Dated 28 December 2018 VELVET SHIPPING CORPORATION GOLEM NAVIGATION LIMITED and COASTERS VENTURES LTD as joint and several Borrowers and THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders and NIBC BANK N.V. as Mandated Lead Arranger...

1

Interpretation

2

Loan Facility

3

Position of the Lenders

4

Drawdown

5

Interest

6

Interest Periods

7

Default Interest

8

Repayment and Prepayment

9

Conditions Precedent

10

Representations and Warranties

11

General Undertakings

12

Corporate Undertakings

13

Insurance

14

Ship covenants

15

Security Cover

16

Payments and Calculations

17

Application of Receipts

18

Application of Earnings

19

Events of Default

20

Fees and Expenses

21

Indemnities

22

No Set-off or Tax Deduction

23

Illegality, etc

24

Increased Costs

25

Set-off

26

Transfers and Changes in Lending Offices

27

Variations and Waivers by majority lenders

28

Notices

29

Supplemental

30

Confidentiality

31

Law and Jurisdiction

32

Bail-In

Schedules

Schedule 1 Lenders and Commitments

Schedule 2 Drawdown Notice

Schedule 3 Condition Precedent Documents

        Part A

        Part B

Schedule 4 Transfer Certificate

Schedule 5 Ship Details

Execution

Execution Page

VELVET SHIPPING CORPORATION, GOLEM NAVIGATION LIMITED and COASTERS VENTURES LTD, each a corporation incorporated and existing under the laws of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, as joint and several Borrowers.

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

NIBC BANK N.V., acting through its office at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ as Mandated Lead Arranger.

NIBC BANK N.V., acting through its office at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ as Agent and Security Trustee.

Advance A shall be in an amount equal to the lesser of (a) $12,000,000 and (b) 55 per cent. of the Market Value of Ship A which shall be made available for the purpose of refinancing the Existing Indebtedness relating to Ship A;

Advance B shall be in an amount equal to the lesser of (a) $8,250,000 and (b) 55 per cent. of the Market Value of Ship B which shall be made available for the purpose of refinancing the Existing Indebtedness relating to Ship B; and

Advance C shall be in an amount equal to the lesser of (a) $8,250,000 and (b) 55 per cent. of the Market Value of Ship C which shall be made available for the purpose of refinancing the Existing Indebtedness relating to Ship C.

IT IS AGREED as follows:

INTERPRETATION

Definitions

in relation to the Retention Account and the Liquidity account, NIBC BANK N.V., acting through its office at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; and

in relation to the Earnings accounts, HSH Nordbank AG acting through its office at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;

31 March 2019, excluding the period between 21 December 2018 to 31 December 2018 (both dates inclusive), or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers; or

if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

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;

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

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

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

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

a Borrower, a change in:

the beneficial ownership of any of the shares in that Borrower; or

the legal ownership of any of those shares; or

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

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

information that:

is or becomes public information other than as a direct or indirect result of any breach by that Creditor Party of Clause 30; or

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

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

any Funding Rate or any quotation supplied to the Agent by a Reference Bank;

all freight, hire and passage moneys, compensation payable to that Borrower or the Security Trustee in the event of requisition of the Ship owned by it 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 Insurances in respect of loss of earnings; and

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

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

in relation to Borrower A, the relevant part of the Term B Loan relating to Ship A;

in relation to Borrower B, the relevant part of the Term B Loan relating to Ship B; and

in relation to Borrower C, the relevant part of the Term B Loan relating to Ship C;

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

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

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

this Agreement;

the Agency and Trust Deed;

the Corporate Guarantee;

the General Assignments;

the Mortgages;

the Account Pledges;

the Charterparty Assignments;

the Approved Manager’s Undertakings;

the Shares Pledges; and

any other document (whether creating a Security Interest or not) which is executed at any time by a Borrower, the Corporate Guarantor, the Approved Manager, the Shareholder 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 under this Agreement or any of the other documents referred to in this definition;

for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

under any loan stock, bond, note or other security issued by the debtor;

under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;

under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, the Earnings or otherwise in relation to it 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 applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that Interest Period; and

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that Interest Period,

‘The International Management Code for the Safe Operation of Ships and for Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and

all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the ‘Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations’ produced by the International Maritime Organisations pursuant to Resolution A.788(19) adopted on 25 November 1995,

the document of compliance (DOC) and safety management certificate (SMC) issued pursuant to the ISM Code within the periods specified by the ISM Code; and

all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Agent may require; and

any other documents which are prepared or which are otherwise relevant to establish and maintain that Ship’s or that Borrower’s compliance with the ISM Code which the Agent may require;

a bank or financial institution listed in Schedule 1 and acting through its branch or office indicated in Schedule 1 (or through another branch notified to the Borrowers under Clause 26.13) unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

the holder for the time being of a Transfer Certificate;

the applicable Screen Rate;

