EX-4.27



 Exhibit 4.27 

DATED 23 OCTOBER 2015 

AMENDMENT AND RESTATEMENT AGREEMENT 

related to a 
 USD 353,000,000

 FACILITIES AGREEMENT 

Dated 27 April 2015 
 for

 KNOT SHUTTLE TANKERS 24 AS 

KNOT SHUTTLE TANKERS 25 AS 

KNOT SHUTTLE TANKERS 26 AS 

as joint and several Borrowers 

with 
 KNUTSEN NYK OFFSHORE
TANKERS AS 
 as Guarantor 

arranged by 
 ABN AMRO BANK
N.V., OSLO BRANCH 
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. 

COMMBANK EUROPE LIMITED 

DNB BANK ASA 
 MIZUHO
BANK, LTD. 
 NORDEA BANK NORGE ASA 

acting as Mandated Lead Arrangers and Bookrunners 

with 
 THE FINANCIAL
INSTITUTIONS listed in Schedule 1 (The Original Lenders) 
 acting as Original Lenders 

and 
 ABN AMRO BANK N.V.

 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. 

COMMONWEALTH BANK OF AUSTRALIA 

DNB BANK ASA 
 MIZUHO
BANK, LTD. 
 NORDEA BANK FINLAND PLC. 

acting as Hedging Banks 
 and 

DNB BANK ASA 
 acting as
Agent 
  
 



 








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 CONTENTS 
  

							
	Clause	 	 	  	Page	 
			
	 1.
	 	Definitions And Interpretation	  	 	4	 
			
	 2.
	 	Amendment Date	  	 	5	 
			
	 3.
	 	Amendment And Restatement	  	 	5	 
			
	 4.
	 	Conditions Precedent	  	 	5	 
			
	 5.
	 	Costs And Expenses	  	 	5	 
			
	 6.
	 	Continuity And Further Assurance	  	 	6	 
			
	 7.
	 	Representations	  	 	6	 
			
	 8.
	 	Governing Law	  	 	6	 
			
	 9.
	 	Enforcement	  	 	6	 
		
	 SCHEDULE 1 CONDITIONS PRECEDENT
	  	 	10	 
		
	 SCHEDULE 2 AMENDED AND RESTATEMENT FACILITIES AGREEMENT
	  	 	13	 









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 THIS AMENDMENT AND RESTATEMENT AGREEMENT is dated 23 October 2015 and made between: 

 

	(1)	KNOT SHUTTLE TANKERS 24 AS, Norwegian registration no. 914 012 902, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway (“Borrower A”);


 KNOT SHUTTLE TANKERS 25 AS, Norwegian registration no. 914 006 600, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway (“Borrower B”); 
 KNOT SHUTTLE TANKERS 26 AS, Norwegian
registration no. 914 021 251, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway (“Borrower C”), 

as joint and several borrowers (the “Borrowers”); 
  

	(2)	KNUTSEN NYK OFFSHORE TANKERS AS, Norwegian registration no. 995 221 713, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway as Guarantor
(“KNOT”); 

  

	(3)	ABN AMRO BANK N.V., OSLO BRANCH, Norwegian registration no. 995 550 164, a banking institution organised under the laws of The Netherlands, acting through its office at Olav V’s Gate 5, N-0161 Oslo, Norway; 

 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., acting through its
office at Ropemaker Place, 25 Ropemaker St, London EC2Y 9AN, UK; 
 COMMBANK EUROPE LIMITED, acting through its office at
Level 3, Strand Towers, 36 The Strand, Sliema SLM1022, Malta; 
 DNB BANK ASA, Norwegian registration no. 984 851 006, a banking
institution organised under the laws of Norway acting through its office at Solheimsgaten 7C, N-5058 Bergen, Norway; 

MIZUHO BANK, LTD., acting through its office at Bracken House, One Friday Street, London, EC4M 9JA, UK; and 

NORDEA BANK NORGE ASA, Norwegian registration no. 911 044 110, a banking institution organised under the laws of Norway acting through
its office at Middelthunsgate 17, N-0368 Oslo, Norway, 
 as mandated lead arrangers (in that
capacity, the “Mandated Lead Arrangers”) and bookrunners (in that capacity, the “Bookrunners”); 
  

	(4)	THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders) of the Facility Agreement as lenders (the “Original Lenders”); 


 

	(5)	ABN AMRO BANK N.V., acting through its office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands; 


THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., acting through its office at Ropemaker Place, 25 Ropemaker St, London EC2Y 9AN, UK; 

COMMONWEALTH BANK OF AUSTRALIA, acting through its office at Senator House, 85 Queen Victoria Street, London EC4V 4HA, United
Kingdom; 
 DNB BANK ASA, Norwegian registration no. 984 851 006, a banking institution organised under the laws of Norway acting
through its office at Solheimsgaten 7C, N-5058 Bergen, Norway; 








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 MIZUHO BANK, LTD., acting through its office at Bracken House, One Friday Street,
London, EC4M 9JA, UK; and 
 NORDEA BANK FINLAND PLC., acting through its offices at Aleksanterinkatu 36, 00200 Helsinki, Finland or
any of its Affiliates, 
 as hedging banks (the “Hedging Banks”); and 

 

	(6)	DNB BANK ASA, Norwegian registration no. 984 851 006, a banking institution organised under the laws of Norway acting through its office at Solheimsgaten 7C, N-5058 Bergen,
Norway as facility agent and security trustee for the other Finance Parties and the Hedging Banks (the “Agent”). 


WHEREAS: 
  

	(A)	This Amendment and Restatement Agreement is an amendment of and supplemental to a loan facility agreement dated 27 April 2015 (the “Facilities Agreement”), entered into between (i) Borrower A
and Borrower B as joint and several borrowers, (ii) KNOT as guarantor, (iii) the Original Lenders, (iv) the Mandated Lead Arrangers, (v) the Bookrunners, (vi) the Hedging Banks and (vii) the Agent,
pursuant to which the Original Lenders agreed to make available to Borrower A and Borrower B a senior secured USD pre- and post-delivery term loan facility in an aggregate amount of USD 238,000,000 (the
“Facility”) for the purposes set out therein. 

  

	(B)	The Original Lenders have agreed to make available to Borrower C a pre-delivery term loan facility in the amount of up to USD 33,750,000 and a post-delivery term loan
facility in the amount of up to USD 115,000,000 (the “New Facilities”) for the purpose of part financing the construction and acquisition of a newbuilding DP 2 shuttle tanker with builder’s hull no. 2818 from Hyundai Heavy
Industries Co., Ltd. pursuant to the terms of a shipbuilding contract dated 18 June 2015. 

  

	(C)	By an accession letter dated on or about the date hereof (the “Borrower C Accession Letter”), Borrower C has acceded to the Facilities Agreement as a joint and several borrower. 


 

	(D)	This Amendment and Restatement Agreement sets out the terms and conditions upon which the New Facilities and the accession of Borrower C pursuant to the Borrower C Accession Letter will be implemented into the Finance
Documents. 

 IT IS AGREED as follows: 

SECTION 1 

INTERPRETATION 
  

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Defined expressions 

 Words and expressions defined in the Facilities Agreement shall,
unless otherwise defined herein, have the same meanings when used herein (including the preamble). 
  

	1.2	Definitions 

 In this Amendment and Restatement Agreement: 

“Amendment Date” means a date to be determined by the Agent (on behalf of the Finance Parties and the Hedging Banks) and
notified in writing to the Borrowers, being a date falling on 








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or after the date the Agent (on behalf of the Finance Parties and the Hedging Banks) have received and approved all condition precedent documents as set out in Exhibit 1 (Conditions
Precedent) to this Amendment and Restatement Agreement. 
 “Party” means a party to this Amendment and Restatement
Agreement. 
  

	1.3	Construction 

 Clause 1.3 (Construction) of the Facilities Agreement shall apply,
mutatis mutandis, to this Amendment and Restatement Agreement as if expressly set out herein. 
  

	1.4	Construction 

 The Parties agree that this Amendment and Restatement Agreement shall be a
Finance Document (as this term is defined in the Facilities Agreement). 
 SECTION 2 

AMENDMENTS 
  

	2.	AMENDMENT DATE 

 The amendments set out in this Amendment and Restatement Agreement shall
have effect from the Amendment Date. 
  

	3.	AMENDMENT AND RESTATEMENT 

 The Facilities Agreement shall be amended and restated so
that it shall be read and construed for all purposes as set out in Exhibit 2 (Amended and Restated Facilities Agreement) to this Amendment and Restatement Agreement. 

SECTION 3 
 MISCELLANEOUS

  

	4.	CONDITIONS PRECEDENT 

 The Borrowers shall deliver to the Agent the documents listed in
Exhibit 1 (Conditions Precedent) to this Amendment and Restatement Agreement, in form and substance acceptable to the Agent, on or before 31 October 2015. 
  

	5.	COSTS AND EXPENSES 

  

	5.1	Transaction expenses 

 The Borrowers shall promptly on demand pay the Agent, the Hedging
Banks and the Mandated Lead Arrangers the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution, syndication, perfection, amendment,
enforcement and preservation of: 
  

	 	(a)	this Amendment and Restatement Agreement and any other documents referred to in this Amendment and Restatement Agreement; and 

  

	 	(b)	any other Finance Documents executed after the date of this Amendment and Restatement Agreement. 

  

	5.2	Non-recoverable costs 

 The costs and expenses
specified in this Clause 5 (Costs and expenses) shall be payable by the Borrowers in any event and shall under no circumstances be recoverable from the Finance Parties or the Hedging Banks. The Borrowers’ obligation to pay any costs and
expenses hereunder shall survive the termination date of the Facility and of this Amendment and Restatement Agreement. 








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	6.	CONTINUITY AND FURTHER ASSURANCE 

  

	6.1	Continuing obligations 

 The provisions of the Finance Documents and the Hedging
Agreements shall, save as amended by this Amendment and Restatement Agreement, continue in full force and effect. 
  

	6.2	Securities 

 Each Obligor hereby confirms, agrees and undertakes that; 

 

	 	(a)	each Security Document entered into prior to the date hereof; and 

  

	 	(b)	KNOT’s guarantee liabilities regulated by Clause 19 (Guarantee and indemnity) of the Facilities Agreement; 


shall, save as amended by this Amendment and Restatement Agreement, continue in full force and effect and extend to and secure all the
liabilities and obligations of each Obligor (including Borrower C) under the Finance Documents and the Hedging Agreements (as these terms are amended by this Amendment and Restatement Agreement). 

 

	6.3	Further assurances 

 The Obligors shall, at the request of the Agent and at its own
expense, do all such acts and things necessary or desirable to give effect to the amendments agreed pursuant to this Amendment and Restatement Agreement. 

SECTION 4 

REPRESENTATIONS 
  

	7.	REPRESENTATIONS 

 Each Obligor makes the representations and warranties set out in Clause
20 (Representations) of the Facilities Agreement to each Finance Party and each Hedging Bank on 
  

	 	(a)	the date of this Amendment and Restatement Agreement; and 

  

	 	(b)	on the Amendment Date. 

 SECTION 5 

GOVERNING LAW AND ENFORCEMENT 
  

	8.	GOVERNING LAW 

 This Amendment and Restatement Agreement is governed by Norwegian law.

  

	9.	ENFORCEMENT 

  

	9.1	Jurisdiction 

  

	 	(a)	The courts of Norway, the venue to be Bergen city court (in Norwegian: Bergen tingrett) have exclusive jurisdiction to settle any dispute arising out of or in connection with this Amendment and Restatement
Agreement (including a dispute relating to the existence, validity or termination of this Agreement (a “Dispute”). 

  

	 	(b)	The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. 









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	 	(c)	This Clause 9.1 (Jurisdiction) is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. 

 This Amendment and
Restatement Agreement has been entered into on the date stated at the beginning of this Amendment and Restatement Agreement. 








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 EXECUTION PAGE 

 

									
	Borrower A:	 		 	Borrower B:
			
	KNOT SHUTTLE TANKERS 24 AS	 		 	KNOT SHUTTLE TANKERS 25 AS
					
	By:	 	 /s/ Bjørn Sande Urtegaard
	 		 	By:	 	 /s/ Bjørn Sande Urtegaard

	Name:	 	Bjørn Sande Urtegaard	 		 	Name:	 	Bjørn Sande Urtegaard
	Title:	 	Attorney-in-Fact	 		 	Title:	 	Attorney-in-Fact
			
	Borrower C:	 		 	Guarantor:
			
	KNOT SHUTTLE TANKERS 26 AS	 		 	KNUTSEN NYK OFFSHORE TANKERS AS
					
	By:	 	 /s/ Bjørn Sande Urtegaard
	 		 	By:	 	 /s/ Bjørn Sande Urtegaard

	Name:	 	Bjørn Sande Urtegaard	 		 	Name:	 	Bjørn Sande Urtegaard
	Title:	 	Attorney-in-Fact	 		 	Title:	 	Attorney-in-Fact
			
	Original Lender, Bookrunner and Mandated Lead Arranger:	 		 	Original Lender Bookrunner, Mandated Lead Arranger and Hedging Bank:
			
	ABN AMRO BANK N.V., OSLO BRANCH	 		 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
					
	By:	 	 /s/ Thomas Dale
	 		 	By:	 	 /s/ Masao Sasayama

	Name:	 	Thomas Dale	 		 	Name:	 	Masao Sasayama
	Title:	 	Attorney-in-Fact	 		 	Title:	 	Managing Director, Deputy Head of Asian Corporate Banking Group for UK London Branch
			
	Original Lender, Bookrunner and Mandated Lead Arranger:	 		 	 Original Lender, Agent, Bookrunner, Mandated Lead

Arranger and Hedging Bank:

			
	COMMBANK EUROPE LIMITED	 		 	DNB BANK ASA
					
	By:	 	 /s/ Raymond De Carlo
	 		 	By:	 	 /s/ Thomas Dale

	Name:	 	Raymond De Carlo	 		 	Name:	 	Thomas Dale
	Title:	 	 Company Secretary/Director
 CommBank Europe
Limited
	 		 	Title:	 	Attorney-in-Fact









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	Original Lender, Bookrunner, Mandated Lead Arranger and Hedging Bank:	 		 	Original Lender, Bookrunner and Mandated Lead Arranger:
			
	MIZUHO BANK, LTD.	 		 	NORDEA BANK NORGE ASA
					
	By:	 	 /s/ Thomas Dale
	 		 	By:	 	 /s/ Thomas Dale

	Name:	 	Thomas Dale	 		 	Name:	 	Thomas Dale
	Title:	 	Attorney-in-Fact	 		 	Title:	 	Attorney-in-Fact
			
	Hedging Bank:	 		 	Hedging Bank:
			
	ABN AMRO BANK N.V.	 		 	COMMONWEALTH BANK OF AUSTRALIA
					
	By:	 	 /s/ Thomas Dale
	 		 	By:	 	 /s/ Will Barrand

	Name:	 	Thomas Dale	 		 	Name:	 	Will Barrand
	Title:	 	Attorney-in-Fact	 		 	Title:	 	Associate Director
				
	Hedging Bank:	 		 		 	
				
	NORDEA BANK FINLAND PLC.	 		 		 	
					
	By:	 	 /s/ Thomas Dale
	 		 		 	
	Name:	 	Thomas Dale	 		 		 	
	Title:	 	Attorney-in-Fact	 		 		 	









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 SCHEDULE 1 

CONDITIONS PRECEDENT 
  

	1.	Obligors 

  

	 	(a)	Certified copies of the constitutional documents of each Obligor. 

  

	 	(b)	A certified copy of a resolution of the board of directors of each Obligor: 

  

	 	(i)	approving the terms of, and the transactions contemplated by, the Finance Documents and Transaction Documents to which it is a party and resolving that it shall execute the Finance Documents and Transaction Documents to
which it is a party; 

  

	 	(i)	authorising a specified person or persons to execute the Finance Documents and Transaction Documents to which it is a party on its behalf; and 


 

	 	(ii)	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it
under or in connection with the Finance Documents to which it is a party. 

  

	 	(c)	A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above. 

  

	 	(d)	An original Power of Attorney (notarised and legalised if requested by the Agent). 

  

	 	(e)	A written confirmation in original from a Director of each Obligor that each document provided by that Obligor under this Schedule 2 (Conditions precedent) are true copies of the originals.


  

	2.	Know Your Customer (KYC) requirements 

 Any documents required by the Agent and the
Lenders pursuant to any “Know your customer Checks” with respect to the Obligors and their signatories, directors and ultimate beneficial owners. 
  

	3.	Authorisations 

 All approvals, authorisations and consents required by any government or
other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the Finance Documents and Transaction Documents to which they are respective parties. 

 

	4.	Finance Documents 

  

	 	(a)	The Amendment and Restatement Agreement. 

  

	 	(b)	Each Fee Letter relating to the New Facilities, duly acknowledged by the Borrowers. 

  

	 	(c)	The Borrower C Accession Letter 

  

	 	(d)	The Borrower C Pre-Delivery Assignment Agreement. 









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	 	(e)	A Notice of Assignment of Shipbuilding Contract C and the Shipyard’s acknowledgement thereof. 

  

	 	(f)	A Notice of Assignment of Refund Guarantee C and the Refund Guarantor’s acknowledgement thereof. 

  

	 	(g)	The Borrower C Account Pledge. 

  

	 	(h)	A Notice of Pledge of Borrower C Account and the Account Bank’s acknowledgement thereof. 

  

	 	(i)	The Borrower C Share Pledge. 

  

	 	(j)	Evidence of perfection of the Borrower C Share Pledge. 

  

	 	(k)	The Borrower C Factoring Agreement. 

  

	 	(l)	A declaration of pledge in respect of the Borrower C Factoring Agreement. 

  

	 	(m)	Evidence that the Borrower C Factoring Agreement has been registered with its intended priority in the Registry of Moveable Property (in No. Løsøreregisteret). 


(All Finance Documents to be delivered in original). 
  

	5.	Transaction Documents 

  

	 	(a)	A copy of the Shipbuilding Contract C. 

  

	 	(b)	The original Refund Guarantee C. 

  

	 	(c)	A copy of the Charterparty C. 

  

	6.	Other documents and evidence 

  

	 	(a)	The Original Financial Statements of Borrower C. 

  

	 	(b)	If relevant, assurance that any withholding tax will be paid or application to tax authorities is or will be sent. 

  

	 	(c)	Any other document, authorisation, opinion or assurance requested by the Agent. 

  

	7.	Legal opinions 

  

	 	(a)	A legal opinion from Advokatfirmaet Schjødt AS, legal advisers to the Agent in Norway, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 


 

	 	(b)	If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior
to signing this Agreement. 









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	 	(c)	If any Mortgaged Asset is situated in a jurisdiction other than Norway, or any Finance Document is subject to any other choice of law than Norwegian law, a legal opinion from the legal advisers to the Agent in the
relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 

  

	 	(d)	Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions. 









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 SCHEDULE 2 

AMENDED AND RESTATED FACILITIES AGREEMENT 







 DATED 27 APRIL 2015 

(amended and restated on 23 October 2015) 

USD 353,000,000 
 FACILITIES
AGREEMENT 
 for 
 KNOT
SHUTTLE TANKERS 24 AS 
 KNOT SHUTTLE TANKERS 25 AS 

KNOT SHUTTLE TANKERS 26 AS 

as joint and several Borrowers 

with 
 KNUTSEN NYK OFFSHORE
TANKERS AS 
 as Guarantor 

arranged by 
 ABN AMRO BANK
N.V., OSLO BRANCH 
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. 

COMMBANK EUROPE LIMITED 

DNB BANK ASA 
 MIZUHO
BANK, LTD. 
 NORDEA BANK NORGE ASA 

acting as Mandated Lead Arrangers and Bookrunners 

with 
 THE FINANCIAL
INSTITUTIONS listed in Schedule 1 (The Original Lenders) 
 acting as Original Lenders 

and 
 ABN AMRO BANK N.V.

 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. 

COMMONWEALTH BANK OF AUSTRALIA 

DNB BANK ASA 
 MIZUHO
BANK, LTD. 
 NORDEA BANK FINLAND PLC. 

acting as Hedging Banks 
 and 

DNB BANK ASA 
 acting as
Agent 
  
  
 



 








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	 CONTENTS
  
	  
 

	Clause	  	 	  	Page	 
			
	 1.
	  	 Definitions And Interpretation
	  	 	5	 
			
	 2.
	  	 The Facilities
	  	 	27	 
			
	 3.
	  	 Purpose
	  	 	28	 
			
	 4.
	  	 Conditions Of Utilisation
	  	 	28	 
			
	 5.
	  	 Utilisation
	  	 	30	 
			
	 6.
	  	 Joint And Several Liability
	  	 	33	 
			
	 7.
	  	 Repayment
	  	 	35	 
			
	 8.
	  	 Prepayment And Cancellation
	  	 	37	 
			
	 9.
	  	 Interest
	  	 	41	 
			
	 10.
	  	 Interest Periods
	  	 	43	 
			
	 11.
	  	 Changes To The Calculation Of Interest
	  	 	43	 
			
	 12.
	  	 Fees
	  	 	45	 
			
	 13.
	  	 Tax Gross Up And Indemnities
	  	 	45	 
			
	 14.
	  	 Increased Costs
	  	 	49	 
			
	 15.
	  	 Other Indemnities
	  	 	50	 
			
	 16.
	  	 Mitigation By The Lenders
	  	 	51	 
			
	 17.
	  	 Costs And Expenses
	  	 	51	 
			
	 18.
	  	 Security
	  	 	52	 
			
	 19.
	  	 Guarantee And Indemnity
	  	 	56	 
			
	 20.
	  	 Representations
	  	 	60	 
			
	 21.
	  	 Information Undertakings
	  	 	65	 
			
	 22.
	  	 Financial Covenants
	  	 	67	 
			
	 23.
	  	 General Undertakings
	  	 	70	 
			
	 24.
	  	 Vessel Undertakings – Pre-Delivery
	  	 	75	 
			
	 25.
	  	 Vessel Undertakings – Post-Delivery
	  	 	76	 
			
	 26.
	  	 Events Of Default
	  	 	81	 
			
	 27.
	  	 Changes To The Lenders
	  	 	84	 
			
	 28.
	  	 Changes To The Obligors
	  	 	87	 
			
	 29.
	  	 Role Of The Agent, The Mandated Lead Arrangers And The Reference Banks
	  	 	89	 
			
	 30.
	  	 Conduct Of Business By The Finance Parties And The Hedging Banks
	  	 	97	 
			
	 31.
	  	 Sharing Among The Finance Parties
	  	 	97	 
			
	 32.
	  	 Payment Mechanics
	  	 	98	 
			
	 33.
	  	 Set-Off
	  	 	100	 
			
	 34.
	  	 Notices
	  	 	101	 









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	 35.
	  	 Calculations And Certificates
	  	 	103	 
			
	 36.
	  	 Partial Invalidity
	  	 	104	 
			
	 37.
	  	 Remedies And Waivers
	  	 	104	 
			
	 38.
	  	 Amendments And Waivers
	  	 	104	 
			
	 39.
	  	 Counterparts
	  	 	105	 
			
	 40.
	  	 Conflict
	  	 	105	 
			
	 41.
	  	 Disclosure Of Information And Confidentiality
	  	 	105	 
			
	 42.
	  	 Confidentiality Of Funding Rates And Reference Bank Quotations
	  	 	106	 
			
	 43.
	  	 “Know Your Customer” Checks
	  	 	107	 
			
	 44.
	  	 Governing Law
	  	 	108	 
			
	 45.
	  	 Enforcement
	  	 	108	 
		
	 SCHEDULE 1 THE ORIGINAL LENDERS
	  	 	109	 
		
	 SCHEDULE 2 CONDITIONS PRECEDENT
	  	 	111	 
	 Part I General Conditions Precedent
	  	 	111	 
	 Part II Conditions Precedent to the Utilisation of each Loan under the Pre-Delivery Facility
	  	 	114	 
	 Part III Conditions Precedent to the Utilisation of each Loan under the
Post-Delivery Facility
	  	 	114	 
	 Part IV Conditions Precedent to Drop Down
	  	 	116	 
	 Part V Conditions Subsequent
	  	 	118	 
		
	 SCHEDULE 3 REQUESTS
	  	 	119	 
	 Part I Utilisation Request
	  	 	119	 
	 Part II Selection Notice
	  	 	120	 
		
	 SCHEDULE 4 FORM OF TRANSFER CERTIFICATE
	  	 	121	 
		
	 SCHEDULE 5 FORM OF COMPLIANCE CERTIFICATE
	  	 	123	 
		
	 SCHEDULE 6 FORM OF ACCESSION LETTER
	  	 	124	 
		
	 SCHEDULE 7 STRUCTURE CHART
	  	 	126	 
		
	 SCHEDULE 8 DRAWINGS AND REPAYMENT SCHEDULE
	  	 	127	 
		
	 SCHEDULE 9 FORM OF DROP DOWN CONFIRMATION LETTER
	  	 	129	 
		
	 SCHEDULE 10 LIST OF EXISTING HEDGING TRANSACTIONS
	  	 	131	 









 schjodt.no  |  Page 4 of 133 

 

 THIS AGREEMENT is dated 27 April 2015 (amended and restated on 23 October 2015) and made
between: 
  

	(1)	KNOT SHUTTLE TANKERS 24 AS, Norwegian registration no. 914 012 902, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway (“Borrower
A”); 

 KNOT SHUTTLE TANKERS 25 AS, Norwegian registration no. 914 006 600, with registered offices at
Smedasundet 40, N-5529 Haugesund, Norway (“Borrower B”); 
 KNOT SHUTTLE
TANKERS 26 AS, Norwegian registration no. 914 021 251, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway (“Borrower C”), 

as joint and several borrowers (the “Borrowers”); 
  

	(2)	KNUTSEN NYK OFFSHORE TANKERS AS, Norwegian registration no. 995 221 713, with registered offices at Smedasundet 40, N-5529 Haugesund, Norway as Guarantor
(“KNOT”); 

  

	(3)	ABN AMRO BANK N.V., OSLO BRANCH, Norwegian registration no. 995 550 164, a banking institution organised under the laws of The Netherlands, acting through its office at Olav V’s Gate 5, N-0161 Oslo, Norway; 

 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., acting through
its office at Ropemaker Place, 25 Ropemaker St, London EC2Y 9AN, UK; 
 COMMBANK EUROPE LIMITED, acting through its office at
Level 3, Strand Towers, 36 The Strand, Sliema SLM1022, Malta; 
 DNB BANK ASA, Norwegian registration no. 984 851 006, a banking
institution organised under the laws of Norway acting through its office at Solheimsgaten 7C, N-5058 Bergen, Norway; 

MIZUHO BANK, LTD., acting through its office at Bracken House, One Friday Street, London, EC4M 9JA, UK; and 

NORDEA BANK NORGE ASA, Norwegian registration no. 911 044 110, a banking institution organised under the laws of Norway acting through
its office at Middelthunsgate 17, N-0368 Oslo, Norway, 
 as mandated lead arrangers (in that
capacity, the “Mandated Lead Arrangers”) and bookrunners (in that capacity, the “Bookrunners”); 
  

	(4)	THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the “Original Lenders”); 

  

	(5)	ABN AMRO BANK N.V., acting through its office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands; 


THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., acting through its office at Ropemaker Place, 25 Ropemaker St, London EC2Y 9AN, UK; 

COMMONWEALTH BANK OF AUSTRALIA, acting through its office at Senator House, 85 Queen Victoria Street, London EC4V 4HA, United Kingdom;

 DNB BANK ASA, Norwegian registration no. 984 851 006, a banking institution organised under the laws of Norway acting through its
office at Solheimsgaten 7C, N-5058 Bergen, Norway; 
 MIZUHO BANK, LTD., acting through its
office at Bracken House, One Friday Street, London, EC4M 9JA, UK; and 








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 NORDEA BANK FINLAND PLC., acting through its offices at Aleksanterinkatu 36, 00200
Helsinki, Finland or any of its Affiliates, 
 as hedging banks (the “Hedging Banks”); and 

 

	(6)	DNB BANK ASA, Norwegian registration no. 984 851 006, a banking institution organised under the laws of Norway acting through its office at Solheimsgaten 7C, N-5058
Bergen, Norway as facility agent and security trustee for the other Finance Parties and the Hedging Banks (the “Agent”). 


IT IS AGREED as follows: 
 SECTION 1

 INTERPRETATION 
  

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Definitions 

 In this Agreement: 

“Accession Letter” means an accession letter signed and presented to the Agent by the Borrowers, KNOT and KNOP in respect of
the Drop Down and the replacement of KNOT by KNOP and KNOT ST as Guarantors substantially in the form set out in Schedule 6 (Form of Accession Letter) 

“Account Bank” means DNB BANK ASA, Norwegian registration no. 984 851 006, a banking institution organised under the laws of
Norway acting through its office at Solheimsgaten 7C, N-5058 Bergen, Norway. 
 “Account
Pledges” means together the Borrower A Account Pledge, the Borrower B Account Pledge and the Borrower C Account Pledge, and “Account Pledge” means either of them. 

“Accounts” means together: 
  

	 	(a)	the Borrower A Account; 

  

	 	(b)	the Borrower B Account; and 

  

	 	(c)	the Borrower C Account, 

 and “Account” means any of them. 

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other
Subsidiary of that Holding Company. 
 “Agreement” means this facility agreement, as it may be amended, supplemented and
varied in writing from time to time, including its schedules. 
 “Approved Ship Registry” means the Norwegian Ordinary Ship
Registry (NOR), the Norwegian International Ship Registry (NIS), the Danish International Ship Registry (DIS), the ship registries of Malta, the United Kingdom, the Isle of Man, Bermuda, Panama or Liberia, or any ship registry as approved in writing
by the Agent (on behalf of all Lenders). 
 “Amendment and Restatement Agreement no. 1” means an agreement for the amendment
and restatement of this Agreement dated 23 October 2015, entered into between the Parties hereto. 








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 “Assignments of Charterparty” means together the Borrower A Assignment of
Charterparty, the Borrower B Assignment of Charterparty and the Borrower C Assignment of Charterparty, and “Assignments of Charterparty” means either of them. 

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or
registration. 
 “Availability Period” means the period from and including the date of this Agreement to and including: 

 

	 	(a)	30 September 2017 in respect of the Pre-Delivery Tranche A and the Post-Delivery Tranche A-1 and the Post-Delivery Tranche A-2; 

  

	 	(b)	31 December 2017 in respect of the Pre-Delivery Tranche B and the Post-Delivery Tranche B-1 and the Post-Delivery Tranche B-2; and 

  

	 	(c)	27 April 2018 in respect of the Pre-Delivery Tranche C and the Post-Delivery Tranche C-1 and the Post-Delivery Tranche C-2. 

 “Available Commitment” means a Lender’s Commitment
in respect of a Tranche minus: 
  

	 	(a)	the amount of its participation in any outstanding Loans utilised under that Tranche; and 

  

	 	(b)	in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made utilised under that Tranche on or before the proposed Utilisation Date. 


“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment in relation to a
Facility. 
 “Basel II Accord” means the “International Convergence of Capital Measurement and Capital Standards, a
Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 as updated prior to, and in the form existing on, the date of this Agreement, excluding any amendment thereto arising out of the Basel III Accord. 

“Basel II Approach” means, in relation to any Finance Party, either the Standardised Approach or the relevant Internal Ratings
Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.

“Basel II Regulation” means: 
  

	 	(a)	any law or regulation implementing the Basel II Accord (including the relevant provisions of directive 2013/36/EU (“CRD IV”) and regulation 575/2013 (“CRR”) of the European Union) to
the extent only that such law or regulation re-enacts and/or implements the requirements of the Basel II Accord but excluding any provision of such law or regulation implementing the Basel III Accord; and


  

	 	(b)	any Basel II Approach adopted by a Finance Party or any of its Affiliates. 

 “Basel III
Accord” means, together: 
  

	 	(a)	 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 










 schjodt.no  |  Page 7 of 133 

 


	 	
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; 

  

	 	(b)	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 

  

	 	(c)	any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”. 


“Basel III Regulation” means any law or regulation implementing the Basel III Accord (including CRD IV and CRR) save to the
extent that such law or regulation re-enacts a Basel II Regulation. 
 “Borrower A Account
Pledge” means an agreement dated on or about the date hereof for the pledge of the Borrower A Account, entered or to be entered into between Borrower A and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and
substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower A Account” means
USD account no. 1250.05.18284, held in the name of Borrower A with the Account Bank. 
 “Borrower A Assignment of
Charterparty” means an agreement dated on or about the Delivery Date of Vessel A for the assignment of Charterparty A, entered or to be entered into between Borrower A and the Agent (on behalf of the Finance Parties and the Hedging Banks)
in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower A Factoring
Agreement” means a Norwegian law factoring agreement in the amount of USD 285,600,000 dated on or about the date hereof between Borrower A and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks), to be registered against Borrower A with the Norwegian Registry of Movable Property (in No. Løsøreregisteret). 

“Borrower A Mortgage” means the first priority mortgage in the amount of USD 423,600,000 (and deed of covenants or declaration
of pledge collateral thereto (if applicable)), to be executed and recorded by Borrower A against Vessel A in favour of the Agent (on behalf of the Finance Parties and the Hedging Banks) in the relevant Approved Ship Registry, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower A
Pre-Delivery Assignment Agreement” means an agreement dated on or about the date hereof for the assignment of all present and future rights under and in connection with the Shipbuilding Contract A and
the Refund Guarantee A, entered into between Borrower A and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 

“Borrower A Post-Delivery Assignment Agreement” means an agreement dated on or about the Delivery Date of Vessel A for the
assignment of the Earnings, the Insurances and any Requisition Compensation in respect of Vessel A, entered or to be entered into between Borrower A and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 








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 “Borrower A Share Pledge” means an agreement for the charge/pledge of 100%
of the shares in Borrower A dated on or about the date hereof or on or about a Drop Down Date (as the case may be) in agreed form between (a) KNOT or KNOP (or a Subsidiary of KNOP) (as the case may be, prior to and as from the relevant Drop
Down Date respectively) and (b) the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower B Account
Pledge” means an agreement dated on or about the date hereof for the pledge of the Borrower B Account, entered or to be entered into between Borrower B and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and
substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower B Account” means
USD account no. 1250.05.18292, held in the name of Borrower B with the Account Bank. 
 “Borrower B Assignment of
Charterparty” means an agreement dated on or about the Delivery Date of Vessel B for the assignment of Charterparty B, entered or to be entered into between Borrower B and the Agent (on behalf of the Finance Parties and the Hedging Banks)
in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower B Factoring
Agreement” means a Norwegian law factoring agreement in the amount of USD 285,600,000 dated on or about the date hereof between Borrower B and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks), to be registered against Borrower B with the Norwegian Registry of Movable Property (in No. Løsøreregisteret). 

“Borrower B Mortgage” means the first priority mortgage in the amount of USD 423,600,000 (and deed of covenants or declaration
of pledge collateral thereto (if applicable)), to be executed and recorded by Borrower B against Vessel B in favour of the Agent (on behalf of the Finance Parties and the Hedging Banks) in the relevant Approved Ship Registry, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower B
Pre-Delivery Assignment Agreement” means an agreement dated on or about the date hereof for the assignment of all present and future rights under and in connection with the Shipbuilding Contract B and
the Refund Guarantee B, entered into between Borrower B and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 

“Borrower B Post-Delivery Assignment Agreement” means an agreement dated on or about the Delivery Date of Vessel B for the
assignment of the Earnings, the Insurances and any Requisition Compensation in respect of Vessel B, entered or to be entered into between Borrower B and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower B Share Pledge” means an
agreement for the charge/pledge of 100% of the shares in Borrower B dated on or about the date hereof or on or about a Drop Down Date (as the case may be) in agreed form between (a) KNOT or KNOP (or a Subsidiary of KNOP) (as the case may be,
prior to and as from the relevant Drop Down Date respectively) and (b) the Agent (on behalf of the Finance Parties and the Hedging Banks). 

“Borrower C Account Pledge” means an agreement dated on or about the date of the Amendment and Restatement Agreement no. 1 for
the pledge of the Borrower C Account, entered or to be entered into between Borrower C and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the
Hedging Banks). 








