Dated 30 August 2017 ZEUS ONE MARINE LLC IKAROS MARINE LLC TASMAN MARINE LLC HUDSON MARINE LLC and DRAKE MARINE LLC as joint and several Borrowers and THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders and ABN AMRO BANK N.V. as...

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Schedules

Schedule 1 Lenders and Commitments

Schedule 2 Drawdown Notice

Schedule 3 Condition Precedent Documents

Part A

Part B

Schedule 4 Designation Notice

Schedule 5 Transfer Certificate

Schedule 6 PIK Compliance Certificate

Execution

Execution Pages

ZEUS ONE MARINE LLC, IKAROS MARINE LLC, TASMAN MARINE LLC, ▇▇▇▇▇▇ MARINE LLC and DRAKE MARINE LLC, as joint and several Borrowers;

THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

ABN AMRO BANK N.V., as Agent;

ABN AMRO BANK N.V., as Arranger;

ABN AMRO BANK N.V., as Security Trustee; and

ABN AMRO BANK N.V, as Swap Bank.

The Lenders have agreed to make available to the Borrowers a term loan facility of $82,459,678.29 in two Tranches, each such Tranche in the relevant Tranche Amount, for the purpose of refinancing the Existing Indebtedness secured on the Ships (as each such term is defined below).

The Swap Bank has agreed to enter into interest rate swap transactions with the Borrowers (at the Borrowers’ option) from time to time to hedge the Borrowers’ exposure under this Agreement to interest rate fluctuations and/or exchange rate risks.

The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement.

INTERPRETATION

Definitions

1 June 2018 (inclusive) and ending on 31 December 2018 (inclusive), 110 per cent.; and

1 January 2019 (inclusive) and ending on 31 December 2019 (inclusive), 120 per cent.;

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

in relation to any other state, any 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;

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; and

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”;

is or becomes public information other than as a direct or indirect result of any breach by a Creditor Party of Clause 31; or

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

is known by the Creditor Parties before the date the information is disclosed to it or is lawfully obtained by the Creditor Parties after that date, from a source which is, as far as the Creditor Parties are aware, unconnected with the Group and which, in either case, as far as the Creditor Parties are aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;

it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank;

its purpose is the hedging of all or part of the Borrowers’ exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the last Final Maturity Date; and

it is designated by the Borrowers, by delivery by the Borrowers to the Agent of a notice of designation in the form set out in Schedule 4, as a Designated Transaction for the purposes of the Finance Documents;

all freight, hire and passage moneys, compensation payable to that Borrower or the Security Trustee in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;

all moneys which are at any time payable under any Insurances in respect of loss of hire, (if applicable under the Insurances); and

if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) 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;

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

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

any release of Environmentally Sensitive Material from a Ship; or

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

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

Tranche A, 31 December 2020; and

Tranche B, 30 June 2018;

this Agreement;

the Master Agreement;

the Agency and Trust Agreement;

the Master Agreement Assignment;

the Corporate Guarantee;

the General Assignments;

the Mortgages;

the Accounts Pledge;

the Shares Security Deeds;

any Charterparty Assignments;

each Approved Manager’s Undertakings;

any Subordination Agreement;

any other document (whether creating a Security Interest or not) which is executed at any time by any Borrower, the Corporate Guarantor, either Shareholder, either Approved Manager or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Bank under this Agreement or any of the other documents referred to in this definition; and

any other document designated as such by the Agent and the Borrowers.

moneys borrowed;

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

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

the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with IFRS, be treated as a balance sheet liability;

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

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;

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);

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

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.

the DVB Facility Agreement;

the CACIB Facility Agreement; and

the EnTrust Facility Agreement,

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

all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;

the limitations on enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; and

any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion delivered as a condition precedent under this Agreement;

the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or

if no rate is quoted on the Screen Rate, the rate per annum determined by the Agent to be the rate per annum notified to the Agent by the Reference Bank as the rate at which deposits in Dollars are offered to the Reference Bank by leading banks in the London Interbank Market at the Reference Bank’s request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it,

before a Tranche has been made, Lenders whose Commitments total 66.66 per cent, of the Total Commitments; and

after a Tranche has been made, Lenders whose Contributions total 66.66 per cent, of the Loan;

Tranche A:

commencing on the Drawdown Date up to and including 31 March 2019, 3.42 per cent, per annum; and

at all times thereafter, 3.50 per cent, per annum; and

Tranche B

commencing on the Drawdown Date up to and including 31 March 2019, 3.92 per cent, per annum; and

at all times thereafter, 4.00 per cent, per annum;

each Ship and each other Fleet Vessel (if not subject to a mortgage), the market value thereof determined in accordance with Clause 15.3; and

each Fleet Vessel (other than the Ships and the Fleet Vessels referred to in paragraph (a) above), the market value thereof determined in accordance with the relevant provisions of the loan agreement financing such Fleet Vessel;

the business, operations, property, condition (financial or otherwise) or prospect of any Borrower, the Corporate Guarantor and/or the Group taken as a whole; or

the ability of a Borrower or the Corporate Guarantor to perform its obligations under the Finance Documents; and

the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purported to be granted pursuant to any of the Finance Documents or the rights or remedies of any Creditor Party under any of the finance Documents;

a loan made to a Borrower by any Affiliate, Holding Company or Subsidiary of the Corporate Guarantor or any other person:

which is unsecured;

in relation to which no interest, fees, costs or expenses are payable during the Security Period;

in relation to which no repayment or prepayment of principal is capable of being made to the relevant lender in accordance with its terms and conditions during the Security Period;

which is fully subordinated in all respects to the Secured Liabilities; and

any creditor’s rights thereunder have been assigned in favour of the Creditor Parties; and

the loan made to the Corporate Guarantor pursuant to the K&T Loan Agreement,

Security Interests created by the Finance Documents;

liens for unpaid master’s and crew’s wages;

liens for salvage;

liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the trading, chartering, operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(g);

any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses while a Borrower is prosecuting or defending such action in good faith by appropriate steps;

a right of pledge (and set-off) under and pursuant to the general conditions of ABN AMRO Bank N.V.; and

for the duration of the Existing Indebtedness Grace Period only, any Security Interests created under and pursuant to the terms of the Existing Facility Agreement;

any Finance Document;

any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;

any other document contemplated by or referred to in any Finance Document; and

any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

England and Wales;

the country under the laws of which the company is incorporated or formed;

a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;

a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

the rights of a plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and

any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

all amounts which have become due for payment by any Borrower or any Security Party under the Finance Documents have been paid;

no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

neither a Borrower nor any Security Party has any future or contingent liability under Clauses 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and

the Agent, the Arranger, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

the Transaction Security expressed to be granted in favour of the Security Trustee as trustee for, or for the benefit of, the Creditor Parties and all proceeds of that Transaction Security;

all obligations expressed to be undertaken by a Borrower or any other Security Party to pay amounts in relation to the Secured Liabilities to the Security Trustee as trustee for, or for the benefit of, the Creditor Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Borrower or any Security Party or any other person in favour of the Security Trustee as trustee for, or for the benefit of, the Creditor Parties;

the Security Trustee’s interest in any turnover trust created under the Finance Documents;

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

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

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

in relation to Borrower B, Odysseus Marine LLC, a limited liability company formed in the ▇▇▇▇▇▇▇▇ Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; and

in relation to the other Borrowers (other than Borrower B), the Corporate Guarantor.