(if no Screen Rate is available for that Interest Period) the Interpolated Screen Rate; or

if:

no Screen Rate is available for the currency of the Loan; or

no Screen Rate is available for that Interest Period and it is not possible to calculate an Interpolated Screen Rate,

before an Advance has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and

after an Advance has been made, Lenders whose Contributions total 66.66 per cent. of the Loan;

the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole;

the ability of any borrower or the Corporate Guarantor to perform its obligations under any Finance Document; or

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

the date falling on the fifth anniversary of the relevant Drawdown Date; and

15 December 2023;

any Financial Indebtedness incurred under the Finance Documents; and

in relation to each Borrower, until the Drawdown Date of the relevant Advance, the Existing Indebtedness;

Security Interests created by the Finance Documents and, until the Drawdown Date of the relevant Advance, the Term B Loan in relation to the Ship relating to such Advance;

liens for unpaid crew’s wages in accordance with usual maritime practice;

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 operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 45 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 14.13(f);

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 where the relevant Borrower is prosecuting or defending such action in good faith by appropriate steps; and

Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

England and Wales;

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

a country 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 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 or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;

formally designated, nominated or recommended as the replacement for a Screen Rate by:

the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or

any Relevant Nominating Body,

in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to that Screen Rate; or

in the opinion of the Majority Lenders and the Borrowers, an appropriate successor to a Screen Rate.;

that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);

that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws; or

that is directly or indirectly owned or controlled by a person referred to in (a) and/or (b) above; or

with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws;

the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders, and the Borrowers materially changed;

the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or

information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,

the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;

the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or

the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or

in the opinion of the Majority Lenders and the Borrowers, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement;

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

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

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

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

no Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 below or any other provision of this Agreement or another Finance Document; and

the Agent, the Security Trustee, the Mandated Lead Arranger and the 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;

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 one year without any right to an extension unless that Ship is within 30 days 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; and

any arrest, capture, seizure, confiscation or detention of that Ship (including any hijacking or theft) unless it is within the Relevant Period redelivered to the full control of the Borrower owning that Ship;

“Relevant Period” means:

in the case of any arrest of a Ship, 1 month; and

in the case of piracy or capture, seizure, confiscation or detention of a Ship (including any hijacking or theft), 90 days Provided that if the relevant underwriters confirm to the Agent in writing prior to the end of the 90-day period referred to in (i) above that the relevant Ship is subject to an approved piracy insurance cover, the earlier of 270 days after the date on which that Ship is captured by pirates and the date on which the piracy insurance cover expires;

in the case of an actual loss, 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 earlier 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 earlier of:

the date at which a total loss is subsequently admitted by such insurers;

the date at which a total loss is subsequently adjudged by a competent court of law or arbitration tribunal to have occurred, if such insurers do not immediately admit such claim; or

the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;

a person which is resident for tax purposes in the United States of America; or

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

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,

Meaning of “subsidiary”

a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

P has direct or indirect control over a majority of the voting rights attached to the issued shares of S;

General Interpretation

In this Agreement:

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; and

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

Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary intention appears.

References in Clause 1.1 to a document being in the form of a particular Appendix include references to that form with any modifications to that form which the Agent (with the authorisation of the Lenders in the case of substantial modifications) approves or requires.

The clause headings shall not affect the interpretation of this Agreement.

LOAN FACILITY

Amount of loan facility

Advance A shall be in an amount equal to the lesser of (a) $12,000,000 and (b) 55 per cent. of the Market Value of Ship A; and

Advance B shall be in an amount equal to the lesser of (a) $8,250,000 and (b) 55 per cent. of the Market Value of Ship B .

Advance C shall be in an amount equal to the lesser of (a) $8,250,000 and (b) 55 per cent. of the Market Value of Ship C .

Lenders’ participations in Advances

Purpose of Advances

POSITION OF THE LENDERS

Interests of Lenders several

Proceedings by individual Creditor Party

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 of Creditor Parties several

the obligations of the other Lenders being increased; nor

a Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Documents,

Parties bound by certain actions of Lenders

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

any instruction or authorisation given by the Lenders to the Agent or the Security Trustee under or in connection with any Finance Document; 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 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

DRAWDOWN

Request for Advance

Availability

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

the amount of each Advance shall not exceed an amount equal to the lesser of:

in respect of each Advance B and Advance C:

55 per cent. of the Market Value of the Ship relevant to such Advance; and

$8,250,000; and

in respect of Advance A:

55 per cent. of the Market Value of Ship A relevant to such Advance;

$12,000,000; and

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

Notification to Lenders of receipt of a Drawdown Notice

the amount of the Advance and the Drawdown Date;

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

the duration of the first Interest Period.

Drawdown Notice irrevocable

Lenders to make available Contributions

Disbursement of Advance

to the account which the Borrowers specify in the Drawdown Notice; and

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

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 Bank to quote

Absence of quotations by Reference Bank

Market disruption

LIBOR is to be determined by reference to the Reference Banks and no Reference Bank does, 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 or Lenders (whose participation in an Advance or the relevant part of such Advance exceeds 35 per cent of that Advance or the relevant part of such Advance) may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to that Lender or, as the case may be, those Lenders of funding its or their respective Contribution(s) (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.

