Up to US$22,000,000 TERM LOAN FACILITY LEONIDAS SHIPPING LTD as Borrower EUROSEAS LTD as Guarantor FIRST-CITIZENS BANK & TRUST COMPANY as Facility Agent and FIRST-CITIZENS BANK & TRUST COMPANY as Security Agent FACILITY AGREEMENT relating to the...

(1)

LEONIDAS SHIPPING LTD, a corporation incorporated in the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960, Majuro, ▇▇▇▇▇▇▇▇ Islands as borrower (the "Borrower")

(2)

EUROSEAS LTD, a corporation incorporated in the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960, Majuro, ▇▇▇▇▇▇▇▇ Islands and whose common shares are currently listed on the "Nasdaq Capital Market" under the trading symbol "ESEA" as guarantor (the "Guarantor")

(3)

THE FINANCIAL INSTITUTIONS listed in 0 of Schedule (The Parties) as lenders (the "Original Lenders")

(4)

FIRST-CITIZENS BANK & TRUST COMPANY as agent of the other Finance Parties (the "Facility Agent")

(5)

FIRST-CITIZENS BANK & TRUST COMPANY as security agent for the Secured Parties (the "Security Agent")

1

DEFINITIONS AND INTERPRETATION

1.1

Definitions

(a)

the amount of its participation in the outstanding Loan; and

(b)

in relation to any proposed Utilisation, the amount of its participation in the Loan that is due to be made on or before the proposed Utilisation Date.

(a)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;

(b)

in relation to any state other than such an EEA Member Country and the United Kingdom, any applicable analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and

(c)

in relation to the United Kingdom, the UK Bail-In Legislation.

(a)

the Federal Funds Rate plus half of one per cent.; or

(b)

the rate of interest in effect for such day as publicly announced from time to time by JPMorgan Chase Bank, N.A. as its "prime rate" in effect for such day.

(a)

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

(b)

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

(a)

an account in the name of the Borrower with the Account Bank designated "[Name of the Borrower] - Cash Reserve Account";

(b)

any other account in the name of the Borrower with the Account Bank which may, with the prior written consent of the Facility Agent, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or

(c)

any sub-account of any account referred to in paragraphs (a) or (b) above.

(a)

in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in 0 of Schedule (The Parties) and the amount of any other Commitment transferred to it under this Agreement; and

(b)

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

(a)

any member of the Group or any of its advisers; or

(b)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

(i)

information that:

(A)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 44 (Confidential Information); or

(B)

is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; and

(C)

is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

(a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Obligor; or

(b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Obligor preventing that, or any other, Party or, if applicable, any Obligor:

(i)

from performing its payment obligations under the Finance Documents; or

(ii)

from communicating with other Parties or, if applicable, any Obligor in accordance with the terms of the Finance Documents,

(a)

a declaration, making or payment of any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its issued shares (or any Clause of its issued shares);

(b)

a repayment or distribution of any dividend or share premium reserve;

(c)

a payment of any management, advisory or other fee (other than any management fee payable by the Guarantor to the Approved Manager under the Master Management Agreement); or

(d)

a redemption, repurchase, defeasance, retirement or repayment of any of its issued shares or a resolution to do any of the foregoing.

(a)

the following, save to the extent that any of them is, with the prior written consent of the Facility Agent, pooled or shared with any other person:

(i)

all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;

(ii)

the proceeds of the exercise of any lien on sub-freights;

(iii)

compensation payable to the Borrower or the Security Agent in the event of requisition of the Ship for hire or use;

(iv)

remuneration for salvage and towage services;

(v)

demurrage and detention moneys;

(vi)

without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;

(vii)

all moneys which are at any time payable under any Insurances in relation to loss of hire;

(viii)

all monies which are at any time payable to the Borrower in relation to general average contribution; and

(b)

if and whenever the Ship is employed on terms whereby any moneys falling within sub- paragraphs (i) to (viii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship.

(a)

an account in the name of the Borrower with the Account Bank designated "[Name of the Borrower] - Earnings Account";

(b)

any other account in the name of the Borrower with the Account Bank which may, with the prior written consent of the Facility Agent, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or

(c)

any sub-account of any account referred to in paragraphs (a) or (b) above.

(a)

any release, emission, spill or discharge of Environmentally Sensitive Material whether within the Ship or from the Ship into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or

(b)

any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or any Transaction Obligor and/or an Approved Manager and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c)

any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or an Approved Manager and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.

(a)

sections 1471 to 1474 of the Code or any associated regulations;

(b)

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

(c)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

(a)

in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or

(b)

in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA.

(a)

the rate calculated by the Federal Reserve Bank of New York based on such day's Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate; and

(b)

zero per cent.

(a)

this Agreement;

(b)

the Utilisation Request;

(c)

any Security Document;

(d)

the Manager's Undertaking; or

(e)

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

(a)

moneys borrowed;

(b)

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c)

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)

the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);

(e)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)

any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;

(g)

any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);

(h)

any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(i)

the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

(a)

the Earnings, the Insurances and any Requisition Compensation;

(b)

any Charter and any Charter Guarantee; and

(c)

the benefit of any warranties of quality in favour of the Borrower under the Shipbuilding Contract,

(a)

all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, effected in relation to the Ship, the Earnings or otherwise in relation to the Ship whether before, on or after the date of this Agreement; and

(b)

all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.

(a)

either

(i)

the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or

(ii)

if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, the most recent Term SOFR for a tenor of one month (as of a day which is not more than three US Government Securities Business Days before the Quotation Day); and

(b)

the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.

(a)

either

(i)

the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or

(ii)

if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, Term SOFR for a tenor of one month (as of the Specified Time); and

(b)

the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.

(a)

any Original Lender; and

(b)

any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 27 (Changes to the Lenders),

(a)

if the Loan has not yet been advanced, a Lender or Lenders whose Commitments aggregate more than 66⅔ per cent. of the Total Commitments; or

(b)

at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66⅔ per cent. of the amount of the Loan then outstanding or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66⅔ per cent. of the Loan immediately before such repayment.

(a)

if, as of the date of this Agreement, the Ship is employed under an Eligible Charter, 1.90 per cent. per annum; or

(b)

if, as of the date of this Agreement, the Ship is not employed under an Eligible Charter, 2.10 per cent. per annum, and, in each case, as the same may be adjusted from time to time pursuant to Clause 10.5 (Calculation of Margin).