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

any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 30 days (or within any such longer period as may be requested by the Borrowers and approved by the Agent acting with the authorisation of the Majority Lenders) redelivered to the full control of the Borrower owning that Ship;

any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal whose decision or judgement is enforceable; and

any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 45 days (or within any such longer period as may be requested by the Borrowers and approved by the Agent acting with the authorisation of the Majority Lenders) redelivered to the full control of the Borrower owning that Ship;

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

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

the date on which a notice of abandonment is given to the insurers; and

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

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

Tranche A, $ 65,292,500; and

Tranche B, $17,167,178.29;

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; and

in relation to any other applicable Bail-In Legislation:

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

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

Construction of certain terms

Meaning of “month”

on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

General Interpretation

references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

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

Clauses 1.1 to 1.4 apply unless the contrary intention appears.

Headings

Accounting Terms

FACILITY

Amount of facility

Lenders’ participations in Tranches

Purpose of Tranches

POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS

Interests of Lenders and Swap Bank several

each Lender shall be entitled to ▇▇▇ for any amount which has become due and payable by the Borrowers to it under this Agreement; and

the Swap Bank shall be entitled to ▇▇▇ for any amount which has become due and payable by the Borrowers to it under the Master Agreement,

Proceedings by individual Lender or Swap Bank

any other liability or obligation of any Borrower or a Security Party under or connected with a Finance Document; or

any misrepresentation or breach of warranty by any Borrower or a Security Party in or connected with a Finance Document.

Obligations several

the obligations of the other Lenders or (as the case may be) the Swap Bank being increased; nor

any Borrower, any Security Party or any other Creditor Party being discharged (in whole or in part) from its obligations under any Finance Document,

Parties bound by certain actions of Majority Lenders

any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;

any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document (subject always to Clause 27.2); and

any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.

Reliance on action of Agent

shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and

shall not be entitled to require any evidence that such an instruction or authorisation has been given.

Construction

Parallel debt

Each Borrower irrevocably and unconditionally undertakes to pay to the Security Trustee amounts equal to, and in the currency or currencies of, its Corresponding Debt.

The Parallel Debt of a Borrower:

shall become due and payable at the same time as its Corresponding Debt;

is independent and separate from, and without prejudice to, its Corresponding Debt.

For the purposes of this Clause 3.7, the Security Trustee:

is the independent and separate creditor of all the Parallel Debt;

acts in its own name and not as agent, representative or trustee of the Creditor Parties and its claims in respect of the Parallel Debt shall not be held on trust; and

shall have the independent and separate right to demand payment of any or all the Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

The Parallel Debt of a Borrower shall be:

decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and

increased to the extent that its Corresponding Debt has increased.

The Corresponding Debt of a Borrower shall be:

decreased to the extent that its Parallel Debt has been irrevocable and unconditionally paid or discharged; and

increased to the extent that its Parallel Debt has increased,

All amounts received or recovered by the Security Trustee in connection with this Clause 3.7, to the extent permitted by applicable law, shall be applied in accordance with Clause 17 (Application of Receipts).

Lender incorporated or having its registered office in the Federal Republic of Germany

for the purposes of determining whether approval of the Majority Lenders is obtained the references in the definition of “Majority Lenders” to 66.66 per cent, of the Total Commitments and to 66.66 per cent, of the Loan shall for this purpose be construed to refer to 66.66 per cent, of the Total Commitments or, as the case may be, the Loan only taking account of the other Commitments of, or as the case may be, the participation in the Loan of, the Lenders and ignoring the Commitment of or, as the case may be, the participation in the Loan of, the Lender incorporated or having its registered office in the Federal Republic of Germany; and an action taken by the Majority Lenders as such definition is modified by this paragraph (a) shall be valid in the applicable circumstances and binding on all parties; and

for the purposes of determining whether the approval of all Lenders is obtained, all Lenders shall be construed to mean all the other Lenders other than any Lender incorporated or having its registered office in the Federal Republic of Germany and an action taken by all Lenders as modified by this paragraph (b) shall be valid in the applicable circumstances and binding on all the parties of this Agreement.

DRAWDOWN

Request for Tranche

Availability

a Drawdown Date has to be a Business Day during the Availability Period;

both Tranches shall be advanced simultaneously on the same Drawdown Date;

the amount of each Tranche shall not exceed the relevant Tranche Amount; and

the aggregate amount of the Tranches shall not exceed the Total Commitments.

Notification to Lenders of receipt of a Drawdown Notice

the amount of the Tranche and the Drawdown Date;

the amount of that Lender’s participation in the Tranche; and

the duration of the first Interest Period.

Drawdown Notice irrevocable

Lenders to make available Contributions

Disbursement of Tranche

to the account of ABN AMRO Bank N.V. (acting as agent under the Existing Facility Agreement relevant to the Tranche being advanced) which the Borrowers specify in the Drawdown Notice; and

in the like funds as the Agent received the payments from the Lenders.

Disbursement of Tranche to third party

INTEREST

Payment of normal interest

Normal rate of interest

Payment of accrued interest

Notification of Interest Periods and rates of normal interest

each rate of interest; and

the duration of each Interest Period,

Obligation of Reference Banks to quote

Absence of quotations by Reference Banks

Market disruption

no screen rate is quoted in the Screen Rate and the Reference Banks (or, if there is only one Reference Bank at the relevant time, that Reference Bank) do not or, as the case may be, does not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or

at least 1 Business Day before the start of an Interest Period, a Lender may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to that Lender of funding its respective Contribution (or any part of it) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or

at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “Affected Lender”) that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.

Notification of market disruption

Suspension of drawdown

in a case falling within Clauses 5.7(a) or 5.7(b), the Lenders’ obligations to make the Tranche; and

in a case falling within Clause 5.7(c), the Affected Lender’s obligation to participate in the Tranche,

Negotiation of alternative rate of interest

Application of agreed alternative rate of interest

Alternative rate of interest in absence of agreement

Notice of prepayment

Prepayment; termination of Commitments

on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and

on the last Business Day of the interest period set by the Agent, the Borrowers shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the applicable Margin and the Mandatory Cost (if any) applicable to the Affected Lender’s Contribution.

Application of prepayment

INTEREST PERIODS

Commencement of Interest Periods

Duration of normal Interest Periods

3 months; or

in the case of the first Interest Period applicable to the second Tranche drawn, a period ending on the last day of the Interest Period applicable to the first Tranche drawn then current, whereupon all Tranches shall be consolidated and treated as the Loan; or

such other period requested by the Borrowers to the Agent not later than 11.00 a.m. (Rotterdam time) 2 Business Days before the commencement of the Interest Period as the Agent may, with the authorisation of all the Lenders, agree with the Borrowers.

Duration of Interest Periods for repayment instalments

Non-availability of matching deposits for Interest Period selected

DEFAULT INTEREST

Payment of default interest on overdue amounts

the date on which the Finance Documents provide that such amount is due for payment; or

if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.

Default rate of interest

in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or

in the case of any other overdue amount, the rate set out at Clause 7.3(b).

Calculation of default rate of interest

the rate applicable to the overdue principal amount immediately prior to the relevant date

the aggregate of the applicable Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

LIBOR; or

if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.