Notification of market disruption

Cost of funds

If this Clause 5.9 applies, the rate of interest on the relevant Advance or the relevant part of that Advance for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

the Margin; and

the weighted average of the rates notified to the Agent by each Lender as soon as practicable and in any event within 5 Business Days of the first day of that Interest Period (or, if earlier, on the date falling 3 Business Days before the date on which interest is due to be paid in respect of that Interest Period) to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Advance or that part of that Advance from whatever source it may reasonably select.

If this Clause 5.9 applies and the Agent or the Borrowers so require, the Agent, the Lenders and the Borrowers shall enter into negotiations (for a period of not more than 30 days after the date on which the Agent serves its notice under Clause 5.8 (the “Negotiation Period”)) with a view to agreeing an alternative interest rate or (as the case may be) an alternative basis for the Lenders to fund or continue to fund their or its Contribution during the Interest Period concerned.

Any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of the Lenders and the Borrowers, be binding on all parties.

Application of agreed alternative rate of interest

Alternative rate of interest in absence of agreement

Notice of prepayment

Prepayment; termination of Commitments

Application of prepayment

INTEREST PERIODS

Commencement of Interest Periods

Duration of normal Interest Periods

3 months; or

such other period as the Agent, with the authorisation of all Lenders, may 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

If a Borrower fails to pay any amount payable by it under a Finance Document on its due date or if there is an Event of Default related to a breach under Clause 15.1, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the relevant Advance in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent (acting on the instructions of the Lenders). Any interest accruing under this Clause 7.2 shall be immediately payable by the Borrowers on demand by the Agent.

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

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

the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

Notification of interest periods and default rates

The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under Clause 7.

The Agent shall promptly notify the Borrower of each Funding Rate relating to the relevant Advance, any part of that Advance or any Unpaid Sum.

Payment of accrued default interest

Compounding of default interest

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

REPAYMENT AND PREPAYMENT

Amount of repayment instalments

in respect of Advance B and Advance C, 20 equal consecutive quarterly instalments, each in the amount of $305,000 and in respect of Advance A, 20 equal consecutive quarterly instalments, each in the amount of $255,000 (each a “Repayment Instalment” and, together, the “Repayment Instalments”); and

in respect of Advance B and Advance C, a balloon instalment in the amount of $2,150,000 and in respect of Advance A, a balloon instalment in the amount of $6,900,000 (each, a “Balloon Instalment”),

the amount made available in respect of each of Advance B and Advance C is less than $8,250,000, and in respect of Advance C, $12,000,000, the aggregate amount of the Repayment Instalments and the Balloon Instalment in respect of the relevant Advance shall be reduced by an amount equal to the undrawn amount on a pro rata basis; and

the Drawdown Date in respect of any Advance falls [on or] after 15 March 2019, the Repayment Instalments in respect of that Advance referred to in paragraph (a) above shall be reduced to 19 and the Balloon Instalment in respect of that Advance shall be increased by an amount equal to one Repayment Instalment in respect of that Advance.

Repayment Dates

Final Repayment Date

Voluntary prepayment

Conditions for voluntary prepayment

a partial prepayment shall be in a minimum amount of $500,000 or in integral multiple of $100,000 or such lesser amount as is acceptable to the Agent (acting on the instructions of the Majority Lenders);

the Agent has received from the Borrowers at least 5 Business Days’ prior written notice 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 an Interest Period);

the prepayment shall be applied proportionately between each Advance and thereafter pro rata against the Instalments in respect of each Advance which are at the time being outstanding and each Balloon Instalment; and

the Borrowers have provided evidence satisfactory to the Agent that any consent required by the Borrowers 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 the Borrowers or any Security Party has been complied with and shall include a representation to that effect in the notice referred to in (b) above.

Voluntary cancellation

Effect of notice of prepayment

Notification of notice of prepayment

Mandatory prepayment

if a Ship is sold, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or

if a Ship becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

the Advance to which the ship being sold or which has become a Total Loss relates; and

an amount, which after giving credit to the prepayment required to be made pursuant to this Clause 8.9, results in the Security Cover Ratio to be maintained pursuant to Clause 15.1 being no less than the greater of (1) 120 per cent and (2) the Security Cover Ratio which applied immediately prior to the applicable event described in paragraphs (a) or (b) of this Clause 8.9.

Amounts payable on prepayment

Application of partial prepayment

if made pursuant to Clause 8.4, pro rata against the Repayment Instalments and of the Balloon Instalment of the Advance being prepaid or in such other manner as the Agent (acting on the instructions of the Lenders) may agree with the Borrowers;

if made pursuant to Clause 8.9:

FIRSTLY: against the Advance which has been used in part financing the relevant Ship and thereafter any balance shall be applied proportionally against the other Advances and in relation to each Advance, pro rata against the then outstanding Repayment Instalments and the Balloon Instalment of such other Advances; and

SECONDLY: pro rata towards repayment of any overdue interest, any Break Costs, any accrued interest relating to the Loan, any other costs, fees, expenses, commissions due under this Agreement; and

THIRDLY: any surplus shall be released to the Borrowers Provided that no Event of Default or Potential Event of Default has occurred or is continuing.

