Document:

EX-10.1

 Exhibit 10.1 

Execution Version 

CONTRACT OPERATING AGREEMENT 

This CONTRACT OPERATING AGREEMENT (this “Agreement”), dated as of June 19, 2020 (the “Effective Date”),
is entered into by and between Atlas Growth Eagle Ford, LLC, a Texas limited liability company (“AGP”), and Texas American Resources Company, a Texas limited liability company (“TAR”). AGP and TAR may sometimes be
referred to herein, individually, as a “Party” and, collectively, as the “Parties”. 
 RECITALS 

WHEREAS, effective as of the Effective Date, AGP desires (a) to engage TAR to operate, certain oil and gas properties located in
Texas described on Exhibit A (the “Properties”) as contract operator and (b) for TAR to provide other services to AGP related to AGP’s business in respect of the Properties in accordance with the terms hereof, and
TAR desires to serve as the contract operator of the Properties and provide the Services (as defined below); and 
 WHEREAS, AGP and
TAR own the Infrastructure, as tenants in common, in the respective ownership percentages set forth opposite their names on Exhibit B, subject to adjustment in accordance with Section 1.2 (the “Infrastructure
Ownership Percentages”) and desire to operate and expand the Infrastructure in a coordinated manner with TAR as the operator of the Infrastructure, and TAR desires to be operator of record of the Infrastructure, in each case, subject to the
terms hereof. 
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements in this Agreement,
and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, TAR and AGP agree as follows: 

ARTICLE I 
 SERVICES

 1.1.    Property Services to be Performed by TAR.
Subject to the terms of this Agreement, AGP hereby engages TAR to perform, or cause to be performed, all services with respect to operating, producing and maintaining the Properties, and marketing the oil, gas and other minerals extracted therefrom
(the “Property Operations”) in accordance with written instructions provided by AGP to TAR from time to time, including: 

(a)    ensuring timely processing of Third-Party accounts payable and receivable, joint interest billings (if any),
revenue and royalty distribution, and calculation of the Service Consideration, in each case, pursuant to Section 3.1; 

(b)    calculating and disbursing proceeds from production to pay monthly severance tax obligations relating to the
Properties; 
 (c)    calculating, filing and paying any Texas General Land Office obligations for oil and gas; 

(d)    providing such information as may be required for AGP to evaluate the ad valorem assessment with respect to the
Properties; 

 (e)    ensuring timely remittance of net proceeds from production from
the Properties to a bank account specified by AGP (the “Operating Account”) in accordance with TAR’s current practice; 

(f)    managing daily production operations of the Properties, including pumping and facilities maintenance; 

(g)    conducting remedial operations or operations to address an Emergency (as defined below), in each case, as required
for compliance with Governmental Authorities, as is necessary to maintain production or as is necessary to respond or otherwise remedy an Emergency; 

(h)    supervising employees, vendors, suppliers and contract personnel as required to satisfy TAR’s obligations in
accordance with the terms of this Agreement; 
 (i)    monitoring production and lease operating statements from the
Properties and submitting reports to AGP as reasonably requested; 
 (j)    performing land administration functions and
maintaining royalty and related information; 
 (k)    maintaining and tracking suspense balances (which, for the
avoidance of doubt subject to Section 5.1, AGP will retain liability for), and, where AGP is the operator of the applicable Properties, remitting monthly proceeds for undistributed revenues relating to suspense to AGP; 

(l)    conducting its activities under this Agreement in compliance with applicable Laws in all material respects and
notifying AGP of any such noncompliance and taking reasonable steps necessary to bring operations into such compliance, including (i) plugging, abandoning and conducting surface and subsurface site
clean-up and restoration associated with any wells or facilities as required by Governmental Authorities, (ii) applying for, or maintaining, and complying with all governmental licenses, permits,
registrations, and authorizations necessary to cause the operation of the Properties to be in compliance with applicable Laws, and (iii) preparing and filing all reports, regulatory reporting, applications and notices required by Governmental
Authorities with respect to the ownership of the Properties and the operation thereof, including monthly production reporting; 

(m)    carrying or providing insurance for benefit of TAR and AGP as required by applicable Laws and the terms of the
Applicable Agreements (as defined below); 
 (n)    administering marketing arrangements for crude oil and natural gas
as necessary to sell production from the Properties; 
 (o)    procuring drilling rigs, equipment, supplies and services
as may be necessary for approved Operations; and 
 (p)    preparing and maintaining all drilling and well status
reports and records. 

  
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 1.2.    Infrastructure. 

(a)    Subject to Section 1.2(b), TAR shall be the operator of the Infrastructure and, subject
to the provisions of this Agreement, shall have the exclusive right to operate the Infrastructure and to perform, or cause to be performed, all services with respect to the Infrastructure (the “Infrastructure Operations” and,
together with the Property Operations, the “Services”) in accordance with written instructions provided by AGP to TAR from time to time; including: 

(i)    consulting with AGP at such reasonable times as may be requested by AGP, keeping AGP apprised of all
matters arising during the construction, operation, maintenance, expansion or alteration of the Infrastructure, and promptly respond to questions and requests for information from AGP about such matters; 

(ii)    contracting for the operation, maintenance and repair of the Infrastructure, as well as for any
Infrastructure Capital Projects; 
 (iii)    maintaining itemized books and records (including records of
the joint account of AGP and TAR) with respect to the Infrastructure and operation of the Infrastructure; 

(iv)    carrying insurance for the joint account of AGP and TAR that is reasonably acceptable to AGP, the
costs of which shall be chargeable to AGP and TAR in proportion to their respective Infrastructure Ownership Percentages at the time of incurrence of such costs; 

(v)    preparing and filing all necessary ad valorem tax and personal property tax renditions and returns
with proper taxing authorities with respect to the Infrastructure or any part thereof, and settling assessments arising therefrom. Taxes and return preparation costs with respect to the Infrastructure shall be chargeable to AGP and TAR in proportion
to their respective Infrastructure Ownership Percentages during the applicable period; and 

(vi)    making all necessary reports to Governmental Authorities, and securing all necessary permits,
licenses, variances, exemptions, orders, franchises, approvals and authorizations of Governmental Authorities necessary for the operation of the Infrastructure. 

(b)    TAR shall be deemed to have resigned as operator of the Infrastructure, and the Infrastructure Operations shall no
longer be included in the Operations, if it (i) tenders its resignation as operator, (ii) becomes insolvent, (iii) files for protection under the federal bankruptcy code or (iv) engages in willful misconduct or is grossly
negligent in the operation of the Infrastructure. In such event, AGP shall immediately have the right to designate the replacement operator. 

(c)    SUBJECT TO SECTION 5.1, AGP ACKNOWLEDGES AND AGREES THAT IN NO EVENT SHALL THE TAR INDEMNIFIED PARTIES, SOLELY
IN RELATION TO TAR’S CAPACITY AS OPERATOR OF THE INFRASTRUCTURE, HAVE ANY LIABILITY TO AGP RELATING TO OR ARISING FROM THE INFRASTRUCTURE OPERATIONS, REGARDLESS OF WHETHER LOSSES  

  
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ASSERTED BY AGP RELATING TO THE INFRASTRUCTURE OPERATIONS IS A RESULT OF OR CAUSED BY THE SOLE, ACTIVE, JOINT, PASSIVE OR CONCURRENT NEGLIGENCE, OR STRICT LIABILITY OR OTHER FAULT OF, THE TAR
INDEMNIFIED PARTIES (EXCEPT TO THE EXTENT OF THE TAR INDEMNIFIED PARTIES’ GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), AND AGP HEREBY RELEASES THE TAR INDEMNIFIED PARTIES, SOLELY RELATING TO TAR’S CAPACITY AS OPERATOR OF THE INFRASTRUCTURE,
WITH RESPECT TO ALL SUCH LIABILITIES. THE PARTIES ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS. NOTWITHSTANDING ANYTHING IN THE FOREGOING TO THE CONTRARY AND FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS
SECTION 1.2(C) SHALL IN ANY WAY LIMIT OR IMPACT TAR’S OBLIGATIONS AND LIABILITY WITH RESPECT TO THE INFRASTRUCTURE AS IT RELATES TO TAR’S CAPACITY AS A CO-OWNER THEREOF, AND THE FOREGOING EXCULPATION
AND RELEASE PROVISIONS SHALL NOT APPLY IN ANY WAY IN RESPECT OF TAR’S CAPACITY AS A CO-OWNER OF THE INFRASTRUCTURE. 