Notification of interest periods and default rates

Payment of accrued default interest

Compounding of default interest

Application to Master Agreement

REPAYMENT AND PREPAYMENT

Amount of repayment instalments

Tranche A by:

4 equal consecutive quarterly instalments in the amount of $1,125,000 each (each a “Repayment Instalment”); and

a balloon instalment in the amount of $60,792,500 (as such amount may be adjusted in accordance with Clause 8.10(b), the “Tranche A Balloon Instalment”) (as such amount may be reduced pursuant to Clause 8.14 (Prepayment out of excess Earnings) and 8.15 (Additional mandatory prepayment event),

if on each PIK Calculation Date the Security Cover Ratio at that date is less than 130 per cent., the principal amount outstanding under Tranche A (and respectively under the Loan) shall be increased on that PIK Calculation Date by an amount equal to the PIK Amount and the Tranche A Balloon Instalment shall be increased accordingly; and

the Tranche A Balloon Instalment may be further increased or reduced in accordance with Clause 8.10(b); and

Tranche B by one balloon instalment in the amount of $17,167,178.29 (the “Tranche B Balloon Instalment” and together, the “Balloon Instalments” and each a “Balloon Instalment”).

Repayment Dates

In respect of Tranche A, the first Repayment Instalment shall be repaid on 31 March 2020, each subsequent Repayment Instalment shall be repaid at three-monthly intervals thereafter and the last Repayment Instalment for Tranche A together with the Tranche A Balloon Instalment in respect thereof shall be repaid not later than the relevant Final Maturity Date; and

In respect of Tranche B, the Tranche B Balloon Instalment in respect thereof shall be repaid on the relevant Final Maturity Date.

Final Repayment Date

Voluntary prepayment

Conditions for voluntary prepayment

a partial prepayment shall be $250,000 or a higher integral multiple of $250,000;

the Agent has received from the Borrowers at least (i) 15 Business Days’ prior written indicative notice and (ii) 10 Business Days’ prior written confirmative and irrevocable notice, in each case specifying the amount to be prepaid and the date on which the prepayment is to be made (such date shall be the last day of the Interest Period then current);

the Borrowers have provided evidence satisfactory to the Agent that any consent required by any Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects any Borrower or any Security Party has been complied with; and

the Borrowers have complied with Clause 8.12 on or prior to the date of prepayment under Clauses 8.4 and 8.5.

Effect of notice of prepayment

Notification of notice of prepayment

Mandatory prepayment

in the case of a sale, on the earlier of (a) the date on which the sale is completed by delivery of that Ship to the buyer and (b) the date of receipt by the relevant Borrower or the Security Trustee of the sale proceeds relating to such Ship,

in the case of a Total Loss, on the earlier of (a) the date falling 120 days after the Total Loss Date and (b) the date of receipt by the Security Trustee of the proceeds of insurance or the Requisition Compensation relating to such Total Loss.

in respect of a sale of Ship A or any of the Tasman Ships which has been initiated by the Lenders in accordance with Clause 11.25 (Sale of Ship A) or Clause 11.27 (Sale of Tasman Ships), as applicable, and, at the time of the sale of Ship A or any of the Tasman Ships, Ship B is no longer a Mortgaged Ship, the total amount of sale proceeds of Ship A or such Tasman Ship or Tasman Ships being sold; and

in respect of any other sale or Total Loss of either Ship A or, subject to Clause 8.10(b), any of the Tasman Ships, which has not been initiated in the manner described under paragraph (i) above:

in the event that Ship B is, at the time of such Total Loss or sale, a Mortgaged Ship, the total amount of sale or, as the case may be, insurance proceeds of the Ship being sold or having become a Total Loss; and

in the event that Ship B is, at the time of such Total Loss or sale, no longer a Mortgaged Ship (and, in respect of a sale or Ship A, should that sale have been initiated by Borrower A and at such Borrower A’s discretion), the greater of (a) the total amount of sale or, as the case may be, insurance proceeds of that Ship being sold or having become a Total Loss and (b) the total amount which after the application of prepayment to be made pursuant to this Clause 8.8, results in the Security Cover Ratio being equal to (i) for the duration of the Waiver Period (A) from the Drawdown Date until 31 December 2017, 105 per cent, (B) from 1 January 2018 until 31 December 2018, 120 per cent. and (C) from 1 January 2019 until 31 December 2019, 125 per cent., and (ii) after the duration of the Waiver Period, the percentage required pursuant to Clause 15.1 (Minimum required security cover);

in respect of a sale or Total Loss of Ship B, the greater of (i) the total amount of sale or, as the case may be, insurance proceeds of that Ship and (ii) the total amount which after the application of prepayment to be made pursuant to this Clause 8.8, results in the Security Cover Ratio being equal to (A) for the duration of the Waiver Period (i) from the Drawdown Date until 31 December 2017, 105 per cent., (ii) from 1 January 2018 until 31 January 2018, 120 per cent, and (iii) from 1 January 2019 until 31 December 2019, 125 per cent. and (B) after the duration of the Waiver Period, the percentage required pursuant to Clause 15.1 (Minimum required security cover).

Amounts payable on prepayment

Application of partial prepayment

Each partial prepayment made pursuant to:

Clause 8.4 shall be applied first against the Balloon Instalment of the Tranche being prepaid as specified in Clause 8.1 and then against the then outstanding Repayment Instalments (in the case of Tranche A) in inverse order of maturity;

Clause 8.8 shall be applied in repayment of the Tranche relevant to the Ship which has been sold or has become a Total Loss, first in or towards the relevant Balloon Instalment under such Tranche and subsequently, in the case of Tranche A, in or towards the then outstanding Repayment Instalments in inverse order of maturity, and any balance shall be applied against the remaining Tranche, first in or towards the relevant Balloon Instalment and, in the case of Tranche A, subsequently in or towards the then outstanding Repayment Instalments in inverse order of maturity; and

If following the disposal of the last of the Tasman Ships, the aggregate sale proceeds (or, in the case of Total Loss, the aggregate insurance proceeds) arising from such disposals (or Total Loss) is:

greater than $17,167,178.29, then any such excess amount shall be applied in or towards prepayment of the Tranche A Balloon Instalment; and

less than $17,167,178.29, then an amount equal to such shortfall shall be added to the Tranche A Balloon Instalment and the amount of the Tranche A Balloon Instalment set out in Clause 8.1 shall be adjusted accordingly.

No reborrowing

Unwinding of Designated Transactions

Mandatory Prepayment in case of Change of Control

the Borrowers shall be obliged to prepay the Loan and pay all other amounts then outstanding under the Finance Documents in full within 15 days; and

any obligations of the Lenders to the Borrowers under this Agreement (including without limitation the obligation to make available the Loan) shall terminate and any undrawn Commitments shall be cancelled.

subject to paragraph (ii) below, without the prior consent of the Lenders, a change has occurred after the date of this Agreement in the direct or ultimate, legal or beneficial ownership of any of the limited liability company interests in any of the Borrowers or in the direct or ultimate control of the voting rights attaching to any of those interests; or

other than in the case of any initial public offering of the limited liability company interests of the Corporate Guarantor on any stock exchange (with the Agent’s prior written consent (to be given with the authorisation of the Majority Lenders) such consent not to be unreasonably withheld)) the members disclosed to the Agent prior to the date of this Agreement as owning the whole of the limited liability interests of the Corporate Guarantor cease to own in aggregate at least 50 per cent, of the limited liability company interests (with a right to vote) of the Corporate Guarantor; or

▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ceases to have a key position (as determined by the Agent, acting on the instructions of all the Lenders) in the executive management of the Corporate Guarantor; or

any Borrower ceases to be a wholly-owned subsidiary of the relevant Shareholder.