If made pursuant to Clause 15.2, pro rata against the Advances and in relation to each Advance, pro rata against the Balloon Instalment and the Repayment Instalments of the Advance being prepaid or in such other manner as the Agent (acting on the instructions of the Lenders) may agree with the Borrowers.

No reborrowing

CONDITIONS PRECEDENT

Documents, fees and no default

that on or before the date of this Agreement, the Lenders receive the documents described in Part A of Schedule 3 in a form and substance satisfactory to the Lenders and their lawyers;

that the Agent has received the commitment fee and arrangement fee on behalf of the Lenders referred to in Clauses 20.1 and 20.2 respectively and the first annual agency fee pursuant to Clause 20.3;

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

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

no Event of Default or Potential Event of Default has occurred or is continuing or would result from the borrowing of the relevant Advance; and

the representations and warranties in Clause 10 and those of the Borrowers 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;

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

there has been no material adverse change in the business, management, condition (financial or otherwise), results of operations, state of affairs, operation, performance, prospects or properties of the Borrowers or any of them and/or the Corporate Guarantor and its affiliates since the Financial Statements;

that, if the ratio set out in Clause 15.1 were applied immediately following the making of an Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; 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

Share capital and ownership

Corporate power

continue to own the Ship owned by it under the relevant Approved Flag;

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

borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which that Borrower is a party.

Consents in force

Legal validity; effective Security Interests

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 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 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

No money laundering; anti-bribery

ISM Code, ISPS Code Compliance and Environmental Laws

No immunity

Sanctions

Each Borrower, each Security Party and each other member of the Group and to the best of their knowledge (having made due inquiry), their joint ventures, and their respective directors, officers, employees, agents or representatives has been and is in compliance with Sanctions Laws;

No Borrower, nor any Security Party, nor any other member of the Group, their joint ventures, and their respective directors, officers, employees, agents or representatives:

is a Restricted Party, or is involved in any transaction through which it is reasonably likely to become a Restricted Party; or

is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

Insolvency

GENERAL UNDERTAKINGS

General

Title and negative pledge

hold the legal title to, and own the entire beneficial interest in the Ship owned by it, the Insurances and Earnings, free from all Security Interests 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;

not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and

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

No disposal of assets

No Borrower will transfer, lease or otherwise dispose of:

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,

but paragraph (a) does not apply to any charter of a Ship as to which clause 14.13 applies.

No other liabilities or obligations to be incurred

liabilities and obligations under the Finance Documents to which it is a party;

under the unsecured guarantee issued by that Borrower in respect of obligations of the Corporate Guarantor under the Term B Loan;

subject to other provisions of this Agreement, liabilities or obligations reasonably incurred in the ordinary course of trading, maintaining, repairing, operating and chartering the Ship owned by it; and

Save for the Permitted Financial Indebtedness to any other corporation which is a member of the Group or individual who is a shareholder or majority shareholder in a member of the Group Provided that such Financial Indebtedness shall be fully subordinated to the Loan and the Borrower shall, promptly following the Agent’s demand, execute or procure the execution of any documents which the Agent specifies to create or maintain the subordination of the rights of the relevant member of the Group against the relevant Borrower to those of the Creditor Parties under the Finance Documents.

Information provided to be accurate

Provision of financial statements

as soon as possible, but in no event later than 90 days after the end of each 3-month period ending on 31 March, 30 June and 30 September in each financial year of the Corporate Guarantor (commencing with the 3-month period ending on 31 March 2019), the quarterly unaudited consolidated accounts (including profit and loss statement, balance sheet and cash flow statement) of the Group duly certified as to their correctness by an officer of the Corporate Guarantor; and

as soon as possible, but in no event later than 180 days after the end of each financial year of the Corporate Guarantor (commencing with the financial year ended on 31 December 2019), the annual audited consolidated financial statements of the Group; and

promptly after each request by the Agent, such further financial information about that Borrower, the Ship owned by it and the Corporate Guarantor or any other member of the Group (including, but not limited to, information regarding the charter arrangements, Financial Indebtedness and operating expenses) as the Agent may require.

Form of financial statements

be prepared in accordance with all applicable laws and US GAAP or IFRS (as applicable);

give a true and fair view of the state of affairs of the relevant person 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 Group.

