Dated 17 January 2020 CAPITAL PRODUCT PARTNERS L.P. as Borrower and THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders and HAMBURG COMMERCIAL BANK AG as Agent, Mandated Lead Arranger and Security Trustee LOAN AGREEMENT relating to a...

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Schedules

Schedule 1

Schedule 2 Drawdown Notice

Schedule 3 Condition Precedent Documents

Schedule 4 Mandatory Cost Formula

Schedule 5 Transfer Certificate

Schedule 6 Power of Attorney

Schedule 7 Form of Compliance Certificate

Execution

Execution Pages

CAPITAL PRODUCT PARTNERS L.P., a limited partnership formed in the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, the ▇▇▇▇▇▇▇▇ Islands as “Borrower”

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part A of Schedule 1, as “Lenders”

HAMBURG COMMERCIAL BANK AG, acting through its office is at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as “Agent”

HAMBURG COMMERCIAL BANK AG, acting through its office is at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as “Mandated Lead Arranger”

HAMBURG COMMERCIAL BANK AG, acting through its office is at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as “Security Trustee”

The Lenders have agreed to make available to the Borrower a senior secured post-delivery term loan facility, in a single advance, in an amount of up to the lesser of:

$38,500,000; and

70 per cent. of the Initial Market Value of the Ship,

INTERPRETATION

Definitions

Capital-Executive Ship Management Corp., a corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands, having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇; or

G-Marine Service Co. Ltd, a company incorporated in South Korea, having its registered office at 14th Floor, 331, Meritz Tower, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; or

any other experienced and capable management company which the Agent (acting on the instructions of the Majority Lenders) may approve (such approval not to be unreasonably withheld or delayed or conditioned) from time to time as the commercial, technical and/or operational manager of the Ship and, in the plural, means all of them, being as at the date of this Agreement Capital-Executive Ship Management Corp..

28 February 2020 (or such later date as the Agent may, with the authorisation of all the Lenders, agree with the Borrower); and

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 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, 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”.

in Hamburg and London regarding the fixing of any interest rate which is required to be determined under this Agreement or any Finance Document;

in Hamburg and New York in respect of any payment which is required to be made under a Finance Document; and

in Hamburg and Piraeus regarding any other action to be taken under this Agreement or any other Finance Document.

any person or group of persons acting in concert gaining direct or indirect control of the Borrower or the Owner other than the Permitted Holders; and/or

any person or group of persons acting in concert (save for any passive institutional investor) acquiring ownership of more common units in the capital of the Borrower than the Permitted Holders; and/or

the Borrower ceasing to directly or indirectly own 100 per cent. of, or ceasing to control, the Owner; and/or

Capital GP L.L.C. of the ▇▇▇▇▇▇▇▇ Islands ceasing to be the Borrower’s general partner.

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 Cost of Funding or Reference Bank Quotation.

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

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

from performing its payment obligations under the Finance Documents; or

from communicating with other Parties in accordance with the terms of the Finance Documents,

except to the extent that they fall within paragraph (b):

all freight, hire and passage moneys;

compensation payable to the Owner or the Security Trustee in the event of requisition of the Ship for hire;

remuneration for salvage and towage services;

demurrage and detention moneys;

damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and

all moneys which are at any time payable under any Insurances in respect of loss of hire; and

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

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

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

any release of Environmentally Sensitive Material from the Ship; or

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

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 Side Letter;

the Agency and Trust Deed;

the Account Pledges;

the Corporate Guarantees;

any Subordination Agreement;

any Subordinated Debt Security;

the Mortgage;

the General Assignment;

any Deed of Covenant;

any Charterparty Assignment;

any Bareboat Charter Security Agreement;

any Approved Manager’s Undertaking;

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

any other document designated as such by the Agent and the Borrower,

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 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, exchange 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;

under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); 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 (f) if the references to the debtor referred to the other person.

all policies and contracts of insurance (including, without limitation, any loss of hire insurance) and any reinsurance, policies or contracts, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and

all rights (including, without limitation, any and all rights or claims which the Owner may have under or in connection with any cut-through clause relative to any reinsurance contract relating to the aforesaid policies or contracts of insurance) 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 aggregate Financial Indebtedness of the Group net of any Liquid Assets; and

the Market Value Adjusted Total Assets (including, without limitation, the Ship).

the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate at or about the Specified Time on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it; or

as otherwise determined pursuant to Clause 5.5 (Unavailability of Screen Rate),

cash in hand or held with banks or other financial institutions of the Borrower and/or any other member of the Group in Dollars or another currency freely convertible into Dollars, which is free of any Security Interest (other than a Permitted Security Interest and other than ordinary bankers’ liens which have not been enforced or become capable of being enforced);

any other short-term financial investment which is free of any Security Interest (other than a Permitted Security Interest);

any cash equivalent of the Borrower and/or any other member of the Group; and

any marketable securities of the Borrower and/or any other member of the Group,

before the Loan is advanced, Lenders whose Commitments total 66 ^2/3 per cent. of the Total Commitments; and

after the Loan is advanced, Lenders whose Contributions total 66 ^2/3 per cent. of the Loan.

the business, property, assets, liabilities, operations or condition (financial or otherwise) of the Borrower and/or any Security Party taken as a whole;

the ability of the Borrower and/or any Security Party to (i) comply with or perform any of its obligations or (ii) discharge any of its liabilities, under any Finance Document as they fall due; or

the validity, legality or enforceability of any Finance Document.