Prepayment out of excess Earnings

the aggregate of the Operating Expenses in respect of the Ships for that Cash Sweep Period; and

the sums incurred by the Borrowers in respect of the payment of principal of, and accrued interest on, the Loan pursuant to this Agreement and any sums paid by the Borrowers pursuant to the Master Agreement (the “Debt Service”), during such three-month period ending on the last day of that Cash Sweep Period; and

the aggregate Minimum Liquidity Amount held in the Borrowers’ Earnings Accounts in respect of all Mortgaged Ships (plus any amounts necessary to cover any shortfall on the aggregate Minimum Liquidity Amount),

Additional mandatory prepayment event

CONDITIONS PRECEDENT

Documents, fees and no default

that, on or before the service of the first Drawdown Notice, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;

that, on the Drawdown Date but prior to the making of any Tranche to be advanced on the Drawdown Date, the Agent receives or is satisfied that it will receive on the making of such Tranche the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers;

that both at the date of each Drawdown Notice and at the Drawdown Date:

no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the relevant Tranche (excluding, for the Refinancing Period up until the Refinancing Date, any Events of Default having occurred and being continuing in connection with and under the Existing Facility Agreement);

the representations and warranties in Clause 10 and those of any Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and

none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and

there has been no Material Adverse Change; and

that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date.

Waiver of conditions precedent

REPRESENTATIONS AND WARRANTIES

General

Status

Limited Liability Company power

to carry out its business carried on or to be carried out by it and own its assets owned or to be owned by it;

to execute the Finance Documents to which that Borrower is a party; and

to borrow under this Agreement, to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.

Consents in force

Legal validity; effective Security Interests

are in full force and effect;

constitute that Borrower’s legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and

create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

No third party Security Interests

each Borrower which is a party to that Finance Document will have the right to create all the Security Interests which that Finance Document purports to create; and

no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

No conflicts

any applicable law or regulation; or

the constitutional documents of that Borrower; or

any contractual or other obligation or restriction which is binding on that Borrower or any of its assets,

No withholding taxes

No default

Information

No litigation

Compliance with certain undertakings

Taxes paid

ISM Code and ISPS Code compliance

No money laundering; anti-bribery

Without prejudice to the generality of Clause 2.3, in relation to the borrowing by each Borrower, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which each Borrower is a party, each Borrower confirms (i) it is acting for its own account; (ii) it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive (2005/60/EC) of the European Parliament and of the Council).

Each Borrower will promptly inform the Agent by written notice, if it is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.

The Agent shall promptly notify the Lenders of any written notice it receives under this Clause 10.16.

No immunity

Pari passu ranking

Patriot Act and anti-terrorism laws

on the date of service of each Drawdown Notice;

on the Drawdown Date; and

with the exception of Clauses 10.9, 10.10, 10.11 and 10.12, on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to clause 11.20 of the Corporate Guarantee,

GENERAL UNDERTAKINGS

General

Title; negative pledge

hold the legal title to, and own the entire beneficial interest in the Ship owned by it, her Insurances and Earnings, free from all Security Interests (except during the Existing Indebtedness Grace Period Security Interests created under the Existing Facility Agreement) and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests;

not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future (including, but not limited to, that Borrower’s rights against the Swap Bank under the Master Agreement or all or any part of that Borrower’s interest in any amount payable to that Borrower by the Swap Bank under the Master Agreement); and

procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its other present and future unsecured and unsubordinated liabilities, except for liabilities which are mandatorily preferred by law.

No disposal of assets

all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,

No other liabilities or obligations to be incurred

liabilities and obligations under the Existing Facility Agreement (up until the Drawdown Date) and the Finance Documents to which it is a party;

liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering the Ship owned by it;

in respect of the Designated Transactions; and

liabilities or obligations under any Permitted Loans.

Information provided to be accurate

Provision of financial statements

as soon as available, but in no event later than 180 days after the end of each Financial Year of the Corporate Guarantor, the annual audited (consolidated in respect of the Corporate Guarantor) financial statements of the Corporate Guarantor for that Financial Year (commencing with the financial statements for the year ended 31 December 2016);

as soon as available, but in no event later than 90 days after the end of the 6-month period ending on 30 June in each Financial Year of the Corporate Guarantor and each Borrower, the unaudited (consolidated in respect of the Corporate Guarantor) financial statements of the Corporate Guarantor and each Borrower in respect of the preceding 6-month period (commencing with the 6-month period ending 30 June 2017) which are certified as to their correctness by an authorised officer of the Corporate Guarantor and each Borrower (as the case may be);

as soon as available, but in no event later than 60 days after the end of the 3-month period ending on 30 September and 31 March in each Financial Year of the Corporate Guarantor and each Borrower, the unaudited (consolidated in respect of the Corporate Guarantor) financial statements of the Corporate Guarantor and each Borrower in respect of the preceding 3-month period (commencing with the 3-month period ending 30 June 2017) which are certified as to their correctness by an authorised officer of the Corporate Guarantor and each Borrower (as the case may be);

at the end of each 3-month period in each Financial Year of the Borrowers (commencing with the 3-month period ending on 30 June 2017), the PIK Compliance Certificate (together with the set of valuations to determine the Market Value of each Ship and the PIK Amount, such set of valuations to be provided on a semi-annual basis commencing with the 3-month period ending on 31 March 2017 and thereafter, at the option of the Borrowers, as provided for and in accordance with the provisions of Clause 15.8) which is to be certified as to its correctness by an authorised officer of the Borrowers;

on or prior to the 10th Business Day of each quarter in each Financial Year of the Corporate Guarantor (commencing with the quarter starting on 1 July 2017), a cash flow forecast in an Agreed Form evidencing all anticipated income and expenses in respect of the Fleet Vessels and the aggregate cash balances held or to be held by members of the Group in restricted and unrestricted accounts on a consolidated and projected basis for the 12-week period commencing as from the date on which the cash flow forecast is determined; and

promptly after each request by the Agent, such further information regarding the financial condition, business and operation of the Borrowers, the Ships and the Corporate Guarantor as the Agent may reasonably require,

Form of financial statements

be prepared in accordance with all applicable laws and IFRS consistently applied and, in respect of the Corporate Guarantor, financial reference periods consistent with those applied in preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in IFRS, the accounting practices or reference periods and its auditors deliver to the Agent:

a description of any change necessary for those financial statements to reflect the IFRS, accounting practices and reference periods upon which the Original Financial Statements were prepared; and

sufficient information, upon request by the Agent, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 11.19 of the Corporate Guarantee has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

give a true and fair view of the state of affairs of the relevant Borrower and the Corporate Guarantor at the date of those accounts and of its profit for the period to which those accounts relate; and

fully disclose or provide for all significant liabilities of the relevant Borrower and the Corporate Guarantor.

Shareholder and creditor notices

Consents

for that Borrower to perform its obligations under any Finance Document to which it is a party;

for the validity or enforceability under any Finance Document to which it is a party; and

for that Borrower to continue to own and operate the Ship owned by it,

and that Borrower will comply with the terms of all such consents.