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 “Borrower C Account” means USD account no. 1250.05.18438, held in the name
of Borrower C with the Account Bank. 
 “Borrower C Assignment of Charterparty” means an agreement dated on or about the
Delivery Date of Vessel C for the assignment of Charterparty C, entered or to be entered into between Borrower C and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on behalf of the
Finance Parties and the Hedging Banks). 
 “Borrower C Factoring Agreement” means a Norwegian law factoring agreement in the
amount of USD 423,600,000 dated on or about the date of the Amendment and Restatement Agreement no. 1 between Borrower C and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on
behalf of the Finance Parties and the Hedging Banks), to be registered against Borrower C with the Norwegian Registry of Movable Property (in No. Løsøreregisteret). 

“Borrower C Mortgage” means the first priority mortgage in the amount of USD 423,600,000 (and deed of covenants or declaration
of pledge collateral thereto (if applicable)), to be executed and recorded by Borrower C against Vessel C in favour of the Agent (on behalf of the Finance Parties and the Hedging Banks) in the relevant Approved Ship Registry, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower C
Pre-Delivery Assignment Agreement” means an agreement dated on or about the date of the Amendment and Restatement Agreement no. 1 for the assignment of all present and future rights under and in
connection with the Shipbuilding Contract C and the Refund Guarantee C, entered into between Borrower C and the Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Agent (on behalf of the Finance
Parties and the Hedging Banks). 
 “Borrower C Post-Delivery Assignment Agreement” means an agreement dated on or about the
Delivery Date of Vessel C for the assignment of the Earnings, the Insurances and any Requisition Compensation in respect of Vessel C, entered or to be entered into between Borrower C and the Agent (on behalf of the Finance Parties and the Hedging
Banks) in form and substance satisfactory to the Agent (on behalf of the Finance Parties and the Hedging Banks). 
 “Borrower C Share
Pledge” means an agreement for the charge/pledge of 100% of the shares in Borrower C dated on or about the date hereof or on or about a Drop Down Date (as the case may be) in agreed form between (a) KNOT or KNOP (or a Subsidiary of
KNOP) (as the case may be, prior to and as from the relevant Drop Down Date respectively) and (b) the Agent (on behalf of the Finance Parties and the Hedging Banks). 

“Break Costs” means the amount (if any) by which: 
  

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

  

	 	(b)	the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting
on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. 









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 “Business Day” means a day (other than a Saturday or Sunday) on which banks
are open for general business in London, New York City, Malta and Bergen. 
 “Change of Control” means: 

 

	 	(a)	if one or more Borrowers are owned by KNOT: 

  

	 	(i)	if KNOT does not own or is not able to vote for (directly or indirectly) all of the shares in the Borrowers or, following the Drop Down of one (1) or two (2) of the Borrowers only, the Borrower or Borrowers
not owned by KNOP; 

  

	 	(ii)	if KNOT does not own or is not able to vote for (directly or indirectly) all shares in Knutsen Offshore Tankers AS; 

  

	 	(iii)	if KNOT does not own or is not able to vote for (directly or indirectly) all shares in Knutsen Offshore Tankers 2 AS; 

  

	 	(iv)	if KNOT does not own or is not able to vote for (directly or indirectly) all shares in the General Partner (being the general partner in KNOP); or 


 

	 	(v)	if TS Shipping Invest AS (or a 100% owned subsidiary of TS Shipping Invest AS) and NYK Europe B.V. (or another 100% subsidiary of Nippon Yusen Kabushiki Kaisha) each does not own or is not able to vote for (directly or
indirectly) for 50% the shares in KNOT; or 

  

	 	(vi)	if Mr. Trygve Seglem and his immediate family do not own or is not able to vote for (directly or indirectly) all of the shares in TS Shipping Invest AS, and/or 


 

	 	(b)	if one or more Borrowers are owned by KNOP: 

  

	 	(i)	if TS Shipping Invest AS (or a 100% owned subsidiary of TS Shipping Invest AS) and NYK Europe B.V. (or another 100 % subsidiary of Nippon Yusen Kabushiki Kaisha) each does not own or is not able to vote for
(directly or indirectly) for 50% the shares in KNOT; 

  

	 	(ii)	if KNOP does not own or is not able to vote for (directly or indirectly) all of the shares in the Borrowers or, following the Drop Down of one (1) or two (2) of the Borrowers only, the Borrower or Borrowers
not owned by KNOT; 

  

	 	(iii)	if KNOP does not own or is not able to vote for (directly or indirectly) all of the shares in KNOT Shuttle Tankers AS; 

  

	 	(iv)	if KNOT does not own or is not able to vote for (directly or indirectly) all of the shares in the General Partner (being the general partner in KNOP); 


 

	 	(v)	the General Partner ceases to be to general partner of KNOP; 









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	 	(vi)	if KNOT does not own at least 25% of all the units in KNOP (capital and voting rights to be subject to the limitations on voting rights relating to election of board members, amendments and certain other matters as set
out in the limited partnership agreement entered into in relation to KNOP); or 

  

	 	(vii)	if any person or group of persons acting in concert (other than KNOT and/or any of its wholly owned Subsidiaries) acquires, legally or beneficially, and either directly or indirectly, more than thirty three point thirty
three per cent. (33.33%) of the capital or voting rights in KNOP. 

 “Charterer” means Brazil Shipping I
Limited, a company incorporated under the laws of England and Wales and having its registered office at 100 Thames Valley Park Drive, Reading, Berkshire RG6 1PT, United Kingdom, a substantial subsidiary of BG Group plc. 

“Charterparty A” means a time charterparty dated 12 September 2014 and entered into between Borrower A and the Charterer
for the chartering of Vessel A for a minimum of five (5) years from the Delivery Date of Vessel A at a daily time charter rate of minimum USD 57,200/day. 

“Charterparty B” means a time charterparty dated 12 September 2014 and entered into between Borrower B and the Charterer
for the chartering of Vessel B for a minimum of five (5) years from the Delivery Date of Vessel B at a daily time charter rate of minimum USD 57,200/day. 

“Charterparty C” means a time charterparty dated 17 June 2015 and entered into between Borrower C and the Charterer for
the chartering of Vessel C for a minimum of five (5) years from the Delivery Date of Vessel C at a daily time charter rate of minimum USD 55,200/day. 

“Charterparties” means together Charterparty A, Charterparty B and Charterparty C, and “Charterparty” means
either of them. 
 “Code” means the US Internal Revenue Code of 1986. 

“Commitment” means: 
  

	 	(a)	in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred to it
under this Agreement; and 

  

	 	(b)	in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement, 


to the extent not cancelled, reduced or transferred by it under this Agreement. 

“Companies Act” means the Norwegian Limited Liability Companies Act of 13 June 1997 No. 44 (in No.
aksjeloven). 
 “Compliance Certificate” means a certificate substantially in the form set out in Schedule 5
(Form of Compliance Certificate). 
 “Default” means an Event of Default or any event or circumstance specified in
Clause 26 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default. 








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 “Delivery Date” means the date of delivery of a Vessel from the Shipyard to
the relevant Borrower pursuant to the relevant Shipbuilding Contract, estimated to be in 4Q 2016 for Vessel A, 1Q 2017 for Vessel B and Q3 2017 for Vessel C. 

“Disruption Event” means either or both of: 
  

	 	(a)	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 Facilities (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 


 

	 	(b)	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: 


 

	 	(i)	from performing its payment obligations under the Finance Documents; or 

  

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


and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted. 

“DOC” means in relation to the Manager of a Vessel a valid document of compliance issued to such company pursuant to paragraph
13.2 of the ISM Code. 
 “Drop Down” means the potential acquisition by KNOP (or a Subsidiary of KNOP) of 100% of the shares
in a Borrower. 
 “Drop Down Date” means the date on which a Drop Down actually takes place, as determined in accordance
with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors). 
 “Earnings” means all moneys whatsoever which are
now or later become, payable (actually or contingently) to a Borrower in respect of and/or arising out of the use of or operation of a Vessel, including (but not limited to): 
  

	 	(a)	all freight, hire and passage moneys payable to that Borrower, including (without limitation) payments of any nature under any contract or any other agreement for the employment, use, possession, management and/or
operation of that Vessel; 

  

	 	(b)	any claim under any guarantees related to hire payable to that Vessel as a consequence of the operation of that Vessel; 

  

	 	(c)	any compensation payable to that Borrower in the event of any requisition of that Vessel or for the use of that Vessel by any government authority or other competent authority; 


 

	 	(d)	remuneration for salvage, towage and other services performed by that Vessel payable to that Borrower; 

  

	 	(e)	demurrage and retention money receivable by that Borrower in relation to that Vessel; 

  

	 	(f)	all moneys which are at any time payable under the Insurances in respect of loss of earnings from that Vessel; 









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

  

	 	(h)	any other money which arise out of the use of or operation of that Vessel and moneys whatsoever due or to become due to that Borrower from third parties in relation to that Vessel. 


“Environmental Claim” means any claim, proceeding, formal notice or investigation by any person or company in respect of any
Environmental Law or Environmental Permits. 
 “Environmental Law” means any applicable law or regulation which relates to:

  

	 	(a)	the pollution or protection of the environment or to the carriage of material which is capable of polluting the environment; 

  

	 	(b)	harm to or the protection of human health; 

  

	 	(c)	the conditions of the workplace; or 

  

	 	(d)	any emission or substance capable of causing harm to any living organism or the environment. 


“Environmental Permits” means any permit, licence, consent, approval and other and other authorisation and the filing of any
notification, report or assessment required under any Environmental Law for the operation of business conducted on or from the properties owned or used by an Obligor. 

“Event of Default” means any event or circumstance specified as such in Clause 26 (Events of Default). 

“Existing Hedging Transactions” means the hedging transactions listed in Schedule 10 (List of Existing Hedging
Transactions) to this Agreement. 
 “FA Act” means the Norwegian Financial Agreements Act of 25 June 1999
No. 46 (in No. finansavtaleloven). 
 “Facilities” means together the
Pre-Delivery Facility and the Post-Delivery Facility, and “Facility” means either of them. 

“Facility Office” means: 
  

	 	(a)	the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices
through which it will perform its obligations under this Agreement; or 

  

	 	(b)	in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes. 


“Factoring Agreements” means together the Borrower A Factoring Agreement, the Borrower B Facility Agreement and the Borrower C
Factoring Agreement, and “Factoring Agreement” means either of them. 








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 “FATCA” means: 

 

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

  

	 	(b)	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 

  

	 	(c)	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. 

 “FATCA Application Date” means: 

 

	 	(a)	in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;


  

	 	(b)	in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from
sources within the US), 1 January 2017; or 

  

	 	(c)	in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, 


or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any
change in FATCA after the date of this Agreement. 
 “FATCA Deduction” means a deduction or withholding from a payment under
a Finance Document required by FATCA. 
 “FATCA Exempt Party” means a Party that is entitled to receive payments free from
any FATCA Deduction. 
 “Fee Letter” means 
  

	 	(a)	a fee letter dated 18 March 2015 from the Agent to KNOT, accepted by the Borrowers and KNOT on 19 April 2015; and 

  

	 	(b)	a fee letter dated 10 September 2015 from the Agent to KNOT, accepted by the Borrowers and KNOT on 18 September 2015, 


setting out any of the fees referred to in Clause 12 (Fees). 

“Final Maturity Date” means 
  

	 	(a)	in respect of the Pre-Delivery Tranche A, the earlier of the Delivery Date of Vessel A and 30 September 2017; 


 

	 	(b)	in respect of the Pre-Delivery Tranche B, the earlier of the Delivery Date of Vessel B and 31 December 2017; 


 

	 	(c)	in respect of the Pre-Delivery Tranche C, the earlier of the Delivery Date of Vessel C and 27 April 2018; 









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	 	(d)	in respect of the Post-Delivery Tranche A, the date falling sixty (60) Months after the Utilisation Date of the Post-Delivery Tranche A-1 and Post-Delivery Tranche A-2; 

  

	 	(e)	in respect of the Post-Delivery Tranche B, the date falling sixty (60) Months after the Utilisation Date of the Post-Delivery Tranche B-1 and Post-Delivery Tranche B-2; and 

  

	 	(f)	in respect of the Post-Delivery Tranche C, the date falling sixty (60) Months after the Utilisation Date of the Post-Delivery Tranche C-1 and Post-Delivery Tranche C-2. 

 “Finance Document” means this Agreement, the Amendment and
Restatement Agreement no. 1, any Security Document, any Fee Letter, any Manager’s Undertaking, any Accession Letter, any Letter of Quiet Enjoyment, any other document designated as such by the Agent and the Borrowers and, as long as there is an
Event of Default which is continuing and for the purposes of Clause 31 (Sharing among the Finance Parties), Clause 32 (Payment mechanics) and Clause 33 (Set-off) only, “Finance
Document” shall also include any Hedging Agreement. 
 “Finance Party” means the Agent, a Mandated Lead Arranger, a
Bookrunner, a Lender or, as long as there is an Event of Default which is continuing and for the purposes of Clause 31 (Sharing among the Finance Parties), Clause 32 (Payment mechanics) and Clause 33
(Set-off) only, “Finance Party” shall also include the Hedging Banks. 

“Financial Indebtedness” means any indebtedness for or in respect of: 

 

	 	(a)	moneys borrowed; 

  

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

  

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


 

	 	(d)	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease; 


 

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


 

	 	(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;


  

	 	(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value (or, if any actual amount is due as a result of the
termination or close-out of that derivative transaction, that amount) of any derivative transaction, only the marked to market value shall be taken into account), including any Hedging Agreement;


  

	 	(h)	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and 


 

	 	(i)	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above. 









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 “Funding Rate” means any individual rate notified by a Lender to the Agent
pursuant to paragraph (a)(ii) of Clause 11.4 (Cost of funds). 
 “GAAP” means generally accepted accounting
principles in Norway, including IFRS. 
 “General Partner” means KNOT Offshore Partners GP LLC, a company incorporated under
the laws of the Marshall Islands and having its registered office at 2 Queen’s Cross, Aberdeen, Aberdeenshire, AB15 4YB, United Kingdom being the general partner in KNOP. 

“Group” means: 
  

	 	(a)	prior to any Drop Down Date, the KNOT Group; 

  

	 	(b)	from the Drop Down Date in respect of one (1) or two (2) of the Borrowers only, the KNOT Group and the KNOP Group; and 

  

	 	(c)	from the Drop Down Date in respect of all three (3) Borrowers, the KNOP Group. 


“Guarantees” means the guarantee liabilities of each Guarantor pursuant to Clause 19 (Guarantee and indemnity), and
“Guarantee” means any of them. 
 “Guarantor” means: 

 

	 	(d)	prior to any Drop Down Date, KNOT; 

  

	 	(e)	from the Drop Down Date in respect of one (1) or two (2) of the Borrowers only, (1) KNOT (guaranteeing the Loans relating to the Vessel or Vessels owned by KNOT’s Subsidiary or Subsidiaries only) and
(2) KNOP and KNOT ST jointly and severally (guaranteeing the Loans relating to the Vessel or Vessels owned by KNOP’s Subsidiary or Subsidiaries only); and 


 

	 	(f)	from the Drop Down Date in respect of all three (3) Borrowers, KNOP and KNOT ST jointly and severally. 


“Hedging Agreement” means any ISDA Master Agreement or other master agreement, including any schedule or confirmation (as
amended at any time, a “Master Agreement”) and/or any transaction or hedging arrangement, including Existing Hedging Transactions, pursuant to such Master Agreement (the “Hedging Transaction(s)”) entered or to be
entered into between a Borrower and a Hedging Bank, for the purpose of hedging interest rate in relation to the Loan and for the Borrowers’ currency needs. 

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a
Subsidiary. 
 “IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the
extent applicable to the relevant financial statements. 
 “Insurances” means, in relation to a Vessel, all policies and
contracts of insurance (which expression includes all entries of that Vessel in a protection and indemnity or war risk association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of
the relevant Borrower (whether in the sole name of that Borrower or in the joint names of that Borrower and any other person) in respect of that Vessel or otherwise in connection with that Vessel and all benefits thereunder (including claims of
whatsoever nature and return of premiums). 








 schjodt.no  |  Page 17 of 133 

 

 “Interest Period” means, in relation to a Loan, each period determined in
accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest). 

“Interpolated Screen Rate” means, in relation to LIBOR for any Loan, the rate (rounded to the same number of decimal places as
the two relevant Screen Rates) which results from interpolating on a linear basis between: 
  

	 	(a)	the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and 


 

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


each as of 11. a.m. in London on the Quotation Day for USD. 

“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention. 

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime
Organization’s (IMO) Diplomatic Conference of December 2002. 
 “ISSC” means an International Ship Security Certificate
issued by the Classification Society confirming that a Vessel is in compliance with the ISPS Code. 
 “KNOP” means KNOT
Offshore Partners L.P., a master limited partnership listed on the New York Stock Exchange, with registered offices at 2 Queen’s Cross, Aberdeen, Aberdeenshire, AB15 4YB, United Kingdom. 

“KNOP Group” means KNOP and its Subsidiaries. 

“KNOT” means Knutsen NYK Offshore Tankers AS, Norwegian registration no. 995 221 713, with registered offices at
Smedasundet 40, N-5529 Haugesund, Norway. 
 “KNOT Group” means KNOT and its
Subsidiaries. 
 “KNOT ST” means KNOT Shuttle Tankers AS, Norwegian registration no. 998 942 829, with registered
offices at Smedasundet 40, N-5529 Haugesund, Norway. 
 “Lender” means: 

 

	 	(a)	any Original Lender; and 

  

	 	(b)	any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 27 (Changes to the Lenders), 


which in each case has not ceased to be a Party in accordance with the terms of this Agreement. 

“Letter of Quiet Enjoyment” means, in respect of each Vessel, a letter of quiet enjoyment entered or to be entered into
between the Agent, the Charterer and the relevant Borrower in respect of the Charterer’s quiet enjoyment of that Vessel under the relevant Charterparty, in form and substance satisfactory to the Lenders. 

“LIBOR” means, in relation to any Loan: 
  

	 	(a)	the applicable Screen Rate; 









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

  

	 	(c)	if: 

  

	 	(i)	no Screen Rate is available for USD; or 

  

	 	(ii)	no Screen Rate is available for the Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan, 


the Reference Bank Rate, 
 as of,
in the case of paragraph (a) above, 11.00 a.m. London time and in the case of paragraph (c) above, 12:00 noon London time on the Quotation Day for USD and for a period equal in length to the Interest Period of that Loan and, if that rate
is less than zero (0), LIBOR shall be deemed to be zero (0). 
 “Loan” means a loan made or to be made under a Facility or
the principal amount outstanding for the time being of that loan. 
 “Majority Lenders” means: 

 

	 	(a)	if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate more than 662/3% of
the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3% of the Total Commitments
immediately prior to the reduction); or 

  

	 	(b)	at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate more than
662/3% of all the Loans then outstanding. 


“Management Agreement” means any agreement made or to be made between a Borrower and a Manager for the technical and/or
commercial management of a Vessel. 
 “Manager” means KNOT Management AS or one of its Affiliates acceptable to the Agent.

 “Manager’s Undertaking” means an undertaking to be provided by each Manager in form to be determined by Agent. 

“Margin” means one hundred and ninety basis points (190 bps) per annum. 

“Market Value” means the fair market value of a Vessel, being the average of valuations of that Vessel obtained from two
(2) reputable and independent brokers to be approved by the Majority Lenders, with or without physical inspection of that Vessel (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing buyer and a willing seller, on an “as is, where is” basis, free of any existing charter or other contract of employment and/or pool arrangement. If the two (2) valuations differ by a margin of
more than 10% then a third independent shipbroker appointed by the Agent and approved by the Majority Lenders shall provide a valuation and the value of the Vessels shall be deemed to be the average of the three (3) valuations. 

“Material Adverse Effect” means any event or occurrence that in the reasonable opinion of the Lenders has or would have
materially adversely affected or could adversely affect: 
  

	 	(a)	the business, condition (financial or otherwise), operations, performance, assets or prospects of an Obligor or the Group taken as a whole since the date at which its latest audited financial statements were prepared;
or 









 schjodt.no  |  Page 19 of 133 

 


	 	(b)	the ability of an Obligor to perform its obligations under the Finance Documents or the Hedging Agreements; or 

  

	 	(c)	the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to, any Finance Document or Hedging Agreement; or 


 

	 	(d)	the right or remedy of a Finance Party or a Hedging Bank in respect of a Finance Document or a Hedging Agreement. 


“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next
calendar month, except that: 
  

	 	(a)	if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately
preceding Business Day; 

  

	 	(b)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month. 


The above rules will only apply to the last Month of any period. 

“Mortgages” means together the Borrower A Mortgage, the Borrower B Mortgage and the Borrower C Mortgage, and
“Mortgage” means any of them. 
 “Mortgaged Assets” means: 

 

	 	(a)	the Vessels; 

  

	 	(b)	the Earnings; 

  

	 	(c)	the Insurances; 

  

	 	(d)	the Accounts; 

  

	 	(e)	any Requisition Compensation; 

  

	 	(f)	the Charterparties; 

  

	 	(g)	the Shipbuilding Contracts; 

  

	 	(h)	the Refund Guarantees; and 

  

	 	(i)	the shares in each Borrower. 

 “Obligors” means the Borrowers, KNOT (as long as
it is a Guarantor), KNOP (as long as it is a Guarantor) and KNOT ST (as long as it is a Guarantor), and “Obligor” means any of them. 

“Original Financial Statements” means: 
  

	 	(a)	in relation to each Borrower, the audited financial statements for the financial year ended 31 December 2014; and 

  

	 	(b)	in relation to KNOT, its audited financial statements for its financial year ended 31 December 2014. 









 schjodt.no  |  Page 20 of 133 

 

 “Outstanding Indebtedness” means the aggregate of all sums of money at any
time and from time to time owing to the Finance Parties under or pursuant to the Finance Documents. 
 “Party” means a party
to this Agreement. 
 “Post-Delivery Facility” means the post-delivery term loan facility made available under this
Agreement as described in Clause 2.2 (The Post-Delivery Facility). 
 “Post-Delivery Assignment Agreements” means
together the Borrower A Post-Delivery Assignment Agreement, the Borrower B Post-Delivery Assignment Agreement and the Borrower C Post-Delivery Assignment Agreement, and “Post-Delivery Assignment Agreement” means either of them. 

“Post-Delivery Tranche A-1” means the lesser of (a) USD 98,000,000, (b) seventy
per cent. (70%) of the Ready-For-Sea Cost of Vessel A and (c) seventy per cent (70%) of the Market Value of Vessel A made or to be made under the Post-Delivery
Facility relating to the acquisition by Borrower A of Vessel A, or the principal amount outstanding for the time being of that tranche. 

“Post-Delivery Tranche A-2” means the lesser of (a) USD 21,000,000, (b) fifteen
per cent. (15%) of the Ready-For-Sea Cost of Vessel A, (c) fifteen per cent (15%) of the Market Value of Vessel A and (d) when aggregated with Post-Delivery
Tranche A-1, eighty five per cent (85%) of the Market Value of Vessel A, made or to be made under the Post-Delivery Facility relating to the acquisition by Borrower A of Vessel A, or the principal amount
outstanding for the time being of that tranche. 
 “Post-Delivery Tranche B-1” means
the lesser of (a) USD 98,000,000, (b) seventy per cent. (70%) of the Ready-For-Sea Cost of Vessel B and (c) seventy per cent (70%) of the Market Value of
Vessel B made or to be made under the Post-Delivery Facility relating to the acquisition by Borrower B of Vessel B, or the principal amount outstanding for the time being of that tranche. 

“Post-Delivery Tranche B-2” means the lesser of (a) USD 21,000,000, (b) fifteen
per cent. (15%) of the Ready-For-Sea Cost of Vessel B and (c) fifteen per cent (15%) of the Market Value of Vessel B and (d) when aggregated with Post-Delivery
Tranche B-1, eighty five per cent (85%) of the Market Value of Vessel B, made or to be made under the Post-Delivery Facility relating to the acquisition by Borrower B of Vessel B, or the principal amount
outstanding for the time being of that tranche. 
 “Post-Delivery Tranche C-1” means
the lesser of (a) USD 94,500,000, (b) seventy per cent. (70%) of the Ready-For-Sea Cost of Vessel C and (c) seventy per cent (70%) of the Market Value of
Vessel C made or to be made under the Post-Delivery Facility relating to the acquisition by Borrower C of Vessel C, or the principal amount outstanding for the time being of that tranche. 

“Post-Delivery Tranche C-2” means the lesser of (a) USD 20,500,000, (b) fifteen
point one nine per cent. (15.19%) of the Ready-For-Sea Cost of Vessel C, (c) fifteen point one nine per cent (15.19%) of the Market Value of Vessel C and
(d) when aggregated with Post-Delivery Tranche C-1, eighty five point one nine per cent (85.19%) of the Market Value of Vessel C, made or to be made under the Post-Delivery Facility relating to the
acquisition by Borrower C of Vessel C, or the principal amount outstanding for the time being of that tranche. 
 “Post-Delivery
Tranches” means together the Post-Delivery Tranche A-1, the Post-Delivery Tranche A-2, the Post Delivery Tranche B-1 and
the Post-Delivery Tranche B-2, the Post Delivery Tranche C-1 and the Post-Delivery Tranche C-2, and “Post-Delivery
Tranche” means any of them. 








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 “Pre-Delivery Assignment Agreements”
means together the Borrower A Pre-Delivery Assignment Agreement, the Borrower B Pre-Delivery Assignment Agreement and the Borrower C
Pre-Delivery Assignment Agreement, and “Pre-Delivery Assignment Agreement” means either of them. 

“Pre-Delivery Facility” means the pre-delivery
term loan facility made available under this Agreement as described in Clause 2.1 (The Pre-Delivery Facility). 

“Pre-Delivery Tranche A” means USD 35,000,000 made or to be made under the Pre-Delivery Facility relating to the acquisition by Borrower A of Vessel A, available for utilisation in maximum three (3) Loans as per the milestones in the Shipbuilding Contract A as set out in Schedule
8 (Drawings and repayment schedule) or the principal amount outstanding for the time being of that tranche. 
 “Pre-Delivery Tranche B” means USD 35,000,000 made or to be made under the Pre-Delivery Facility relating to the acquisition by Borrower B of Vessel B, available for
utilisation in maximum three (3) Loans as per the milestones in the Shipbuilding Contract B as set out in Schedule 8 (Drawings and repayment schedule) or the principal amount outstanding for the time being of that tranche. 

“Pre-Delivery Tranche C” means USD 33,750,000 made or to be made under the Pre-Delivery Facility relating to the acquisition by Borrower C of Vessel C, available for utilisation in maximum three (3) Loans as per the milestones in the Shipbuilding Contract C as set out in Schedule
8 (Drawings and repayment schedule) or the principal amount outstanding for the time being of that tranche. 
 “Pre-Delivery Tranches” means together the Pre-Delivery Tranche A, the Pre-Delivery Tranche B and the Pre-Delivery Tranche C, and “Pre-Delivery Tranche” means either of them. 

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two (2) Business Days
before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if
quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days). 

“Ready-For-Sea Cost” means, in respect of a
Vessel, the sum of the contract amount payable to the Shipyard pursuant to the relevant Shipbuilding Contract, including variation orders, and other documented capital expenditures related to supervision, buyer’s supplies and finance. This is
estimated to approx. USD 141,000,000 per Vessel for each of Vessel A and Vessel B and approx. USD 135,000,000 for Vessel C. 

“Reference Bank Quotation” means any quotation supplied to the Agent by a Reference Bank. 

“Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent
at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in USD for the relevant period were it to do so by asking for and then accepting interbank offers for deposits
in reasonable market size in that currency and for that period. 
 “Reference Banks” means each Lender or such other banks
as may be appointed by the Agent in consultation with the Borrowers. 








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 “Refund Guarantee A” means in a refund guarantee (titled “Our Letter of
Guarantee no. M0931409LG00299”) dated 18 September 2014 in the maximum amount of USD 51,040,000, executed by the Refund Guarantor in favour of Borrower A securing the instalments payable by Borrower A to the Shipyard under Shipbuilding
Contract A. 
 “Refund Guarantee B” means in a refund guarantee (titled “Our Letter of Guarantee no.
M0931409LG00300”) dated 18 September 2014 in the maximum amount of USD 51,040,000, executed by the Refund Guarantor in favour of Borrower B securing the instalments payable by Borrower B to the Shipyard under Shipbuilding Contract B. 

“Refund Guarantee C” means in a refund guarantee (titled “Our Letter of Guarantee no. M093-1506-LG00559”) dated
25 June 2015 in the maximum amount of USD 48,444,000, executed by the Refund Guarantor in favour of Borrower C securing the instalments payable by Borrower C to the Shipyard under Shipbuilding Contract C. 

“Refund Guarantees” means together the Refund Guarantee A, the Refund Guarantee B and the Refund Guarantee C, and
“Refund Guarantee” means any of them. 
 “Refund Guarantor” means The Export-Import Bank of Korea, of 38, Eunhaeng-Ro (16-1, Yeouido-Dong), Yeongdeungpo-Gu, Seoul 150-996, Korea. 

“Relevant Interbank Market” means the London interbank market.  

“Relevant Person” means: 
  

	 	(a)	each member of the Group; and 

  

	 	(b)	each of its directors, officers, employees, agents and representatives. 

 “Repeating
Representations” means each of the representations set out in Clause 20 (Representations). 

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian. 

“Requisition Compensation” means all sums of money or other compensation from time to time payable in respect of any
requisition for title of other compulsory acquisition, requisition, expropriation or similar of a Vessel by any governmental entity. 

“Restricted Party” means a person that is: 
  

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


 

	 	(b)	located in or incorporated under the laws of any country or territory that is the target of comprehensive, country- or territory-wide Sanctions; or 


 

	 	(c)	directly or indirectly owned or controlled by, or acting on behalf, at the direction or for the benefit of, a person referred to in (a) and/or (to the extent relevant under Sanctions) (b) above; or


 in each case, only to the extent a Finance Party would be prohibited or restricted by Sanctions from transacting or dealing
with (including but not limited to being a party to this Agreement), or otherwise exercising any rights in respect of, or fulfilling any duties or obligations owed to, such a person. 








 schjodt.no  |  Page 23 of 133 

 

 “Sanctions” means any applicable (to the Obligors and/or any Relevant Person
and/or Finance Party as the context provides) laws, regulations or orders concerning any trade, economic or financial sanctions or embargoes. 

“Sanctions Authority” means the Norwegian State, the United Nations, the European Union, the member states of the European
Union, the United States of America, Australia and any authority acting on behalf of any of them in connection with Sanctions. 

“Sanctions List” means (a) the lists of Sanctions designations and/or targets maintained by any Sanctions Authority
and/or (b) any other Sanctions designation or target listed and/or adopted by a Sanctions Authority, in all cases, from time to time. 

“Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other
person which takes over the administration of that rate) for USD for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01/LIBOR02 of the Thomson Reuters Screen (or any replacement
Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may
specify another page or service displaying the relevant rate after consultation with the Borrowers and the Lenders. 

“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any
other agreement or arrangement having a similar effect. 
 “Security Document” means each document listed in Clause 18
(Security) and any other document agreement agreed between the Parties to be a Security Document. 
 “Security
Period” means the period commencing on the date of this Agreement and ending the date on which the Agent notifies the Borrowers, the other Finance Parties and the Hedging Banks that: 

 

	 	(a)	all amounts which have become due for payment by the Borrowers under the Finance Documents and the Hedging Agreements have been paid; 


 

	 	(b)	no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents and the Hedging Agreements; 


 

	 	(c)	none of the Obligors have any future or contingent liability under any provision of this Agreement, the other Finance Documents and the Hedging Agreements; and 


 

	 	(d)	the Agent, the Lenders and the Hedging Banks do not consider that there is a significant risk that any payment or transaction under a Finance Document or a Hedging Agreement would be set aside, or would have to be
reversed or adjusted, in any present or possible future proceeding relating to a Finance Document a Hedging Agreement or any asset covered (or previously covered) by a Security created by a Finance Document a Hedging Agreement. 


“Selection Notice” means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in
accordance with Clause 10 (Interest Periods). 








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 “Share Pledges” means together the Borrower A Share Pledge, the Borrower B
Share Pledge and the Borrower C Share Pledge, and “Share Pledge” means either of them. 
 “Shareholder
Loans” means shareholder loans and/or loans from other companies within the Group and/or loans from other Affiliates. 

“Shipbuilding Contract A” means a shipbuilding contract dated 12 September 2014 entered into between Borrower A and the
Shipyard for the construction of Vessel A. 
 “Shipbuilding Contract B” means a shipbuilding contract dated
12 September 2014 entered into between Borrower B and the Shipyard for the construction of Vessel B. 
 “Shipbuilding Contract
C” means a shipbuilding contract dated 18 June 2015 entered into between Borrower C and the Shipyard for the construction of Vessel C. 

“Shipbuilding Contracts” means together the Shipbuilding Contract A, the Shipbuilding Contract B and the Shipbuilding Contract
C, and “Shipbuilding Contract” means any of them. 
 “Shipyard” means Hyundai Heavy Industries Co., Ltd., a
company organised and existing under the laws of the Republic of Korea, having its principal office at 1,000, Bangeojinsunhwan-doro, Dong-gu, Ulsan, Korea. 

“SMC” means a valid safety management certificate issued for a Vessel issued by the Classification Society pursuant to
paragraph 13.7 of the ISM Code. 
 “SMS” means a safety management system for a Vessel developed and implemented in
accordance with the ISM Code and including the functional requirements duties and obligations that follow from the ISM Code. 

“Subsidiary” means an entity of which a person has direct or indirect control (whether through the ownership of voting
capital, by contract or otherwise) or owns directly or indirectly more than 50% of the shares and for this purpose an entity shall be treated as controlled by another if that entity is able to direct its affairs and/or to control the composition of
the board of directors or equivalent body. 
 “Tax” means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). 

“Total Commitments” means the aggregate of the Commitments being USD 353,000,000 at the date of this Agreement. 

“Total Loss” means, in relation to a Vessel: 
  

	 	(a)	the actual, constructive, compromised, agreed, arranged or other total loss of that Vessel; 

  

	 	(b)	the requisition for title or compulsory acquisition of that Vessel by any government or other competent authority; 

  

	 	(c)	the capture, seizure, destruction, abandonment, condemnation, arrest, detention or confiscation of that Vessel by any government or by persons acting or purporting to act on behalf of any government or public authority,
unless that Vessel is released and returned to the possession of the relevant Borrower within thirty (30) days after the capture, seizure, arrest, detention or confiscation in question; or 


 

	 	(d)	any piracy, hijacking or theft of that Vessel, unless that Vessel is released and restored to the relevant Borrower within thirty (30) days after the occurrence of such incident. 









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 “Total Loss Date” means: 

 

	 	(a)	in the case of an actual total loss of a Vessel, the date on which it occurred or, if that is unknown, the date when that Vessel was last heard of; 


 

	 	(b)	in the case of a constructive, compromised, agreed or arranged total loss of a Vessel, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is
admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or
arbitration panel to have occurred or, if earlier, the date falling three (3) Months after notice of abandonment of that Vessel was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of
the relevant Borrower with that Vessel’s insurers in which the insurers agree to treat that Vessel as a total loss; or 

  

	 	(c)	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. 


“Total Post-Delivery Commitments” means the aggregate of the Commitments relating to the Post-Delivery Facility being USD
353,000,000 at the date of this Agreement. 
 “Total Pre-Delivery Commitments” means
the aggregate of the Commitments relating to the Pre-Delivery Facility being USD 103,750,000 at the date of this Agreement. 

“Tranches” means together the Pre-Delivery Tranches and the Post-Delivery Tranches,
and “Tranche” means any of them. 
 “Transaction Documents” means each Shipbuilding Contract, each Refund
Guarantee and each Management Agreement, together with the other documents contemplated herein or therein or otherwise designated as a Transaction Document by the Agent and the Borrowers, and “Transaction Document” means any of
them. 
 “Transfer Certificate” means a certificate substantially in the form set out in Schedule 4 (Form of
Transfer Certificate) or any other form agreed between the Agent and the Borrowers. 
 “Transfer Date” means, in
relation to a transfer, the later of: 
  

	 	(a)	the proposed Transfer Date specified in the relevant Transfer Certificate; and 

  

	 	(b)	the date on which the Agent executes the relevant Transfer Certificate. 