Security Interests created by the Finance Documents;

liens for unpaid master’s and 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 the Ship not prohibited by this Agreement;

liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the trading, chartering, operation, repair or maintenance of the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(d);

any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower is prosecuting or defending such proceedings or arbitration in good faith; and

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

any Finance Document;

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

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

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

England and Wales;

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

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

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

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

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

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

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

if:

the Reference Bank is a contributor to the Screen Rate; and

it consists of a single figure,

in any other case, as the rate at which the relevant Reference Bank could fund itself in dollars for the relevant period with reference to the unsecured wholesale funding market.

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,

if paragraph (a) above does not apply, in the opinion of the Lenders, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to that Screen Rate; or

if paragraphs (a) and (b) do not apply, in the opinion of the Lenders, an appropriate successor to a Screen Rate.

the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders, and the Borrower materially changed and as a result the Screen Rate is no longer appropriate for the purposes of calculating interest under this Agreement;

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, 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

the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lenders and the Borrower) temporary; or

that Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than 15 Business Days; or

in the opinion of the Lenders and the Borrower, 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;

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

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

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

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

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

the Agent, the Mandated Lead Arranger, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the 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 the Ship;

any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority unless it is within 1 months from the date of such occurrence redelivered to the full control of the Owner excluding a requisition for hire for a fixed period not exceeding 90 days without any right to an extension;

any condemnation of the Ship by any tribunal or by any competent person or any competent person claiming to be a tribunal; and

any arrest, capture, seizure, confiscation or detention of the Ship (including any hijacking or theft) unless it is within 3 months redelivered to the full control of the Owner.

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

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

30 days after 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 Owner with the Ship’s insurers in which the insurers agree to treat the Ship as a total loss; and

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

the Borrower, if it is resident for tax purposes in the US; or

the Borrower or a Security Party some or all whose payments under the Finance Documents are from sources within the US 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

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

Construction of certain terms

cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a meeting of the limited partners of the Borrower or at a general meeting of the shareholders of the Owner; or

appoint or remove all, or the majority, of the directors of the Borrower or officers of the Borrower’s general partner or officers or directors of any Owner; or

give directions with respect to the operating and financial policies of the Borrower or the Owner with which the directors of the Borrower or officers of the Borrower’s general partner or officers or directors of the Owner are obliged to comply;

approve a merger or consolidation of the Borrower and/or the Owner and/or the sale or other dispositions of the Owner or any of them; and/or

approve a complete liquidation or dissolution of the Borrower or the Owner;

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 (other than for the purposes of the definition of “Group”) indirect control over a majority of the voting rights attaching to the issued shares of S; or

P has the direct or (other than for the purposes of the definition of “Group”) indirect power to appoint or remove a majority of the directors of S; or

P otherwise has the direct or (other than for the purposes of the definition of “Group”) indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

General Interpretation

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

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

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

Clauses 1.1 to 1.5 apply unless the contrary intention appears.

Headings

FACILITY

Amount of facility

Lenders’ participations in the Loan

POSITION OF THE LENDERS AND THE REFERENCE BANKS

Interests several

Individual right of action

Proceedings requiring Majority Lender consent

Obligations several

the obligations of the other Lenders being increased; nor

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

Role of Reference Banks

No Reference Bank is under any obligation to provide a quotation or any other information to the Agent.

No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

No party to this Agreement (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 3.5 subject to Clause 32.4 and the provisions of the Third Parties Act.

Third Party Reference Banks

DRAWDOWN

Request for the Loan

Availability

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

the amount of the Loan shall not exceed the Maximum Loan Amount;

any undrawn portion of the Total Commitments in respect of the borrowing of the Loan shall be automatically cancelled as at the Drawdown Date; and

the amount of the Loan shall not exceed the Total Commitments.

Notification to Lenders of receipt of the Drawdown Notice

the amount of the Loan and the Drawdown Date;

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

the duration of the first Interest Period.

Drawdown Notice irrevocable

Lenders to make available Contributions

Disbursement the Loan

to the account which the Borrower specifies in the Drawdown Notice; and

in 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,

Unavailability of Screen Rate

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

Reference Bank Rate: If no Screen Rate is available for:

Dollars; or

the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Screen Rate,

Cost of funds: If paragraph (b) above applies but no Reference Bank Rate is available for Dollars or the relevant Interest Period, there shall be no LIBOR for the Loan or that part thereof and Clause 5.8 shall apply to the Loan or that part thereof for that Interest Period.

Calculation of Reference Bank Rate

Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by 1.00 p.m. London time on the Quotation Date, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Bank(s).

If at or about noon on the Quotation Date none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

Market disruption

Cost of funds

If this Clause 5.8 applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

the Margin; and

the rate notified to the Agent by that Lender as soon as practicable and in any event before 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 Contribution from whatever source it may reasonably select.

If this Clause 5.8 applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

Subject to Clause 27.4, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

If this Clause 5.8 applies but any Lender does not supply a quotation by the time specified in sub-paragraph (ii) of paragraph (a) above the rate of interest shall be calculated on the basis of the quotations of the remaining Lenders.

Suspension of drawdown

INTEREST PERIODS

Commencement of Interest Periods

Duration of normal Interest Periods

3, 6 or 12 months as notified by the Borrower to the Agent not later than 11.00 a.m. (Hamburg time) 3 Business Days before the commencement of the Interest Period; or

such other period (as proposed by the Borrower to the Agent not later than 11:00 a.m. (Hamburg time) 5 Business Days before the commencement of the Interest Period in respect of the Loan) as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower; or

3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a) or if no such other period is agreed with the Borrower and the Agent in accordance with paragraph (b).