1.3.    TAR’s Standard of Care. TAR shall conduct the Services (a) as would a
reasonable prudent operator owning such Properties or operating such Infrastructure, (b) consistent with its past practice with respect to oil and gas properties or midstream infrastructure owned by it or its Affiliates, and (c) in
compliance with the terms and provisions of the applicable oil and gas leases, operating agreements, gathering agreements, any other contracts with respect to all or any portion of the Properties, the Infrastructure, and this Agreement, true and
complete copies (including all amendments thereto) of which AGP shall provide to TAR (the “Applicable Agreements”); provided, however, in no event shall TAR have any obligations or liability hereunder except to the
extent expressly set forth in Section 5.1. Notwithstanding the foregoing, except as set forth in Section 5.1, the Parties understand and agree that TAR shall never have any liability to AGP in connection with its performance of the
Property Operations hereunder greater than the liability standard of an operator to a non-operator under the applicable Operating Agreement (or, in the absence of such an agreement, under the AAPL 610 (1989
Revision) Model Form Operating Agreement (the “Standard JOA”)), IT BEING RECOGNIZED THAT UNDER SUCH AGREEMENTS, THE PARTY NAMED AS OPERATOR IS RESPONSIBLE ONLY FOR THE GROSS NEGLIGENCE AND WILLFUL MISCONDUCT OF SUCH PARTY WITH RESPECT TO
THE SERVICES. 
 1.4.    Operatorship of Record. TAR shall be designated as operator of record
of the Properties and Infrastructure with applicable Governmental Authorities during the Term, and upon execution of this Agreement, AGP shall execute and deliver to TAR the Producer’s Transportation Authority and Certificate of Compliance
(Texas Railroad Commission Form P-4) to evidence such designation of operator as of the Effective Date. 

1.5.    Reports. TAR shall (a) keep AGP informed of the status of the Services by submitting
such oral and/or written reports to AGP at such times and in such a manner as AGP may reasonably request, and (b) furnish a monthly report of all expenditures made or incurred during the preceding month, together with any reasonable information
required by AGP relating to accounts or operations with regard to the Properties and Infrastructure. In addition, TAR shall promptly inform AGP in writing of any notices it receives alleging violations of applicable Law,

  
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pending or threatened litigation or other proceedings, and any fire, explosion, loss of well control, spills or other emergencies that result, or may result, in serious bodily injury, death,
damage to or destruction of property, or material damage to natural resources or the environment (each, an “Emergency”), in each case to the extent relating to the Services or that could otherwise adversely impact the operation or
use of the Properties and/or Infrastructure. 
 1.6.    Limitations on Authority. Unless previously
expressly approved in writing by AGP, neither TAR nor any agent, representative or contractor of TAR shall enter into any agreement, or bind or make any promise, commitment, release or waiver on behalf of AGP or bind AGP in any respect whatsoever
with respect to the Properties or Infrastructure (including commitments regarding expenditures, obligations or liabilities). 

1.7.    Subcontractors. TAR may elect to have any part of the Services provided by reasonably
qualified subcontractors pursuant to Third Party contracts on substantially the same terms as the Third Party contracts utilized by TAR and its Affiliates for the same or substantially similar services (“Third Party Contracts”). The
creation of any such subcontract relationship shall not: (i) relieve TAR any of its obligations under this Agreement; or (ii) relieve TAR of its responsibility for the performance of Services rendered by any such subcontractor. Unless
otherwise agreed by TAR, all Third Party Contracts shall be in the name of TAR and any and all fees, costs and expenses incurred during the Term in connection with Third Party Contracts shall be incurred directly by and for the account of TAR (such
fees, costs and expenses, “Third Party Expenses”). All such Third Party Expenses shall be recovered by TAR under Section 3.3 or through the Service Consideration as set forth herein. 

1.8.    Limitation of Services . 

(a)    Notwithstanding anything herein to the contrary, in no event shall TAR or any of its Affiliates be obligated
hereunder in connection with the performance of its obligations under this Agreement to: (i) provide Services that TAR does not perform for its own account (or that of any of its Affiliates) or perform any such Services in a manner
substantially different from the manner in which TAR performs such Services for its own account (or that of any of its Affiliates); (ii) provide any records, information or data (A) that does not pertain to the Properties, the Infrastructure or
the Services, or (B) other than in the same form or format in which TAR maintains such records, information or data for its own account regarding the operation of its, or any of its Affiliates’; (iii) make modifications to its existing
systems or properties; (iv) acquire additional assets, equipment, rights or properties (including computer equipment, software, furniture, furnishings, fixtures, machinery, vehicles, tools and other tangible personal property) that are not in
the ordinary course of operations of TAR or any of its Affiliates; (v) hire any additional employees; (vi) incur any additional obligations or liabilities except as expressly set forth in this Agreement or (vii) advance its own funds
to cover AGP’s portion of costs and expenses, including Third Party Expenses (provided that TAR shall be required to pay such amounts out of revenues from the Properties in accordance with Section 3.3). 

(b)    Notwithstanding anything herein to the contrary, but subject to Section 1.3, AGP
acknowledges that (i) the personnel providing such Services may have other responsibilities to the business of TAR and its Affiliates to which said personnel are required to devote substantial time, (ii) such personnel will not be
dedicated full-time to performing the Services and (iii) certain personnel of TAR and/or its Affiliates may leave the employment of TAR and/or its Affiliates or terminate their employment or contract with TAR or its Affiliates during the Term.

  
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 (c)    Except as are expressly included in the Services, AGP retains
responsibility for all customary corporate functions, including maintenance of suspense accounts and AGP’s payment of taxes, and TAR shall have no obligation to perform any such corporate or operational functions (with regard to the Properties,
the Infrastructure or otherwise). 
 (d)    Notwithstanding anything in this Agreement to the contrary, TAR shall not
enter into agreements permitting any Third Party to use the Infrastructure without prior written consent of AGP. 

(e)    TAR shall not initiate Property Operations with respect to the Properties with an estimated total cost to AGP for
its proportionate share exceeding (i) $25,000.00 with respect to any such operation affecting only Properties owned by AGP, and (ii) $50,000.00 with respect to any such operation affecting both Properties owned by AGP and oil and gas properties
owned by TAR or its Affiliates, in either case, without the prior written approval by AGP of an applicable authorization for expenditure (“AFE”) related thereto; provided, however, TAR may, without first seeking the
written approval by AGP of an AFE, elect on behalf of AGP to participate in any operations of the Properties to the extent required to respond to or otherwise address an Emergency, or the terms of the applicable lease to the extent such operation is
necessary to prevent the loss or cancellation of such lease. AGP shall have five (5) Business Days from receipt of such AFE within which to grant such approval; provided, that if AGP does not respond to such AFE within five
(5) Business Days from receipt of such AFE it shall be deemed to have denied such AFE. AGP acknowledges that any AFE is only an estimate and not a guarantee or cap of ultimate costs and expenses that may be incurred with any specified operation
and agrees that it shall be responsible for all such costs and expenses associated with any approved AFE, including any in excess of the estimate, up to the greater of (A) $5,000.00 in excess of the amount estimated in the AFE and (B) one
hundred ten percent (110%) of the amount estimated in the AFE, beyond which approval from AGP shall be required for further expenditure. 

1.9.    AGP Cooperation. AGP shall use commercially reasonable efforts to assist TAR in
providing the Services, which assistance shall include: (a) obtaining such approvals, permits and licenses, complete any registrations, and implement any systems, in each case, as may be reasonably necessary for TAR to perform the Services
independently as soon as commercially practicable and (b) at AGP’s own cost, promptly providing to TAR’s personnel and its contractors or agents engaged in providing Services such information (including copies of documents and data)
and other assistance reasonably requested by such personnel, contractors, or agents and as needed to provide or procure the provision of the Services. 

ARTICLE II 
 TERM

 2.1.    Term. The term of this Agreement will commence on the Effective Date and will
continue until, with respect to (a) the Property Operations, the end of the month in which the Effective Date occurs, and will thereafter continue in full force and effect on a
month-to-month basis unless and until terminated by either Party upon thirty (30) days’ prior written notice to the

  
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other Party (such term, the “Property Term”); provided, that, with respect to the Properties and the Property Operations, Sections 2.1, 2.4 (until the end
of the ninety (90) day period thereunder), 3.4, 3.5, 3.6, 3.7, 4.1 and 4.3 and Articles V, VI and VII shall survive any expiration or termination of this Agreement
insofar as such expiration or termination relates to the Property Operations, and (b) the Infrastructure Operations, for a period of twenty four (24) months from and after the Effective Date, and will thereafter continue in full force and
effect on a month-to-month basis unless and until terminated by either Party upon thirty (30) days’ prior written notice to the other Party (such term, the
“Infrastructure Term” and, together with the Property Term, the “Term”); provided, that, with respect to the Infrastructure and the Infrastructure Operations, Sections 2.1, 2.4 (until the end of the
ninety (90) day period thereunder), 3.4, 3.5, 3.6, 3.7, 4.1 and 4.3 and Articles V, VI and VII shall survive any expiration or termination of this Agreement
insofar as such expiration or termination relates to the Infrastructure Operations. Notwithstanding anything to the contrary in this Agreement, the termination or expiration of this Agreement will not affect or limit any of the Parties’
respective rights or obligations that are vested pursuant to this Agreement as of the effective date of any such termination or expiration (including any obligations for payment and remedies for breach of this Agreement). For the avoidance of doubt,
and by way of example and not of limitation, if the Property Term were to expire prior to the end of the Infrastructure Term, those provisions of this Agreement (including, but not limited to, Section 1.2) to the extent
relating to the Infrastructure Operations shall not be affected by the expiration of the Property Term.  