(a)

as at a date not more than 14 days previously;

(b)

by an Approved Valuer selected by the Facility Agent;

(c)

with or without physical inspection of the Ship or vessel (as the Facility Agent may require); and

(d)

on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter.

(a)

the business, operations, property, condition (financial or otherwise) or prospects of an Obligor; or

(b)

the ability of an Obligor to perform its obligations under any Finance Document to which it is a party, in accordance with its terms; or

(c)

the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

(a)

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

(b)

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

(c)

if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

(a)

which is a time, voyage or consecutive voyage charter;

(b)

the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 11 months plus a redelivery allowance of not more than 30 days;

(c)

which is entered into on bona fide arm's length terms at the time at which the Ship is fixed; and

(d)

in relation to which not more than two months' hire is payable in advance,

(a)

any Financial Indebtedness incurred under the Finance Documents; and

(b)

in relation to the Borrower, any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a subordination agreement in a form and substance acceptable to the Facility Agent and which is assigned in favour of the Security Agent in such form acceptable to it; and

(c)

in relation to the Guarantor, any Financial Indebtedness necessary for it to promote its business, including but not limited to, in relation to its subsidiaries or its Fleet Vessels.

(a)

Security created by the Finance Documents;

(b)

liens for unpaid master's and crew's wages in accordance with the usual maritime practice;

(c)

liens for salvage or collision;

(d)

liens for master's disbursements incurred in the ordinary course of trading; and

(e)

any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Ship:

(i)

not as a result of any default or omission by the Borrower; and

(ii)

subject, in the case of liens for repair or maintenance, to Clause 23.16 (Restrictions on chartering, appointment of managers etc.),

(a)

listed on a Sanctions List;

(b)

resident in, or incorporated or organised under the laws of a Sanctioned Country;

(c)

otherwise a target of Sanctions ("target of Sanctions", for the purpose of this paragraph (c), signifying a person with whom a person organised or resident in the US or any other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities, or against whom Sanctions are otherwise directed); or

(d)

acting or purporting to act on behalf of any of the persons listed in paragraphs (a) to (c) above.

(a)

the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or

(b)

as otherwise determined pursuant to Clause 10.1 (Unavailability of Term SOFR).

(a)

its Original Jurisdiction;

(b)

any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;

(c)

any jurisdiction where it conducts its business; and

(d)

the jurisdiction whose laws govern the perfection of any of the Finance Documents to which it is a party, in accordance with their respective terms.

(a)

any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and

(b)

any capture or seizure of the Ship (including any hijacking or theft) by any person whatsoever.

(a)

the Shares Security;

(b)

any Mortgage;

(c)

the General Assignment;

(d)

any Charterparty Assignment;

(e)

any Account Security; or

(f)

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

(a)

the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;

(b)

all obligations expressed to be undertaken by a Transaction Obligor and/or an Approved Manager in accordance with any of the Finance Documents to which it is a party and in accordance with their terms to pay amounts in relation to the Secured Liabilities to the Security Agent as trustee for the Secured Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor and/or an Approved Manager in accordance with any of the Finance Documents to which it is a party and in accordance with their terms in favour of the Security Agent as trustee for the Secured Parties;

(c)

the Security Agent's interest in any turnover trust created under the Finance Documents;

(d)

any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties in connection with the Secured Liabilities,

(i)

rights intended for the sole benefit of the Security Agent; and

(ii)

any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

(a)

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

(b)

any Requisition of the Ship unless the Ship is returned to the full control of the Borrower within 60 days of such Requisition.

(a)

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

(b)

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

(i)

the date on which a notice of abandonment is given (or deemed or agreed to be given) to the insurers; and

(ii)

the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the Ship as a total loss;

(c)

in the case of a Requisition, the date on which that Requisition occurs; and

(d)

in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.

(a)

a Finance Document;

(b)

the Shipbuilding Contract;

(c)

any Assignable Charter; or

(d)

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

(a)

the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(b)

the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

(a)

a Saturday or a Sunday; and

(b)

a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.

(a)

a person which is resident for tax purposes in the US; or

(b)

a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

(a)

any value added tax imposed by the Value Added Tax Act 1994;

(b)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(c)

any other tax of a similar nature, whether imposed in the United Kingdom or a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) or (b) above, or imposed elsewhere.

(a)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;

(b)

in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and

(c)

in relation to any other applicable Bail-In Legislation:

(i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii)

any similar or analogous powers under that Bail-In Legislation.

1.2

Construction

(a)

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

(i)

the "Account Bank", the "Facility Agent", any "Finance Party", any "Lender", any "Obligor", any "Party", any "Secured Party", the "Security Agent", any "Transaction Obligor" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;

(ii)

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

(iii)

a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;

(iv)

"document" includes a deed and also a letter, fax, email or telex;

(v)

a Lender's "cost of funds" in relation to its participation in the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan.

(vi)

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

(vii)

a "Finance Document", a "Security Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended, replaced, novated, supplemented, extended or restated;

(viii)

a "group of Lenders" includes all the Lenders;

(ix)

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

(x)

"law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

(xi)

"proceedings" means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

(xii)

a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);

(xiii)

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

(xiv)

a reference to the "Ship", its name, its flag and, if applicable, its port of registry shall include any replacement name, flag and, if applicable, replacement port of registry, in each case, as may be approved in writing from time to time by the Facility Agent acting with the authorisation of the Majority Lenders;

(xv)

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

(xvi)

a time of day is a reference to London time;

(xvii)

any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

(xviii)

words denoting the singular number shall include the plural and vice versa; and

(xix)

"including" and "in particular" (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

(b)

The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

(c)

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

(d)

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

(e)

An Event of Default or a Potential Event of Default is "continuing" if it has not been remedied or waived Provided that, following the exercise by the Facility Agent of any right pursuant to Clause 26.20 (Acceleration), an Event of Default is "continuing" only if it has not been waived.

1.3

Construction of insurance terms

1.4

Agreed forms of Finance Documents

(a)

in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or

(b)

in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 43.2 (All Lender matters) applies, all the Lenders.