Duration of Interest Periods for Instalments

Non-availability of matching deposits for Interest Period selected

DEFAULT INTEREST

Payment of default interest on overdue amounts

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

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

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

Default rate of interest

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

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

Calculation of default rate of interest

the rate of interest applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);

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

LIBOR; or

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

Notification of interest periods and default rates

Payment of accrued default interest

Compounding of default interest

REPAYMENT AND PREPAYMENT

Amount of Instalments

20 equal consecutive quarterly instalments, each in the amount of $860,000 (each an “Instalment” and, together, the “Instalments”); and

a balloon instalment in the amount of $21,300,000 (the “Balloon Instalment”),

Repayment Dates

Final Repayment Date

Voluntary prepayment

Conditions for voluntary prepayment

a partial prepayment shall be in an amount equal to $860,000 or a higher integral multiple thereof (or such other amount acceptable to the Agent in its discretion);

the Agent has received from the Borrower at least 5 Business Days’ prior irrevocable written notice (in each case, a “Prepayment Notice”) specifying the amount to be prepaid and the date on which the prepayment is to be made;

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

the Borrower has complied with Clause 8.11, on or prior to the date of prepayment.

Optional facility cancellation

Cancellation Notice or Prepayment Notice

Mandatory prepayment on sale or Total Loss

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

becomes a Total Loss, on the earlier of the date falling 150 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.

Effect of Prepayment Notice and Cancellation Notice

in the case of a Prepayment Notice, the amount specified in that Prepayment Notice shall become due and payable by the Borrower on the date for prepayment specified in that Prepayment Notice; and

in the case of a Cancellation Notice, the amount cancelled shall be permanently cancelled and may not be borrowed.

Right of repayment and cancellation in relation to a single Lender

If:

any sum payable to any Lender by the Borrower or a Security Party is required to be increased under paragraph (b) of Clause 22.2 or under that Clause as incorporated by reference or in full in any other Finance Document; or

any Lender claims indemnification from the Borrower under Clause 24.1; or

the Agent receives notification from a Relevant Lender under Clause 5.7,

whilst in the case of sub-paragraphs (i) and (ii) above the circumstance giving rise to the requirement for that increase or indemnification continues; or

whilst in the case of sub-paragraph (iii) above the situation in relation to the Relevant Lender continues,

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

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

Amounts payable on prepayment

Application of partial prepayment

No reborrowing

CONDITIONS PRECEDENT

Documents, fees and no default

that, on or before the service of the Drawdown Notice, the Agent receives:

the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; and

payment in full of any fees payable by the Borrower pursuant to Clause 20.1 which are due and payable on or before the Drawdown Date;

that, on the Drawdown Date but prior to the making of the Loan, the Agent receives:

the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers save for any documents that the Agent agrees at the Borrower’s request to receive after any prepositioning of funds but before the disbursement of the Loan;

payment in full of any fees payable by the Borrower pursuant to Clause 20.1 which are due and payable on or before the Drawdown Date; and

payment of any expenses payable pursuant to Clause 20.2 which are due and payable on the Drawdown Date;

that both at the date of the Drawdown Notice and at the Drawdown Date and, if applicable, the date on which the Loan is disbursed:

no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan;

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

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

there has been no Material Adverse Change; and

that, if the Security Cover Ratio was tested immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause 15.1; 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 Borrower prior to the Drawdown Date.

Waiver of conditions precedent

Conditions Subsequent

REPRESENTATIONS AND WARRANTIES

General

Status

Partnership interests and ownership

Power

in the case of the Owner, to execute the Underlying Documents to which it is a party and to register the Ship in its ownership under the applicable Approved Flag;

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

in the case of the Borrower, to borrow under this Agreement and, in the case of the Borrower and/or the Owner, to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.

Consents in force

Legal validity; effective Security Interests

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

create legal, valid and binding Security Interests (having the priority specified in the relevant Finance Document) enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

No third party Security Interests

the 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

will not involve or lead to a contravention of:

any law or regulation; or

the constitutional documents of the Borrower or any Security Party; or

any contractual or other obligation or restriction which is binding on the Borrower or any Security Party or any of its assets, and

will not have a Material Adverse Effect; and

is for the corporate benefit of the Borrower or the relevant Security Party.

No withholding taxes

No default

Information

No litigation

Validity and completeness of Underlying Documents

each of the copies of that Underlying Document delivered to the Agent before the date of this Agreement is a true and complete copy; and

no amendments or additions to that Underlying Document have been agreed nor has any party which is a party to that Underlying Document, waived any of their respective rights thereunder.

Compliance with certain undertakings

Taxes paid

ISM Code and ISPS Code compliance

No Money laundering

will not, and will procure that no Security Party, to the extent applicable, will, in connection with this Agreement or any of the other Finance Documents, contravene or permit any subsidiary to contravene, any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2015/849/EC of the Council of the European Communities) and comparable United States Federal and state laws. The Borrower shall further submit any documents and declarations on request, if such documents or declarations are required by any Creditor Party to comply with its domestic money laundering and/or legal identification requirements; and

confirms that it is the beneficiary within the meaning of the German Anti Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz)), acting for its own account and not for or on behalf of any other person for each part of the Loan made or to be made available to it under this Agreement. That is to say, it acts for its own account and not for or on behalf of anyone else.

No immunity

Corrupt Practices

Choice of law

Pari passu ranking

Repetition

on the date of service of the Drawdown Notice;

on the Drawdown Date; and

with the exception of Clauses 10.3, 10.9, 10.10, 10.11, 10.12 and 10.14 on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to Clause 11.21,

GENERAL UNDERTAKINGS

General

Title; negative pledge

on and from the Utilisation date, hold (directly or indirectly) the legal title to, and own the entire beneficial interest in the Owner, the Ship, her 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 and except for Permitted Security Interests; and

not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future, other than Security Interests arising in the normal course of the Borrower’s business of acquiring, operating and (re)financing vessels.

