“Late Charges” Charges” means the interest, default interest or late payment premiums or penalties by the Mortgagor at any time and from time to time accrued and owing under the Note and the Note Purchase Documents. “Lien” means each, and “Liens” means every mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, rights in rem, lien (statutory or other), claim, charge, right of set-off or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).“ “Loan Commitment Amount” Commitment Amount” means the particular amount specified in Schedule I to the Note Purchase Agreement as being the “Loan Commitment Amount.” “Loss Event” Event” means any (a) actual, constructive, agreed or compromised total loss of a Vessel, (b) requisition of title to, or seizure or forfeiture of a Vessel or (c) termination of the Construction Contract. “Mandatory Loss Prepayment” Loss Prepayment” means the mandatory prepayment of the Advances required as a result of a Loss Event pursuant to Section 3.03 of this Mortgage. “Mandatory Loss Prepayment Amount” Loss Prepayment Amount” means an amount equal to the Proportionate Part of the Outstanding Advances affected by a Loss Event. “Mandatory Prepayment Election” Prepayment Election” means the mandatory election of the Mortgagor required to be made pursuant to Section 3.03 of this Mortgage to prepay all or any portion of the Outstanding Advances, in the manner, at the price, and subject to the limitations specified in Paragraph 14 of the Note. “Mandatory Prepayment Election Notice” means the written notification, in the form specified in Paragraph 14(b) of the Note, delivered to FFB (and if FFB is not the Holder, then also to the Holder) and the Mortgagee of the payment of each mandatory prepayment made pursuant to Section 3.03 of this Mortgage, which notice may not be rescinded. “Material Adverse Effect” Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or condition (financial or otherwise) of the Mortgagor or the Affiliate Guarantor, individually and taken as a whole; (b) a material impairment of the rights and remedies of the Mortgagee under any Transaction Document, or of the ability of either (1) the Mortgagor, (2) the Affiliate Guarantor or (3) the Mortgagor and the Affiliate Guarantor taken as a whole, to perform its or their, as applicable, obligations under any Transaction Document to which it is or they are, as applicable, a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against either (1) the Mortgagor, (2) the Affiliate Guarantor or (3) the Mortgagor and the Affiliate Guarantor taken as a whole, of any Transaction Document to which any of them is a party. “Maximum Payment Amount of Losses Directly to Mortgagor” Payment Amount of Losses Directly to Mortgagor” means the amount as set forth on Appendix 2 of this Mortgage opposite such term.

First Preferred [Fleet/Ship] Mortgage, Contract No. MA-\_\_\_\_\_\_ Page 33