1.5

Third party rights

(a)

Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.

(b)

Subject to Clause 43.3 (Other exceptions) but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

(c)

Any Receiver, Delegate, Affiliate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 29.10 (Exclusion of liability), or paragraph (b) of Clause 30.11 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

2

THE FACILITY

2.1

The Facility

2.2

Finance Parties' rights and obligations

(a)

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

(b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt of an Obligor to a Finance Party, arising under the Finance Documents to which it is a party in accordance with their respective terms, is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by an Obligor under the Finance Documents to which it is a party in accordance with their respective terms and which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Obligor under the Finance Documents to which it is a party in accordance with their respective terms.

(c)

A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents subject to and in accordance with their respective terms.

3

PURPOSE

3.1

Purpose

3.2

Monitoring

4

CONDITIONS OF UTILISATION

4.1

Initial conditions precedent

4.2

Further conditions precedent

(a)

on the date of the Utilisation Request and on the proposed Utilisation Date and before the Loan is made available:

(i)

no Default is continuing or would result from the proposed Utilisation; and

(ii)

the Repeating Representations to be made by each Obligor (as the case may be) are true;

(b)

the Facility Agent has received on or before the Utilisation Date, or is satisfied it will receive when the Loan is made available, all of the documents and other evidence listed in 0 of Schedule (Conditions Precedent) in form and substance reasonably satisfactory to the Facility Agent.

4.3

Notification of satisfaction of conditions precedent

(a)

The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).

(b)

Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.4

Conditions Subsequent

4.5

Waiver of conditions precedent

5

UTILISATION

5.1

Delivery of the Utilisation Request

(a)

The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.

(b)

The Borrower may not deliver more than one Utilisation Request in respect of the Loan to be advanced.

5.2

Completion of the Utilisation Request

(a)

the proposed Utilisation Date is a Business Day within the Availability Period;

(b)

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

(c)

all agreed applicable deductible items have been completed; and

(d)

the proposed Interest Period complies with Clause 9 (Interest Periods).

5.3

Currency and amount

(a)

The currency specified in the Utilisation Request must be dollars.

(b)

The amount of the proposed Loan must be an amount which is up to the lower of (i) $22,000,000 and (ii) 55 per cent. of the Initial Market Value of the Ship.

(c)

The amount of the proposed Loan must be an amount which is not more than the Available Facility.

5.4

Lenders' participation

(a)

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

(b)

The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately before making the Loan.

(c)

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

5.5

Cancellation of Commitments

5.6

Retention and payment to Builder

(a)

To deduct from the proceeds of the Loan any agreed fees then payable to the Finance Parties in accordance with Clause 11 (Fees), any agreed solicitors fees and disbursements together with any applicable VAT and any other items listed as deductible items in the relevant Utilisation Request and to apply them in payment of the items to which they relate; and

(b)

On the Utilisation Date to pay to, or for the account of, the Borrower, the balance (after any deduction made in accordance with paragraph (a) above) of the amounts which the Facility Agent receives from the Lenders in respect of the Loan. That payment shall be made:

(i)

To the account of the Builder which the Borrower specifies in the relevant Utilisation Request; and

(ii)

In like funds as the Facility Agent received from the Lenders in respect of the Loan.

5.7

Disbursement of Loan to third party

5.8

Prepositioning of funds

(a)

agree to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 (Calculation of interest) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on the Loan after the Utilisation Date in respect of it or, if such Utilisation Date does not occur, within three Business Days of demand by the Facility Agent; and

(b)

shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may incur in connection with such arrangement.

6

REPAYMENT

6.1

Repayment of Loan

6.2

Effect of cancellation and prepayment on scheduled repayments

(a)

If the Borrower cancels the whole or any part of any Available Commitment in accordance with Clause 7.5 (Right of repayment and cancellation in relation to a single Lender) or if the Available Commitment of any Lender is cancelled under Clause 7.1 (Illegality and Sanctions affecting a Lender) then the Repayment Instalments falling after that cancellation will be reduced pro rata (including, for the avoidance of doubt, the Balloon Instalment) by the amount of the Available Commitments so cancelled.

(b)

If the whole or any part of any Available Commitment is cancelled in accordance with Clause 7.2 (Voluntary and automatic cancellation) or if the whole or part of any Commitment is cancelled pursuant to Clause 5.5 (Cancellation of Commitments), the Repayment Instalments for each Repayment Date falling after that cancellation will reduce pro rata (including, for the avoidance of doubt, the Balloon Instalment) by the amount of the Commitments so cancelled.

(c)

If any part of the Loan is repaid or prepaid in accordance with Clause 7.5 (Right of repayment and cancellation in relation to a single Lender) or Clause 7.1 (Illegality and Sanctions affecting a Lender) then the Repayment Instalments for each Repayment Date falling after that repayment or prepayment will be reduced pro rata (including, for the avoidance of doubt, the Balloon Instalment) by the amount of the Loan repaid or prepaid.

(d)

If any part of the Loan is prepaid in accordance with Clause 7.3 (Voluntary prepayment of Loan) then the amount of the Repayment Instalments for each Repayment Date falling after that repayment or prepayment will be reduced pro rata (including, for the avoidance of doubt, the Balloon Instalment) by the amount of the Loan repaid or prepaid.

6.3

Termination Date

6.4

Reborrowing

7

PREPAYMENT AND CANCELLATION

7.1

Illegality and Sanctions affecting a Lender

(a)

it is or becomes unlawful or contrary to any regulation for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it is or becomes unlawful or contrary to any regulation for any Affiliate of a Lender for that Lender to do so; or

(b)

it would be unlawful for any Affiliate of a Lender to perform any of its obligations contemplated by this Agreement or to fund or maintain its participation in any Loan if that Affiliate were a Lender under this Agreement; or

(c)

either:

(i)

in the sole discretion of a Lender any Sanction applies to or otherwise affects the performance by that Lender of any; or

(ii)

it is or becomes contrary to, or declared by any Sanctions Authority to be contrary to, Sanctions for a Lender to perform any,