Shareholder notices

Consents

for that Borrower and that Security Party to perform its obligations under any Finance Document or any Charterparty to which it is party;

for the validity or enforceability of any Finance Document and any Charterparty to which it is party; and

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

Maintenance of Security Interests

at its own cost, do all that it reasonably can 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) above, 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

Principal place of business

Confirmation of no default

states that no Event of Default or Potential Event of Default has occurred; or

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

Notification of default

Provision of further information

to that Borrower, the Ship owned by it, the Insurances, the Earnings or the Corporate Guarantor; or

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

any information requested in respect of that Borrower, the Corporate Guarantor, the Shareholder and the Designated Unitholders in connection with the Creditor Parties’ and/or the Account Bank’s “Know your customer” regulations, including, but not limited to information required pursuant to all applicable laws and regulations, including, without limitation, the laws of the European Union, The Netherlands, United Kingdom and the United States of America in connection with that Borrower, the Corporate Guarantor and any other Security Party and their respective beneficial owners,

Provision of copies and translation of documents

“Know your customer” checks. If:

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 or any Security Party 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,

Use of proceeds

Sanctions

Information: sanctions

promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws against it, any of its direct or indirect owners, subsidiaries, other members of the Group, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives, as well as information on what steps are being taken with regards to answer or oppose such.

promptly upon becoming aware that it, any of its direct or indirect owners, subsidiaries, other members of the Group, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has become or is reasonably likely to become a Restricted Party.

Hedging of interest rate risks – Right of first refusal

Dividends

No change in financial year

Minimum Liquidity

CORPORATE UNDERTAKINGS

General

Maintenance of status

Negative undertakings

carry on any business other than the ownership, chartering and operation of the Ship owned by it; or

provide any form of credit or financial assistance or issue guarantees in favour of any other corporation or individual other than:

in the normal course of its business; and

the unsecured guarantees issued by that Borrower in respect of obligations of the Corporate Guarantor under the Term B Loan,

provide any form of credit or financial assistance to:

a person who is directly or indirectly interested in that Borrower’s share 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 Account Bank for the purposes of the Finance Documents and any accounts disclosed to the Agent on or prior to the date of this Agreement; or

issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; or

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; or

enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or

change its legal name and shall procure that no Security Party will change its legal name.

INSURANCE

General

Maintenance of obligatory insurances

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

war risks including blocking and trapping; and

protection and indemnity mean the usual risks including liability for oil pollution and excess war risk P&I cover (including FD&D cover); and

any other risks against which the Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lenders 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, including hull and machinery, and war risks, on an agreed value basis in such amounts as shall from time to time be approved by the Agent but in any event in an amount not less than the greater of (i) the Market Value of the Ship owned by it and (ii) an amount which, when aggregated with the amount for which the other ship then subject to a Mortgage is insured, is equal to 120 per cent. of the Loan; and

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 (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

in relation to protection and indemnity risks in respect of the relevant Ship’s full value and tonnage;

on such terms as shall from time to time be approved in writing by the Agent (including, without limitation, a blocking and trapping clause); 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 which are members of the International Group of Protection and Indemnity Associations.

Further protections for the Creditor Parties

subject always to paragraph (b), name that Borrower as the sole named 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;

name (or be amended to name) the Security Trustee as mortgagee 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 sole 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 insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than any Borrower or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee;

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

provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Security Trustee for 30 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.

Renewal of obligatory insurances

at least 14 days before the expiry of any obligatory insurance:

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 insurance and of the proposed terms of renewal; and

in case of any substantial change in insurance cover, obtain the Lenders’ approval to the matters referred to in paragraph (i) above;

at least 7 days before the expiry of any obligatory insurance, renew the insurance; 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 13.3(f);

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 it 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; and

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

where required to be issued under the terms of insurance/indemnity provided by that 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 relation to that Ship in accordance with the requirements of such protection 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

Restrictions on employment

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) above) 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;

no Borrower 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 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

no Borrower 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 (including but not limited to any applicable laws and Sanctions), 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; and

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; and

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

Provision of information

obtaining or preparing any report from an independent marine insurance broker appointed by the Agent 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 below or dealing with or considering any matters relating to any such insurances,

Mortgagee’s interest and additional perils insurances

a mortgagee’s interest marine insurance in relation to the Ships in an amount equal to 120 per cent. of the Loan, providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Borrower owning that Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:

any act or omission on the part of that Borrower, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;

any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of that Borrower, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Borrower or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or

any other matter capable of being insured against under a mortgagee’s interest marine insurance policy whether or not similar to the foregoing;

a mortgagee’s interest additional perils policy in relation to the Ships in an amount equal to 120 per cent. of the Loan, providing for the indemnification of the Security Trustee against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of any Security Interest over that Ship and/or any other matter capable of being insured against under a mortgagee’s interest additional perils policy whether or not similar to the foregoing,

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 with an Approved Classification Society free of overdue recommendations and conditions of such classification society;

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

each Borrower shall use its best efforts to allow the Agent (or its agents), at any time, to inspect the original class and related records of that Borrower and the Ship owned by it electronically (through the classification society directly) and to take copies of such records.

Modification

Removal of parts

Surveys

Technical Survey

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 with all laws or regulations:

applicable to its business; and

applicable to the Ship owned, chartered or managed by it, its ownership, employment, operation, management and registration.