2.2.    AGP Default. It shall constitute a default of AGP (a “AGP Default”) if AGP
fails to timely pay any undisputed amount owed and payable to TAR for Services provided pursuant to this Agreement in accordance with the provisions of Article III, which failure continues for at least five (5) Business Days
following AGP’s receipt of TAR’s written notice to AGP that such amount is past due. Upon the occurrence of a AGP Default, at TAR’s option, (a) TAR may suspend all or any portion of the provision of Services hereunder, including
Services for which a payment is outstanding, until such time as such AGP Default is cured and all amounts owing to TAR under this Agreement for such suspended Services are paid in full or (b) TAR may elect to terminate this Agreement. If TAR
elects to suspend Services as described in subsection (a), TAR shall continue to have the right at any time thereafter to terminate this Agreement if such AGP Default is continuing. 

2.3.    TAR Default. It shall constitute a default of TAR (a “TAR Default”) if TAR
(a) fails to timely pay any amount owed and payable to AGP pursuant to this Agreement in accordance with the provisions of Article III, which failure continues for at least five (5) Business Days following TAR’s receipt
of AGP’s written notice to TAR that such amount is past due or (b) materially breaches any of TAR’s obligations under this Agreement, which breach continues for at least thirty (30) days following TAR’s receipt of AGP’s
written notice to TAR that a material breach has occurred. Upon the occurrence of a TAR Default, at AGP’s option, AGP may elect to terminate this Agreement. 

2.4.    Transition. Notwithstanding anything to the contrary in this Agreement, upon the end of the
Property Term, Infrastructure Term or the other termination of this Agreement, at the election of AGP, TAR shall provide to AGP, for a period of up to ninety (90) days after the end of the Property Term or Infrastructure Term, as applicable,
any assistance reasonably requested by AGP to facilitate the transfer of the performance of the Services to any successor “service 

  
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provider” designated by AGP. During such ninety (90) day period, TAR agrees to use commercially reasonable efforts to cause, as applicable, each of its and its Affiliates’
contractors, subcontractors and consultants to provide any assistance requested by AGP. Additionally, prior to the end of such ninety (90) day period, TAR shall deliver to AGP and/or any successor service provider all assets and equipment that
is the property of, or has been paid for by, AGP in its possession, including all books and records that pertain to the Services, the Properties or the Infrastructure (including those maintained pursuant to Section 3.8).
AGP shall reimburse TAR for any actual, documented, out of pocket costs or expenses incurred by TAR in connection with providing the transition assistance as set forth in this Section 2.4. 

ARTICLE III 
 EXPENSES;
INFRASTRUCTURE CAPITAL PROJECTS; AUDIT RIGHTS; ACCESS; 
 BOOKS AND RECORDS; INSURANCE 

3.1.    Infrastructure Operating Expenses. Direct out-of-pocket costs and expenses incurred by TAR necessary or proper in connection with the ownership, operation, maintenance and repair of the Infrastructure (“Operating Expenses”) shall be
allocated to AGP and TAR each month in proportion to each such Party’s throughput of hydrocarbons, water and other substances, as applicable, through the Infrastructure during such month, except as otherwise expressly provided in
Section 1.2(a)(iv) and Section 1.2(a)(v). 

3.2.    Infrastructure Capital Projects. 

(a)    With respect to the Infrastructure, TAR shall be entitled to undertake Infrastructure Capital Projects as follows:

 (i)    If TAR desires to undertake an Infrastructure Capital Project for the benefit of itself (as co-owner of the Infrastructure): (A) TAR shall deliver to AGP a written request that includes reasonably detailed specifications for the Infrastructure Capital Project; (B) as promptly as practicable following
such request, TAR shall submit to AGP a budget for such Infrastructure Capital Project; (C) TAR shall undertake such Infrastructure Capital Project in accordance with such specifications and budget; and (D) TAR shall bear all costs and
expenses with respect to such Infrastructure Capital Project (“Infrastructure Capital Expenditures”). 

(ii)    If AGP requests TAR to undertake an Infrastructure Capital Project for the benefit of AGP:
(A) AGP shall include with such request reasonably detailed specifications for the Infrastructure Capital Project; (B) as promptly as practicable following such request, TAR shall submit to AGP a budget for such Infrastructure Capital
Project and AGP and TAR shall negotiate in good faith to agree on the budget; (C) TAR shall undertake such Infrastructure Capital Project in accordance with AGP specifications and the agreed upon budget, provided that TAR shall obtain
AGP’s written approval for any Infrastructure Capital Expenditures in excess of 110% of the budget; and (D) AGP shall bear all Infrastructure Capital Expenditures with respect to such Infrastructure Capital Project. 

  
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 (iii)    If either TAR or AGP request that an
Infrastructure Capital Project be undertaken that is for the benefit of both ARP and TAR, the Parties shall negotiate in good faith to agree on the budget. If the Parties agree on a budget for such Infrastructure Capital Project, TAR shall undertake
such Infrastructure Capital Project in accordance with the agreed budget and each Party shall bear Infrastructure Capital Expenditures in proportion to its respective Infrastructure Ownership Percentage at the time such Infrastructure Capital
Project is approved. 
 (b)    TAR shall maintain a schedule of accounts that reflects the aggregate Infrastructure
Capital Expenditures funded by each of AGP and TAR, and shall adjust AGP’s and TAR’s respective Infrastructure Ownership Percentages in proportion to the aggregate Infrastructure Capital Expenditures funded by each such Party at the time
such amounts are funded. The aggregate Infrastructure Capital Expenditures attributable to AGP and TAR as of the date of this Agreement are set forth on Exhibit B hereto and shall be reflected in such schedule of accounts. 

(c)    TAR shall pay all Infrastructure Capital Expenditures and Operating Expenses when due and shall allocate the same
to AGP and TAR in accordance with Section 3.1 and this Section 3.2. 

3.3.    General Accounting; Monthly Statement. During each month of the Term, TAR shall ensure the
revenues directly attributable to the Properties and Infrastructure (net of applicable Property Costs (as defined below)) that TAR received during the prior month are deposited in the Operating Account. TAR shall provide to AGP a revenue statement
for the Properties and Infrastructure on or before the fifth (5th) Business Day of each month during the Term, which shall set forth (a) the revenue received from each Property and, as
applicable, the Infrastructure during the immediately preceding month, (b) the calculation of all Third Party royalties, accounts payable and receivable, severance taxes, joint interest billings (if any), any Texas General Land Office payments
or obligations, Third Party Expenses, AGP’s allocated portion of the Operating Expenses incurred in such month, AGP’s allocated portion of any Infrastructure Capital Expenditures and Property Capital Expenditures to the extent not paid in
advance by AGP under Section 3.4(b) (whether such amounts were billed under Section 3.4(b) or otherwise incurred by TAR) and any other deductions or expenses attributable to AGP, the Properties or
the Infrastructure, in each case, in accordance with Section 1.1, Section 1.2, Section 3.1, Section 3.2 and Section 3.4(b) and
this Agreement (such royalties, expenses, expenditures and taxes, the “Property Costs”), and (c) a reasonably detailed accounting of all expenditures made by TAR during the immediately preceding month of any funds advanced by
AGP including pursuant to any Advance Payment Notice (as defined below) and the remaining balance, if applicable, of any such advanced funds held by TAR (such statement, the “Monthly Net Revenue Statement”). Additionally,
each Monthly Net Revenue Statement shall include TAR’s calculation of the Service Consideration for such month. 

3.4.    Monthly Net Revenue Payment and Capital Expenditures. 

(a)    Following the receipt of each Monthly Net Revenue Statement, AGP shall pay TAR the undisputed amount of the Service
Consideration, in each case, as set forth in such Monthly Net Revenue Statement, no later than the twentieth (20th) day of the month in which such Monthly Net Revenue Statement is received (the
“Service Consideration Payment Date”). 