(d)

of its obligations as contemplated by any Finance Document or its funding or participation in the Loan or if, in the sole discretion of a Lender, its Affiliate may be in breach of any Sanctions as a result of that Lender doing so (including in each case, without limitation, due to (x) the non- existence or cessation of legality, validity, binding effect or enforceability of a provision of a Finance Document; or (y) the presence of any circumstances resulting in the imposition of any civil, administrative or criminal measures on a Lender or any Affiliate of a Lender); or

(e)

without prejudice to the generality of the preceding paragraphs and also without prejudice to any of the express obligations of the Transaction Obligors or an Approved Manager under the Transaction Documents to which they are a party in accordance with their respective terms, any Transaction Obligor or any other member of the Group or any Approved Manager being or becoming a Prohibited Person which would result in a breach of Sanctions by a Lender or an Affiliate of a Lender or, in the opinion of a Lender acting reasonably, anything whatsoever is done or omitted to be done by a Transaction Obligor or an Approved Manager which would result in that Lender or an Affiliate of that Lender being in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions:

(i)

to the extent permitted by applicable law, that Lender shall promptly notify the Borrower through the Facility Agent upon becoming aware of that event;

(ii)

upon the Facility Agent notifying the Borrower, the Available Commitment of that Lender will be immediately cancelled;

(iii)

the Borrower shall repay that ▇▇▇▇▇▇'s participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law and, in any event, not earlier than 5 Business Days after giving such notice to the Borrower) and that ▇▇▇▇▇▇'s corresponding Commitment shall be cancelled in the amount of the participation prepaid; and

(iv)

accrued interest and all other amounts accrued for that Lender under the Finance Documents shall be immediately due and payable.

(f)

For the purposes of this clause, any "anti-blocking" or "anti-boycott" or other similar legislation to which a Lender or its Affiliates may be subject, shall not be considered.

7.2

Voluntary and automatic cancellation

(a)

The Borrower may, if it gives the Facility Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $300,000). Any cancellation under this Clause 7.2 (Voluntary and automatic cancellation) shall reduce the Commitments of the Lenders rateably.

(b)

The unutilised Commitment (if any) of each Lender shall be automatically cancelled at close of business on the date on which the Loan is made available.

7.3

Voluntary prepayment of Loan

(a)

Subject to paragraph (b) below, the Borrower may, if it gives the Facility Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $300,000 or a multiple of that amount).

(b)

The Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

7.4

Mandatory prepayment on sale or Total Loss

(a)

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

(b)

in the case of a Total Loss, on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss,

7.5

Right of repayment and cancellation in relation to a single Lender

(a)

If:

(i)

any sum payable to any Lender by an Obligor under the Finance Documents to which it is a party in accordance with their respective terms, is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up) or under that clause as incorporated by reference or in full in any other Finance Document; or

(ii)

any Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs),

(b)

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

(c)

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

7.6

Restrictions

(a)

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

(b)

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to the fee provided for in Clause 11.3 (Prepayment fee), if applicable, and any Break Costs, without premium or penalty.

(c)

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

(d)

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

(e)

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

(f)

If the Facility Agent receives a notice under this Clause 7 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to either the Borrower or the affected Lenders.

(g)

If all or part of any Lender's participation in the Loan is repaid or prepaid, an amount of that ▇▇▇▇▇▇'s Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.

7.7

Application of prepayments

8

INTEREST

8.1

Calculation of interest

(a)

Margin; and

(b)

the applicable Reference Rate.

8.2

Payment of interest

(a)

The Borrower shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").

(b)

If an Interest Period is longer than 3 Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.

8.3

Default interest

(a)

If an Obligor fails to pay any amount payable by it under a Finance Document to which it is a party in accordance with its terms on its due date (after taking into account any grace periods, if applicable), interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent. Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Obligor on demand by the Facility Agent.

(b)

If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:

(i)

the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and

(ii)

the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

(c)

Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

8.4

Notification of rates of interest

9

INTEREST PERIODS

9.1

Selection of Interest Periods

(a)

The Borrower may select the Interest Period for the Loan in the Utilisation Request. Subject to paragraph (f) below and Clause 9.2 (Changes to Interest Periods), the Borrower may select each subsequent Interest Period in respect of the Loan in a Selection Notice.

(b)

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

(c)

If the Borrower fails to select an Interest Period in the Utilisation Request or fails to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraph (f) below and Clause 9.2 (Changes to Interest Periods), be three Months.

(d)

Subject to this Clause 9 (Interest Periods), the Borrower may select an Interest Period of one, three or six Months or any other period agreed between the Borrower and the Facility Agent (acting on the instructions of all the Lenders).

(e)

An Interest Period in respect of the Loan or any part of the Loan shall not extend beyond the Termination Date.

(f)

In respect of a Repayment Instalment, the Borrower may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.

(g)

The first Interest Period for the Loan shall start on the Utilisation Date and, each subsequent Interest Period shall start on the last day of the preceding Interest Period.

(h)

Except for the purposes of paragraph (f) above and Clause 9.2 (Changes to Interest Periods), the Loan shall have one Interest Period only at any time.

(i)

No Interest Period can be selected in respect of a tenor that has ceased to be available in accordance with Clause 43.4 (Benchmark Replacement setting).

9.2

Changes to Interest Periods

(a)

In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Facility Agent may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 (Selection of Interest Periods).

(b)

If the Facility Agent makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrower and the Lenders.

9.3

Non-Business Days

10

CHANGES TO THE CALCULATION OF INTEREST

10.1

Unavailability of Term SOFR

(a)

Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.

(b)

Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR by 17:00 New York time on the relevant Quotation Day, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.

(c)

Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.

(d)

Base Rate: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 10.3 (Base Rate) shall apply to the Loan or that part of the Loan for that Interest Period.

10.2

Market disruption

10.3

Base Rate

(a)

If this Clause 10.3 (Base Rate) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

(i)

the Margin; and

(ii)

the Base Rate from time to time.

(b)

If this Clause 10.3 (Base Rate) applies and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

(c)

Subject to Clause 43.4 (Benchmark Replacement setting), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

10.4

Break Costs

(a)

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

(b)

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

10.5

Calculation of Margin

(a)

in the event that, on the first day of that interest Period, the Ship is employed on an Eligible Charter, the interest shall be 1.90 per cent. per annum for the duration of such Eligible Charter until the end of that Interest Period following the expiration of that Eligible Charter; and

(b)

in the event that, on the first day of that Interest Period, the Ship is not employed on an Eligible Charter, the interest shall be 2.10 per cent. per annum.