 “US”
means the United States of America. 
 “US Tax Obligor” means: 

 

	 	(a)	a Borrower which is resident for tax purposes in the US; or 

  

	 	(b)	an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes. 


“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents. 








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 “Utilisation” means a utilisation of a Facility. 

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made. 

“Utilisation Request” means a notice substantially in the form set out in Part I of Schedule 3 (Requests). 

“VAT” means value added tax as provided for in the Norwegian Value Added Tax Act of 19 June 2009 no. 58 (in
No. Merverdiavgiftsloven) and any other tax of a similar nature. 
 “Vessel A” means a newbuilding DP 2 shuttle
tanker with the Shipyard’s hull no. 2816, with a contract price of USD 127,600,000 and estimated delivery 4Q 2016, to be registered in the name of Borrower A with an Approved Ship Registry upon delivery. 

“Vessel B” means a newbuilding DP 2 shuttle tanker with the Shipyard’s hull no. 2817, with a contract price of
USD 127,600,000 and estimated delivery 1Q 2017, to be registered in the name of Borrower B with an Approved Ship Registry upon delivery. 

“Vessel C” means a newbuilding DP 2 shuttle tanker with the Shipyard’s hull no. 2818, with a contract price of
USD 121,110,000 and estimated delivery 3Q 2017, to be registered in the name of Borrower C with an Approved Ship Registry upon delivery. 

“Vessels” means together Vessel A, Vessel B and Vessel C, and “Vessel” means any of them. 

 

	1.2	Construction 

  

	 	(a)	Unless a contrary indication appears, any reference in this Agreement to: 

  

	 	(i)	the “Agent”, a “Mandated Lead Arranger”, a “Bookrunner”, any “Finance Party”, any “Lender”, or any “Party” shall be
construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents; 


 

	 	(ii)	a “Hedging Bank”, shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under any Hedging Agreement;


  

	 	(iii)	“assets” includes present and future properties, revenues and rights of every description; 

  

	 	(iv)	a “Finance Document”, “Transaction Document” or any other agreement or instrument is a reference to that Finance Document, Transaction Document or other agreement or instrument as
amended, novated, supplemented, extended or restated; 

  

	 	(v)	a “group of Lenders” includes all the Lenders; 

  

	 	(vi)	“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; 


 

	 	(vii)	a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not
having separate legal personality); 









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	 	(viii)	a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency,
department or of any regulatory, self-regulatory or other authority or organisation; 

  

	 	(ix)	a provision of law is a reference to that provision as amended or re-enacted; 

  

	 	(x)	words importing the singular shall include the plural and vice versa; and 

  

	 	(xi)	a time of day is a reference to Bergen time unless specified otherwise. 

  

	 	(b)	Section, Clause and Schedule headings are for ease of reference only. 

  

	 	(c)	Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this
Agreement. 

  

	 	(d)	Each Hedging Agreement shall operate subject to the terms of this Agreement and, accordingly, in the event of any inconsistency between the terms of a Hedging Agreement and this Agreement, the terms of this Agreement
will prevail. 

  

	 	(e)	A Default is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived. 


 

	1.3	Currency symbols and definitions 

 “$”, “USD” and
“dollars” denote the lawful currency of the United States of America and “kr”, “NOK” and “norske kroner” denote the lawful currency of Norway. 

SECTION 2 
 THE
FACILITIES 
  

	2.	THE FACILITIES 

  

	2.1	The Pre-Delivery Facility 

 Subject to the terms
of this Agreement, the Lenders make available to the Borrowers a senior secured USD pre-delivery term loan facility in an aggregate amount equal to the Total
Pre-Delivery Commitments. 
  

	2.2	The Post-Delivery Facility 

 Subject to the terms of this Agreement, the Lenders make
available to the Borrowers a senior secured USD post-delivery term loan facility in an aggregate amount equal to the Total Post-Delivery Commitments. 
  

	2.3	Finance Parties’ and Hedging Banks’ rights and obligations 

  

	 	(a)	The obligations of each Finance Party and each Hedging Bank under the Finance Documents are several. Failure by a Finance Party or a Hedging Bank to perform its obligations under the Finance Documents or the Hedging
Agreements does not affect the obligations of any other Party under the Finance Documents or the Hedging Agreements. No Finance Party or Hedging Bank is responsible for the obligations of any other Finance Party or Hedging Bank under the Finance
Documents and the Hedging Agreements. 

  

	 	(b)	The rights of each Finance Party and each Hedging Bank under or in connection with the Finance Documents and the Hedging Agreements are separate and independent rights and any debt arising under the Finance Documents to
a Finance Party or under the Hedging Agreements to a Hedging Bank from an Obligor shall be a separate and independent debt. 









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	 	(c)	A Finance Party and a Hedging Bank may, except as otherwise stated in the Finance Documents and the Hedging Agreements, separately enforce its rights under the Finance Documents and the Hedging Agreements.


  

	 	(d)	No Finance Party or Hedging Bank will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document
or Hedging Agreement, unless directly caused by its gross negligence or wilful misconduct. 

  

	3.	PURPOSE 

  

	3.1	Purpose of the Pre-Delivery Facility 

 The
Borrowers shall apply all amounts borrowed by them under the Pre-Delivery Facility towards financing of instalments under the Shipbuilding Contracts. 

 

	3.2	Purpose of the Post-Delivery Facility 

 The Borrowers shall apply all amounts borrowed by
them under the Post-Delivery Facility towards financing the delivery instalment of the Vessels and applicable project costs. 
  

	3.3	Monitoring 

 No Finance Party is bound to monitor or verify the application of any amount
borrowed pursuant to this Agreement. 
  

	4.	CONDITIONS OF UTILISATION 

  

	4.1	Initial conditions precedent  

  

	 	(a)	The Borrowers may not deliver a Utilisation Request relating to a Loan under the Pre-Delivery Facility unless the Agent has received all of the documents and other evidence listed
in Part I (General Conditions Precedent) and Part II (Conditions precedent to Utilisation of each Loan under the Pre-Delivery Facility) of Schedule 2 (Conditions precedent and
subsequent), except those documents which specifically will only be available on the Utilisation Date or within another specified date as previously notified and agreed to by the Majority Lenders. The Agent shall notify the Borrowers and the
Lenders promptly upon being so satisfied. 

  

	 	(b)	The Borrowers may not deliver a Utilisation Request relating to a Loan under the Post-Delivery Facility unless the Agent has received all of the documents and other evidence listed in Part I (General Conditions
Precedent) and Part III (Conditions precedent to Utilisation of each Loan under the Post-Delivery Facility) of Schedule 2 (Conditions precedent and subsequent), except those documents which specifically will only be
available on the Utilisation Date or within another specified date as previously notified and agreed to by the Majority Lenders. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied. 


 

	 	(c)	Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require)
the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification. 









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	4.2	Further conditions precedent 

 The Lenders will only be obliged to comply with Clause 5.5
(Lenders’ participation) if on the date of the Utilisation Request and on the proposed Utilisation Date: 
  

	 	(a)	no Default is continuing or would result from the proposed Loan; and 

  

	 	(b)	the Repeating Representations to be made by each Obligor are true in all material respects. 

  

	4.3	Conditions subsequent 

 The Borrowers undertake to deliver or cause to be delivered to
the Agent the additional documents and other evidence listed in Part V of Schedule 2 (Conditions precedent and subsequent), within the time periods specified, in form and substance satisfactory to the Agent. 

 

	4.4	Maximum number of Loans 

  

	 	(a)	The Pre-Delivery Tranche A may be drawn in three (3) Loans. 

  

	 	(b)	The Pre-Delivery Tranche B may be drawn in three (3) Loans. 

  

	 	(c)	The Pre-Delivery Tranche C may be drawn in three (3) Loans. 

  

	 	(d)	The Post-Delivery Tranche A-1 may be drawn in one (1) Loan. 

  

	 	(e)	The Post-Delivery Tranche A-2 may be drawn in one (1) Loan. 

  

	 	(f)	The Post-Delivery Tranche B-1 may be drawn in one (1) Loan. 

  

	 	(g)	The Post-Delivery Tranche B-2 may be drawn in one (1) Loan. 

  

	 	(h)	The Post-Delivery Tranche C-1 may be drawn in one (1) Loan. 

  

	 	(i)	The Post-Delivery Tranche C-2 may be drawn in one (1) Loan. 

  

	4.5	Form and content 

 All documents and evidence delivered to the Agent pursuant to this
Clause 4 (Conditions of Utilisation) shall: 
  

	 	(a)	be in form and substance satisfactory to the Agent; 

  

	 	(b)	if required by the Agent, be in original; and 

  

	 	(c)	if required by the Agent, be certified, notarized, legalized or attested in a manner acceptable to the Agent. 

  

	4.6	Waiver of conditions precedent  

 The conditions specified in this Clause 4
(Conditions of Utilisation) are solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Agent (acting on the instructions of all of the Lenders). 








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 SECTION 3 

UTILISATION 
  

	5.	UTILISATION 

  

	5.1	Delivery of a Utilisation Request 

 The Borrowers may utilise a Facility by delivery to
the Agent of a duly completed Utilisation Request not later than 12:00 noon Bergen time on the date falling three (3) Business Days prior to the relevant Utilisation Date. 

 

	5.2	Completion of a Utilisation Request 

 Each Utilisation Request is irrevocable and will
not be regarded as having been duly completed unless: 
  

	 	(a)	the proposed Utilisation Date is a Business Day within the Availability Period, and complies with Clause 5.3 (Utilisation Dates); 


 

	 	(b)	the currency and amount of the Utilisation comply with Clause 5.4 (Currency and amount); and 

  

	 	(c)	the proposed Interest Period complies with Clause 10 (Interest Periods). 

  

	5.3	Utilisation Dates 

 Subject always to the terms of this Agreement: 

 

	 	(a)	The Pre-Delivery Tranche A shall be utilised on the following dates: 

  

	 	(i)	on the date of the third instalment under the Shipbuilding Contract A, within six (6) months from 1 November 2014; 

  

	 	(ii)	on the date of the fourth instalment under the Shipbuilding Contract A, within three (3) Business Days of receipt by Borrower A of a facsimiled advice from the Shipyard confirmed by the classification society that
steel cutting of Vessel A has been commenced, but in no event earlier than 26 October 2015; and 

  

	 	(iii)	on the date of the fifth instalment under the Shipbuilding Contract A, within three (3) Business Days of receipt by Borrower A of a facsimiled advice from the Shipyard confirmed by the classification society that
the first block of the keel of Vessel A has been laid, but in no event earlier than 22 March 2016. 

  

	 	(b)	The Pre-Delivery Tranche B shall be utilised on the following dates: 

  

	 	(i)	on the date of the third instalment under the Shipbuilding Contract B, within nine (9) months from 1 November 2014; 

  

	 	(ii)	on the date of the fourth instalment under the Shipbuilding Contract B, within three (3) Business Days of receipt by Borrower B of a facsimiled advice from the Shipyard confirmed by the classification society that
steel cutting of Vessel B has been commenced, but in no event earlier than 18 January 2016; and 

  

	 	(iii)	on the date of the fifth instalment under the Shipbuilding Contract B, within three (3) Business Days of receipt by Borrower B of a facsimiled advice from the Shipyard confirmed by the classification society that
the first block of the keel of Vessel B has been laid, but in no event earlier than 13 June 2016. 

  

	 	(c)	The Pre-Delivery Tranche C shall be utilised on the following dates: 

  

	 	(i)	on the date of the second instalment under the Shipbuilding Contract C, within six (6) months from 18 June 2015; 









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	 	(ii)	on the date of the third instalment under the Shipbuilding Contract C, within three (3) Business Days of receipt by Borrower C of a facsimiled advice from the Shipyard confirmed by the classification society that
steel cutting of Vessel C has been commenced, but in no event earlier than 9 May 2016; and 

  

	 	(iii)	on the date of the fourth instalment under the Shipbuilding Contract C, within three (3) Business Days of receipt by Borrower C of a facsimiled advice from the Shipyard confirmed by the classification society that
the first block of the keel of Vessel C has been laid, but in no event earlier than 12 September 2016. 

  

	 	(d)	The Post-Delivery Tranche A-1 and the Post-Delivery Tranche A-2 shall be utilised simultaneously on or after the Delivery Date of Vessel A.


  

	 	(e)	The Post-Delivery Tranche B-1 and the Post-Delivery Tranche B-2 shall be utilised simultaneously on or after the Delivery Date of Vessel B.


  

	 	(f)	The Post-Delivery Tranche C-1 and the Post-Delivery Tranche C-2 shall be utilised simultaneously on or after the Delivery Date of Vessel C.


  

	5.4	Currency and amount 

  

	 	(a)	The currency specified in a Utilisation Request must be USD. 

  

	 	(b)	The amount of the proposed Loan must be an amount which is not more than the Available Facility in respect of the relevant Tranche, provided that: 


 

	 	(i)	the Loans utilised under the Pre-Delivery Tranche A must be amounts which are not more than: 


 

	 	(A)	USD 7,000,000 in respect of the Loan described in paragraph (a)(i) of Clause 5.3 (Utilisation Dates); 

  

	 	(B)	USD 14,000,000 in respect of the Loan described in paragraph (a)(ii) of Clause 5.3 (Utilisation Dates); 

  

	 	(C)	USD 14,000,000 in respect of the Loan described in paragraph (a)(iii) of Clause 5.3 (Utilisation Dates); 

  

	 	(ii)	the Loans utilised under the Pre-Delivery Tranche B must be amounts which are not more than: 


 

	 	(A)	USD 7,000,000 in respect of the Loan described in paragraph (b)(i) of Clause 5.3 (Utilisation Dates); 

  

	 	(B)	USD 14,000,000 in respect of the Loan described in paragraph (b)(ii) of Clause 5.3 (Utilisation Dates); 

  

	 	(C)	USD 14,000,000 in respect of the Loan described in paragraph (b)(iii) of Clause 5.3 (Utilisation Dates); 

  

	 	(iii)	the Loans utilised under the Pre-Delivery Tranche C must be amounts which are not more than: 


 

	 	(A)	USD 6,750,000 in respect of the Loan described in paragraph (c)(i) of Clause 5.3 (Utilisation Dates); 









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	 	(B)	USD 13,500,000 in respect of the Loan described in paragraph (c)(ii) of Clause 5.3 (Utilisation Dates); 

  

	 	(C)	USD 13,500,000 in respect of the Loan described in paragraph (c)(iii) of Clause 5.3 (Utilisation Dates); 

  

	 	(iv)	the Loan utilised under the Post-Delivery Tranche A-1 must be an amount which is not more than the lesser of (a) USD 98,000,000, (b) seventy per cent. (70%) of the Ready-For-Sea Cost of Vessel A and (c) seventy per cent (70%) of the Market Value of Vessel A, and shall be applied by Borrower A towards financing the delivery
instalment of Vessel A and applicable project costs; 

  

	 	(v)	the Loan utilised under the Post-Delivery Tranche A-2 must be an amount which is not more than the lesser of (a) USD 21,000,000, (b) fifteen per cent. (15%) of the Ready-For-Sea Cost of Vessel A, (c) fifteen per cent (15%) of the Market Value of Vessel A and (d) when aggregated with Post-Delivery Tranche A-1, eighty five per cent (85%) of the Market Value of Vessel A, and shall be applied by Borrower A towards financing the delivery instalment of Vessel A and applicable project costs; 


 

	 	(vi)	the Loan utilised under the Post-Delivery Tranche B-1 must be an amount which is not more than the lesser of (a) USD 98,000,000, (b) seventy per cent. (70%) of the Ready-For-Sea Cost of Vessel B and (c) seventy per cent (70%) of the Market Value of Vessel B, and shall be applied by Borrower B towards financing the delivery
instalment of Vessel B and applicable project costs; 

  

	 	(vii)	the Loan utilised under the Post-Delivery Tranche B-2 must be an amount which is not more than the lesser of (a) USD 21,000,000, (b) fifteen per cent. (15%) of the Ready-For-Sea Cost of Vessel B, (c) fifteen per cent (15%) of the Market Value of Vessel A and (d) when aggregated with Post-Delivery Tranche B-1, eighty five per cent (85%) of the Market Value of Vessel A, and shall be applied by Borrower B towards financing the delivery instalment of Vessel B and applicable project costs; 


 

	 	(viii)	the Loan utilised under the Post-Delivery Tranche C-1 must be an amount which is not more than the lesser of (a) USD 94,500,000, (b) seventy per cent. (70%) of the Ready-For-Sea Cost of Vessel C and (c) seventy per cent (70%) of the Market Value of Vessel C, and shall be applied by Borrower C towards financing the delivery
instalment of Vessel C and applicable project costs; and 

  

	 	(ix)	the Loan utilised under the Post-Delivery Tranche C-2 must be an amount which is not more than the lesser of (a) USD 20,500,000, (b) fifteen point one nine per cent. (15.19%)
of the Ready-For-Sea Cost of Vessel C, (c) fifteen point one nine per cent (15.19%) of the Market Value of Vessel C and (d) when aggregated with Post-Delivery
Tranche C-1, eighty five point one nine per cent (85.19%) of the Market Value of Vessel C, and shall be applied by Borrower C towards financing the delivery instalment of Vessel C and applicable project costs.


  

	5.5	Lenders’ participation 

  

	 	(a)	If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office. 









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	 	(b)	The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making that Loan. 


 

	 	(c)	The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by 12:00 noon Bergen time on the date falling one (1) Business Day prior to the relevant Utilisation
Date. 

  

	5.6	Cancellation of Commitment 

 The Commitments which, at that time, are unutilised shall be
immediately cancelled at the end of the Availability Period. 
  

	6.	JOINT AND SEVERAL LIABILITY 

  

	6.1	Joint and several liability 

 Notwithstanding anything to the contrary herein contained,
each Borrower shall be and remain jointly and severally liable with the other Borrowers for (i) the payment of each and every sum from time to time due from the Borrowers, (ii) each and every obligation undertaken and (iii) each and
every liability incurred on the part of the Borrowers under or pursuant to the Finance Documents. 
 If at any time a Borrower has paid to
the Finance Parties or the Finance Parties have recovered from that Borrower a sum which was due from the Borrowers under or pursuant to the Finance Documents and such sum is higher than the amount that Borrower was obliged to contribute in its
relation (if any) with the other Borrowers, then that Borrower shall not have the benefit of any right of subrogation and shall not exercise any right of recourse or claim any set-off or counterclaim against
the other Borrowers or prove otherwise in competition with the Finance Parties (all such rights being hereby irrevocably waived by each Borrower) unless and until the Outstanding Indebtedness has been paid and discharged in full. 

 

	6.2	Limitations 

  

	 	(a)	Notwithstanding the joint and several liability of each Borrower with the other Borrowers under the Finance Documents: 

  

	 	(i)	the maximum liability of each Borrower under the Finance Documents shall always be limited to USD 423,600,000 plus (i) any interest, default interest, Break Cost or other costs, fees and expenses related to the
Borrowers’ obligations under the Finance Documents and (ii) any default interest or other costs, fees and expenses related to the liability of the that Borrower hereunder; 


 

	 	(ii)	the joint and several liability of each Borrower with the other Borrowers does not apply to any liability if and to the extent that it would result in this guarantee constituting unlawful financial assistance within the
meaning of Chapter 8 of the Companies Act or any equivalent and applicable provisions under the laws of the relevant jurisdiction of the Borrowers. 

  

	 	(b)	The limitations set out in this Clause 6.2 (Limitations) shall only apply to the extent the joint and several obligations (or parts thereof) are deemed to be guarantee obligations (in Norwegian: kausjon)
pursuant to the terms of the FA Act. 

  

	 	(c)	The joint and several liability of each Borrower with the other Borrowers shall not apply from the date a Drop Down in respect of one Borrower has occurred until a Drop Down has occurred also for the other Borrowers,
and during this time: 

  

	 	(i)	Borrower A shall only be liable for the Outstanding Indebtedness relating to the Pre-Delivery Tranche A, the Post-Delivery Tranche A-1 and
the Post-Delivery Tranche A-2 (if any); 









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	 	(ii)	Borrower B shall only be liable for the Outstanding Indebtedness relating to the Pre-Delivery Tranche B, the Post-Delivery Tranche B-1 and
the Post-Delivery Tranche B-2 (if any); and 

  

	 	(iii)	Borrower C shall only be liable for the Outstanding Indebtedness relating to the Pre-Delivery Tranche C, the Post-Delivery Tranche C-1 and
the Post-Delivery Tranche C-2 (if any), 

 provided, however, that any two
(2) Borrowers owned by the same Guarantor shall always be jointly and severally liable with each other as set out in this Clause 6 (Joint and Several Liability). 
  

	6.3	Waiver of defences 

 Each Borrower hereby specifically agrees and accepts that the nature
of its liability hereunder is joint and several, and that the obligations of a Borrower under the Finance Documents will not be affected by an act, omission, matter or thing which, but for this Clause 6 (Joint and several liability), would
reduce, release or prejudice any of its obligations under this Clause 6 (Joint and several liability) (without limitation and whether or not known to it or any Finance Party) including: 

 

	 	(a)	any time, waiver or consent granted to, or composition with, the other Borrowers or any other person; 

  

	 	(b)	the release of the other Borrowers or any other person under the terms of any composition or arrangement with any creditor of that Borrower; 


 

	 	(c)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the other Borrowers or any other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;


  

	 	(d)	any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the other Borrowers or any other person; 


 

	 	(e)	any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case, however fundamental and of whatsoever nature) or replacement of a Finance Document or any other document or
security in relation to the other Borrowers; 

  

	 	(f)	any unenforceability, illegality or invalidity of any obligation of the other Borrowers under any Finance Document or any other document or security; or 


 

	 	(g)	any insolvency or similar proceedings in relation to the other Borrowers. 

  

	6.4	FA Act 

 Each Borrower, to the extent it is considered to be a guarantor for the
obligations of the other Borrowers, specifically waives all rights under the provisions of the FA Act not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as
indicated in the brackets): 
  

	 	(a)	§ 29 (as the Agent shall be entitled to exercise all its rights under this Agreement and applicable law in order to secure payment. Such rights shall include the right to
set-off any credit balance in any currency, on any bank account the that Borrower might have with each of the Finance Parties individually against the amount due); 









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	 	(b)	§ 63 (1) – (2) (to be notified of a Default or an Event of Default hereunder and to be kept informed thereof); 

  

	 	(c)	§ 63 (3) (to be notified of any extension granted to the other Borrowers in payment of principal and/or interest); 

  

	 	(d)	§ 63 (4) (to be notified of the other Borrowers’ bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter); 


 

	 	(e)	§ 65 (3) (that the consent of that Borrower is required for that Borrower to be bound by amendments to the Finance Documents that may be detrimental to its interest); 


 

	 	(f)	§ 66 (that its consent is required for the release of other Security); 

  

	 	(g)	§ 67 (2) (about any reduction of that Borrower’s liabilities hereunder, since no such reduction shall apply as long as any amount is outstanding under the Finance Documents); 


 

	 	(h)	§ 67 (4) (that that Borrower’s liabilities hereunder shall lapse after ten (10) years, as that Borrower shall remain liable hereunder as long as any amount is outstanding under any of the Finance
Documents); 

  

	 	(i)	§ 70 (as that Borrower shall not have any right of subrogation into the rights of the Finance Parties under the Finance Documents until and unless the Finance Parties shall have received all amounts due or to
become due to them under the Finance Documents); 

  

	 	(j)	§ 71 (as the Finance Parties shall have no obligation first to make demand upon or seek to enforce remedies against any other Obligor or any other Security provided in respect of any other Obligor’s
liabilities under the Finance Documents before demanding payment under or seeking to enforce the guarantee obligations of that Borrower hereunder); 

  

	 	(k)	§ 72 (as all interest and default interest due under any of the Finance Documents shall be secured by the guarantee obligations of that Borrower hereunder); 


 

	 	(l)	§ 73 (1) – (2) (as all costs and expenses related to a termination event, a Default or an Event of Default shall be secured by the guarantee obligations of that Borrower hereunder); and 


 

	 	(m)	§ 74 (1) – (2) (as that Borrower shall not make any claim against any other Borrower for payment by reason of performance by it of its obligations under the Finance Documents until and unless the Finance
Parties first shall have received all amounts due or to become due to them under the Finance Documents). 

 SECTION 4

 REPAYMENT, PREPAYMENT AND CANCELLATION 
  

	7.	REPAYMENT 

  

	7.1	Repayment of the Pre-Delivery Tranche A 

  

	 	(a)	The Pre-Delivery Tranche A and any Outstanding Indebtedness related thereto is due and payable on the Final Maturity Date of the
Pre-Delivery Tranche A. 

  

	 	(b)	No Borrower may reborrow any part of Pre-Delivery Tranche A which is repaid. 









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	7.2	Repayment of the Pre-Delivery Tranche B 

  

	 	(a)	The Pre-Delivery Tranche B and any Outstanding Indebtedness related thereto is due and payable on the Final Maturity Date of the
Pre-Delivery Tranche B. 

  

	 	(b)	No Borrower may reborrow any part of Pre-Delivery Tranche B which is repaid. 

  

	7.3	Repayment of the Pre-Delivery Tranche C 

  

	 	(a)	The Pre-Delivery Tranche C and any Outstanding Indebtedness related thereto is due and payable on the Final Maturity Date of the
Pre-Delivery Tranche C. 

  

	 	(b)	No Borrower may reborrow any part of Pre-Delivery Tranche C which is repaid. 

  

	7.4	Repayment of the Post-Delivery Tranche A-1 

  

	 	(a)	The Post-Delivery Tranche A-1 shall be repaid by consecutive quarterly repayment instalments over a nineteen (19) year profile as set out in Schedule 8 (Drawings
and repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel A. 

  

	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche A-1 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
A-1. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche A-1 which is repaid. 

  

	7.5	Repayment of the Post-Delivery Tranche A-2 

  

	 	(a)	The Post-Delivery Tranche A-2 shall be repaid by consecutive quarterly repayment instalments over a five (5) year profile as set out in Schedule 8 (Drawings and
repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel A. 

  

	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche A-2 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
A-2. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche A-2 which is repaid. 

  

	7.6	Repayment of the Post-Delivery Tranche B-1 

  

	 	(a)	The Post-Delivery Tranche B-1 shall be repaid by consecutive quarterly repayment instalments over a nineteen (19) year profile as set out in Schedule 8 (Drawings
and repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel B. 

  

	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche B-1 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
B-1. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche B-1 which is repaid. 

  

	7.7	Repayment of the Post-Delivery Tranche B-2 

  

	 	(a)	The Post-Delivery Tranche B-2 shall be repaid by consecutive quarterly repayment instalments over a five (5) year profile as set out in Schedule 8 (Drawings and
repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel B. 









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	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche B-2 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
B-2. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche B-2 which is repaid. 

  

	7.8	Repayment of the Post-Delivery Tranche C-1 

  

	 	(a)	The Post-Delivery Tranche C-1 shall be repaid by consecutive quarterly repayment instalments over a nineteen (19) year profile as set out in Schedule 8 (Drawings
and repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel C. 

  

	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche C-1 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
C-1. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche C-1 which is repaid. 

  

	7.9	Repayment of the Post-Delivery Tranche C-2 

  

	 	(a)	The Post-Delivery Tranche C-2 shall be repaid by consecutive quarterly repayment instalments over a five (5) year profile as set out in Schedule 8 (Drawings and
repayment schedule), the first of which is due and payable on the date falling three (3) months after the Delivery Date of Vessel C. 

  

	 	(b)	Any Outstanding Indebtedness related to the Post-Delivery Tranche C-2 is due and payable on the Final Maturity Date of the Post-Delivery Tranche
C-2. 

  

	 	(c)	No Borrower may reborrow any part of the Post-Delivery Tranche C-2 which is repaid. 

  

	7.10	Final Maturity Date 

 All Outstanding Indebtedness is due and payable on the Final
Maturity Date of the Post-Delivery Tranche C-1 and the Post-Delivery Tranche C-2. 
  

	8.	PREPAYMENT AND CANCELLATION 

  

	8.1	Voluntary cancellation 

 The Borrowers may, if they give the Agent not less than ten
(10) Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 5,000,000) of the Available Facility in respect of a Tranche. Any cancellation under
this Clause 8.1 (Voluntary cancellation) shall reduce the Commitments of the Lenders in respect of that Tranche rateably. 
  

	8.2	Voluntary prepayment of Loans 

  

	 	(a)	The Borrowers may, if they give the Agent not less than ten (10) Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loans (but, if in
part, being an amount that reduces the amount of the Loan by a minimum amount of USD 2,000,000). 

  

	 	(b)	Any prepayment under this Clause 8.2 (Voluntary prepayment of Loans) shall rateably satisfy the obligations under (1) Clause 7.1 (Repayment of the Pre-Delivery
Tranche A), Clause 7.2 (Repayment of e Pre-Delivery Tranche B) and Clause 7.3 (Repayment of the Pre-Delivery Tranche C) or (2) Clause 7.4
(Repayment of the Post-Delivery Tranche A-1), Clause 7.5 (Repayment of the Post-Delivery Tranche A-2), Clause 7.6 (Repayment of the Post-Delivery
Tranche B-1), Clause 7.7 (Repayment of the Post-Delivery Tranche B-2), Clause 7.8 (Repayment of the Post-Delivery Tranche
C-1) and Clause 7.9 (Repayment of the Post-Delivery Tranche C-2) (as the case may be, depending on whether or not the Vessels have been delivered and the
Post-Delivery Facility utilised), in inverse order of maturity including any balloon payment. 









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	8.3	Mandatory prepayment - Drop Down 

 If a Drop Down occurs in relation to a Borrower, the
Agent shall on the relevant Drop Down Date cancel the Total Commitments relating to: 
  

	 	(a)	the Post-Delivery Tranche A-2 if the Drop Down relates to Borrower A; 

  

	 	(b)	the Post-Delivery Tranche B-2 if the Drop Down relates to Borrower B; and/or 

  

	 	(c)	the Post-Delivery Tranche C-2 if the Drop Down relates to Borrower C, 


and declare the relevant outstanding Tranche, together with accrued interest, and all other amounts accrued in relation thereto immediately due
and payable, whereupon the Total Commitments relating to the Post-Delivery Tranche A-2, the Post-Delivery Tranche B-2 or the Post-Delivery Tranche C-2 (as the case may be) will be cancelled and all such outstanding amounts will become immediately due and payable. 
  

	8.4	Mandatory prepayment – illegality 

 If it becomes unlawful in any applicable
jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan or it becomes contrary to Sanctions to do the same: 

 

	 	(a)	that Lender shall promptly notify the Agent upon becoming aware of that event; 

  

	 	(b)	upon the Agent notifying the Borrowers, each Available Commitment of that Lender will be immediately cancelled; and 

  

	 	(c)	to the extent that the Lender’s participation has not been transferred pursuant to paragraph (d) of Clause 8.8 (Right of replacement or repayment and cancellation in relation to a single Lender), the
Borrowers shall repay that Lender’s participation in the Loans on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to
the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment shall be cancelled in the amount of the participations repaid. 


 

	8.5	Mandatory prepayment – Total Loss or sale of a Vessel 

 If a Vessel is sold or shall
suffer a Total Loss, the Agent shall: 
  

	 	(a)	in case of a sale, on or before the date on which the sale is completed by delivery of that Vessel to the buyer; or 

  

	 	(b)	in the case of a Total Loss, on the earlier of the date falling ninety (90) days after the Total Loss Date and the receipt by the Agent of the proceeds of Insurance relating to such Total Loss (or in the event of a
requisition for title of that Vessel, immediately after the occurrence of such requisition of title); 

 cancel the Total
Commitments relating to the relevant Tranches under which that Vessel is financed and declare the relevant outstanding Loans, together with accrued interest, and all other amounts accrued in relation thereto immediately due and payable, whereupon
the Total Commitments relating to the relevant Tranches under which that Vessel in financed will be cancelled and all such outstanding amounts will become immediately due and payable. 








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	8.6	Mandatory prepayment – Market Value 

  

	 	(a)	If the aggregate Market Value of the Vessels falls below: 

  

	 	(i)	one hundred and fifteen per cent (115%) of the Loans at any time up to 31 December 2018, 

  

	 	(ii)	one hundred and twenty per cent (120%) of the Loans at any time thereafter and up to 31 December 2020, 

  

	 	(iii)	one hundred and twenty five per cent (125%) of the Loans at any time thereafter; or 

  

	 	(iv)	one hundred and thirty per cent (130%) of the Loans at any time following a Drop Down, 

 the
Borrowers shall, unless otherwise agreed with the Agent within fifteen (15) Business Days, either: 
  

	 	(v)	prepay the Loans or a part of the Loans (as the case may be); or 

  

	 	(vi)	provide the Lenders with such additional security, in form and substance and being of a kind and having a value satisfactory to the Lenders, 


required to restore the aforesaid ratio. Any additional security shall be documented and perfected in such terms as the Agent (on behalf of all
Lenders) may approve or require. 
  

	 	(b)	Any prepayment under this Clause 8.6 (Mandatory prepayment – Market Value) shall rateably satisfy the Borrowers’ obligations under Clause 7.4 (Repayment of the Post-Delivery Tranche A-1), Clause 7.5 (Repayment of the Post-Delivery Tranche A-2), Clause 7.6 (Repayment of the Post-Delivery Tranche
B-1), Clause 7.7 (Repayment of the Post-Delivery Tranche B-2), Clause 7.8 (Repayment of the Post-Delivery Tranche
C-1) and Clause 7.9 (Repayment of the Post-Delivery Tranche C-2), in inverse order of maturity including any balloon payment. 


 

	8.7	Mandatory prepayment – Change of control 

 If a Change of Control occurs: 

 

	 	(a)	the Borrowers shall promptly notify the Agent upon becoming aware of that event; 

  

	 	(b)	a Lender shall not be obliged to fund a Utilisation; 

  

	 	(c)	the Agent (acting on the instructions of the Majority Lenders) may, by not less than sixty (60) days’ notice to the Borrowers, cancel the Total Commitments and declare all outstanding Loans, together with
accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.










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	8.8	Right of replacement or repayment and cancellation in relation to a single Lender 

  

	 	(a)	If: 

  

	 	(i)	any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 13.2 (Tax gross-up); or 


 

	 	(ii)	any Lender claims indemnification from a Borrower under Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased costs), 


the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice
of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with paragraph
(d) below. 
  

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


 

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

  

	 	(d)	If: 

  

	 	(i)	any of the circumstances set out in paragraph (a) above apply to a Lender; or, 

  

	 	(ii)	an Obligor becomes obliged to pay any amount in accordance with Clause 8.4 (Mandatory prepayment – illegality) to any Lender, 


the Borrowers may, on thirty (30) Business Days’ prior notice to the Agent and that Lender, replace that Lender by requiring that
Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 27 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial
institution, trust, fund or other entity selected by the Borrowers which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 27 (Changes to the Lenders) for a purchase
price in cash payable at the time of the transfer in an amount equal to the outstanding principal amount of such Lender’s participation in the outstanding Loans and all accrued interest (to the extent that the Agent has not given a notification
under Clause 27.7 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents. 
  

	 	(e)	The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions: 

  

	 	(i)	the Borrowers shall have no right to replace the Agent; 

  

	 	(ii)	neither the Agent nor any Lender shall have any obligation to find a replacement Lender; 

  

	 	(iii)	in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and 


 

	 	(iv)	the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (d) above once it is satisfied that it has complied with all necessary “know your customer” or other similar
checks under all applicable laws and regulations In relation to that transfer. 

  

	 	(f)	A Lender shall perform the checks described in paragraph (e)(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (d) above and shall notify the Agent and the Borrower
when it is satisfied that it has complied with this checks. 









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	8.9	Restrictions 

  

	 	(a)	Any notice of cancellation or prepayment given by any Party under this Clause 7.10 (Prepayment and cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the
date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. 

  

	 	(b)	Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. 


 

	 	(c)	The Borrowers may not reborrow any part of the Facilities which is prepaid. 

  

	 	(d)	The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. 


 

	 	(e)	No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. 

  

	 	(f)	If the Agent receives a notice under this Clause 7.10 (Prepayment and cancellation) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.


  

	 	(g)	If all or part of any Lender’s participation in a Loan is repaid or prepaid an amount of that Lender’s Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be
cancelled on the date of repayment or prepayment. 