No disposal of assets

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

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,

any charter of the Ship;

any sale of the Ship, subject to (A) the net sale proceeds of such sale being in an amount sufficient to make the mandatory prepayment of the Loan pursuant to Clause 8.8 and (B) no Event of Default has occurred, which is continuing at the relevant time;

in the case of the Borrower, if such transfer, lease or disposal results in (A) the Borrower being in breach of any of its obligations under Clause 12.5 or (B) the occurrence of an Event of Default.

No other liabilities or obligations to be incurred

liabilities and obligations under the Finance Documents and the Underlying Documents to which it is or, as the case may be, will be a party;

in the case of the Owner, liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Ship (including, without limitation, any Financial Indebtedness owing to the Borrower); and

in the case of the Borrower, liabilities or obligations reasonably incurred in the normal course of its business of acquiring, operating and financing or refinancing vessels (and issuing relevant guarantees), acquiring shares in vessel owning companies (or their holding companies) and financing from any type of lender of such acquisitions and all other matters incidental thereto (including, without limitation, any Financial Indebtedness owing to the partners of the Borrower, subject to the Borrower ensuring on or prior to the Drawdown Date, that the rights of each creditor thereunder are fully subordinated in writing pursuant to a Subordination Agreement).

Information provided to be accurate

Provision of financial statements

as soon as possible, but in no event later than 120 days after the end of each Financial Year of the Borrower the consolidated audited annual financial statements of the Group for that Financial Year (commencing with the financial statements for the Financial Year which ended on 31 December 2019);

as soon as possible, but in no event later than 60 days after the end of each 3-month period ending on 31 March, 30 June, 30 September, 31 December in each Financial Year of the Borrower the quarterly consolidated unaudited financial statements of the Group, in each case, for that 3-month period (commencing with the financial statements for the 3-month period, ending on 31 March 2020), duly certified as to their correctness by the chief financial officer of the Borrower; and

promptly after each request by the Agent, such further financial or other information in respect of the Borrower, the Ship, the Owner, the other Security Parties and the Group (including, without limitation any sale and purchase agreements, investment brochure(s), shipbuilding contracts and charter agreements) as may be requested by the Agent.

Form of financial statements

be prepared in accordance with all applicable laws and GAAP and, in the case of any audited financial statements, be certified by an independent and reputable auditor having requisite experience selected and appointed by the Borrower, Provided however that following a request by the Agent setting out the reasons for the requested replacement the Borrower shall promptly replace its auditor;

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

Creditor notices

whilst an Event of Default is in existence, at the same time as they are dispatched; and

at all other times, upon the Agent’s request,

Consents

for the Borrower and the Owner to perform their respective obligations under any Finance Document and/or any Underlying Document to which each is or, as the case may be, will be a party;

for the validity or enforceability of any Finance Document and/or any Underlying Document to which each is or, as the case may be, will be a party; and

for the Owner to continue to own and operate the Ship,

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), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

Notification of litigation

No amendment to the Underlying Documents

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

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

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

Provision of further information

to the Borrower, the Owner, the Ship, the Earnings or the Insurances of any Ship; or

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

General and administrative costs

Provision of copies of SEC filings

Provision of copies and translation of documents

“Know your customer” checks

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

any change in the status of the general partner of the 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,

Minimum Liquidity

Compliance Certificate

The Borrower shall supply to the Agent, together with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11.6 or, in the case of paragraph (a) of Clause 11.6, together with the notification that the consolidated audited annual financial statements of the Group have been made available to the public, a Compliance Certificate.

Each Compliance Certificate shall be duly signed by the chief financial officer of the Borrower, evidencing (inter alia) the Borrower’s compliance (or not, as the case may be) with the provisions of Clauses 12.5 and 15.1 (setting out calculations in reasonable details as to such compliance or not).

CORPORATE UNDERTAKINGS

General

Maintenance of status

Negative undertakings

change the nature of its business; or

pay any dividend or make any other form of distribution or effect any form of redemption, purchase, return or reduction of its partnership interests unless:

no Event of Default has occurred and is continuing at the relevant time (including, without limitation, any failure by the Borrower to satisfy the covenants contained in Clauses 12.5 and 15.1);

no Event of Default will result from the payment of a dividend or the making of any other form of distribution; and

it has first supplied to the Agent any Compliance Certificate required to be supplied at the relevant time to the Agent pursuant to Clause 11.21 evidencing compliance with the provisions of Clauses 12.5 and 15.1 for the period covered by the latest financial statements delivered to the Agent pursuant to Clause 11.6;

provide any form of credit or financial assistance to:

a person who is directly or indirectly interested in the Borrower’s partnership interests; or

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

allow the Owner to open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents;

enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation unless:

the surviving entity following such amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation is the Borrower; and

no Event of Default has occurred which is continuing nor any Event of Default (including, without limitation, any breach of Clause 12.5) will occur as a result of such amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation;

change, or allow the Owner to change, its Financial Year; or

change its auditors without notifying the Agent promptly after the occurrence of such change.

Subordination of rights of Borrower

claim, or in a bankruptcy of the Owner prove for, any amount payable to the Borrower by the Owner, whether in respect of this or any other transaction;

take or enforce any Security Interest for any such amount; or

claim to set-off any such amount against any amount payable by the Borrower to the Owner.

Financial Covenants

the Leverage Ratio shall be less than 75 per cent.;

the Borrower and other members of the Group maintain immediately freely available and unencumbered bank or cash deposits (including time deposits and the amounts standing to the credit of the Retention Account and the Minimum Liquidity Account) in an amount of not less than the product of (i) $500,000 and (ii) the number of Fleet Vessels at the time; and

the ratio of EBITDA to Net Interest Expense shall be no less than 2:1.