  
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 (b)    On or before the first (1st) day of each month during the Term, TAR shall deliver a written notice (an “Advance Payment Notice”) to AGP setting forth (i) TAR’s good faith estimation of AGP’s
share of the (A) Infrastructure Capital Expenditures, up to the agreed budgeted amounts as set forth in Section 3.2(a)(ii) and Section 3.2(a)(iii), as applicable, (B) Property Capital
Expenditures approved or authorized in accordance with Section 1.8(e), and (C) reasonable working capital and overhead costs to be incurred with respect to the Services hereunder calculated in accordance with the
procedures under Section III.1.A. of the COPAS Accounting Procedure attached hereto as Exhibit C (the “Accounting Procedure”), in each case, for the month immediately following the month in which such Advance Payment Notice
is delivered, and (ii) the balance, if any, of any funds previously advanced by AGP pursuant to a previous Advance Payment Notice but not yet utilized by TAR in connection with the Services (the resulting amount of the difference between the
amounts set forth in the Advance Payment Notice in accordance with the preceding clause (i) and the remaining balance as set forth in clause (ii) of the foregoing sentence, the “Advance Payment Delta”).
Following the delivery of each Advance Payment Notice and to the extent the Advance Payment Delta set forth in such Advance Payment Notice is positive, AGP shall advance the undisputed amount of the Advance Payment Delta to TAR on or before the last
day of the month in which the applicable Advance Payment Notice is delivered. If AGP fails to pay any portion of an Advance Payment Delta when due, but specifically subject to AGP’s rights in Section 3.7, such unpaid
portion of the Advance Payment Delta shall bear interest as provided under Section I.3.B. of the Accounting Procedure until paid. 

3.5.    Payments on Non-Business Days. Any payment due on a
date that is not a Business Day shall be made on the next succeeding Business Day. 
 3.6.    Audit
Rights. TAR shall, for a period of two years after the end of the calendar year in which such Services were provided (the “Audit Period”), maintain records and other evidence sufficient to accurately and properly reflect the
performance of the Services and each Monthly Net Revenue Statement. During the Audit Period, TAR shall provide AGP and its representatives, advisers and consultants with access, during normal business hours upon at least five (5) days prior
written notice, to examine and obtain copies of such records for the purpose of auditing any Services or the calculations and amounts shown on any Monthly Net Revenue Statement. Any such audits performed by or on behalf of AGP will be at AGP’s
sole cost and expense. The Parties agree to diligently work together in good faith to resolve and settle any dispute or discrepancy as is identified by any audit conducted pursuant to this Section 3.6. 

3.7.    Disputed Charges. 

(a)    Without limiting Section 3.6, if AGP disputes, in good faith, all or any portion of
TAR’s calculation of the Service Consideration and/or Property Costs set forth in any Monthly Net Revenue Statement or TAR’s calculation of any amounts set forth in an Advance Payment Notice, AGP may deliver written notice of such dispute
to TAR prior to the applicable Service Consideration Payment Date or payment date for any applicable Advance Payment Delta, setting forth in reasonable detail a description of the dispute in question, including the reasons therefor. AGP shall pay to
TAR all Service Consideration amounts and any Advance Payment Delta other than those amounts that are the subject of a dispute notice delivered pursuant to this Section 3.7 by AGP in good faith, in accordance with the terms
of this Agreement. Upon determination by the Parties (or otherwise pursuant to Section 3.7(b)) of the proper amount payable with respect to 

  
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the disputed Service Consideration, Advance Payment Delta or Property Costs, the owing Party shall promptly (but in any event within five (5) Business Days after the date of determination)
pay the owed Party the final agreed amount of such disputed Service Consideration, Advance Payment Delta or Property Cost (or other payment with respect thereto). 

(b)    In the event that the Parties cannot reach agreement with respect to any disputed amount within thirty
(30) days after the receipt by TAR of AGP’s dispute notice pursuant to Section 3.7(a), each of the Parties shall have the option, exercisable no later than thirty (30) days after the end of such thirty
(30) day period, refer the dispute to one of the “Big 4” nationally recognized accounting firms that is mutually acceptable to both Parties (the “Accounting Arbitrator”) for review and final determination by
arbitration. If the Parties have not agreed upon the Accounting Arbitrator within thirty (30) days, either Party may formally apply to the Dallas, Texas office of the American Arbitration Association to choose the Accounting Arbitrator from
among the “Big 4” nationally recognized accounting firms. The Accounting Arbitrator shall not have worked as a consultant or contractor for any Party during the five (5) year period preceding the arbitration or have any financial
interest in the dispute. The Accounting Arbitrator shall conduct the arbitration proceedings in Houston, Texas in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Accounting Arbitrator’s
determination shall be made within thirty (30) days after submission of the matters in dispute and shall be final and binding on all Parties, without right of appeal. In determining the proper amount of any item in dispute, the Accounting
Arbitrator shall be bound by the terms of this Agreement and may not award an amount for any item in dispute that is more than the amount claimed by TAR or less than the amount claimed by AGP. The Accounting Arbitrator shall act as an expert for the
limited purpose of determining the validity and amount of any disputed Service Consideration amount, Advance Payment Delta amount or Property Cost and may not award interest, damages or penalties to any Party with respect to any matter. Each Party
shall bear its own legal fees and other costs of presenting its case and shall bear one-half of the costs and expenses of the Accounting Arbitrator. 

3.8.    Access. 

(a)    During the Term, the TAR Indemnified Parties shall have the right to access all well pads and any facilities
relating to any oil and gas wells on the Properties (collectively, the “Well Site”) during normal business hours; provided, however, that the TAR Indemnified Parties shall comply with all of AGP’s and its
Affiliates’ health, safety, security and environmental rules at all times while on the Well Site. 
 (b)    During
the Term, the AGP Indemnified Parties shall have the right to access all portions of the Infrastructure during normal business hours; provided, however, that the AGP Indemnified Parties shall comply with all of TAR’s and its
Affiliates’ health, safety, security and environmental rules in place with respect to the ownership or operation of the Infrastructure at all times while accessing the Infrastructure. 

3.9.    Books and Records. TAR shall keep accurate books and records of all reports, expenditures,
operations and transactions relating to the Services, which books and records shall be available for review by AGP during regular business hours of TAR upon reasonable advance request during the Term. 

  
 11 

 ARTICLE IV 

OTHER AGREEMENTS 

4.1.    Status as a Contractor. The Parties expressly agree that in rendering the Services in the
fulfillment of the terms and obligations of this Agreement, TAR and any contractors, subcontractors, vendors or other Third Parties hired by TAR will each be an “independent contractor,” and nothing in this Agreement is intended and
nothing will be construed to create an agency, employer/employee, partnership, joint venture or other similar relationship between TAR or any such Third Party and AGP or any of its respective Affiliates. TAR shall not, and this Agreement does not
provide TAR with any power to, create any obligations, express or implied, on behalf of AGP. In carrying out its obligations under this Agreement, subject to Section 1.2, TAR will have the authority and responsibility to
elect the means, manner and method of performing the Services to be provided by, or on behalf of, AGP. Nothing stated in this Agreement shall operate to create any special or fiduciary duty between the Parties. Except for the Service Consideration
and as otherwise expressly agreed in writing by AGP, TAR shall, at its own expense and cost, and at no charge to AGP, furnish all labor, materials, equipment, insurance, supplies, training and/or other goods and services necessary for the
performance of TAR’s obligations under this Agreement. TAR shall pay all applicable taxes with respect to the Service Consideration and any other amounts received by TAR as consideration for its performance of the Services. 

4.2.    Force Majeure. Neither Party shall be liable for any default or delay in the performance of
any obligations under this Agreement (other than the obligation to pay money due hereunder) if such default or delay is due to any cause beyond the reasonable control of such Party and which, by the exercise of due diligence, such Party is not able
to avoid, including fire, flood, earthquake, elements of nature or acts of God, pandemic, power or equipment failure, acts of war, terrorism, riots, civil disorders, strikes, lockouts or labor disruptions (each, a “Force Majeure
Event”); provided, however, that the effects of the COVID-19 pandemic shall only be considered a Force Majeure Event applicable to TAR to the extent the Properties are affected in the
same manner as the oil and gas properties owned by TAR or its Affiliates, and TAR or its Affiliates take (or omits to take) the same action(s) with respect to the Properties and Services so affected as it takes (or omits to take) with respect to the
oil and gas properties owned by TAR or its Affiliates. The Party claiming excuse from its obligations hereunder due to a Force Majeure Event shall (a) use commercially reasonable efforts to remedy such Force Majeure Event as promptly as
practicable, (b) give prompt written notice to the other Party of any such Force Majeure Event and (c) fully inform the other Party of the nature of the delay and the expected duration and consequences thereof. Upon the delivery of notice
a Force Majeure Event, the Party delivering such notice will be excused from performance of its obligations under this Agreement to the extent affected by such Force Majeure Event for so long as such circumstances prevail. Notwithstanding anything
herein to the contrary, the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty and the requirement that any Force Majeure Event shall be remedied with all commercially reasonable dispatch
shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such is deemed inadvisable by the Party involved. 