Maintenance of Security Interests

at its own cost, do all that it is necessary to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

Notification of litigation

No amendment to Master Agreement

Principal place of business

Confirmation of no default

states that no Potential Event of Default or Event of Default has occurred and is continuing; or

states that no Potential Event of Default or Event of Default has occurred and is continuing, except for a specified event or matter, of which all material details are given.

Notification of default

the occurrence of an Event of Default or a Potential Event of Default; or

any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,

Provision of further information

Each Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:

to the Borrowers, the Group, the Ships, the other Fleet Vessels, their Insurances or their Earnings (including, but not limited to, any sales or purchases of any Fleet Vessels, the incurrence of Financial Indebtedness by members of the Group, the refinancing or restructuring of any loan or credit facilities to which any members of the Group are a party (to the extent permitted to disclose information under the terms of such loan or credit facilities) as the Agent may reasonably require; or

to any other matter relevant to, or to any provision of, a Finance Document,

Each Borrower will immediately notify the Agent if, prior to the delivery of the Compliance Certificate pursuant to clause 11.20 of the Corporate Guarantee, it becomes aware that the financial covenants included in clause 11.19 of the Corporate Guarantee will not be complied with.

Provision of copies and translation of documents

Minimum Liquidity

“Know your customer” checks

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;

any change in the status of any Borrower, any Shareholder or any Approved Manager after the date of this Agreement; or

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, obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender 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 pursuant to the transactions contemplated in the Finance Documents, including without limitation obtaining, verifying and recording certain information and documentation that will allow the Agent and each of the Lenders to identify each of the Borrowers, the Shareholders and the Approved Managers (as the case may be) in accordance with the requirements of the PATRIOT Act.

Sanctions and compliance with laws

Compliance with laws

Sanctions

Each Borrower undertakes that it, and shall procure that the Corporate Guarantor and any other member of the Group or any Affiliate of any of them, or any director, officer, agent, employee or person acting on behalf of the foregoing, is not a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person.

Each Borrower shall not, and shall procure that neither the Corporate Guarantor nor any other member of the Group or any Affiliate of any of them shall not, use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Creditor Parties.

Each Borrower shall, and shall procure that the Corporate Guarantor shall, procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Creditor Party in its name or in the name of any Borrower, the Corporate Guarantor or any other member of the Group or any Affiliate of any of them.

Each Borrower shall, and shall procure that the Corporate Guarantor and each other member of the Group shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.

Use of proceeds

Each party to this Agreement acknowledges and agrees that the Borrower does not undertake under paragraphs (a) to (c) (inclusive) above in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 11.20.

Subordination and assignment of Permitted Loans

Ownership

Employees and ERISA Compliance

Further assurance

Each Borrower shall, and shall procure that each Security Party will, promptly, and in any event within the time period specified by the Security Trustee do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Security Trustee may specify (and in such form as the Security Trustee may require in favour of the Security Trustee or its nominee(s)):

to create, perfect, vest in favour of the Security Trustee or protect the priority of the Security Interest or any right of any kind created or intended to be created under or evidenced by the Finance Documents to which such Security Party is a party (which may include the execution of a mortgage, charge, assignment or other Security Interest over all or any of the assets which are, or are intended to be, the subject of the Finance Documents) or for the exercise of any rights, powers and remedies of the Security Trustee, any receiver or the Creditor Parties provided by or pursuant to the Finance Documents or by law;

to confer on the Security Trustee or confer on the Creditor Parties Security Interests over any property and assets of that Borrower or Security Party (as the case may be) located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Finance Documents;

to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Finance Documents or to exercise any power specified in any Finance Document in respect of which the Security Interest has become enforceable; and/or

to enable or assist the Security Trustee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.

Each Borrower shall, and shall procure that each other Security Party shall, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Trustee or the Creditor Parties by or pursuant to the Finance Documents to which such Borrower or Security Party is a party.

At the same time as a Borrower delivers to the Security Trustee any document executed by itself or another Security Party pursuant to this Clause, that Borrower shall deliver, or shall procure that such other Security Party will deliver, to the Security Trustee a certificate signed by two of that Borrower’s or Security Party’s directors or officers which shall:

set out the text of a resolution of that Borrower’s or Security Party’s directors specifically authorising the execution of the document specified by the Security Trustee; and

state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors or officers and is valid under that Borrower’ or Security Party’s articles of association or other constitutional documents.

Sale of Ship A

to take all necessary actions in order to market Ship A for sale immediately upon receipt of the Lenders’ instructions including, without limitation, closely monitoring the market and liaising with brokers;

on a best efforts basis, to ensure that Ship A is sold for cash on normal commercial arm’s length terms to a buyer and for a purchase price, each reasonably acceptable to the Agent in its consideration of the market standards prevailing at that time (acting on the instructions of the Lenders);

to keep the Agent regularly updated (quarterly and at any other time upon the Agent’s request) regarding the sale process of Ship A and to advise the Agent promptly of any offers received (including, without limitation, the price offered, the identity of the buyer, the main terms of any offers and the process of the negotiations), such updates to be satisfactory to the Lenders;

in the event of the sale of Ship A being agreed, on a best efforts basis, to ensure that (i) the memorandum of agreement is signed between Borrower A and the buyer for the sale of Ship A and (ii) that the sale of Ship A is successfully completed and Ship A is irrevocably and unconditionally delivered to the relevant buyer within a time frame reasonably set out by the Agent at that time; and

on a best efforts basis, to send to the Agent a certified copy of the memorandum of agreement (and any addenda or supplemental agreements applicable thereto) made between Borrower A and the buyer in respect of the sale of Ship A, promptly after the execution of such document.

Most favoured nation clause

any amendment to a maturity date under any such Group Facility Agreement as a result of which the maturity date will fall before 31 December 2020;

the existence of any amortization principal payment profile/schedule until 31 December 2019 (inclusive);

the provisions relevant to the calculation of the Excess Cash Flow and generally the cash sweep mechanism;

the waiver of the security cover ratio at the Borrowers’ level;

the financial covenants relevant to the Value Adjusted Leverage Ratio, Book Leverage Ratio and minimum Net Worth of the Corporate Guarantor; and

any increase to the aggregate of any amounts to be paid in respect of interest solely related to margin (howsoever defined) for the duration of the Waiver Period (calculated as at the date of that Group Facility Agreement).

Sale of Tasman Ships

to take all necessary actions in consultation with the Lenders, in order to market each Tasman Ship for sale including, without limitation, closely monitoring the market and liaising with brokers;

on a best efforts basis, ensure that each Tasman Ship is sold for cash on normal commercial arm’s length terms to a buyer and for a purchase price, each reasonably acceptable to the Agent after taking consideration of the market conditions prevailing at any relevant time (acting on the instructions of the Lenders);

keep the Agent regularly updated (at least quarterly and at any other time upon the Agent’s reasonable request) regarding the sale process of each Tasman Ship and to advise the Agent promptly of any offers received (including, without limitation, the price offered, the identity of the buyer, the main terms of any offers and the process of the negotiations), such updates to be satisfactory to the Lenders; and

in the event that an opportunity acceptable to the Borrowers and the Lenders arises for the sale of a Tasman Ship, on a best efforts basis, ensure that (i) the memorandum of agreement is signed between the Borrower being the owner of that Tasman Ship and the buyer for the sale and purchase of that Tasman Ship and to send to the Agent a certified copy of the memorandum of agreement (and any addenda or supplemental agreements applicable thereto) promptly after the execution of the same and (ii) the sale of that Tasman Ship is successfully completed and that such Tasman Ship is irrevocably and unconditionally delivered to the relevant buyer.

