Mortgagee, the Mortgagor shall not enter into any succession, merger or consolidation or convey, sell, mortgage, demise, charter, or otherwise transfer, or dispose of any Vessel.

SECTION 4.02. Time Charters; Liens. 4.02. Time Charters; Liens. (a) (1) The Mortgagor shall not enter into any time charter of the Vessels in excess of six months unless the time charter contains the following provision, “This time charter is subject to each of the rights and remedies of the Maritime Administrator of the Maritime Administration, an agency of the United States of America, and has been assigned to the Administrator under a Consolidated Agreement and a First Preferred [Fleet/Ship] Mortgage, each executed by the Shipowner in favor of the Administrator with respect to the Vessels being chartered.” and (2) shall, within ten (10) calendar days of entering into any time charter in excess of six months, transmit a copy of the time charter to the Mortgagee.

(b) The Mortgagor shall not create, incur or permit to be placed or imposed on any Vessel, or permit any charterer, master of any Vessel or other Person to create, incur or permit to be placed or imposed on any Vessel, any Lien except Permitted Liens. SECTION 4.03. 4.03. Vessels Operation. Except when the Vessel is in Government Use, the Mortgagor shall not (a) cause or permit the Vessels to be operated in any manner contrary to law or to any lawful rules or regulations of the Maritime Administration, (b) remove or attempt to remove the Vessels beyond the limits of the United States without the Mortgagee’s prior consent except on voyages with the intention of returning to the United States, (c) abandon such Vessels in any foreign port unless there has been an actual or constructive total loss or an agreed or compromised total loss of any of the Vessels; (d) engage in any unlawful trade or violate any law or carry any cargo that will expose any Vessel to penalty, forfeiture, or capture, (e) do, or suffer or permit to be done, anything which can or may injuriously affect the documentation of the Vessel under the laws and regulations of the United States. SECTION 4.04. 4.04. Service, Management and Operating Agreement. The Mortgagor shall not enter into any service, management or operating agreement for the operation of the Vessel (excluding husbanding type agreements), or appoint or designate a managing or operating agent for the operation of the Vessel (excluding husbanding agents) unless approved by the Mortgagee.

### ARTICLE V Defaults and Remedies

SECTION 5.01.What Constitutes “Defaults”; Continuance of Defaults. Each of the following events shall constitute a “Default”:

(a) A default in the payment of the whole or any part of the interest on any of the Outstanding Advances when the same shall become due and payable; a default in the payment of the whole or any part of the Late Charges, prepayment or refinancing amounts, premiums or penalties when the same shall become due and payable; or default in the payment of the whole or any part of the principal of the Outstanding Advances when the same shall become due and payable, whether by reason of mandatory prepayment, maturity, acceleration, or otherwise; a default in any payment in compliance with a final order of a court of competent jurisdiction pursuant to any provision of the Bankruptcy Code or any Federal Law replacing or superseding such Code, or applicable state law or otherwise; and continuation of such default for a period of 30 days shall constitute and is herein called a "Payment Default." Any corresponding default with

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