  

	8.10	Application of prepayments 

 Any prepayment of a Loan pursuant to Clause 8.2
(Voluntary prepayment of Loans), Clause 8.3 (Mandatory prepayment – Drop Down), Clause 8.5 (Mandatory prepayment – Total Loss or sale of a Vessel), Clause 8.6 (Mandatory prepayment – Market Value) or Clause
8.7 (Mandatory prepayment – Change of control) shall be applied pro rata to each Lender’s participation in that Loan. 

SECTION 5 
 COSTS OF
UTILISATION 
  

	9.	INTEREST 

  

	9.1	Calculation of interest 

  

	 	(a)	The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: 


 

	 	(i)	Margin; and 

  

	 	(ii)	LIBOR. 









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	 	(b)	It is not possible to calculate the effective interest rate on a Loan in advance. The Lenders are nevertheless, according to the FA Act obliged to give a representative example. LIBOR for three (3) months was at
7 April 2015 0.27375% p.a. and at 5 October 2015 0.3232% and provided unaltered LIBOR and Margin for the duration of the Loans, full payment of fees agreed hereunder and full Utilisation of the Total Commitments, the effective interest
rate will be 2.508% p.a. for each of the Pre-Delivery Tranche A, the Pre-Delivery Tranche B, the Post-Delivery Tranche A-1, the
Post-Delivery Tranche A-2, the Post Delivery Tranche B-1 and the Post-Delivery Tranche B-2 and 2.547% for each of the Pre-Delivery Tranche C, the Post Delivery Tranche C-1 and the Post-Delivery Tranche C-2. 


 

	 	(c)	Interest shall be calculated on the actual number of days elapsed on the basis of a three hundred and sixty (360) day year. 

  

	 	(d)	For purpose of calculation of such number of days, the first day of each Interest Period shall be included and the last day thereof shall be excluded. 


 

	9.2	Payment of interest 

 The Borrowers shall pay accrued interest on each Loan on the last
day of each Interest Period (and, if the Interest Period is longer than six (6) Months, on the dates falling at six (6) monthly intervals after the first day of the Interest Period). 

 

	9.3	Default interest 

  

	 	(a)	If (i) an Obligor fails to pay any amount payable by it under a Finance Document on its due date or (ii) an Event of Default has occurred and is continuing, interest shall accrue on the Loans from the due date
or the date when the notice of the requirement to pay default interest in accordance with Clause 26.15 (Acceleration) has been given by the Agent to the Borrowers (save in case of breach of Clause 21.5 (Notification of default) (in
which case default interest shall be payable from the date when the Event of Default occurred) and up to the date of actual payment (both before and after judgment) or until the Event of Default is remedied at a rate which, subject to paragraph
(b) below, is two hundred basis points (200 bps) per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 9.3 (Default interest) shall be immediately payable by the Obligor on demand
by the Agent. 

  

	 	(b)	If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan: 


 

	 	(i)	the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and 


 

	 	(ii)	the rate of interest applying to the overdue amount during that first Interest Period shall be two hundred basis points (200 bps) per annum higher than the rate which would have applied if the overdue amount had not
become due. 

  

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










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	9.4	Notification of rates of interest 

  

	 	(a)	The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement. 

  

	 	(b)	The Agent shall promptly notify the relevant Borrower of each Funding Rate relating to a Loan. 

  

	10.	INTEREST PERIODS 

  

	10.1	Selection of Interest Periods 

  

	 	(a)	The Borrowers may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan has already been borrowed) in a Selection Notice. 


 

	 	(b)	Each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrowers not later than the 12:00 noon Bergen time on the date falling three (3) Business Days prior to the last day of the
current Interest Period. 

  

	 	(c)	If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will be three (3) Months. 


 

	 	(d)	Subject to this Clause 10 (Interest Periods), the Borrowers may select an Interest Period of three (3) or six (6) Months or any other period agreed between the Borrowers and the Agent (acting on the
instructions of all the Lenders). 

  

	 	(e)	An Interest Period for a Loan shall not extend beyond the Final Maturity Date applicable for that Loan. 

  

	 	(f)	Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period. 


 

	10.2	Non-Business Days 

 If an Interest Period would
otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). 

 

	11.	CHANGES TO THE CALCULATION OF INTEREST 

  

	11.1	Unavailability of Screen Rate 

  

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

  

	 	(b)	Reference Bank Rate: If no Screen Rate is available for LIBOR for: 

  

	 	(i)	USD; or 

  

	 	(ii)	the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate, 


the applicable LIBOR shall be the Reference Bank Rate as of noon London time on the Quotation Day and for a period equal in length to the
Interest Period of that Loan. 
  

	11.2	Calculation of Reference Bank Rate 

  

	 	(a)	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 noon London time on the Quotation Day, the Reference Bank Rate
shall be calculated on the basis of the quotations of the remaining Reference Banks. 









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


 

	 	(c)	Cost of funds: If paragraph (b) above applies but no Reference Bank Rate is available for USD or the relevant Interest Period there shall be no LIBOR for that Loan and Clause 11.4 (Cost of funds)
shall apply to that Loan for that Interest Period. 

  

	11.3	Market disruption 

 If before close of business in London on the Quotation Day for the
relevant Interest Period the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed fifty per cent. (50%) of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may
reasonably select would be in excess of LIBOR then Clause 11.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period. 
  

	11.4	Cost of funds 

  

	 	(a)	If this Clause 11.4 (Cost of funds) applies, the rate of interest on each Lender’s share of the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:


  

	 	(i)	the Margin; and 

  

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

  

	 	(b)	If this Clause 11.4 (Cost of Funds) applies and the Agent or a Borrower so requires, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty (30) days) with a view to
agreeing a substitute basis for determining the rate of interest. 

  

	 	(c)	Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties. 


 

	11.5	Break Costs 

  

	 	(a)	Each Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a
day other than the last day of an Interest Period for that Loan or Unpaid Sum. 

  

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









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	12.	FEES 

  

	12.1	Commitment fee 

  

	 	(a)	The Borrowers shall pay to the Agent (for the account of each Lender) a commitment fee computed at the rate of forty per cent. (40%) of the Margin per annum on that Lender’s Available Commitment for the period
commencing on: 

  

	 	(i)	31 March 2015 in respect of the Commitment relating to the Pre-Delivery Tranche A, the Pre-Delivery Tranche B, the Post-Delivery
Tranche A-1, the Post-Delivery Tranche A-2, the Post Delivery Tranche B-1 and the Post-Delivery Tranche B-2; or 

  

	 	(ii)	18 September 2015 in respect of the Commitment relating to Pre-Delivery Tranche C, the Post Delivery Tranche C-1 and the Post-Delivery
Tranche C-2, 

 and throughout the Availability Period. 

 

	 	(b)	The accrued commitment fee is payable on the last day of each successive period of three (3) Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full,
on the cancelled amount of the relevant Lender’s Commitment at the time the cancellation is effective. 

  

	12.2	Flat fee 

 The Borrowers shall pay to the Agent (for further distribution to the Original
Lenders) a non-refundable flat fee in the amount of: 
  

	 	(a)	0.975% of the amount of the Post-Delivery Tranche A-1, the Post-Delivery Tranche A-2, the Post Delivery Tranche B-1 and the Post-Delivery Tranche B-2 on the date of this Agreement; and 

  

	 	(b)	0.975% of the amount of the Post-Delivery Tranche C-1 and the Post-Delivery Tranche C-2 on the date of the Amendment and Restatement
Agreement, 

 due and payable on the first Utilisation Date in respect of the flat fee described in paragraph (a) above
(this was paid on 30 April 2015) and on the first Utilisation Date in relation to the Pre-Delivery Tranche C in respect of the flat fee described in paragraph (b) above, or, in each case, the date of
cancellation of the Total Commitments (whichever occurs first). 
  

	12.3	Other fees 

 The Borrowers shall pay to the Agent such fees as set out in the Fee
Letters. 
 SECTION 6 

ADDITIONAL PAYMENT OBLIGATIONS 
  

	13.	TAX GROSS UP AND INDEMNITIES 

  

	13.1	Definitions 

  

	 	(a)	In this Agreement: 

 “Protected Party” means a Finance Party which is or will
be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document. 

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than
a FATCA Deduction. 








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	13.2	Tax gross-up 

  

	 	(a)	Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. 

  

	 	(b)	The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender
shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor. 


 

	 	(c)	If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the
payment which would have been due if no Tax Deduction had been required. 

  

	 	(d)	If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by
law. 

  

	 	(e)	Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party
entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. 


 

	13.3	Tax indemnity 

  

	 	(a)	The Borrowers shall (within three (3) Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been
(directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. 

  

	 	(b)	Paragraph (a) above shall not apply: 

  

	 	(i)	with respect to any Tax assessed on a Finance Party: 

  

	 	(A)	under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or


  

	 	(B)	under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction, 


if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or
receivable) by that Finance Party; or 
  

	 	(ii)	to the extent a loss, liability or cost: 

  

	 	(A)	is compensated for by an increased payment under Clause 13.2 (Tax gross-up); or 









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	 	(B)	would have been compensated for by an increased payment under Clause 13.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph
(d) of Clause 13.2 (Tax gross-up) applied; or 

  

	 	(C)	relates to a FATCA Deduction required to be made by a Party. 

  

	 	(c)	A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify
the Borrowers. 

  

	 	(d)	A Protected Party shall, on receiving a payment from an Obligor under this Clause 13.3 (Tax indemnity), notify the Agent. 

  

	13.4	Stamp taxes 

 The Borrowers shall pay and, within three (3) Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document. 

 

	13.5	VAT 

  

	 	(a)	All amounts set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to
be exclusive of any VAT which is chargeable on such supply or supplies, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and
such Finance Party shall promptly provide an appropriate VAT invoice to such Party). 

  

	 	(b)	Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such
cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. 


 

	13.6	FATCA Information 

  

	 	(a)	Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party: 

  


	 	(i)	confirm to that other Party whether it is: 

  

	 	(A)	a FATCA Exempt Party; or 

  

	 	(B)	not a FATCA Exempt Party; 

  

	 	(ii)	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;


  

	 	(iii)	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. 









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	 	(b)	If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify
that other Party reasonably promptly. 

  

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

  

	 	(i)	any law or regulation; 

  

	 	(ii)	any fiduciary duty; or 

  

	 	(iii)	any duty of confidentiality. 

  

	 	(d)	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 paragraph (a)(i) or (ii) above (including, for the avoidance
of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (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. 

  

	 	(e)	If an Obligor is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten (10) Business Days of:


  

	 	(i)	where that Obligor is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; 

  

	 	(ii)	where that Obligor is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date; or 

  

	 	(iii)	where that Obligor is not a US Tax Obligor, the date of a request from the Agent, 

 supply to
the Agent: 
  

	 	(A)	a withholding certificate on Form W-8, Form W-9 or any other relevant form; or 


 

	 	(B)	any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation. 


 

	 	(f)	The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the relevant Obligor. 


 

	 	(g)	If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that
Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the
Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Obligor. 

  

	 	(h)	The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification. The Agent
shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above. 









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	13.7	FATCA Deduction 

  

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

  

	 	(b)	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 Borrowers and the Agent and the Agent shall notify the other Finance Parties. 

  

	14.	INCREASED COSTS 

  

	14.1	Increased costs 

  

	 	(a)	Subject to Clause 14.3 (Exceptions) the Borrowers shall, within three (3) Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that
Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation, (ii) compliance with any law or regulation made after the
date of this Agreement or (iii) the implementation or application of or compliance with any Basel III Regulation (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).


  

	 	(b)	In this Agreement “Increased Costs” means: 

  

	 	(i)	a reduction in the rate of return from the Facilities or on a Finance Party’s (or its Affiliate’s) overall capital; 

  

	 	(ii)	an additional or increased cost; or 

  

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

 which is incurred or
suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document. 

 

	14.2	Increased cost claims 

  

	 	(a)	A Finance Party intending to make a claim pursuant to Clause 14.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.


  

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


 

	14.3	Exceptions 

  

	 	(a)	Clause 14.1 (Increased costs) does not apply to the extent any Increased Cost is: 

  

	 	(i)	attributable to a Tax Deduction required by law to be made by an Obligor; 









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	 	(ii)	attributable to a FATCA Deduction required to be made by a Party; 

  

	 	(iii)	compensated for by Clause 13.3 (Tax indemnity) (or would have been compensated for under Clause 13.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph
(b) of Clause 13.3 (Tax indemnity) applied); or 

  

	 	(iv)	attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. 

  

	 	(b)	In this Clause 14.3 (Exceptions), a reference to a “Tax Deduction” has the same meaning given to the term in Clause 13.1 (Definitions). 


 

	15.	OTHER INDEMNITIES 

  

	15.1	Currency indemnity 

  

	 	(a)	If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First
Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of: 

  

	 	(i)	making or filing a claim or proof against that Obligor; 

  

	 	(ii)	obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, 


that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due
against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or
rates of exchange available to that person at the time of its receipt of that Sum. 
  

	 	(b)	Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. 


 

	15.2	Other indemnities 

 Each Obligor shall, within three (3) Business Days of demand,
indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of: 
  

	 	(a)	the occurrence of any Event of Default; 

  

	 	(b)	a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 31 (Sharing among the Finance
Parties); 

  

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


 

	 	(d)	funding, or making arrangements to fund, its participation in a Loan requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement
(other than by reason of default or negligence by that Finance Party alone); or 

  

	 	(e)	a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers. 









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 The indemnity in this Clause 15.2 (Other indemnities) shall cover any cost, loss or
liability incurred by each Finance Party in any jurisdiction arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions. 

 

	15.3	Indemnity to the Agent 

 The Borrowers shall promptly indemnify the Agent against any
cost, loss or liability incurred by the Agent (acting reasonably) as a result of: 
  

	 	(a)	investigating any event which it reasonably believes is a Default; 

  

	 	(b)	acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or 


 

	 	(c)	instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement. 


 

	16.	MITIGATION BY THE LENDERS 

  

	16.1	Mitigation 

  

	 	(a)	Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of Clause 8.4 (Mandatory prepayment – illegality), Clause 13 (Tax gross-up and indemnities) or Clause 14 (Increased costs) including (but not limited to) transferring
its rights and obligations under the Finance Documents to another Affiliate or Facility Office. 

  

	 	(b)	Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents. 

  

	16.2	Limitation of liability 

  

	 	(a)	The Borrowers shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 16.1 (Mitigation). 


 

	 	(b)	A Finance Party is not obliged to take any steps under Clause 16.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. 


 

	17.	COSTS AND EXPENSES 

  

	17.1	Transaction expenses 

 The Borrowers shall promptly on demand pay the Agent, the Hedging
Banks and the Mandated Lead Arrangers the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution, syndication, perfection, amendment,
enforcement and preservation of: 
  

	 	(a)	this Agreement and any other documents referred to in this Agreement; and 

  

	 	(b)	any other Finance Documents executed after the date of this Agreement. 









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	17.2	Amendment and enforcement costs 

 The Borrowers shall, within three (3) Business
Days of demand, reimburse the Agent, any Finance Party and any Hedging Bank for the amount of all costs and expenses (including but not limited to legal fees and administration fees, including costs of utilising the Agent’s management time)
incurred by the Agent, any such Finance Party and any such Hedging Bank in connection with: 
  

	 	(a)	responding to, evaluating, negotiating or complying with a request or requirement for any amendment, waiver or consent; 

  

	 	(b)	the granting of any release, waiver or consent under the Finance Documents and/or the Hedging Agreements; 

  

	 	(c)	any amendment or variation of a Finance Document or a Hedging Agreement; and 

  

	 	(d)	the enforcement of, or the preservation, protection or maintenance of, or attempt to preserve or enforce, any of the rights of the Finance Parties under the Finance Documents and of the Hedging Banks under the Hedging
Agreements. 

 For the avoidance of doubt, costs payable by the Borrowers under Clause 17.1 (Transaction Expenses) and
this Clause 17.2 (Amendment and enforcement costs) remain payable whether or not any Utilisation is ever made. 
 SECTION 7

 SECURITY 
  

	18.	SECURITY 

  

	18.1	Security – Pre-Delivery Facility 

 The
obligations and liabilities of the Obligors under the Finance Documents in respect of the Pre-Delivery Facility and under the Hedging Agreements, including (without limitation) the Borrowers’ obligation
to repay the Loans utilised under the Pre-Delivery Tranches together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrowers
towards the Finance Parties and the Hedging Banks in connection therewith, shall at any time until all amounts due to the Finance Parties under any Finance Document in respect of the Pre-Delivery Facility and
to the Hedging Banks under any Hedging Agreement have been paid and/or repaid in full, be secured by the following security: 
  

	 	(a)	the Pre-Delivery Assignment Agreements; 

  

	 	(b)	the Factoring Agreements; 

  

	 	(c)	the Account Pledges; 

  

	 	(d)	the Guarantee from KNOT; 

  

	 	(e)	the Share Pledges; 

  

	 	(f)	the Mortgages; 

  

	 	(g)	the Post-Delivery Assignment Agreements; and 

  

	 	(h)	the Assignments of Charterparty, 









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and any other document that may have been or shall from time to time hereafter be executed as Security for the Obligors’ obligations under or pursuant to the Finance Documents in respect of
the Pre-Delivery Facility and under the Hedging Agreements. 
 The Security Documents shall rank with
first priority and shall include any obligations under the Finance Documents in respect of the Pre-Delivery Facility and under the Hedging Agreements, always subject to the provision of Clause 32.5 (Partial
Payments). 
  

	18.2	Security – Post-Delivery Facility 

 The obligations and liabilities of the Obligors
under the Finance Documents in respect of the Post-Delivery Facility and under the Hedging Agreements, including (without limitation) the Borrowers’ obligation to repay the Loans utilised under the Post-Delivery Tranches together with all
unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrowers towards the Finance Parties and the Hedging Banks in connection therewith, shall at any time until all amounts due to the
Finance Parties under any Finance Document in respect of the Post-Delivery Facility and to the Hedging Banks under any Hedging Agreement have been paid and/or repaid in full, be secured by the following security: 

 

	 	(a)	the Mortgages; 

  

	 	(b)	the Post-Delivery Assignment Agreements; 

  

	 	(c)	the Assignments of Charterparty; 

  

	 	(d)	the Factoring Agreements; 

  

	 	(e)	the Account Pledges; 

  

	 	(f)	the Guarantees; and 

  

	 	(g)	the Share Pledges, 

 and any other document that may have been or shall from time to time
hereafter be executed as Security for the Obligors’ obligations under or pursuant to the Finance Documents in respect of the Post-Delivery Facility and under the Hedging Agreements. 

The Security Documents shall rank with first priority and shall include any obligations under the Finance Documents in respect of the
Post-Delivery Facility and under the Hedging Agreements, always subject to the provision of Clause 32.5 (Partial Payments). 
  

	18.3	Cross-collateralization 

  

	 	(a)	The Security Documents shall be cross-collateralized, save as set out in paragraph (b) below. 

  

	 	(b)	The cross-collateralisation of the Security Documents entered into by each of the Borrowers respectively shall not apply from the date a Drop Down in respect of one Borrower has occurred, as determined by Clause 28.2
(KNOP and KNOT ST as replacement Guarantors) until a Drop Down has occurred also for the second and third Borrowers, and during this time: 

  

	 	(i)	 the obligations and liabilities of Borrower A and the Guarantors under the Finance Documents in respect of the
Post-Delivery Facility and under any Hedging Agreement entered into by Borrower A, including (without limitation) the Borrower A’s obligation to repay the Loans utilised under the Post-Delivery Tranche
A-1 and 










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Post-Delivery Tranche A-2 together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of
the Borrower A towards the Finance Parties and the Hedging Banks in connection therewith, shall at any time be secured by the following security: 

  

	 	(A)	the Borrower A Mortgage; 

  

	 	(B)	the Borrower A Post-Delivery Assignment Agreement; 

  

	 	(C)	the Borrower A Assignment of Charterparty; 

  

	 	(D)	the Borrower A Factoring Agreement; 

  

	 	(E)	the Borrower A Account Pledge; 

  

	 	(F)	the Guarantee from (1) KNOT or (2) KNOP and KNOT ST (as the case may be); 

  

	 	(G)	the Borrower A Share Pledge; and 

  

	 	(H)	any Security Documents provided by the other Borrower (if any) owned by the same Guarantor (or a Subsidiary) as Borrower A, 


and any other document that may have been or shall from time to time hereafter be executed as Security for Borrower A’s obligations under
or pursuant to the Finance Documents in respect of the Post-Delivery Tranche A-1 and Post-Delivery Tranche A-2 and under the Hedging Agreements; 

 

	 	(ii)	the obligations and liabilities of Borrower B and the Guarantors under the Finance Documents in respect of the Post-Delivery Facility and under any Hedging Agreement entered into by Borrower B, including (without
limitation) the Borrower B’s obligation to repay the Loans utilised under the Post-Delivery Tranche B-1 and Post-Delivery Tranche B-2 together with all unpaid
interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrower B towards the Finance Parties and the Hedging Banks in connection therewith, shall at any time be secured by the following
security: 

  

	 	(A)	the Borrower B Mortgage; 

  

	 	(B)	the Borrower B Post-Delivery Assignment Agreement; 

  

	 	(C)	the Borrower B Assignment of Charterparty; 

  

	 	(D)	the Borrower B Factoring Agreement; 

  

	 	(E)	the Borrower B Account Pledge; 

  

	 	(F)	the Guarantee from (1) KNOT or (2) KNOP and KNOT ST (as the case may be); 

  

	 	(G)	the Borrower B Share Pledge; and 

  

	 	(H)	any Security Documents provided by the other Borrower (if any) owned by the same Guarantor (or a Subsidiary) as Borrower B, 


and any other document that may have been or shall from time to time hereafter be executed as Security for Borrower B’s obligations under
or pursuant to the Finance Documents in respect of the Post-Delivery Tranche B-1 and Post-Delivery Tranche B-2 and under the Hedging Agreements; and 








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	 	(iii)	the obligations and liabilities of Borrower C and the Guarantors under the Finance Documents in respect of the Post-Delivery Facility and under any Hedging Agreement entered into by Borrower C, including (without
limitation) the Borrower C’s obligation to repay the Loans utilised under the Post-Delivery Tranche C-1 and Post-Delivery Tranche C-2 together with all unpaid
interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrower C towards the Finance Parties and the Hedging Banks in connection therewith, shall at any time be secured by the following
security: 

  

	 	(A)	the Borrower C Mortgage; 

  

	 	(B)	the Borrower C Post-Delivery Assignment Agreement; 

  

	 	(C)	the Borrower C Assignment of Charterparty; 

  

	 	(D)	the Borrower C Factoring Agreement; 

  

	 	(E)	the Borrower C Account Pledge; 

  

	 	(F)	the Guarantee from (1) KNOT or (2) KNOP and KNOT ST (as the case may be); 

  

	 	(G)	the Borrower C Share Pledge; and 

  

	 	(H)	any Security Documents provided by the other Borrower (if any) owned by the same Guarantor (or a Subsidiary) as Borrower C, 


and any other document that may have been or shall from time to time hereafter be executed as Security for Borrower C’s obligations under
or pursuant to the Finance Documents in respect of the Post-Delivery Tranche C-1 and Post-Delivery Tranche C-2 and under the Hedging Agreements. 

 

	18.4	Perfection etc. 

 The Obligors undertake to ensure that the Security Documents are duly
executed by the parties thereto in favour of the Agent (on behalf of the Finance Parties and the Hedging Banks) on or about the initial Utilisation Date or the Delivery Dates of the respective Vessels (as the case may be) in accordance with Clause 4
(Conditions of Utilisation), legally valid, enforceable by the Finance Parties and the Hedging Banks and in full force and effect, and to execute or procure the execution of such further documentation as the Agent may reasonable require in
order for the relevant Finance Parties and Hedging Banks, to maintain the security position envisaged hereunder or to facilitate the realisation of any assets the subject of any Security. 

 

	18.5	Security - Hedging Agreement 

  

	 	(a)	The Borrowers’ obligations and liabilities under any Hedging Agreement, together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the
Borrowers towards a Hedging Bank in connection with the Hedging Agreement, shall at any time until all amounts due to a Hedging Bank under a Hedging Agreement have been paid and/or repaid in full, be secured by the Security Documents and the
guarantee liabilities of the Guarantors pursuant to Clause 19 (Guarantee and Indemnity), however on subordinated basis to the rights of the other Finance Parties. 


 

	 	(b)	The cross-collateralisation of the Security Documents entered into by each of the Borrowers shall not apply from the date a Drop Down in respect of one Borrower has occurred until a Drop Down has occurred also for the
second and third Borrowers, and during this time the obligations of each Borrower under any Hedging Agreement shall be secured by the Security Documents executed by that Borrower, the other Borrower (if any) owned by the same Guarantor (or a
Subsidiary) and the Guarantors only. 









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	19.	GUARANTEE AND INDEMNITY 

  

	19.1	Guarantee and indemnity 

 Each Guarantor irrevocably and unconditionally: 

 

	 	(a)	guarantees to each Finance Party and each Hedging Bank punctual performance by each Borrower of all that Borrower’s obligations under the Finance Documents and the Hedging Agreements; 


 

	 	(b)	undertakes with each Finance Party and each Hedging Bank that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document or any Hedging Agreement, each Guarantor shall
immediately on demand (in No. påkravsgaranti) pay that amount, and no Guarantor shall have any right of reservation or objection to such demand for payment by the Agent and no conflict or dispute of whatsoever nature between the Agent
and the Borrowers shall have an impact on a Guarantor’s obligation to pay under the guarantee set out in this Clause 19 (Guarantee and indemnity); and 


 

	 	(c)	agrees with each Finance Party and each Hedging Bank that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance
Party and/or that Hedging Bank immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under
any Finance Document or any Hedging Agreement on the date when it would have been due. The amount payable by each Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 (Guarantee and
indemnity) if the amount claimed had been recoverable on the basis of a guarantee; 

 subject, however, to Clause 19.2
(Guarantee limitations) below. 
  

	19.2	Guarantee limitations 

 Notwithstanding the obligations of a Guarantor pursuant to the
guarantee set out in this Clause 19 (Guarantee and indemnity): 
  

	 	(a)	the maximum guarantee liability of that Guarantor hereunder shall always be limited to USD 423,600,000 plus (i) any interest, default interest, Break Cost or other costs, fees and expenses related to the
Borrowers’ obligations under the Finance Documents and the Hedging Agreements and (ii) any default interest or other costs, fees and expenses related to the liability of that Guarantor hereunder; 


 

	 	(b)	the guarantee set out in this Clause 19 (Guarantee and indemnity) does not apply to any liability if and to the extent that it would result in this guarantee constituting unlawful financial assistance within the
meaning of Chapter 8 of the Companies Act or any equivalent and applicable provisions under the laws of the relevant jurisdiction of that Guarantor. 









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	 	(c)	With effect from the date a Drop Down in respect of one Borrower has occurred and until a Drop Down has occurred also for the second and third Borrowers (whereafter KNOP and KNOT ST shall be jointly and severally liable
for all three Borrowers’ obligations under the Finance Documents): 

  

	 	(i)	the guarantee liabilities of KNOT shall be limited to the obligations of the Borrower or Borrowers owned by it only; and 

  

	 	(ii)	the joint and several guarantee liabilities of KNOP and KNOT ST shall be limited to the obligations of the Borrower or Borrowers owned by KNOP or a Subsidiary of KNOP only. 


 

	19.3	Continuing guarantee 

 This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance Documents and the Hedging Agreements, regardless of any intermediate payment or discharge in whole or in part. 

 

	19.4	Reinstatement 

 If any discharge, release or arrangement (whether in respect of the
obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party or a Hedging Bank in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in
insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 19 (Guarantee and indemnity) will continue or be reinstated as if the discharge, release or arrangement had not
occurred. 
  

	19.5	Waiver of defences 

 The obligations of the Guarantors under this Clause 19 (Guarantee
and indemnity) will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 19 (Guarantee and indemnity) (without limitation and whether
or not known to it or any Finance Party or any Hedging Bank) including: 
  

	 	(a)	any time, waiver or consent granted to, or composition with, any Obligor or other person; 

  

	 	(b)	the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; 


 

	 	(c)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;


  

	 	(d)	any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; 


 

	 	(e)	any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document, any Hedging Agreement or any other document or security including
without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document, any Hedging Agreement or other document or security; 









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	 	(f)	any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or 


 

	 	(g)	any insolvency or similar proceedings. 

  

	19.6	Immediate recourse 

 Each Guarantor waives any right it may have of first requiring any
Finance Party or any Hedging Bank (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantors under this Clause 19 (Guarantee and
indemnity). This waiver applies irrespective of any law or any provision of a Finance Document or a Hedging Agreement to the contrary. 
  

	19.7	Appropriations 

 Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents and the Hedging Agreements have been irrevocably paid in full, each Finance Party and each Hedging Bank (or any trustee or agent on its behalf) may: 

 

	 	(a)	refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party or that Hedging Bank (or any trustee or agent on its behalf) in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and 


 

	 	(b)	hold in an interest-bearing suspense account any moneys received from a Guarantor or on account of a Guarantor’s liability under this Clause 19 (Guarantee and indemnity). 


 

	19.8	Deferral of Guarantors’ rights 

 Until all amounts which may be or become payable by
the Obligors under or in connection with the Finance Documents and the Hedging Agreements have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by
it of its obligations under the Finance Documents and the Hedging Agreements or by reason of any amount being payable, or liability arising, under this Clause 19 (Guarantee and indemnity): 

 

	 	(a)	to be indemnified by an Obligor; 

  

	 	(b)	to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents and the Hedging Agreements; 


 

	 	(c)	to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in
connection with, the Finance Documents by any Finance Party or any rights of the Hedging Banks under the Hedging Agreements or of any other guarantee or security taken pursuant to, or in connection with, the Hedging Agreements by any Hedging Bank;


  

	 	(d)	to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which that Guarantor has given a guarantee, undertaking or indemnity under Clause 19.1
(Guarantee and Indemnity); 

  

	 	(e)	to exercise any right of set-off against any Obligor; and/or 

  

	 	(f)	to claim or prove as a creditor of any Obligor in competition with any Finance Party or any Hedging Bank. 









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 If a Guarantor receives any benefit, payment or distribution in relation to such rights it
shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents and to the Hedging Banks under or
in connection with the Hedging Agreements to be repaid in full on trust for the Finance Parties and the Hedging Banks and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 32
(Payment mechanics). 
  

	19.9	Additional security 

 This guarantee is in addition to and is not in any way prejudiced
by any other guarantee or security now or subsequently held by any Finance Party or any Hedging Bank. 
  

	19.10	Norwegian Financial Agreements Act 

 Each Guarantor, to the extent it is deemed to be a
guarantor pursuant to the FA Act, specifically waives all rights under the provisions of the FA Act not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as
indicated in the brackets): 
  

	 	(a)	§ 29 (as the Agent shall be entitled to exercise all its rights under this Agreement and applicable law in order to secure payment. Such rights shall include the right to
set-off any credit balance in any currency, on any bank account that Guarantor might have with each of the Finance Parties and the Hedging Banks individually against the amount due); 


 

	 	(b)	§ 63 (1) – (2) (to be notified of an Event of Default hereunder or under a Hedging Agreement and to be kept informed thereof); 


 

	 	(c)	§ 63 (3) (to be notified of any extension granted to a Borrower in payment of principal and/or interest); 

  

	 	(d)	§ 63 (4) (to be notified of a Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter); 


 

	 	(e)	§ 65 (3) (that its consent is required for it to be bound by amendments to the Finance Documents and the Hedging Agreements that may be detrimental to its interest); 


 

	 	(f)	§ 66 (that its consent is required for the release of other Security); 

  

	 	(g)	§ 67 (2) (about any reduction of its liabilities hereunder, since no such reduction shall apply as long as any amount is outstanding under the Finance Documents and the Hedging Agreements); 


 

	 	(h)	§ 67 (4) (that its liabilities hereunder shall lapse after ten (10) years, as it shall remain liable hereunder as long as any amount is outstanding under any of the Finance Documents and the Hedging
Agreements); 

  

	 	(i)	§ 70 (as it shall not have any right of subrogation into the rights of the Finance Parties under the Finance Documents and/or the Hedging Banks under the Hedging Agreements until and unless the Finance Parties and
the Hedging Banks shall have received all amounts due or to become due to them under the Finance Documents and the Hedging Agreements); 









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	 	(j)	§ 71 (as the Finance Parties and the Hedging Banks shall have no liability first to make demand upon or seek to enforce remedies against any other Obligor or any other Security Interest provided in respect of any
other Obligor’s liabilities under the Finance Documents and the Hedging Agreements before demanding payment under or seeking to enforce its guarantee obligations hereunder); 


 

	 	(k)	§ 72 (as all interest and default interest due under any of the Finance Documents and the Hedging Agreements shall be secured by its guarantee obligations hereunder); 


 

	 	(l)	§ 73 (1) – (2) (as all costs and expenses related to a termination event or an Event of Default under this Agreement and under the Hedging Agreements shall be secured by its guarantee obligations hereunder);
and 

  

	 	(m)	§ 74 (1) – (2) (as it shall not make any claim against any other Obligor for payment by reason of performance by it of its obligations under the Finance Documents and the Hedging Agreements until and unless
the Finance Parties and the Hedging Banks first shall have received all amounts due or to become due to them under the Finance Documents and the Hedging Agreements). 


SECTION 8 

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT 
  

	20.	REPRESENTATIONS 

 Each Obligor makes the representations and warranties set out in this
Clause 20 (Representations) to each Finance Party and each Hedging Bank on the date of this Agreement and on the dates on which the Repeating Representations are made. 
  

	20.1	Status 

  

	 	(a)	It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation. 

  

	 	(b)	It has the power to own its assets and carry on its business as it is being conducted. 

  

	20.2	Binding obligations 

  

	 	(a)	The obligations expressed to be assumed by it in each Finance Document are, subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to
Clause 4 (Conditions of Utilisation), legal, valid, binding and enforceable obligations. 

  

	 	(b)	Save as provided herein or therein and/or as have been or shall be completed prior to the Utilisation Date, no registration, filing, payment of tax or fees or other formalities are necessary or desired to render the
Finance Documents enforceable against the Obligors, and in respect of a Vessel, for the Mortgage over that Vessel to constitute valid and enforceable first priority mortgage over that Vessel. 


 

	20.3	Non-conflict with other obligations 

 The entry
into and performance by it of, and the transactions contemplated by, the Finance Documents and the Transaction Documents do not and will not conflict with: 
  

	 	(a)	any law, statute, rule or regulation applicable to it, or any order, judgment, decree or permit to which it is subject (including the Council Directive 2001/97/EC of the European Parliament and of the Council of
4 December 2001 amending Council Directive 91/308/EEC of the Council of the European Community implemented to combat “money laundering”); 









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	 	(b)	its constitutional documents; or 

  

	 	(c)	any agreement or instrument binding upon it or any of its assets. 

  

	20.4	Power and authority 

  

	 	(a)	It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents and the Transaction Documents to which it is a
party and the transactions contemplated by those Finance Documents and Transaction Documents. 

  

	 	(b)	All necessary corporate, shareholder and other action have been taken by it to approve and authorize the execution of the Finance Documents and the Transaction Documents, the compliance with the provisions thereof and
the performance of its obligations thereunder. 

  

	 	(c)	Each Borrower acts for its own account by entering into the Finance Documents and obtaining the Facilities. 

  

	20.5	Validity and admissibility in evidence 

 All Authorisations required or desirable: 

 

	 	(a)	to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents and the Transaction Documents to which it is a party; 


 

	 	(b)	to make the Finance Documents and the Transaction Documents to which it is a party admissible in evidence in its jurisdiction of incorporation; and 


 

	 	(c)	in connection with its business and ownership of assets, 

 have been obtained or effected and
are in full force and effect, and there are no circumstances which indicate that any of the same are likely to be revoked in whole or in part. 
  

	20.6	Governing law and enforcement 

  

	 	(a)	The choice of Norwegian and English law respectively as the governing law of the Finance Documents and the Hedging Agreements will be recognised and enforced in its jurisdiction of incorporation. 


 

	 	(b)	Any judgment obtained in Norway and/or England in relation to a Finance Document or a Hedging Agreement will be recognised and enforced in its jurisdiction of incorporation. 