Equal treatment

The Borrower confirms that as at the date of this Agreement the financial covenants, including without limitation the asset cover ratio requirement set out in Clause 15.1 and the dividend restrictions set out in Clause 12.3(b), applicable to the Borrower pursuant to this Agreement, place no lender or other credit provider of the Borrower or any other member of the Group in a more favourable position than that applicable to the Creditor Parties pursuant to the Finance Documents.

If, in the opinion of the Agent (acting on the instructions of the Lenders), the Borrower or any other member of the Group agrees with any lender or other credit provider in the context of a financing made or to be made available to that member of the Group, financial covenants including without limitation any asset cover ratio and dividend restrictions (the “Covenants”), which place such lender or credit provider in a more favourable position than that applicable to the Creditor Parties pursuant to the Finance Documents, the Borrower shall, or shall procure that any Security Party or any other member of the Group shall give the Creditor Parties the benefit of such Covenants which, in the opinion of the Creditor Parties, would place them in an equivalent position as that applicable to the other lender or credit provider at the relevant time. The Borrower and the Owner shall also enter, if required by the Agent (acting on the instructions of all Lenders), into a supplemental agreement to this Agreement or, as the case may be, any of the other Finance Documents, to amend each such document accordingly (with such supplemental agreement or agreements being entered into on or immediately after the date on which the Covenants are granted).

Borrower’s and Owner’s subsidiaries

INSURANCE

General

Maintenance of obligatory insurances

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

war risks (including, without limitation, protection and indemnity war risks with a separate limit not less than hull value of the Ship);

protection and indemnity risks (including, without limitation protection and indemnity war risks in excess of the amount for war risks (hull) and oil pollution liability risks in each case in the highest amount available in the international insurance market); and

any other risks the insurance of which the Security Trustee acting on the instructions of the Majority Lenders, having regard to practices, recommendations and other circumstances prevailing at the relevant time, may from time to time require by notice to the Borrower (excluding loss of hire insurance).

Terms of obligatory insurances

in Dollars;

in the case of fire and usual marine risks and war risks, on an agreed value basis in an amount equal to at least the higher of:

an amount equal to 120 per cent. of the aggregate of:

the Loan; and

the principal amount secured by any equal or prior ranking Security Interest on the Ship; and

the Market Value of the Ship,

in the case of oil pollution liability risks, for an 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 for any one accident or occurrence);

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

in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance;

on approved terms and conditions;

such other risks of whatever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of a vessel similar to the Ship; and

through approved brokers and with approved insurance companies and/or underwriters which have a Standard & Poor’s rating of at least BBB- or a comparable rating by any other rating agency acceptable to the Security Trustee (acting on the instructions of the Majority Lenders) 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 Clubs.

Further protections for the Creditor Parties

the Borrower, the Owner and any and all third parties who are named assured or co-assured under any obligatory insurance shall assign their interest in any and all obligatory insurances and other Insurances if so required by the Agent;

whenever the Security Trustee requires, the obligatory insurances name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation they may have under any applicable law 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;

the interest of the Security Trustee as assignee and as loss payee shall be duly endorsed on all slips, cover notes, policies, certificates of entry or other instruments of insurance in respect of the obligatory insurances;

the obligatory insurances shall name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;

the obligatory insurances shall 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;

the obligatory insurances shall 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 (f) from making personal claims against persons (other than the Owner or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

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

the obligatory insurances shall provide that the Security Trustee may make proof of loss if the Owner fails to do so; and

the obligatory insurances shall 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 only be effective against the Security Trustee 14 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 10 days before the expiry of any obligatory insurance effected by it:

notify the Security Trustee of the brokers, underwriters, insurance companies and any protection and indemnity or war risks association through or with whom the Owner proposes to renew that obligatory insurance and of the proposed terms of renewal; and

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

at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and

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

Copies of policies; letters of undertaking

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

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

they will advise the Security Trustee immediately of any 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 the Owner 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 under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the 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 the Ship forthwith upon being so requested by the Security Trustee.

Copies of certificates of entry; letters of undertaking

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

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

where required to be issued under the terms of insurance/indemnity provided by the Owner’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 the Owner 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 or, as the case may be, protection and indemnity associations in relation to the Ship (if applicable).

Deposit of original policies

Payment of premiums

Guarantees

Compliance with terms of insurances

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

the Borrower shall procure that the Owner shall not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances;

the Borrower shall procure that the Owner shall make (and promptly supply copies to the Agent (upon its request)) of all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship 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, if applicable, shall procure that each Approved Manager complies with this requirement; and

the Borrower shall procure that the Owner shall not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

Alteration to terms of insurances

Settlement of claims

Provision of copies of communications

in the case of:

an Event of Default, for as long as such Event of Default is continuing;

a Major Casualty, for as long as such Major Casualty has not been rectified and/or the relevant insurances proceeds have not been paid to the Security Trustee, pursuant to the Finance Documents; and

a Total Loss during the period commencing on the Total Loss Date and ending on the earlier of (A) the date falling 120 days after the Total Loss Date and (B) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss,

at all other times, upon the Security Trustee’s request,

the approved brokers;

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

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

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

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

a claim under any obligatory insurances of the Ship.