4.3.    TAR Employee Benefits. The TAR Indemnified Parties (including their respective personnel)
will not be, and will not claim to be, eligible to participate in, or receive benefits under, any employee benefit plans, arrangements or policies of AGP or its Affiliates 

  
 12 

 
including any plan, arrangement or policy providing bonus, vacation, stock options, stock purchase, sick leave, disability, health or life insurance, 401(k), retirement, profit sharing or similar
benefits for AGP’s employees (collectively, “Benefit Plans”). If any TAR Indemnified Party is later determined to have been a common-law employee or employee of AGP or its Affiliates for any purpose, such TAR Indemnified Party
nevertheless will not be entitled to participate in, or receive benefits under, any Benefit Plan. As between the Parties, such TAR Indemnified Party will be responsible for the payment of all compensation and benefits to be paid to or for the
benefit of TAR’s or its Affiliates’ employees, consultants or contractors providing the Services. No TAR Indemnified Party shall seek, and TAR shall cause its insurers and underwriters not to seek, any contribution or indemnity from AGP
for any compensation benefits paid or payable by any TAR Indemnified Party and its insurers and underwriters. 
 ARTICLE V 

LIMITATION OF LIABILITY AND INDEMNIFICATION 

5.1.    Indemnification by TAR. Notwithstanding anything herein to the
contrary, TAR, on behalf of itself and its Affiliates, hereby agrees to indemnify, defend and hold harmless AGP and its Affiliates and their respective employees, members, partners, managers, directors, officers, contractors, subcontractors,
consultants, agents and other representatives (collectively, the “AGP Indemnified Parties”) from and against any and all claims, causes of action, losses, demands, costs, expenses, penalties or liabilities, including reasonable
attorneys’ fees (collectively, “Losses”) resulting from or arising from any TAR Indemnified Party’s fraud, gross negligence or willful misconduct in connection with the performance of the Services, in each case, REGARDLESS
OF WHETHER SUCH LOSSES ARE A RESULT OF OR CAUSED BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF AN AGP INDEMNIFIED PARTY, EXCEPT TO THE EXTENT SUCH LOSSES RESULT FROM THE FRAUD, GROSS NEGLIGENCE OR THE WILLFUL
MISCONDUCT OF AN AGP INDEMNIFIED PARTY. 
 5.2.    Indemnification by
AGP. Notwithstanding anything herein to the contrary, AGP, on behalf of itself and its Affiliates, hereby agrees to indemnify, defend and hold harmless TAR and its Affiliates and their respective employees, members, partners,
managers, directors, officers, contractors, subcontractors, consultants, agents and other representatives (collectively, the “TAR Indemnified Parties”) from and against any and all Losses resulting from, in connection with or
arising from the TAR Indemnified Parties’ performance of the Services, except to the extent arising from any TAR Indemnified Party’s fraud, gross negligence or willful misconduct in connection with the performance of the Services, in each
case, REGARDLESS OF WHETHER SUCH LOSSES ARE A RESULT OF OR CAUSED BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF A TAR INDEMNIFIED PARTY, EXCEPT TO THE EXTENT SUCH LOSSES RESULT FROM THE FRAUD, GROSS NEGLIGENCE OR
THE WILLFUL MISCONDUCT OF A TAR INDEMNIFIED PARTY. 
 5.3.    Waiver of Certain Damages. NOTWITHSTANDING ANY
TERM OR PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO ANY TAR INDEMNIFIED PARTY OR AGP INDEMNIFIED PARTY, AS APPLICABLE, FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR
SIMILAR 

  
 13 

 
DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, EXCEPT TO THE EXTENT ANY SUCH PERSON WAS ACTUALLY REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A CLAIM AND SUCH DAMAGES
ARE OTHERWISE COVERED BY THE INDEMNITIES CONTAINED IN SECTION 5.1 OR SECTION 5.2, AS APPLICABLE, IN WHICH EVENT SUCH DAMAGES SHALL BE RECOVERABLE HEREUNDER. 

5.4.    Third Party Infrastructure Claims. Subject to the indemnification provisions of
Section 5.1, any and all Losses arising from any demand, claim, action, suit, legal proceeding (whether at law or in equity) or arbitration by a Third Party against any AGP Indemnified Party or TAR Indemnified Party (or for
which AGP and TAR are obligated to indemnify against pursuant to Section 5.1 or Section 5.2, as applicable), in each case, in their capacity as an owner of the Infrastructure, and arising out of or
resulting from the ownership, condition or operation of the Infrastructure or any part thereof shall be (after application thereto of any insurance coverage or proceeds) borne by AGP and TAR in proportion to their respective Infrastructure Ownership
Percentages at the time of such Loss. 
 ARTICLE VI 

MISCELLANEOUS 

6.1.    Notices. All notices required or permitted by this Agreement, except where otherwise
specified, shall be in writing and shall be delivered personally, or sent by bonded overnight courier, or mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent by electronic mail
(provided, that any such electronic mail is confirmed either orally or by written confirmation), addressed, in each case, as follows: 
  

			
	If to AGP:	  	 Atlas Energy Group, LLC
 6387B Camp Bowie
Blvd #341
 Fort Worth, TX 76116
 Attention: Christopher Walker,
Chief Operating Officer
 Email: cwalker@atlasenergy.com
  

and
  

Atlas Energy Group, LLC
 2400 Market Street, Suite 246

Philadelphia, PA 19103
 Attention: Jeffrey Slotterback

Email: jslotterback@phicapadvisors.com

		
	If to TAR:	  	 Texas American Resource II, LLC
 201 West 5th
Street, Suite 1300
 Austin, Texas 78701
 Attention: David R.
Cape
 Email: dcape@texasarc.com
 Telephone No. 512-482-4444

  
 14 

 Any notice given in accordance herewith shall be deemed to have been given when (a) delivered to the
addressee in person or by courier, (b) transmitted by electronic mail during regular business hours, or if transmitted after regular business hours, on the next Business Day, in each case, provided the receipt of such transmission is confirmed
by the recipient, or (c) upon actual receipt by the addressee after such notice has either been delivered to an overnight courier or deposited in the United States Mail if received during regular business hours, or if not received during
regular business hours, then on the next Business Day, as the case may be. Either Party may, from time to time, change the address to which notice shall be given by notifying the other Party of such change of address in the manner provided in this
Section 6.1. 
 6.2.    Entire Agreement; Schedules and
Exhibits. This Agreement constitutes the entire, complete and exclusive agreement and understanding of the Parties in respect of its respective subject matters and expressly supersedes all prior understandings, agreements or representations
by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. The provisions of this Agreement may not be explained, supplemented or qualified through evidence of
trade usage or a prior course of dealings. In entering into this Agreement, neither Party has relied upon a statement, representation, warranty or agreement of the other Party except for those expressly contained in this Agreement. All Schedules and
Exhibits referred to herein are made a part of this Agreement and incorporated herein by reference. 

6.3.    Use of Information. To the extent personnel of either Party are connected to or
otherwise have access to any existing hardware or server owned by the other Party, or the information contained therein, each Party hereby agrees that such Party will not utilize, convert, damage or otherwise take advantage of such access for any
purpose outside this Agreement. 
 6.4.    Confidentiality. To the extent either
Party receives or has access to any proprietary information of the other (the “Recipient”), including any information related to well data, production data and other commercially or operationally sensitive information relating to
either Party, the Properties or the Infrastructure, such information shall be considered “Confidential Information” hereunder, and each Party, on behalf of itself and its Affiliates, employees, directors, officers, contractors,
consultants, agents and other representatives, hereby agrees to keep confidential all such Confidential Information strictly confidential during the Term and for a period of two (2) years following the end of the Term to any Person that is not
a Party, except: 
 (a)    to the extent such Confidential Information is requested or required to be furnished
(i) in compliance with applicable Law, or pursuant to any legal proceedings or because of any order of any court, regulatory body or other governmental authority that is binding upon a Party (ii) in connection with any prospective purchase
by a Third Party of all or any portion of the Properties or the Infrastructure, (iii) in connection with any prospective or actual purchase by a Third Party of any equity interests of either Party, (iv) to any prospective or actual sources
of financing or capital, or (v) to any member, manager, officer, director or other Person having an ownership or managerial interest in either Party; 

(b)    to prospective or actual attorneys or accountants engaged by AGP or TAR where disclosure of such Confidential
Information is appropriate or essential to such attorney’s or accountant’s work for AGP or TAR, as applicable; 

  
 15 

 (c)    to any Third Party contractor or consultant of the AGP where
disclosure of such Confidential Information is appropriate or essential to such contractor’s or consultant’s work for the AGP; and 

(d)    to TAR’s employees, contractors and subcontractors in the ordinary course in connection with performing the
Services; 
 Notwithstanding the foregoing, (i) “Confidential Information” shall not include any information that: (A) was
publicly known at the time of disclosure to a Recipient, or has become publicly known through no act of a Recipient or its representatives or contractors in breach of this Section 6.4, (B) was rightfully received by such
Recipient from a Third Party without a duty of confidentiality or (C) was developed by such Recipient independently without any reliance on the Confidential Information, and (ii) any person or party receiving Confidential Information
pursuant to clauses (a) through (d) of this Section 6.4 shall be instructed to maintain in confidence the Confidential Information. 