11

FEES

11.1

Commitment fee

(a)

The Borrower shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 0.25 per cent. per annum on that ▇▇▇▇▇▇'s Available Commitment from time to time on and from the date of this Agreement until and including the earlier of (i) the Utilisation Date and (ii) the last day of the Availability Period.

^(b)

The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

(c)

The commitment fee referred to in paragraphs (a) and (b) of this Clause 11.1 (Commitment Fee) shall not be payable by the Borrower if the Utilisation Date occurs within 5 Business Days from the date of this Agreement.

11.2

Upfront fee

11.3

Prepayment fee

(a)

Subject to paragraph (b) below, the Borrower must pay to the Facility Agent for each Lender (pro rata in accordance with their Commitments) a prepayment fee on the date of prepayment of all or any part of the Loan (by way of a re-financing, including, any sale and lease back financing).

(b)

The amount of the prepayment fee is:

(i)

if the prepayment occurs on or before the first anniversary of the Utilisation Date, 2 per cent. of the amount prepaid; and

(ii)

if the prepayment occurs after the first anniversary on or before the second anniversary of the Utilisation Date, 1 per cent. of the amount prepaid; and

(iii)

if the prepayment occurs after the second anniversary of the Utilisation Date, no prepayment fee is payable.

(c)

No prepayment fee shall be payable under this Clause if the prepayment is made under Clause 7.1 (Illegality and Sanctions affecting a Lender), Clause 7.4 (Mandatory Prepayment on Sale or Total Loss) and Clause 7.5 (Right of repayment and cancellation in relation to a single Lender), Clause 24.2 (Provision of additional security; prepayment) or Clause 24.6 (Prepayment mechanism).

12

TAX GROSS UP AND INDEMNITIES

12.1

Definitions

(a)

In this Agreement:

(b)

Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) reference to "determines" or "determined" means a determination made in the reasonable discretion of the person making the determination.

12.2

Tax gross-up

(a)

Each Obligor shall make all payments to be made by it under the Finance Documents to which it is a party in accordance with their terms without any Tax Deduction, unless a Tax Deduction is required by law.

(b)

The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.

(c)

If a Tax Deduction is required by law to be made by an Obligor under the Finance Documents to which it is a party in accordance with their terms, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

(d)

If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(e)

Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.3

Tax indemnity

(a)

The relevant Obligor shall (within five Business Days of written demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document to which it is a party.

(b)

Paragraph (a) above shall not apply:

(i)

with respect to any Tax assessed on a Finance Party:

(a)

under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(b)

under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

(ii)

to the extent a loss, liability or cost:

(a)

is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or

(b)

relates to a FATCA Deduction required to be made by a Party.

(c)

A Protected Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Obligors.

(d)

A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 (Tax indemnity), notify the Facility Agent.

12.4

Tax Credit

(a)

a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and

(b)

that Finance Party has obtained and utilised that Tax Credit,

12.5

Stamp taxes

12.6

VAT

(a)

To the extent applicable, all amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

(b)

If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(i)

(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT (if applicable). The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT (if applicable) chargeable on that supply; and

(ii)

(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply (if applicable) but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

(c)

Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT (if applicable), save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT (if any) from the relevant tax authority.

(d)

Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes (if applicable), include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union or equivalent provisions imposed elsewhere) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes (if applicable) at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).

(e)

In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration (if applicable) and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements (if applicable) in relation to such supply.

(f)

For the avoidance of doubt, no VAT is chargeable by a Finance Party in connection with any Instalment, any payment of interest or any of the fees set out under Clause 11 (Fees).

12.7

FATCA Information

(a)

Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:

(i)

confirm to that other Party whether it is:

(a)

a FATCA Exempt Party; or

(b)

not a FATCA Exempt Party; and

(ii)

supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

(iii)

supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

(b)

If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

(c)

Paragraph (a) above shall not oblige any Finance Party to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:

(i)

any law or regulation;

(ii)

any fiduciary duty; or

(iii)

any duty of confidentiality.

(d)

If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

12.8

FATCA Deduction

(a)

Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(b)

Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify each Obligor and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

12.9

Withholding certificate etc.

(a)

Each Lender shall:

(i)

where that Lender is an Original Lender, on the date of this Agreement;

(ii)

where that Lender is a New Lender (as defined in Clause 28.1 (Assignment or transfer by Transaction Obligors)), on the relevant Transfer Date; or

(iii)

within ten Business Days of the date of a request from the Facility Agent, supply to the Facility Agent:

(a)

a withholding certificate on IRS Form W-8, IRS Form W-9 or any other relevant form (including, for the avoidance of doubt, forms required in connection with tax laws other than in the US); or

(b)

any withholding statement or other document, authorisation or waiver as the Facility Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.

(b)

The Facility Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (a) above to the Borrower.

(c)

If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Lender pursuant to paragraph (a) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for that Lender to do so (in which case such Lender shall promptly notify the Facility Agent). The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.

(d)

The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (a) or (c) above without further verification. The Facility Agent shall not be liable for any action taken by it under or in connection with paragraphs (a), (b) or (c) above.

13

INCREASED COSTS

13.1

Increased costs

(a)

Subject to Clause 13.3 (Exceptions), the Borrower shall, within five Business Days of written demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs (to the extent applicable) incurred by that Finance Party or13 any of its Affiliates as a result of:

(i)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

(ii)

compliance with any law or regulation made,

(iii)

the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.

(b)

In this Agreement:

(i)

"Basel III" means:

(a)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b)

the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

(ii)

"CRD IV" means:

(a)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012, as amended by Regulation (EU) 2019/876;

(b)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended by Directive (EU) 2019/878; and

(c)

any other law or regulation which implements Basel III.

(iii)

"Increased Costs" means, to the extent applicable:

(a)

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

(b)

an additional or increased cost; or

(c)

a reduction of any amount due and payable under any Finance Document,

(c)

Notwithstanding anything in this Clause above to the contrary, the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act, and all requests, rules, guidelines and directives promulgated thereunder, are deemed to have been introduced or adopted after the date of this Agreement, regardless of the date enacted or adopted.