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

without limiting paragraph (a) above, not employ that Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws; and

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

Provision of information

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

the Earnings and payments and amounts due to that Ship’s master and crew of that Ship;

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

any towages and salvages;

any intended dry-docking of that Ship;

that Borrower’s, the Approved Manager’s compliance or the compliance of that Ship with the ISM Code and the ISPS Code; and

any other information which the Creditor Parties (or any of them) may reasonably request,

Notification of certain events

any casualty which is or is likely to be or to become 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 complied with in accordance with its terms;

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

any 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, the 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.

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 Manager or agree to any material alteration to the terms of the Approved Manager’s appointment which could lead to an Event of Default (“material alterations” to include, without limitation, alterations concerning fees, duration and parties);

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 her 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 her Earnings for the cost of such work or otherwise.

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 that Borrower to any Earnings; or

enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings.

Time Charter Assignment

ISM Code, ISPS Code compliance and Environmental Laws

Green scrapping

Each Borrower shall and shall procure that the Corporate Guarantor shall ensure that any scrapping of a ship owned by it (directly or indirectly) is carried out in accordance with the IMO Convention for the Safe and Environmentally Sound Recycling of Ships.

Each Borrower shall obtain (in its first survey) and to maintain (in subsequent surveys) a green passport notification (based on the inventory of hazardous materials) for the Ship owned by it from the Approved Classification Society.

SECURITY COVER

Minimum required security cover

Provision of additional security; prepayment

Requirement for additional documents

Valuation of Ship

The market value of a Ship at any date is that shown (i) in a valuation or (ii) (at the Agent’s request acting in its sole discretion) by taking the average of 2 valuations, in each case prepared:

as at a date not more than 30 days previously;

by an Approved Broker selected by and appointed by the Borrower (unless the Borrower has not appointed an Approved Broker within 14 days of the Agent’s request in which case the Agent will be entitled to select and appoint an Approved Broker);

with or without physical inspection of that 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 (as the Agent may require).

In case 2 valuations are obtained, by taking the arithmetic average of the 2 valuations provided that if there is a difference, of 10 per cent. or more between the 2 valuations, a third valuation from an Approved Broker shall be obtained by the Agent and the market value shall be determined as the arithmetic average of the two lowest valuations.

Value of additional security

Valuations binding

Provision of information

Payment of valuation expenses

Frequency of valuations

PAYMENTS AND CALCULATIONS

Currency and method of payments

by the Lenders to the Agent; or

by any Borrower to the Agent, the Security Trustee or any Lender,

by not later than 11.00 a.m. (Amsterdam 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);

to the account of Agent, 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 or the Security Trustee shall be made available by the Agent to that Lender 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 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 generally shall be distributed by the Agent to each Lender 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 Documents in the following proportions:

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 (ii) and (iii) below (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

thirdly, in or towards satisfaction of the Loan;

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 (or any of them), the Security Parties and the other Creditor Parties, states in its opinion will 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 foregoing provisions of this Clause 17.1(a);

THIRDLY: in or towards satisfaction of any amounts representing management fees then due and payable by the Borrowers (or any of them) to the Approved Manager in connection with the Ships; and

FOURTHLY: any surplus shall be paid to the Borrowers (or any of them) 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

Payment of Earnings

it shall maintain the Earnings Accounts opened in its name (whether individually or jointly) with the Account Bank; and

it shall ensure that all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship.

Application of Earnings

in or towards making payments of all amounts due and payable by the Borrowers under this Agreement (other than payments of principal and interest);

in or towards satisfaction of all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents;

in or towards satisfaction of the Loan;

in or towards making payments of all fees due to the Approved Manager and thereafter meeting the costs and expenses from time to time incurred by or on behalf of a Borrower in connection with the operation of the Ship owned by it; and

as to any surplus from time to time arising on an Earnings Account following application as aforesaid, to be paid to the Borrower owning that Ship or to whomsoever it may direct.

Location of account

comply with any requirement of the Agent as to the location or re-location of its Earnings Account; 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) its Earnings Account.

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 under any Finance Document.

Monthly retentions

one-third of the amount of the Repayment Instalment falling due under Clause 8.1 on the next Repayment Date; and

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

and the Borrowers irrevocably authorise the Agent to make those transfers (in its sole discretion and without any obligation) if the Borrowers fail to do so.

the numerator is one; and

the denominator is:

the number of months comprised in the then relevant current Interest Period; or

if the amount Interest Period in respect of that Advance and after the next due date for payment of interest under this Agreement, the number of months from the later of the commencement of the relevant current Interest Period in respect of that Advance or the last due date for payment of interest to the next due date for payment of interest of that Advance under this Agreement.