 

	20.7	Insolvency 

 No corporate action, legal proceeding or other procedure or step described
in Clause 26.6 (Insolvency), 26.7 (Insolvency proceedings) or Clause 26.8 (Creditors’ process) is currently pending or, to its knowledge, threatened in relation to it, and none of the circumstances described in Clause 26.6
(Insolvency), 26.7 (Insolvency proceedings) or Clause 26.8 (Creditors’ process) applies to it. 
  

	20.8	Deduction of Tax  

 It is not required to make any Tax Deduction (as defined in Clause
13.1 (Definitions)) from any payment it may make under any Finance Document. 
  

	20.9	No filing or stamp taxes 

 Under the law of its jurisdiction of incorporation it is not
necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions
contemplated by the Finance Documents. 








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	20.10	No default 

  

	 	(a)	No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation. 

  

	 	(b)	No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.


  

	20.11	No misleading information 

  

	 	(a)	Any factual information provided by any member of the Group was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. 


 

	 	(b)	The financial information provided by any member of the Group has been prepared on the basis of recent historical information and on the basis of reasonable assumptions. 


 

	 	(c)	Nothing has occurred or been omitted and no information has been given or withheld that results in the information provided by any member of the Group being untrue or misleading in any material respect.


  

	20.12	Financial statements 

  

	 	(a)	Its Original Financial Statements and the financial information most recently delivered to the Agent pursuant to Clause 21 (Information Undertakings) were prepared in accordance with GAAP consistently applied.


  

	 	(b)	Its Original Financial Statements and the financial information most recently delivered to the Agent pursuant to Clause 21 (Information Undertakings) fairly represent its financial condition as at the end of the
relevant financial year and operations during the relevant financial year (consolidated in the case of KNOT and KNOP). 

  

	 	(c)	As of the date of the Original Financial Statements and the financial information most recently delivered to the Agent pursuant to Clause 21 (Information Undertakings), no Obligor has had any material
liabilities, direct or indirect, actual or contingent which has not been disclosed to the Agent, and there is no material, unrealised or anticipated losses from any unfavourable commitments not disclosed by or reserved against it in the Original
Financial Statements, the most recent delivered financial information or in the notes thereto. 

  

	 	(d)	There has been no material adverse change in its business or financial condition (or the business or consolidated financial condition of the Group) since the date of delivery of its latest financial statements.


  

	20.13	Pari passu ranking 

 Its payment obligations under the Finance Documents and the Hedging
Agreements rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. 

 

	20.14	No proceedings pending or threatened 

 No litigation, arbitration or administrative
proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened against it.









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	20.15	Title 

 The Borrowers will hold the legal title and/or will be the beneficial party, as
the case may be, to the Mortgaged Assets (other than the shares pledged pursuant to the Share Pledges, which shall owned by (a) KNOT or (b) KNOP or a Subsidiary of KNOP (as the case may be)). 

 

	20.16	No security 

 None of the Mortgaged Assets are affected by any Security, and it is not a
party to, nor is it or any of the Mortgaged Assets bound by any order, agreement or instrument under which it is, or in certain events may be, required to create, assume or permit to arise any Security over any of the Mortgaged Assets, save for the
Security created under the Security Documents, for liens arising solely by operation of law and/or in the ordinary course of business or otherwise as permitted pursuant to the terms of Clause 23.2 (Negative pledge). 

 

	20.17	No immunity 

 Neither it, nor any of its assets, are entitled to immunity from suit,
execution, attachment or other legal process, and its entry into of the Finance Documents, the Hedging Agreements and the Transaction Documents constitutes, and the exercise of its rights and performance of and compliance with its obligations under
Finance Documents, the Hedging Agreements and the Transaction Documents will constitute, private and commercial acts done and performed for private and commercial purposes. 
  

	20.18	Ranking of Security Documents 

 The Security created by the Security Documents has or
will have the ranking in priority which it is expressed to have in the Security Documents and the Security is not subject to any prior ranking. 
  

	20.19	Taxation 

  

	 	(a)	It is not overdue in the filing of any Tax returns. 

  

	 	(b)	No claims or investigations are being, or are reasonably likely to be, made or conducted against it with respect to Taxes which is reasonably likely to have a material adverse effect on its ability to perform its
obligations under the Finance Documents. 

  

	 	(c)	It is resident for Tax purposes only in the jurisdiction of its incorporation, unless the Agent shall have been otherwise informed in writing. 


 

	20.20	Environmental compliance 

 Each Borrower and the Manager have performed and observed all
Environmental Laws, Environmental Permits and all other covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in
connection with the Vessels. 
  

	20.21	Environmental Claims 

 No Environmental Claim has been commenced or (to the best of its
knowledge and belief, having made due and careful enquiry) is threatened against it where that claim has or is reasonably likely, if determined against it, to have a material adverse effect on its ability to perform its obligations under the Finance
Documents, the Hedging Agreements and the Transaction Documents. 
  

	20.22	Laws and regulations 

 It and parties acting on its behalf shall observe and abide with
all applicable laws and regulations applicable to it, inter alia to bribery and corrupt practices and to SOLAS conventions. 








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	20.23	ISM Code and ISPS Code compliance 

 All requirements of the ISM Code and the ISPS Code as
they relate to the Borrowers (or any of their Affiliates), the Manager any charterers and the Vessels have been complied with. 
  

	20.24	The Vessels 

 Each Vessel will on the Utilisation Date of the Loans under the relevant
Post-Delivery Tranche be: 
  

	 	(a)	in the absolute ownership of the relevant Borrower free and clear of all encumbrances (other than current crew wages and the relevant Mortgage) and that Borrower will be the sole, legal and beneficial owner of that
Vessel; 

  

	 	(b)	registered in the name of the relevant Borrower with the relevant Approved Ship Registry under the laws and flag applicable for the relevant Approved Ship Registry; 


 

	 	(c)	operationally seaworthy in every way and fit for service; and 

  

	 	(d)	classed with American Bureau of Shipping (ABS) or such other classification society as approved by the Agent, free of all overdue requirements and other recommendations. 


 

	20.25	Financial Indebtedness 

 It is not in breach of or in default under any agreement or
other instrument relating to Financial Indebtedness to which it is a party or by which it is bound (nor would it be with the giving of notice or lapse of time or both). 
  

	20.26	Sanctions 

 None of the Obligors, nor any of their Subsidiaries nor any of their
directors and officers or to their knowledge any other Relevant Person is or has been: 
  

	 	(a)	a Restricted Party; or 

  

	 	(b)	in breach of Sanctions; or 

  

	 	(c)	subject to or involved in any complaint, claim, proceeding, formal notice, investigation or other action by any regulatory or enforcement authority or third party concerning any Sanctions. 


 

	20.27	Ownership 

 The structure chart set out in Schedule 7 (Structure Chart)
hereto correctly reflects the KNOT Group and the KNOP Group at the date of the Amendment and Restatement Agreement no. 1 and the Obligors will procure that the Agent receives an updated version of Schedule 7 (Structure Chart) if any
changes are made to the structure of the KNOT Group or the KNOP Group. 
  

	20.28	Transaction Documents 

  

	 	(a)	No material terms of any of the Transaction Documents have been amended or terminated, nor have any waivers of any material terms thereof been agreed, without the prior written consent of the Agent. 


 

	 	(b)	It has not received any notice of termination or force majeure under any of the Transaction Documents. 

  

	20.29	Repetition 

 The Repeating Representations are deemed to be made by each Obligor by
reference to the facts and circumstances then existing on the date of each Utilisation Request, on each Drop Down Date and the first day of each Interest Period and on the date of delivery of each Compliance Certificate (or, if no such Compliance
Certificate is forwarded, on each day such certificate should have been forwarded to the Agent at the latest). 








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	21.	INFORMATION UNDERTAKINGS 

 The undertakings in this Clause 21 (Information
undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents and the Hedging Agreements or any Commitment is in force. 

 

	21.1	Financial statements 

 The Borrowers shall supply to the Agent in sufficient copies for
all the Lenders: 
  

	 	(a)	as soon as the same become available, but in any event within one hundred and fifty (150) days after the end of each of its financial years: 


 

	 	(i)	their audited consolidated financial statements for that financial year; and 

  

	 	(ii)	the audited consolidated financial statements of the Guarantors for that financial year; 

  

	 	(b)	as soon as the same become available, but in any event within ninety (90) days after the end of its financial quarters: 

  

	 	(i)	their unaudited consolidated financial statements for that financial quarter; and 

  

	 	(ii)	the unaudited consolidated financial statements of the Guarantors for that financial quarter; 

  

	 	(c)	as soon as the same become available, but in any event within 31 January of each financial year, the annual budget and cash flow projections for that financial year and for the next five years for the Guarantors,
specifying major assumptions and structure charts which correctly reflects the KNOT Group and/or the KNOP Group on such date. 

  

	21.2	Compliance Certificate 

 The Borrowers shall supply to the Agent, with each set of
financial statements delivered pursuant to paragraph (a)(i) or (b)(i) of Clause 21.1 (Financial statements), a Compliance Certificate signed by the chief financial officer of the Borrowers and the Guarantors setting out (in reasonable detail)
computations as to compliance with Clause 22 (Financial covenants) and the relevant Market Value requirement set out in Clause 8.6 (Mandatory prepayment – Market Value) as at the date as at which those financial statements were
drawn up. 
  

	21.3	Requirements as to financial statements 

  

	 	(a)	Each set of financial statements delivered by the Borrowers pursuant to Clause 21.1 (Financial statements) shall be certified by a director of the relevant company as fairly representing its financial condition
as at the date as at which those financial statements were drawn up. 

  

	 	(b)	The Borrowers shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 21.1 (Financial statements) is prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting
practices or reference periods and its auditors (or, if appropriate, the auditors of the Obligor) deliver to the Agent: 

  

	 	(i)	a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor’s Original Financial Statements were prepared; and


  

	 	(ii)	sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 22 (Financial covenants) has been complied with and make an accurate
comparison between the financial position indicated in those financial statements and that Obligor’s Original Financial Statements. 









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 Any reference in this Agreement to those financial statements shall be construed as a
reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared. 
  

	21.4	Information: miscellaneous 

 Each Obligor shall supply to the Agent (in sufficient copies
for all the Lenders, if the Agent so requests): 
  

	 	(a)	all relevant documents dispatched by an Obligor to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; 


 

	 	(b)	promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which might, if adversely
determined, have a Material Adverse Effect; 

  

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


 

	 	(d)	promptly upon becoming aware that it, any of its direct or indirect owners, other member of the Group, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has
become or is likely to become a Restricted Party; and 

  

	 	(e)	promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Agent) may reasonably request. 


 

	21.5	Notification of default 

  

	 	(a)	Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been
provided by another Obligor). 

  

	 	(b)	Promptly upon a request by the Agent, each Obligor shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken to remedy it). 

  

	21.6	Notification of Environmental Claims 

 Each Obligor shall inform the Agent in writing as
soon as reasonably practicable upon becoming aware of the same: 
  

	 	(a)	if any Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against an Obligor (or any of its Affiliates), the Manager or any Vessel; and 


 

	 	(b)	of any fact and circumstances which will or are reasonably likely to result in any Environmental Claim being commenced or threatened against an Obligor (or any of its Affiliates), the Manager or any Vessel,










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 where the claim would be reasonably likely, if determined against an Obligor (or any of its
Affiliates) or any Vessel, to have a Material Adverse Effect. 
  

	21.7	Market Value and inspection reports 

 The Borrowers shall: 

 

	 	(a)	arrange, at their own expense, or undertake to let the Agent arrange for the Market Value of each Vessel to be determined at their expense, semi-annually and otherwise at the cost of, and when requested by, the Majority
Lenders, unless an Event of Default has occurred whereby any future valuation shall be at the expense of the Borrowers; and 

  

	 	(b)	if any relevant inspection reports are made or issued in respect of a Vessel, promptly forward copies of such reports to the Agent. 


 

	22.	FINANCIAL COVENANTS 

  

	22.1	Definitions 

 In this Agreement: 

“Book Equity” means, at any time, the value of the paid-in capital and reserves
determined on a consolidated basis in accordance with GAAP and as shown in the latest financial statements. Subordinated Shareholder Loans shall be included in the calculation of Book Equity when determining the Equity Ratio for KNOT. 

“Current Assets” means the aggregate (on a consolidated basis) of all inventory, work in progress, trade and other receivables
including prepayments in relation to operating items and sundry debtors expected to be realised within twelve months from the date of computation but excluding amounts in respect of: 

 

	 	(a)	receivables in relation to Tax; 

  

	 	(b)	exceptional items and other non-operating items; 

  

	 	(c)	insurance claims; and 

  

	 	(d)	any interest owing to any member of the relevant Group. 

 “Current Liabilities”
means the aggregate (on a consolidated basis) of all liabilities (including trade creditors, accruals and provisions) expected to be settled within twelve months from the date of computation but excluding amounts in respect of liabilities for
instalments on long-term debt and capital lease payments falling due within twelve (12) months after the relevant calculation date and (when calculating the Current Liabilities of a Borrower) any group intercompany balances. 

“EBITDA” means, in respect of any Relevant Period, the consolidated earnings, before: 

 

	 	(a)	deducting any provision on account of taxation; 









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	 	(b)	deducting any interest, discounts or other fees incurred or payable, by any member of the relevant Group in respect of Financial Indebtedness; 


 

	 	(c)	taking into account any items treated as exceptional or extraordinary items; and 

  

	 	(d)	any amount attributable to the amortisation of intangible assets and depreciation of tangible assets. 


“Free Liquidity” means the aggregate value of: 
  

	 	(a)	cash in hand or on deposit with any bank or financial institution; 

  

	 	(b)	cash equivalents as reported in accordance with GAAP; and 

  

	 	(c)	(when determining the Free Liquidity of KNOP) 2/3 of the available facility in respect of the revolving facility under a certain USD 240,000,000 credit facility to KNOP. 


“Interest Bearing Debt” means, at any time, the aggregate amount of all obligations for or in respect of Financial
Indebtedness, but excluding any such obligations to any other member of the relevant Group (to the extent included in the Financial Indebtedness). 

“Relevant Period” means each period of twelve (12) months ending on the last day of each financial quarter of each
financial year, provided that for the purposes of the calculation of EBITDA, the earnings of a vessel (following its delivery) shall be annualised (by reference to annual earnings of similar ships acceptable to the Agent for this purpose) until it
has operated for a period of twelve (12) months. 
 “Subordinated Shareholder Loan” means a loan made by a shareholder
to KNOT or any of its Subsidiaries which is fully subordinated to the rights of the Finance Parties under the Finance Documents on terms approved in writing by the Lenders and which: 

 

	 	(a)	has a maturity date not earlier than 31 December 2022; 

  

	 	(b)	may not be serviced (neither in respect of principal or interest or otherwise) until after the Final Maturity Date (other than as permitted by Clause 23.11 (Distribution restrictions)); and 


 

	 	(c)	has no acceleration rights. 

 “Total Assets” means, at any time, the total book
value of all the assets which would, in accordance with GAAP, be classified as assets. 
 “Working Capital” means, on any
date, Current Assets less Current Liabilities. 
  

	22.2	Financial condition – each Borrower 

  

	 	(a)	Working Capital – each Borrower  

 Each Borrower shall at all times maintain
positive Working Capital. 
  

	 	(b)	Free Liquidity – each Borrower 

 Each Borrower shall at all times as long as it is
owned by KNOT under this Agreement maintain a consolidated Free Liquidity equal to or greater than USD 500,000. 








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	22.3	Financial condition – KNOT 

  

	 	(a)	Working Capital  

 KNOT (on a consolidated basis) shall at all times as long as it is a
Guarantor under this Agreement maintain positive Working Capital. 
  

	 	(b)	Free Liquidity 

  

	 	(i)	KNOT (on a consolidated basis) shall at all times as long as it is a Guarantor under this Agreement maintain a Free Liquidity equal to or greater than USD 25,000,000. 


 

	 	(ii)	KNOT (on a consolidated basis) shall at all times as long as it is the Guarantor under this Agreement maintain a consolidated Free Liquidity equal to or greater than four per cent. (4%) of its Interest Bearing Debt.


  

	 	(c)	Minimum Equity Ratio  

 KNOT (on a consolidated basis) shall at all times as long as it
is a Guarantor under this Agreement have a ratio of Book Equity to Total Assets greater than 30%. 
  

	22.4	Financial condition – KNOP 

  

	 	(a)	Working Capital 

 KNOP (on a consolidated basis) shall at all times as long as it is a
Guarantor under this Agreement maintain positive Working Capital. 
  

	 	(b)	Free Liquidity 

 KNOP (on a consolidated basis) shall at all times from (and including)
the time when it has acceded to this Agreement as a Guarantor in accordance with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors) maintain a Free Liquidity equal to or greater than USD 15,000,000 plus USD 1,500,000 for each owned
(directly or indirectly) vessel (up to a total of eight (8) vessels) with employment contracts with less than twelve (12) months’ remaining tenor (excluding options) plus USD 1,000,000 for each vessel in excess of eight
(8) vessels owned (directly or indirectly) with employment contracts with less than twelve (12) months’ remaining tenor (excluding options), provided always that employment contracts entered into with KNOT or any of its Subsidiaries
shall not count as employment contracts for the purpose of this provision. 
  

	 	(c)	Minimum Equity Ratio 

 KNOP (on a consolidated basis) shall at all times from (and
including) the time when it has acceded to this Agreement as a Guarantor in accordance with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors) have a ratio of Book Equity to Total Assets greater than 30%. 

 

	 	(d)	Interest Coverage Ratio 

 KNOP (on a consolidated basis) shall at all times from (and
including) the time when it has acceded to this Agreement as a Guarantor in accordance with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors) have a ratio of EBITDA to interest expense greater than 2.5x. 








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	22.5	Financial testing 

 The financial covenants set out in Clause 22.2 (Financial
condition – each Borrower) and Clause 22.4 (Financial condition – KNOP) shall be calculated on KNOT’s or KNOP’s (as the case may be) consolidated figures and in accordance with GAAP and tested (i) by reference to
each of its financial statements delivered pursuant to Clause 21.1 (Financial statements) (whether audited or un-audited) and each Compliance Certificate delivered pursuant to Clause 21.2
(Compliance Certificate) and (ii) at such other times as reasonably requested by the Agent by reference to such documentation as is then available or made available in accordance with paragraph (c) of Clause 21.4 (Information:
miscellaneous), and presented to the Agent in form and substance satisfactory to the Agent. 
  

	22.6	Financial covenants in other agreements 

 If any other loans, bonds or similar capital
instruments have any stronger covenants on KNOP, such covenants shall at all times from (and including) the time when it has acceded to this Agreement as a Guarantor in accordance with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors)
apply for the Facilities as if expressly set out in this Agreement. 
  

	23.	GENERAL UNDERTAKINGS 

 The undertakings in this Clause 23 (General undertakings)
remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents and the Hedging Agreements or any Commitment is in force. 
  

	23.1	Authorisations 

 Each Obligor shall promptly: 

 

	 	(a)	obtain, comply with and do all that is necessary to maintain in full force and effect; and 

  

	 	(b)	supply certified copies to the Agent of, 

 any Authorisation required under any law or
regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance
Document. 
  

	23.2	Negative pledge 

  

	 	(a)	No Obligor shall create or permit to subsist any Security over any of the Mortgaged Assets. 

  

	 	(b)	No Borrower shall create or permit to subsist any Security over any of its assets nor any factoring agreement to be registered with the Norwegian Registry of Movable Property (in No.
Løsøreregisteret). 

  

	 	(c)	Following a Drop Down, KNOP shall not create or permit to exist any security over any of the shares or other ownership interests in KNOT Offshore Partners UK LLC and KNOT ST. 


 

	 	(d)	No Borrower shall: 

  

	 	(i)	sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;


  

	 	(ii)	sell, transfer or otherwise dispose of any of its receivables on recourse terms; 

  

	 	(iii)	enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or 


 

	 	(iv)	enter into any other preferential arrangement having a similar effect, 









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 in circumstances where the arrangement or transaction is entered into primarily as a method
of raising Financial Indebtedness or of financing the acquisition of an asset. 
  

	 	(e)	Paragraph (a), (b) and (c) above do not apply to any Security listed below: 

  

	 	(i)	any netting or set-off arrangement entered into by any member of the relevant Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit
balances; 

  

	 	(ii)	any lien arising by operation of law and in the ordinary course of trading and securing obligations not more than thirty (30) days overdue; 


 

	 	(iii)	any Security entered into pursuant to any Finance Document or Hedging Agreement; or 

  

	 	(iv)	Security consented to in writing by the Agent (acting upon instructions from the Lenders). 

  

	23.3	Disposals 

  

	 	(a)	No Borrower shall, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. 


 

	 	(b)	Paragraph (a) above does not apply to any sale, lease, transfer or other disposal: 

  

	 	(i)	made in the ordinary course of trading of the disposing entity; or 

  

	 	(ii)	of assets in exchange for other assets comparable or superior as to type, value and quality. 

  

	23.4	Merger 

 No Obligor shall enter into any amalgamation, demerger, merger or corporate
reconstruction. 
  

	23.5	Change of business 

  

	 	(a)	Each Obligor shall procure that no substantial change is made to the general nature of its business from that carried on at the date of this Agreement. 


 

	 	(b)	Except for the Drop Downs, there shall be no change in ownership of the Borrowers or of KNOT and no material changes to the corporate structure of the KNOT Group or the KNOP Group without the prior written consent of
the Lenders (not to be unreasonably withheld). 

  

	23.6	Transactions with Affiliates 

 Each Obligor shall procure that all transactions entered
into between a member of the Group and an Affiliate are made on arm’s length terms. 
  

	23.7	Title 

 The Obligors (as the case may be) shall hold legal title to and own the entire
beneficial interest in the Mortgaged Assets, free of all Security and other interests and rights of every kind, except for those created by the Finance Documents and as permitted by Clause 23.2 (Negative pledge). 








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	23.8	Insurances – general 

 Each Obligor shall maintain appropriate insurance cover with
respect to its properties, assets and operations of such types, in such amounts and against such risks as are maintained by prudent companies carrying on the same or substantially similar business. All insurances must be with financially sound and
reputable insurance companies, funds or underwriters. 
  

	23.9	Bank Accounts 

 Each Borrower shall maintain the Accounts with the Account Bank and all
its other bank accounts with any of the Lenders and ensure that all Earnings are paid to the Borrower A Account, the Borrower B Account or the Borrower C Account (as the case may be). 

 

	23.10	Derivative transactions 

  

	 	(a)	No Obligor shall enter into any derivative transactions with other parties than the Hedging Banks unless the Hedging Banks have received a reasonable opportunity, in writing, to provide competitive rates to that
Borrower and the Hedging Banks cannot provide such competitive rates. 

  

	 	(b)	The Borrowers shall procure that no material terms of any of the Hedging Agreements are amended without the prior written consent of all Hedging Banks. 


 

	23.11	Distribution restrictions 

  

	 	(a)	KNOT shall not, without the prior written consent of the Agent (on behalf of the Lenders), make any reduction of its share capital. 

  


	 	(b)	KNOT shall not, without the prior written consent of the Agent (on behalf of the Lenders): 

  

	 	(i)	declare, make or pay any dividend or other distribution (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); 


 

	 	(ii)	repay or distribute any of its share premium reserve; 

  

	 	(iii)	service or repay any loan from a shareholder comparable to equity; or 

  

	 	(iv)	redeem, repurchase or repay any of its shares capital (or resolve to do so), 

 to its
shareholders (or any Affiliates thereof) in respect of any financial year, unless: 
  

	 	(A)	no Default has occurred and is continuing at the time the making, payment or declaration of the relevant dividend or other distribution is made, or would result from the making, payment or declaration of the relevant
dividend or other distribution; 

  

	 	(B)	KNOT has consolidated net profit after taxes based on the audited annual accounts for the previous financial year; 

  

	 	(C)	KNOT will following the making, payment or declaration of the relevant dividend or other distribution have a Free Liquidity equal to or exceeding USD 35,000,000; and 


 

	 	(D)	KNOT and each Borrower will be in compliance with the financial covenants following the making, payment or declaration of the relevant dividend or other distribution. 









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	 	(c)	Neither KNOP nor KNOT ST shall, without the prior written consent of the Agent (on behalf of the Lenders): 

  

	 	(i)	declare, make or pay any dividend or other distribution (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); 


 

	 	(ii)	repay or distribute any of its share premium reserve; 

  

	 	(iii)	service or repay any loan from a shareholder comparable to equity; or 

  

	 	(iv)	redeem, repurchase or repay any of its shares capital (or resolve to do so), 

 to its
shareholders (or any Affiliates thereof) in respect of any financial year, unless: 
  

	 	(A)	no Default has occurred and is continuing at the time the making, payment or declaration of the relevant dividend or other distribution is made, or would result from the making, payment or declaration of the relevant
dividend or other distribution; and 

  

	 	(B)	KNOP and each Borrower will be in compliance with the financial covenants following the making, payment or declaration of the relevant dividend or other distribution. 


 

	 	(d)	No Borrower shall, without the prior written consent of the Agent (on behalf of the Lenders) declare, make or pay any dividend or other distribution (whether in cash or in kind) on or in respect of its share capital (or
any class of its share capital) to its shareholders (or any Affiliates thereof) in respect of any financial year, unless: 

  

	 	(i)	no Default has occurred and is continuing at the time the making, payment or declaration of the relevant dividend or other distribution is made, or would result from the making, payment or declaration of the relevant
dividend or other distribution; 

  

	 	(ii)	that Borrower will following the making, payment or declaration of the relevant dividend or other distribution have a Free Liquidity equal to or exceeding USD 500,000; and 


 

	 	(iii)	that Borrower and the relevant Guarantor(s) will be in compliance with the financial covenants following the making, payment or declaration of the relevant dividend or other distribution. 


 

	23.12	Transaction Documents 

 The Obligors shall procure that no material terms of any of the
Transaction Documents are amended or terminated, or any waivers of any material terms thereof are agreed, without the prior written consent of the Agent. 
  

	23.13	Taxation 

 Each Obligor shall pay and discharge all Taxes imposed upon it or its assets
within the time period allowed without incurring penalties unless and only to the extent that such payment is being contested in good faith or can be lawfully withheld. 
  

	23.14	No change of name etc. 

 No Obligor shall change: 

 

	 	(a)	the end of its fiscal year; 









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	 	(b)	its nature of business; 

  

	 	(c)	its constitutional documents; 

  

	 	(d)	its legal name; 

  

	 	(e)	its type of organization; or 

  

	 	(f)	its jurisdiction; 

 without the prior written consent of the Agent. 

 

	23.15	Subordination 

 Each Borrower shall procure that all Shareholder Loans and all amounts
payable to and/or claims against it from the Manager and/or any manager are fully subordinated to the interest of the Finance Parties hereunder and the Hedging Banks under the Hedging Agreements. 

 

	23.16	Indebtedness 

 No Borrower shall, without the prior written consent of the Agent, borrow
any additional funds or enter into any transaction (including derivative transactions other than any Hedging Transactions) that may result in the incurrence of any additional Financial Indebtedness (it being understood however that intercompany
loans, deposits or equity contributions within the Group (“Intra-Group Indebtedness”) shall be allowed provided always that (x) no Default is then in existence or will occur from such disposition, (y) after giving effect
to such disposition, the Obligors will be in compliance with the financial covenants in Clause 22 (Financial covenants), and (z) Intra-Group Indebtedness shall be fully subordinated to the Facilities and any obligations under the Hedging
Agreements). 
  

	23.17	Investments 

 No Borrower shall, without the prior written consent of the Lenders make
any further investments or acquisitions. 
  

	23.18	Financial support 

 No Borrower shall make or grant any loans, guarantees or any other
form of financial support, except financial support in the ordinary course of operation of the Vessels (it being understood however that intercompany loans, deposits or equity contributions within the Group (“Intra-Group
Indebtedness”) shall be allowed provided always that (x) no Default is then in existence or will occur from such disposition, (y) after giving effect to such disposition, the Obligors will be in compliance with the financial
covenants in Clause 22 (Financial covenants), and (z) Intra-Group Indebtedness shall be fully subordinated to the Facilities and any obligations under the Hedging Agreements). 

 

	23.19	Compliance with laws etc.  

 The Obligors shall (and shall ensure that each other
member of the Group, as well as any manager and charterer): 
  

	 	(a)	comply with all laws or regulations: 

  

	 	(i)	applicable to its business; and 

  

	 	(ii)	applicable to the Vessels, its ownership, employment, operation, management and registration, 









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 including the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of
the jurisdiction of each relevant Approved Ship Registry; 
  

	 	(b)	obtain, comply with and do all that is necessary to maintain in full force and effect any Environment Permits; and 


without limiting paragraph (a) above, not employ a Vessel nor allow its employment, operation or management in any manner contrary to any
law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws, anti-bribery and corruption laws and all Sanctions. 
  

	23.20	Sanctions 

  

	 	(a)	No Obligor shall (and shall ensure that no other Relevant Person will) take any action, make any omission or use (directly or indirectly) any proceeds of a Loan, in a manner that: 


 

	 	(i)	is a breach of Sanctions or is an attempt to evade any Sanctions; and/or 

  

	 	(ii)	causes (or will cause) a breach of Sanctions by any Relevant Person or Finance Party. 

  

	 	(b)	No Obligor shall (and shall ensure that no other Relevant Person will) take any action or make any omission that results, or is reasonably likely to result, in it or any Finance Party becoming a Restricted Party or
otherwise a target of sanctions (“target of sanctions” signifying an entity or person (“Target”) that is a target of laws, regulations or orders concerning any trade, economic or financial sanctions or embargoes by virtue
of prohibitions and/or restrictions being imposed on any US person or other legal or natural person subject to the jurisdiction or authority of a US Sanctions Authority which prohibit or restrict them from them engaging in trade, business or other
activities with such Target without all appropriate licences or exemptions issued by all applicable US Sanctions Authorities). 

  

	24.	VESSEL UNDERTAKINGS – PRE-DELIVERY 

  

	24.1	General 

 The undertakings in this Clause 24 (Vessel undertakings) are granted by
each Borrower in respect of the Vessel to be delivered to it and remain in force from the date of this Agreement and until (and including) the Delivery Date of the relevant Vessel. 

 

	24.2	No variation, release etc. of a Shipbuilding Contract 

 No Borrower shall, without the
prior written consent of the Majority Lenders, whether by a document, by conduct, by acquiescence or in any other way: 
  

	 	(a)	vary a Shipbuilding Contract in such manner as to affect the type of class of the relevant Vessel or in such manner as might reasonably be expected to diminish the value of that Vessel or materially (as determined by
the Agent) alter its contractual delivery date; 

  

	 	(b)	vary a Shipbuilding Contract in such manner as might be expected to affect the relevant Refund Guarantee in any adverse way; or 

  

	 	(c)	release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which that Borrower has at any time to, in or in connection with that Shipbuilding Contract or in relation to any
matter arising out of or in connection with that Shipbuilding Contract. 

  

	24.3	Provision of information relating to the Shipbuilding Contracts 

 Without prejudice to
Clause 21.4 (Information: miscellaneous) each Borrower shall: 
  

	 	(a)	immediately inform the Agent if any breach of a Shipbuilding Contract occurs or a serious risk of such a breach arises and of any other event or matter affecting a Shipbuilding Contract; 









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	 	(b)	provide the Agent, promptly after service, with copies of all notices served on or by a Borrower under or in connection with a Shipbuilding Contract; and 


 

	 	(c)	provide the Agent with any information which it requests about any interest or right of any kind which the Borrowers have at any time to, in or in connection with the Shipbuilding Contracts or in relation to any matter
arising out of or in connection with the Shipbuilding Contracts including the progress of the construction of the Vessels. 

  

	24.4	No assignment etc. of a Shipbuilding Contract 

 No Borrower shall assign, novate,
transfer or dispose of any of its rights or obligations under the relevant Shipbuilding Contract. 
  

	24.5	Reports and Inspections 

  

	 	(a)	Each Borrower shall provide the Agent with status reports, in form and substance acceptable to the Agent, with regard to the progress of the construction work under each Shipbuilding Contract and to demonstrate that the
delivery date will be on or prior to 4Q 2016 in respect of Vessel A, 1Q 2017 in respect of Vessel B and 3Q 2017 in respect of Vessel C. During the construction period under the Shipbuilding Contracts up until the actual delivery date such status
reports shall be delivered to the Agent on the last day of each financial quarter. 

  

	 	(b)	The Borrowers shall upon request from the Agent arrange for the Agent, and/or any other persons appointed by the Agent, to inspect each Vessel during the construction period or thereafter without interference of the
construction or daily operation of that Vessel. 

  

	25.	VESSEL UNDERTAKINGS – POST-DELIVERY 

  

	25.1	General 

 The undertakings in this Clause 24 (Vessel undertakings) are granted by
each Borrower in respect of the Vessel owned by it and remain in force from the Delivery Date of the relevant Vessel and for so long as any amount is outstanding under the Finance Documents and the Hedging Agreements or any Commitment is in
force. 
  

	25.2	Insurance – Vessels 

  

	 	(a)	The Borrowers shall maintain or ensure that each Vessel is insured against such risks, including but not limited to, hull and machinery, protection & indemnity (including cover for pollution liability to the
uppermost limit available via the P&I club), hull interest, freight interest, war risk insurances, including confiscation, terrorism and piracy, and Loss of Hire, in such amounts, on such terms and placed through first class insurance brokers
with such first class insurers as the Agent shall approve. 

  

	 	(b)	The aggregate value of the hull and machinery insurance, hull interest insurance and/or freight interest insurance for each Vessel shall be at least equal to the higher of the Market Value of each Vessel and, when
aggregated with the other Vessels, one hundred and twenty per cent (120%) of the Loans, whereof the hull and machinery insurance for a Vessel shall at all times cover at least eighty per cent (80%) of the Market Value of that Vessel.


  

	 	(c)	 The Borrowers shall procure that the Agent (on behalf of the Finance Parties and the Hedging Banks) is noted as
first priority mortgagee in the insurance contracts, and that 










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confirmation is promptly given by the underwriters thereof to the Agent that the notice of assignment with regards to the Insurances and the loss payable clauses are noted in the insurance
contracts and that standard letters of undertaking/cover notes/policies/certificates of entry are promptly executed by the insurers and/or the insurance broker(s). 


 

	 	(d)	Within reasonable time prior to the expiry date of the relevant Insurances, the Borrowers shall procure the delivery to the Agent of a confirmation from the insurance broker(s) through whom the Insurances referred to in
paragraph (a) above have been renewed and taken out in respect of a Vessel with insurance values as required by paragraph (b) above, and similarly from the P&I club in which the Vessel is entered that such entry is continuing, that
such Insurances are or shall be in full force and effect and that the Agent (on behalf of the Finance Parties and the Hedging Banks) has been noted as first priority mortgagee by the relevant insurers and that the broker and, if applicable, the
P&I club shall promptly issue a letter of undertaking in respect of such renewed insurances. 

  

	 	(e)	The Borrowers shall allow the Agent to take out (for the benefit of the Finance Parties and the Hedging Banks but at the cost and expense of the Borrowers), a Mortgagee’s Interest Insurance and a Mortgagee’s
Interest - Additional Perils Pollution Insurance (covering one hundred and twenty per cent (120%) of the Loans). 

  

	 	(f)	If any of the Insurances referred to in paragraph (a) above form part of a fleet cover, the Borrowers shall procure, except for protection & indemnity (where the Borrowers shall procure to obtain standard
market undertakings in favour of the Agent with respect to protection & indemnity from the insurers or the insurance broker), that the insurers or the insurer broker shall undertake to the Agent that they shall neither set-off against any claims in respect of any Vessel any premiums due in respect of other vessels or units under such fleet cover or any premiums due for other insurances, nor cancel this Insurance for reason of non-payment of premiums for other units under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of a Vessel if and when so requested by the Agent.


  

	 	(g)	The Borrowers shall procure that each Vessel always is employed in conformity with the terms of the instruments of Insurances (including any warranties expressed or implied therein) and comply with such requirements as
to extra premium or otherwise as the insurers may prescribe. 

  

	 	(h)	The Borrowers will not make any material change to the insurances described under (a) above without the prior written consent of the Agent. 


