewed, in each case in accordance with the terms thereof, pursuant to which the Shipowners assign to the Mortgagee, on behalf of the Collateral Agent, the Agent, the Lenders, the Trustee and the Noteholders, all of its right, title and interest in, to and under the Earnings and Insurances with respect to their respective Vessels.

“Charterer” means, with respect to a Charter, the customer or charterer thereunder.

“Earnings” has the meaning assigned to such term in the Assignment of Earnings and Insurances.

“Fair Market Value” has the meaning assigned to such term in the Credit Agreement.

“Governmental Authority” means any government, parliament, legislature, regulatory authority, agency, commission, tribunal, department, commission, board, instrumentality, court, arbitration board or arbitrator or other law, regulation or rule making entity (including a Minister of the Crown) having or purporting to have jurisdiction on behalf of, or pursuant to the laws of, any country in which the Shipowner is organized, continued, amalgamated, merged or otherwise created or established or in which the Shipowner carries on business or holds property, or any province, territory, state, municipality, district or political subdivision of any such country or of any such state, province or territory of such country.

“Insurances” has the meaning assigned to such term in the Assignment of Earnings and Insurances.

“Jurisdiction of Vessel Registry” means the jurisdiction of registry indicated on Schedule I hereto which shall at all times be an Approved Jurisdiction.

“Material Adverse Change” has the meaning assigned to such term in the Credit Agreement.

“Permitted Encumbrances” means with respect to a Vessel (a) liens or rights in rem for current crew’s wages (including wages of a master), for general average or salvage (including contract salvage) or for wages of stevedores employed by the charterer, the operator, agent or master of such Vessel which in each case (i) are unclaimed or (ii) shall not have been due and payable for ten (10) days after termination of a voyage; (b) liens or rights in rem for repairs or incident to current operations of such Vessel (other than those referred to in clause (a) above) or with respect to any change, alteration or addition made to such Vessel, but only to the extent in each case that such liens are based on claims not yet delinquent and do not involve any risk of a sale, forfeiture, hindrance to operation or loss of such Vessel; (c) liens for amounts that

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are not delinquent or that are due and unpaid for not more than thirty (30) days after such amounts shall become due that do not involve any risk of a sale, forfeiture, hindrance to operation or loss of such Vessel; (d) liens for amounts being contested by the applicable Shipowner in good faith by appropriate procedures, diligently prosecuted or appealed which do not involve any risk of a sale, forfeiture, hindrance to operation or loss of such Vessel; (e) liens covered by valid policies of insurance held with respect to such Vessel and meeting the requirements of this Deed; (f) the lien of the related Mortgage and the other Transaction Documents; and (g) any other liens expressly permitted by any of the Transaction Documents.

“Security Interests” means the mortgages, charges, assignments and security interests created pursuant to this Deed.

“Total Loss” shall have the meaning assigned to such term in the Credit Agreement.

“Transaction Document” when used in the singular and “Transaction Documents” when used in the plural means any and all of the Credit Agreement, the Revolving Loan Notes, the Collateral Agency Agreement, the Subsidiary Guarantee Agreements, the Assignment of Earnings and Insurances, the Assignments of Contract, the Hedging Agreements (if any), the Mortgages, the Deed of Covenant, the Pledge Agreement, the Account Pledge Agreements, the Indenture, the Note Guarantees, the Notes and each other Security Document, each as the same may from time to time be amended, restated, modified, supplemented or renewed.

“Vessel” means each vessel listed on Schedule I attached hereto and includes any share or interest therein and its boilers, engines, machinery, masts, spars, boats, anchors, cables, chains, rigging, tackle, capstans, outfit, tools, pumps and pumping equipment, apparel, furniture, fittings, equipment, spare parts, and all other appurtenances thereunto appertaining or belonging, any and all general intangibles exclusively used for, and in connection with, the ownership, expansion, operation, use, maintenance or sale or disposition of such Vessel, whether now owned or hereafter acquired, whether or not on board such Vessel, and also any and all additions, improvements, renewals and replacements hereafter made in or to such Vessel or any part thereof or any part thereof including all items and appurtenances aforesaid, provided that, for greater certainty, “Vessel” shall not include any of the following assets: (a) all fast rescue craft now owned or hereafter acquired and any substitutions, renewals and replacements thereof and accretions thereto; and (b) all portable fire fighting sets now owned or hereafter acquired and any substitutions, renewals and replacements thereof and accretions thereto.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SHIPOWNERS

Section 2.01 Organization of Shipowner. As of the date hereof, each Shipowner has full power and authority to own, operate, charter and mortgage its Vessel or Vessels; all action necessary and required by law for the execution and delivery of this Deed and its Mortgage or Mortgages has been duly and effectively taken; and this Deed and such Mortgages and the Indebtedness hereby secured is and will be the valid and enforceable obligation of the Shipowner in accordance with its terms, except to the extent that such enforceability may be limited by any applicable bankruptcy, insolvency or similar laws generally affecting the

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enforcement of creditor’s rights and by general principles of equity. All consents or approvals required in respect of this Deed and the Mortgages have been obtained and are in full force and effect.

Section 2.02 No Existing Liens. As of the date hereof, each Shipowner lawfully owns and is lawfully possessed of the whole of its Vessel or Vessels free from any Lien whatsoever other than Permitted Encumbrances. Each Shipowner will warrant and defend the title and possession thereto and to every part thereof for the benefit of the Mortgagee against the claims and demands of all persons whomsoever.

Section 2.03 Registered Ship Mortgage under Applicable Law. Each Vessel is duly documented in the name of the related Shipowner under the laws of the Jurisdiction of Vessel Registry indicated on Schedule I. The Mortgagee, in accordance with Section 2.1(a)(xi) of the Collateral Agency Agreement, and any Shipowner may from time to time agree to replace Schedule I to add descriptions of additional Vessels or make other modifications thereto as may be required without the consent of the other Shipowners. Each Shipowner will, at its expense and at no cost to the Mortgagee, cause the related Mortgage or Mortgages to be duly recorded in accordance with the provisions of the applicable Juridiction of Vessel Registry under which such Vessel is from time to time registered or recorded (“Applicable Maritime Law”), and will otherwise comply with and satisfy all of the provisions of the Applicable Maritime Law in order to establish and maintain the applicable Mortgage or Mortgages, as at any time amended, supplemented or assigned, as a first registered mortgage lien thereunder upon its Vessel or Vessels and upon all renewals, replacements and improvements made in or to the same or any part thereof for the amount of the Indebtedness hereby secured.

Section 2.04 Vessel Operation. (a) Each Shipowner agrees that (i) other than with respect to Vessels that are laid-up pursuant to the terms hereof, it will in all material respects operate or cause to be operated its Vessel or Vessels in compliance with all applicable laws except if such failure to comply could not reasonably be expected to result in a Material Adverse Change and (ii) it will not engage in any unlawful trade or violate any applicable law or carry any cargo that will expose its Vessel or Vessels to forfeiture, capture or material penalty and will not do, or suffer or permit to be done, anything which can or may injuriously affect the registration or enrollment of its Vessel or Vessels under the laws and regulations of the applicable Jurisdiction of Vessel Registry and will at all times at its own expense keep its Vessel or Vessels duly documented thereunder, except in the case of any change of registry (or placement on bareboat registry) of such Vessel or Vessels permitted hereby, in which case a mortgage will be recorded against such Vessel or Vessels under the laws of any such new Jurisdiction of Vessel Registry.

(b) Each Shipowner hereby agrees that its Vessel or Vessels may be laid up only in the reasonable business judgment of such Shipowner and so long as (i) the laying up of such Vessel would not result in a Material Adverse Change determined for this purpose only by reference to the condition (financial or otherwise) of the Borrower and the Shipowners taken as a whole; (ii) the laid up Vessel is maintained in accordance with ordinary and reasonable commercial standards for laid up vessels; and (iii) the Shipowner notifies the Mortgagee in writing that such Vessel is being laid up within thirty (30) days after the commencement thereof.

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Section 2.05 Payment of Taxes, etc. Each Shipowner will pay and discharge when due and payable, from time to time, all taxes, assessments, governmental charges, fines and penalties lawfully imposed on its Vessel or Vessels or any income therefrom unless such taxes, assessments, governmental charges or fines are being contested in good faith by appropriate procedures diligently prosecuted or appealed which do not involve any risk of a sale, forfeiture, hinderance to operation or loss of such Vessel or Vessels and for which adequate reserves have been established in accordance with GAAP.

Section 2.06 No Power To Create Liens. None of the Shipowners, any charterer, the Masters of the Vessels or any other Person has or shall have any right, power or authority to create, incur or permit to be placed or imposed or continued upon any of the Vessels any lien or encumbrance whatsoever other than Permitted Encumbrances and the lien of this Deed and the Mortgages.

Section 2.07 Notice of Mortgage. Each Shipowner will place, and at all times and places will retain, a properly certified copy of this Deed and the applicable Mortgage on board its Vessel or Vessels with her papers and will cause each such certified copy and such Vessel’s marine document to be exhibited to any and all persons having business therewith which might give rise to any lien thereon other than a Permitted Encumbrance, and to any representative of the Mortgagee; and will place and keep prominently displayed in the chart room and in the Master’s cabin of such Vessel a framed printed notice in plain type reading as follows:

“NOTICE OF MORTGAGE

This ship is covered by a First Registered Mortgage in favor of Wilmington Trust Company, as Mortgagee/ Agent, under authority of the provisions of [Canada Shipping Act /Barbados Shipping Act, 1994]. Under the terms of said First Registered Mortgage, none of the Shipowner, any charterer, the Master of this Vessel or any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any other lien whatsoever except liens permitted by the Deed of Covenants.”

Section 2.08 Discharge of Liens, Encumbrances, Etc. Except for the Lien of this Deed and the Mortgages, Permitted Encumbrances 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 a Shipowner with the appropriate court or other tribunal to prevent the arrest or secure the release of a Vessel from arrest on account of such claim or lien (collectively, “Excepted Liens”), no Shipowner will suffer to be continued any Lien on any Vessel, and in due course and in any event, by the earlier of twenty (20) days after the same becomes due and payable or five (5) days after being requested to do so by the Mortgagee, will pay or cause to be discharged or make adequate provision for the satisfaction or discharge of all such claims or demands, or will cause such Vessel to be released or discharged from any lien, encumbrance or charge therefor other than Excepted Liens.