Provision of information and further undertakings

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

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

do all things necessary and provide the Agent and the Security Trustee with all documents and information to enable the Security Trustee to collect or recover any moneys in respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents; and

promptly provide the Agent with full information regarding any Major Casualty or in consequence whereof the Ship has become or may become a Total Loss and agree to any settlement of such casualty or other accident or damage to the Ship only with the Agent’s prior written consent,

Mortgagee’s interest and additional perils insurances

a mortgagee’s interest insurance in relation to the Ship providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document in an amount of up to 120 per cent. of the aggregate of:

the Loan; and

the principal amount secured by any equal or prior ranking Security Interest on the Ship,

any act or omission on the part of the Owner, of any operator, charterer, manager or sub-manager of the Ship or of any officer, employee or agent of the Owner 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 the Owner, any other person referred to in paragraph (i) above, or of any officer, employee or agent of the Owner or of such a person, including the casting away or damaging of the Ship and/or the 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; and

a mortgagee’s interest additional perils insurance in relation to the Ship providing for the indemnification of the Creditor Parties 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 the 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, and in an amount of up to 110 per cent. of the aggregate of:

the Loan; and

the principal amount secured by any equal or prior ranking Security Interest on the Ship,

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 available for vessels of the same type, specification and age as the Ship free of overdue recommendations and conditions, with the Approved Classification Society; and

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

Classification society undertaking

to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship;

to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of the Ship at the offices of the classification society and to take copies of them;

to notify the Security Trustee immediately in writing if the classification society:

receives notification from the Borrower or the Owner or any person that the Ship’s classification society is to be changed; or

becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship’s class under the rules or terms and conditions of the Owner’s or the Ship’s membership of the classification society;

following receipt of a written request from the Security Trustee:

to confirm that the Owner is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or

if the Owner is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.

Modification

Removal of parts

Surveys

Inspection

Prevention of and release from arrest

all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship and the Earnings or the Insurances of the Ship;

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

all other outgoings whatsoever in respect of the Ship and the Earnings or the Insurances of the Ship,

Compliance with laws etc.

comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Owner;

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

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

Provision of information

the Ship, its employment, position and engagements;

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

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

any towages and salvages; and

its compliance, each Approved Manager’s compliance and the compliance of the Ship with the ISM Code and the ISPS Code,

Notification of certain events

within 30 days after entering into any demise or bareboat charter for any period in respect of its Ship or any other Assignable Charter in respect of its Ship, notify the Agent and provide certified true and complete copies of such charter and, if applicable, any charter guarantee and that:

the Owner executes in favour of the Security Trustee a specific assignment of all its rights, title and interest in and to such charter and any charter guarantee in the form of a Charterparty Assignment;

to use its reasonable endeavours to procure that (1) the charterer and any charter guarantor agree to acknowledge to the Security Trustee the specific assignment of such charter and charter guarantee by executing an acknowledgement substantially in the form included in the relevant Charterparty Assignment and (2) that the Mortgage over the Ship has been registered prior to the entry into such charter, the charterer provides to the Security Trustee a letter of undertaking pursuant to which the charterer subordinates all its claims against the Owner and the Ship to the claims of the Creditor Parties under or in connection with the Finance Documents in the Agreed Form;

in the case where such charter is a demise charter the charterer undertakes to the Security Trustee (1) to comply with all of the Owner’s undertakings with regard to the employment, insurances, operation, repairs and maintenance of its Ship contained in this Agreement, the Mortgage, any Deed of Covenant and the General Assignment in relation to the Ship and (2) to execute a Bareboat Charter Security Agreement, including (inter alia) an assignment of its interest in the insurances of the Ship in Agreed Form;

the Agent’s receipt of a copy of the charter and its failure or neglect to act, delay or acquiescence in connection with the Owner’s entering into such charter shall not in any way constitute an acceptance by the Agent of whether or not the Earnings under the charter are sufficient to meet the debt service requirements under this Agreement nor shall it in any way affect the Agent’s or the Security Trustee’s entitlement to exercise its rights under the Finance Documents pursuant to Clause 19 upon the occurrence of an Event of Default arising as a result of an act or omission of the charterer; and

the Owner delivers to the Agent such other documents equivalent to those referred to at paragraphs 2, 3, 4, 5, 7, 8, 11 and 12 of Part A of Schedule 3, as the Agent may require; and

immediately notify the Security Trustee by letter, of:

its entry 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 the Owner to any Earnings;

its entry into any time or consecutive voyage charter in respect of the Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, three months;

any casualty which is or is likely to be or to become a Major Casualty;

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

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

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

any intended dry docking of the Ship;

any Environmental Claim made against the Owner or in connection with the Ship, or any Environmental Incident;

any claim for breach of the ISM Code or the ISPS Code being made against the Owner, any Approved Manager or otherwise in connection with the Ship;

its intention to de-activate or lay up the Ship; 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.

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

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

appoint a manager of the Ship other than an Approved Manager or agree to any alteration to the terms of any Approved Manager’s appointment; or

put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $1,000,000 (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 the Ship or its Earnings for the cost of such work or for any other reason.

Notice of Mortgage

Sharing of Earnings

ISPS Code

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

maintain for the Ship an ISSC; and

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

SECURITY COVER

Minimum required security cover

Prepayment; provision of additional security

Valuation of Ship

The Market Value of a Ship for the purpose of determination of the Initial Market Value of the Ship, is that shown by taking the arithmetic mean of two valuations issued by two Approved Brokers, one selected and appointed by the Agent and one selected and appointed by the Borrower (unless the Borrower does not select and appoint an Approved Broker within 14 days after the Agent’s request, in which case the Agent shall select and appoint both Approved Brokers).