13.2

Increased cost claims

(a)

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

(b)

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

13.3

Exceptions

(a)

attributable to a Tax Deduction required by law to be made by an Obligor;

(b)

attributable to a FATCA Deduction required to be made by a Party;

(c)

compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied); or

(d)

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

14

OTHER INDEMNITIES

14.1

Currency indemnity

(a)

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

(i)

making or filing a claim or proof against that Obligor; or

(ii)

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

(b)

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

14.2

Other indemnities

(a)

Each Obligor shall, on written demand, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:

(i)

the occurrence of any Event of Default;

(ii)

a failure by an Obligor to pay any amount due under a Finance Document to which it is a party in accordance with their terms on its due date;

(iii)

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

(iv)

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

(b)

Each Obligor shall, on written demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person"), against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents in accordance with their terms, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, the Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.

(c)

Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

(i)

arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or

(ii)

in connection with any Environmental Claim.

(d)

Each Obligor agrees that no Finance Party shall have any liability to any Obligor whether in tort, contract or otherwise for losses suffered by any Obligor in connection with, arising out of or in any way related to the transactions contemplated and the relationship established by any of the Finance Documents in accordance with their terms, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of a competent jurisdiction that such losses resulted from the gross negligence or wilful misconduct of the party from which recovery is sought. No Finance Party shall be liable for any damages arising from the use of others of any information or other materials obtained through 'intralinks' or other similar information transmission systems in connection with any of the Finance Documents in accordance with their terms and in no event shall any Finance Party be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not that Finance Party has been advised of the possibility of such loss or damages.

14.3

Indemnity to the Facility Agent

(a)

any reasonably incurred cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

(i)

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

(ii)

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

(iii)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and

(b)

any reasonably incurred cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents.

14.4

Indemnity to the Security Agent

(a)

Each Obligor shall, on written demand, indemnify the Security Agent and every Receiver and Delegate against any reasonably incurred cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them:

(i)

in relation to or as a result of:

(a)

any failure by the Borrower to comply with its obligations under Clause 16 (Costs and Expenses);

(b)

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

(c)

the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;

(d)

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents to which it is a party in accordance with their terms or by law;

(e)

any default by any Transaction Obligor or an Approved Manager in the performance of any of the obligations expressed to be assumed by it in the Finance Documents to which it is a party in accordance with their terms;

(f)

any action by any Transaction Obligor or an Approved Manager which vitiates, affects its validity or is otherwise prejudicial to, the Transaction Security; and

(g)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents,

(ii)

acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents in accordance with their terms (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).

(b)

The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

15

MITIGATION BY THE FINANCE PARTIES

15.1

Mitigation

(a)

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality and Sanctions affecting a Lender), Clause 12 (Tax Gross Up and Indemnities), Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b)

Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor or an Approved Manager under the Finance Documents to which it is a party, in accordance with their respective terms.

15.2

Limitation of liability

(a)

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

(b)

A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if either:

(i)

a Default has occurred and is continuing; or

(ii)

in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16

COSTS AND EXPENSES

16.1

Transaction expenses

(a)

this Agreement and any other documents referred to in this Agreement or in a Finance Document; and

(b)

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

16.2

Amendment costs

(a)

a Transaction Obligor or an Approved Manager requests an amendment, waiver or consent under or in connection with this Agreement or any Finance Document to which it is a party; or

(b)

an amendment is required either pursuant to Clause 33.9 (Change of currency) or as contemplated in Clause 43.4 (Benchmark Replacement setting); or

(c)

a Transaction Obligor or an Approved Manager requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,

16.3

Enforcement and preservation costs

17

GUARANTEE AND INDEMNITY

17.1

Guarantee and indemnity

(a)

guarantees to each Finance Party punctual performance by the Borrower of all the Borrower's obligations under the Finance Documents;

(b)

undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document to which it is a party in accordance with their terms, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

(c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document to which it is a party in accordance with their terms on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 (Guarantee and Indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

17.2

Continuing guarantee

17.3

Reinstatement

17.4

Waiver of defences

(a)

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

(b)

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

(c)

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

(d)

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

(e)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

(f)

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

(g)

any insolvency or similar proceedings.

17.5

Immediate recourse

17.6

Appropriations

(a)

refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and

(b)

hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 17 (Guarantee and Indemnity).

17.7

Deferral of Guarantor's rights

(a)

to be indemnified by the Borrower;

(b)

to claim any contribution from any third party providing security for, or any other guarantor of, the Borrower's obligations under the Finance Documents to which it is a party in accordance with their terms;

(c)

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

(d)

to bring legal or other proceedings for an order requiring the Borrower to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 (Guarantee and indemnity);

(e)

to exercise any right of set-off against the Borrower; and/or

(f)

to claim or prove as a creditor of the Borrower in competition with any Secured Party.

17.8

Additional security

17.9

Applicability of provisions of Guarantee to other Security

17.10

Release

18

REPRESENTATIONS

18.1

General

18.2

Status

(a)

It is a limited liability company, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.

(b)

It has the power to own its assets and carry on its business as it is being conducted.

18.3

Share capital and ownership

(a)

The Borrower is authorised to issue 500 registered shares of $0.01 par value each, all of which shares have been issued fully paid.

(b)

The legal title to and beneficial interest in the shares in the Borrower is held by the Guarantor free of any Security (other than Permitted Security) or any other claim it being acknowledged however that the Guarantor is a US Nasdaq listed company.

(c)

None of the shares in the Borrower is subject to any option to purchase, pre-emption rights or similar rights.

18.4

Binding obligations

18.5

Validity, effectiveness and ranking of Security

(a)

Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create, the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.

(b)

No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it under the Finance Documents to which it is a party in accordance with its terms.

(c)

The Transaction Security granted by it to the Security Agent or any other Secured Party has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking Security.

(d)

No concurrence, consent or authorisation of any person that is not party to this Agreement is required for the creation of or otherwise in connection with any Transaction Security.

18.6

Non-conflict with other obligations

(a)

any law or regulation applicable to it;

(b)

its constitutional documents; or

(c)

any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument.

18.7

Power and authority

(a)

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:

(i)

its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents; and

(ii)

in the case of the Borrower, its registration of the Ship under the Approved Flag.