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Section 2.09 Libel. If a libel, complaint, arrest or similar process be filed against a Vessel or a Vessel is otherwise attached, levied upon or taken into custody by virtue of any legal proceeding in any court, the related Shipowner will promptly notify the Mortgagee thereof by cable, facsimile or telex, confirmed by letter, at its address, as specified in this Deed, and within five (5) days of such filing, attachment, levy or taking into custody will cause such Vessel to be released and all liens thereon other than Permitted Liens, this Deed and the Mortgage to be discharged and will promptly notify the Mortgagee thereof in the manner aforesaid. In the event a Vessel is levied upon or taken into custody or detained by any authority whatsoever, the related Shipowner agrees forthwith to promptly notify the Mortgagee thereof by email or fax, confirmed by letter. Each Shipowner will notify the Mortgagee within forty-eight (48) hours after it has become known to such Shipowner of any average or salvage incurred by any of its Vessels.

Section 2.10 Vessel Condition. (a) Each Shipowner (i) at all times and without cost or expense to the Mortgagee, will maintain and preserve, or cause to be maintained and preserved, ordinary wear and tear and insured losses excepted, its Vessel or Vessels and all its equipment, outfit and appurtenances, other than Vessels in lay-up pursuant to the terms hereof, tight, staunch, strong, in good condition, working order and repair and in all respects seaworthy and fit for its intended service except to the extent it could not reasonably be expected to result in a Material Adverse Change, and (ii) will keep its Vessel or Vessels, or cause her to be kept and maintained, in such condition as will entitle her to maintain classification and rating for ships of the same age and type, free of notices, recommendations or qualifications which negatively affect such classification in the classification society indicated on Schedule I attached hereto and made a part hereof or Lloyds Registry of Shipping, Det norske Veritas, Bureau Veritas, American Bureau of Shipping, or any other member of the International Association of Classification Societies or such other classification society of like standing approved by the Mortgagee (acting at the direction of the Agent or the Trustee). No Shipowner will make, or permit to be made, any substantial change in the structure, type or speed of any Vessel that would materially diminish the value of any Vessel.

(b) Each Shipowner agrees to give the Mortgagee at least ten (10) days written notice of the actual date and place of any survey or drydocking of a Vessel for the purpose of repairs in an amount exceeding 20% of the Fair Market Value of such Vessel in order that the Mortgagee may have representatives present if desired.

(c) Each Shipowner agrees to submit its Vessel or Vessels regularly to such periodical or other surveys as may be required for classification purposes and will promptly supply to the Mortgagee copies of all reports issued in respect thereof.

(d) Each Shipowner shall comply in all material respects or use commercially reasonable efforts to procure that the operator of each of the Vessels, other than the Vessels in lay-up pursuant to the terms hereof, will comply in all material respects within the requisite applicable time limits for vessels of the same type, size, age and flag of the Vessels with the International Management Code for the Safe Operation of Ships and for Pollution Prevention (as the same may be amended from time to time, the “ISM Code”) adopted by the International Maritime Organization or any replacement of the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all

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times thereafter, (i) to hold or to procure that the operator of each of the Vessels holds, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Shipowner or the operator (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the vessel operator and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of that vessel operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to each of the Vessels pursuant to the ISM Code, (ii) to provide the Agent or the Trustee promptly after written request therefor with copies of any such Document of Compliance and Safety Management Certificate promptly following the issue thereof and after every renewal and (iii) to keep or to procure that there is kept, on board each of the Vessels a copy of any such Document of Compliance and the original of any such Safety Management Certificate.

Section 2.11 Provision of Information and Documents.

(a) Each Shipowner will at all reasonable times afford the Mortgagee, the Agent and the Trustee and their respective or authorized representatives at their risk and expense full and complete access to its Vessel or Vessels for the purpose of inspecting such Vessel or Vessels and her cargo and papers and, at the reasonable request of the Mortgagee, the Agent or the Trustee, the Shipowner will deliver for inspection, copies of any and all contracts and documents relating to such Vessel or Vessels, whether on board or not.

(b) Each Shipowner hereby agrees to promptly furnish to the Mortgagee, the Agent and the Trustee on demand, all charterparties or contracts of affreightment relating to its Vessel or Vessels and full details as to the parties, times of delivery and the like pertaining thereto.

(c) Each Shipowner agrees to assign to the Mortgagee contemporaneously with the execution of this Deed any charters or earnings of its Vessel or Vessels pursuant to an Assignment of Earnings and Insurances and, with respect to any charter of a term greater than twelve (12) months, an Assignment of Contract.

(d) Each Shipowner hereby appoints the Mortgagee attorney-in-fact of such Shipowner, after an Event of Default shall have occurred or is continuing, to appear before governmental bodies, classification societies and insurers and to demand and receive to the same extent that such Shipowner itself might, all information and certificates respecting (i) the organizational status of such Shipowner under the laws of its jurisdiction of organization or any other jurisdiction in which it may have qualified to do business, (ii) the status of its Vessel or Vessels under the laws and regulations of its Jurisdiction of Vessel Registry, and its compliance with the requirements thereof, and (iii) the state of the records of its Vessel or Vessels or of such Shipowner in respect of its Vessel or Vessels in any classification society with which the Vessel may be classed or of any company, association or club by whom the Vessel or the Shipowner in respect of the Vessel may be insured; and the Shipowner hereby agrees that the Mortgagee may execute its powers as attorney-in-fact as aforesaid through its agents, representatives and attorneys. This power of attorney is coupled with an interest and shall be irrevocable as long as any Indebtedness hereby secured remains outstanding.

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Section 2.12 No Transfer of Flag. No Shipowner will transfer or change the flag or port of documentation of a Vessel; provided, however, if a Vessel is redocumented under the laws of an Approved Jurisdiction, it shall be a condition to such redocumentation that the related Shipowner deliver to the Mortgagee (A) evidence (including an opinion of counsel) that such Vessel has been registered or recorded in the name of the related Shipowner under the laws of such jurisdiction; (B) evidence (including an opinion of counsel) that the related Mortgage has been properly registered or recorded under the laws of such jurisdiction and constitutes a first priority mortgage subject only to Permitted Encumbrances; (C) evidence that all necessary governmental or regulatory approvals, licenses and authorities which are necessary to the operation of such Vessel have been obtained; (D) evidence that insurances in compliance with the requirements of the Mortgage have been obtained; and (E) such other items as the Mortgagee may reasonably require. No Shipowner will permit its Vessel or Vessels to be bareboat registered under the laws of any jurisdiction other than an Approved Jurisdiction; provided, however, if a Vessel is bareboat registered (but not recorded or registered) under the laws of an Approved Jurisdiction, it shall be a condition to such bareboat registry that the related Shipowner deliver to the Mortgagee (A) evidence (including an opinion of counsel) that such Vessel remains recorded or registered in the name of the related Shipowner under the laws of the jurisdiction in which it was recorded or registered on the date hereof (or such other Approved Jurisdiction in which it has been recorded or registered after the date hereof); (B) evidence that the related Mortgage continues to be properly registered or recorded under the laws of such jurisdiction and constitutes a first priority mortgage subject only to Permitted Encumbrances; (C) evidence that all necessary governmental or regulatory approvals, licenses and authorities which are necessary to the operation of such Vessel have been obtained; (D) evidence that insurances in compliance with the requirements of the Mortgage have been obtained; and (E) such other items as the Mortgagee may reasonably require.

Section 2.13 Insurances. (a) Each Shipowner will cause to be carried and maintained on or in respect of its Vessel, without expense to the Mortgagee, the Agent or the Trustee, insurances, payable in U.S. or Canadian Dollars, in amounts, against risks (including marine hull and machinery 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 ships similar to such Vessel in the same geographic area and for similar purposes and with insurance companies, underwriters, funds, mutual insurance associations or clubs of recognized standing. Hull and machinery and war risk insurance for each Vessel shall be carried in an amount which is not less than 120% of the Fair Market Value of such Vessel as measured at the time of each renewal, or such greater sums as such Shipowner shall desire; provided, however, if a Shipowner desires to maintain hull and machinery and war risk insurance in an amount less than 120% of the Fair Market Value of its Vessel, it may do so only with the prior written consent of the Mortgagee acting at the direction of the Agent (acting at the direction of the Required Lenders (as defined in the Credit Agreement)); provided further, however, if a Shipowner desires to maintain hull and machinery and war risk insurance in an amount less than 100% of the Fair Market Value of its Vessel, it may do so only with the prior written consent of the Mortgagee acting at the direction of the Agent (acting at the direction of the Required Lenders) and the Trustee (acting at the direction of the Holders (as defined in the Indenture) of a majority in principal amount of the Notes then outstanding). Protection and indemnity insurance as well as required insurance

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against liability for pollution or spillage or leakage of cargo for such Vessel which shall have limits of liability as may from time to time be provided by full entry in a protection and indemnity association or club that is a member in good standing of the International Group of P & I Clubs. Such protection and indemnity insurance shall cover (x) to the extent not covered by statutory worker’s compensation, liability for bodily injury to the master and any and all officers and crew members of such Vessel and any third Person including “special operations” cover as from time to time might be required to ensure that such Vessel remains fully covered by the “Club cover” and (y) war risk perils and strikes, riots and civil commotion; provided, however, that the coverage referred to in clause (y) may be effected wholly or in part by endorsement to the hull insurance policy or policies maintained or caused to be maintained by such Shipowner. None of the aforementioned insurance shall provide for a deductible amount in excess of CAD 300,000 per occurrence or CAD 2,000,000 per calendar year (or equivalent in any other currency or currency unit); provided, however, if a Shipowner desires to increase the deductible amount and such increase is consistent with the practices of prudent owners and operators of ships similar to the Vessels and engaged in trades in the same geographic region and similar to the trades in which the Vessels are engaged, it may do so only with the prior written consent of the Mortgagee acting at the direction of the Agent (acting at the direction of the Required Lenders (as defined in the Credit Agreement)); provided further, however, if a Shipowner desires to increase the deductible to an amount in excess of CAD 600,000 per occurrence or CAD 4,000,000 per calendar year (or equivalent in any other currency or currency unit) and such increase is consistent with the practices of prudent owners and operators of ships similar to the Vessels and engaged in trades in the same geographic region and similar to the trades in which the Vessels are engaged, it may do so only with the prior written consent of the Mortgagee acting at the direction of the Agent (acting at the direction of the Required Lenders)and the Trustee (acting at the direction of the Holders (as defined in the Indenture) of a majority in principal amount of the Notes then outstanding).