CORPORATE UNDERTAKINGS

General

Maintenance of status

Negative undertakings

change the nature of its business; or

pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of its limited liability company interests at any time;

provide any form of credit or financial assistance to:

a person who is directly or indirectly interested in that Borrower’s limited liability company interests or loan capital; or

any company in or with which such a person is directly or indirectly interested or connected,

open or maintain any account with any bank or financial institution except accounts with the Agent for the purposes of the Finance Documents;

issue, allot or grant any person any limited liability company interests other than the relevant Shareholder;

acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than the Designated Transactions;

enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation or any form of acquisition, including any joint venture (save for an IPO);

change its constitutional documents; or

acquire any vessel other than the Ship owned by it.

INSURANCE

General

Maintenance of obligatory insurances

fire and usual marine risks (including increased value, hull and machinery and excess risks);

war risks;

protection and indemnity risks (including excess war risk P&I cover); and

any other risks (other than loss of hire) against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower.

Terms of obligatory insurances

in Dollars;

in the case of fire and usual marine risks and war risks, in such amount as shall from time to time be approved by the Security Trustee but in any event in an amount not less than the greater of (i) an amount which when aggregated with the insured aggregate value of the other Ships, 120 per cent, of the Loan and (ii) the aggregate Market Value of the Mortgaged Ships;

in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry;

in relation to protection and indemnity risks in respect of the full tonnage of the Ship owned by it;

on such terms as shall from time to time be approved in writing by the Security Trustee (including, without limitation, a blocking and trapping clause);

on approved terms; and

through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

Further protections for the Creditor Parties

subject always to paragraph (b), name that Borrower as the sole named assured and the Approved Manager so co-assured unless the interest of every other named assured is limited:

in respect of any obligatory insurances for hull and machinery and war risks;

to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;

provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;

provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

provide that the Security Trustee may make proof of loss if that Borrower fails to do so.

Renewal of obligatory insurances

at least 14 days (or such other shorter period as the Agent may approve) before the expiry of any obligatory insurance effected by it:

notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and

obtain the Security Trustee’s approval to the matters referred to in paragraph (i);

at least 5 Business Days (or such other shorter period as the Agent may approve) before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and

procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

Copies of policies; letters of undertaking

they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;

they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.

Copies of certificates of entry

a certified copy of the certificate of entry for that Ship;

a letter or letters of undertaking in such form as may be required by the Security Trustee;

where required to be issued under the terms of insurance/indemnity provided by a Borrower’s protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Borrower in accordance with the requirements of such protections and indemnity association; and

a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.

Deposit of original policies

Payment of premiums

Guarantees

Compliance with terms of insurances

each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

none of the Borrowers shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;

each Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

none of the Borrowers shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

Alteration to terms of insurances

Settlement of claims

Provision of copies of communications

the approved brokers;

the approved protection and indemnity and/or war risks associations; and

the approved insurance companies and/or underwriters, which relate directly or indirectly to:

that Borrower’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls;

any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and

a claim under any obligatory insurances of the Ship.

Provision of information

obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 or dealing with or considering any matters relating to any such insurances,

Mortgagee’s interest marine insurance and additional perils insurance

Review of insurance requirements

Modification of insurance requirements

Compliance with mortgagee’s instructions

SHIP COVENANTS

General

Ship’s name and registration

Repair and classification

consistent with first-class ship ownership and management practice;

so as to maintain the highest class free of overdue recommendations and conditions with a first-class classification society which is a member of IACS acceptable to the Agent (such acceptance not to be unreasonably withheld);

so as to comply with all laws and regulations applicable to vessels registered at ports in the applicable Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

Modification

Removal of parts

Surveys

Inspection

Prevention of and release from arrest

all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;

all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

Compliance with laws etc.

comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations applicable to the Ship owned by it, its ownership, operation and management or to the business of that Borrower;

not employ the Ship owned by it nor allow its employment in any manner contrary to any applicable law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code;

in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by the Ship’s war risks insurers unless the prior written consent of the war risk insurers has been given and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the war risk insurers may require; and

comply with the PATRIOT Act and the United States Foreign Corrupt Practices Act.

Provision of information

the Ship owned by it, its employment, position and engagements;

the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;

any towages and salvages; and

its compliance, the Approved Managers’ compliance and the compliance of the Ship owned by it with the ISM Code and the ISPS Code,

Notification of certain events

in respect of any Tasman Ship, any time or consecutive voyage charter otherwise permitted without the prior written consent of the Agent (acting with the authorisation of the Majority Lenders) pursuant to Clause 14.12(a);

in respect of Ship A or Ship B, any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

any casualty which is a Major Casualty;

any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;

any intended dry docking of the Ship owned by it;

any Environmental Claim made against that Borrower or in connection with the Ship owned by it, or any Environmental Incident;

any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with the Ship owned by it; or

any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,

Restrictions on chartering, appointment of managers etc.

in respect of any Tasman Ship, enter into any time or consecutive voyage charter in respect of any Tasman Ship for a term which exceeds, or which by virtue of any optional extensions may exceed 12 months (+/- 45 days) unless (i) such charter contains a “sales clause” entitling the Borrower owning that Tasman Ship to sell its Tasman Ship subject to the consent of the charterer, such consent not to be unreasonably withheld and (ii) the last day of the charter period (including any optional extensions) does not fall after the Final Maturity Date in respect of Tranche B;

let that Ship on demise charter for any period;

enter into any charter in relation to that Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;

charter that Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;

appoint a manager of that Ship other than the Approved Managers or agree to any alteration to the terms of the Approved Managers’ appointment;

de-activate or lay up that Ship; or

put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.

Notice of Mortgage

Sharing of Earnings

enter into any agreement or arrangement for the sharing of any Earnings;

enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of a Borrower to any Earnings.

ISPS Code

procure that the Ship owned by that Borrower and the company responsible for that Ship’s compliance with the ISPS Code comply with the ISPS Code; and

maintain for that Ship an ISSC; and

notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

Charterparty Assignment

serve notice of the Charterparty Assignment on the charterer and use its best endeavours to procure that the charterer acknowledges such notice in such form as the Agent may approve or require; and

deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 3, Part A as the Agent may require.

Green Award

Responsible Ship Recycling

SECURITY COVER

Minimum required security cover

Provision of additional security; prepayment

Valuation of Ships

as at a date not more than 30 days previously;

by an Approved Broker nominated by the Borrowers and approved by the Agent;

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

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 existing charter or other contract of employment.