 

	 	(i)	The Borrowers shall pay for an insurance audit report commissioned by the Agent to be prepared by an independent insurance consultant, in form and contents acceptable to the Agent, to be tabled prior to the Delivery
Date of each Vessel and thereafter (if requested by the Agent or Lenders) upon each (annual) renewal of the Insurances referred to in paragraph (a) above. 

  

	25.3	Flag, name and registry 

 Each Vessel shall be registered in an Approved Ship Registry.
The Borrowers may not move a Vessel to any other ship register without the prior written consent of the Majority Lenders. 








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	25.4	Classification and repairs 

 The Borrowers shall, and shall procure that the relevant
Manager shall, keep or shall procure that each Vessel is kept in a good, safe and efficient condition consistent with first class ownership and management practice and in particular: 

 

	 	(a)	so as to maintain its class at the highest level with American Bureau of Shipping (ABS) or another IACS classification society approved to the Majority Lenders, free of overdue material recommendations and
qualifications; and 

  

	 	(b)	so as to comply with the laws and regulations (statutory or otherwise) applicable to units registered under the flag state of that Vessel or to vessels trading to any jurisdiction to which that Vessel may trade from
time to time; 

  

	 	(c)	not, without the prior written consent of the Majority Lenders, change the classification society of a Vessel; 

  

	 	(d)	not, without the prior written consent of the Agent, bring a Vessel or allow a Vessel to be brought to any yard for repairs or for the purpose of work being done upon her where the costs of such repairs or work is
likely to exceed USD 1,000,000 (or the equivalent thereof in any other currency), unless such person shall first have given to the Agent and in terms reasonably satisfactory to it, a written undertaking not to exercise any lien on that Vessel
or her Insurances or Earnings for the cost of such repairs or work or otherwise; and 

  

	 	(e)	not permit any major change or structural alteration to be made to a Vessel, nor any modification of, or part removal from, a Vessel in a way which would materially diminish her value; 


 

	 	(f)	procure that each Vessel is kept in a good, safe and efficient condition and state of repair consistent with the industry’s best ownership and management practice with
dry-docking to be completed at the frequency required under the relevant Charterparty; and 

  

	 	(g)	not permit a Vessel to enter the territorial waters (12 mile limit) of the US unless a valid Certificate of Financial Responsibility as required by the United States Coast Guard has been obtained for that Vessel in
advance. 

  

	25.5	Inspections and class records 

  

	 	(a)	The Borrowers shall procure that the Agent’s surveyor at the Borrowers’ cost, is permitted to inspect the condition of each Vessel twice a year provided always that such arrangement shall not interfere with
the operation of that Vessel and subject to satisfactory indemnities approved by the P&I insurers. 

  

	 	(b)	Each Borrower shall, and shall procure that the Manager shall procure that the Agent is: 

  

	 	(i)	granted permission to access class records and other information from the classification society in relation to each Vessel, through a letter sent by that Borrower to the classification society (in a form prepared or
approved by the Agent), which will also specify that should there be a condition of class imposed or a class recommendation issued in respect of a Vessel, the classification society shall immediately inform the Agent by email; and 


 

	 	(ii)	granted electronic access to class records directly by the classification society or indirectly via the account manager of that Borrower and/or the Manager (as the case may be) and designating the Agent as a user or
administrator of the system under its account. 

  

	 	(c)	The Borrowers shall, and shall procure that the relevant Manager shall, instruct the classification society to send to the Agent, following a written request from the Agent, copies of all class records held by the
classification society in relation to each Vessel. 









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	25.6	Surveys 

 The Borrowers shall, and shall procure that the relevant Manager shall, submit
to or cause each Vessel to be submitted to such periodic or other surveys as may be required for classification purposes and to ensure full compliance with regulations of the flag state of each Vessel and to supply or to cause to be supplied to the
Agent copies of all survey reports and confirmations of class issued in respect thereof whenever such is required by the Agent, however such requests are limited to once a year. 

 

	25.7	Notification of certain events 

 The Borrowers shall immediately notify the Agent of:

  

	 	(a)	any accident to a Vessel involving repairs where the costs will or is likely to exceed USD 3,000,000 (or the equivalent in any other currency); 


 

	 	(b)	any requirement or recommendation made by any insurer or classification society or by any competent authority which is not, or cannot be, complied with immediately; 


 

	 	(c)	any exercise or purported exercise of any arrest or lien on a Vessel, its Earnings or its Insurances; 

  

	 	(d)	any occurrence as a result of which a Vessel has become or is, by the passing of time or otherwise, likely to become a Total Loss; and 


 

	 	(e)	any claim for a material breach of the ISM Code or the ISPS Code being made against a Borrower or otherwise in connection with a Vessel. 


 

	25.8	Operation of the Vessels 

  

	 	(a)	The Borrowers shall procure that each Vessel is managed by a Manager pursuant to a Management Agreement and shall not, without the prior written consent of the Majority Lenders, change or allow the change of the
technical or commercial management of a Vessel. 

  

	 	(b)	The Borrowers shall, and shall procure that each Manager shall, comply, or procure the compliance in all material respects with the International Convention for the Safety of Life at Sea (SOLAS) 1974, the ISM Code and
the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Vessels (all as adopted, amended or replaced from time to time), its ownership, operation and management or to the business of the Borrowers and each Manager and
shall not employ a Vessel nor allow its employment: 

  

	 	(i)	in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; 

  

	 	(ii)	to carry any nuclear waste or nuclear material under any circumstances; 

  

	 	(iii)	in carrying illicit or prohibited goods; 









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	 	(iv)	in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; and 

  

	 	(v)	in any part of the world where there are hostilities (whether war is declared or not) or in any zone which is declared a war zone by any government or is or becomes a listed area of enhanced risk by the war risk
insurers of a Vessel unless the Borrowers have (at their own expense) effected any special, additional or modified insurance cover which shall be necessary or customary for first class vessel owners within the territorial waters of such country at
such time and has provided evidence of such cover to the Agent. 

  

	25.9	ISM Code compliance 

 The Borrowers shall: 

 

	 	(a)	procure that each Vessel remains subject to a SMS; 

  

	 	(b)	procure that a valid and current SMC is maintained for each Vessel; 

  

	 	(c)	if not itself, procure that the relevant Manager maintains a valid and current DOC; 

  

	 	(d)	immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of a Vessel or of its DOC or the DOC of the relevant Manager; and 


 

	 	(e)	immediately notify the Agent in writing of any “accident” or “major nonconformity”, each as those terms is defined in the Guidelines in the application of the IMO International Safety Management Code
issued by the International Chamber of Shipping and International Shipping Federation. 

  

	25.10	Environmental compliance 

 The Borrowers shall, and shall procure that any charterers
shall, comply in all respects with all Environmental Laws applicable to any of them or the Vessels, including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with all
Environmental Permits applicable to any of them and/or the Vessels. 
  

	25.11	Arrest 

 The Borrowers shall pay and discharge when due: 

 

	 	(a)	all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against a Vessel, its Earnings or its Insurances; 


 

	 	(b)	all tolls, taxes, dues, fines, penalties and other amounts charged in respect of a Vessel, its Earnings or its Insurances; and 

  

	 	(c)	all other outgoings whatsoever in respect of a Vessel, its Earnings and its Insurances, 

 and
forthwith (however not later than after thirty (30) Business Days) upon receiving a notice of arrest of a Vessel, or its detention in exercise or purported exercise of any lien or claim, the Borrowers shall procure its release by providing bail
or providing the provision of security or otherwise as the circumstances may require. 
  

	25.12	Chartering and employment 

 No Borrower shall enter into arrangements which provide an
obligation to charter (or similar arrangement) in any tonnage. 








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	25.13	Restrictions on sale, chartering etc. 

 No Borrower shall, without the prior written
consent of the Lenders: 
  

	 	(a)	sell or otherwise dispose of a Vessel, unless the Loans are prepaid in accordance with Clause 8.5 (Mandatory prepayment - Total Loss or sale of a Vessel) in connection therewith; or 


 

	 	(b)	terminate, cancel, materially amend or supplement any Charterparty or other contract of employment entered into in respect of the Vessel, nor assign such Charterparty or other contract of employment to any other person.


  

	26.	EVENTS OF DEFAULT 

 Each of the events or circumstances set out in Clause 26 (Events
of Default) is an Event of Default (save for Clause 26.15 (Acceleration)). 
  

	26.1	Non-payment 

 An Obligor does not pay on the due
date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless: 
  

	 	(a)	its failure to pay is caused by: 

  

	 	(i)	administrative or technical error; or 

  

	 	(ii)	a Disruption Event; and 

  

	 	(b)	payment is made within three (3) Business Days of its due date. 

  

	26.2	Financial covenants etc. 

 Any requirement of Clause 22 (Financial
covenants), Clause 23.19 (Compliance with laws etc.), Clause 23.20 (Sanctions), Clause 25.2 (Insurance – Vessels), Clause 25.3 (Flag, name and registry) and Clause 25.4 (Classification and repairs) is not
satisfied. 
  

	26.3	Other obligations 

  

	 	(a)	An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 26.1 (Non-payment) and Clause 26.2 (Financial
covenants etc.)). 

  

	 	(b)	No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the earlier of (A) the Agent giving notice to the
Borrowers and (B) the Borrowers becoming aware of the failure to comply. 

  

	26.4	Misrepresentation 

 Any representation or statement made or deemed to be made by an
Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be
made. 
  

	26.5	Cross default 

  

	 	(a)	Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period. 

  

	 	(b)	Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). 









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	 	(c)	Any commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor as a result of an event of default (however described). 


 

	 	(d)	Any creditor of any Obligor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described). 


 

	 	(e)	No Event of Default will occur under this Clause 26.5 (Cross default) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is
less than USD 5,000,000 (or its equivalent in any other currency or currencies). 

  

	26.6	Insolvency 

  

	 	(a)	An Obligor: 

  

	 	(i)	is unable or admits inability to pay its debts as they fall due; 

  

	 	(ii)	suspends making payments on any of its debts; or 

  

	 	(iii)	by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party or Hedging Bank in its capacity as such) with a view to rescheduling any
of its indebtedness. 

  

	 	(b)	The value of the assets of any Obligor is less than its liabilities (taking into account contingent and prospective liabilities). 

  

	 	(c)	A moratorium is declared in respect of any indebtedness of any Obligor. 

  

	26.7	Insolvency proceedings 

 Any corporate action, legal proceedings or other procedure or
step is taken in relation to: 
  

	 	(a)	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or
otherwise) of any Obligor; 

  

	 	(b)	a composition, compromise, assignment or arrangement with any creditor of any Obligor; 

  

	 	(c)	the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor or any of its assets; or 


 

	 	(d)	enforcement of any Security over any assets of any Obligor, 

 or any analogous procedure or step
is taken in any jurisdiction. 
 This Clause 26.7 (Insolvency proceedings) shall not apply to any
winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within thirty (30) days of commencement. 

 

	26.8	Creditors’ process 

 Any expropriation, attachment, sequestration, distress or
execution affects any asset or assets of an Obligor having an aggregate value of USD 5,000,000 and is not discharged within thirty (30) days. 
  

	26.9	Cessation of business 

 An Obligor suspends or ceases to carry on (or threatens to
suspense or cease to carry on) all or a part of its business. 








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	26.10	Unlawfulness 

 It is or becomes unlawful for an Obligor to perform any of its obligations
under the Finance Documents or any Security created or expressed to be created or evidenced by any Security Document ceases to be effective or does not create the ranking and priority it is expressed to have. 

 

	26.11	Material adverse change 

 Any event or series of events occur which, in the opinion of
the Majority Lenders, has or is likely to have a Material Adverse Effect. 
  

	26.12	Repudiation, validity and cancellation/termination 

  

	 	(a)	An Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document or a Transaction Document. 

  

	 	(b)	Any Finance Document or Transaction Document ceases to be legal, valid, binding, enforceable or effective. 

  

	 	(c)	A Shipbuilding Contract, Refund Guarantee or Charterparty is cancelled or terminated for any reason, or any party to a Shipbuilding Contract, Refund Guarantee or Charterparty is in breach of any payment obligation
thereunder. 

  

	 	(d)	A Vessel is not accepted by the Charterer under the relevant Charterparty within the time period for such acceptance provided by such Charterparty. 


 

	26.13	Insurances 

 Any insurance policy taken out in respect of a Vessel is cancelled, revoked
or lapses, or any insurance claim(s) by a Borrower is repudiated following a Total Loss. 
  

	26.14	The Vessels 

  

	 	(a)	Class certification of a Vessel is withdrawn. 

  

	 	(b)	There is an instability affecting a country of flag and each affected Vessel is not transferred to another Approved Ship Registry immediately upon request by the Agent. 


 

	26.15	Acceleration 

 On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrowers: 
  

	 	(a)	require payment of default interest on the Loans in accordance with Clause 9.3 (Default interest); 

  

	 	(b)	cancel the Total Commitments whereupon they shall immediately be cancelled; 

  

	 	(c)	declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due
and payable; and/or 

  

	 	(d)	declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders. 









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 SECTION 9 

CHANGES TO PARTIES 
  

	27.	CHANGES TO THE LENDERS 

  

	27.1	Transfers by the Lenders 

 Subject to this Clause 27 (Changes to the Lenders), a
Lender (the “Existing Lender”) may transfer by novation any of its rights and obligations, to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of
making, purchasing or investing in loans, securities or other financial assets (the “New Lender”). 
  

	27.2	Conditions of transfer 

  

	 	(a)	The consent of the Borrowers is required for a transfer by an Existing Lender, unless the transfer is to another Lender or an Affiliate of a Lender or an Event of Default has occurred which is continuing.


  

	 	(b)	The consent of the Borrowers to a transfer must not be unreasonably withheld or delayed. The Borrowers will be deemed to have given its consent five (5) Business Days after the Existing Lender has requested it
unless consent is expressly refused by the Borrowers within that time. 

  

	 	(c)	A transfer will only be effective if the procedure set out in Clause 27.4 (Procedure for transfer) is complied with. 

  

	 	(d)	If: 

  

	 	(i)	a Lender transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and 

  

	 	(ii)	as a result of circumstances existing at the date the transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 13 (Tax gross-up and indemnities) or Clause 14 (Increased Costs), 

 then the New Lender
or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the transfer or change had
not occurred. This paragraph (d) shall not apply in respect of a transfer made in the ordinary course of the primary syndication of the Facilities. 
  

	 	(e)	Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf
of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender
would have been had it remained a Lender. 

  

	27.3	Limitation of responsibility of Existing Lenders 

  

	 	(a)	Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: 


 

	 	(i)	the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents; 

  

	 	(ii)	the financial condition of any Obligor; 









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	 	(iii)	the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or 

  

	 	(iv)	the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, 


and any representations or warranties implied by law are excluded. 
  

	 	(b)	Each New Lender confirms to the Existing Lender and the other Finance Parties that it: 

  

	 	(i)	has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this
Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and 

  

	 	(ii)	will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.


  

	 	(c)	Nothing in any Finance Document obliges an Existing Lender to: 

  

	 	(i)	accept a re-transfer from a New Lender of any of the rights and obligations transferred under this Clause 27 (Changes to the Lenders); or 


 

	 	(ii)	support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.


  

	27.4	Procedure for transfer 

  

	 	(a)	Subject to the conditions set out in Clause 27.2 (Conditions of transfer) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer
Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to
comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. 

  

	 	(b)	The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other
similar checks under all applicable laws and regulations in relation to the transfer to such New Lender. 

  

	 	(c)	Subject to Clause 27.7 (Pro rata interest settlement), on the Transfer Date: 

  

	 	(i)	to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from
further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”); 









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	 	(ii)	each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the
New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender; 

  

	 	(iii)	the Agent, the Mandated Lead Arrangers, the Hedging Banks, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had
the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Mandated Lead Arrangers, the Hedging Banks and the Existing Lender shall each be
released from further obligations to each other under the Finance Documents; and 

  

	 	(iv)	the New Lender shall become a Party as a “Lender”. 

  

	27.5	Copy of Transfer Certificate to the Borrowers  

 The Agent shall, as soon as
reasonably practicable after it has executed a Transfer Certificate, send to the Borrowers a copy of that Transfer Certificate. 
  

	27.6	Security over Lenders’ rights 

 In addition to the other rights provided to Lenders
under this Clause 27 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all
or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation: 
  

	 	(a)	any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and 

  

	 	(b)	in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security
for those obligations or securities, 

 except that no such charge, assignment or Security shall: 

 

	 	(i)	release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or


  

	 	(ii)	require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.


  

	27.7	Pro rata interest settlement 

  

	 	(a)	If the Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause
27.4 (Procedure for transfer) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period): 


 

	 	(i)	 any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the
lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest











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accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six (6) Months, on the next of the dates which falls at six Monthly intervals
after the first day of that Interest Period); and 

  

	 	(ii)	the rights transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: 


 

	 	(A)	when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and 

  

	 	(B)	the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 27.7 (Pro rata interest settlement), have been payable to it on that date, but after
deduction of the Accrued Amounts. 

  

	 	(b)	In this Clause 27.7 (Pro rata interest settlement) references to “Interest Period” shall be construed to include a reference to any other period for accrual of fees. 


 

	28.	CHANGES TO THE OBLIGORS 

  

	28.1	Assignments and transfer by Obligors 

 No Obligor may assign any of its rights or
transfer any of its rights or obligations under the Finance Documents. 
  

	28.2	KNOP and KNOT ST as replacement Guarantors 

  

	 	(a)	KNOT shall have the option to sell its shares in a Borrower to KNOP or a Subsidiary of KNOP during the period from the Delivery Date of the Vessel to be delivered to that Borrower and for up to two (2) years
thereafter, subject to the terms and conditions set out in this Clause 28.2 (KNOT and KNOT ST as replacement Guarantors). 

  

	 	(b)	A Drop Down may only take place once the Agent (on behalf of the Lenders) in its sole discretion is satisfied that: 

  

	 	(i)	no Default is continuing or would result from the proposed Drop Down; 

  

	 	(ii)	no Material Adverse Effect would result from the proposed Drop Down; 

  

	 	(iii)	the Repeating Representations to be made by each Obligor (including KNOP and KNOT ST) are true in all material respects; 

  

	 	(iv)	the Borrowers have delivered to the Agent a duly completed and executed Accession Letter; and 

  

	 	(v)	the Agent has received all of the documents and other evidence listed in Part IV (Conditions precedent to Drop Down) of Schedule 2 (Conditions precedent and subsequent) in form and substance
satisfactory to it. 

  

	 	(c)	On a Drop Down Date: 

  

	 	(i)	KNOP and KNOT ST shall accede to this Agreement as Guarantors and become liable for the obligations of the Borrower to which the Drop Down relates; 


 

	 	(ii)	KNOT shall be released from its obligations under any Finance Document and each Hedging Agreement entered into by the Borrower to which the Drop Down relates as a Guarantor for the obligations of the Borrower to which
the Drop Down relates, and if, following the Drop Down, all Borrowers have been subject to a Drop Down, KNOT shall cease to be a Party to this Agreement; 









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	 	(iii)	all references to the terms “Guarantors”, “Guarantor”, “Obligors” or “Obligor” shall include KNOP and KNOT ST, unless the context implies otherwise; 


 

	 	(iv)	the financial covenants regulated by Clause 22.4 (Financial condition – KNOP) shall become applicable; 

  

	 	(v)	if, following the Drop Down, all Borrowers have been subject to a Drop Down, the financial covenants regulated by Clause 22.3 (Financial condition – KNOT) shall cease to apply; 


 

	 	(vi)	the joint and several liability of the Borrowers shall cease, until Drop Down has taken place for all Borrowers, as regulated by paragraph (c) of Clause 6.2 (Limitations), provided, however, that any two
(2) Borrowers owned by the same Guarantor shall always be jointly and severally liable with each other as set out in Clause 6 (Joint and Several Liability); and 


 

	 	(vii)	cross-collateralization of the Security Documents entered into between each of the Borrowers respectively shall cease, until Drop Down has taken place for all Borrowers, as regulated by paragraph (b) of Clause 18.3
(Limitations), provided, however, that the obligations of a Borrower shall also be secured by any Security Documents provided by the other Borrower (if any) owned by the same Guarantor (or a Subsidiary) as that Borrower. 


 

	 	(d)	The Agent shall notify the other Parties, substantially in the form set out in Schedule 9 (Form of Drop Down Confirmation Letter), promptly upon being satisfied that (1) it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in paragraph (b) above, (2) KNOP and KNOT ST have acceded to this Agreement as Guarantors and (3) prepayment has been made in accordance with Clause 8.3
(Mandatory prepayment - Drop Down), and the Drop Down and the replacement of KNOT by KNOP and KNOT ST as Guarantors shall become effective as of the date and time the Parties are notified in accordance with this paragraph (d).


  

	 	(e)	 Irrespective of anything to the contrary set out in this Agreement or any other Finance Document, no
representations, covenants or other obligations of a Guarantor or provisions referring to a Guarantor (whether in its capacity as Guarantor or otherwise) under this Agreement shall apply to KNOP or KNOT ST prior to the date KNOP and KNOT ST accede
as Guarantors under this Agreement or to KNOT after such date as KNOT has been released from its obligations as a Guarantor under this Agreement and the same shall apply in respect of a Loan for which that Guarantor does not provide a guarantee
pursuant to Clause 19 (Guarantee and indemnity) (e.g. because only one (1) or two (2) Vessels have been subject to Drop Downs and KNOT is the Guarantor for at least one (1) Borrower and KNOP and KNOT ST are Guarantors for the
other Borrower or Borrowers). During a period where KNOT is the Guarantor for at least one (1) Borrower and KNOP and KNOT ST are Guarantors for the other Borrower or Borrowers, the Loan(s) relating to each Borrower shall be treated on a
stand-alone basis except for the Loan(s) relating to each Borrower owned by the same Guarantor (or Subsidiary). During such period there shall be no cross-default or joint liability between the obligations of a Borrower or Borrowers and/or its/their
Guarantor (KNOT) on the one side and the other Borrower or Borrowers and/or the other Guarantors (KNOP and KNOT ST) on the other side. For the avoidance of doubt, the 










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foregoing shall not in any way limit the application of cross-default or other provisions of the Finance Documents in the relation to a Borrower and its respective Guarantor or Guarantors.


 SECTION 10 

THE FINANCE PARTIES 
  

	29.	ROLE OF THE AGENT, THE MANDATED LEAD ARRANGERS AND THE REFERENCE BANKS 

  

	29.1	Appointment of the Agent 

  

	 	(a)	Each other Finance Party and each Hedging Bank appoints the Agent to act as its agent under and in connection with the Finance Documents and the Hedging Agreements. 


 

	 	(b)	Each other Finance Party and each Hedging Bank authorises the Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent
under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. 

  

	29.2	Instructions 

  

	 	(a)	The Agent shall: 

  

	 	(i)	unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:


  

	 	(A)	all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and 

  

	 	(B)	in all other cases, the Majority Lenders; and 

  

	 	(ii)	not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above. 

  

	 	(b)	The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group
of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Agent may refrain from acting unless and until it receives any such
instructions or clarification that it has requested. 

  

	 	(c)	Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given
to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. 

  

	 	(d)	The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be
greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. 


 

	 	(e)	In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. 


 

	 	(f)	The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document. 









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	29.3	Duties of the Agent 

  

	 	(a)	The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature. 

  

	 	(b)	Subject to paragraph (c) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. 


 

	 	(c)	Without prejudice to Clause 27.5 (Copy of Transfer Certificate to the Borrowers), paragraph (b) above shall not apply to any Transfer Certificate. 


 

	 	(d)	Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. 


 

	 	(e)	If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.


  

	 	(f)	If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Mandated Lead Arrangers)
under this Agreement it shall promptly notify the other Finance Parties. 

  

	 	(g)	The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied). 


 

	29.4	Role of the Mandated Lead Arrangers 

 Except as specifically provided in the Finance
Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document. 
  

	29.5	No fiduciary duties 

  

	 	(a)	Nothing in any Finance Document constitutes the Agent or the Mandated Lead Arrangers as a trustee or fiduciary of any other person. 

  


	 	(b)	Neither the Agent nor the Mandated Lead Arrangers shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. 


 

	29.6	Business with the Group 

 The Agent and the Mandated Lead Arrangers may accept deposits
from, lend money to and generally engage in any kind of banking or other business with any member of the Group. 
  

	29.7	Rights and discretions 

  

	 	(a)	The Agent may: 

  

	 	(i)	rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; 

  

	 	(ii)	assume that: 

  

	 	(A)	any instructions received by it from the Majority Lenders, any Lender or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and 


 

	 	(B)	unless it has received notice of revocation, that those instructions have not been revoked; and 









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	 	(iii)	rely on a certificate from any person: 

  

	 	(A)	as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or 

  

	 	(B)	to the effect that such person approves of any particular dealing, transaction, step, action or thing, 


as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that
certificate. 
  

	 	(b)	The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that: 

  

	 	(i)	no Default has occurred (unless it has actual knowledge of a Default arising under Clause 26.1 (Non-payment)); 


 

	 	(ii)	any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and 

  

	 	(iii)	any notice or request made by the Borrowers (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors. 


 

	 	(c)	The Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts. 


 

	 	(d)	Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so
separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be necessary. 

  

	 	(e)	The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable
for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying. 

  

	 	(f)	The Agent may act in relation to the Finance Documents through its officers, employees and agents. 

  

	 	(g)	Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. 


 

	 	(h)	Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor any Mandated Lead Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion
constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. 

  

	 	(i)	Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or
responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.










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	29.8	Responsibility for documentation 

 Neither the Agent nor any Mandated Lead Arranger is
responsible or liable for: 
  

	 	(a)	the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, any Mandated Lead Arranger, an Obligor or any other person given in or in connection with any Finance Document
or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or 


 

	 	(b)	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with
any Finance Document; or 

  

	 	(c)	any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by
applicable law or regulation relating to insider dealing or otherwise. 

  

	29.9	No duty to monitor 

 The Agent shall not be bound to enquire: 

 

	 	(a)	whether or not any Default has occurred; 

  

	 	(b)	as to the performance, default or any breach by any Party of its obligations under any Finance Document; or 

  

	 	(c)	whether any other event specified in any Finance Document has occurred. 

  

	29.10	Exclusion of liability 

  

	 	(a)	Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent), the Agent will not be liable for: 


 

	 	(i)	any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document, unless directly
caused by its gross negligence or wilful misconduct. 

  

	 	(ii)	exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or 









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	 	(iii)	without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation, for negligence
or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of: 

  

	 	(A)	any act, event or circumstance not reasonably within its control; or 

  

	 	(B)	the general risks of investment in, or the holding of assets in, any jurisdiction, 

 including
(in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or
fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or
systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action. 
  

	 	(b)	No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by
that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause. 

  

	 	(c)	The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as
soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. 


 

	 	(d)	Nothing in this Agreement shall oblige the Agent or any Mandated Lead Arranger to carry out: 

  

	 	(i)	any “know your customer” or other checks in relation to any person; or 

  

	 	(ii)	any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender, 


on behalf of any Lender and each Lender confirms to the Agent and the Mandated Lead Arrangers that it is solely responsible for any such checks
it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any Mandated Lead Arranger. 
  

	 	(e)	Without prejudice to any provision of any Finance Document excluding or limiting the Agent’s liability, any liability of the Agent arising under or in connection with any Finance Document shall be limited to the
amount of actual loss which has been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or
circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect
or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages. 









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	29.11	Lenders’ indemnity to the Agent 

 Each Lender shall (in proportion to its share of
the Total Commitments or, if the Total Commitments are then zero (0), to its share of the Total Commitments immediately prior to their reduction to zero (0)) indemnify the Agent, within three (3) Business Days of demand, against any cost, loss
or liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance
Document). 
  

	29.12	Resignation of the Agent 

  

	 	(a)	The Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers. 


 

	 	(b)	Alternatively the Agent may resign by giving thirty (30) days’ notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a
successor Agent. 

  

	 	(c)	If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within twenty (20) days after notice of resignation was given, the retiring Agent (after consultation with
the Borrowers) may appoint a successor Agent. 

  

	 	(d)	If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under paragraph
(c) above, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to
this Clause 29 (Role of the Agent and the Mandated Lead Arrangers) and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of
corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent’s normal fee rates and those amendments will bind the Parties. 


 

	 	(e)	The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its
functions as Agent under the Finance Documents. The Borrowers shall, within three (3) Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making
available such documents and records and providing such assistance. 

  

	 	(f)	The Agent’s resignation notice shall only take effect upon the appointment of a successor. 

  

	 	(g)	Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain
entitled to the benefit of Clause 15.3 (Indemnity to the Agent) and this Clause 29 (Role of the Agent and the Mandated Lead Arrangers) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be
payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. 









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	 	(h)	After consultation with the Borrowers, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with
paragraph (b) above. 

  

	 	(i)	The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the
date which is three (3) Months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either: 

  

	 	(i)	the Agent fails to respond to a request under Clause 13.6 (FATCA Information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA
Application Date; 

  

	 	(ii)	the information supplied by the Agent pursuant to Clause 13.6 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or


  

	 	(iii)	the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; 


and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent
were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign. 
  

	29.13	Confidentiality 

  

	 	(a)	In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.


  

	 	(b)	If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. 


 

	29.14	Relationship with the Lenders 

  

	 	(a)	Subject to Clause 27.7 (Pro rata Interest Settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to
the Finance Parties from time to time) as the Lender acting through its Facility Office: 

  

	 	(i)	entitled to or liable for any payment due under any Finance Document on that day; and 

  

	 	(ii)	entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, 


unless it has received not less than five (5) Business Days’ prior notice from that Lender to the contrary in accordance with the
terms of this Agreement. 
  

	 	(b)	 Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications,
information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and 










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(where communication by electronic mail or other electronic means is permitted under Clause 34.5 (Electronic communication)) electronic mail address and/or any other information required
to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic
mail address, department and officer by that Lender for the purposes of Clause 34.2 (Addresses) and paragraph (a)(iii) of Clause 34.5 (Electronic communication) and the Agent shall be entitled to treat such person as the person
entitled to receive all such notices, communications, information and documents as though that person were that Lender. 

  

	29.15	Credit appraisal by the Lenders 

 Without affecting the responsibility of any Obligor for
information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Mandated Lead Arrangers that it has been, and will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to: 
  

	 	(a)	the financial condition, status and nature of each member of the Group; 

  

	 	(b)	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with
any Finance Document; 

  

	 	(c)	whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the
Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and 


 

	 	(d)	the adequacy, accuracy or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document
or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document. 

  

	29.16	Role of Reference Banks 

  

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

  

	 	(b)	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.


  

	 	(c)	No Party (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 29.16 (Role of the
Reference Banks). 









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	29.17	Third party Reference Banks 

 A Reference Bank which is not a Party may rely on
Clause 29.16 (Role of Reference Banks), Clause 38.3 (Other exceptions) and Clause 42 (Confidentiality of Funding Rates and Reference Bank Quotations). 

 

	29.18	Reference Banks 

 If a Reference Bank (or, if a Reference Bank is not a Lender, the
Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrowers) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank. 

 

	29.19	Deduction from amounts payable by the Agent 

 If any Party owes an amount to the Agent
under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted. 

 

	30.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES AND THE HEDGING BANKS 

 No provision of
this Agreement will: 
  

	 	(a)	interfere with the right of any Finance Party and any Hedging Bank to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; 


 

	 	(b)	oblige any Finance Party or any Hedging Bank to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or 


 

	 	(c)	oblige any Finance Party or any Hedging Bank to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. 


 

	31.	SHARING AMONG THE FINANCE PARTIES 

  

	31.1	Payments to Finance Parties 

 If a Finance Party (a “Recovering Finance
Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 32 (Payment mechanics) (a “Recovered Amount”) and applies that amount to a payment due under the Finance Documents then:

  

	 	(a)	the Recovering Finance Party shall, within three (3) Business Days, notify details of the receipt or recovery to the Agent; 

  

	 	(b)	the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in
accordance with Clause 32 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and 


 

	 	(c)	the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which
the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 32.5 (Partial payments). 









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	31.2	Redistribution of payments 

 The Agent shall treat the Sharing Payment as if it had been
paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 32.5 (Partial payments) towards the obligations of
that Obligor to the Sharing Finance Parties. 
  

	31.3	Recovering Finance Party’s rights 

 On a distribution by the Agent under Clause 31.2
(Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated
as not having been paid by that Obligor. 
  

	31.4	Reversal of redistribution 

 If any part of the Sharing Payment received or recovered by
a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then: 
  

	 	(a)	each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with
an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and


  

	 	(b)	as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. 


 

	31.5	Exceptions 

  

	 	(a)	This Clause 31 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim
against the relevant Obligor. 

  

	 	(b)	A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:


  

	 	(i)	it notified that other Finance Party of the legal or arbitration proceedings; and 

  

	 	(ii)	that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or
arbitration proceedings. 

 SECTION 11 

ADMINISTRATION 
  

	32.	PAYMENT MECHANICS 

  

	32.1	Payments to the Agent 

  

	 	(a)	On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment. 


 

	 	(b)	Payment shall be made to such account with such bank as the Agent specifies. 









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	32.2	Distributions by the Agent 

 Each payment received by the Agent under the Finance
Documents for another Party shall, subject to Clause 32.3 (Distributions to an Obligor) and Clause 32.4 (Clawback and pre-funding) be made available by the Agent as soon as practicable after
receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account with such bank as that Party may notify to the Agent by not less than five
(5) Business Days’ notice. 
  

	32.3	Distributions to an Obligor 

 The Agent may (with the consent of the Obligor or in
accordance with Clause 33 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor
under the Finance Documents or in or towards purchase of any amount of any currency to be so applied. 
  

	32.4	Clawback and pre-funding 

  

	 	(a)	Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has
been able to establish to its satisfaction that it has actually received that sum. 

  

	 	(b)	Unless paragraph (c) below applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the
proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its
cost of funds. 

  

	 	(c)	If the Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrowers before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves
to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrowers: 

  

	 	(i)	the Agent shall notify the Borrowers of that Lender’s identity and the Borrowers shall on demand refund it to the Agent; and 

  

	 	(ii)	the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent
against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender. 

  

	32.5	Partial payments 

  

	 	(a)	If the Agent receives a payment under a Finance Document or a Hedging Agreement that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents and/or by a Borrower under
the Hedging Agreements, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents and the Hedging Agreements in the following order: 


 

	 	(i)	first, in or towards payment pro rata of any unpaid amount owing to the Agent under the Finance Documents; 









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	 	(ii)	secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement; 


 

	 	(iii)	thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; 

  

	 	(iv)	fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents (except any Hedging Agreement); 


 

	 	(v)	fifthly, in or towards payment of any sum due but unpaid under the Hedging Agreements, pro rata in accordance with the amount of outstanding liabilities under the respective Hedging Agreements (after
application of any netting arrangements in respect thereof. 

  

	 	(b)	The Agent shall, if so directed by the Lenders and the Hedging Banks, vary the order set out in paragraphs (a)(ii) to (v) above. 


 

	 	(c)	Paragraphs (a) and (b) above will override any appropriation made by an Obligor. 

  

	32.6	No set-off by Obligors 

 All payments to be made
by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. 

 

	32.7	Business Days 

  

	 	(a)	Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if
there is not). 

  

	 	(b)	During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. 


 

	32.8	Currency of account 

  

	 	(a)	Subject to paragraphs (b) and (c) below, USD is the currency of account and payment for any sum due from an Obligor under any Finance Document. 


 

	 	(b)	Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. 


 

	 	(c)	Any amount expressed to be payable in a currency other than USD shall be paid in that other currency. 

  

	33.	SET-OFF 

  

	 	(a)	A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any obligation owed by that Finance Party to that
Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of
business for the purpose of the set-off. 

  

	 	(b)	Each Obligor hereby agrees and accepts that this Clause 33 (Set-off) shall constitute a waiver of the provisions of Section 29 of the FA Act and further agrees and
accepts, to the extent permitted by law that Section 29 of the FA Act shall not apply to this Agreement. 

  

	 	(c)	The provisions of this Clause 33 (Set-off) shall not prejudice or otherwise affect or apply to any netting arrangements in any Hedging Agreement, provided that on and from
a date when an Event of Default is continuing, any resulting amount due to a Hedging Bank is made to and/or through the Agent in accordance with Clause 32.1 (Payments to the Agent). 









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	34.	NOTICES 

  

	34.1	Communications in writing 

 Any communication to be made under or in connection with the
Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter. 
  