The Market Value of the Ship or other Fleet Vessel at any other date is that shown by taking the arithmetic means of two valuations requested by the Agent to be issued by two Approved Brokers, selected and appointed by the Borrower (unless the Borrower does not select or appoint two Approved Brokers within 14 days after the Agent’s request, in which case the Agent shall select and appoint one Approved Broker and the Market Value of the Ship or other Fleet Vessel shall be that shown by the single valuation issued by such Approved Broker).

Each valuation referred to in paragraphs (a) and (b) above shall be prepared:

as at a date not more than 30 days previously;

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

on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment

Value of additional vessel security

Valuations binding

Provision of information

Payment of valuation expenses

Frequency of valuations

PAYMENTS AND CALCULATIONS

Currency and method of payments

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

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

in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to the account of the Agent at ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Bank (SWIFT Code ▇▇▇▇▇▇▇▇) (Account No. 001 1331 808 in favour of Hamburg Commercial Bank AG, SWIFT Code ▇▇▇▇▇▇▇▇; Reference “Capital Product Partners L.P. - US$38.5m facility”) or to such other account with such other bank as the Agent may from time to time notify to the Borrower 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 Borrower 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 order and proportions:

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

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 pro rata of the Loan;

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

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

Application by any covered bond Lender

first, in or towards satisfaction of the amounts set out under Clause 17.1(a)(i);

secondly, in or towards satisfaction of the amounts set out under Clause 17.1(a)(ii); and

thirdly, in or towards satisfaction pro rata of any part of the Loan that corresponds to any unregistered part of that Lender’s contribution.

Variation of order of application

Notice of variation of order of application

Appropriation rights overridden

APPLICATION OF EARNINGS

Payment of Earnings

it shall, and it shall procure that the Owner will, maintain the Accounts with the Agent;

it shall procure that the Owner ensures that all Earnings of the Ship are paid (subject only to the provisions of the General Assignment and any Deed of Covenant to which the Owner is a party) to the Earnings Account for the Ship; and

all Minimum Liquidity amounts required to be maintained pursuant to Clause 11.21 shall be maintained in the Minimum Liquidity Account.

Monthly retentions

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

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

Shortfall in Earnings

Application of retentions

the Instalment due on that Repayment Date pursuant to Clause 8.1; or

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

Interest accrued on the Accounts

Release of accrued interest

Location of Accounts

comply or, as the case may be, procure compliance by the Owner, with any requirement of the Agent as to the location or re-location of the Accounts (or any of them); and

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

Debits for fees, expenses etc.

Borrower’s obligations unaffected

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

any other liability or obligation of the Borrower or any Security Party under any Finance Document.

Restriction on withdrawal

EVENTS OF DEFAULT

Events of Default

the 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:

its failure to pay is caused by:

administrative or technical error; or

a Disruption Event; and

payment is made within 3 Business Days of its due date; or

any breach occurs of Clauses 9.2, 9.3, 11.2, 11.3, 11.20, 12.2, 12.3, 12.5 or 15.2 Provided that in respect of any breach of Clause 9.2, 9.3, 11.2 or 12.3(a), (c), (d), (f) and (g) which, in the opinion of the Majority Lenders, is capable of remedy, such default continues unremedied 14 days after written notice from the Agent requesting action to remedy the same (subject to any other applicable grace period specified in a Finance Document or otherwise agreed by the Agent); or

any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 14 Business Days after written notice from the Agent requesting action to remedy the same (subject to any other applicable grace period specified in a Finance Document or otherwise agreed by the Agent); or

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

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

any of the following occurs in relation to any Financial Indebtedness of a Relevant Person, which in the case of any member of the Group, equals $10,000,000 (or the equivalent in any other currency) or more or, as regards Financial Indebtedness arising under different documents or transactions, an aggregate amount of $10,000,000 (or the equivalent in any other currency) or more:

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; or

a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

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

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

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

a Relevant Person becomes, in the opinion of the Majority 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 or any form of freezing order, which in the case of the Borrower and Capital-Executive Ship Management Corp. relate to a sum of, or sums aggregating, $5,000,000 (or the equivalent in any other currency) or more unless such execution, attachment, arrest, sequestration or distress is dismissed, withdrawn, released or lifted within 10 Business Days of the occurrence of such event; or

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

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

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

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

a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a 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 the Borrower or the Owner 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 three 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 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

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

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

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

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

it becomes unlawful in any Pertinent Jurisdiction or impossible:

for the Borrower, the Owner or any other 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 the Owner to own, operate or charter its Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Underlying Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

if the common units of the Borrower cease to be quoted on the Nasdaq National Market in New York or any other internationally recognised stock exchange acceptable to the Lenders or if the whole of the issued share capital of the Ship is not wholly-owned by the Borrower; or

it evidently appears to the Majority Lenders that, without their prior consent, a Change of Control has occurred; 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

the Borrower or any other Security Party or any other person (other than a Creditor Party) repudiates any of the Finance Documents to which the Borrower or that Security Party or person is a party or evidences an intention to do so; or

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

a change in the financial position, state of affairs or prospects of the Borrower, the Owner or any other Security Party; or

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

the threat or commencement of legal or administrative action involving the Borrower, a Ship, any Approved Manager (but in relation to an Approved Manager which is not member of the Group, only insofar it relates to a Ship) or any Security Party; or

the withdrawal of any material license or governmental or regulatory approval in respect of a Ship, the Borrower, the Owner or any other Security Party or the Borrower’s or any Security Party’s business (unless such withdrawal can be contested with the effect of suspension and is in fact so contested in good faith by the Borrower or that Security Party),

Actions following an Event of Default

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

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

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

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

the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, the Agent, the Mandated Lead Arranger and/or the 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

Structuring and commitment fees

a non-refundable structuring fee in an amount equal to $346,500 (representing 0.90 per cent. of the Total Commitments), which shall be due and payable on the earlier of the Drawdown Date and the last day of the Availability Period; and

a non-refundable commitment fee at the rate of 1 per cent. per annum on the undrawn or uncancelled amount of the Total Commitments, payable quarterly in arrears to the Agent for distribution among the Lenders pro rata to their Commitments, during the period from (and including) 19 December 2019 (being the date of acceptance of the firm offer letter in relation to this Agreement) to the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period (and on the last day of such period).