In the case of all marine, navigating and war risk hull and machinery policies, each Shipowner will cause the Mortgagee, the Agent and the Trustee to be named as an additional insured and will use all reasonable efforts (and cause its insurance broker to use all reasonable efforts) to cause the insurers under such policies to waive any liability of the Mortgagee, the Agent and the Trustee for premiums, calls payable, assessments or advances under such policies and for the representations and warranties made therein by such Shipowner or any other person.

Each Shipowner will also, without expense to the Mortgagee, have its Vessel fully entered in a protection and indemnity association or club that is a member in good standing of the International Group of P&I Clubs. Each Shipowner will use reasonable efforts to cause such association or club to issue to the Mortgagee a Letter of Undertaking in a form satisfactory to the Lenders and the Initial Purchasers. In the event that, at any time and from time to time, the creditworthiness or soundness of the association or club in which such Shipowner has entered its Vessel shall become unsatisfactory to the Mortgagee (acting at the direction of the Agent or the Trustee), such Shipowner shall as soon as practicable after notification by the Mortgagee that the creditworthiness or soundness of such club has become unsatisfactory to it, transfer such Vessel to another club that is approved by the Mortgagee (acting at the direction of the Agent or the Trustee) or insure such Vessel pursuant to valid policies of protection and indemnity insurance complying with the requirements of this Section 2.13. Each Shipowner also agrees to indemnify

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and hold harmless the Mortgagee, the Agent and the Trustee against any liability of, or payment by, the Mortgagee, the Agent or the Trustee, as the case may be, of protection and indemnity club premia, club calls or assessments, and to reimburse any such amount promptly on demand to the Mortgagee, the Agent or the Trustee, as the case may be (it being acknowledged and agreed that the Mortgagee, the Trustee and the Agent shall have no obligation to make such payments).

In the case of all protection and indemnity insurance (including insurance against liability arising out of pollution), each Shipowner will cause the Mortgagee, the Agent and the Trustee to be named as an additional insured (to the extent that the rules of such club or society so permit) and will use all commercially reasonable efforts to provide that none of the Mortgagee, the Agent or the Trustee shall be liable under such policies for payment of any premium, club call, assessment or advance or for the representations and warranties made therein by such Shipowner or any other person. Any loss involving damage to the Vessel shall be paid to the Mortgagee for deposit into the Asset Sale Proceeds Account and shall be disbursed in accordance with the terms of the applicable Account Pledge Agreement. Each Shipowner will use reasonable efforts to cause its brokers to agree to advise the Mortgagee promptly in writing of any default in the payment of any premium and of any other act or omission on the part of such Shipowner of which they have knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on such Vessel.

Each Shipowner will use reasonable efforts to cause such brokers to agree to mark their records and to advise the Mortgagee by cable, telex or facsimile transmission, at least seven (7) business days’ prior to the expiration date of any Insurance carried pursuant to this Deed, whether such insurance has been renewed or replaced with new insurance which complies with the provisions of this Section 2.13.

(b) Each Shipowner will assign to the Mortgagee contemporaneously with the execution of this Deed all Insurances and any policies of Insurance in respect of its Vessel or Vessels pursuant to the Assignment of Earnings and Insurances.

(c) All amounts of whatsoever nature payable under any Insurance must be payable as provided in the applicable Account Pledge Agreement.

(d) Reserved.

(e) In the event that any claim or lien is asserted against a Vessel for loss, damage or expense which is covered by Insurance and it is necessary for the related Shipowner to obtain a bond or supply other security to prevent arrest of such Vessel or to release such Vessel from arrest on account of such claim or lien, the related Shipowner may assign to any person, firm or corporation executing a surety or guarantee bond or other agreement to save or release such Vessel from such arrest, all right, title and interest of the Mortgagee in and to said insurance covering said loss, damage or expense, as collateral security to indemnify against liability under said bond or other agreement and the Mortgagee shall execute such documents as are prepared by such person, firm or corporation as may be required to cause such assignment.

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(f) The Shipowners shall deliver to the Mortgagee copies or originals on the date hereof and annually thereafter all certificates of Insurance as evidence of insurance for the purpose of inspection or safekeeping. In addition, the Shipowners will furnish the Mortgagee concurrently with the execution hereof and thereafter, at the request of the Agent or the Trustee, at intervals of not more than twelve (12) calendar months, a detailed report by independent marine insurance brokers, selected by the Shipowners in good faith, describing in reasonable detail the insurance pursuant to this Section 2.13 and stating that in the opinion of such brokers such insurance complies in all material respects with the terms of this Section 2.13 and is common and customary for types of insurances and coverage generally required by mortgagees from prudent owners and operators of ships similar to the Vessels and engaged in trades in the same geographic region and similar to the trades in which the Vessels are engaged.

(g) Each Shipowner agrees that it will not execute or permit or willingly allow to be done any act by which any Insurance may be suspended, impaired or canceled, and that it will not permit or allow any Vessel to undertake any voyage or run any risk or transport any cargo which may not be permitted by the policies in force, without having previously insured such Vessel by additional coverage to extend to such voyages, risks or cargoes with insurance customarily obtained in the industry therefor and each Shipowner agrees (without limiting the foregoing) that it will not permit any Vessel to enter or trade to any zone which is declared a war zone by any government or by the war risk insurers for such Vessel without maintaining such Vessel’s war risk insurance.

(h) In case any underwriter of any Insurance proposes to pay less on any claim than the amount thereof, the Shipowner shall forthwith inform the Mortgagee and shall negotiate and agree to any compromise using its good faith determination as to the fairness of such compromise; provided, however, after the occurrence of an Event of Default, the Mortgagee shall have the right to negotiate and agree to any compromise.

(i) Each Shipowner will comply with and satisfy all of the provisions of any applicable law, convention, regulation, proclamation or order concerning financial responsibility for liabilities imposed on such Shipowner or any Vessel with respect to pollution by any state or nation or political subdivision thereof and will maintain all certificates or other evidence of financial responsibility as may be required by any such law, convention, regulation, proclamation or order with respect to the trade which any Vessel is from time to time engaged in and the cargo carried by it.

Section 2.14 Reimbursement for Expenses. Each Shipowner will reimburse the Mortgagee promptly, with interest at the rate at which the Notes accrue interest for any and all expenditures which the Mortgagee may from time to time make, lay out or expend in exercising its rights under Article III hereof following Events of Default or in providing such protection in respect of insurance, discharge or purchase of liens, taxes, dues, assessments, governmental charges, fines and penalties lawfully imposed, repairs, attorneys’ fees, necessary translation fees for documents made in a language other than English and other matters as, in each case, such Shipowner is obligated herein to provide, but fails to provide. Such obligation of each Shipowner to reimburse the Mortgagee shall be an additional indebtedness due from such Shipowner, secured by the Collateral, and shall be payable by the Shipowners on demand. The Mortgagee, though privileged to do so, shall be under no obligation to any Shipowner to make

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any such expenditures, nor shall the making thereof relieve any Shipowner of any default in that respect.

Section 2.15 Performance of Charterparties and Contracts of Affreightment; Charters. Each Shipowner whose Vessel is subject to a Charter agrees that it will not agree to any variation of such Charter or release the related Charterer from any of its obligations thereunder or waive any breach of such Charterer’s obligations thereunder or consent to any such act or omission of such Charterer as would otherwise constitute such breach, in each case, if such variation, release or waiver could reasonably be expected to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole). Except for assignments to another Subsidiary Guarantor or an Affiliate that will become a Subsdiary Guarantor upon such assignment, each Shipowner agrees that it will not assign a Charter to any other Person. Each such Shipowner will perform its obligations under its Charter and will use its commercially reasonable efforts to cause the related Charterer to perform its obligations thereunder excepted where the failure to do so could not reasonably be expect to result in a Material Adverse Change (determined by reference to the Borrower and the Subsidiary Guarantors taken together as a whole).

Section 2.16 Event of Loss. So long as no Event of Default shall have occurred and be continuing, in the event of a Total Loss, any adjustment or compromise of such loss by a Shipowner will be at the highest amount reasonably obtainable by such Shipowner using its own business judgment.

Section 2.17 Financing Statements. Each Shipowner hereby irrevocably authorizes the Mortgagee to execute and for the Borrower to file and record financing statements in any jurisdiction where the same may be in force and to make any filings or recordings under any legislation having similar effect for the purpose of perfecting or continuing the perfection of the security interests granted by the Shipowners to the Mortgagee herein and under the other Transaction Documents without obtaining the signature of any Shipowner thereto. Each Shipowner hereby irrevocably authorizes the Mortgagee to execute any such financing statement or similar document in the name of such Shipowner. The Borrower will provide or cause to be provided to such Shipowner verification or other written evidence of filing thereof. Each Shipowner hereby waives its right to receive from the Mortgagee a copy of any verification statement.

ARTICLE III

EVENTS OF DEFAULT AND REMEDIES.

Section 3.01 Events of Default; Remedies. In case an Event of Default shall have occurred and be continuing; then, and in each and every such case, the Mortgagee shall have the right, without prejudice to any statutory or common law remedies to:

(i) Exercise all of the rights and remedies in foreclosure and otherwise given to mortgagees by the laws of the applicable Jurisdiction of Vessel Registry or of any other jurisdiction where a Vessel may be found and exercise all of its rights and remedies as attorney-in-fact or otherwise under this Deed and the Mortgages;

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(ii) Bring suit at law, in equity or in admiralty, as it may be advised, to recover judgment for the Indebtedness hereby secured, and collect the same out of any and all property of the Shipowners whether covered by this Deed or the Mortgages or otherwise;

(iii) Take and enter into possession of the Vessels, any of them or any part thereof, at any time, wherever the same may be, without legal process and without being responsible for loss or damage, and the Shipowners or other Person(s) in possession forthwith upon demand of the Mortgagee shall surrender to the Mortgagee possession of such Vessel or Vessels, or any part thereof, and the Mortgagee may do all acts necessary, without being responsible for loss or damage, including hold, lay-up, lease, charter, operate or otherwise use such Vessel or Vessels, or any part thereof, 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, recoveries in general average, and all other sums due or to become due in respect of such Vessel or Vessels, or any part thereof, in respect of any insurance thereon from any person whomsoever, accounting only for the net profits, if any, arising from such use of such Vessel or Vessels, or any part thereof, and charging upon all receipts from the use of such Vessel or Vessels, or any part thereof, or from the sale thereof by court proceedings or pursuant to Section 3.01(v) below, all costs, expenses, charges, damages or losses by reason of such use; and if at any time the Mortgagee shall avail itself of the right herein given it to take such Vessel or Vessels, or any part thereof, the Mortgagee shall have the right to dock such Vessel or Vessels for a reasonable time at any dock, pier or other premises of the Shipowner without charge, or to dock her at any other place at the cost and expense of the Shipowner;