	34.2	Addresses 

 The address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is: 
  

					
	 (a)  
	  	 in the case of Borrower A, that identified with its name
below;

		
		  	 KNOT Shuttle Tankers 24 AS

		  	 P. O. Box 2017

		  	 N-5504 Haugesund

		  	 Norway

			
		  	 Fax no.:
	 	 +47 52 70 40 40

		  	 E-mail:
	 	 finance@knutsenoas.com

		  		 	 omk@knotgroup.com

		  		 	 kly@knutsenoas.com

		
	 (b)  
	  	 in the case of Borrower B, that identified with its name
below;

		
		  	 KNOT Shuttle Tankers 25 AS

		  	 P. O. Box 2017

		  	 N-5504 Haugesund

		  	 Norway

			
		  	 Fax no.:
	 	 +47 52 70 40 40

		  	 E-mail:
	 	 finance@knutsenoas.com

		  		 	 omk@knotgroup.com

		  		 	 kly@knutsenoas.com

		
	 (c)  
	  	 in the case of Borrower C, that identified with its name
below;

		
		  	 KNOT Shuttle Tankers 26 AS

		  	 P. O. Box 2017

		  	 N-5504 Haugesund

		  	 Norway

			
		  	 Fax no.:
	 	 +47 52 70 40 40

		  	 E-mail:
	 	 finance@knutsenoas.com

		  		 	 omk@knotgroup.com

		  		 	 kly@knutsenoas.com










 schjodt.no  |  Page 102 of 133 

 


					
	 (d)  
	  	in the case of KNOT, that identified with its name below;
		
		  	 Knutsen NYK Offshore Tankers AS

		  	 P. O. Box 2017

		  	 N-5504 Haugesund

		  	 Norway

			
		  	 Fax no.:
	 	 +47 52 70 40 40

		  	 E-mail:
	 	 finance@knutsenoas.com

		  		 	 omk@knotgroup.com

		  		 	 kly@knutsenoas.com

		
	 (e)  
	  	in the case of each Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
		
	 (f)  
	  	 in the case of the Agent, that identified with its name below,

		
		  	 DNB Bank ASA

		  	 P. O. Box 7100

		  	 N-5020 Bergen

		  	 Norway

			
		  	 Fax no.:
	 	 +47 24 05 03 59

		  	 E-mail:
	 	 Middle.Office.Agency.Bergen@dnb.no


 or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the
Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days’ notice. 
  

	34.3	Delivery 

  

	 	(a)	Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: 


 

	 	(i)	if by way of fax, when received in legible form; 

  

	 	(ii)	if by way of electronic communication, when actually received in readable form and in the case of any electronic communication made to the Agent only if it is addressed in such a manner as the Agent shall specify for
this purpose; or 

  

	 	(iii)	if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; 


and, if a particular department or officer is specified as part of its address details provided under Clause 34.2 (Addresses), if
addressed to that department or officer. 
  

	 	(b)	Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer
identified with the Agent’s signature below (or any substitute department or officer as the Agent shall specify for this purpose). 

  

	 	(c)	All notices from or to an Obligor shall be sent through the Agent. 

  

	 	(d)	Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors. 









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	34.4	Notification of address and fax number 

 Promptly upon receipt of notification of an
address or fax number or change of address or fax number pursuant to Clause 34.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties. 

 

	34.5	Electronic communication 

  

	 	(a)	Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:


  

	 	(i)	agree that, unless and until notified to the contrary, this is to be an accepted form of communication; 

  

	 	(ii)	notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and 


 

	 	(iii)	notify each other of any change to their address or any other such information supplied by them. 

  

	 	(b)	Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is
addressed in such a manner as the Agent shall specify for this purpose. 

  

	34.6	English language 

  

	 	(a)	Any notice given under or in connection with any Finance Document must be in English. 

  

	 	(b)	All other documents provided under or in connection with any Finance Document must be: 

  

	 	(i)	in English; or 

  

	 	(ii)	if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other
official document. 

  

	35.	CALCULATIONS AND CERTIFICATES 

  

	35.1	Accounts 

 In any litigation or arbitration proceedings arising out of or in connection
with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate. 
  

	35.2	Certificates and Determinations 

 Any certification or determination by a Finance Party
of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates. 
  

	35.3	Day count convention 

 Any interest, commission or fee accruing under a Finance Document
will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with
that market practice. 








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	36.	PARTIAL INVALIDITY 

 If, at any time, any provision of a Finance Document is or becomes
illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired. 
  

	37.	REMEDIES AND WAIVERS 

 No failure to exercise, nor any delay in exercising, on the part
of any Finance Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any Finance Document on the part of any
Finance Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance
Document are cumulative and not exclusive of any rights or remedies provided by law. 
  

	38.	AMENDMENTS AND WAIVERS 

  

	38.1	Required consents 

  

	 	(a)	Subject to Clause 38.2 (All Lender matters) and Clause 38.3 (Other exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and
any such amendment or waiver will be binding on all Parties. 

  

	 	(b)	The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause. 

  

	38.2	All Lender matters 

 An amendment or waiver of any term of any Finance Document that has
the effect of changing or which relates to: 
  

	 	(a)	the definitions of “Change of Control”, “Majority Lenders”, “Relevant Person”, “Restricted Party”, “Sanctions”, “Sanctions Authority” or “Sanctions
List” in Clause 1.1 (Definitions); 

  

	 	(b)	an extension to the date of payment of any amount under the Finance Documents; 

  

	 	(c)	a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable; 

  

	 	(d)	an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facilities; 


 

	 	(e)	any provision which expressly requires the consent of all the Lenders; 

  

	 	(f)	Clause 2.2 (Finance Parties’ rights and obligations), Clause 8.7 (Mandatory prepayment – Change of Control), Clause 8.10 (Application of prepayments), Clause 20.26 (Sanctions),
Clause 23.19 (Compliance with laws etc.), Clause 23.20 (Sanctions), Clause 27 (Changes to the Lenders), Clause 28 (Changes to the Obligors), Clause 31 (Sharing among the Finance Parties), Clause 32.5 (Partial
payments), this Clause 38 (Amendments and waivers), Clause 44 (Governing law) or Clause 45.1 (Jurisdiction); 

  

	 	(g)	the nature or scope of the guarantee and indemnity granted under Clause 19 (Guarantee and indemnity); 









 schjodt.no  |  Page 105 of 133 

 


	 	(h)	release of any Security created by the Security Documents unless permitted under the Finance Documents or undertaken by the Agent acting on instruction of the Majority Lenders following an Event of Default which is
continuing; 

  

	 	(i)	a change to any Obligor, other than in accordance with Clause 28.2 (KNOP and KNOT ST as replacement Guarantors); or 

  

	 	(j)	any material change in any of the Security Documents, 

 shall not be made without the prior
consent of all the Lenders and all the Hedging Banks. 
  

	38.3	Other exceptions 

 An amendment or waiver which relates to the rights or obligations of
the Agent, a Bookrunner, a Mandated Lead Arranger, a Reference Bank or a Hedging Bank (each in their capacity as such) may not be effected without the consent of the Agent, that Bookrunner, that Mandated Lead Arranger, that Reference Bank or that
Hedging Bank, as the case may be. 
  

	39.	COUNTERPARTS 

 Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. 
  

	40.	CONFLICT 

 In case of conflict between the Security Documents and this Agreement, the
provisions of this Agreement shall prevail, provided however that this will not in any way be interpreted or applied to prejudice the legality, validity or enforceability of any Security Document. 

SECTION 12 

MISCELLANEOUS 
  

	41.	DISCLOSURE OF INFORMATION AND CONFIDENTIALITY 

  

	 	(a)	Each Obligor irrevocably authorises any Finance Party to give, divulge and reveal from time to time information and details relating to its account, the Vessels, the Finance Documents, the Transaction Documents, the
Facilities, any Commitment and any agreement entered into by any Obligor or information provided by any Obligor in connection with the Finance Documents to; 

  

	 	(i)	any private, public or internationally recognised authorities; 

  

	 	(ii)	the head offices, branches and Affiliates, auditors and professional advisors of any Finance Party; 

  

	 	(iii)	any other parties to the Finance Documents; 

  

	 	(iv)	a rating agency or their professional advisors; 

  

	 	(v)	any person with whom they propose to enter (or contemplate entering) into contractual relations in relation to the Facilities and/or Commitments; or 


 

	 	(vi)	any other person(s) regarding the funding, re-financing, transfer, assignment, sale, sub-participation or operational arrangement or other
transaction in relation thereto, 

 including, without limitation, any enforcement, preservation, assignment, transfer, sale or
sub-participation of any of the rights and obligations of any Finance Documents. 
  

	 	(b)	The Agent and/or the Mandated Lead Arrangers shall have the right, at its own expense, to publish information about its participation in and the agency and arrangement of the Facilities and for such purpose use the
Obligors’ logos and trademark in connection with such publication. 









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	42.	CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS 

  

	42.1	Confidentiality and disclosure 

  

	 	(a)	The Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b),
(c) and (d) below. 

  

	 	(b)	The Agent may disclose: 

  

	 	(i)	any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant Borrower pursuant to Clause 9.4 (Notification of rates of interest); and 


 

	 	(ii)	any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service
provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With
Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender or Reference Bank, as the case may be. 


 

	 	(c)	The Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: 

  

	 	(i)	any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be
given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional
obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; 


 

	 	(ii)	any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any
relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive
information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; 


 

	 	(iii)	any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom
that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or
the relevant Obligor , as the case may be, it is not practicable to do so in the circumstances; and 

  

	 	(iv)	any person with the consent of the relevant Lender or Reference Bank, as the case may be. 

  

	 	(d)	The Agent’s obligations in this Clause 42 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications
under Clause 9.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (b)(i) above) the Agent shall not include the details of any individual Reference Bank Quotation as part of any such
notification. 









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	42.2	Related obligations 

  

	 	(a)	The Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by
applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Agent, any Reference Bank Quotation for any unlawful purpose.


  

	 	(b)	The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: 


 

	 	(i)	of the circumstances of any disclosure made pursuant to paragraph (c)(ii) of Clause 42.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that
paragraph during the ordinary course of its supervisory or regulatory function; and 

  

	 	(ii)	upon becoming aware that any information has been disclosed in breach of this Clause 42 (Confidentiality of Funding Rates and Reference Bank Quotations). 


 

	42.3	No Event of Default 

 No Event of Default will occur under Clause 26.3 (Other
obligations) by reason only of an Obligor’s failure to comply with this Clause 42 (Confidentiality of Funding Rates and Reference Bank Quotations). 
  

	43.	“KNOW YOUR CUSTOMER” CHECKS 

  

	 	(a)	If: 

  

	 	(i)	the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation (whether in public regulation or in internal regulation of any of the Finance Parties) made after
the date hereof; 

  

	 	(ii)	any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date hereof; 

  

	 	(iii)	a proposed assignment or transfer by a Finance Party of any of its rights and/or obligations under this Agreement to a party that is not a Finance Party prior to such assignment or transfer; or 


 

	 	(iv)	any internal requirements or routines of any of the Finance Parties, 









 schjodt.no  |  Page 108 of 133 

 

 obliges the Agent or any Finance Party (or, in the case of paragraph (iii) above, any
prospective new Finance Party) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the
Agent or any Finance Party supply, or procure the supply of, such documentation and other evidence as is requested by the Agent (for itself or on behalf of any Finance Party) or any Finance Party (for itself or, in the case of the event described in
paragraph (iii) above, on behalf of any prospective new Finance Party) in order for the Agent, such Finance Party or, in the case of the event described in paragraph (iii) above, any prospective new Finance Party to carry out and be
satisfied with the results of all necessary “know your customer” or other checks in relation to any relevant person pursuant to the transactions contemplated in the Finance Documents. 

 

	 	(b)	Each Finance Party shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is requested by the Agent (for itself) in order for the Agent to carry out and
be satisfied with the results of all necessary “know your customer” or other checks on Finance Parties or prospective new Finance Parties pursuant to the transactions contemplated in the Finance Documents. 


SECTION 12 
 GOVERNING
LAW AND ENFORCEMENT 
  

	44.	GOVERNING LAW 

 This Agreement is governed by Norwegian law. 

 

	45.	ENFORCEMENT 

  

	45.1	Jurisdiction 

  

	 	(a)	The courts of Norway, the venue to be Bergen city court (in Norwegian: Bergen tingrett) have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute
relating to the existence, validity or termination of this Agreement (a “Dispute”). 

  

	 	(b)	The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. 


 

	 	(c)	This Clause 45.1 (Jurisdiction) is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with
jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. 

 This
Agreement has been entered into on the date stated at the beginning of this Agreement. 








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 SCHEDULE 1 

THE ORIGINAL LENDERS 

THE PRE-DELIVERY FACILITY 

 

																	
	 Name of Original Lender:
	  	Pre-Delivery
Tranche A
Commitment	 	  	Pre-Delivery
Tranche B
Commitment	 	  	Pre-Delivery
Tranche C
Commitment	 	  	Total Pre-Delivery
Commitment:	 
					
	 DNB Bank ASA
	  	USD	5,833,334	 	  	USD	5,833,334	 	  	USD	5,625,000	 	  	USD	17,291,668	 
	 Nordea Bank Norge ASA
	  	USD	5,833,333	 	  	USD	5,833,333	 	  	USD	5,625,000	 	  	USD	17,291,666	 
	 CommBank Europe Limited
	  	USD	5,833,333	 	  	USD	5,833,333	 	  	USD	5,625,000	 	  	USD	17,291,666	 
	 Mizuho Bank, Ltd.
	  	USD	5,833,334	 	  	USD	5,833,334	 	  	USD	5,625,000	 	  	USD	17,291,668	 
	 The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	  	USD	5,833,333	 	  	USD	5,833,333	 	  	USD	5,625,000	 	  	USD	17,291,666	 
	 ABN Amro Bank N.V., Oslo Branch
	  	USD	5,833,333	 	  	USD	5,833,333	 	  	USD	5,625,000	 	  	USD	17,291,666	 
					
		  	USD	35,000,000	 	  	USD	35,000,000	 	  	USD	33,750,000	 	  	USD	103,750,000	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 









 schjodt.no  |  Page 110 of 133 

 

 THE POST-DELIVERY FACILITY 

 

																	
	 Name of Original Lender:
	  	Post-Delivery
Tranche A-1
Commitment	 	  	Post-Delivery
Tranche A-2
Commitment	 	  	Post-Delivery
Tranche B-1
Commitment	 	  	Post-Delivery
Tranche B-2
Commitment	 
					
	 DNB Bank ASA
	  	USD	16,333,334	 	  	USD	3,500,000	 	  	USD	16,333,334	 	  	USD	3,500,000	 
	 Nordea Bank Norge ASA
	  	USD	16,333,333	 	  	USD	3,500,000	 	  	USD	16,333,333	 	  	USD	3,500,000	 
	 CommBank Europe Limited
	  	USD	16,333,333	 	  	USD	3,500,000	 	  	USD	16,333,333	 	  	USD	3,500,000	 
	 Mizuho Bank, Ltd.
	  	USD	16,333,334	 	  	USD	3,500,000	 	  	USD	16,333,334	 	  	USD	3,500,000	 
	 The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	  	USD	16,333,333	 	  	USD	3,500,000	 	  	USD	16,333,333	 	  	USD	3,500,000	 
	 ABN Amro Bank N.V., Oslo Branch
	  	USD	16,333,333	 	  	USD	3,500,000	 	  	USD	16,333,333	 	  	USD	3,500,000	 
					
		  	USD	98,000,000	 	  	USD	21,000,000	 	  	USD	98,000,000	 	  	USD	21,000,000	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

													
	 Name of Original Lender:
	  	 Post-Delivery

Tranche C-1

Commitment
	 	  	 Post-Delivery

Tranche C-2
Commitment
	 	  	 Total Post-Delivery

Commitment:
	 
				
	 DNB Bank ASA
	  	USD	15,750,000	 	  	USD	3,416,666	 	  	USD	58,833,334	 
	 Nordea Bank Norge ASA
	  	USD	15,750,000	 	  	USD	3,416,667	 	  	USD	58,833,333	 
	 CommBank Europe Limited
	  	USD	15,750,000	 	  	USD	3,416,667	 	  	USD	58,833,333	 
	 Mizuho Bank, Ltd.
	  	USD	15,750,000	 	  	USD	3,416,666	 	  	USD	58,833,334	 
	 The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	  	USD	15,750,000	 	  	USD	3,416,667	 	  	USD	58,833,333	 
	 ABN Amro Bank N.V., Oslo Branch
	  	USD	15,750,000	 	  	USD	3,416,667	 	  	USD	58,833,333	 
				
		  	USD	94,500,000	 	  	USD	20,500,000	 	  	USD	353,000,000	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 









 schjodt.no  |  Page 111 of 133 

 

 SCHEDULE 2 

CONDITIONS PRECEDENT AND SUBSEQUENT 

Part I 
 General
Conditions Precedent 
  

	1.	Obligors 

  

	 	(a)	Certified copies of the constitutional documents of each Obligor. 

  

	 	(b)	A certified copy of a resolution of the board of directors of each Obligor: 

  

	 	(i)	approving the terms of, and the transactions contemplated by, the Finance Documents and Transaction Documents to which it is a party and resolving that it shall execute the Finance Documents and Transaction Documents to
which it is a party; 

  

	 	(ii)	authorising a specified person or persons to execute the Finance Documents and Transaction Documents to which it is a party on its behalf; and 


 

	 	(iii)	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it
under or in connection with the Finance Documents to which it is a party. 

  

	 	(c)	A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above. 

  

	 	(d)	An original Power of Attorney (notarised and legalised if requested by the Agent). 

  

	 	(e)	A written confirmation in original from a Director of each Obligor that each document provided by that Obligor under Part I (General Conditions Precedent) of this Schedule 2 (Conditions precedent and
subsequent) are true copies of the originals. 

  

	2.	Know Your Customer (KYC) requirements 

 Any documents required by the Agent and the
Lenders pursuant to any “Know your customer Checks” with respect to the Obligors and their signatories, directors and ultimate beneficial owners. 
  

	3.	Authorisations 

 All approvals, authorisations and consents required by any government or
other authorities for the Obligors to enter into and perform their obligations under this Agreement and/or any of the Finance Documents and Transaction Documents to which they are respective parties. 

 

	4.	Finance Documents 

  

	 	(a)	The Agreement. 

  

	 	(b)	Each Fee Letter, duly acknowledged by the Borrowers. 

  

	 	(c)	The Borrower A Pre-Delivery Assignment Agreement. 









 schjodt.no  |  Page 112 of 133 

 


	 	(d)	A Notice of Assignment of Shipbuilding Contract A and the Shipyard’s acknowledgement thereof. 

  

	 	(e)	A Notice of Assignment of Refund Guarantee A and the Refund Guarantor’s acknowledgement thereof. 

  

	 	(f)	The Borrower B Pre-Delivery Assignment Agreement. 

  

	 	(g)	A Notice of Assignment of Shipbuilding Contract B and the Shipyard’s acknowledgement thereof. 

  

	 	(h)	A Notice of Assignment of Refund Guarantee B and the Refund Guarantor’s acknowledgement thereof. 

  

	 	(i)	The Borrower C Pre-Delivery Assignment Agreement. 

  

	 	(j)	A Notice of Assignment of Shipbuilding Contract C and the Shipyard’s acknowledgement thereof. 

  

	 	(k)	A Notice of Assignment of Refund Guarantee C and the Refund Guarantor’s acknowledgement thereof. 

  

	 	(l)	The Borrower A Account Pledge. 

  

	 	(m)	A Notice of Pledge of Borrower A Account and the Account Bank’s acknowledgement thereof. 

  

	 	(n)	The Borrower B Account Pledge. 

  

	 	(o)	A Notice of Pledge of Borrower B Account and the Account Bank’s acknowledgement thereof. 

  

	 	(p)	The Borrower C Account Pledge. 

  

	 	(q)	A Notice of Pledge of Borrower C Account and the Account Bank’s acknowledgement thereof. 

  

	 	(r)	The Borrower A Share Pledge. 

  

	 	(s)	Evidence of perfection of the Borrower A Share Pledge. 

  

	 	(t)	The Borrower B Share Pledge. 

  

	 	(u)	Evidence of perfection of the Borrower B Share Pledge. 

  

	 	(v)	The Borrower C Share Pledge. 

  

	 	(w)	Evidence of perfection of the Borrower C Share Pledge. 

  

	 	(x)	The Borrower A Factoring Agreement. 

  

	 	(y)	A declaration of pledge in respect of the Borrower A Factoring Agreement. 

  

	 	(z)	Evidence that the Borrower A Factoring Agreement has been registered with its intended priority in the Registry of Moveable Property (in No. Løsøreregisteret). 


 

	 	(aa)	The Borrower B Factoring Agreement. 









 schjodt.no  |  Page 113 of 133 

 


	 	(bb)	A declaration of pledge in respect of the Borrower B Factoring Agreement. 

  

	 	(cc)	Evidence that the Borrower B Factoring Agreement has been registered with its intended priority in the Registry of Moveable Property (in No. Løsøreregisteret). 


 

	 	(dd)	The Borrower C Factoring Agreement. 

  

	 	(ee)	A declaration of pledge in respect of the Borrower C Factoring Agreement. 

  

	 	(ff)	Evidence that the Borrower C Factoring Agreement has been registered with its intended priority in the Registry of Moveable Property (in No. Løsøreregisteret). 


(All Finance Documents to be delivered in original). 
  

	5.	Transaction Documents 

  

	 	(a)	A copy of the Shipbuilding Contract A. 

  

	 	(b)	A copy of the Shipbuilding Contract B. 

  

	 	(c)	A copy of the Shipbuilding Contract C. 

  

	 	(d)	The original Refund Guarantee A. 

  

	 	(e)	The original Refund Guarantee B. 

  

	 	(f)	The original Refund Guarantee C. 

  

	 	(g)	A copy of the Charterparty A. 

  

	 	(h)	A copy of the Charterparty B. 

  

	 	(i)	A copy of the Charterparty C. 

  

	6.	Other documents and evidence 

  

	 	(a)	The Hedging Agreements (if relevant). 

  

	 	(b)	The Original Financial Statements of each Obligor. 

  

	 	(c)	Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 12 (Fees) and Clause 17 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.


  

	 	(d)	If relevant, assurance that any withholding tax will be paid or application to tax authorities is or will be sent. 

  

	 	(e)	Evidence that any existing facilities will be cancelled and repaid in full prior to, or simultaneously with, the first drawdown under the Facilities, and that any securities related thereto are being released or
cancelled. 

  

	 	(f)	Any other document, authorisation, opinion or assurance requested by the Agent. 

  

	7.	Legal opinions 

 The following documents to be received by the Agent latest on the
Utilisation Date: 
  

	 	(a)	A legal opinion from Advokatfirmaet Schjødt AS, legal advisers to the Agent in Norway, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 









 schjodt.no  |  Page 114 of 133 

 


	 	(b)	If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior
to signing this Agreement. 

  

	 	(c)	If any Mortgaged Asset is situated in a jurisdiction other than Norway, or any Finance Document is subject to any other choice of law than Norwegian law, a legal opinion from the legal advisers to the Agent in the
relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 

  

	 	(d)	Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions. 


Part II 
 Conditions
Precedent to the Utilisation of each Loan under the Pre-Delivery Facility 
  

	8.	Documents relating to the relevant Vessel 

  

	 	(a)	Evidence satisfactory to the Agent that the relevant milestone has been completed. 

  

	9.	Other documents and evidence 

  

	 	(a)	A Utilisation Request. 

  

	 	(b)	An original Compliance Certificate confirming that the Borrowers and the Guarantors are in compliance with the financial covenants as set out in Clause 22 (Financial covenants); 


 

	 	(c)	Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 12 (Fees) and Clause 17 (Costs and expenses) have been paid or will be paid by the relevant Utilisation Date.


  

	 	(d)	Any other document, authorisation, opinion or assurance requested by the Agent. 

 Part III

 Conditions Precedent to the Utilisation of each Loan under the Post-Delivery Facility 

 

	10.	Finance Documents 

 Each of the following Finance Documents related to that Loan: 

 

	 	(a)	The relevant Mortgage. 

  

	 	(b)	Evidence that the relevant Mortgage have been registered with its intended priority in the relevant Approved Ship Registry. 

  

	 	(c)	A Letter of Quiet Enjoyment. 

  

	 	(d)	The relevant Post-Delivery Assignment Agreement. 

  

	 	(e)	A Notice of Assignment of Insurances and the insurers’ acknowledgement thereof. 

  

	 	(f)	A Notice of Assignment of Earnings and the Charterer’s acknowledgement thereof. 









 schjodt.no  |  Page 115 of 133 

 


	 	(g)	The relevant Assignment of Charterparty (if obtainable). 

  

	 	(h)	A Notice of Assignment of Charterparty and the Charterer’s acknowledgement thereof (if obtainable). 

  

	 	(i)	A Manager’s Undertaking from each Manager. 

 (All Finance Documents to be delivered in
original). 
  

	11.	Documents relating to the relevant Vessel 

  

	 	(a)	Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the Vessel in accordance with Clause 25.2 (Insurance - Vessels), and evidencing that the Agent’s
Security in the insurance policies have been noted in accordance with the relevant notices as required under the relevant Assignment Agreement. 

  

	 	(b)	A copy of a report, in form and scope reasonably acceptable to the Agent, from Bankserve or another firm of marine insurance brokers acceptable to the Lenders with respect to the insurance maintained in respect of the
Vessel, together with a certificate from such broker certifying that such insurances (I) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as is acceptable to the
Lenders and (II) conform with requirements of the mortgage taken for the benefit of the Lenders in the Vessel. 

  

	 	(c)	A copy of the current relevant DOC. 

  

	 	(d)	A certified copy of the relevant Management Agreement. 

  

	 	(e)	A copy of the relevant builder’s certificate and/or bill of sale (as relevant) from the Shipyard. 

  

	 	(f)	A copy of the protocol of delivery and acceptance under the relevant Shipbuilding Contract. 

  

	 	(g)	Evidence (by way of transcript of registry) that the Vessel is, or will be, registered in the name of the relevant Borrower in an Approved Ship Registry acceptable to the Agent, that the relevant Mortgage has been, or
will in connection with Utilisation of the relevant Loan be, executed and recorded with its intended priority against the Vessel and that no other encumbrances, maritime liens, mortgages or debts whatsoever are registered against the Vessel.


  

	 	(h)	A certified copy of an updated class certificate related to the Vessel from the relevant classification society, confirming that the Vessel is classed with the highest class in accordance with Clause 25.4
(Classification and repairs), free of extensions and overdue recommendations. 

  

	 	(i)	A copy of the current SMC. 

  

	 	(j)	A copy of the current ISSC. 

  

	 	(k)	Valuation certificates issued not earlier than thirty (30) days before the Utilisation Date evidencing the Market Value of the Vessel. 









 schjodt.no  |  Page 116 of 133 

 


	12.	Legal opinions 

 The following documents to be received by the Agent latest on the
Utilisation Date: 
  

	 	(a)	A legal opinion from Advokatfirmaet Schjødt AS, legal advisers to the Agent in Norway, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 


 

	 	(b)	If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior
to signing this Agreement. 

  

	 	(c)	If any Mortgaged Asset is situated in a jurisdiction other than Norway, or any Finance Document is subject to any other choice of law than Norwegian law, a legal opinion from the legal advisers to the Agent in the
relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 

  

	 	(d)	Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions. 


 

	13.	Other documents and evidence 

  

	 	(a)	A complete and detailed breakdown of the Ready-For-Sea Cost. 


 

	 	(b)	A Utilisation Request. 

  

	 	(c)	An original Compliance Certificate confirming that the Borrowers and the Guarantors are in compliance with the financial covenants as set out in Clause 22 (Financial covenants); 


 

	 	(d)	Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 12 (Fees) and Clause 17 (Costs and expenses) have been paid or will be paid by the relevant Utilisation Date.


  

	 	(e)	Any other document, authorisation, opinion or assurance requested by the Agent. 

 Part IV

 Conditions Precedent to Drop Down 
  

	14.	KNOP and the relevant Subsidiary which will become the owner of the Borrower 

  

	 	(a)	Copies of the constitutional documents of KNOP and the relevant Subsidiary which will become the owner of the Borrower. 

  

	 	(b)	A copy of a resolution of the board of directors of KNOP and the relevant Subsidiary which will become the owner of the Borrower: 

  

	 	(i)	approving the terms of, and the transactions contemplated by, the Finance Documents to which it will become a party and resolving that it shall execute the Finance Documents to which it will become a party;


  

	 	(ii)	authorising a specified person or persons to execute the Finance Documents to which it will become a party on its behalf; and 

  

	 	(iii)	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which will become is
a party. 









 schjodt.no  |  Page 117 of 133 

 


	 	(c)	A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above. 

  

	 	(d)	A copy of a Power of Attorney (notarised and legalised if requested by the Agent). 

  

	 	(e)	A written confirmation in original from a Director of KNOP and the relevant Subsidiary which will become the owner of the Borrower that each document provided by that Obligor under items 14 and 15 of Part IV
(Conditions Precedent to Drop Down) of this Schedule 2 (Conditions precedent and subsequent) are true copies of the originals. 

  

	15.	Know Your Customer (KYC) requirements 

 Any documents required by the Finance Parties
pursuant to any “Know your customer Checks” with respect to KNOP and its signatories, directors and ultimate beneficial owners. 
  

	16.	Authorisations 

 All approvals, authorisations and consents required by any government or
other authorities for KNOP to enter into and perform their obligations under this Agreement and/or any of the Finance Documents to which it will become a party. 
  

	17.	Finance Documents 

  

	 	(a)	An Accession Letter. 

  

	 	(b)	The relevant Share Pledge (executed by KNOP (or a Subsidiary of KNOP)). 

  

	 	(c)	Evidence of perfection of the relevant Share Pledge. 

  

	18.	Other documents and evidence 

  

	 	(a)	Evidence (by way of a share purchase agreement or similar and an updated register of shareholders issued by the Borrower) that all shares in the Borrower has been, or will in connection with the Drop Down, be
transferred from KNOT to KNOP (or a Subsidiary of KNOP). 

  

	 	(b)	Evidence that all process agent appointments required by the Finance Documents have been duly accepted. 

  

	 	(c)	Evidence that the mandatory prepayment amount payable in accordance with Clause 8.3 (Mandatory prepayment – Drop Down) has been paid or will be paid by the relevant Drop Down Date. 


 

	 	(d)	Any other documents as reasonably requested by the Agent. 

  

	19.	Legal opinions 

  

	 	(a)	A legal opinion from Advokatfirmaet Schjødt AS, legal advisers to the Agent in Norway. 

  

	 	(b)	If an Obligor is incorporated in a jurisdiction other than Norway, a legal opinion from the legal advisers to the Agent in the relevant jurisdiction. 


 

	 	(c)	Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions. 









 schjodt.no  |  Page 118 of 133 

 

 Part V 

Conditions Subsequent 
  

	20.	Documents relating to the Vessels 

  

	 	(a)	A copy of the protocol of delivery and acceptance under Charterparty A, within ninety (90) days after 1 February 2017. 

  

	 	(b)	A copy of the protocol of delivery and acceptance under Charterparty B, within ninety (90) days after 1 May 2017. 









 schjodt.no  |  Page 119 of 133 

 

 SCHEDULE 3 

REQUESTS 
 Part I

 Utilisation Request 
  

			
	From:	  	KNOT Shuttle Tankers 24 AS
		  	KNOT Shuttle Tankers 25 AS
		  	KNOT Shuttle Tankers 26 AS
		
	To:	  	DNB Bank ASA
		
	Dated:	  	

 Dear Sirs 

KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 26 AS – USD 353,000,000 Facilities Agreement dated
27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request. 


 

	2.	We wish to borrow a Loan under the [Pre-Delivery] [Post-Delivery] Tranche [ ] on the following terms: 


 

			
	Proposed Utilisation Date:	  	[ ] (or, if that is not a Business Day, the next Business Day)
		
	Amount:	  	[ ] or, if less, the Available Facility
		
	Interest Period:	  	[ ]

  

	3.	We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request. 


 

	4.	The proceeds of this Loan should be credited to [account]. 

  

	5.	This Utilisation Request is irrevocable. 

 Yours faithfully 

 

	
	  

	authorised signatory for
	KNOT SHUTTLE TANKERS 24 AS
	KNOT SHUTTLE TANKERS 25 AS
	KNOT SHUTTLE TANKERS 26 AS









 schjodt.no  |  Page 120 of 133 

 

 Part II 

Selection Notice 
  

			
	From:	  	KNOT Shuttle Tankers 24 AS
		  	KNOT Shuttle Tankers 25 AS
		  	KNOT Shuttle Tankers 26 AS
		
	To:	  	DNB Bank ASA
		
	Dated:	  	

 Dear Sirs 

KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 26 AS – USD 353,000,000 Facilities Agreement dated
27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice. 


 

	2.	We request that the next Interest Period for the Loan under the [Pre-Delivery] [Post-Delivery] Tranche [ ] is [        ] Months.


  

	3.	This Selection Notice is irrevocable. 

 Yours faithfully 

 

	
	  

	authorised signatory for
	KNOT SHUTTLE TANKERS 24 AS
	KNOT SHUTTLE TANKERS 25 AS
	KNOT SHUTTLE TANKERS 26 AS









 schjodt.no  |  Page 121 of 133 

 

 SCHEDULE 4 

FORM OF TRANSFER CERTIFICATE 
  

			
	To:	  	DNB BANK ASA as Agent
		
	From:	  	[The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)
		
	Dated:	  	

 KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 25 AS – USD 353,000,000
Facilities Agreement dated 27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.


  

	2.	We refer to Clause 27.4 (Procedure for transfer): 

  

	 	(a)	The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender’s Commitment, rights and obligations referred to in the Schedule in
accordance with Clause 27.4 (Procedure for transfer). 

  

	 	(b)	The proposed Transfer Date is [ ]. 

  

	 	(c)	The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 34.2 (Addresses) are set out in the Schedule. 


 

	3.	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 27.3 (Limitation of responsibility of Existing Lenders). 


 

	4.	This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate. 


 

	5.	This Transfer Certificate is governed by Norwegian law. 

  

	6.	This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate. 









 schjodt.no  |  Page 122 of 133 

 

 THE SCHEDULE 

Commitment/rights and obligations to be transferred 

[insert relevant details] 

[Facility Office address, fax number and attention details for notices and account details for payments,] 

 

			
	[Existing Lender]	  	 [New Lender]

		
	By:	  	 By:

	
	This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [            ].
		
	[Agent]	  	
		
	By:	  	









 schjodt.no  |  Page 123 of 133 

 

 SCHEDULE 5 

FORM OF COMPLIANCE CERTIFICATE 
  

			
	From:	  	KNOT Shuttle Tankers 24 AS
		  	KNOT Shuttle Tankers 25 AS
		  	KNOT Shuttle Tankers 26 AS
		  	Knutsen NYK Offshore Tankers AS
		
	To:	  	DNB Bank ASA as Agent
		
	Dated:	  	

 Dear Sirs 

KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 26 AS – USD 353,000,000 Facilities Agreement dated
27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.


  

	2.	We confirm that: 

 [ ] 
  


	3.	[We confirm that each Repeating Representation is true and correct on this date and that no Default is continuing.] * 


Yours faithfully 
  

	
	   

	authorised signatory for
	KNOT SHUTTLE TANKERS 24 AS
	KNOT SHUTTLE TANKERS 25 AS
	KNOT SHUTTLE TANKERS 26 AS
	KNUTSEN NYK OFFSHORE TANKERS AS

  

	*	If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it. 









 schjodt.no  |  Page 124 of 133 

 

 SCHEDULE 6 

FORM OF ACCESSION LETTER 
  

			
	From:	  	KNOT Shuttle Tankers 24 AS
		  	KNOT Shuttle Tankers 25 AS
		  	KNOT Shuttle Tankers 26 AS
		  	Knutsen NYK Offshore Tankers AS
		  	KNOT Offshore Partners LP
		  	KNOT Shuttle Tankers AS
		
	To:	  	DNB Bank ASA as Agent
		
	Dated:	  	

 Dear Sirs 

KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 26 AS – USD 353,000,000 Facilities Agreement dated
27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter. 