(b)

No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

18.8

Validity and admissibility in evidence

(a)

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

(b)

to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,

18.9

Governing law and enforcement

(a)

To the best of its knowledge and belief, the choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.

(b)

To the best of its knowledge and belief, any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.

18.10

Insolvency

(a)

corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 26.8 (Insolvency proceedings); or

(b)

creditors' process described in Clause 26.9 (Creditors' process),

18.11

No filing or stamp taxes

18.12

Deduction of Tax

18.13

No default

(a)

On the date of this Agreement and on the Utilisation Date, no Event of Default has occurred which is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

(b)

No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which could have a Material Adverse Effect.

18.14

No misleading information

(a)

any factual information provided by any Transaction Obligor or an Approved Manager for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

(b)

any budget contained in such information has been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

(c)

Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.

18.15

Financial Statements

(a)

The Original Financial Statements give a true and fair view of the Guarantor's financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year (consolidated and inclusive of the Guarantor's subsidiaries).

(b)

There has been no event having a Material Adverse Effect since 31 December 2023.

(c)

Its most recent financial statements delivered pursuant to Clause 19.2 (Financial statements):

(i)

have been prepared in accordance with Clause 19.4 (Requirements as to financial statements); and

(ii)

give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Guarantor).

(d)

Since the date of the most recent financial statements delivered pursuant to Clause 19.2 (Financial statements) there has been no event having a Material Adverse Effect.

18.16

Pari passu ranking

18.17

No proceedings pending or threatened

(a)

No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any other Transaction Obligor, an Approved Manager or any member of the Group.

(b)

No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor, an Approved Manager or any member of the Group.

18.18

Validity and completeness of the Shipbuilding Contract

(a)

The Shipbuilding Contract constitutes legal, valid, binding and enforceable obligations of the Builder.

(b)

The Shipbuilding Contract delivered to the Facility Agent before the date of this Agreement is a true and complete copy.

(c)

No amendments or additions to the Shipbuilding Contract have been agreed nor has the Borrower or the Builder waived any of their respective rights under the Shipbuilding Contract, other than as disclosed to the Facility Agent in writing on or before the date of this Agreement.

18.19

No rebates etc.

18.20

Valuations

(a)

All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Facility Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.

(b)

It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.

(c)

There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.

18.21

No breach of laws

18.22

No Charter

18.23

Compliance with Environmental Laws

18.24

No Environmental Claim

18.25

No Environmental Incident

18.26

ISM and ISPS Code compliance

18.27

Taxes paid

(a)

It is not and no other member of the Group is materially overdue in the filing of any applicable Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of applicable Tax.

(b)

No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.

18.28

Financial Indebtedness

18.29

Good title to assets

18.30

Ownership

(a)

The Borrower is the sole legal and beneficial owner of all rights and interests which the Shipbuilding Contract creates in favour of the Borrower.

(b)

With effect on and from the Delivery Date, the Borrower will be the sole legal and beneficial owner of the Ship, the Earnings and the Insurances it being acknowledged however that the Guarantor, in its capacity as Shareholder, is a US Nasdaq listed company.

(c)

With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor under the Finance Documents to which it is a party in accordance with their terms.

(d)

The constitutional documents of each Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrower on enforcement, following, for the avoidance of doubt, an Event of Default which is continuing, conferred by the Finance Documents in accordance with their terms.

18.31

Place of business

18.32

No employee or pension arrangements

(a)

The Borrower does not have any employees (other than the master and crew members of the Ship owned by it) or any outstanding liabilities under any pension scheme.

(b)

To the extent applicable, within the last six years, no Transaction Obligor or an Approved Manager nor any ERISA Affiliate has sponsored, maintained or was obligated to contribute to any Plan.

(c)

To the extent applicable, no Transaction Obligor nor an Approved Manager is deemed to be an entity whose underlying assets constitute "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

18.33

Sanctions

(a)

Neither any Approved Manager nor any other Transaction Obligor nor any of their respective Subsidiaries, directors or officers (nor to the Borrower's best knowledge, none of any such person's employees or agents acting within the scope of their agency):

(i)

is a Prohibited Person;

(ii)

has violated or is violating any Sanctions;

(iii)

has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority; or

(iv)

is knowingly engaged in any activity that would reasonably be expected to result in such person being designated as a Prohibited Person.

(b)

Each of the Transaction Obligors and the Approved Manager has implemented and maintains in effect a Sanctions compliance policy or internal procedure, which is designed to ensure compliance by each such Transaction Obligor and the Approved Manager, its Subsidiaries and their respective directors, officers, employees and agents with Sanctions.

(c)

The Ship is not a Sanctioned Ship.

18.34

US Tax Obligor

18.35

Margin Regulations; Investment Company Act

(a)

No Obligor is not engaged, nor will it engage in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System of the United States), and no proceeds of the Loan will be used to buy or carry any margin stock or to extend credit to others for the purpose of buying or carrying any margin stock.

(b)

No Transaction Obligor is required to be registered as an "investment company" under the United States of America Investment Company Act of 1940.

18.36

Anti-bribery

18.37

PATRIOT Act

18.38

Repetition

19

INFORMATION UNDERTAKINGS

19.1

General

19.2

Financial statements

(a)

as soon as they become available, but in any event within 180 days after the end of each of the Guarantor's financial years, the audited consolidated financial statements of the Guarantor and its subsidiaries (including the Borrower) for that financial year;

(b)

as soon as they become available, but in any event within 75 days after the end of each of the Borrower's financial years, the unaudited financial statements of the Borrower for that financial year;

(c)

as soon as they become available, but in any event within 75 days after the end of the Guarantor's and the Borrower's Fiscal Quarter, the management accounts for that Fiscal Quarter of the Borrower and the unaudited consolidated financial statements of the Guarantor and its subsidiaries (including the Borrower) for that Fiscal Quarter, unless such information in respect of the financial statements of the Guarantor is otherwise publicly available to the Facility Agent; and

(d)

as soon as possible, but in any event within 60 days after the end of each financial year of the Borrower, a budget in a format reasonably approved by the Facility Agent which shows the anticipated expenditure in respect of the Ship during the next financial year of the Borrower (including, if applicable, an estimate of the first special survey of the Ship).

19.3

Compliance Certificate

(a)

The Guarantor shall supply to the Facility Agent, with each set of financial statements delivered pursuant to sub-paragraph (a) of Clause 19.2 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20.2 (Guarantor's financial covenants) as at the date as at which those financial statements were drawn up.

(b)

Each Compliance Certificate shall be signed by two directors of the Guarantor and shall be reported on by the Guarantor's auditors in the form agreed by the Obligors and all the Lenders before the date of this Agreement.

19.4

Requirements as to financial statements

(a)

Each set of financial statements delivered by an Obligor pursuant to Clause 19.2 (Financial statements) shall be certified by a director of the relevant Obligor as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.

(b)

The Guarantor shall procure that each set of financial statements delivered pursuant to Clause 19.2 (Financial statements) is prepared using GAAP accounting practices unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Facility Agent:

(i)

a description of any change necessary for those financial statements to reflect the current GAAP, accounting practices and reference periods; and

(ii)

sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether Clause 20 (Financial Covenants) has been complied with.

19.5

Information: miscellaneous

(a)

all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;

(b)

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;

(c)

promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group and which might have a Material Adverse Effect;

(d)

as soon as practicable upon becoming aware of any fact indicating that it or any other member of the Group or an Approved Manager may be in breach, or be exposed to a breach, of Sanctions, Provided that the notification as such does not constitute a breach of mandatory law applicable to it;

(e)

promptly, its constitutional documents where these have been amended or varied;

(f)

promptly, such further information and/or documents regarding:

(i)

the Ship, the Earnings or the Insurances;

(ii)

the Security Assets;

(iii)

compliance of the Transaction Obligors and an Approved Manager with the terms of the Finance Documents to which they are a party in accordance with their terms;

(iv)

the financial condition, business and operations of any member of the Group,

(g)

promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it or as may be required by any regulatory authority.

19.6

Notification of Default

(a)

Each Obligor shall notify the Facility Agent of any Default which is continuing (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

(b)

Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default has occurred and is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

19.7

"Know your customer" checks

(a)

If (considering that the Guarantor is listed at the US Nasdaq):

(i)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii)

any change in the status of a Transaction Obligor or an Approved Manager (or of a Holding Company of that Transaction Obligor or that Approved Manager) (including, without limitation, a change of ownership of a Transaction Obligor or an Approved Manager or of a Holding Company of a Transaction Obligor or an Approved Manager) after the date of this Agreement; or

(iii)

a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

(b)

Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations, including without limitation Sanctions, pursuant to the transactions contemplated in the Finance Documents including, without limitation, obtaining, verifying and recording certain information and documentation that will allow the Facility Agent and each of the Lenders to identify each Transaction Obligor and the Approved Manager in accordance with the requirements of the PATRIOT Act.

19.8

No variation of Shipbuilding Contract

19.9

Provision of information relating to the Shipbuilding Contract

(a)

immediately inform the Facility Agent if any breach of the Shipbuilding Contract occurs or a serious risk of such a breach arises and of any other event or matter affecting the Shipbuilding Contract which has or is reasonably likely to have a Material Adverse Effect;

(b)

provide the Facility Agent, promptly after service, with copies of all notices served on or by the Borrower under or in connection with the Shipbuilding Contract; and

(c)

provide the Facility Agent with any information which it requests about any interest or right of any kind which the Borrower has at any time to, in or in connection with, the Shipbuilding Contract or in relation to any matter arising out of or in connection with the Shipbuilding Contract including the progress of the construction of the Ship.

20

FINANCIAL COVENANTS

20.1

Minimum Cash Reserve

(a)

$300,000, at any time when the Ship is employed under an Assignable Charter and for the duration of such Assignable Charter; or

(b)

$500,000, at any time when the Ship is not employed under an Assignable Charter,

20.2

Guarantor's financial covenants

(a)

At all times during the Security Period the Guarantor shall:

(i)

maintain Net Worth of not less than $15,000,000;

(ii)

ensure that the Leverage Ratio shall not exceed 75 per cent; and

(b)

The financial covenants set out in paragraphs (i) and (ii) above shall apply at all times throughout the duration of the Security Period and shall be tested (A) annually by reference to the financial statements of the Guarantor delivered pursuant to paragraph (a) of Clause 19.2 (Financial Statements) together with the Compliance Certificate delivered pursuant to Clause 19.3 (Compliance Certificate) and (B) at any other time that the Facility Agent may reasonably require, by reference to the financial statements of the Guarantor most recently provided pursuant to Clause 19.2 (Financial Statements), commencing with the first relevant quarter test period following the Utilisation Date.

(c)

Definitions

(a)

the Total Liabilities; to

(b)

the Market Value Adjusted Total Assets.

(d)

The Borrower shall provide the valuations (which, for the avoidance of doubt, may be desktop valuations) required to determine the Fleet Market Value for the purpose of this Clause 20.2 (Guarantor's financial covenants) together with each Compliance Certificate to be provided pursuant to Clause 19.3 (Compliance certificate).

20.3

Most favoured Nations

21

GENERAL UNDERTAKINGS

21.1

General

21.2

Authorisations

(a)

obtain, comply with and do all that is necessary to maintain in full force and effect;

(b)

supply certified copies to the Facility Agent of,

(i)

perform its obligations under the Transaction Documents to which it is a party in accordance with its terms;

(ii)

ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction and in the state of the Approved Flag at any time of the Ship of any Transaction Document to which it is a party in accordance with its terms;

(iii)

own and operate the Ship (in the case of the Borrower); and

(c)

without prejudice to the generality of the above, ensure that if, but for the obtaining of an applicable Authorisation, an Obligor would be in breach of any of the provisions of this Agreement which relate to Sanctions or, by reason of Sanctions, would be prohibited from performing any provision of this Agreement, such an Authorisation is obtained so as to avoid such breach or to enable such performance.

21.3

Compliance with laws

21.4

Environmental compliance

(a)

comply with all applicable Environmental Laws;

(b)

obtain, maintain and ensure compliance with all requisite and applicable Environmental Approvals;

(c)

implement procedures to monitor compliance with and to prevent liability under any applicable Environmental Law,

21.5

Environmental Claims

(a)

any Environmental Claim which is current, pending or threatened against it or any member of the Group or the Approved Manager; and