(iv) Take and enter into possession of the Vessels, any of them, at any time, or any part thereof, wherever the same may be, without legal process, and if it seems desirable to the Mortgagee and without being responsible for loss or damage, sell such Vessel or Vessels, or any part thereof, at any place and at such time as the Mortgagee may specify and in such manner as the Mortgagee may deem advisable, free from any claim by the Shipowner in admiralty, in equity, at law or by statute, at public or private sale, by sealed bids or otherwise, by mailing, by air or otherwise, notice of such sale, whether public or private, addressed to the Shipowner at its last known address, twenty (20) days prior to the date fixed for entering into the contract of sale and by first publishing notice of any such public sale for ten (10) consecutive days, in a newspaper published in The City of New York, State of New York or if the place of sale should not be in New York City then by publication of a similar notice at or near the place of sale; in the event that such Vessel or Vessels, or any part thereof, shall be offered for sale by private sale, no newspaper publication of notice shall be required, nor notice of adjournment of sale; sale may be held at such place and at such time as the Mortgagee by notice may have specified, or may be adjourned by the Mortgagee from time to time by announcement at the time and place appointed for such sale or for such adjourned sale, and without further notice or publication the Mortgagee may make any such sale at the time and place to which the same shall be so adjourned; and any sale may be conducted without bringing such Vessel or Vessels, or any part thereof, to the place designated for such sale and in such manner as the Mortgagee may deem to be for its best advantage, and the Mortgagee may become the purchaser at any judicial sale;

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(v) Take and receive all Insurance proceeds to which it shall become entitled by reason of the existence of an Event of Default

(vi) Appoint by instrument a receiver, receiver and manager or receiver-manager (the person so appointed is hereafter called the “Receiver”) of the Collateral or any part thereof secured hereby with or without bond as the Mortgagee may determine, and from time to time in its absolute discretion remove such Receiver and appoint another in its stead; and

(vii) To the extent the same are applicable to the property in respect of which a security interest is created hereby in favor of the Agent, exercise all of the rights and remedies under the Personal Property Security Act of Nova Scotia and comparable legislation in other jurisdictions and all regulations thereunder, as amended from time to time.

Section 3.02 Sale Divests Title. Any sale of the Vessels or any of them made in pursuance of this Deed and/or the Mortgages, whether under the power of sale hereby granted or any judicial proceedings, shall operate to divest all right, title and interest of any nature whatsoever of the Shipowner therein and thereto, and shall bar the Shipowner, its successors and assigns, and all persons claiming by, through or under them. No purchaser shall be bound to inquire whether notice has been given, or whether any default has occurred, or as to the propriety of the sale, or as to the application of the proceeds thereof. In case of any such sale, the Mortgagee, if it is the purchaser, shall be entitled for the purpose of making settlement or payment for the property purchased to use and apply the Indebtedness hereby secured in order that there may be credited against the amount remaining due and unpaid thereon the sums payable out of the net proceeds of such sale to the Mortgagee after allowing for the costs and expense of sale and other charges; and thereupon such purchaser shall be credited, on account of such purchase price, with the net proceeds that shall have been so credited upon the Indebtedness hereby secured. At any such judicial sale, the Mortgagee may bid for and purchase such property, may credit against payment of the purchase price thereof the amount of the Secured Obligations (or any portion thereof) and upon compliance with the terms of sale may hold, retain and dispose of such property without further accountability therefore to the extent permitted by applicable law.

Section 3.03 Mortgagee’s Power of Attorney - Sales. The Mortgagee is hereby appointed attorney-in-fact of each of the Shipowners, upon the happening of any Event of Default, to execute and deliver to any purchaser aforesaid, and is hereby vested with full power and authority to make, in the name and on behalf of the Shipowner, a good conveyance of the title to each of the Vessels so sold. In the event of any sale of any Vessel, under any power herein contained, the related Shipowner will, if and when required by the Mortgagee, execute such form of conveyance of such Vessel as the Mortgagee may direct or approve.

Section 3.04 Mortgagee’s Power of Attorney - Collection. The Mortgagee is hereby appointed attorney-in-fact of each of the Shipowners upon the happening of any Event of Default, in the name and on behalf of the Shipowners or any of them to demand, collect, receive, compromise and sue for, so far as may be permitted by law, all freights, hire, earnings, issues, revenues, income and profits of the related Vessel or Vessels and all amounts due from

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underwriters under any Insurances thereon 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 at the time of the happening of any Event of Default in respect of the Vessels or any of them, or in respect of any Insurances thereon, from any person whomsoever, and to make, give and execute in the name of the related Shipowner or Shipowners acquittances, receipts, releases or other discharges for the same, whether under seal or otherwise, and to endorse and accept in the name of such Shipowner or Shipowners all checks, notes, drafts, warrants, agreements and other instruments in writing with respect to the foregoing.

Section 3.05 Mortgagee Power of Attorney - Discharge of Liens. Upon the happening of any Event of Default, each Shipowner authorizes and empowers the Mortgagee or its appointees or any of them to appear in the name of such Shipowner, its successors and assigns, in any court of any country or nation of the world where a suit is pending against a Vessel because of or on account of any alleged lien against such Vessel from which such Vessel has not been released and to take such proceedings as to them or any of them 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 them or any of them for the purpose of such defense or purchase or discharge shall be a debt due from such Shipowner, its successors and assigns, to the Mortgagee, shall be payable on demand and shall be secured by the lien of this Deed and the Mortgages in like manner and extent as if the amount and description thereof were written herein.

Section 3.06 Delivery of Ship. Whenever any right to enter and take possession of the Vessels or any of them accrues to the Mortgagee hereunder, it may require the related Shipowner to deliver, and such Shipowner shall on demand, at its own cost and expense, deliver to the Mortgagee such Vessel or Vessels as demanded. If, upon the happening of any Event of Default, the Mortgagee shall be entitled to take any legal proceedings to enforce any right under this Deed, the Mortgagee shall be entitled as a matter of right to the appointment of a receiver of the Vessels or any of them and of the freights, hire, earnings, issues, revenues, income and profits due or to become due and arising from the operation thereof.

Section 3.07 Every Power Cumulative. Each and every power and remedy herein given to the Mortgagee 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, in 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 Mortgagee, 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 Mortgagee in the exercise of any right or power or in the pursuance of any remedy accruing upon any default as above defined shall impair any such right, power or remedy or be construed to be a waiver of any such Event of Default or to be an acquiescence therein; nor shall the acceptance by the Mortgagee of any security or of any payment of or on account of the Indebtedness hereby secured maturing after any 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

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completely cured thereby. No consent, waiver or approval of the Mortgagee shall be deemed to be effective unless in writing and duly signed by authorized signatories of the Mortgagee.

Section 3.08 Restoration. In case the Mortgagee shall have proceeded to enforce any right, power or remedy under this Deed or the Mortgages by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Mortgagee, then and in every such case the Shipowners and the Mortgagee shall be restored to their former positions and rights hereunder with respect to the property subject or intended to be subject to this Deed and the Mortgages, and all rights, remedies and powers of the Mortgagee shall continue as if no such proceedings had been taken.

Section 3.09 Distribution of Proceeds. The proceeds of any sale of the Vessels or any of them and the net earnings of any charter operation or other use of the Vessels or any of them and any and all other moneys received by the Mortgagee pursuant to or under the terms of this Deed or in any proceedings hereunder, the application of which has not elsewhere herein been specifically provided for, shall be applied in accordance with the Collateral Agency Agreement.

Section 3.10 No Waiver of First Preferred Status. (a) If any provision of this Deed or any of the Mortgages should be deemed invalid or shall be deemed to affect adversely the preferred status of this Deed or any of the Mortgages under any applicable law, such provision shall cease to be a part of this Deed and the related Mortgage without affecting the remaining provisions, which shall remain in full force and effect.

(b) In the event that the Collateral Agency Agreement, any of the Transaction Documents, this Deed, the Mortgages or any of the documents or instruments which may from time to time be delivered hereunder or thereunder or any provision hereof or thereof shall be deemed invalidated by present or future law of any nation or by decision of any court, or if any third party shall fail or refuse to recognize any of the powers granted to the Mortgagee hereunder when it is sought to exercise them, this shall not affect the validity and/or enforceability of any other parts of the Collateral Agency Agreement, any of the Transaction Documents, this Deed, the Mortgages or such documents or instruments.

(c) Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the first preferred status of this Deed or any of the Mortgages and that, if any provision or portion thereof herein shall be construed to waive the first preferred status of this Deed or any Mortgage, then such provision to such extent shall be void and of no effect.

ARTICLE IV

SUNDRY PROVISIONS.

Section 4.01 Binding on Successors. All of the covenants, promises, stipulations and agreements of the Shipowners in this Deed and the Mortgages shall bind the Shipowners and its successors and assigns and shall inure to the benefit of the Mortgagee and its respective successors and assigns. In the event of any assignment or transfer of this Deed to the

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extent permitted by the Collateral Agency Agreement, the term “Mortgagee”, as used in this Deed, shall be deemed to mean any such assignee or transferee.

Section 4.02 Governing Law. This Deed shall be governed by and interpreted in accordance with the laws of the State of New York, except to the extent the laws of another jurisdiction mandatorily apply to issues, including the validity, creation, attachment and perfection (or non-perfection and the effect thereof), and enforcement of remedies and Liens granted hereby.

Section 4.03 Exercise by Agents. Wherever and whenever herein any right, power or authority is granted or given to the Mortgagee, such right, power or authority may be exercised in all cases by the Mortgagee or such agent or agents as it may appoint, and the act or acts of such agent or agents when taken shall constitute the act of the Mortgagee hereunder.

Section 4.04 Notices. Any notice or other communication to be given pursuant hereto shall be in the manner provided in the Collateral Agency Agreement and addressed as follows:

If to the Mortgagee, to

Wilmington Trust Company,

            as Collateral Agent

1100 North Market Street

Rodney Square North

Wilmington, DE 19890

Attn: Corporate Trust

Telephone: (302) 636-6453

Fax: (302) 636-4145

If to the Shipowners, to

c/o Secunda International Limited

One Canal Street

Dartmouth, Nova Scotia B2Y 2W1 Canada

Telephone: 902-465-3400

Fax: 902-465-2578

or at such other address as either party may notify to the other in writing.

Section 4.05 Titles and Section Heading. The titles and section headings in this Deed are for convenience only and shall not affect the construction hereof.

Section 4.06 Stamp Tax. The Shipowners shall be responsible for payment of any and all stamp duties eligible in respect of this Deed and shall indemnify the Mortgagee on demand against any and all expenditure and liability incurred by the Mortgagee in connection with the payment of such stamp duty.

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Section 4.07 Rights of the Mortgagee. The Mortgagee, the Trustee and the Agent shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement for such Persons as if specifically set forth herein.

Section 4.08 Amendments, Etc. No amendment or waiver of any provision of this Deed nor consent to any departure by any Shipowner therefrom, shall in any event be effective unless the same shall be in writing and signed by the Mortgagee (in accordance with Section 7.1 of the Collateral Agency Agreement) and the affected Shipowner(s) with respect to any amendment and by the Mortgagee Agent with respect to any waiver or consent. With respect to any waiver or consent, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

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IN WITNESS WHEREOF, the Shipowners have caused this DEED to be duly executed the day and year first above written.

JDM SHIPPING INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA ATLANTIC INCORPORATED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA GLOBAL MARINE INC.
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: Director and Authorized Person
SECUNDA MARINE ATLANTIC LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President
SECUNDA MARINE SERVICES LIMITED
By:	/s/ Alfred A. Smithers
	Name: Alfred A. Smithers
	Title: President

Schedule I

LIST OF VESSELS OWNED BY THE SHIPOWNERS

Shipowner	Vessel Name	Jurisdiction of Incorporation	Jurisdiction of Vessel Registry	Official #	Year Built / Rebuilt	Call Sign	Classification Society	Gross Tonnage	Net Tonnage
Secunda Global Marine Inc. (Barbados)	AGILE	Barbados	Barbados	725439	1978 /1998	8POC	DNV	9402	2821
JDM Shipping Inc. (Barbados)	J.D. MITCHELL	Barbados	Barbados	355811	1975 / -	8PMU	Lloyds	12522	5936
Secunda Marine Services Limited (Nova Scotia)	MARINER SEA	Nova Scotia	Canada	817120	1979 /2003	VAAB	Lloyds	2904	871
Secunda Marine Services Limited (Nova Scotia)	PANUKE SEA	Nova Scotia	Canada	823801	1984 /2003	VOCT	DNV	2704	813
Secunda Marine Services Limited (Nova Scotia)	CABOT SEA	Nova Scotia	Canada	329550	1975 / -	CFD8024	Lloyds	849	266
Secunda Marine Services Limited (Nova Scotia)	RYAN LEET	Nova Scotia	Canada	811492	1978 /1993	VOQY	DNV	1473	442
Secunda Marine Atlantic Limited (Nova Scotia)	THEBAUD SEA	Nova Scotia	Canada	821340	1999 / -	VCXR	DNV	2594	778
Secunda Atlantic Incorporated (Nova Scotia)	VENTURE SEA	Nova Scotia	Canada	820661	1998 / -	VCVZ	DNV	2235	670
Secunda Marine Services Limited (Nova Scotia)	BURIN SEA	Nova Scotia	Canada	820679	1984 /1999	VCXN	DNV	2372.11	675.18
Secunda Marine Services Limited (Nova Scotia)	TRINITY SEA	Nova Scotia	Canada	820678	1984 /1999	VCXJ	DNV	2372.11	675.18
Secunda Marine Services Limited (Nova Scotia)	SABLE SEA	Nova Scotia	Canada *	733413	1977 /2001	8PPU	DNV	2341	702
Secunda Marine Services Limited (Nova Scotia)	HEBRON SEA	Nova Scotia	Canada	363608	1975 /1994	VORM	Lloyds	1963	589

* The Canadian Registry has been voluntarily suspended to have this Vessel registered on the Bareboat Registry of Barbados.

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EX-10.8

Exhibit 10.8

CHARGE OVER SHARES

THIS CHARGE is dated the 26th day of August, 2004 (“Charge”) and made between (1) JDM Shipping Inc., a Company registered and incorporated in accordance with the Laws of Barbados and whose registered office is situate at Suite 102 Warrens Court, Warrens, in the parish of Saint Michael in the Island of Barbados (hereinafter called “the Chargor”) and (2) Wilmington Trust Company (hereinafter called “the Collateral Agent”) not in its individual capacity but solely as Collateral Agent under a Collateral Agency Agreement, dated the 26th day of August, 2004, (“the Collateral Agency Agreement”) and made between Secunda International Limited (hereinafter called “the Borrower”) and certain of its subsidiaries, Fortis Capital Corp. (hereinafter called “the Agent”) in its capacity as Agent for the benefit of the Lenders (defined below) (hereinafter called “the Lenders”) and Wells Fargo Bank, National Association (hereinafter called “the Trustee”) in its capacity as Trustee for the benefit of the Noteholders and the Collateral Agent.

WHEREAS:

Pursuant to the terms of a Credit Agreement dated the 26th day of August 2004 and made between Fortis Capital Corp., as agent, arranger and book runner (the “Agent”), Secunda International Limited (the “Borrower”), and certain of its affiliates and the Lenders party thereto (“Lenders”) (hereinafter called “the Credit Agreement”) each of the Lenders agreed to make the Facility (as defined in the Credit Agreement) available to the Borrower in accordance with and subject to the terms and conditions of the Credit Agreement. As a condition to providing such Facility, each of the Lenders has requested that the Chargor enter into this Legal Charge Over Shares and charge all of its issued and outstanding shares to the Collateral Agent, on behalf of the Agent and the Lenders.

AND WHEREAS pursuant to the terms of an Indenture, dated the 26th day of August 2004 and made between Secunda International Limited, certain of its

Affiliates and the Trustee (hereinafter called “the Indenture”), the Borrower issued the Notes.

AND WHEREAS as a condition to the initial purchasers purchasing such Notes, each of the initial purchasers have requested that the Chargor enter into this Legal Charge Over Shares and charge its shares to the Collateral Agent, on behalf of the Trustee and the Noteholders.

NOW THIS DEED WITNESSETH AS FOLLOWS:

In consideration of the mutual covenants and agreements herein contained and of other valuable consideration, receipt of which is hereby acknowledged, the Chargor and the Collateral Agent hereby agree as follows:

DEFINED TERMS

1. Capitalized terms used herein, but not otherwise defined herein, shall have the meanings assigned to such terms in the Collateral Agency Agreement.

“Share Capital” means 100 Common Shares in the capital of the Chargor, together with any and all shares, interests, participations, or other equivalent of share capital or corporate stock.

“Transaction Document” when used in the singular and “Transaction Documents” when used in the plural means any and all of the Credit Agreement, the Revolving Loan Notes, the Collateral Agency Agreement, the Subsidiary Guarantee Agreements, the Assignment of Earnings and Insurances, the Assignments of Contract, the Hedging Agreements (if any), the Mortgages, the Deed of Covenants, the Pledge Agreement, the Control Agreements, the Indenture, the Notes, the Note Guarantees and each other Security Document, each as the same may from time to time be amended, restated, modified, supplemented or renewed.

“Charged Collateral” means the Share Capital hereby charged by the Chargor to the Collateral Agent and any after acquired share capital or other property charged to the Collateral Agent pursuant to the terms hereof.

2

“Vessel Owner” means any Subsidiary of the Borrower that (i) owns one or more Vessels or other Vessel Assets or (ii) charters or arranges for the charter of one or more of the Vessels.

CHARGING CLAUSE

2. The Chargor as beneficial owner hereby charges to the Collateral Agent as a continuing security for the payment of all Secured Obligations by way of a first fixed charge:

(a) all of its issued and outstanding shares and the certificates and instruments representing the shares, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Share Capital; and

(b) all additional Share Capital of the Chargor from time to time acquired by Chargor in any manner, and the certificates or instruments representing such additional shares, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares, but so that the Collateral Agent shall not in any circumstances incur any liability whatsoever in respect of any calls installments or otherwise in connection with the Shares. The Share Capital and all other property described in Section 2 are referred hereunder as the Charged Shares.

SECURITY FOR OBLIGATIONS

3. This Legal Charge over Shares secures the payment of all of the Secured Obligations.

DELIVERY OF CHARGED SHARES

4. (a) All certificates or instruments representing or evidencing the Charged Shares shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto 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 reasonably satisfactory to the Collateral Agent. Each of the Chargors shall promptly deliver to the Collateral Agent, certificates or other instruments representing or evidencing the Charged Shares acquired or received after the date of this Charge

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with a share transfer or such other instrument of transfer or assignment in blank duly executed by the relevant Chargor. If at any time the Collateral Agent notifies a Chargor that, in its reasonable determination, it requires additional share transfers or such other instruments of transfer endorsed in blank, such Chargor shall promptly execute in blank and deliver the requested transfer instrument to the Collateral Agent.

(b) The Collateral Agent shall have the right, but not the obligation, in accordance with the terms of the Collateral Agency Agreement, at any time following the occurrence and during the continuation of an Event of Default, and without prior notice to the Chargor except as may be required by applicable law, to transfer to or to register in the name of the Collateral Agent or any of its nominees any or all of the Charged Shares, subject only to the revocable rights specified in Section 7(a) hereof. The Collateral Agent shall notify the Chargor of such transfer to or registration in the name of the Collateral Agent or its nominee promptly thereafter, provided, however, that failure to provide such notice shall not invalidate or otherwise affect such transfer or registration nor shall the Collateral Agent have any liability to the Chargors for failure to give any such notice. The Collateral Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Charged Shares for certificates or instruments of smaller or larger denominations.

REPRESENTATIONS AND WARRANTIES

5. The Chargor represents and warrants as follows as of the date hereof:

(a) The Shares Charged of the Chargor are validly issued and fully paid for and non-assessable.

(b) The Chargor is the legal and beneficial owner of the Charged Shares indicated as owned by it in the definition of Charged Shares free and clear of any lien, security interest, option or other charge or encumbrance other than by virtue of this Charge.

(c) No options, warrants or other agreements with respect to the Charged Shares are outstanding.

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(d) Upon the delivery to the Collateral Agent of the certificates or other instruments evidencing the Charged Shares together with an undated share transfer form executed by the Chargor transferring the Charged Shares to the Collateral Agent, the Collateral Agent will have a valid, perfected first priority Lien on the Charged Shares, enforceable as such against all creditors of the Chargor, except for the security interest under this Charge or any other Lien permitted by the Transaction Documents, and against all Persons purporting to purchase any of the Charged Shares from the Chargor.

VOTING RIGHTS; DIVIDENDS; ETC.

6. (a) So long as no Event of Default has occurred and is continuing:

(i) Each Chargor shall be entitled to exercise any and all voting and other consensual rights pertaining to its Charged Shares or any part thereof for any purpose not inconsistent with the express terms of this Charge or the Credit Agreement.

(ii) Each Chargor shall be entitled to receive and retain, free and clear of all liens hereunder, any and all dividends permitted under the Credit Agreement paid in respect of its Charged Shares, provided, however, that any and all

(A) dividends and interest paid or payable other than in cash in respect of, any instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Charged Shares,

(B) dividends and other distributions paid or payable in cash in respect of any Charged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and

(C) cash paid, payable or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Charged Shares and shall be forthwith delivered to the Collateral Agent to deposit it in the Collateral Account and to hold as Charged Collateral and shall, if received by a Chargor, be received in trust for the benefit of the Collateral Agent and be forthwith delivered to the Collateral Agent as Charged Collateral the same form as so received (with any necessary endorsement).

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(iii) The Collateral Agent shall, at the expense of a Chargor, execute and deliver (or cause to be executed and delivered) to such Chargor all such proxies and other instruments as such Chargor may reasonably request for the purpose of enabling such Chargor to exercise the voting and other rights which such Chargor is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of an Event of

Default:

(i) All rights of such Chargor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and, all such rights shall thereupon become vested in the Collateral Agent who shall thereupon have the right to exercise such voting and other consensual rights and to receive and hold as Charged Collateral such dividends and interest payments.

(ii) All dividends and interest payments which are received by the Chargor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Collateral Agent, and shall be forthwith paid over to the Collateral Agent for deposit in the Collateral Account to hold as Charged Collateral in the same form as so received (with any necessary endorsement) and shall be held and disbursed pursuant to the Collateral Agency Agreement and the applicable Control Agreement, as the case may be.

TRANSFERS AND LIENS

7. (a) Chargor agrees that it will not, except as expressly permitted in the Transaction Documents,

(i) sell or otherwise dispose of, or grant any option with respect to, any of the Charged Shares, or

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(ii) create or permit to exist any lien, security interest, or other charge or encumbrance upon or with respect to any of the Charged Shares, except for the security interest under this Charge or any other Lien permitted by the Transaction Documents.

(b) Chargor agrees that it will charge hereunder, promptly upon such Chargor’s acquisition thereof, any and all additional Share Capital of any Vessel Owner.

POWER OF ATTORNEY

8. The Chargor by way of security upon an Event of Default and during its continuance hereby irrevocably appoints the Collateral Agent and the persons deriving title under it severally to be its attorney in the name and on behalf and as the act and deed of the Chargor or otherwise to execute and complete any transfers or other documents which the Collateral Agent may require for perfecting its title to or for vesting the Charged Shares in the Collateral Agent or its nominees or in any purchaser and to make to make any alteration or addition thereto and to re-deliver the same thereafter and otherwise generally to sign seal and deliver and otherwise perfect any such transfers or other documents and any such legal or other charges or assignments over the Charged Shares required by the Collateral Agent and all such deeds and documents and do all such acts and things as may be required for the full exercise of the powers hereby conferred including any sale or other disposition realization or getting in or to receive, indorse and collect all instruments made payable to such Chargor representing any dividend, interest payment or other distribution in respect of the Charged Shares or any part thereof and to give full discharge for the same and this appointment shall operate as a general power of attorney. The Chargor hereby covenants with the Collateral Agent to ratify and confirm any deed document act and thing and all transactions which any such attorney may lawfully execute or do.

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COLLATERAL AGENT MAY PERFORM

9. If the Chargor fails to perform any agreement contained herein, the Collateral Agent may (but shall have no obligation to) itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by the Chargor.

REASONABLE CARE

10. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Charged Collateral in its possession if the Charged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords similiar property of the same type, or if it appoints an agent to hold the Charged Collateral on its behalf and such agent agrees to be bound by a similar standard of care, it being understood that neither the Collateral Agent nor such agent shall have any responsibility for

(i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Charged Collateral, whether or not the Collateral Agent or such agent has or is deemed to have knowledge of such matters, or

(ii) taking any necessary steps to preserve rights against any parties with respect to any Charged Collateral.

REMEDIES UPON DEFAULT

11. If any Event of Default shall have occurred and be continuing, to the extent permitted by applicable law:

(a) The Collateral Agent may, in accordance with the terms of the Collateral Agency Agreement,

(i) exercise in respect of the Charged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default (after demand for payment) and all powers given to trustees under the Trustee Act Chapter 250 of the Laws of Barbados in respect of shares or property subject to a trust and any powers or rights which may be

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exercisable by the person in whose name the Shares are registered or by the bearer thereof, and the Collateral Agent may also,

(ii) upon notice specified below, sell the Charged 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 Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and

(iii) may appoint by instrument a receiver, receiver and manager or receiver-manager (the person so appointed is hereafter called the “Receiver”) of the Charged Collateral with or without bond as the Collateral Agent may determine, and from time to time remove such Receiver and appoint another in its stead. The Chargor agrees that, to the extent notice of sale shall be required by law, at least 20 days’ notice to the Chargor of the time and place of any public sale or the time after which any private sale may be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of the Charged Collateral regardless of notice of sale having been given. The Collateral 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.

(b) Any cash held by the Collateral Agent as Charged Shares and all cash proceeds received by the Collateral Agent in respect of any sale of, or other realization upon all or any part of the Charged Collateral shall be deposited in the Collateral Account and disbursed in accordance with the Collateral Agency Agreement or the applicable Control Agreement, as the case may be.

SECURITY INTEREST VALID

12. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Chargors hereunder shall be valid and subsisting irrespective of, to the extent permitted by applicable law:

(a) any lack of validity or enforceability of any of the Transaction Documents or any other agreement or instrument relating thereto;

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(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from any of the Transaction Document or any extension of the maturity date of the Secured Obligations;

(c) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Secured Obligations; or

(d) any other circumstance which might otherwise constitute a defence available to, or a discharge of the Chargor in respect of the Secured Obligations or otherwise.

AMENDMENTS, ETC.

13. No amendment or waiver of any provision of this Charge nor consent to any departure by the Chargor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent (acting in accordance with Section 7.1 of the Collateral Agency Agreement), and the Chargor with respect to any amendment and by the Collateral Agent (acting upon the written direction of the Trustee or the Agent) with respect to any waiver or consent. With respect to any waiver or consent, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

NOTICES

14. Any notice or other communication to be given pursuant hereto shall be in the manner provided in the Collateral Agency Agreement and addressed as follows:

If to the Collateral Agent, to

Wilmington Trust Company, as Collateral Agent

1100 North Market Street

Rodney Square North

10

Wilmington, DE 19890

Attn: Corporate Trust

Telephone: (302) 636-6453

If to the Chargor, to

Paula S. Lett (as Attorney-at-Law for the Chargor)

Suite 102 Warrens Court

Warrens

St. Michael

Barbados

Telephone: (246) 425-3447

Fax: (246) 425-2949

Or at such other address as either party may notify to the other in writing.

CONTINUING SECURITY INTEREST

15. This Legal Charge over Shares shall create a continuing security interest in the Charged Shares and shall (i) remain in full force and effect until the Secured Obligations have been paid in full or until such security interest is released pursuant to the provisions of the Collateral Agency Agreement,

(ii) be binding upon and inure to the benefit of the Chargor, each of the Chargor’s executors, administrators, successors and assigns, and

(iii) inure to the benefit of and be binding upon the Collateral Agent and its successors, transferees and assigns. Upon the payment in full of the Secured Obligations or compliance with the provisions of the Collateral Agency Agreement, the Chargor shall be entitled to the return, upon its request and at its expense, of such of the Charged Shares as shall not have been sold or otherwise applied pursuant to the terms hereof.

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GOVERNING LAW

16. This Legal Charge over Shares shall be governed by and construed in accordance with the laws of Barbados.

RIGHTS OF THE COLLATERAL AGENT

17. The Collateral Agent shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

IN WITNESS WHEREOF, The Chargor and the Collateral Agent by its duly authorized officers have or have caused this Agreement to be duly executed and delivered under seal as of the date first above written.

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SIGNED SEALED AND DELIVERED

By the said

WILMINGTON TRUST COMPANY, not

in its individual capacity but solely as

Collateral Agent

By: /s/ James J. McGinley

Its: Authorized Signer

In the presence of:

Witness: /s/ Sybrandt Davis

Name: Sybrandt Davis

Calling or Description: Notary Public

Abode: State of New York

SIGNED SEALED AND DELIVERED

By the said

JDM SHIPPING INC.

By: /s/ Alfred A. Smithers

Its: Director and Authorized Person

in the presence of:

Witness: /s/ Sybrandt Davis

Name: Sybrandt Davis

Calling or Description: Notary Public

Abode: State of New York

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EX-10.9

Exhibit 10.9

CHARGE OVER SHARES

THIS CHARGE is dated the 26th day of August, 2004 (“Charge”) and made between (1) Secunda Global Marine Incorporated a Company registered and incorporated in accordance with the Laws of Barbados and whose registered office is situate at Suite 102 Warrens Court, Warrens, in the parish of Saint Michael in the Island of Barbados (hereinafter called “the Chargor”) and (2) Wilmington Trust Company of (hereinafter called “the Collateral Agent”) not in its individual capacity but solely as Collateral Agent under a Collateral Agency Agreement, dated the 26th day of August, 2004, (“the Collateral Agency Agreement”) and made between Secunda International Limited (hereinafter called “the Borrower”) and certain of its subsidiaries, Fortis Capital Corp. (hereinafter called “the Agent”) in its capacity as Agent for the benefit of the Lenders (defined below) (hereinafter called “the Lenders”) and Wells Fargo Bank, National Association (hereinafter called “the Trustee”) in its capacity as Trustee for the benefit of the Noteholders and the Collateral Agent.

WHEREAS:

Pursuant to the terms of a Credit Agreement dated the 26th day of August 2004 and made between Fortis Capital Corp., as agent, arranger and book runner (the “Agent”), Secunda International Limited (the “Borrower”), and certain of its affiliates and the Lenders party thereto (“Lenders”) (hereinafter called “the Credit Agreement”) each of the Lenders agreed to make the Facility (as defined in the Credit Agreement) available to the Borrower in accordance with and subject to the terms and conditions of the Credit Agreement. As a condition to providing such Facility, each of the Lenders has requested that the Chargor enter into this Legal Charge Over Shares and charge all of its issued and outstanding shares to the Collateral Agent, on behalf of the Agent and the Lenders.

AND WHEREAS pursuant to the terms of an Indenture, dated the 26th day of August 2004 and made between Secunda International Limited, certain of its

Affiliates and the Trustee (hereinafter called “the Indenture”), the Borrower issued the Notes.

AND WHEREAS as a condition to the initial purchasers purchasing such Notes, each of the initial purchasers have requested that the Chargor enter into this Legal Charge Over Shares and charge its shares to the Collateral Agent, on behalf of the Trustee and the Noteholders.

NOW THIS DEED WITNESSETH AS FOLLOWS:

In consideration of the mutual covenants and agreements herein contained and of other valuable consideration, receipt of which is hereby acknowledged, the Chargor and the Collateral Agent hereby agree as follows:

DEFINED TERMS

1. Capitalized terms used herein, but not otherwise defined herein, shall have the meanings assigned to such terms in the Collateral Agency Agreement.

“Share Capital” means 25 Common Shares and 1180 Preferred Shares in the capital of the Chargor, together with any and all shares, interests, participations, or other equivalent of share capital or corporate stock.

“Transaction Document” when used in the singular and “Transaction Documents” when used in the plural means any and all of the Credit Agreement, the Revolving Loan Notes, the Collateral Agency Agreement, the Subsidiary Guarantee Agreements, the Assignment of Earnings and Insurances, the Assignments of Contract, the Hedging Agreements (if any), the Mortgages, the Deed of Covenants, the Pledge Agreement, the Control Agreements, the Indenture, the Notes, the Note Guarantees and each other Security Document, each as the same may from time to time be amended, restated, modified, supplemented or renewed.

“Charged Collateral” means the Share Capital hereby charged by the Chargor to the Collateral Agent and any after acquired share capital or other property charged to the Collateral Agent pursuant to the terms hereof.

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“Vessel Owner” means any Subsidiary of the Borrower that (i) owns one or more Vessels or other Vessel Assets or (ii) charters or arranges for the charter of one or more of the Vessels.

CHARGING CLAUSE

2. The Chargor as beneficial owner hereby charges to the Collateral Agent as a continuing security for the payment of all Secured Obligations by way of a first fixed charge:

(a) all of its issued and outstanding shares and the certificates and instruments representing the shares, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Share Capital; and

(b) all additional Share Capital of the Chargor from time to time acquired by Chargor in any manner, and the certificates or instruments representing such additional shares, and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares, but so that the Collateral Agent shall not in any circumstances incur any liability whatsoever in respect of any calls installments or otherwise in connection with the Shares. The Share Capital and all other property described in Section 2 are referred hereunder as the Charged Shares.

SECURITY FOR OBLIGATIONS

3. This Legal Charge over Shares secures the payment of all of the Secured Obligations.

DELIVERY OF CHARGED SHARES

4. (a) All certificates or instruments representing or evidencing the Charged Shares shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto 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 reasonably satisfactory to the Collateral Agent. Each of the Chargors shall promptly deliver to the Collateral Agent, certificates or other instruments representing or evidencing the Charged Shares acquired or received after the date of this Charge

3

with a share transfer or such other instrument of transfer or assignment in blank duly executed by the relevant Chargor. If at any time the Collateral Agent notifies a Chargor that, in its reasonable determination, it requires additional share transfers or such other instruments of transfer endorsed in blank, such Chargor shall promptly execute in blank and deliver the requested transfer instrument to the Collateral Agent.

(b) The Collateral Agent shall have the right, but not the obligation, in accordance with the terms of the Collateral Agency Agreement, at any time following the occurrence and during the continuation of an Event of Default, and without prior notice to the Chargor except as may be required by applicable law, to transfer to or to register in the name of the Collateral Agent or any of its nominees any or all of the Charged Shares, subject only to the revocable rights specified in Section 7(a) hereof. The Collateral Agent shall notify the Chargor of such transfer to or registration in the name of the Collateral Agent or its nominee promptly thereafter, provided, however, that failure to provide such notice shall not invalidate or otherwise affect such transfer or registration nor shall the Collateral Agent have any liability to the Chargors for failure to give any such notice. The Collateral Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Charged Shares for certificates or instruments of smaller or larger denominations.

REPRESENTATIONS AND WARRANTIES

5. The Chargor represents and warrants as follows as of the date hereof:

(a) The Shares Charged of the Chargor are validly issued and fully paid for and non-assessable.

(b) The Chargor is the legal and beneficial owner of the Charged Shares indicated as owned by it in the definition of Charged Shares free and clear of any lien, security interest, option or other charge or encumbrance other than by virtue of this Charge.

(c) No options, warrants or other agreements with respect to the Charged Shares are outstanding.

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(d) Upon the delivery to the Collateral Agent of the certificates or other instruments evidencing the Charged Shares together with an undated share transfer form executed by the Chargor transferring the Charged Shares to the Collateral Agent, the Collateral Agent will have a valid, perfected first priority Lien on the Charged Shares, enforceable as such against all creditors of the Chargor, except for the security interest under this Charge or any other Lien permitted by the Transaction Documents, and against all Persons purporting to purchase any of the Charged Shares from the Chargor.

VOTING RIGHTS; DIVIDENDS; ETC.

6. (a) So long as no Event of Default has occurred and is continuing:

(i) Each Chargor shall be entitled to exercise any and all voting and other consensual rights pertaining to its Charged Shares or any part thereof for any purpose not inconsistent with the express terms of this Charge or the Credit Agreement.

(ii) Each Chargor shall be entitled to receive and retain, free and clear of all liens hereunder, any and all dividends permitted under the Credit Agreement paid in respect of its Charged Shares, provided, however, that any and all

(A) dividends and interest paid or payable other than in cash in respect of, any instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Charged Shares,

(B) dividends and other distributions paid or payable in cash in respect of any Charged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and

(C) cash paid, payable or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Charged Shares and shall be forthwith delivered to the Collateral Agent to deposit it in the Collateral Account and to hold as Charged Collateral and shall, if received by a Chargor, be received in trust for the benefit of the Collateral Agent and be forthwith delivered to the Collateral Agent as Charged Collateral the same form as so received (with any necessary endorsement).

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(iii) The Collateral Agent shall, at the expense of a Chargor, execute and deliver (or cause to be executed and delivered) to such Chargor all such proxies and other instruments as such Chargor may reasonably request for the purpose of enabling such Chargor to exercise the voting and other rights which such Chargor is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) All rights of such Chargor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and, all such rights shall thereupon become vested in the Collateral Agent who shall thereupon have the right to exercise such voting and other consensual rights and to receive and hold as Charged Collateral such dividends and interest payments.

(ii) All dividends and interest payments which are received by the Chargor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Collateral Agent, and shall be forthwith paid over to the Collateral Agent for deposit in the Collateral Account to hold as Charged Collateral in the same form as so received (with any necessary endorsement) and shall be held and disbursed pursuant to the Collateral Agency Agreement and the applicable Control Agreement, as the case may be.

TRANSFERS AND LIENS

7. (a) Chargor agrees that it will not, except as expressly permitted in the Transaction Documents,

(i) sell or otherwise dispose of, or grant any option with respect to, any of the Charged Shares, or

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(ii) create or permit to exist any lien, security interest, or other charge or encumbrance upon or with respect to any of the Charged Shares, except for the security interest under this Charge or any other Lien permitted by the Transaction Documents.

(b) Chargor agrees that it will charge hereunder, promptly upon such Chargor’s acquisition thereof, any and all additional Share Capital of any Vessel Owner.

POWER OF ATTORNEY

8. The Chargor by way of security upon an Event of Default and during its continuance hereby irrevocably appoints the Collateral Agent and the persons deriving title under it severally to be its attorney in the name and on behalf and as the act and deed of the Chargor or otherwise to execute and complete any transfers or other documents which the Collateral Agent may require for perfecting its title to or for vesting the Charged Shares in the Collateral Agent or its nominees or in any purchaser and to make to make any alteration or addition thereto and to re-deliver the same thereafter and otherwise generally to sign seal and deliver and otherwise perfect any such transfers or other documents and any such legal or other charges or assignments over the Charged Shares required by the Collateral Agent and all such deeds and documents and do all such acts and things as may be required for the full exercise of the powers hereby conferred including any sale or other disposition realization or getting in or to receive, indorse and collect all instruments made payable to such Chargor representing any dividend, interest payment or other distribution in respect of the Charged Shares or any part thereof and to give full discharge for the same and this appointment shall operate as a general power of attorney. The Chargor hereby covenants with the Collateral Agent to ratify and confirm any deed document act and thing and all transactions which any such attorney may lawfully execute or do.

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COLLATERAL AGENT MAY PERFORM

9. If the Chargor fails to perform any agreement contained herein, the Collateral Agent may (but shall have no obligation to) itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by the Chargor.

REASONABLE CARE

10. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Charged Collateral in its possession if the Charged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords similiar property of the same type, or if it appoints an agent to hold the Charged Collateral on its behalf and such agent agrees to be bound by a similar standard of care, it being understood that neither the Collateral Agent nor such agent shall have any responsibility for

(i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Charged Collateral, whether or not the Collateral Agent or such agent has or is deemed to have knowledge of such matters, or

(ii) taking any necessary steps to preserve rights against any parties with respect to any Charged Collateral.

REMEDIES UPON DEFAULT

11. If any Event of Default shall have occurred and be continuing, to the extent permitted by applicable law:

(a) The Collateral Agent may, in accordance with the terms of the Collateral Agency Agreement,

(i) exercise in respect of the Charged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default (after demand for payment) and all powers given to trustees under the Trustee Act Chapter 250 of the Laws of Barbados in respect of shares or property subject to a trust and any powers or rights which may be

8

exercisable by the person in whose name the Shares are registered or by the bearer thereof, and the Collateral Agent may also,

(ii) upon notice specified below, sell the Charged 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 Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and

(iii) may appoint by instrument a receiver, receiver and manager or receiver-manager (the person so appointed is hereafter called the “Receiver”) of the Charged Collateral with or without bond as the Collateral Agent may determine, and from time to time remove such Receiver and appoint another in its stead. The Chargor agrees that, to the extent notice of sale shall be required by law, at least 20 days’ notice to the Chargor of the time and place of any public sale or the time after which any private sale may be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of the Charged Collateral regardless of notice of sale having been given. The Collateral 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.

(b) Any cash held by the Collateral Agent as Charged Shares and all cash proceeds received by the Collateral Agent in respect of any sale of, or other realization upon all or any part of the Charged Collateral shall be deposited in the Collateral Account and disbursed in accordance with the Collateral Agency Agreement or the applicable Control Agreement, as the case may be.

SECURITY INTEREST VALID

12. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Chargors hereunder shall be valid and subsisting irrespective of, to the extent permitted by applicable law:

(a) any lack of validity or enforceability of any of the Transaction Documents or any other agreement or instrument relating thereto;

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(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from any of the Transaction Document or any extension of the maturity date of the Secured Obligations;

(c) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Secured Obligations; or

(d) any other circumstance which might otherwise constitute a defence available to, or a discharge of the Chargor in respect of the Secured Obligations or otherwise.

AMENDMENTS, ETC.

13. No amendment or waiver of any provision of this Charge nor consent to any departure by the Chargor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent (acting in accordance with Section 7.1 of the Collateral Agency Agreement), and the Chargor with respect to any amendment and by the Collateral Agent (acting upon the written direction of the Trustee or the Agent) with respect to any waiver or consent. With respect to any waiver or consent, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

NOTICES

14. Any notice or other communication to be given pursuant hereto shall be in the manner provided in the Collateral Agency Agreement and addressed as follows:

If to the Collateral Agent, to

Wilmington Trust Company, as Collateral Agent

1100 North Market Street

Rodney Square North

10

Wilmington, DE 19890

Attn: Corporate Trust

Telephone: (302) 636-6453

If to the Chargor, to

Paula S. Lett (as Attorney-at-Law for the Chargor)

Suite 102 Warrens Court

Warrens

St. Michael

Barbados

Telephone: (246) 425-3447

Fax: (246) 425-2949

Or at such other address as either party may notify to the other in writing.

CONTINUING SECURITY INTEREST

15. This Legal Charge over Shares shall create a continuing security interest in the Charged Shares and shall (i) remain in full force and effect until the Secured Obligations have been paid in full or until such security interest is released pursuant to the provisions of the Collateral Agency Agreement,

(ii) be binding upon and inure to the benefit of the Chargor, each of the Chargor’s executors, administrators, successors and assigns, and

(iii) inure to the benefit of and be binding upon the Collateral Agent and its successors, transferees and assigns. Upon the payment in full of the Secured Obligations or compliance with the provisions of the Collateral Agency Agreement, the Chargor shall be entitled to the return, upon its request and at its expense, of such of the Charged Shares as shall not have been sold or otherwise applied pursuant to the terms hereof.

11

GOVERNING LAW

16. This Legal Charge over Shares shall be governed by and construed in accordance with the laws of Barbados.

RIGHTS OF THE COLLATERAL AGENT

17. The Collateral Agent shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Collateral Agency Agreement as if specifically set forth herein.

IN WITNESS WHEREOF, The Chargor and the Collateral Agent by its duly authorized officers have or have caused this Agreement to be duly executed and delivered under seal as of the date first above written.

12

SIGNED SEALED AND DELIVERED

By the said

WILMINGTON TRUST COMPANY, not

in its individual capacity but solely as

Collateral Agent

By: /s/ James J. McGinley

Its: Authorized Person

In the presence of:

Witness: /s/ Sybrandt Davis

Name: Sybrandt Davis

Calling or Description: Notary Public

Abode: State of New York

SIGNED SEALED AND DELIVERED

By the said

SECUNDA GLOBAL MARINE INCORPORATED

By: /s Alfred A. Smithers

Its: Director and Authorized Person

in the presence of:

Witness: /s/ Sybrandt Davis

Name: Sybrandt Davis

Calling or Description: Notary Public

Abode: State of New York

13

EX-12.1

EXHIBIT 12.1

Secunda International Limited

Ratio of Earnings to Fixed Charges

	Years Ended June 30,
	2001		2002		2003		2004
	($ in thousands)
EARNINGS
Pretax income (loss)	$	4,731	$	4,233	$	3,948	($	4,669	)
Less: Capital taxes		413		368		445		474
Fixed charges (computed below)		15,636		13,361		13,546		12,587
Less: Interest capitalized		—		190		735		—
Total earnings (A)	$	19,954	$	17,036	$	16,314	$	7,444
FIXED CHARGES
Interest expensed (1)	$	11,565	$	7,714	$	7,668	$	8,829
Interest capitalized		—		190		735		—
Estimate of interest in lease expense		4,071		5,457		5,143		3,758
Total fixed charges (B)	$	15,636	$	13,361	$	13,546	$	12,587
RATIO OF EARNINGS TO FIXED CHARGES (A) DIVIDED BY (B)		1.3X		1.3X		1.2X		0.6X

(1) Includes amortization of deferred financing costs.

(2) For the year ended June 30, 2004, the ratio of earnings to fixed charges was less than one-to-one due to a deficiency in earnings of approximately $5.1 million.

EX-21.1

EXHIBIT 21.1

Secunda International Limited

Subsidiaries

Name	Country of Incorporation	Proportion of Ownership Interest		Proportion of Voting Power Held
3013563 Nova Scotia Limited	Canada	100	%	100	%
Secunda Marine International Incorporated	Canada	100	%	100	%
Secunda Marine Services Limited	Canada	100	%	100	%
Navis Shipping Incorporated	Canada	100	%	100	%
Secunda Atlantic Inc.	Canada	100	%	100	%
Secunda Marine Atlantic Limited	Canada	100	%	100	%
Offshore Logistics Incorporated	Canada	100	%	100	%
Wright Cove Holdings Limited	Canada	100	%	100	%
Associated Marine Limited	Canada	100	%	100	%
Pol-E-Mar Inc.	Canada	100	%	100	%
Polyfab International Inc.	Canada	100	%	100	%
Secunda Global Marine Incorporated	Barbados	100	%	100	%
JDM Shipping Inc.	Barbados	100	%	100	%
International Shipping Corporation Inc.	Barbados	100	%	100	%
I.S. Atlantic Corporation Inc.	Barbados	100	%	100	%
I.S. Pacific Corporation Inc.	Barbados	100	%	100	%
Secunda Global International Inc.	Barbados	100	%	100	%

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement of Secunda International Limited on Form F-4 of our reports accompanying the financial statements and schedules of Secunda International Limited dated August 27, 2004, except for Note 20 and 22, as to which the date is December 6, 2004, and Secunda Marine Services Limited and Secunda Marine International Incorporated dated August 27, 2004, except for Note 22, as to which the date is December 6, 2004, contained in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading “Independent Accountants” in such Prospectus.

Halifax, Canada

February 3, 2005

EX-25.1

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)

WELLS FARGO BANK, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

A National Banking Association	94-1347393
(Jurisdiction of incorporation or	(I.R.S. Employer
organization if not a U.S. national	Identification No.)
bank)
101 North Phillips Avenue
Sioux Falls, South Dakota	57104
(Address of principal executive offices)	(Zip code)

Wells Fargo & Company

Law Department, Trust Section

MAC N9305-175

Sixth Street and Marquette Avenue, 17^th Floor

Minneapolis, Minnesota 55479

(612) 667-4608

(Name, address and telephone number of agent for service)

SECUNDA INTERNATIONAL LIMITED¹

(Exact name of obligor as specified in its charter)

Nova Scotia	Not Applicable
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
One Canal Street
Dartmouth, Nova Scotia	B2Y 2W1
(Address of principal executive offices)	(Zip code)

Senior Secured Floating Rate Notes due 2012

(Title of the indenture securities)

¹ See Table 1 – List of additional obligors

Table 1

Exact Name of Registrant As Specified In Its Charter	State or other Jurisdiction of Incorporation or Organization	IRS Employer Identification Number	Address, Including ZIP Code, Of Registrant’s Principal Executive Offices
3013563 Nova Scotia Limited	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Marine International Incorporated	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Marine Services Limited	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Global Marine Inc.	Barbados	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
JDM Shipping Inc.	Barbados	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
International Shipping Corporation Inc.	Barbados	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Global International Inc.	Barbados	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Navis Shipping Incorporated	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Atlantic Incorporated	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Secunda Marine Atlantic Limited	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1
Offshore Logistic Incorporated	Nova Scotia	Not Applicable	One Canal Street Dartmouth, Nova Scotia B2Y 2W1

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.

Comptroller of the Currency

Treasury Department

Washington, D.C.

Federal Deposit Insurance Corporation

Washington, D.C.

Federal Reserve Bank of San Francisco

San Francisco, California 94120

(b) Whether it is authorized to exercise corporate trust powers.

The trustee is authorized to exercise corporate trust powers.

Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation.

None with respect to the trustee.

No responses are included for Items 3-14 of this Form T-1 because the obligor is not in default as provided under Item 13.

Item 15. Foreign Trustee. Not applicable.

Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility.

Exhibit 1.	A copy of the Articles of Association of the trustee now in effect.*
Exhibit 2.	A copy of the Comptroller of the Currency Certificate of Corporate Existence and Fiduciary Powers for Wells Fargo Bank, National Association, dated February 4, 2004.**
Exhibit 3.	See Exhibit 2
Exhibit 4.	Copy of By-laws of the trustee as now in effect.***
Exhibit 5.	Not applicable.
Exhibit 6.	The consent of the trustee required by Section 321(b) of the Act.
Exhibit 7.	A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.****
Exhibit 8.	Not applicable.
Exhibit 9.	Not applicable.

* Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation file number 022-28721.

** Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation file number 022-28721.

*** Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation file number 022-28721.

**** Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the form S-4/A dated December 8, 2004 of Merisant Company file number 333-114105.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wells Fargo Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Minneapolis and State of Minnesota on the 3rd day of February 2005.

WELLS FARGO BANK, NATIONAL ASSOCIATION

/s/ Jeffery T. Rose

Jeffery T. Rose

Corporate Trust Officer

EXHIBIT 6

February 3, 2005

Securities and Exchange Commission

Washington, D.C. 20549

Gentlemen:

In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, the undersigned hereby consents that reports of examination of the undersigned made by Federal, State, Territorial, or District authorities authorized to make such examination may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Very truly yours,

WELLS FARGO BANK, NATIONAL ASSOCIATION

/s/ Jeffery T. Rose

Jeffery T. Rose

Corporate Trust Officer