Value of additional vessel security

Valuations binding

Provision of information

Frequency of valuations

Payment of valuation expenses

Application of prepayment

PAYMENTS AND CALCULATIONS

Currency and method of payments

by not later than 11.00 a.m. (New York City time) on the due date;

in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

in the case of an amount payable by a Lender to the Agent or by any Borrower to the Agent or any Lender, to the account of the Agent with correspondent bank Bank of America Intl. New York (correspondent bank SWIFT: BOFAUS3N (SWIFT: ▇▇▇▇▇▇▇▇, beneficiary: ABN AMRO Bank N.V. Amsterdam and account number: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇) with reference “$82,459,678.29 facility re m.v.’s ORCA I, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Y AND ▇▇▇ H”, or to such other account with such other bank as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and

in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

Payment on non-Business Day

the due date shall be extended to the next succeeding Business Day; or

if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,

Basis for calculation of periodic payments

Distribution of payments to Creditor Parties

any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it.

Permitted deductions by Agent

Agent only obliged to pay when monies received

Refund to Agent of monies not received

refund the sum in full to the Agent; and

pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

Agent may assume receipt

Creditor Party accounts

Agent’s memorandum account

Accounts prima facie evidence

APPLICATION OF RECEIPTS

Normal order of application

FIRST: in or towards satisfaction of any amounts then due and payable under the Finance

first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at paragraphs (ii) and (iii) (including, but without limitation, all amounts payable by any Borrower under Clauses 20, 21 and 22 of this Agreement or by any Borrower or any Security Party under any corresponding or similar provision in any other Finance Document);

secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression “interest” shall include any net amount which any Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and

thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);

SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers, the Security Parties and the other Creditor Parties, states in its opinion will either or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a); and

THIRDLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.

Variation of order of application

Notice of variation of order of application

Appropriation rights overridden

APPLICATION OF EARNINGS; SWAP PAYMENTS

Payment of Earnings and Swap Payments

all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship; and

all payments by the Swap Bank to any Borrower under each Designated Transaction are paid to the Earnings Account of that Borrower.

Application of Earnings

in or towards making payments of all amounts due and payable by the Borrowers under this Agreement and the Master Agreement (other than payments of principal and interest pursuant to Clauses 5.1, 7.2 and/or 8.1);

in or towards making the transfers to the Retention Account required pursuant to Clause 18.3; and

any surplus shall be applied in accordance with Clause 8.14 and once Clause 8.14 is no longer applicable, any surplus shall be released to the Borrowers Provided that no Event of Default has occurred and is continuing or will occur following such release to the Borrowers.

Monthly retentions

one-third of the amount of the repayment instalment in respect of Tranche A falling due under Clause 8.1 on the next Repayment Date in respect of Tranche A;

the relevant fraction of the aggregate amount of interest on that Tranche which is payable on the next due date for payment of interest under this Agreement; and

the relevant fraction of the net amount which is payable by the Borrowers to the Swap Bank in respect of any Designated Transaction on the next due date for payment of such amount under the relevant Confirmation.

in relation to paragraph (b) a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period applicable to the relevant Tranche (or, if the current Interest Period ends after the next due date for payment of interest under this Agreement for the relevant Tranche, the number of months from the later of the commencement of the current Interest Period for the relevant Tranche or the last due date for payment of interest for that Tranche to the next due date for payment of interest for that Tranche under this Agreement); and

in relation to paragraph (c), a fraction of which the numerator is one and the denominator is the number of months between fixed rate payments specified in the relevant Confirmation.

Shortfall in Earnings

Application of retentions

the repayment instalment in respect of the relevant Tranche due on that Repayment Date; or

the amount of interest in respect of the relevant Tranche payable on that interest payment date,

in discharge of the Borrowers’ liability for that repayment instalment or that interest.

Interest accrued on Accounts

No release of accrued interest

Location of accounts

comply with any requirement of the Agent as to the location or re-location of the Accounts (or any of them); and

execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts.

Debits for expenses etc.

Borrowers’ obligations unaffected

the liability of the Borrowers to make payments of principal and interest on the due dates; or

any other liability or obligation of the Borrowers or any Security Party or K&T Marine under any Finance Document.

EVENTS OF DEFAULT

Events of Default

any Borrower or any Security Party fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document unless payment is made within 3 Business Days of its due date due to an administrative or technical error or a disruption event in the payment and/or communication system which, in each case, is beyond the control of the Creditor Parties; or

any breach occurs of Clause 9.2, 10.18, 10.19, 11.2, 11.3, 11.18, 11.20, 11.21, 12.2, 12.3, 13.2, 13.4, 14.2, 14.8, 18.1 or 18.3 (and, in the case of Clause 18.3, such breach is not remedied as provided in Clause 18.4) or clause 11.19 of the Corporate Guarantee (unless (i) in respect of any breach under Clause 11.18, the Borrowers remedy any shortfall of the Minimum Liquidity Amount within 5 Business Days of the earlier of (A) the date on which the Agent becomes aware of such breach or (B) the date on which the Borrowers become aware of such breach or (ii) in respect of any breach under Clause 14.8, the arrest of the relevant Ship is discharged within 25 days (or such longer period as may be requested by the Borrowers and approved by the Agent acting with the authorisation of the Majority Lenders)); or

any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 10 days after the earlier of (i) the written notice from the Agent requesting action to remedy the same and (ii) the Borrower or the relevant Security Party becoming aware of the breach; or

(subject to any applicable grace period specified in any Finance Document) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or

any representation, warranty or statement made by, or by an officer of, a Borrower or a Security Party or K&T Marine in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

at any time other than during the Refinancing Period, any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (any Financial Indebtedness, exceeding in aggregate, in the case of the Corporate Guarantor $3,000,000 (or the equivalent in any other currency or currencies) and, in the case of a Borrower, $1,000,000 (or the equivalent in any other currency or currencies)):

any Financial Indebtedness of a Relevant Person is not paid when due; or

any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default (howsoever described in the relevant agreement or instrument) and irrespective of whether that event of default is or may be remedied or waived by the creditor(s) of that Relevant Person Provided that:

in the case of an event of default that is remedied or waived by the creditor(s) of that Relevant Person, an Event of Default shall cease to exist under this Agreement once the Borrowers have provided written notice to the Agent of such remedy or waiver; and

in the case of any Financial Indebtedness created under:

any guarantee and indemnity of the Corporate Guarantor, a demand is made by the relevant creditor(s) under such guarantee and indemnity; or

any guarantee and indemnity of the Corporate Guarantor securing the obligations of any Subsidiary, the Financial Indebtedness of that Subsidiary is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of that Subsidiary’s payment default or that Subsidiary’s declaration of bankruptcy or insolvency and, in the opinion of the Agent in its discretion, that payment default or, as the case may be, that default due to that declaration of bankruptcy or insolvency, may adversely affect the ability of the Corporate Guarantor to comply with its obligations under the Corporate Guarantee unless, in the case of any payment default, the Corporate Guarantor is able to provide evidence to the Agent that such payment default has been remedied within 10 days of the date on which the overdue payment(s) became due and payable; or

a lease or hire purchase agreement (other than a time charter in connection with a Ship) creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

any of the following occurs in relation to a Relevant Person:

at any time other than during the Refinancing Period, a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due (in respect of a sum of, or sums aggregating, $1,000,000 (in the case of a Borrower)) or $3,000,000 (in the case of the Corporate Guarantor) or more or the equivalent in another currency or currencies, Provided that no Event of Default will occur under this paragraph if that debt is paid by that Relevant Person within 3 Business Days); or