 

	2.	KNOT Offshore Partners LP (“KNOP”) and KNOT Shuttle Tankers AS (“KNOT ST”) agree to become Guarantors with respect to all amounts outstanding under [the Post-Delivery Tranche [ ]] [the Agreement] and
to be bound by the terms of the Agreement as Guarantor pursuant to Clause 28.2 (KNOP and KNOT ST as replacement Guarantors) of the Agreement. 

  

	3.	KNOP’s and KNOT ST’s administrative details are as follows: 

 Address: 

Fax no.: 
 Attention: 

 

	4.	We confirm that the Repeating Representations are made by each of KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS, KNOT Shuttle Tankers 26 AS, KNOP and KNOT ST on the date of this Accession Letter and that all
Repeating Representations are true in all material respects on that date. 

  

	5.	This Accession Letter is governed by Norwegian law and KNOP has appointed [●] as its process agents in respect of this Accession Letter and the other Finance Documents. 









 schjodt.no  |  Page 125 of 133 

 

 Yours faithfully 
  

	
	  

	authorised signatory for
	KNOT Shuttle Tankers 24 AS
	
	  

	authorised signatory for
	KNOT Shuttle Tankers 25 AS
	
	  

	authorised signatory for
	KNOT Shuttle Tankers 26 AS
	
	  

	authorised signatory for
	Knutsen NYK Offshore Tankers AS
	
	  

	authorised signatory for
	KNOT Offshore Partners LP









 schjodt.no  |  Page 126 of 133 

 

 SCHEDULE 7 

STRUCTURE CHART 
  

 
 



 








 schjodt.no  |  Page 127 of 133 

 

 SCHEDULE 8 

DRAWINGS AND REPAYMENT SCHEDULE 
  

							
		  	 Contract price
	  	127 600	  	
		  	 Owners items & fin cost
	  	13 400	  	
		  	 Ready for sea cost
	  	141 000 	  	

  

																																															
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Vessel A	 	 	 	 	 	 	 	 	 	Vessel A	 	 	 	 	 	 	 	 	Vessel A	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 Post-Delivery
Tranche A-1
	 	 	 	 	 	 	 	Post-Delivery
Tranche A-2	 	 	 	 	 	Total Dost-Delivery
Tranche A
	 	 	 Periode
	 	 Contract
payment
	 	 Ready for
sea cost
	 	Total cost	 	 	 Equity
	 	 Opening
balance
	 	 Drawdown
	 	Instalment	 	 	Closing
Balance	 	 	 Opening
balance
	 	Drawdown	 	 	 Instalment
	 	 Closing
Balance
	 	 Opening
balance
	 	Drawdown	 	 	Instalment	 	 	 Closing
Balance

	10%	 	1st yard payment	 	12 760	 	1 340	 	 	14 100	 	 	14 700	 	—  	 	—  	 	 	—  	 	 	 	—  	 	 	—  	 	 	—  	 	 	—	 	—  	 	—  	 	 	—  	 	 	 	—  	 	 	—  
	10%	 	2nd yard payment	 	12 760	 	1 340	 	 	14 100	 	 	7 300	 	—  	 	7 000	 	 	—  	 	 	 	7 000	 	 	—  	 	 	—  	 	 		 	—  	 	—  	 	 	7 000	 	 	 	—  	 	 	7 000
	10%	 	3rd yard payment	 	12 760	 	1 340	 	 	14 100	 	 		 	7 000	 	14 000	 	 	—  	 	 	 	21 000	 	 	—  	 	 	—  	 	 		 	—  	 	7 000	 	 	14 000	 	 	 	—  	 	 	21 000
	10%	 	4th yard payment	 	12 760	 	1 340	 	 	14 100	 	 		 	21 000	 	14 000	 	 	—  	 	 	 	35 000	 	 	—  	 	 	—  	 	 		 	—  	 	21 000	 	 	14 000	 	 	 	—  	 	 	35 000
	40%	 	Pre-Delivery	 		 		 	 	56 400	 	 	22 000	 	35 000	 	—  	 	 	35 000	 	 	 	—  	 	 	—  	 	 	—  	 	 	—	 	—  	 	35 000	 	 	—  	 	 	 	35 000	 	 	—  
	60%	 	Post - Delivery	 	76 560	 	8 040	 	 	84 600	 	 	—  	 	—  	 	98 000	 	 	—  	 	 	 	98 000	 	 	—  	 	 	21 000	 	 	—	 	21 000	 	—  	 	 	119 000	 	 	 	—  	 	 	119 000
		 		 	  
	 	  
	 	  
	  
	 	 	  
	 		 	  
	 				 	  
	  
	 	 		 	  
	  
	 	 		 	  
	 	  
	 	  
	  
	 	 	  
	  
	 	 	  

		 	Sub Total	 	127 600	 	13 400	 	 	141 000	 	 	22 000	 		 	98 000	 				 	 	98 000	 	 		 	 	21 000	 	 		 	21 000	 	—  	 	 	119 000	 	 	 	—  	 	 	119 000
		 		 	  
	 	  
	 	  
	  
	 	 	  
	 		 	  
	 				 	  
	  
	 	 		 	  
	  
	 	 		 	  
	 	  
	 	  
	  
	 	 	  
	  
	 	 	  


  

																																																	
	 Date
	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 
	 Delivery
	  	 	—  	 	  	 	98 000	 	  	 	—  	 	  	 	98 000	 	  	 	—  	 	  	 	21 000	 	  	 	—  	 	  	 	21 000	 	  	 	—  	 	  	 	119 000	 	  	 	—  	 	  	 	119 000	 
	 1Q 2017
	  	 	98 000	 	  	 	—  	 	  	 	1 289	 	  	 	96 711	 	  	 	21 000	 	  	 	—  	 	  	 	1 050	 	  	 	19 950	 	  	 	119 000	 	  	 	—  	 	  	 	2 339	 	  	 	116 661	 
	 2Q 2017
	  	 	96 711	 	  	 	—  	 	  	 	1 289	 	  	 	95 421	 	  	 	19 950	 	  	 	—  	 	  	 	1 050	 	  	 	18 900	 	  	 	116 661	 	  	 	—  	 	  	 	2 339	 	  	 	114 321	 
	 3Q 2017
	  	 	95 421	 	  	 	—  	 	  	 	1 289	 	  	 	94 132	 	  	 	18 900	 	  	 	—  	 	  	 	1 050	 	  	 	17 850	 	  	 	114 321	 	  	 	—  	 	  	 	2 339	 	  	 	111 982	 
	 4Q 2017
	  	 	94 132	 	  	 	—  	 	  	 	1 289	 	  	 	92 842	 	  	 	17 850	 	  	 	—  	 	  	 	1 050	 	  	 	16 800	 	  	 	111 982	 	  	 	—  	 	  	 	2 339	 	  	 	109 642	 
	 1Q 2018
	  	 	92 842	 	  	 	—  	 	  	 	1 289	 	  	 	91 553	 	  	 	16 800	 	  	 	—  	 	  	 	1 050	 	  	 	15 750	 	  	 	109 642	 	  	 	—  	 	  	 	2 339	 	  	 	107 303	 
	 2Q 2018
	  	 	91 553	 	  	 	—  	 	  	 	1 289	 	  	 	90 263	 	  	 	15 750	 	  	 	—  	 	  	 	1 050	 	  	 	14 700	 	  	 	107 303	 	  	 	—  	 	  	 	2 339	 	  	 	104 963	 
	 3Q 2018
	  	 	90 263	 	  	 	—  	 	  	 	1 289	 	  	 	88 974	 	  	 	14 700	 	  	 	—  	 	  	 	1 050	 	  	 	13 650	 	  	 	104 963	 	  	 	—  	 	  	 	2 339	 	  	 	102 624	 
	 4Q 2018
	  	 	88 974	 	  	 	—  	 	  	 	1 289	 	  	 	87 684	 	  	 	13 650	 	  	 	—  	 	  	 	1 050	 	  	 	12 600	 	  	 	102 624	 	  	 	—  	 	  	 	2 339	 	  	 	100 284	 
	 1Q 2019
	  	 	87 684	 	  	 	—  	 	  	 	1 289	 	  	 	86 395	 	  	 	12 600	 	  	 	—  	 	  	 	1 050	 	  	 	11 550	 	  	 	100 284	 	  	 	—  	 	  	 	2 339	 	  	 	97 945	 
	 2Q 2019
	  	 	86 395	 	  	 	—  	 	  	 	1 289	 	  	 	85 105	 	  	 	11 550	 	  	 	—  	 	  	 	1 050	 	  	 	10 500	 	  	 	97 945	 	  	 	—  	 	  	 	2 339	 	  	 	95 605	 
	 3Q 2019
	  	 	85 105	 	  	 	—  	 	  	 	1 289	 	  	 	83 816	 	  	 	10 500	 	  	 	—  	 	  	 	1 050	 	  	 	9 450	 	  	 	95 605	 	  	 	—  	 	  	 	2 339	 	  	 	93 266	 
	 4Q 2019
	  	 	83 816	 	  	 	—  	 	  	 	1 289	 	  	 	82 526	 	  	 	9 450	 	  	 	—  	 	  	 	1 050	 	  	 	8 400	 	  	 	93 266	 	  	 	—  	 	  	 	2 339	 	  	 	90 926	 
	 1Q 2020
	  	 	82 526	 	  	 	—  	 	  	 	1 289	 	  	 	81 237	 	  	 	8 400	 	  	 	—  	 	  	 	1 050	 	  	 	7 350	 	  	 	90 926	 	  	 	—  	 	  	 	2 339	 	  	 	88 587	 
	 2Q 2020
	  	 	81 237	 	  	 	—  	 	  	 	1 289	 	  	 	79 947	 	  	 	7 350	 	  	 	—  	 	  	 	1 050	 	  	 	6 300	 	  	 	88 587	 	  	 	—  	 	  	 	2 339	 	  	 	86 247	 
	 3Q 2020
	  	 	79 947	 	  	 	—  	 	  	 	1 289	 	  	 	78 658	 	  	 	6 300	 	  	 	—  	 	  	 	1 050	 	  	 	5 250	 	  	 	86 247	 	  	 	—  	 	  	 	2 339	 	  	 	83 908	 
	 4Q 2020
	  	 	78 658	 	  	 	—  	 	  	 	1 289	 	  	 	77 368	 	  	 	5 250	 	  	 	—  	 	  	 	1 050	 	  	 	4 200	 	  	 	83 908	 	  	 	—  	 	  	 	2 339	 	  	 	81 568	 
	 1Q 2021
	  	 	77 368	 	  	 	—  	 	  	 	1 289	 	  	 	76 079	 	  	 	4 200	 	  	 	—  	 	  	 	1 050	 	  	 	3 150	 	  	 	81 568	 	  	 	—  	 	  	 	2 339	 	  	 	79 229	 
	 2Q 2021
	  	 	76 079	 	  	 	—  	 	  	 	1 289	 	  	 	74 789	 	  	 	3 150	 	  	 	—  	 	  	 	1 050	 	  	 	2 100	 	  	 	79 229	 	  	 	—  	 	  	 	2 339	 	  	 	76 889	 
	 3Q 2021
	  	 	74 789	 	  	 	—  	 	  	 	1 289	 	  	 	73 500	 	  	 	2 100	 	  	 	—  	 	  	 	1 050	 	  	 	1 050	 	  	 	76 889	 	  	 	—  	 	  	 	2 339	 	  	 	74 550	 
	 4Q 2021
	  	 	73 500	 	  	 	—  	 	  	 	1 289	 	  	 	72 211	 	  	 	1 050	 	  				  	 	1 050	 	  	 	—  	 	  	 	74 550	 	  				  	 	2 339	 	  	 	72 211	 

  

							
		  	 Contract price
	  	127 600	  	
		  	 Owners items & fin cost
	  	13 400	  	
		  	 Ready for sea cost
	  	141 000	  	

  

																																													
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Vessel B	 	 	 	 	 	 	 	 	Vessel B	 	 	 	 	 	 	Vessel B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Post-Delivery
Tranche B-1
	 	 	 	 	 	 	Post-Delivery
Tranche B-2	 	 	 	 	 	
Total Post-Delivery
Tranche B

	 	 	 Periode
	 	 Contract
payment
	 	 Ready for
sea cost
	 	Total cost	 	 	Equity	 	 	 Opening
balance
	 	 Drawdown
	 	 Instalment
	 	Closing
Balance	 	 	 Opening
balance
	 	Drawdown	 	 	 Instalment
	 	 Closing
Balance
	 	 Opening
balance
	 	 Drawdown
	 	Instalment	 	 	 Closing
Balance

	10%	 	1st yard payment	 	12 760	 	1 340	 	 	14 100	 	 	 	14 700	 	 	—  	 	—  	 	—  	 	 	—  	 	 	—  	 	 	—  	 	 	—	 	—  	 	—  	 	—  	 	 	—  	 	 	—  
	10%	 	2nd yard payment	 	12 760	 	1 340	 	 	14 100	 	 	 	7 300	 	 	—  	 	7 000	 	—  	 	 	7 000	 	 	—  	 	 	—  	 	 		 	—  	 	—  	 	7 000	 	 	—  	 	 	7 000
	10%	 	3rd yard payment	 	12 760	 	1 340	 	 	14 100	 	 				 	7 000	 	14 000	 	—  	 	 	21 000	 	 	—  	 	 	—  	 	 		 	—  	 	7 000	 	14 000	 	 	—  	 	 	21 000
	10%	 	4th yard payment	 	12 760	 	1 340	 	 	14 100	 	 				 	21 000	 	14 000	 	—  	 	 	35 000	 	 	—  	 	 	—  	 	 		 	—  	 	21 000	 	14 000	 	 	—  	 	 	35 000
	40%	 	Pre-Delivery	 		 		 	 	56 400	 	 	 	22 000	 	 	35 000	 	—  	 	35 000	 	 	—  	 	 		 				 		 		 	35 000	 	—  	 	 	35 000	 	 	—  
	60%	 	Post - Delivery	 	76 560	 	8 040	 	 	84 600	 	 	 	—  	 	 	—  	 	98 000	 	—  	 	 	98 000	 	 	—  	 	 	21 000	 	 	—	 	21 000	 	—  	 	119 000	 	 	—  	 	 	119 000
		 		 	  
	 	  
	 	  
	  
	 	 	  
	  
	 	 		 	  
	 		 	  
	  
	 	 		 	  
	  
	 	 		 	  
	 	  
	 	  
	 	  
	  
	 	 	  

		 	Sub Total	 	127 600	 	13 400	 	 	141 000	 	 	 	22 000	 	 		 	98 000	 		 	 	98 000	 	 		 	 	21 000	 	 		 	21 000	 	—  	 	119 000	 	 	—  	 	 	119 000
		 		 	  
	 	  
	 	  
	  
	 	 	  
	  
	 	 		 	  
	 		 	  
	  
	 	 		 	  
	  
	 	 		 	  
	 	  
	 	  
	 	  
	  
	 	 	  


  

																																																	
	 Date
	  	Opening
Balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 
	 Delivery
	  	 	—  	 	  	 	98 000	 	  	 	—  	 	  	 	98 000	 	  	 	—  	 	  	 	21 000	 	  	 	—  	 	  	 	21 000	 	  	 	—  	 	  	 	119 000	 	  	 	—  	 	  	 	119 000	 
	 2Q 2017
	  	 	98 000	 	  	 	—  	 	  	 	1 289	 	  	 	96 711	 	  	 	21 000	 	  	 	—  	 	  	 	1 050	 	  	 	19 950	 	  	 	119 000	 	  	 	—  	 	  	 	2 339	 	  	 	116 661	 
	 3Q 2017
	  	 	96 711	 	  	 	—  	 	  	 	1 289	 	  	 	95 421	 	  	 	19 950	 	  	 	—  	 	  	 	1 050	 	  	 	18 900	 	  	 	116 661	 	  	 	—  	 	  	 	2 339	 	  	 	114 321	 
	 4Q 2017
	  	 	95 421	 	  	 	—  	 	  	 	1 289	 	  	 	94 132	 	  	 	18 900	 	  	 	—  	 	  	 	1 050	 	  	 	17 850	 	  	 	114 321	 	  	 	—  	 	  	 	2 339	 	  	 	111 982	 
	 1Q 2018
	  	 	94 132	 	  	 	—  	 	  	 	1 289	 	  	 	92 842	 	  	 	17 850	 	  	 	—  	 	  	 	1 050	 	  	 	16 800	 	  	 	111 982	 	  	 	—  	 	  	 	2 339	 	  	 	109 642	 
	 2Q 2018
	  	 	92 842	 	  	 	—  	 	  	 	1 289	 	  	 	91 553	 	  	 	16 800	 	  	 	—  	 	  	 	1 050	 	  	 	15 750	 	  	 	109 642	 	  	 	—  	 	  	 	2 339	 	  	 	107 303	 
	 3Q 2018
	  	 	91 553	 	  	 	—  	 	  	 	1 289	 	  	 	90 263	 	  	 	15 750	 	  	 	—  	 	  	 	1 050	 	  	 	14 700	 	  	 	107 303	 	  	 	—  	 	  	 	2 339	 	  	 	104 963	 
	 4Q 2018
	  	 	90 263	 	  	 	—  	 	  	 	1 289	 	  	 	88 974	 	  	 	14 700	 	  	 	—  	 	  	 	1 050	 	  	 	13 650	 	  	 	104 963	 	  	 	—  	 	  	 	2 339	 	  	 	102 624	 
	 1Q 2019
	  	 	88 974	 	  	 	—  	 	  	 	1 289	 	  	 	87 684	 	  	 	13 650	 	  	 	—  	 	  	 	1 050	 	  	 	12 600	 	  	 	102 624	 	  	 	—  	 	  	 	2 339	 	  	 	100 284	 
	 2Q 2019
	  	 	87 684	 	  	 	—  	 	  	 	1 289	 	  	 	86 395	 	  	 	12 600	 	  	 	—  	 	  	 	1 050	 	  	 	11 550	 	  	 	100 284	 	  	 	—  	 	  	 	2 339	 	  	 	97 945	 
	 3Q 2019
	  	 	86 395	 	  	 	—  	 	  	 	1 289	 	  	 	85 105	 	  	 	11 550	 	  	 	—  	 	  	 	1 050	 	  	 	10 500	 	  	 	97 945	 	  	 	—  	 	  	 	2 339	 	  	 	95 605	 
	 4Q 2019
	  	 	85 105	 	  	 	—  	 	  	 	1 289	 	  	 	83 816	 	  	 	10 500	 	  	 	—  	 	  	 	1 050	 	  	 	9 450	 	  	 	95 605	 	  	 	—  	 	  	 	2 339	 	  	 	93 266	 
	 1Q 2020
	  	 	83 816	 	  	 	—  	 	  	 	1 289	 	  	 	82 526	 	  	 	9 450	 	  	 	—  	 	  	 	1 050	 	  	 	8 400	 	  	 	93 266	 	  	 	—  	 	  	 	2 339	 	  	 	90 926	 
	 2Q 2020
	  	 	82 526	 	  	 	—  	 	  	 	1 289	 	  	 	81 237	 	  	 	8 400	 	  	 	—  	 	  	 	1 050	 	  	 	7 350	 	  	 	90 926	 	  	 	—  	 	  	 	2 339	 	  	 	88 587	 
	 3Q 2020
	  	 	81 237	 	  	 	—  	 	  	 	1 289	 	  	 	79 947	 	  	 	7 350	 	  	 	—  	 	  	 	1 050	 	  	 	6 300	 	  	 	88 587	 	  	 	—  	 	  	 	2 339	 	  	 	86 247	 
	 4Q 2020
	  	 	79 947	 	  	 	—  	 	  	 	1 289	 	  	 	78 658	 	  	 	6 300	 	  	 	—  	 	  	 	1 050	 	  	 	5 250	 	  	 	86 247	 	  	 	—  	 	  	 	2 339	 	  	 	83 908	 
	 1Q 2021
	  	 	78 658	 	  	 	—  	 	  	 	1 289	 	  	 	77 368	 	  	 	5 250	 	  	 	—  	 	  	 	1 050	 	  	 	4 200	 	  	 	83 908	 	  	 	—  	 	  	 	2 339	 	  	 	81 568	 
	 2Q 2021
	  	 	77 368	 	  	 	—  	 	  	 	1 289	 	  	 	76 079	 	  	 	4 200	 	  	 	—  	 	  	 	1 050	 	  	 	3 150	 	  	 	81 568	 	  	 	—  	 	  	 	2 339	 	  	 	79 229	 
	 3Q 2021
	  	 	76 079	 	  	 	—  	 	  	 	1 289	 	  	 	74 789	 	  	 	3 150	 	  	 	—  	 	  	 	1 050	 	  	 	2 100	 	  	 	79 229	 	  	 	—  	 	  	 	2 339	 	  	 	76 889	 
	 4Q 2021
	  	 	74 789	 	  	 	—  	 	  	 	1 289	 	  	 	73 500	 	  	 	2 100	 	  	 	—  	 	  	 	1 050	 	  	 	1 050	 	  	 	76 889	 	  	 	—  	 	  	 	2 339	 	  	 	74 550	 
	 1Q 2022
	  	 	73 500	 	  	 	—  	 	  	 	1 289	 	  	 	72 211	 	  	 	1 050	 	  				  	 	1 050	 	  	 	—  	 	  	 	74 550	 	  				  	 	2 339	 	  	 	72 211	 









 schjodt.no  |  Page 128 of 133 

 


									
		 		 	 Contract price
	  	121 110	  	
		 		 	 Owners items & fin cost
	  	13 890	  	
		 		 	 Ready for sea cost
	  	135 000	  	

  

																																							
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Vessel 3	 	 	 	 	 	 	 	Vessel 3	 	 	 	 	 	 	 	Vessel 3	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 Tranche 1
	 	 70,0000%
	 	 	 	 	 	 Tranche 2
	 	 15,1852%
	 	 	 	 	 	 Total Facility
	 	 	 	 
	 	 	 Periode
	 	 Contract

payment
	 	Ready for
sea cost	 	 	Total cost	 	 	 Equity
	 	 Opening

balance
	 	 Drawdown
	 	 Instalment
	 	 Closing
Balance
	 	 Opening

balance
	 	 Drawdown
	 	 Instalment
	 	 Closing

Balance
	 	 Opening

balance
	 	 Drawdown
	 	 Instalment
	 	 Closing

Balance

	10%	 	1st yard payment	 	12 111	 	 	1 389	 	 	 	13 500	 	 	13 500	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  	 	—  
	10%	 	2nd yard payment	 	12 111	 	 	1 389	 	 	 	13 500	 	 	6 750	 	—  	 	6 750	 	—  	 	6 750	 	—  	 	—  	 		 	—  	 	—  	 	6 750	 	—  	 	6 750
	10%	 	3rd yard payment	 	12 111	 	 	1 389	 	 	 	13 500	 	 		 	6 750	 	13 503	 	—  	 	20 250	 	—  	 	—  	 		 	—  	 	6 750	 	13 500	 	—  	 	20 250
	10%	 	4th yard payment	 	12 111	 	 	1 389	 	 	 	13 500	 	 		 	20 250	 	13 500	 	—  	 	33 750	 	—  	 	—  	 		 	—  	 	20 250	 	13 500	 	—  	 	33 750
	40%	 	Pre-Delivery	 		 				 				 		 	33 750	 		 	33 750	 	—  	 		 		 		 		 	33 750	 	—  	 	33 750	 	—  
	50%	 	Post - Delivery	 	72 666	 	 	8 334	 	 	 	81 000	 	 		 	—  	 	94 500	 	—  	 	94 500	 	—  	 	20 500	 	—  	 	20 500	 	—  	 	115 000	 	—  	 	115 000
		 		 	  
	 	  
	  
	 	 	  
	  
	 	 	  
	 		 	  
	 		 	  
	 		 	  
	 		 	  
	 	  
	 	  
	 	  
	 	  

		 	Sub Total	 	121 110	 	 	13 890	 	 	 	135 000	 	 	20 250	 		 	94 500	 		 	94 500	 		 	20 500	 		 	20 500	 	—  	 	115 000	 	—  	 	115 000
		 		 	  
	 	  
	  
	 	 	  
	  
	 	 	  
	 		 	  
	 		 	  
	 		 	  
	 		 	  
	 	  
	 	  
	 	  
	 	  


  

																																																	
	 Date
	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
Balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 	  	Opening
balance	 	  	Drawdown	 	  	Instalment	 	  	Closing
Balance	 
	 Delivery
	  	 	—  	 	  	 	91500	 	  	 	—  	 	  	 	94 500	 	  	 	—  	 	  	 	20 500	 	  	 	—  	 	  	 	20 500	 	  	 	—  	 	  	 	115 000	 	  	 	—  	 	  	 	115 000	 
	 4Q 2017
	  	 	94 500	 	  	 	—  	 	  	 	1 243	 	  	 	93 257	 	  	 	20 500	 	  	 	—  	 	  	 	1 025,001	 	  	 	19 475	 	  	 	115 000	 	  	 	—  	 	  	 	2 268	 	  	 	112 732	 
	 1Q 2018
	  	 	93 257	 	  	 	—  	 	  	 	1 243	 	  	 	92 013	 	  	 	19 475	 	  	 	—  	 	  	 	1 025	 	  	 	18 450	 	  	 	112 732	 	  	 	—  	 	  	 	2 268	 	  	 	110 463	 
	 2Q 2018
	  	 	92 013	 	  	 	—  	 	  	 	1 243	 	  	 	90 770	 	  	 	18 450	 	  	 	—  	 	  	 	1 025	 	  	 	17 425	 	  	 	110 463	 	  	 	—  	 	  	 	2 268	 	  	 	108 195	 
	 3Q 2018
	  	 	90 770	 	  	 	—   	 	  	 	1 243	 	  	 	89 526	 	  	 	17 425	 	  	 	—  	 	  	 	1 025	 	  	 	16 400	 	  	 	108 195	 	  	 	—  	 	  	 	2 268	 	  	 	105 926	 
	 4Q 2018
	  	 	89 526	 	  	 	—  	 	  	 	1 243	 	  	 	88 283	 	  	 	16 400	 	  	 	—  	 	  	 	1 025	 	  	 	15 375	 	  	 	105 926	 	  	 	—  	 	  	 	2 268	 	  	 	103 658	 
	 1Q 2019
	  	 	88 283	 	  	 	—  	 	  	 	1 243	 	  	 	87 039	 	  	 	15 375	 	  	 	—  	 	  	 	1 025	 	  	 	14 350	 	  	 	103 658	 	  	 	—  	 	  	 	2 268	 	  	 	101 389	 
	 2Q 2019
	  	 	87 039	 	  	 	—  	 	  	 	1 243	 	  	 	85 796	 	  	 	14 350	 	  	 	—  	 	  	 	1 025	 	  	 	13 325	 	  	 	101 389	 	  	 	—  	 	  	 	2 268	 	  	 	99 121	 
	 3Q 2019
	  	 	85 796	 	  	 	—  	 	  	 	1 245	 	  	 	84 553	 	  	 	13 325	 	  	 	—  	 	  	 	1 025	 	  	 	12 300	 	  	 	99 121	 	  	 	—  	 	  	 	2 268	 	  	 	96 853	 
	 4Q 2019
	  	 	84 553	 	  	 	—  	 	  	 	1 243	 	  	 	83 309	 	  	 	12 300	 	  	 	—  	 	  	 	1 025	 	  	 	11 275	 	  	 	96 853	 	  	 	—  	 	  	 	2 268	 	  	 	94 584	 
	 1Q 2020
	  	 	83 309	 	  	 	—  	 	  	 	1 243	 	  	 	82 066	 	  	 	11 275	 	  	 	—  	 	  	 	1 025	 	  	 	10 250	 	  	 	94 584	 	  	 	—  	 	  	 	2 268	 	  	 	92 316	 
	 2Q 2020
	  	 	82 066	 	  	 	—  	 	  	 	1 243	 	  	 	80 822	 	  	 	10 250	 	  	 	—  	 	  	 	1 025	 	  	 	9 225	 	  	 	92 316	 	  	 	—  	 	  	 	2 268	 	  	 	90 047	 
	 3Q 2020
	  	 	80 822	 	  	 	—  	 	  	 	1 243	 	  	 	79 579	 	  	 	9 225	 	  	 	—  	 	  	 	1 025	 	  	 	8 200	 	  	 	90 047	 	  	 	—  	 	  	 	2 268	 	  	 	87 779	 
	 4Q 2020
	  	 	79 579	 	  	 	—  	 	  	 	1 243	 	  	 	78 336	 	  	 	8 200	 	  	 	—  	 	  	 	1 025	 	  	 	7 175	 	  	 	87 779	 	  	 	—  	 	  	 	2 268	 	  	 	85 511	 
	 1Q 2021
	  	 	78 336	 	  	 	—  	 	  	 	1 243	 	  	 	77 092	 	  	 	7 175	 	  	 	—  	 	  	 	1 025	 	  	 	6 150	 	  	 	85 511	 	  	 	—  	 	  	 	2 268	 	  	 	83 242	 
	 2Q 2021
	  	 	77 092	 	  	 	—  	 	  	 	1 243	 	  	 	75 849	 	  	 	6 150	 	  	 	—  	 	  	 	1 025	 	  	 	5 125	 	  	 	83 242	 	  	 	—  	 	  	 	2 268	 	  	 	80 974	 
	 3Q 2021
	  	 	75 849	 	  	 	—  	 	  	 	1 243	 	  	 	74 605	 	  	 	5 125	 	  	 	—  	 	  	 	1 025	 	  	 	4 100	 	  	 	80 974	 	  	 	—  	 	  	 	2 268	 	  	 	78 705	 
	 4Q 2021
	  	 	74 605	 	  	 	—  	 	  	 	1 243	 	  	 	73 362	 	  	 	4 100	 	  	 	—  	 	  	 	1 025	 	  	 	3 075	 	  	 	78 705	 	  	 	—  	 	  	 	2 268	 	  	 	76 437	 
	 1Q 2022
	  	 	73 362	 	  	 	—  	 	  	 	1 243	 	  	 	72 118	 	  	 	3 075	 	  	 	—  	 	  	 	1 025	 	  	 	2 050	 	  	 	76 437	 	  	 	—  	 	  	 	2 268	 	  	 	74 168	 
	 2Q 2022
	  	 	72 118	 	  	 	—  	 	  	 	1 243	 	  	 	70 875	 	  	 	2 050	 	  	 	—  	 	  	 	1 025	 	  	 	1 025	 	  	 	74 168	 	  	 	—  	 	  	 	2 268	 	  	 	71 900	 
	 3Q 2022
	  	 	70 875	 	  	 	—  	 	  	 	1 243	 	  	 	69 632	 	  	 	1 025	 	  				  	 	1 025	 	  	 	-0	 	  	 	71 900	 	  				  	 	2 268	 	  	 	69 632	 









 schjodt.no  |  Page 129 of 133 

 

 SCHEDULE 9 

FORM OF DROP DOWN CONFIRMATION LETTER 
  

			
	 From:
	  	 DNB Bank ASA as Agent

		
	 To:
	  	KNOT Shuttle Tankers 24 AS
		  	KNOT Shuttle Tankers 25 AS
		  	KNOT Shuttle Tankers 26 AS
		  	Knutsen NYK Offshore Tankers AS
		  	KNOT Offshore Partners LP
		  	KNOT Shuttle Tankers AS
		  	Finance Parties
		
	Dated:	  	

 Dear Sirs 

KNOT Shuttle Tankers 24 AS, KNOT Shuttle Tankers 25 AS and KNOT Shuttle Tankers 26 AS – USD 353,000,000 Facilities Agreement dated
27 April 2015 (the “Agreement”) 
  

	1.	We refer to the Agreement. This is a Drop Down Confirmation Letter. The purpose of this Drop Down Confirmation Letter is to give notice that a Drop Down has become effective. 


 

	2.	Terms defined in the Agreement have the same meaning in this Drop Down Confirmation Letter unless given a different meaning herein. 

  


	3.	We hereby confirm that we have received: 

  

	 	(a)	all the documents and other evidence listed in paragraph (b) of Clause 28.2 (KNOP and KNOT ST as replacement Guarantors) of the Facility Agreement (in form and substance satisfactory to us); and


  

	 	(b)	prepayment in accordance with Clause 8.3 (Mandatory prepayment - Drop Down), 

 and
consequently we confirm that: 
  

	 	(c)	the Drop Down in relation to Borrower [A] [B] [C]; 

  

	 	(d)	the accession of KNOP and KNOT ST as Guarantors in relation to the Post-Delivery Tranche [A-1 and A-2]
[B-1 and B-2] [C-1 and C-2]; and 


 

	 	(e)	the secession of KNOT as Guarantor in relation to the Post-Delivery Tranche [A-1 and A-2] [B-1 and B-2] [C-1 and C-2], 


shall become effective as of [time] on [date], as per the terms of Clause 28.2 (KNOP and KNOT ST as replacement
Guarantors) of the Facility Agreement. 
  

	4.	This Drop Down Confirmation Letter is governed by Norwegian law. 









 schjodt.no  |  Page 130 of 133 

 


	
	Yours faithfully
	
	   

	authorised signatory for
	DNB Bank ASA









 schjodt.no  |  Page 131 of 133 

 

 SCHEDULE 10 

LIST OF EXISTING HEDGING TRANSACTIONS 
  

	 	1.	The USD 50,000,000 interest rate swap initially made by Knutsen NYK Offshore Tankers AS with trade date 5 February 2015 and termination date 2 February 2022, to be transferred by novation to any of the
Borrowers and to be documented under an ISDA Master Agreement entered or to be entered into between the relevant Borrower and Nordea Bank Finland Plc. 

  

	 	2.	The USD 50,000,000 interest rate swap initially made by Knutsen NYK Offshore Tankers AS with trade date 20 March 2015 and termination date 3 March 2025, to be transferred by novation to any of the Borrowers
and to be documented under an ISDA Master Agreement entered or to be entered into between the relevant Borrower and Nordea Bank Finland Plc. 

  

	 	3.	The USD 25,000,000 interest rate swap initially made by Knutsen NYK Offshore Tankers AS with trade date 25 August 2015 and termination date 1 October 2025, to be transferred by novation to any of the Borrowers
and to be documented under an ISDA Master Agreement entered or to be entered into between the relevant Borrower and Nordea Bank Finland Plc. 









 schjodt.no  |  Page 132 of 133 

 

 EXECUTION PAGE 

 

									
	Borrower A:	 		 	Borrower B:
			
	KNOT SHUTTLE TANKERS 24 AS	 		 	KNOT SHUTTLE TANKERS 25 AS
					
	By:	 	  
	 		 	By:	 	  

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	
			
	Borrower C:	 		 	Guarantor:
			
	KNOT SHUTTLE TANKERS 26 AS	 		 	KNUTSEN NYK OFFSHORE TANKERS AS
					
	By:	 	  
	 		 	By:	 	  

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	
			
	Original Lender, Bookrunner and Mandated Lead Arranger:	 		 	Original Lender Bookrunner, Mandated Lead Arranger and Hedging Bank:
			
	ABN AMRO BANK N.V., OSLO BRANCH	 		 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
					
	By:	 	  
	 		 	 By:
	 	  

	Name:	 		 		 	 Name:
	 	
	Title:	 		 		 	 Title:
	 	
			
	Original Lender, Bookrunner and Mandated Lead Arranger:	 		 	Original Lender, Agent, Bookrunner, Mandated Lead Arranger and Hedging Bank:
			
	COMMBANK EUROPE LIMITED	 		 	DNB BANK ASA
					
	By:	 	  
	 		 	By:	 	  

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	









 schjodt.no  |  Page 133 of 133 

 


									
	Original Lender, Bookrunner, Mandated Lead Arranger and Hedging Bank:	 		 	Original Lender, Bookrunner and Mandated Lead Arranger:
			
	MIZUHO BANK, LTD.	 		 	NORDEA BANK NORGE ASA
					
	By:	 	  
	 		 	By:	 	  

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	
			
	Hedging Bank:	 		 	Hedging Bank:
			
	ABN AMRO BANK N.V.	 		 	COMMONWEALTH BANK OF AUSTRALIA
					
	By:	 	  
	 		 	By:	 	  

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	
				
	Hedging Bank:	 		 		 	
				
	NORDEA BANK FINLAND PLC.	 		 		 	
					
	By:	 	  
	 		 		 	
	Name:	 		 		 		 	
	Title: