IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:

FASTSHIP, INC., et al.,

Debtors.
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)
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Chapter 11

Case No. 12-10968 (BLS)
(Joint Administration Pending)

MOTION FOR ENTRY OF INTERIM ORDER (I) AUTHORIZING DEBTORS TO
INCUR POST-PETITION SECURED INDEBTEDNESS PURSUANT TO SECTIONS
105(A), 362, 364(C) AND (D) OF THE BANKRUPTCY CODE; (II) SCHEDULING A
FINAL HEARING; AND (III) GRANTING RELATED RELIEF

FastShip, Inc. (FSI), FastShip Atlantic, Inc. (FSA) and Thornycroft, Giles & Co.,
Inc. (TGC, together with FSI and FSA, the Debtors and each individually, a Debtor),
debtors and debtors in possession in the above-captioned chapter 11 cases, hereby move (the
Motion) this Court pursuant to sections 105, 362, and 364 of Title 11 of the United States
Code 11 U.S.C. 101, et seq. (as amended, the Bankruptcy Code), Rules 2002, 4001(c) and
(d) and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rule
4001-2 of the Local Rules for the United States Bankruptcy Court for the District of Delaware
(the Local Rules) for entry of an interim order (the Interim Order) authorizing
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:
(1) the Debtors (in such capacity, the Borrowers) to borrow on a senior secured
revolving credit basis (the Financing) in an amount not to exceed $400,000 (the
Commitment), pursuant to that certain Debtor-In-Possession Loan and Security Agreement (as
amended in accordance with the terms thereof, the Interim Order and the Final Order (as defined
below), the (DIP Credit and Security Agreement), substantially in the form attached as Exhibit
B to this Motion, and, together with each of the Loan Documents, as defined by the DIP Loan

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The Debtors, along with the last four digits of each Debtors tax identification number, are as follows:
FastShip, Inc. (8309), FastShip Atlantic, Inc. (0980) and Thornycroft, Giles & Co., Inc. (1142). The mailing
address for the Debtors is 1608 Walnut Street, Suite 501, Philadelphia, PA 19103.
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A proposed Interim Order is attached to this Motion as Exhibit A.
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and Security Agreement hereinafter collectively being called the DIP Documents), by and
among the Debtors and IP Co., Inc., as lender (the DIP Lender);
(2) the Debtors to execute and enter into the DIP Documents and to perform such
other and further acts as may be required in connection with the DIP Documents;
(3) the Debtors to incur secured and superpriority administrative expense DIP
Obligations (as defined below) under sections 364(c) and 364(d) of the Bankruptcy Code,
payable from the Debtors estates, subject only to the Carve-Out (as defined below), to secure
any and all of the DIP Obligations;
(4) the scheduling of a final hearing (the Final Hearing) to be held within thirty
days of the entry of the Interim Order to consider entry of a final order (the Final Order)
authorizing, inter alia, the balance of the borrowings in accordance with the terms of the DIP
Documents on a final basis; and
(5) the waiver of any applicable stay to provide for the immediate effectiveness of
this Interim Order.
In support of this Motion, the Debtor relies on the Declaration of Roland K. Bullard, II in
Support of Chapter 11 Petitions and Requests for First Day Relief (the Bullard Declaration),
which has been filed simultaneously with this Motion with the Court and is incorporated in this
Motion by reference. In further support of this Motion, the Debtor respectfully represents as
follows:








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STATEMENT PURSUANT TO BANKRUPTCY RULE 4001(c)(1)(A)
AND LOCAL RULE 4001-2

Summary of Terms
Borrowing Limit: $400,000. See DIP Loan and Security
Agreement, Article II, Section 2.01(a).
Interest Rate for Post-Petition Advances: 5%. See DIP Loan and Security Agreement,
Article II, Section 2.07(a).
Maturity Date: The Effective Date of a plan of reorganization,
if the such plan of reorganization is confirmed
over the objection of the Lender. See DIP
Loan and Security Agreement, Article I,
Section 1.01.
Events of Default: At any time after the entry of the Initial DIP
Order, Lender may terminate this lending
relationship for any or no reason by sending a
notice to the Borrowers in writing (the
Termination Notice), which Termination
Notice shall be effective immediately upon
receipt of same by the Borrowers. See DIP
Loan and Security Agreement, Article II,
Section 2.02. Upon receipt of such
Termination Notice, the Borrowers shall
provide and accounting to the Lender of all
sums received from the Lender and all amounts
paid out or accrued per the budget. The
borrowers shall then pay to Lender all sums
borrowed by them from Lender in excess of all
allowed payments and accruals, without further
court order.
Grant of Liens to DIP Lender First lien on cash balances, save and except for
cash on hand prior to any loans by Lender, and
all assets, except for any accounts receivables
owed to Borrowers or any of them as of the
Petition Date; liens junior to non-avoidable
Permitted Liens (defined below) with respect
to certain property of the Debtors; and the DIP
Liens shall not be subordinated to any lien that
is avoided or arising after the Petition Date.
The liens granted to DIP Lenders do not
include a first lien on Avoidance Actions
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(defined below). See DIP Loan and Security
Agreement, Article II, Section 2.08.
JURISDICTION
1. This Court has subject matter jurisdiction to consider this matter pursuant to 28
U.S.C. 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (B), (D), (G),
(K), and (M). Venue is proper before this Court pursuant to 28 U.S.C. 1408 and 1409.
BACKGROUND
2. Simultaneously herewith (the Petition Date), the Debtors filed with this Court
voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Pursuant to sections
1107 and 1108 of the Bankruptcy Code, the Debtors are continuing to operate their business and
manage their property and assets as debtors in possession. No trustee, examiner or committee of
creditors has yet been appointed in the Debtors chapter 11 cases.
3. The Debtors are composed of three interrelated entities, each of which is a
Delaware corporation. FSI was formed in 1997. Shortly thereafter FSA and TGC were merged
into, and then became, wholly-owned subsidiaries of FSI.
4. The Debtors are privately held companies that have sought to raise seed capital to
implement a business plan using patented ship technology to revolutionize international freight
transportation. The new ships would provide service speeds three times faster than traditional
sea freight with previously unheard-of reliability. On a door-to-door basis, the resulting service
would be comparable to airfreight at half the cost.
5. TGC holds U.S. and international patents for its unique design (the Design) for
a ship that operates at high speeds carrying heavy loads of freight in open-ocean conditions in
virtually any weather. The Debtors believe the Design will be of significant commercial and
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military value, particularly in a world of expanding trade, global manufacturing, and just-in-time
supply-chain methods.
6. For many years, the Debtors focused their efforts on creating the first commercial
service using the Design to demonstrate the value of the new technology in commercial use. To
this end, the Debtors developed a business plan for a freight service on the North Atlantic trade
route, which business plan required the Debtors to build four ships using the Design with
specialized cargo-handling systems calling on dedicated terminals in Philadelphia, Pennsylvania
and Cherbourg, France.
7. In order to construct the ships and fully fund the business plan, the Debtors sought
to raise $2 billion in financing. During the period from 1998 to 2008, the Debtors were close to
raising the necessary capital to launch the business plan on three occasions, but were unable to
close on the required financing because of political and markets setbacks.
8. The combination of deal fatigue and the collapse of the global economy in 2008-
2009 forced the Debtors to abandon their original commercial business plan.
9. At the same time that hope for the commercial business plan faded, the U.S. Navy
entered into a contract to build a new class of high speed combat vessels, the first of which was
built and delivered at a cost of $650 million. The Debtors believe that the design of this vessel
infringes on TGCs patents. As a result, the Debtors believe a strong claim exists against the
U.S. government for patent infringement. The Debtors attempted to reach a negotiated
settlement with the U.S. government by filing an administrative claim in April 2008. Fully two
years later, the U.S. government summarily denied the Debtors claim on what the Debtors, and
their technical advisors, believe to be meritless grounds.
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10. Through the bankruptcy process, the Debtors will create a liquidating trust to
pursue and monetize the patent infringement litigation against the U.S. government and
distribute the proceeds of such action to their creditors in an orderly fashion.
RELIEF REQUESTED
11. By this Motion, the Debtors seek entry of an interim order pursuant to Bankruptcy
Code 105, 362 and 364, Bankruptcy Rules 2002, 4001, and 9014 and Local Rule 4001-2 (i)
authorizing Debtors to incur post-petition secured indebtedness pursuant to sections 105(a), 363,
364(c) and 364(d) of the bankruptcy code; (ii) scheduling a final hearing; and (iii) granting
related relief.
BASIS FOR RELIEF REQUESTED
Necessary Showing under Bankruptcy Code 364
12. Pursuant to Bankruptcy Code 364 (c), the Court may authorize the Debtors to
obtain credit or incur debt with superpriority administrative expense status or pursuant to section
364 (d) secured by a lien on the Debtors property equal or superior to all other liens, if the
Debtors are unable to obtain credit on an unsecured basis. Specifically, Bankruptcy Code
364(d) provides:
(d)(1) The court, after notice and a hearing, may authorize the
obtaining of credit or the incurring of debt secured by a
senior or equal lien on property of the estate that is subject
to a lien only if
(A) the trustee is unable to obtain such credit otherwise;
and;
(B) there is adequate protection of the interest of the
holder of the lien on the property of the estate on
which such senior or equal lien is proposed to be
granted.
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13. The Debtors possess insufficient cash or revenues to maintain their minimum
necessary operations to preserve the value of their assets. As a consequence, the Debtors must
pay their post-petition expenses from certain post-petition advances (Post-Petition Advances).
The Debtors were unable to obtain unsecured credit allowable under Bankruptcy Code
503(b)(1) as an administrative expense, solely in exchange for a grant of superpriority
administrative expense claim or secured by a junior lien on property of the estate that is subject
to a lien. As a result, the Debtors propose to obtain post-petition financing from the DIP Lender
in an amount of up to $400,000 pursuant both to Sections 364(c) and 364(d)(1) on the terms and
conditions as summarized below
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:
14. The Debtors submit that, given its pre-petition efforts to identify potential lending
sources, no further search is required at this time. See Bray v. Shenandoah Fed. Say. & Loan
Assn. (In re Snowshoe Co., Inc.), 789 F.2d 1085, 1088 (4th Cir. 1986); In re Ames Dept. Stores,
115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) (holding that the debtor made a reasonable effort to
secure financing where it approached four lending institutions, was rejected by two, and selected
the least onerous financing option from the remaining two lenders). There are a few lenders
likely to be able and willing to extend the necessary credit to the debtor. As a result, it would
be unrealistic and unnecessary to require [the debtor] to conduct such an exhaustive search for
financing. In re Sky Valley, Inc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 1988), affd, sub nom.;
Anchor Say. Bank FSB v. Sky Valley, Inc., 99 B.R. 117, 120 n.4 (N.D. Ga. 1989); see also, In re
Ames, 115 B.R. at 40.
15. The Debtors further submit that the terms of the DIP Credit and Security
Agreement are appropriate and reasonable and that deference should be given to the Debtors

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All capitalized terms not defined in this Motion shall have the meanings given to them in the DIP Credit and
Security Agreement.
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reasonable business judgment. See, Group of Institutional Investors v. Chicago Mil. St. P. &
Prac. Ry., 318 U.S. 523, 550 (1943) (holding that decisions regarding the rejection or assumption
of a lease is left to the business judgment of the debtor); In re Lifeguard Indus., Inc., 37 B.R. 3,
17 (Bankr. S.D. Ohio 1983) ([B]usiness judgment should be left to the board room and not to
this Court); see also In re Trans World Airlines, Inc., 163 B.R. 964, 974 (Bankr. D. Del. 1994)
(noting that the interim loan, receivables facility and asset-based facility were approved because
they reflect[ed] sound and prudent business judgment on behalf of TWA ... [were] reasonable
under the circumstances and in the best interest of TWA and its creditors.); In re TM Carlton
House Partners, LTD, 91 B.R. 349, 358 (Bankr. E.D. Pa. 1988) (holding that due to the debtors
distinct awareness of its own financial needs, the court would not second-guess its business
judgment to put aside cash to effectuate a refinancing of its debts.); cf., In re Simasko Prod. Co.,
47 B.R. 444, 449 (D. Colo. 1985) (business judgments should be left to the board room and not
to this Court).
Approval of the Financing and the DIP Documents
16. The Debtors seek authorization to enter into the DIP Documents. The Borrowers
seek Court authority to borrow money pursuant to the DIP Documents in the principal amount
not to exceed the Commitment (plus interest, as provided for in the DIP Documents). In
accordance with the terms of the DIP Documents, the borrowings under the DIP Documents, (the
DIP Obligations) shall be used solely for purposes permitted under the DIP Documents.
17. In accordance with the DIP Documents and upon approval of the Court, each
Debtor seeks authority on an interim basis to perform all acts, to make, execute and deliver all
instruments and documents (including the execution or recordation of security agreements and
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financing statements), that may be required or necessary for the Debtors performance of the DIP
Obligations, including:
i. the execution, delivery and performance of the DIP Documents
and any exhibits attached thereto; and
ii. the performance of all other acts required under or in connection
with the DIP Documents.
18. Upon execution and delivery of the DIP Documents and the Courts entry of the
Interim Order, the DIP Documents shall constitute valid and binding obligations of the Debtors,
enforceable against each Debtor party thereto in accordance with the terms of the DIP
Documents. No DIP Obligation, payment, transfer or grant of security under the DIP Documents
or the entry of the Interim Order shall be stayed, restrained, voidable, or recoverable under the
Bankruptcy Code or under any applicable law (including under section 502(d) of the Bankruptcy
Code), or subject to any defense, disallowance, recharacterization, reduction, setoff, recoupment
or counterclaim.
Termination of DIP Loan Documents
19. The obligation to lend money under the DIP Loan and Security Agreement (but
no other provision of the DIP Loan and Security Agreement or the Interim Order), shall
immediately and automatically terminate (except as the DIP Lender may otherwise agree) upon
receipt of the Termination Notice from Lender to Borrowers (the Termination Event). In such
event, Borrowers shall provide an accounting to Lender of all sums borrowed and all payments
made or expenses accrued per the budgets and shall pay to Lender the net of all amounts
borrowerd after deducting all sums so paid or accrued.
Superpriority Claim
20. Pursuant to section 364(c)(1) of the Bankruptcy Code, all of the DIP Obligations
shall constitute an allowed administrative expense claim against the Debtors (the Superpriority
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Claim), with priority over any and all administrative expenses, diminution claims, and all other
claims against the Debtors, now existing or hereafter arising, of any kind whatsoever, including
all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy
Code, and over any and all administrative expenses or other claims arising under sections 105,
326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 726, 1113 or 1114 of the Bankruptcy Code,
whether or not such expenses or claims may become secured by a judgment lien or other non-
consensual lien, levy or attachment, subject, in each instance, only to the payment of the Carve-
Out.
DIP Liens
21. As security for the DIP Obligations, Debtors seek authority to grant DIP Lender
the security interests and liens described in subparagraphs (a) through (c) of paragraph 24 for the
benefit of the DIP Lender (all property identified in subparagraphs (a), (b) and (c) below being
collectively referred to as the DIP Collateral) (all such liens and security interests granted to
the DIP Lender, for its benefit and for the benefit of the DIP Lender pursuant to this Motion and
the DIP Documents, the DIP Liens).
22. No Lien on Avoidance Actions. For the avoidance of doubt, the DIP Collateral
shall not include any proceeds or property recovered or otherwise the subject of successful
causes of action under sections 502(d), 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code,
or any other avoidance actions under the Bankruptcy Code or other applicable law (collectively,
the Avoidance Actions). Neither shall the DIP Collateral include any funds on hand as of the
Petition Date nor any accounts receivables (or the proceeds of same) owed to the Borrowers or
any of them as of the Petition Date.
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23. As more fully described below in this Motion, the DIP Liens shall be valid,
enforceable, effective, and perfected by operation of law on a final basis immediately upon entry
of the Interim Order by the Court and without the necessity of the execution, recordation or filing
by the Debtors or the DIP Lender of mortgages, title certificates, security agreements, pledge
agreements, financing statements, control agreements or other agreements.
24. The DIP Liens shall consist of the following:
a. First Lien on Cash Balances, Excluding Funds on Hand Priot to any
Loans from Lender and Unencumbered Property. Except for funds on
hand as of the Petiton Date, or any accounts receivables owe to Borrowers
or either of them as of the Petition Date, Pursuant to Section 364(c)(2) of
the Bankruptcy Code, at all times secured by a valid, binding, continuing,
enforceable and fully-perfected first priority senior security interest in and
Lien on all unencumbered pre- and post-petition tangible and intangible
property of the Borrowers estates in the Chapter 11 Case of any nature
whatsoever (both real and personal), whether existing on the Petition Date
or thereafter acquired, and the proceeds thereof, wherever located that, on
or as of the Petition Date is not subject to valid, perfected and non-
avoidable Liens, including, without limitation, all cash and cash collateral
of the Borrowers (whether maintained with the Lender or otherwise) and
any investment of such cash and cash collateral, all present and future
accounts receivable, tax refund claims, net insurance/condemnation
proceeds or any rights to payment whether arising before or after the
Petition Date, inventory, general intangibles, chattel paper, contracts,
documents, instruments, interests in leaseholds, real properties, fixtures,
machinery and equipment, vehicles, deposit accounts, patents, copyrights,
trademarks, tradenames, rights under license agreements and other
intellectual property, and the proceeds of the foregoing;

b. Liens Junior to Certain Other Liens with Respect to Certain Property of
the Debtors. Except for funds on hand as of the Petiton Date, or any
accounts receivables owe to Borrowers or either of them as of the Petition
Date, pursuant to Section 364(c)(3) of the Bankruptcy Code, at all times
secured by valid, binding, continuing, enforceable and fully-perfected
second priority, junior security interests and junior Liens on all pre- and
post-petition property of the Debtors (other than the property described in
clauses (ii) and (iv) of Section 2.08(b), as to which the Liens and security
interests in favor of the Lender will be as described in such clauses),
whether now existing or hereafter acquired, that are subject to valid,
perfected and non-avoidable Permitted Liens in existence on the Petition
Date or to valid Permitted Liens in existence on the Petition Date that are
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perfected subsequent to the Petition Date as permitted by Section 546(b)
of the Bankruptcy Code; and


c. Priming Liens, Liens Securing the Adequate Protection Obligations and
Other Liens. Except for funds on hand as of the Petiton Date, or any
accounts receivables owe to Borrowers or either of them as of the Petition
Date, pursuant to Section 364(d)(1) of the Bankruptcy Code, at all times
secured by a valid, binding, continuing, enforceable and fully-perfected
first priority senior priming security interest in, and a senior priming Lien
on, all of the tangible and intangible pre- and post-petition property of the
Borrowers, including without limitation, (A) such property of the
Borrowers described in clause (ii) of Section 2.08(b), and (B) the
proceeds of the foregoing, whether now existing or hereafter acquired that
is subject to any existing Liens (whether or not valid or perfected)
including, without limitation, the liens securing the obligations existing on
the Petition Date.

25. Limitation on Charging Expenses Against Collateral. Except to the extent of
the Carve-Out, no expenses of administration of the Cases or any future proceeding that may
result therefrom, including liquidation in bankruptcy or other proceedings under any chapter of
the Bankruptcy Code, shall be charged against or recovered from the DIP Collateral pursuant to
section 506(c) of the Bankruptcy Code or any similar principle of law without the prior written
consent of the DIP Lender. No such consent shall be implied from any other action, inaction, or
acquiescence by the DIP Lender.
Carve-Out
26. The term Carve-Out means, subject to the proviso below, an amount necessary
to pay (i) all fees required to be paid to the clerk of the Bankruptcy Court and to the Office of the
United States Trustee pursuant to 28 U.S.C. 1930(a), (ii) all allowed but unpaid fees and
expenses incurred by professionals of the Borrowers, in respect of allowances of compensation
for services rendered or reimbursement of expenses awarded by the Bankruptcy Court to the
Professionals, in an aggregate amount not to exceed $195,000 and (iii) all amounts otherwise
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paid or accrued under a budget approved by Lender which payment was made prior to the receipt
of the Termination Notice. The payment of the fees and expenses described in clauses (ii) of this
paragraph shall only be to the extent authorized in, and in accordance with the Budget, a copy of
which is attached hereto as Exhibit C, and which was delivered by the Debtors to and approved
by the DIP Lender, and the payment of the fees and expenses described in clause (ii) of this
paragraph shall be subject to, among other things, entry of an order of the Court allowing for the
payment of such amounts.
27. In the event of a conversion of any of the Cases to cases under chapter 7, any
amounts of the Carve-Out that have accrued through the date of any such conversion shall be
charged against the assets of the Debtors; provided, however, that, in no event shall the Carve-
Out include any fees or expenses incurred after the conversion of the Cases to cases under
chapter 7 of the Bankruptcy Code. Nothing herein shall be construed to impair the ability of any
party in interest in the Chapter 11 Cases to object to the reasonableness of any of the professional
fees, expenses, reimbursement, or compensation described above.
Need for Immediate Borrowing to Avoid Irreparable Harm
28. Bankruptcy Rule 4001 permits a court to approve a debtors request for the use of
post-petition financing on an interim basis to the extent necessary to avoid immediate and
irreparable harm to the estate pending a final hearing. Fed.R.Bankr.P. 4001. This type of
interim relief is necessary for to avoid immediate and potentially irreparable damage to the
Debtors business. The Post-Petition Advances provide the Debtors with the cash necessary to
meet its ordinary course operating expenses from now until confirmation of a plan of
reorganization, as shown on the Budget. Without immediate financing, the Debtors will be
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precluded from moving this case forward, compelling a liquidation, which will cause immediate
and irreparable harm to their estates and creditors.
29. Pursuant to Bankruptcy Rule 4001(c)(2), the Debtors are required to give fourteen
(14) days notice of the Final Hearing. The Debtors submit that sufficient notice of this interim
relief was provided pursuant to Bankruptcy Code 102(1), 362, and 364, and Bankruptcy Rules
2002 and 4001(c), and other applicable procedures. Specifically, the Debtors provided notice of
the first-day hearing in this chapter 11 case by hand delivery, overnight courier or email to (i) the
Office of the United States Trustee for this District, (ii) the creditors identified on the Debtors
list of twenty (20) largest unsecured creditors, and (iii) the DIP Lender.
Good Faith
30. Section 364(e) of the Bankruptcy Code provides as follows:
The reversal or modification on appeal of an authorization under
this section to obtain credit or incur debt, or of a grant under this
section of a priority or a lien, does not affect the validity of any
debt so incurred, or any priority or lien so granted, to an entity that
extended such credit in good faith, whether or not such entity knew
of the pendency of the appeal, unless such authorization and the
incurring of such debt, or the granting of such priority or lien, were
stayed pending appeal.
11 U.S.C. 364(e).
31. The DIP Credit and Security Agreement and all other related documents were
negotiated in good faith and at arms length between the Debtors and DIP Lender. Accordingly,
the Debtors submit that any loans or extensions of credit to be made by the DIP Lender should be
deemed to have been made in good faith within the meaning of Bankruptcy Code 364(e). In
addition, the DIP Lender will make cash collateral available to the Debtors under the DIP Credit
and Security Agreement.

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Request for Final Hearing and Proposed Notice Thereof
32. The Debtors request that the Final Hearing on the Motion be scheduled in
accordance with Bankruptcy Rule 4001(c)(2). The Debtors intend to serve notice of the Final
Hearing via regular first-class U.S. Mail to all appropriate parties in accordance with the
Bankruptcy Rules and Local Rules.
33. The Debtors further request that any opposition to the relief requested in the
Motion be in writing, filed with the Court, and served upon (a) Raymond H. Lemisch, Benesch,
Friedlander, Coplan & Aronoff LLP, 222 Delaware Avenue, Suite 801, (b) the DIP Lender, IP
Co. LLC, c/o Donald E. Stout, Esquire, Antonelli, Terry, Stout & Kraus, LLP, Suite 1800, 1300
North Seventeenth Street, Arlington, VA 22209; (c) the United States Trustee for this District,
(d) counsel for the Committee, if any, and (e) any other parties requesting notice in this case.
34. The Debtors have not previously applied for the relief requested in this Motion to
this or any other Court.
NOTICE AND SERVICE
35. Notice of this Motion has been given via electronic transmission, facsimile or
overnight mail to: (a) the United States Trustee for the District of Delaware, (b) the Debtors
twenty (20) largest unsecured creditors, (c) the DIP Lender, and (d) all other known holders of
secured claims against any of the Debtors assets affected by the relief requested in this Motion.
In light of the nature of the relief requested in this Motion, the Debtors submit that this notice is
adequate, appropriate, and proper under the circumstances and that no other or further notice is
required.


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WHEREFORE, the Debtors respectfully request that the Court grant the relief requested
in this Motion on an interim basis.

Dated: March 20, 2012 Respectfully submitted,

BENESCH, FRIEDLANDER,
COPLAN & ARONOFF LLP

By: /s/ Raymond H. Lemisch
Raymond H. Lemisch, Esquire (No. 4204)
Jennifer E. Smith, Esquire (No. 5278)
222 Delaware Avenue, Suite 801
Wilmington, DE 19801
(302) 442-7010 (Telephone)
(302) 442-7012 (Facsimile)
rlemisch@beneschlaw.com
jsmith@beneschlaw.com

-and-

Kari Coniglio, Esquire (OH 0081463)
200 Public Square
2300 BP Tower
Cleveland, OH 44114
(216) 363-4500 (Telephone)
(216) 363-4588 (Facsimile)
kconiglio@beneschlaw.com

Proposed Counsel for FastShip, Inc., FastShip
Atlantic, Inc. and Thornycroft, Giles & Co., Inc.,
Debtors and Debtors in Possession