Restriction on withdrawal

Minimum Liquidity

Interest accrued on the Liquidity Account

Release of accrued interest

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 such date or, its failure to pay is caused by administrative or technical error, payment is made within 10 days; or

any breach occurs of Clause 9.2, 10.15, 10.18, 11.2, 11.3, 11.19, 11.20, 12.2, 12.3, 13.2, 13.3, 14.2, or 14.10 (insofar as that Clause relates to Sanctions Laws) and such default continues unremedied 20 Business Days of receipt of the notice from the Agent; or

any breach under clause 15 or clause 12.3 (financial covenants) of the Corporate Guarantee and such default continues unremedied 20 Business Days of receipt of the notice from the Agent;

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) above) if, in the opinion of the Majority Lenders, such default is capable of remedy, and such default continues unremedied 30 Business Days after the earlier of (i) written notice from the Agent requesting action to remedy the same and (ii) any Borrower becoming aware of such breach; or

(subject to any applicable grace period specified in the Finance Document) 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), (b), (c) or(d) above); or

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

any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (for an amount exceeding, in the case of the Corporate Guarantor $10,000,000 and in the case of the Borrowers $500,000 (or the equivalent in any other currency) in aggregate):

any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; 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 unless the Relevant Person is contesting the declaration of an event of default or of the Financial Indebtedness becoming due and payable in good faith and on substantial grounds by appropriate proceedings and adequate reserves have been set aside for its payment if such proceedings fail; or

a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner 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:

a Relevant Person becomes, in the reasonable opinion of the Lenders, unable to pay its debts as they fall due; or

any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress (in respect of a sum of, or sums aggregating, $10,000,000 or more, in the case of the Corporate Guarantor, the equivalent in another currency) and such execution, attachment, arrest, sequestration or distress is not withdrawn or discharged within thirty (30) days; 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 or officers 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, shareholders, officers 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 Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than any Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

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 60 days of being made or presented, or (bb) within 60 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 or officers 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, shareholders 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, shareholders,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; or

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

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

it becomes unlawful in any Pertinent Jurisdiction or impossible:

for any Borrower 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 or the Lenders 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 to comply with any provision which the Majority Lenders reasonably 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, unless the relevant Borrower contests any denial, expiration or revocation (other than with respect to a Finance Documents) and on the condition that, in the reasonable opinion of the Majority Lenders (i) there are real prospects of such contest being successfully granted/upheld by the relevant Borrower (ii) such contest being made in good faith; or

it appears to the reasonable opinion of the Majority Lenders that, without their prior written consent:

a change has occurred or probably has occurred after the date of this Agreement in the legal or direct beneficial ownership of any of the shares in any Borrower or the Shareholder in the voting rights attaching to any of those shares; or

a Change of Control has occurred or probably has occurred after the date of this Agreement; or

the Corporate Guarantor ceases being the direct legal and beneficial owner of the shares in the Shareholder and the voting rights attaching to those shares; or

the units of the Corporate Guarantor cease to be listed on the New York Stock Exchange (NYSE) or any other US or European stock exchange acceptable to the Agent; or

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; or

the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

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

a Material Adverse Change in the business, condition (financial or otherwise), operation, state of affairs or prospects of any Borrower, the Corporate Guarantor or the Group; or

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

any Borrower, the Approved Manager or any Security Party or any other person (other than a Creditor Party) repudiates any of the Finance Documents to which that Borrower, the Approved Manager or that Security Party or person is a party; or

any litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency are started or threatened, or any judgment or order of a court, arbitral body or agency is made, in relation to any of the Finance Documents or the transactions contemplated in any of the Finance Documents or against any Borrower, the Approved Manager or any Security Party or its assets which has a Material Adverse Effect.

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 terminated; and/or

serve on the Borrowers a notice stating that all or part of the Loan, all 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) above, 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 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 (ii) above, the Security Trustee, the Agent, the Mandated Lead Arranger and/or the Majority Lenders 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

FEES AND EXPENSES

Commitment fee

Arrangement fee

Agency fee

Prepayment and cancellation fee

Subject to paragraph (c) below, the Borrowers must pay to the Agent for distribution to each pro rata to their Commitment Lender a prepayment and cancellation fee on the date of prepayment of all or any part of the Loan and on the date of cancellation of any part of the Total Commitments.

The amount of the prepayment and cancellation fee is:

if the prepayment or cancellation occurs on or before the first anniversary of the first Drawdown Date, 2 per cent. of the amount prepaid or cancelled;

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

if the prepayment or cancellation occurs after the second but on or before the third anniversary of the first Drawdown Date, 0.5 per cent. of the amount prepaid or cancelled; and

if the prepayment occurs after the date falling on the third anniversary of the Drawdown Date, no amount of prepayment and cancellation fee shall be payable;

No prepayment or cancellation fee shall be payable under this Clause if the prepayment or cancellation is made under Clause 5.7, 8.9(a) (on the basis that the sale of the relevant Ship is to a third party not affiliated to the Group), 8.9(b), cancellation of the Loan pursuant to Clause 4.2(b), Clause 15.2, Clause 24 or pursuant to a refinancing with NIBC Bank N.V. or any other refinancing if NIBC Bank N.V. has been invited to refinance and is unable to.

Provided however that if any Ship is refinanced by the Term B Loan or any Term B facility that refinances in whole or in part the Term B Loan, the applicable prepayment fee shall be reduced by 50%.

Costs of negotiation, preparation etc.

Costs of variations, amendments, enforcement etc.