any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order(in respect of a sum of, or sums aggregating, $500,000 (in the case of a member of the Group (other than the Corporate Guarantor)) or $2,000,000 (in the case of the Corporate Guarantor) or more or the equivalent in another currency or currencies, Provided that no Event of Default will occur under this paragraph if that execution, attachment, arrest, sequestration or distress or any form of freezing order is discharged or released within 25 days (or such longer period as may be requested by the Borrowers and approved by the Agent acting with the authorisation of the Majority Lenders) of its commencement; or

any administrative or other receiver is appointed over any asset of a Relevant Person; or

an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a

an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise,

if that Negotiating Party has granted a Security Interest, guarantee or other form of assurance or security in favour of any creditor, that creditor has neither demanded any payment from that Negotiating Party nor exercised any of its enforcement rights in respect of that Subsidiary Indebtedness;

the Agent is immediately notified by that Negotiating Party (or, in the case of a Subsidiary of the Corporate Guarantor, by the Corporate Guarantor) that it takes or resolves to take the Steps and Actions (together with any details, as may be reasonably requested by the Agent and to the extent that the same may be disclosed under any relevant non-disclosure arrangements entered into with the relevant creditor(s) in good faith, in connection with the Steps and Actions); and

any Steps and Actions taken by that Negotiating Party do not have a material adverse effect (in the reasonable opinion of the Agent) on the financial condition, state of affairs or operations of that Negotiating Party and/or result in the non-compliance of any of the provisions of Clause 11.26 (Most favoured nation clause); or

in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

any Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of all the Lenders, is material in the context of this Agreement; or

it becomes unlawful in any Pertinent Jurisdiction or impossible:

for any Borrower, the Corporate Guarantor or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

for the Agent, the Security Trustee, the Lenders or the Swap Bank to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

any official consent necessary to enable any Borrower to own, operate or charter the Ship owned by it or to enable any Borrower or any Security Party or K&T Marine to comply with any provision which the Majority Lenders consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

without the prior written consent of the Agent (to be given with the authorisation of the Majority Lenders (such consent not to be unreasonably withheld)) the Corporate Guarantor is listed on any stock exchange;

any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest except the Permitted Security Interests; or

the security constituted by a Finance Document is in any way imperilled or in jeopardy or the state of the Approved Flag of a Ship is or becomes involved in hostilities or civil war or there is a seizure of power in such state by unconstitutional means, or any other event occurs in relation to that Ship, the Mortgage or the Approved Flag in respect of that Ship and in the reasonable opinion of the Agent such event is likely to have a Material Adverse Effect unless the Borrower owning that Ship, within 14 days of the occurrence of such event (or such longer period as may be agreed by the Agent acting with the authorisation of the Lenders) re-registers that Ship on an alternative Approved Flag and subject to:

the Ship remaining subject to a Security Interest created by a first priority or preferred ship mortgage on the Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority security) on substantially the same terms as the Mortgage in respect of the Ship in Agreed Form; and

the execution of such other documentation amending and supplementing the Finance Documents, as the Agent, acting with the authorisation of the Lenders, shall reasonably approve or require; or

an Event of Default (as defined in section 14 of the Master Agreement) occurs; or

the Master Agreement or any other Finance Document is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Agent, acting with the authorisation of the Majority Lenders; or

any breach occurs of Clause 15.2, and such default continues un-remedied 14 days after written notice from the Agent requesting action to remedy the same; or

the authority or ability of a Borrower or the Corporate Guarantor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to such Borrower or Corporate Guarantor (as the case may be) or any of its assets (unless, in the case of any Borrower, any such occurrence would otherwise be considered a Total Loss as a result of which a mandatory prepayment would be required pursuant to Clause 8.8(b) (Mandatory prepayment), and the Borrowers prepay the required amount in accordance with Clause 8.8(b) (Mandatory prepayment)); or

a Borrower or a Security Party (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document; or

any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to any of the Finance Documents or the transactions contemplated in any of the Finance Documents or against a Borrower or the Corporate Guarantor or its respective assets which has or could reasonably be expected to have a Material Adverse Effect; or

any other event occurs or any other circumstances arise or develop including, without limitation:

a change in the financial position, state of affairs or prospects of any Borrower or the Corporate Guarantor; or

any accident or any Environmental Incident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,

Actions following an Event of Default

the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

serve on the Borrowers a notice stating that all or part of the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or

serve on the Borrowers a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law.

Termination of Commitments

Acceleration of Loan

Multiple notices; action without notice

Notification of Creditor Parties and Security Parties

Creditor Party’s rights unimpaired

Exclusion of Creditor Party liability

for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

Relevant Persons

Interpretation

Position of Swap Bank

FEES AND EXPENSES

Costs of negotiation, preparation etc.

Costs of variations, amendments, enforcement etc.

any amendment or supplement to a Finance Document and the Equity Undertaking, or any proposal for such an amendment to be made;

any consent or waiver by the Lenders, the Swap Bank, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document and the Equity Undertaking, or any request for such a consent or waiver;

the valuation of any security provided or offered under Clause 15 (save as otherwise provided in Clause 15.8) or any other matter relating to such security; or

where the Security Trustee, in its absolute opinion, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of that Ship pursuant to Clause 13.17; and

any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or the Equity Undertaking or for any similar purpose.

Documentary taxes

Agent’s management time

Security Trustee’s management time

Certification of amounts

INDEMNITIES

Indemnities regarding borrowing and repayment of Loan

a Tranche not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

the receipt or recovery of payment in respect of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 7); and

the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,

Breakage costs

in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

Miscellaneous indemnities

any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or

any other Pertinent Matter,

Environmental Indemnity

Currency indemnity

making or lodging any claim or proof against any Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

obtaining an order or judgment from any court or other tribunal; or

enforcing any such order or judgment,

Application to Master Agreement

Certification of amounts

Sums deemed due to a Lender

Mandatory cost

in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that facility office; and

in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender’s participation in the Loan.

Notice of prepayment

Prepayment

NO SET-OFF OR TAX DEDUCTION

No deductions

without any form of set-off, cross-claim or condition; and

free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.

Grossing-up for taxes

that Borrower shall notify the Agent as soon as it becomes aware of the requirement;

that Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

Evidence of payment of taxes

Exclusion of tax on overall net income

Application to Master Agreement

Notice of prepayment

Prepayment

FATCA

FATCA Information

Subject to paragraph (iii) below, each party to a Finance Document shall, within 10 Business Days of a reasonable request by another party to the Finance Documents:

confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

supply to the requesting party such forms, documentation and other information relating to its status under FATCA (including its applicable “passthru percentage” or other information required under the US Treasury regulations or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purposes of such requesting party’s compliance with FATCA.

If a party to any Finance Document confirms to another party pursuant to Clause 22.6(a)(i) 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;

Sub-clause (i) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such party for purposes of this sub-clause (iii);

If a party to any Finance Document fails to confirm its status or to supply forms, documentation or other information requested in accordance with sub-clause (i) above (including, for the avoidance of doubt, where sub-clause (iii) above applies), then:

if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is 100 per cent.,

FATCA Withholding

Each party to any Finance Document 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.

Each party to any Finance Document 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 the Borrower, the Agent and the other Creditor Parties.

ILLEGALITY, ETC.

Illegality

unlawful or prohibited as a result of the introduction of a new and applicable law, an amendment to an existing and applicable law or a change in the manner in which an existing and applicable law is or will be interpreted or applied; or

contrary to, or inconsistent with, any applicable regulation,