Costs of negotiation, preparation etc.

Costs of variations, amendments, enforcement etc.

any amendment or supplement (or any proposal for such an amendment or supplement) requested (or, in the case of a proposal, made) by or on behalf of the Borrower and relating to a Finance Document or any other Pertinent Document;

any consent, waiver or suspension of rights by the Lenders, the Majority Lenders or the Creditor Party concerned or any proposal for any of the foregoing requested (or, in the case of a proposal, made) by or on behalf of the Borrower under or in connection with a Finance Document or any other Pertinent Document;

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

any step taken by the Lender concerned with a view to the preservation, protection, exercise or enforcement of any rights or Security Interest created by a Finance Document or for any similar purpose including, without limitation, any proceedings to recover or retain proceeds of enforcement or any other proceedings following enforcement proceedings until the date all outstanding indebtedness to the Creditor Parties under the Finance Documents and any other Pertinent Document is repaid in full; or

any amendment or supplement (or any proposal for such an amendment or supplement) in connection with a Finance Document or any other Pertinent Document required as contemplated in Clause 27.4).

Documentary taxes

Certification of amounts

INDEMNITIES

Indemnities regarding borrowing and repayment of Loan

the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity after the Drawdown Notice has been served in accordance with the provisions of this Agreement;

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;

any failure (for whatever reason) by the Borrower 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 Borrower on the amount concerned under Clause 7) including, but not limited to, any costs and expenses of enforcing any Security Interests created by the Finance Documents and any claims, liabilities and losses which may be brought against, or incurred by, a Creditor Party when enforcing any Security Interests created by the Finance Documents; and

the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19 (including, without limitation, any costs, expenses or liabilities incurred for a Creditor Party in relation to any Insurances taken or arranged by that Creditor Party following the occurrence of an Event of Default in relation to port risks, new liability insurance or any other type of insurance),

Break Costs

the Agent shall promptly notify the Borrower of a notice it receives from a Notifying Lender under this Clause 21.2;

the Borrower shall, within three Business Days of the Agent’s demand, pay to the Agent for the account of the Notifying Lender the amount of such Break Costs; and

the Notifying Lender shall, as soon as reasonably practicable, following a request by the Borrower, provide a certificate confirming the amount of the Notifying Lender’s Break Costs for the Interest Period in which they accrue, such certificate to be, in the absence of manifest error, conclusive and binding on the Borrower.

the interest which the Notifying Lender, should have received in accordance with Clause 5 in respect of the sum received or recovered from the date of receipt or recovery of such Payment to the last day of the then current Interest Period applicable to the sum received or recovered had such Payment been made on the last day of such Interest Period;

the amount which the Notifying Lender, would be able to obtain by placing an amount equal to such Payment on deposit with a leading bank in the Relevant Interbank Market for a period commencing on the Business Day following receipt or recovery of such Payment (as the case may be) and ending on the last day of the then current Interest Period applicable to the sum received or recovered.

Other breakage costs

a loss of a prospective profit, incurred by a Lender in borrowing, liquidating or re-employing deposits from third parties acquired, contracted for or arranged to fund, effect or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount) other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned; and

any applicable legal fees.

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;

investigating any event which the Creditor Party concerned reasonably believes constitutes an Event of Default or Potential Event of Default;

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

any other Pertinent Matter,

Environmental Indemnity

Currency indemnity

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

obtaining an order, judgment or award from any court or other tribunal in relation to any litigation or arbitration proceedings; or

enforcing any such order, judgment or award,

Certification of amounts

Sums deemed due to a Lender

NO SET-OFF OR TAX DEDUCTION

No deductions

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

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

Grossing-up for taxes

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

the amount due in respect of the payment shall be increased by the amount necessary to ensure that, after the making of such tax deduction, each Creditor Party receives on the due date for such payment (and retains free from any liability relating to the tax deduction) a net amount which is equal to the full amount which it would have received had no such tax deduction been required to be made; and

the Borrower shall pay the full amount of the tax required to be deducted to the appropriate taxation authority promptly in accordance with the relevant law, regulation or regulatory requirement, and in any event before any fine or penalty arises.

Indemnity and evidence of payment of taxes

Exclusion of tax on overall net income

tax on a Creditor Party’s overall net income; and

a FATCA Deduction.

FATCA Information

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

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

any law or regulation;

any fiduciary duty; or

any duty of confidentiality.

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

If a Lender knows or has reason to know that the Borrower is a US Tax Obligor, or where the Agent reasonably believes that its obligations under FATCA require it, each Lender shall, within ten Business Days of:

where the Lender knows or has reason to know that the Borrower is a US Tax Obligor and the relevant Lender is a Party as at the date of this Agreement, the date of this Agreement;

where the Lender knows or has reason to know that the Borrower is a US Tax Obligor and the relevant Lender became a Party after the date of this Agreement, the date on which the relevant Transfer Certificate became effective; or

the date of a request from the Agent,

a withholding certificate on US Internal Revenue Service Form W-8 or Form W-9 (or any successor form) (as applicable); or

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

Each Lender agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraph (e) 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 provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the Borrower, to the extent required for compliance with FATCA or any other law or regulation. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (f).

FATCA Deduction

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

Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower 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