Doc 7045488 Ver 1



EXHIBIT A
In re:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
) Chapter 11
)
FASTSHIP, INC., et al., ) Case No. 12-10968 (BLS)
Debtors.
1
) (Joint Administration Pending)
)
) Re: Docket No.
INTERIM ORDER (I) AUTHORIZING DEBTORS TO INCUR POST -PETITION
SUPERPRIORITY AND SECURED INDEBTEDNESS PURSUANT TO SECTIONS
lOS(A), 362, AND 364 (C) AND (D) OF THE BANKRUPTCY CODE; (II) SCHEDULING
A FINAL HEARING; AND (III) AND GRANTING RELATED RELIEF
This matter is before the Court on the motion (the "Motion"),2 ofFastShip, Inc. ("FSI"),
FastShip Atlantic, Inc. ("FSA") and Thornycroft, Giles & Co., Inc. ("TGC", together with FSI
and FSA, the "Debtors" and each individually, a "Debtor"), debtors and debtors in possession in
the above-captioned chapter 11 cases, (the "Cases"), pursuant to sections 105(a), 362 and 364(d)
oftitle 11 ofthe United States Code, 11 U.S.C. 101- 1532 (as amended, the "Bankruptcy
Code"), rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (as amended,
the "Bankruptcy Rules") and rule 4001-2 of Local Rules for the United States Bankruptcy Court
for the District of Delaware (the "Local Rules") seeking, among other things:
2
(1) authorization for the Debtors (in such capacity, the "Borrowers") to
borrow on a senior secured basis (the "Financing") in an amount not to exceed $400,000
(the "Commitment"), pursuant to that certain Debtor-In-Possession Credit and Security
Agreement (as amended in accordance with the terms thereof, hereof and the Final Order,
the "DIP Credit and Security Agreement" and, together with each of the Loan
The Debtors, along with the last four digits of each Debtor's tax identification number, are as follows:
FastShip, Inc. (8309), FastShip Atlantic, Inc. (0980) and Thomycroft, Giles & Co., Inc. (1142). The mailing
address for the Debtors is 1608 Walnut Street, Suite 501, Philadelphia, PA 191 03.
Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings ascribed to
such terms in the DIP Loan and Security Agreement
Documents, the "DIP Documents"), by and among the Debtors and IP Co. LLC, as lender
(the "DIP Lender");
(2) authorization for the Debtors to execute and enter into the DIP Documents
and to perform such other and further acts as may be required in connection with the DIP
Documents;
(3) authorization for the Debtors to incur secured and superpriority
administrative expense DIP Obiigations (as defined beiow) under sections 364(c) and
364(d) of the Bankruptcy Code, payable from the Debtors' estates, subject only to the
Carve-Out (as defined below), to secure any and all ofthe DIP Obligations;
( 4) scheduling of a final hearing (the "Final Hearing") to be held within thirty
(30) days of the entry of this Interim Order to consider entry of a final order (the "Final
Order") authorizing, inter alia, the balance of the borrowings in accordance with the
terms of the DIP Documents on a final basis; and
(5) the waiver of any applicable stay to provide for the immediate
effectiveness of this Interim Order.
Due and appropriate notice of the Motion having been provided under the circumstances
in accordance with section 102 ofthe Bankruptcy Code and Bankruptcy Rule 4001(c) and (d),
and the relief requested therein having been served by the Debtors on, among others, (i) United
States Trustee for the District of Delaware (the "U.S. Trustee"); (ii) the Debtors' twenty largest
unsecured creditors; (iii) DIP Lender or its counsel; and (iv) all other known holders of secured
claims against any of the Debtors' assets affected by the relief requested in the Motion.
Upon the record made the testimony proffered at the Interim Hearing, the record in the
Chapter 11 Cases and the Declaration of Roland K. Bullard, II in Support of Chapter II
- 2 -
Petitions and Requests for First Day Relief, and after due deliberation and consideration and
sufficient cause appearing therefor;
IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:3
1. Disposition. The Motion hereby is granted on an interim basis on the terms set
forth herein. Any objections to the interim relief sought in the Motion that have not previously
been resolved or withdrawn hereby are overruled on the merits. This Interim Order shall be
valid, binding on all parties in interest and fuily effective immediately upon entry by the Court.
2. Jurisdiction and Venue. This Court has jurisdiction to consider the Motion and
the relief requested therein pursuant to 28 U.S.C. 1334. Consideration of the Motion and the
relief requested therein is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper in
this district pursuant to 28 U.S.C. 1408 and 1409. No request has been made for the
appointment of a trustee or examiner and no Committee (as defined below) has yet been
appointed in the Cases.
3. Commencement of the Cases. On March 20,2012 (the "Petition Date"), each of
the Debtors filed a voluntary petition for relief under chapter 11 ofthe Bankruptcy Code. The
Debtors are continuing to operate their businesses and manage their properties as debtors in
possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
4. Notice. Under the circumstances, the notice given by the Debtors constitutes due
and sufficient notice thereof and complies with section 102 of the Bankruptcy Code and
Bankruptcy Rules 2002, 4001 (c) and (d) and 9014.
5. Findings Regarding the Financing.
(a) Good cause has been shown for the entry of this Interim Order.
3 Findings of fact shall also constitute conclusions of law, and conclusions of law shall also constitute findings
of fact.
- 3 -
(b) The Debtors have an immediate need to obtain the Financing to ensure
that the Debtors have sufficient liquidity to finance the Debtors' operations, pay employees,
satisfy other working capital and operational needs and administer and preserve the value of the
Debtors' estates during the pendency of the Cases and to permit a reorganization of the Debtors'
assets. The Debtors' incurrence of new indebtedness and other financial accommodations are
vital to the preservation, maintenance maximization of the value of the Debtors' assets.
(c) The Debtors are unable to obtain the required financing on terms more
favorable than those offered by the DIP Lender under the DIP Documents and are unable to
obtain adequate unsecured credit allowable under section 503(b )(1) of the Bankruptcy Code as
an administrative expense. The Debtors also are unable to obtain secured credit under sections
364(c) or 364(d) of the Bankruptcy Code on equal or more favorable terms than those set forth in
the DIP Documents within the time frame required by their need to avoid immediate and
irreparable harm. A loan facility in the amount and under the terms provided by the DIP
Documents is not available without the Debtors granting to the DIP Lender, subject to the Carve-
Out as provided for herein, the DIP Liens and the Superpriority Claim (each, as defined below)
under the terms and conditions set forth in the DIP Documents. After considering all alternatives
the Debtors have concluded, in the exercise of their prudent business judgment, that the DIP
Facility represents the best working capital financing available to them at this time.
(d) The terms of the Financing are fair and reasonable, reflect the Debtors'
exercise of prudent business judgment consistent with their fiduciary duties and constitute
reasonably equivalent value and fair consideration.
(e) The terms ofthe Financing have been negotiated in good faith and at
arm's length among the Debtors and the DIP Lender. All of the Debtors' obligations and
- 4-
indebtedness arising under, in respect of, or in connection with, the Financing and the DIP
Documents, including, but not limited to, (i) all loans made to the Debtors pursuant to the DIP
Documents and (ii) all Obligations incurred (collectively, the "DIP Obligations"), have been
extended by the DIP Lender in good faith, as that term is used in section 364(e) of the
Bankruptcy Code, and in express reliance upon the protections offered by section 364(e) of the
Bankruptcy Code. The DIP Lender shall be entitled to the full protection of section 364( e) of the
Bankruptcy Code in the event that this Interim Order or any provision herein is vacated, reversed
or modified, on appeal or otherwise.
(f) The Debtors have requested entry of this Interim Order pursuant to
Bankruptcy Rule 4001(c) and (d). Absent the relief in this Interim Order, the Debtors' estates
will be immediately and irreparably harmed. Consummation of the Financing, therefore, is in
the best interests of the Debtors' estates.
6. Authorization of the Financing and the DIP Documents.
(a) The Debtors hereby are authorized to enter into the DIP Documents. The
Borrowers are hereby authorized to borrow money pursuant to the DIP Documents in the
principal amount of One Hundred Fifty Thousand ($150,000) Dollar (plus interest, as provided
for in the DIP Documents). In accordance with the terms of this Interim Order and the DIP
Documents, the borrowings under the DIP Documents shall be used solely for purposes
permitted under the DIP Documents.
(b) In furtherance of the foregoing and without further approval of the Court,
each Debtor is authorized and directed on an interim basis to perform all acts, to make, execute
and deliver all instruments and documents (including the execution or recordation of security
- 5 -
agreements, mortgages and financing statements),that may be required or necessary for the
Debtors' performance of the DIP Obligations, including:
(i) the execution, delivery and performance of the DIP Documents
and any exhibits attached thereto; and
(ii) the performance of all other acts required under or in connection
with the DIP Documents.
(c) Upon execution and delivery of the DIP Documents and the entry of this Interim
Order, the DIP Documents shall constitute valid and binding obligations of the Debtors,
enforceable against each Debtor party thereto in accordance with the terms of the DIP
Documents. No DIP Obligation, payment, transfer or grant of security under the DIP Documents
or this Interim Order shall be stayed, restrained, voidable, or recoverable under the Bankruptcy
Code or under any applicable law (including under section 502( d) of the Bankruptcy Code), or
subject to any defense, disallowance, recharacterization, reduction, setoff, recoupment or
counterclaim.
7. Termination of DIP Loan Documents. The obligation to lend money under the
DIP Credit and Security Agreement (but no other provision of the DIP Credit and Security
Agreement or the Interim Order), shall immediately and automatically terminate (except as the
DIP Lender may otherwise agree) upon receipt of the Termination Notice from Lender to
Borrowers (the "Termination Event"). Upon receipt of a Termination Notice, Debtors shall
provide an accounting to Lender of all funds received by Debtors, all Allowed Payments (as
defined in the DIP Credit and Security Agreement, and then to pay to Lender all unused
borrowed funds (the borrowed funds less all Allowed Payments).
- 6 -
8. Superpriority Claim.
(a) Pursuant to section 364(c)(l) of the Bankruptcy Code, all of the DIP
Obligations shall constitute an allowed administrative expense claim against the Debtors (the
"Superpriority Claim"), with priority over any and all administrative expenses, diminution
claims, and all other claims against the Debtors, now existing or hereafter arising, of any kind
whatsoever, including all administrative expenses of the kind specified in sections 503(b) and
507(b) ofthe Bankruptcy Code, and over any and aii administrative expenses or other claims
arising under sections 105,326, 328, 330,331, 503(b), 506(c), 507, 546(c), 726, 1113 or 1114 of
the Bankruptcy Code, whether or not such expenses or claims may become secured by a
judgment lien or other non-consensual lien, levy or attachment, subject, in each instance, only to
the payment of the Carve-Out.
(b) The term "Carve-Out" means, subject to the proviso below, an amount
necessary to pay (i) all fees required to be paid to the clerk of the Bankruptcy Court and to the
Office ofthe United States Trustee pursuant to 28 U.S.C. 1930(a), (ii) all allowed but unpaid
fees and expenses incurred by professionals of the Borrowers, in respect of allowances of
compensation for services rendered or reimbursement of expenses awarded by the Bankruptcy
Court to the Professionals, in an aggregate amount not to exceed $195,000, and (iii) all amounts
paid or accrued in accordance with an approved budget, until the receipt of the Termination
Notice. The payment of the fees and expenses described in clauses (ii) of this paragraph shall
only be to the extent authorized in, and in accordance with the Budget, a copy of which is
attached hereto as Exhibit A, and which was delivered by the Debtors to and approved by the
DIP Lender, and the payment of the fees and expenses described in clause (ii) of this paragraph
- 7-
shall be subject to, among other things, entry of an order of the Court allowing for the payment
of such amounts.
(c) In the event of a termination of funding by Lender, any amounts of the
Carve-Out that have accrued through the date of receipt of such Termination Notice from Lender
shall be charged against the assets of the Debtors; provided, however, that, in no event shall the
Carve-Out include any fees or expenses incurred after the receipt of such Termination Notice.
Nothing herein shaH be construed to impair the ability of any party in interest in the Chapter i 1
Cases to object to the reasonableness of any of the professional fees, expenses, reimbursement or
compensation described above.
9. DIP Liens. As security for the DIP Obligations, the security interests and liens
described in subparagraphs (a) through (c) below hereby are granted to the DIP Lender for its
own benefit and for the benefit of the DIP Lender (all property identified in subparagraphs (a),
(b) and (c) below being collectively referred to as the "DIP Collateral") (all such liens and
security interests granted to the DIP Lender, for its benefit and for the benefit of the DIP Lender
pursuant to this Interim Order and the DIP Documents, the "DIP Liens"). For the avoidance of
doubt, the DIP Collateral shall not include any proceeds or property recovered or otherwise the
subject of successful causes of action under sections 502(d), 544, 545, 547, 548, 549 and 550 of
the Bankruptcy Code, or any other avoidance actions under the Bankruptcy Code or other
applicable law (collectively, the "Avoidance Actions"), nor shall the DIP Collateral include the
Debtors' cash on hand as of the Petition Date or any accounts receivables owed to the Debtors or
any ofthem as of the Petition Date. The DIP Liens shall be valid, enforceable, effective and
perfected by operation of law on a final basis immediately upon entry of this Interim Order by
the Court and without the necessity of the execution, recordation or filing by the Debtors or the
- 8 -
DIP Lender of mortgages, title certificates, security agreements, pledge agreements, financing
statements, control agreements or other agreements.
(a) First Lien on Cash Balances and Unencumbered Property. Pursuant to
Section 364(c)(2) of the Bankruptcy Code, at all times secured by a valid, binding, continuing,
enforceable and fully-perfected first priority senior security interest in and Lien on all
unencumbered, (except for funds of the Borrowers on hand as of the Petition Date and any
accounts receivables and proceeds of same, owed to Debtors or any of them, as of the Petition
Date), pre- and post-petition tangible and intangible property of the Borrowers' estates in the
Chapter 11 Case of any nature whatsoever (both real and personal), whether existing on the
Petition Date or thereafter acquired, and the proceeds thereof, wherever located that, on or as of
the Petition Date is not subject to valid, perfected and non-avoidable Liens, including, without
limitation, all cash and cash collateral of the Borrowers (whether maintained with the Lender or
otherwise) and any investment of such cash and cash collateral, all present and future accounts
receivable, tax refund claims, net insurance/condemnation proceeds or any rights to payment
whether arising before or after the Petition Date, inventory, general intangibles, chattel paper,
contracts, documents, instruments, interests in leaseholds, real properties, fixtures, machinery
and equipment, vehicles, deposit accounts, patents, copyrights, trademarks, tradenames, rights
under license agreements and other intellectual property, and the proceeds of the foregoing.
(b) Liens Junior to Certain Other Liens with Respect to Certain Property of
the Debtors. Pursuant to Section 364(c)(3) of the Bankruptcy Code, at all times secured by
valid, binding, continuing, enforceable and fully-perfected second priority, junior security
interests and junior Liens, (except for funds of the Borrowers on hand as of the Petition Date and
any accounts receivables, and the proceeds of same, owed to Debtors or any of them, as of the
- 9 -
Petition Date), on all pre- and post-petition property of the Debtors (other than the property
described in clauses (ii) and (iv) of Section 2.08(b ), as to which the Liens and security interests
in favor of the Lender will be as described in such clauses), whether now existing or hereafter
acquired, that are subject to valid, perfected and non-avoidable Permitted Liens in existence on
the Petition Date or to valid Permitted Liens in existence on the Petition Date that are perfected
subsequent to the Petition Date as permitted by Section 546(b) of the Bankruptcy Code.
(c) Priming Liens, Liens Securing the Adequate Protection Obligations and
Other Liens. Pursuant to Section 364(d)(l) of the Bankruptcy Code, at all times secured by a
valid, binding, continuing, enforceable and fully-perfected first priority senior priming security
interest in, and a senior priming Lien on, (except for funds of the Borrowers on hand as of the
Petition Date and any accounts receivables, and the proceeds of same, owed to Debtors or any of
them, as of the Petition Date), all of the tangible and intangible pre- and post-petition property of
the Borrowers, including without limitation, (A) such property of the Borrowers described in
clause (ii) of Section 2.08(b), and (B) the proceeds ofthe foregoing, whether now existing or
hereafter acquired that is subject to any existing Liens (whether or not valid or perfected)
including, without limitation, the liens securing the obligations existing on the Petition Date.
10. Limitation on Charging Expenses Against Collateral. Except to the extent of
the Carve-Out, no expenses of administration of the Cases or any future proceeding that may
result therefrom, including liquidation in bankruptcy or other proceedings under any chapter of
the Bankruptcy Code, shall be charged against or recovered from the DIP Collateral pursuant to
section 506( c) of the Bankruptcy Code or any similar principle of law without the prior written
consent of the DIP Lender. No such consent shall be implied from any other action, inaction, or
acquiescence by the DIP Lender.
- 10-
11. Limitation on Use of Financing Proceeds. Notwithstanding anything herein or
in any other order by the Court to the contrary, no borrowings under the Financing, DIP
Collateral or the Carve-Out may be used (i) to object, contest or raise any defense to, the validity,
perfection, priority, extent or enforceability of any amount due under the DIP Documents, or the
liens or claims granted under this Interim Order or the DIP Documents, (ii) to assert any action
for preferences, fraudulent conveyances, other avoidance power claims or any other claims,
counterclaims or causes of action, objections, contests or defenses against the DIP Lender, or its
respective agents, affiliates, representatives, attorneys or advisors, in respect of the DIP
Documents, (iii) to prevent, hinder or otherwise delay the DIP Lender's assertion, enforcement
or realization on the DIP Collateral in accordance with the DIP Documents or this Interim Order,
(iv) to seek to modify any of the rights granted to the DIP Lender under this Interim Order or
under the DIP Documents, or (v) to pay any amount on account of any claims or expenses arising
prior to or after the Petition Date unless such payments are approved by this Interim Order (to
the extent requested in the Motion) or are consistent with the Budget and approved (to the extent
necessary) by an order of the Court.
12. Binding Effect; Successors and Assigns. The DIP Documents and the
provisions of this Interim Order, including all findings herein, shall be binding upon all parties in
interest in the Cases, including the DIP Lender, all Committees appointed in the Cases and the
Debtors and their respective successors and assigns (including any chapter 7 or chapter 11 trustee
hereinafter appointed or elected for the estate of any ofthe Debtors) and shall inure to the benefit
of the DIP Lender and the Debtors and their respective successors and assigns; provided,
however, that the DIP Lender shall have no obligation to extend any financing to any chapter 7
trustee, chapter 11 trustee, examiner or similar responsible person appointed for the estates of the
- 11 -
Debtors. In determining to make any loan under the DIP Documents or in exercising any rights
or remedies as and when permitted pursuant to this Interim Order or the DIP Documents, the DIP
Lender shall not be deemed to be in control of the operations ofthe Debtors or to be acting as a
"responsible person" or "owner or operator" with respect to the operation or management of the
Debtors (as such terms, or any similar terms, are used in the United States Comprehensive
Environmental Response, Compensation and Liability Act, 29 U.S.C. 9601 et seq. as
amended, or any simiiar federal or state statute).
13. Rights Reserved. Notwithstanding anything herein to the contrary, the entry of
this Interim Order is without prejudice to, and does not constitute a waiver of, expressly or
implicitly, or otherwise impair (a) any of the rights, claims, privileges, objections or defenses
(whether legal, equitable or otherwise) of the DIP Lender under the Bankruptcy Code or under
non-bankruptcy law, including, without limitation, the right of such parties to (i) request
modification ofthe automatic stay of section 362 ofthe Bankruptcy Code, (ii) request dismissal
of the Cases, conversion of the Cases to cases under chapter 7 of the Bankruptcy Code, or
appointment of a chapter 11 trustee or examiner, or (iii) propose, subject to the provisions of
section 1121 of the Bankruptcy Code, a chapter 11 plan or plans or (b) any other rights, claims or
privileges of the DIP Lender (whether legal, contractual, equitable or otherwise) against any
person or entity in any court.
14. Agreed Budget and Use of Funds. The Debtors represent that the Budget is
achievable and will allow the Debtors to operate in the Cases without the accrual of unpaid
administrative expenses. The DIP Lender is relying upon the Debtors' compliance with the
Budget in accordance with this Interim Order in determining to enter into the DIP Documents.
The Debtors shall use the loans or advances made under, or in connection with, the DIP
- 12-
Documents solely as provided in the DIP Documents (including in accordance with the Budget,
as such Budget may be extended, varied, supplemented, or otherwise modified in accordance
with the provisions of the DIP Documents). The Debtors shall not, without the prior written
consent of the DIP Lender, use any amounts loaned or advanced under the DIP Documents or
proceeds of the DIP Collateral in an amount in excess of the amounts budgeted other than as set
forth in the DIP Documents. Notwithstanding anything herein to the contrary, the Debtors shall
be deemed to be in compiiance thereof to the extent the aggregate cumulative expenditures or
obligations incurred are not in excess of ten percent (1 0%) of the aggregate amount set forth in
the Budget for the applicable time period.
15. No Obligation to Lend. The DIP Lender shall have no obligation to lend under
the DIP Documents unless and until this Interim Order is entered.
16. Amendments. The DIP Documents may be amended, modified, supplemented,
or the provisions thereof waived in accordance with their terms, without further order of this
Court or notice to any party; provided, however, that if such amendment, modification,
supplement, or waiver is material and adverse to the Debtors' estates, such amendment,
modification, supplement, or waiver, and upon any such timely written objection such
amendment, modification, supplement, or waiver shall be effective only pursuant to an order of
this Court.
17. No Third Party Rights. Except as explicitly provided for herein, this Interim
Order does not create any rights for the benefit of any third party, creditor, equity holder or any
direct, indirect, or incidental beneficiary.
18. Interim Order Effective Immediately. This Interim Order shall constitute
findings of fact and conclusions of law and shall take effect and be fully enforceable
- 13 -
immediately upon entry hereof. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h),
6006(d), 7062 or 9024 or any other Bankruptcy Rule, or Rule 62(a) ofthe Federal Rules of Civil
Procedure, this Interim Order shall be immediately effective and enforceable upon its entry and
there shall be no stay of execution or effectiveness of this Interim Order.
19. Priority of Terms. To the extent of any conflict between or among (a) the
express terms or provisions of any of the DIP Documents, the Motion, any other order of this
Court, or any other agreements, on the one hand, and (b) the terms and provisions of this Interim
Order, on the other hand, unless such term or provision herein is phrased in terms of "as defined
in" or "as more fully described in" the DIP Loan Documents, the terms and provisions of this
Interim Order shall govern.
Dated: Wilmington, DE
_____ ,2012
HONORABLE BRENDAN L. SHANNON
United States Bankruptcy Judge
- 14-
EXHIBIT A
BUDGET
Doc 7045510 Vcr I
FastShip Inc. et al. Bankruptcy Budget
total
-
BFC&A (debtors' counsel) 175,000
The Brownstein Corporation (financial advisor) 20,000
US Trustee 7,000
Claims agent 30,000
Roland K. Bullard, II 57,400
Kathryn R. Chambers 30,625
FastShip Inc. office expenses 25,000
D&O tail 26,378
Contingency 28 597
400,000
Tranche 1 Tranche 2
1st month 2nd month
72,500 57,500
10,000 5,000
1,000 1,000
7,500 7,500
16,400 16,400
8,750 8,750
5,000 5,000
26,378 0
2472 23 850
150,000 125,000
7046063_1.XLSX
Tranche 3
remainder of
case
45,000
5,000
5,000
15,000
24,600
13,125
15,000
0
2 275
125,000
unused for professionals rolls over
unused for professionals rolls over
unused for UST rolls over
unused for professionals rolls over
2 months @ $16,400; 3 months@ $8,200
2 months @ $8,750; 3 months@ $4,375
5 months @ $5,000
unused rolls over



EXHIBIT B
DEBTOR-IN-POSSESSION
CREDIT AND SECURITY AGREEMENT
Dated as of March [ ], 2012
Between
F ASTSHIP, INC.,
THORNYCROFT, GILES & COMPANY, INC., and
FASTSHIP ATLANTIC, INC.,
as Borrowers,
And
IP CO, INC.
as Lender
DEBTOR-IN-POSSESSION
CREDIT AND SECURITY AGREEMENT
This DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT (as
amended, supplemented or modified from time to time, this "Agreement"), dated as of March [ ],
20I2 (the "Agreement Date"), between FASTSHIP, INC., ("FSI") a, a Delaware corporation,
THORNYCROFT, GILES & COMPANY, INC., ("TGC") a Virginia corporation and
FASTSHIP ATLANTIC, INC., ("FSA") a Delaware corporation (collectively, FSI, TGC and
FSA as the "Borrowers"), and IP CO, INC., a [] company ("Lender").
RECITALS
WHEREAS, on March [ ], 20I2 (the "Petition Date"), the Borrowers (a) commenced
cases under Chapter 11 of the United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), that will be jointly
administered (such jointly administered cases, collectively, the "Chapter II Case"), and (b) have
retained possession of their assets and are authorized under the Bankruptcy Code to continue the
operation of their businesses as debtors-in-possession; and
WHEREAS, the Borrowers and the Lender wish to enter into an agreement to provide a
secured, superpriority debtor-in-possession financing facility that is senior to all other creditors,
in the amount of up to the Commitment (as defined below), to be used by the Borrowers in
accordance with the Budgets (as defined below) to (a) pay fees and expenses in connection with
the administration of the Chapter II Case, (b) make payments for other purposes as may be
agreed to by the Lender and identified in the Budgets, and (c) make any other payments
(including, without limitation, of the Carve-Out Expenses (as defined below)) permitted to be
made by the Bankruptcy Code, the Interim DIP Order (as defined below), the Final DIP Order
(as defined below), or any other order of the Bankruptcy Court to the extent not prohibited by
this Agreement or otherwise consented to by the Lender (such uses of the proceeds of the credit
facilities hereunder, subject to the Budgets, collectively, the "Designated Purposes").
NOW, THEREFORE, in consideration of the promises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01. Definitions. The words and expressions defined in the introductory
paragraph, the recitals and the other Sections hereof shall have the meanings given to such words
and expressions in such introductory paragraph, recitals and Sections, and the following words
and expressions shall have the following meanings, in each case unless the context otherwise
reqmres:
"Loans" means Loans made by the Lender pursuant to Section 2.0I(b) in the aggregate
amount not exceeding $400,000.
"Affiliate" of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, "control", as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided, that, beneficial ownership of I 0% or more of the voting Capital Stock of a
Person shall be deemed to be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" have correlative meanings.
"Agreement" has the meaning specified in the introductory paragraph hereto.
"Agreement Date" has the meaning specified in the introductory paragraph hereto.
"Assignee" has the meaning specified in Section 9.03(b).
"Assignment" has the meaning specified in Section 9.03(b).
"Assignment Agreement" has the meaning specified in Section 9.03(b ).
"A voidance Actions" means avoidance actions available to the bankruptcy estate of the
Borrowers in the Chapter I1 Case pursuant to Chapter 5 of the Bankruptcy Code.
"Bankruptcy Code" has the meaning specified in the recitals hereto.
"Bankruptcy Court" has the meaning specified in the recitals hereto.
"Borrowers" has the meaning specified in the introductory paragraph hereto.
"Budgets" means, collectively, the Initial Budget and the Subsequent Budgets (as each
such budget may vary by up to 1 0% in the total amount, without agreement between the Lender
and the Borrowers and without further notice or hearing).
"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banks in Wilmington, DE are authorized or required to close.
"Capital Stock" means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other
arrangements or rights to acquire any of the foregoing.
"Carve-Out Expenses" has the meaning specified in Section 2.08(c).
"Chapter II Case" has the meaning specified in the recitals hereto.
"Collateral" has the meaning specified in Section 2.08.
2
"Commitment" means the commitment of the Lender to make or otherwise fund the
Loans in an aggregate amount not to exceed the sum of the amounts of (a) the Initial Loan and
(b) the Additional Loans, which aggregate amount in any event shall not exceed $400,000.
"Committee" means the Official Committee of Unsecured Creditors that may be
appointed by the U.S. Trustee in the Chapter 11 Case.
"Default" means an event which, with the giving of notice or the lapse of time or both,
would constitute an Event of Default.
"Designated Purposes" has the meaning specified in the recitals hereto.
"Dollars" or "$" means United States dollars.
"Eligible Assignee" means (a) any Lender or any Affiliate or Approved Fund of any
Lender, (b) any commercial bank, insurance company, investment or mutual fund or other entity
that is an "accredited investor" (as defined in Regulation D under the Securities Act) and that
extends credit or buys loans as one of its businesses and/or (c) any other Person approved by the
Lender that is an "accredited investor" (as defined in Regulation D under the Securities Act);
provided that no Borrower nor any of its Affiliates or subsidiaries shall be an Eligible Assignee.
"Event of Default" means any of the events set forth in Section 8.01.
"Final DIP Order" means an order of the Bankruptcy Court entered in the Chapter 11
Case after a final hearing under Bankruptcy Rule 4001 ( c )(2), which contains the provisions
present in the Interim DIP Order (including without limitation, the granting of the superpriority
status and Liens referred to herein, the automatic perfection of all Liens referred to herein, the
payment of all fees referred to herein and the first priority Lien referred to herein) and additional
provisions allowing for the borrowing of the full amount of the Revolving Loans hereunder and
prohibiting any claims against the Collateral pursuant to Section 506( c) of the Bankruptcy Code
(except as provided in the Carve-Out Expenses and agreed to by the Lender), which such order
shall be in form and substance satisfactory to the Lender in its sole discretion, and which shall
not have been vacated, stayed, reversed or (except with the express written consent of the
Lender) amended, supplemented or otherwise modified.
"GAAP" means generally accepted accounting principles in effect from time to time in
the United States, applied on a consistent basis.
"Governmental Authority" means any nation or government, any Federal, state, city,
town, municipality, county, local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Initial Budget" means the pro forma rolling thirteen (13) week cash flow budget
prepared by the Borrowers and delivered to the Lender on or before the Agreement Date, which
budget shall be reasonably satisfactory to the Lender, and substantially in the form attached
hereto as Exhibit A.
3
"Initial Loan" means the Initial Loan made by the Lender pursuant to Section 2.0I(a) in
the aggregate amount of $I50,000.
"Interim DIP Order" means an order of the Bankruptcy Court entered in the Chapter II
Case after a hearing under Bankruptcy Rule 400 I ( e )(2), (i) approving this Agreement and the
other Loan Documents and the transactions contemplated hereby and thereby, (ii) authorizing the
Borrowers to borrow the Loans, (iii) granting a perfected security interest in the Collateral with
the priority described in Section 2.08, and (iv) finding that the Lender is extending credit to the
Borrowers in good faith within the meaning of Section 364(e) of the Bankruptcy Code, which
such order shall be in form and substance satisfactory to the Lender in its sole discretion, and
substantially in the form of Exhibit B, and which shall not have been vacated, stayed, reversed,
amended, supplemented or otherwise modified without the prior written consent of the Lender.
"Lender" has the meaning specified in the introductory paragraph hereto.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security
interest, lease, easement, title defect, restriction, levy, execution, seizure, attachment, charge,
right of setoff, interest or other encumbrance or security or preferential arrangement of any
nature.
"Loan" means a Loan made pursuant to the terms hereof.
"Loan Documents" means this Agreement, the Interim DIP Order, the Final DIP Order
and all other agreements, instruments, and other documents executed and delivered pursuant
hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation.
"Material Adverse Change" means a material adverse change with respect to any of the
following: (a) the operations, business, assets, properties or condition (financial or otherwise) of
any of the Borrowers, on an aggregate basis, (b) the ability of any of the Borrowers to perform
any of its material obligations under the Loan Documents, (c) the legality, validity or
enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of the
Lender under any Loan Document, (e) the validity, perfection or priority of the Liens in favor of
the Lender on any material part of the Collateral, or (f) the value of any material part of the
Collateral; provided that the filing of the Chapter II Case shall not constitute a Material Adverse
Change.
"Maturity Date" means the date which is the Effective Date of a plan of reorganization, if
such plan of reorganization has been confirmed over the objection of the Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02.
"Obligations" means (a) the obligations of the Borrowers to pay, as and when due and
payable (by scheduled maturity, required prepayment, acceleration, demand or otherwise), all
amounts from time to time owing by it in respect of the Loan Documents, whether for principal,
interest, fees, indemnification payments, expense reimbursements or otherwise, and (b) the
obligations of the Borrowers to perform or observe all of its obligations from time to time
existing under the Loan Documents.
4
"Orders" means, collectively, the Interim DIP Order and the Final DIP Order.
"Permitted Indebtedness" means (a) any Indebtedness owed to the Lender under this
Agreement and the other Loan Documents, (b) Indebtedness secured by Permitted Liens,
(c) other unsecured debt having no greater priority than that provided in Section 503(b) of the
Bankruptcy Code, and (d) any Indebtedness consented to in writing by the Lender.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges;
(c) Liens existing on the Agreement Date to the extent valid, perfected and
non-avoidable.
"Person" means an individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, joint venture or
Governmental Authority.
"Petition Date" has the meaning specified in the recitals hereto.
"Professionals" has the meaning specified in Section 2.08(c).
"Securities Act" means the Securities Act of 1933, as amended from time to time, and
any successor statute.
"Superpriority Claim" means an administrative expense claim having priority over any
and all administrative expenses of the kind specified in Sections 503(b) or 507(b) of the
Bankruptcy Code and over any and all administrative expenses or other claims arising under
Sections 105,326,328,330,331, 503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 ofthe
Bankruptcy Code.
"Tax" means any present or future tax, levy, impost, duty, assessment, charge, fee,
deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever
and wherever imposed, levied, collected, withheld or assessed.
"UCC" means the Uniform Commercial Code as in effect in the State of Delaware or in
any other relevant jurisdiction from time to time.
"U.S. Trustee" means the Office of the United States Trustee for the District of Delaware.
5
Section 1.02. Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and effect as the word
"shall." Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) 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, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
Section 1.03. Accounting Terms. Unless otherwise expressly provided herein, each
accounting term used herein shall have the meaning given it under GAAP.
ARTICLE II
LOANS
Section 2.01. Initial Loan and Additional Loans.
(a) The Lender shall be obligated to, and shall fund to Borrowers on the date of the
entry of the Interim DIP Order, the Initial Loan, without the need for Borrowers to make a
request in accordance with Section 2.02.
(b) Unless a Termination Notice, as set forth in Section 2.02 has already been
received by Borrowers, the Lender is obligated to, and shall fund to Borrowers on the date of the
entry of the Final DIP Order, an Additional Loan in the amount of $125,000 (the "Additional
Loan"), without the need for Borrowers to make a request in accordance with Section 2.02.
(c) Unless a Termination Notice, as set forth in Section 2.02, has already been
received by Borrowers, the Lender shall be obligated to, and shall fund on a date that is at least
30 days after the date of the entry of the Final DIP Order (the "Second Additional Loan Funding
Date") a final Additional Loan ("Final Additional Loan") in the amount of $125,000, as
requested by Borrowers in accordance with Section 2.02.
Section 2.02. Borrowing Mechanics for Loans.
(a) The Borrowers shall give the Lender prior telephone notice (promptly confirmed
in writing by telecopy or email (such confirmation in writing, a "Notice of Borrowing")), not
later than 12:00 noon (Wilmington, DE time) on the day which is one (1) Business Day prior to
the date of the proposed Loan. Such Notice of Borrowing shall specify (a) the principal amount
6
of the proposed Final Additional Loan. Such Notice of Borrowing shall specify the location and
number of the account to which proceeds of such Final Additional Loan are to be disbursed. At
any time after the entry of the Initial DIP Order, Lender may terminate this lending relationship
for any or no reason by sending a notice to the Borrowers in writing (the "Termination Notice"),
which Termination Notice shall be effective immediately upon receipt of same by the Borrowers.
Upon receipt of the Termination Notice by Borrowers, Lender shall have no further obligation to
advance any funds under this Agreement. So long as a Termination Notice has not yet been
received by Borrowers, notwithstanding anything else to the contrary contained herein, if the
Final DIP Order is entered or if the Borrowers have given notice in accordance with this Section
2.02 of their intent to borrow the Final Additional Loan, Lender shall be obligated to advance the
Additional Loan or the Final Additional Loan, as the case may be.
(b) Upor1 receipt of tl1e Terttliriatiotl all arr1ounts paid or accrued, per the
budget, through the date of receipt of the termination Notice, shall be allowed payments
("Allowed Payments"). After an accounting, as necessary, to ascertain all Allowed Payments,
the remaining funds received from the Lender over and above all Allowed Payments shall be
returned to the Lender. Any other funds shall remain with the Borrowers.
Section 2.03. Use of Proceeds. The proceeds of the Revolving Loans shall be used,
subject to the Bankruptcy Code, the Initial DIP Order and the Final DIP Order, only for the
Designated Purposes and to the extent set forth in the applicable Budget.
Section 2.04. Optional Prepayments. Subject to the terms and conditions of this
Agreement, amounts borrowed as Loans may be repaid at any time during the term of this
Agreement, without penalty or premium of any kind, on any Business Day, in whole or in part, at
any time.
Section 2.05. Repayment of Loans on Maturity Date. The Borrowers hereby
unconditionally promise to pay to the Lender the then unpaid principal amount of each Loan,
together with all other amounts outstanding hereunder and under the other Loan Documents, on
the Maturity Date.
Section 2.06. Conversion of Obligations.
(a) On the Effective Date of a plan of reorganization, assuming that the plan has not
been confirmed over the objection of the Lender, the Loans will be forgiven.
Section 2.07. Interest.
(a) Interest Rate. Each Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date of the making of such Loan until such principal amount
becomes due or is earlier repaid, at a rate per annum equal to five percent (5%) per annum.
(b) Interest Payment. Interest on all Loans shall be due and payable only on the
Maturity Date.
(c) General. All interest shall be computed on the basis of a year of 360 days for the
actual number of days, including the first day but excluding the last day, elapsed.
7
(d) Usury. Notwithstanding any provision to the contrary hereunder, if the rate of
interest payable pursuant to this Agreement is limited by law, the rate payable hereunder shall be
the lesser of: (i) the rate set forth in this Agreement and (ii) the maximum rate permitted by law.
If interest is paid hereunder in excess of the maximum rate of interest permitted by law, any
interest so paid that exceeds such maximum rate shall automatically be deemed to be a payment
of principal and shall automatically be applied in reduction of the principal due under this
Agreement to the extent of such excess.
Section 2.08. Superpriority Nature of Obligations and Lender's Liens.
(a) The priority of the Lender's Liens on the Collateral shall be as set forth in the
Orders, which shall reflect the provisions as set forth in this Section 2.08.
(b) Each Borrower hereby covenants, represents and warrants that, upon entry of the
Orders, all Obligations will be (subject, in each of clauses (i) through (iv) below, to the Carve-
Out Expenses):
(i) entitled to a Superpriority Claim, junior only to the Carve-Out Expenses,
pursuant to Section 364(c)(1) ofthe Bankruptcy Code;
(ii) pursuant to Section 364( c )(2) of the Bankruptcy Code, at all times secured
by a valid, binding, continuing, enforceable and fully-perfected first priority senior
security interest in and Lien on all unencumbered pre- and post-petition tangible and
intangible property of the Borrowers' estates in the Chapter 11 Case of any nature
whatsoever (both real and personal), whether existing on the Petition Date or thereafter
acquired, and the proceeds thereof, except for cash on hand and the accounts receivable
owed to the Debtors or any of them, as of the Petition Date, wherever located that, on or
as of the Petition Date is not subject to valid, perfected and non-avoidable Liens,
including, without limitation, all cash and cash collateral of the Borrowers (whether
maintained with the Lender or otherwise) and any investment of such cash and cash
collateral, all present and future accounts receivable, tax refund claims, net
insurance/condemnation proceeds or any rights to payment whether arising before or
after the Petition Date, inventory, general intangibles, chattel paper, contracts,
documents, instruments, interests in leaseholds, real properties, fixtures, machinery and
equipment, vehicles, deposit accounts, patents, copyrights, trademarks, tradenames, rights
under license agreements and other intellectual property, and the proceeds of the
foregoing;
(iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, at all times secured
by valid, binding, continuing, enforceable and fully-perfected second priority, junior
security interests and junior Liens on all pre- and post-petition property of the Debtors
(other than the property described in clauses (ii) and (iv) of this Section 2.08(b), as to
which the Liens and security interests in favor of the Lender will be as described in such
clauses), whether now existing or hereafter acquired, that are subject to valid, perfected
and non-avoidable Permitted Liens in existence on the Petition Date or to valid Permitted
Liens in existence on the Petition Date that are perfected subsequent to the Petition Date
as permitted by Section 546(b) ofthe Bankruptcy Code; and
8
(iv) pursuant to Section 364(d)(l) of the Bankruptcy Code, at all times secured
by a valid, binding, continuing, enforceable and fully-perfected first priority senior
priming security interest in, and a senior priming Lien on, all of the tangible and
intangible pre- and post-petition property of the Borrowers except for cash on hand and
accounts receivables owed t the Debtors or any of them, as of the Petition Date, including
without limitation, (A) such property of the Borrowers described in clause (ii) of this
Section 2.08(b) above, and (B) the proceeds of the foregoing, whether now existing or
hereafter acquired that is subject to any existing Liens (whether or not valid or perfected)
including, without limitation, the liens securing the obligations existing on the Petition
Date.
The assets listed m clauses (i), (ii), (iii) and (iv) of this Section 2.08(b), collectively, the
"Collateral". For the avoidance of doubt, the Collateral shall not include any proceeds of
A voidance Actions.
(c) The Lender's Liens on the Collateral owned by the Borrowers and their
administrative claim under Sections 364(c)(l) of the Bankruptcy Code afforded the Obligations
shall be subject and subordinate only to a carve-out for the following (herein after referred to as
the "Carve-Out Expenses"): an amount which may be used to pay (i) all fees required to be paid
to the clerk of the Bankruptcy Court and to the Office of the United States Trustee pursuant to
28 U.S.C. 1930(a), (ii) all allowed but unpaid fees and expenses incurred by professionals
(collectively, the "Professionals") of the Borrowers, in respect of allowances of compensation for
services rendered or reimbursement of expenses awarded by the Bankruptcy Court to the
Professionals, in an aggregate amount not to exceed $195,000, and (iii) all payments made by the
Debtors prior to receipt of Notice of Termination in accordance with any approved budge of the
Debtors;
(d) Except as set forth herein or in the Orders, no other claim having a priority
superior to or pari passu with that granted to the Lender by the Orders shall be granted or
approved while any Obligations under this Agreement remain outstanding.
(e) Subject to the priorities set forth in subsection (a) above and to the Carve-Out
Expenses, as to all Collateral, including, without limitation, all real property the title to which is
held by the Borrowers, or the possession of which is held by any Borrower pursuant to a
leasehold interest, each Borrower hereby assigns and conveys as security, grants a security
interest in, hypothecates, mortgages, pledges and sets over unto the Lender, all of the right, title
and interest of the Borrowers in all of such Collateral, including without limitation, all owned
real property and in all such leasehold interests, together in each case with all of the right, title
and interest of the Borrowers in and to all buildings, improvements, and fixtures related thereto,
any lease or sublease thereof, all general intangibles relating thereto and all proceeds thereof.
Each Borrower acknowledges that, pursuant to the Orders, the Liens granted in favor of the
Lender in all of the Collateral shall be perfected without the recordation of any UCC financing
statements, notices of Lien, title certificates, other instruments of mortgage or assignment or any
control agreement. Notwithstanding subsections (a), (b) and (c) of this Section 2.08, or any
failure on the part of any Borrower and the Lender to take any further act to perfect, maintain,
protect or enforce the Liens and security interests in the Collateral granted hereunder, the Orders
(when entered) shall automatically, and without further action by any Person, perfect such Liens
9
and security interests against the Collateral. Each Borrower further agrees that (i) the Lender
shall have rights and remedies set forth in Section 8.02 in respect of the Collateral and (ii) if
requested by the Lender, the Borrowers shall enter into separate security agreements, control
agreements, pledge agreements and fee and leasehold mortgages with respect to such Collateral
on terms reasonably satisfactory to counsel to the Lender.
ARTICLE III
fRESERVEDl
ARTICLE IV
PAYMENTS
Section 4.01. Payments. The Borrowers will make the payment due on the Maturity
Date not later than 12:00 noon (Delaware time) on the day when due, in Dollars and in
immediately available funds, to the Lender. Such payment shall include the principal amount of
all Loans outstanding and any accrued interest only.
CONDITIONS PRECEDENT TO EFFECTIVENESS OF
AGREEMENT AND MAKING OF REVOLVING LOANS
Section 4.02. Conditions Precedent to Effectiveness of Agreement and Making of Initial
Loan. The obligation of the Lender to perform its obligations under this Agreement and to make
the Initial Loan is subject to the fulfillment, in a manner satisfactory to the Lender, of the
following conditions precedent (unless waived by the Lender in accordance with the terms
hereof):
(a) the Borrowers shall have commenced the Chapter 11 Case;
(b) the Interim DIP Order shall have been entered by the Bankruptcy Court;
(c) prior to filing or submission to the Bankruptcy Court, counsel to the Lender or
Lender shall have received the motions and other pleadings or related documents to be filed or
submitted to the Bankruptcy Court in connection with this Agreement and the other Loan
Documents and the approval thereof, and such motions, orders, pleadings and related documents
shall be satisfactory in all respects to Lender, or its counsel;
(d) the Loan Documents shall have been approved by the Bankruptcy Court;
10
(e) the Lender shall have received the Loan Documents executed and delivered by the
Borrowers, and such documentation shall be in form and substance satisfactory to the Lender;
(f) the Initial Budget shall have been finalized and shall be in form and substance
satisfactory to the Lender;
(g) all Liens of the Lender on the Collateral shall have been deemed valid and
perfected upon entry of the Interim DIP Order, without further action required by the Lender or
any other Person;
(h) Conditions Precedent to Making of Each Additional Loan. The obligation of the
Lender to make each Additional Loan is set forth in Section 2.01 and 2.02 above.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BORROWERS
Section 5.01. Representations and Warranties of Borrowers. Each of the Borrowers
hereby represents and warrants to the Lender, on the Agreement Date, as follows:
(a) Organization, Good Standing, Etc. Such Borrower (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, and
(ii) subject to the entry ofthe Interim DIP Order, has all requisite power and authority to conduct
its business as now conducted and as currently contemplated, to make the borrowings hereunder,
to execute and deliver each Loan Document to which it is a party, to consummate the
transactions contemplated thereby, and to own, lease, operate and use its properties.
(b) Executive Offices, Collateral Locations, FEIN, Organizational Information.
Schedule 6.01(b) sets forth the current location of each Borrower's chief executive office,
principal place of business, the locations at which any Collateral is stored or located, and the
location of each Borrower's books and records concerning such Collateral. In addition, Schedule
6.01(b) sets forth (a) each Borrower's federal employer identification number, (b) the
organizational identification number issued by the Governmental Authority of the jurisdiction of
organization of each Borrower, as applicable, (c) the exact legal name of each Borrower, and
(d) any other corporate, fictitious or trade names used by such Borrower currently or at any time
prior to the date of this Agreement.
(c) Authorization, Etc. The execution, delivery and performance by such Borrower
of each Loan Document to which it is or will be a party, (i) upon entry of the Interim DIP Order,
have been duly authorized by all necessary action, (ii) do not and will not contravene its
organizational documents or any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties (other than conflicts, breaches and defaults the
enforcement of which will be stayed by virtue of the filing of the Chapter 11 Case), (iii) do not
and will not result in or require the creation of any Lien (other than pursuant to any Loan
Document) or Permitted Liens upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or non-renewal of any
permit, license, authorization or approval applicable to its operations or any of its properties to
11
the extent such suspension, revocation, impairment, forfeiture or non-renewal would result in a
Material Adverse Change.
(d) Execution and Binding Effect. Upon entry of the Interim DIP Order, each of the
Loan Documents executed and delivered on or prior to the Agreement Date will constitute a
legal, valid and binding obligation thereof enforceable in accordance with the terms hereof or
thereof. Each Loan Document that was not required to be executed and delivered by such
Borrower prior to the Agreement Date, when executed and delivered, will be validly executed
and delivered by such Borrower, and will constitute legal, valid and binding obligations of such
Borrower, enforceable in accordance with the terms thereof.
(e) Rights in Collateral. Such Borrower has rights (or the power to transfer the right)
in the Collateral in vvhich it is granting the Liens hereunder free and clear of any and all Liens
except for Permitted Liens.
(f) Governmental Approvals. Other than (i) the permits, licenses, authorizations,
plans, directives, consent orders or consent decrees of or from the Governmental Authorities and
the consents of other Persons that the Borrowers have already obtained and delivered to the
Lender and (ii) the permits, licenses, authorizations, plans, directives, consent orders or consent
decrees of or from the Governmental Authorities and consents of other Persons the absence of
which would not be reasonably likely to result in a Material Adverse Change, no permits,
licenses, authorizations, plans, directives, consent orders or consent decrees of or from the
Governmental Authorities, or consents of other Persons, are required in connection with the due
execution, delivery and performance by the Borrowers of any Loan Document.
(g) Litigation. There does not exist any action, suit, investigation, litigation,
proceeding, hearing or other legal or regulatory developments, pending or threatened in any
court or before any arbitrator or Governmental Authority (other than the Chapter 11 Case) that,
singly or in the aggregate, could result in a Material Adverse Change.
(h) Compliance with Law, Etc. Such Borrower is not in violation of its
organizational documents, any law, rule, regulation, judgment or order of any Governmental
Authority applicable to it or any of its property or assets which is reasonably likely to result in a
Material Adverse Change, and no Material Adverse Change, Default or Event of Default has
occurred and is continuing. Such Borrower has paid all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or franchises.
(i) Title. Such Borrower has good and marketable title to all real property and
personal property owned by it, in each case free and clear of all Liens, encumbrances and defects
except Permitted Liens.
(j) Permitted Indebtedness; Permitted Liens.
(i) No Borrower has any outstanding Indebtedness, other than Permitted
Indebtedness.
(ii) There are no Liens or financing statements securing Indebtedness of the
Borrowers, except for Permitted Liens.
12
(k) USA Patriot Act, Etc. Each Borrower is in compliance in all material respects
with the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)). No
part of the proceeds of the extensions of credit hereunder will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official of a political
party, candidate for political office or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the federal
Foreign Corrupt Practices Act of 1977.
ARTICLE VI
COVENANTS OF BORROWERS
Section 6.01.
Loan or any other Obligation (whether or not due) shall remain unpaid, each of the Borrowers
will, unless the Lender shall otherwise consent in writing:
(a)
Budgets.
Adherence to Budget. Adhere, in all material respects, in accordance with the
(b) Notice of Change in Board of Directors. With reasonable promptness, deliver to
the Lender written notice of any change in the board of directors or managers (or similar
governing body) of such Borrower.
Section 6.02. Negative Covenants. So long as any principal of or interest on any Loan
or any other Obligation (whether or not due) shall remain unpaid, none of the Borrowers shall,
unless the Lender shall otherwise consent in writing:
(a) Final DIP Order; Administrative Priority; Lien Priority; Payment of Claims.
(i) At any time seek, consent to or suffer to exist any modification, stay,
vacation or amendment of the Interim DIP Order or the Final DIP;
(ii) At any time, except pursuant to Bankruptcy Court Order, suffer to exist a
priority for any administrative expense or unsecured claim against such Borrower (now
existing or hereafter arising of any kind or nature whatsoever, including any
administrative expenses of the kind specified in Sections 503(b) and 507(b) of the
Bankruptcy Code) equal or superior to the priority of the Lender in respect of the
Obligations, except for the Carve-Out Expenses;
(iii) At any time, except pursuant to Bankruptcy Court Order, suffer to exist
any Lien on the Collateral having a priority equal or superior to the Lien in favor of the
Lender in respect of the Collateral, except for the Carve-Out Expenses; or
(b) Liens, Etc. Except pursuant to Bankruptcy Court Order, create, incur, assume or
suffer to exist any Lien (other than Liens existing on the Agreement Date) upon or with respect
to any of its properties, whether now owned or hereafter acquired, to file or suffer to exist under
the UCC or any similar law or statute of any jurisdiction, a financing statement (or the equivalent
thereof) that names such Borrower as debtor, to sign or suffer to exist any security agreement
13
authorizing any secured party thereunder to file such financing statement (or the equivalent
thereof), to sell any of its property or assets subject to an understanding or agreement, contingent
or otherwise, to repurchase such property or assets (including sales of accounts receivable) with
recourse to such Borrower or assign or otherwise transfer, any account or other right to receive
income, other than, as to all of the above, Permitted Liens.
(c) Payment of Existing Indebtedness. Make any payment on the ex1stmg
Indebtedness (other than Permitted Indebtedness to the extent permitted by the Bankruptcy Court
or by the Lender in writing).
(d) Incurrence of Indebtedness. Except pursuant to Bankruptcy Court Order, create,
incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to,
an;' Indebtedness other tha..11 Permitted Indebtedness.
(e) Expenditures Not Approved by Budget. Make any material expenditure except of
the type and for the purposes provided for in the applicable Budget.
(f) Fundamental Changes. Except pursuant to Bankruptcy Court Order, wind-up,
liquidate or dissolve (or permit or suffer any thereof) or merge, consolidate or amalgamate with
any Person, convey, sell, lease or sublease, transfer or otherwise dispose of, whether in one
transaction or a series of related transactions, all or substantially all of its business, property or
assets, whether now owned or hereafter acquired.
(g) Use of Proceeds. Use the proceeds of any Loan for any purpose other than the
Designated Purposes.
(h) Restricted Payments. Directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted Payment.
(i) Investments. Directly or indirectly, make or own any Investment in any Person,
including without limitation any joint venture, except equity Investments owned as of the
Agreement Date in any Subsidiary.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be hand delivered, or sent by electronic mail if to the
Borrowers, at the following address, telecopy number or email address:
Address for notices to all Borrowers
P.O. Box 318028
1608 Walnut Street, Suite 501
Philadelphia, P A 19103.
Attention: Roland Bullard
14
Telephone: 267-577-9384
Email: rkbullard@fastshipatlantic.com
with a copy to counsel for the Borrowers:
Benesch, Friedlander, Coplan & Aronoff, LLP
222 Delaware A venue, Suite 801
Wilmington, DE 19801
Attention: Raymond H. Lemisch
Telephone: (302) 442-7010
Telecopy: (302) 442-7012
Email: rlemisch@beneschlaw.com
with a copy to counsel for the Committee (if one is appointed),
and with a copy to the U.S. Trustee;
if to the Lender, to it at the following address, telecopy number or email address:
IP Co LLC
c/o Donald E. Stout, Esquire
Antonelli, Terry, Stout & Kraus, LLP
Suite 1800, 1300 North Seventeenth Street
Arlington, VA 22209
Telephone: (703) 312-6650
Telecopy: (703) 312-6666
Email: dstout@antonelli.com
All such notices and other communications shall be effective, (a) if hand delivered, upon
delivery or (b) if sent by electronic mail, when received.
Section 7.02. Waivers, Amendments, Etc. No waiver of any provision of this
Agreement or the other Loan Documents, and no consent to any departure by the Lender
therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. The Borrowers and the Lender may enter into amendments
and modifications to this Agreement and the other Loan Documents without further order of the
Bankruptcy Court; provided that such amendments and modifications shall be in writing and
served upon counsel for the Committee (if one is appointed) and the U.S. Trustee. The Loan
Documents shall be amended as soon as practicable after entry of the Final DIP Order to ensure
the terms and conditions of the Final DIP Order are incorporated in the Loan Documents.
Section 7.03. Assignments and Participations.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby, except that none
15
of the Borrowers may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any attempted assignment or transfer by
such Borrower without such consent shall be null and void).
(b) Lender may assign (an "Assignment") to one or more Eligible Assignees (each,
an "Assignee") all or a portion of its rights and obligations under this Agreement (including all
or a portion of such Lender's Loans). Assignment shall be subject to the following:
(i) to an Affiliate of a Lender, providing that the assignee, provides evidence
to the Borrowers sole satisfaction that such assignee has sufficient financial reserves in
liquid assets to provide the Loan and any additional Loans, provided for hereunder, not
yet then made;
(ii) the parties to each assignment shall execute and deliver to Borrowers an
assignment agreement, in form and substance satisfactory to the Borrowers (each, an
"Assignment Agreement"); and
(iii) upon its receipt of a duly executed and completed Assignment Agreement,
the assigning Lender shall give prompt notice thereof to the Borrowers and shall maintain
a copy of such Assignment Agreement in its office specified in Section 9.01 (or such
other office as such Lender may from time to time designate in writing to the Borrowers
and the other Lenders (if applicable)). From and after the effective date of an
Assignment, the Assignee shall be a party hereto and, to the extent of the interest
assigned pursuant to the Assignment, have the rights and obligations of a "Lender" under
this Agreement, and the assigning Lender shall, to the extent of the interest assigned, be
released from its obligations under this Agreement. Each Borrower hereby consents to
the disclosure of any information obtained by an assigning Lender in connection with this
Agreement to any Affiliate to which such Lender sells, or proposes to sell, its Loans.
Section 7.04. No Waiver; Remedies, Etc. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any
Loan Document preclude any other or further exercise thereof or the exercise of any other right.
The rights and remedies of the Lender provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Lender under any Loan Document against any party thereto are not conditional
or contingent on any attempt by the Lender to exercise any of its rights under any other Loan
Document against such party or against any other Person.
Section 7.05. Marshalling; Payments Set Aside. The Lender shall be under no
obligation to marshal any assets in favor of any of the Borrowers or any other Person or against
or in payment of any or all of the Obligations. To the extent that any of the Borrowers makes a
payment or payments to the Lender, or the Lender enforces any Lien, and such payment or
payments or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to
the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and
16
all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such enforcement or set-
off had not occurred.
Section 7.06. Survival. All covenants, agreements, representations and warranties made
by the Borrowers herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the Lender and
shall survive the execution and delivery of this Agreement and the making of any Loans,
regardless of any investigation made by the Lender or on its behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan is outstanding and
unpaid.
Section 7.07. Severability. provision of this \vhich is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
Section 7.08. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement.
Section 7.09. Confidentiality. The Borrowers and the Lender shall take reasonable
precautions, in accordance with their customary procedures for handling confidential information
of the same nature, to maintain the confidentiality of all non-public information obtained
pursuant to the requirements of this Agreement or any other Loan Document but may, in any
event, make disclosures (a) as required or requested by any Governmental Authority or
representative thereof or as required pursuant to legal process, (b) to their respective Affiliates,
attorneys, accountants and other professional consultants, (c) as otherwise required by law, or
(d) in connection with litigation involving the Borrowers or the Lender.
Section 7.1 0. Headings. Article, Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part hereof for any other purpose or be
given any substantive effect.
Section 7.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE
(WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE,
EXCEPT AS GOVERNED BY THE BANKRUPTCY CODE.
Section 7.12. WAIVER OF JURY TRIAL, ETC. THE BORROWERS AND THE
LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT
17
DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION,
PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
Section 7.13. Consent to Jurisdiction.
(a) Each party to this Agreement hereby irrevocably and unconditionally submits for
itself and its property in any legal action or proceeding relating to this Agreement or any of the
other Loan Documents, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the Bankruptcy Court, and, if the Bankruptcy Court
does not have (or abstains from) jurisdiction, to the jurisdiction of an)l state or federal court of
competent jurisdiction sitting in Wilmington, DE.
(b) Each party to this Agreement hereby irrevocably waives, in connection with any
such action or proceeding relating to this Agreement or any of the other Loan Documents, any
objection, including, without limitation, any objection to the laying of venue or based on the
grounds of forum non-conveniens, which they may now or hereafter have to the bringing of any
such action or proceeding such respective jurisdiction.
(c) Each party to this Agreement hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such action or proceeding relating to this
Agreement or any of the other Loan Documents by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each such party, as the case may be, at its address set forth in
Section 9.01 hereof.
Section 7 .14. Prior Agreements. This Agreement represents the entire agreement of the
parties with regard to the subject matter hereof and the terms of any agreements, letters and other
documentation entered into between the Borrowers and the Lender prior to the execution of this
Agreement which relate to the Loans to be made hereunder shall be replaced by the terms of this
Agreement and the other Loan Documents.
[SIGNATURES FOLLOWJ
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IN WITNESS WHEREOF, the parties hereto have caused this Debtor-in-Possession
Credit and Security Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWERS:
FASTSHIP, INC.
Name:
Title:
THORNYCROFT, GILES & COMPANY, INC.
Name:
Title:
F ASTSHIP ATLANTIC, INC.
Name:
Title:
LENDER:
IP Co LLC
Name:
Title:
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Doc 7029764 Vcr 2



EXHIBIT C
FastShip Inc. et al. Bankruptcy Budget
total
BFC&A (debtors' counsel) 175,000
The Brownstein Corporation (financial advisor) 20,000
US Trustee 7,000
Claims agent 30,000
Roland K. Bullard, II 57,400
Kathryn R. Chambers 30,625
FastShip Inc. office expenses 25,000
D&O tail 26,378
Contingency 28 597
400,000
Tranche 1 Tranche 2
1st month 2nd month
72,500 57,500
10,000 5,000
1,000 1,000
7,500 7,500
16,400 16,400
8,750 8,750
5,000 5,000
26,378 0
2 472 23 850
150,000 125,000
7046063_1.XLSX
Tranche 3
remainder of
case
45,000
5,000
5,000
15,000
24,600
13,125
15,000
0
2 275
125,000
unused for professionals rolls over
unused for professionals rolls over
unused for UST rolls over
unused for professionals rolls over
2 months @ $16,400; 3 months@ $8,200
2 months@ $8,750; 3 months@ $4,375
5 months @ $5,000
unused rolls over