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

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

the valuation of any security provided or offered under Clause 15 or any other matter relating to such security;

where the Agent, acting on the instructions of the Majority Lenders, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of a Ship pursuant to Clause 13.18;

the opinions of the independent insurance consultant referred to in paragraph 5 of Part B, Schedule 3; and

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

Documentary taxes

Certification of amounts

INDEMNITIES

Indemnities regarding borrowing and repayment of Loan

an Advance 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 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 including, without limitation, where such receipt or recovery is made as a result of the voluntary or mandatory repayment or prepayment of the Loan, or any part thereof;

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);

any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred by the Agent or any Lender as a result of conduct of any Borrower any Security Party or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions Laws; and

the occurrence and/or continuance of an Event of Default and/or the acceleration of repayment of the Loan under Clause 18.6,

Break costs

The Borrowers shall, within 3 Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the relevant Advance or Unpaid Sum being paid by a Borrower on a day other than the last day of an Interest Period for that Advance, the relevant part of that Advance or that Unpaid Sum.

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

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; and

any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document,

Extension of indemnities; environmental indemnity

any matter which would be covered by Clause 21.2(a) if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and

any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment, the ISM Code, the ISPS Code or any Environmental Law.

Currency indemnity

making or lodging any claim or proof against a 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,

Certification of amounts

Sums deemed due to a Lender

Sanctions

The Borrowers shall, within three (3) Business Days of demand by a Creditor Party, indemnify each Creditor Party against any cost, loss or liability incurred by it as a result of any civil penalty or fine against, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with the defence thereof by, the Agent or any Lender as a result of conduct of the Borrowers or any Security Party or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions.

The indemnity in Clause 21.8(a) above shall cover any losses incurred by each Creditor Party in any jurisdiction arising or asserted under or in connection with any law relating to any Sanctions.

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; and

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

FATCA information

Subject to paragraph (c) below, each party to the Finance Documents shall, within 5 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

not a FATCA Exempt Party; and

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

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

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

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

any law or regulation;

any fiduciary duty; or

any duty of confidentiality;

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

If a Borrower is or becomes a US Tax Obligor or a FATCA FFI, it shall as soon as reasonably practicable inform the Agent of the same;

Where the Agent reasonably believes that its obligations under FATCA require it, the relevant Borrower or the relevant Security Party shall provide the Agent, upon request, with a W-8 BEN-E form (or any successor form) or any other forms or documentation the Agent may reasonably require, as soon as reasonably practicable. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (f);

If a Borrower is or becomes a US Tax Obligor or a FATCA FFI, or where the Agent reasonably believes that its obligations under FATCA require it, each Creditor Party shall, within 10 Business Days of the date of a request from the Agent supply to the Agent:

a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); and/or

any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Creditor Party under FATCA,

The Borrowers, each Security Party and each Creditor Party agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraphs (f) to (g) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall, if applicable, provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the Borrowers or the relevant Security Party. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (h).

FATCA Deduction

Each party to a 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 shall not 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 a 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 a Finance Document to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Creditor Parties.

ILLEGALITY, ETC

Illegality

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

contrary to, or inconsistent with, any regulation,

Notification of illegality

Prepayment; termination of Commitment

INCREASED COSTS

Increased costs

Each Borrower shall, within 3 Business Days of a demand by the Agent, pay for the account of a Creditor Party the amount of any Increased Costs incurred by that Creditor Party or any of its affiliates as a result of:

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

compliance with any law or regulation made,

In this Agreement, “Increased Costs” means:

a reduction in the rate of return from the Loan or on a Creditor Party’s (or its affiliate’s) overall capital;

an additional or increased cost; or

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

Increased cost claims

A Creditor Party (the “Notifying Lender”) intending to make a claim pursuant to Clause 24.1 shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

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

Notification to Borrowers of claim for increased costs

Payment of increased costs

Notice of prepayment

Prepayment; termination of Commitment

on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

Application of prepayment

SET-OFF

Application of credit balances

apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of a Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from that Borrower to that Creditor Party under any of the Finance Documents; and

for that purpose:

break, or alter the maturity of, all or any part of a deposit of that Borrower;

convert or translate all or any part of a deposit or other credit balance into Dollars; and

enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

Existing rights unaffected

Sums deemed due to a Lender

No Security Interest

TRANSFERS AND CHANGES IN LENDING OFFICES

Transfer by Borrowers and the Corporate Guarantor

transfer any of its rights or obligations under any Finance Document; or

enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.

Transfer by a Lender

its rights in respect of all or part of its Contribution; or

its obligations in respect of all or part of its Commitment; or

a combination of (a) and (b),

Transfer Certificate, delivery and notification

sign the Transfer Certificate on behalf of itself, each Borrower, the Security Parties, the Security Trustee and each of the other Lenders, upon completion of its “know your customer” checks in relation to the relevant Transferee Lender;

on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and

send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.

Effective Date of Transfer Certificate

No transfer without Transfer Certificate

Effect of Transfer Certificate

to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrowers or any Security Party had against the Transferor Lender;

the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;

the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor’s title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;

the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

Maintenance of register of Lenders