6.5.    Publicity. Without prior written consent of the other Party (which consent is not to be
unreasonably withheld), neither Party will issue, or permit any agent or Affiliate to issue, any press releases or otherwise make, or cause any agent or Affiliate of it to make, any public statements with respect to this Agreement or the activities
contemplated hereby or thereby, except where such release or statement is deemed in good faith by the releasing Party to be required by Law or under the rules and regulations of a recognized stock exchange on which shares such Party or any of its
Affiliates are listed, and in any case, prior to making any such press release or public statement, the releasing Party shall provide a copy of the proposed press release or public statement to the other Party reasonably in advance of the proposed
release date as necessary to enable the non-releasing Party to provide comments on it; provided, that the non-releasing Party shall, in each case, respond with
any comments within three (3) Business Days after its receipt of such proposed press release. 

6.6.    Waiver. No waiver by either Party of any default, misrepresentation or breach
of warranty or covenant under this Agreement or course of dealing between the Parties, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant under this Agreement or affect in
any way any rights arising because of any prior or subsequent such occurrence. No single or partial exercise of any right or remedy under this Agreement precludes the simultaneous or subsequent exercise of any other right or remedy at law or equity.

 6.7.    Amendment. No amendment, modification, waiver replacement, rescission,
termination or cancellation of any provision of this Agreement will be valid, unless the same is in writing and signed by the Parties, and any such amendment, modification, waiver, rescission, termination or cancellation without the written consent
of each of the Parties shall be void ab initio. 
 6.8.    No Third-Party Beneficiary. Except as expressly provided in Section 5.1 and Section 5.2, the terms and provisions of
this Agreement are intended solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon
any other person or entity; provided, that only a Party will have the right to enforce the provisions of this Agreement on its own behalf or on behalf of any of the TAR Indemnified Parties or the AGP Indemnified Parties, as applicable (but
shall not be obligated to do so). 

  
 16 

 6.9.    Assignment; Binding Effect.
Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any Party without the prior express written consent of the other Party, and any attempt to do so will be void; provided, however, that,
notwithstanding the foregoing, AGP may freely assign this Agreement, to the extent relating to the Infrastructure, and transfer its rights, interests and obligations hereunder to a purchaser of all or substantially all of AGP’s interest in the
Infrastructure. Subject to this Section 6.9, this Agreement is binding upon, inures to the benefit of and is enforceable by the Parties and their respective successors and permitted assigns. 

6.10.    Further Assurances. In connection with this Agreement and the transactions contemplated
hereby, each Party shall execute and deliver all such future instruments and take such other and further action as may be reasonably necessary or appropriate to carry out the provisions of this Agreement and the intention of the Parties as expressed
herein. 
 6.11.    Headings; Construction. The Article and Section headings
contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring either Party because of the authorship of any provision of
this Agreement. The Parties will treat the words “include,” “includes” and “including” as if followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include
any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. All references to “$” or “dollars” shall be deemed references to U.S. dollars. Where
a date or time period is specified, it will be deemed inclusive of the last day in such period or the date specified, as the case may be. Unless expressly provided to the contrary, the word “or” is not exclusive. The words “this
Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The words “this
Article,” “this Section,” “this subsection,” “this clause,” and words of similar import, refer only to the Article, Section, subsection and clause hereof in which such words occur. References herein to any
Section or Article are references to a Section or Article of this Agreement unless the context clearly requires otherwise. 

6.12.    Severability. If any term or other provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable
in any respect under the Laws governing this Agreement, they shall take any reasonable actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by applicable Law and, to the extent
necessary, shall negotiate in good faith to amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties to
the greatest extent legally permissible. 

  
 17 

 6.13.    Counterparts. This Agreement
may be executed in two (2) or more counterparts, each of which the Parties will treat as an original but all of which together will constitute one and the same instrument. The signatures of all the Parties need not appear on the same
counterpart and delivery of an executed counterpart signature page of this Agreement (including by means of facsimile or email attaching a copy in portable document format (.pdf)) will be equally as effective as delivery of an original executed
counterpart of this Agreement in the presence of the other Party. This Agreement is effective on the delivery of one (1) executed counterpart from each Party to the other Party. 

6.14.    Governing Law. This Agreement, the obligations of the Parties
under this Agreement and all other matters arising out of or relating to this Agreement and the transactions it contemplates, will be governed by and construed in accordance with the Laws of the State of Texas, without giving effect to any conflicts
of law principles that would cause the laws of another jurisdiction to apply. Any dispute arising out of or relating to this Agreement which cannot be amicably resolved by the Parties, shall be brought in a federal or state court of competent
jurisdiction sitting in Harris County of the State of Texas and the Parties irrevocably submit to the jurisdiction of any such court solely for the purpose of any such suit, action or proceeding. EACH OF THE PARTIES WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 

6.15.    Prior Agreements. AGP and TAR acknowledge and agree that this
Agreement replaces and supersedes in their entirety the following agreements: (a) Second Amended and Restated Shared Acquisition and Operating Agreement effective as of January 1, 2016 among ARP Eagle Ford, LLC, AGP and Atlas Eagle Ford
Operating Company, LLC, as contract operator, and (b) Amended and Restated Contract Operating Agreement effective as of January 1, 2016 among ARP Eagle Ford, LLC, AGP and Atlas Eagle Ford Operating Company, LLC, as contract operator
(collectively, the “Existing Affiliate Operating Agreements”) and AGP shall take, or cause its Affiliates to take, such actions as necessary to cause the termination of the Existing Affiliate Operating Agreements. 

ARTICLE VII 
 CERTAIN
DEFINITIONS 
 7.1.    Certain Definitions. When used in this Agreement, the
following terms shall have the following meanings (other defined terms may be found elsewhere in this Agreement): 

(a)    “Affiliate” means, when used with respect to any Person, any other Person that,
directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person in question; provided, that, AGP and its Affiliates shall not be considered “Affiliates” of TAR for the purposes of this Agreement.

 (b)    “Business Day” means a day other than a Saturday, Sunday, or other day on which
commercial banks in the State of Texas are authorized or required to close for the general transaction of banking business. 

  
 18 

 (c)    “Control” means the ability to
direct the management and policies of a Person, directly or indirectly, through ownership of voting shares or other equity rights, pursuant to a written agreement, or otherwise. The terms “Controls” and
“Controlled by” and other derivatives shall be construed accordingly. 

(d)    “Governmental Authorities” means any federal, state, local or tribal governmental
authorities having jurisdiction over the Properties or the Infrastructure. 
 (e)    “Infrastructure”
means (i) all equipment, machinery, fixtures, spare parts, inventory, communications equipment, telemetry and production measurement equipment, and other personal property (including leasehold interests therein) used in connection with the
treatment, compression gathering, transportation, sale, or disposal of hydrocarbons produced from or attributable to the Properties or TAR’s and its Affiliates’ oil and gas assets located in the vicinity of the Properties (collectively,
the “Infrastructure Area Assets”), and any water, byproducts or waste produced therefrom or therewith or otherwise attributable thereto, (ii) all pumps, pumping units, flowlines, gathering systems, pipe, tanks, treatment
facilities, injection facilities, disposal facilities, compression facilities and other materials, supplies, buildings, trailers and offices used in connection with the Infrastructure Area Assets (but excluding Wellhead Equipment) and (iii) all
contracts and records to the extent related to the foregoing. 
 (f)    “Infrastructure Capital
Projects” means any construction, expansion, improvement, alteration, changes or significant repair activities of/to the Infrastructure. 

(g)    “Laws” means any and all laws, statutes, codes, ordinances, permits, licenses,
authorizations, agreements, decrees, writs, orders, awards, judgments, principles of common law, rules or regulations (including, for the avoidance of doubt, environmental laws), as well as legally binding guidance, that are promulgated, issued or
enacted by a Governmental Authority having jurisdiction. 
 (h)    “Person” means any
individual, group, partnership, corporation, limited liability company, trust or other entity, including Governmental Authorities. 

(i)    “Property Capital Expenditures” means (i) any capital expenditure pursuant to AFEs or an
agreed upon capital expenditure budget or projects for which work has already been commenced or committed and (ii) any capital expenditures reasonably necessary to address an Emergency. 

(j)    “Service Consideration” means (without duplication of any other amounts under this
Agreement, including any amounts advanced to TAR by AGP pursuant to this Agreement): (i) direct charges chargeable to the Properties pursuant to Section II of the Accounting Procedure (such charges, “Direct Charges”), (ii) overhead
chargeable to the Properties pursuant to Section III of the Accounting Procedure, (iii) in relation to the Property Operations only, a monthly administrative fee of $5,000 (which, for the avoidance of doubt, shall not be prorated for any
partial month) and (iv) the amount, if any, by which the Property Costs incurred during the month for which operations and Services are accounted for in a particular Monthly Net Revenue Statement exceed an amount equal to (A) the revenues
directly attributable to the Properties and Infrastructure during such month, plus (B) all amounts advanced to TAR by AGP with respect to such month (as well as any negative Advance Payment Delta amount associated with such month). 

  
 19 

 (k)    “Third Party” means, whether such term is
capitalized or not, a Person other than AGP and its Affiliates or TAR and its Affiliates. 
 (l)    “Wellhead
Equipment” means all wellhead equipment and other equipment and items primarily used in drilling, completing or operating any wells located on the Infrastructure Area Assets. 

[Signature Page Follows] 

  
 20 

 IN WITNESS WHEREOF, each Party has caused this Agreement to be executed
on its behalf, all as of the Effective Date. 
  

			
	ATLAS GROWTH EAGLE FORD, LLC
		
	By:	 	  

	Name:	 	Jeffrey Slotterback
	Title:	 	Chief Executive Officer

  
 Signature Page to
Contract Operating Agreement 

 
			
	TEXAS AMERICAN RESOURCES COMPANY

 
			
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 Signature Page to
Contract Operating Agreement 

 Exhibit A 

Properties 
 Attached. 

  
 Exhibit A 

 Exhibit B 

Infrastructure 
 Attached. 

  
 Exhibit B 

 Exhibit C 

COPAS Accounting Procedure 
 Attached. 

  
 Exhibit C​

Exhibit 10.1
KAIMANA HILA, Official Number: 1274135
AMENDMENT No. 1 to CONSOLIDATED AGREEMENT
	

	

	

	​

	

	Matson Navigation Company, Inc.

	Name of Shipowner

	555 12th Street
	    
	MA -14454
	[MATNAV 0002]

	Street Address for Notices
	​
	Contract No.
	FFB Note Identifier No.

	Oakland
	California
	94607
	​
	Corporation

	City
	State
	Zip Code
	​
	Organizational Form (e.g., corporation, limited liability company, partnership)

	Treasurer
	​
	Hawaii

	Name of Contact Person to Receive Notices
	​
	Jurisdiction of Organization

	Email Address: bbowler@matson.com
	​
	June 22, 2020
	$139,584,000

	​
General Counsel
	​
	Second Closing Date
	Maximum Principal Amount of Guarantee

	Send Copies of Notices to
	​
	​
	​
	​

	Email Address: none
	​
	​
	​
	​

​
THIS AMENDMENT No. 1 to CONSOLIDATED AGREEMENT (this “Amendment”) is made as of the Closing Date set forth above (such Closing Date is the Second Closing Date, as defined in the Agreement hereinafter referred to) between THE UNITED STATES OF AMERICA (the “United States”), represented by the Maritime Administrator (the “Administrator”) of the Maritime Administration (“MARAD”), pursuant to Chapter 537 of Title 46 of the United States Code (“Chapter 537”), and the Shipowner named above (the “Shipowner”), an entity existing under the laws of the Jurisdiction of Organization in the Organizational Form both as stated above.  Capitalized terms used herein, unless otherwise noted, have the respective meanings set forth in Annex B.
RECITALS:
A.       On April 27, 2020, the Administrator, the Shipowner, and the Affiliate Guarantor entered into the Consolidated Agreement, Contract No. MA-14454 (the “Agreement”);
B.         As set forth in the Recitals to the Agreement, the Shipowner submitted an application to the Administrator for the Guarantee of obligations pursuant to Chapter 537 to finance a portion of the cost of constructing, reconstructing or reconditioning the Vessel and the Second Vessel;
C.         After review of such application, the Administrator made certain determinations and issued the Letter Commitment on the Letter Commitment Date;
D.        The Shipowner is the sole owner of the Second Vessel constructed pursuant to the Construction Contract with the Shipyard;
​

	Relating to Contract No. MA-14454
	Page 1

​

​

E.         To aid in the Financing of the Second Vessel, FFB, the Shipowner and the Administrator have executed and delivered the Second Vessel Note Purchase Agreement providing for the sale and delivery of the Second Vessel Note having the Stated Maturity Date and Approved Interest Rate to be determined with respect to each Advance as set forth on Annex A of this Amendment;
F.         As provided in the Agreement, pursuant to this Amendment, the Administrator is executing, and the Shipowner is accepting, the Commitment to Guarantee with respect to the Second Vessel Note in the maximum principal amount equal to the Applicable Guarantee Percentage of the Depreciated Actual Cost or the Actual Cost of the Second Vessel, as the case may be, on the Second Closing Date, set forth in Table A of Annex A to this Amendment;
G.        Pursuant to this Amendment, the Shipowner is issuing and delivering the Second Administrator’s Note to the Administrator on the date hereof;
H.        Pursuant to this Amendment, as security for the due and timely payment of the Second Administrator’s Note and for the issuance of the Guarantee, the Shipowner and the Administrator are executing and delivering an amendment to the first preferred fleet mortgage on the Vessel in the form of Annex F hereto to add the Second Vessel thereto, and amendments to the first preferred mortgages on the Existing Vessels (the “Amendments No. 1 to the Mortgages”), and granting a security interest to the Administrator in the Second Vessel Collateral, including without limitation the Chapter 537 Reserve Fund, the Late Charges Reserve Subfund, the No-Call Prepayment Fund and the Interest Escrow Fund;
I.          As further security for the due and timely payment of the Administrator’s Note and for the issuance of the Guarantee, (1) the Shipyard has executed and delivered the Consent of Shipyard to the assignment of the Construction Contract to the Administrator with respect to the Second Vessel; (2) the Affiliate Guarantor has executed and delivered this Amendment and Amendment No. 1 to the Affiliate Guaranty to the Administrator; and (3) the Shipowner has executed and delivered the Assignment of Construction Contract, the Assignment of Earnings and the Assignment of Insurances to the Administrator, all with respect to the Second Vessel;
J.          It is the intention of the parties that the security interests of the Administrator in the Second Vessel Collateral be perfected by: (1) the execution and delivery of this Amendment and Amendment No. 1 to the Mortgage; (2) the Administrator’s possession of the Chapter 537 Reserve Fund, the Late Charges Reserve Subfund, the No-Call Prepayment Fund and the Interest Escrow Fund in accounts at Treasury, and all other sums, moneys, securities and proceeds thereof; and (3) the filing of appropriate financing statements to record the Administrator’s security interests in the Second Vessel Collateral;
K.        Capitalized terms used herein have the meanings given to them in Annex B to the Agreement, as amended by Annex X to the Agreement, unless otherwise defined herein.
NOW, THEREFORE, under the provisions of Chapter 537, and in consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereby agree that this Amendment consists of this introduction, the provisions below, and signature page and the following attached parts, all of which together with the Agreement constitute the entire agreement of the Administrator and the Shipowner with respect to the subject matter hereof,
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superseding all prior written and oral agreements and understandings between the parties with respect to such subject matter:
	Annex A:   Information Specific to the Shipowner, the Affiliate Guarantor and the Second Vessel Guarantee Transaction
Annex B:     [See Agreement]
Annex C:     [See Agreement]
Annex D:     Disclosure Schedule
Annex E:     Form of Second Administrator’s Note
Annex F:     Form of Amendment No. 1 to First Preferred Fleet Mortgage
Annex G:     Form Assignment of Construction Contract
Annex H-1: Form of Consent of Shipyard
Annex H-2: [See Agreement]
	Annex I:       Form of Assignment of Earnings
Annex J:      Form of Assignment of Insurances
Annex K :    Form of Amendment No. 1 to Affiliate Guaranty
Annex L:      [See Agreement]
Annex M-1: [See Agreement]
Annex M-2: [See Agreement]
Annex N:     [See Agreement]
Annex O:     [See Agreement]
Annex P:     [See Agreement]
Annex X:     [See Agreement]

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In the event of any conflict or inconsistency between the provisions of this Amendment or Annex A of this Amendment (Information Specific to the Shipowner, the Affiliate Guarantor and the Second Vessel Guarantee Transaction) and the Agreement or Annex C (General Terms and Conditions), the provisions of the Agreement and of Annex A of this Amendment shall control.
ARTICLE I
Definitions
Section 1.01.  Definitions.  (a) Except as otherwise specified herein or as the context may otherwise require, from and after the Second Closing Date, the following terms have the respective meanings set forth below for all purposes of the Agreement:
“Administrator’s Note” means the Administrator’s Note as defined in the Agreement and includes the Second Administrator’s Note.
“Affiliate Guaranty Amendment” means Amendment No. 1, dated the date hereof, to the Affiliate Guaranty to the Administrator dated April 27, 2020.
“Amendment No. 1 to the Mortgage” means the Amendment and Supplement No. 1 to the First Preferred Fleet Mortgage dated April 16, 2020, which First Preferred Fleet Mortgage was recorded at Batch # 74980700, Doc. # 6.
“Collateral” includes the Collateral as defined in the Agreement and the Second Vessel Collateral, except that as used in Section 4.01 of the Agreement, the term Collateral does not include the Second Vessel Collateral.
“First Vessel” means the DANIEL K. INOUYE, Official Number 1274136.
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“Second Administrator’s Note” means the promissory note issued and delivered by the Shipowner to the Administrator, as originally executed, substantially in the form attached to this Amendment as Annex E, and as the same may be amended, modified, supplemented or endorsed, including any promissory note issued in substitution thereof.
“Second Vessel Collateral” has the meaning set forth in Section 5.01 (a) below.
“Second Vessel Note” means the Note issued by the Shipowner to FFB pursuant to the Second Vessel Note Purchase Agreement dated as of the date set forth in Annex A of this Amendment opposite such term.
“Second Vessel Note Purchase Agreement” means the Note Purchase Agreement among FFB, the Shipowner and the Administrator dated as of the date set forth in Annex A of this Amendment opposite such term.
“Second Vessel Note Purchase Document” means the Second Vessel Note, the Second Vessel Note Purchase Agreement and any other document executed in connection therewith, and “Second Vessel Note Purchase Documents” means all of such documents.
(b)  As provided in the Agreement, the term “Vessel” or “Vessels” as used in the Agreement includes the Second Vessel.
(c)  From and after the Second Closing Date, the terms “Note”, “Note Purchase Agreement” and “Note Purchase Documents” include, respectively, the “Second Vessel Note”, the “Second Vessel Note Purchase Agreement” and the “Second Vessel Note Purchase Documents.”
ARTICLE II
The Second Vessel Note
The Second Vessel Note shall be as provided in the Second Vessel Note Purchase Agreement and in the form of the Second Vessel Note annexed as Exhibit C to the Second Vessel Note Purchase Agreement, the proceeds of which shall be used for the Financing as set forth on Annex A of this Amendment.  The Second Vessel Note shall be subject to all of the terms and conditions set forth in the Second Vessel Note Purchase Agreement.
ARTICLE III
Commitment to Guarantee
SECTION 3.01. Commitment to Guarantee. The United States, represented by the Administrator, HEREBY COMMITS ITSELF TO GUARANTEE the payment of the unpaid interest on, and the unpaid balance of the principal of, the Second Vessel Note, including interest accruing between the date of default under the Second Vessel Note and the payment in full of the Guarantee, and, to effect this Commitment to Guarantee, hereby, subject to the terms and conditions hereof, commits itself to execute and deliver the Administrator’s Guarantee on the Second Closing Date.  The Shipowner hereby accepts this Commitment to Guarantee subject to the terms and conditions hereof.
SECTION 3.02.  Form of Guarantee.  The form of the Guarantee to be attached to the Second Vessel Note is as follows:
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“The United States of America, acting through the Maritime Administrator, Maritime Administration, U.S. Department of Transportation (the “Administrator”), hereby guarantees to the Federal Financing Bank, its successors and assigns (“FFB”), all payments of principal and interest, when and as due in accordance with the terms of the note dated on or about June 22, 2020, issued by Matson Navigation Company, Inc., (the “Borrower”) payable to FFB in the maximum principal amount of $139,584,000 to which this Administrator’s Guarantee is attached (such note being the “Note”), with interest on the principal until paid, irrespective of (i) acceleration of such payments under the terms of the Note, or (ii) receipt by the Administrator of any sums or property from its enforcement of its remedies for the Borrower’s default.
“This Administrator’s Guarantee is issued pursuant to Chapter 537 of Title 46 of the United States Code, Section 6 of the Federal Financing Bank Act of 1973 (12 U.S.C. § 2285), and the Note Purchase Agreement dated as of June 22, 2020, among FFB, the Borrower, and the Administrator.
UNITED STATES OF AMERICA
By:       _______________________________
Name: _______________________________
Title:    _______________________________
Date:   _______________________________”
Section 3.03.  Conditions to Guarantee the Second Vessel Note and Execution and Delivery of the Guarantee on the Second Vessel Note.  The obligation of the Administrator to execute and deliver the Guarantee on the Second Closing Date shall be subject to receipt by the Administrator of the following items on the Second Closing Date, or such other date specified herein, unless waived by the Administrator:
Transaction Documents
(a)        the Shipowner shall have executed and delivered to the Administrator this Amendment, the Second Administrator’s Note, Amendment No. 1 to the Mortgage, the Assignment of Construction Contract in the form of Annex G to this Amendment, the Assignment of Earnings in the form of Annex I to this Amendment, the Assignment of Insurance in the form of Annex J to this Amendment, an amendment to the First Preferred Ship Mortgage on each of the Existing Vessels, the Second Vessel Note, and the Second Vessel Note Purchase Agreement;
(b)        the Affiliate Guarantor shall have executed and delivered to the Administrator (1) this Amendment and (2) the Amendment No. 1 to the Affiliate Guaranty, and the Affiliate Guaranty as so amended shall be in full force and effect;
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(c)        the Shipowner and the Affiliate Guarantor shall have executed and delivered to the Administrator the declaration required by Section 1352 of Title 31 of the United States Code, as amended, and the Lobbying Disclosure Act of 1995, classified at 2 U.S.C. § 1601;
(d)        (1) the Shipowner and the Shipyard shall have executed and delivered to the Administrator the certificate described in Section 13.03(e) of the Agreement; and (2) the Shipyard shall have executed and delivered to the Administrator the Consent of Shipyard in the form of Annex H-1 hereto;
(e)        If the Administrator so requests, the Administrator shall have received a subordination in form and substance satisfactory to the Administrator with respect to all non-Chapter 537 debt of the Shipowner relating to the Vessels, if any, that has not been discharged, provided, however, it is agreed that any debt under the Existing Credit Agreement or under existing unsecured long term notes issued by the Affiliate Guarantor (in each case, including any guarantees thereof by Shipowner) does not constitute “debt of the Shipowner relating to the Vessels” for purposes hereof;
(f)        FFB shall have executed and delivered the Second Vessel Note Purchase Agreement in form and substance acceptable to the Administrator;
(g)        the Shipowner and Affiliate Guarantor each shall have delivered to the Administrator one or more Opinions of Counsel, which shall include, among other things, an opinion to the effect that: (1) by the terms of this Amendment, the Shipowner has granted to the Administrator a fully perfected, first priority security interest in each of the assets which constitutes the Second Vessel Collateral; and (2) all filings, recordings, notices and other actions required to perfect the Administrator's interests in the Second Vessel Collateral and to render such security interests valid and enforceable under applicable law have been duly effected, together with copies of such filings, such opinion to be substantially in the form of the opinions delivered on the Closing Date of the First Vessel;
(h)        the Administrator shall have received from the Shipowner: (i) two executed original counterparts of the Second Vessel Note Purchase Agreement; (ii) two copies of the Second Vessel Note; (iii) two executed originals of the legal opinions issued under Subsection (g) of this Section; (iv) two executed originals of the legal opinion delivered to FFB pursuant to the Second Vessel Note Purchase Agreement; and (v) two executed original counterparts of this Amendment, each of the Annexes hereto and all other documents executed and delivered by the Shipowner, the Affiliate Guarantor or FFB in connection with the Second Closing Date.
Vessel Documents
(i)         at least ten (10) days prior to the Second Closing Date, the Shipowner shall have provided the Administrator with satisfactory evidence of marine insurance as required by Section 11.10 of the Agreement, naming the Administrator as lender loss payee for Second Vessel’s hull & machinery coverage and as a co-assured to all liability coverage;
(j)         the Shipowner and any bareboat charterers of the Second Vessel shall have furnished to the Administrator an affidavit complying with the requirements of 46 CFR Part 355, demonstrating U.S. citizenship;
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(k)        at least ten (10) days prior to the Second Closing Date, the Shipowner shall have delivered to the Administrator (1) evidence that the Second Vessel is documented by the United States Coast Guard with a coastwise endorsement and (2) the United States Coast Guard certificates and evidence from the Classification Society that the Second Vessel is in class;
Financial Conditions
(l)         the Administrator shall have received at least ten (10) Business Days prior to the Second Closing Date (1) a detailed consolidated pro forma balance sheet for the Shipowner and its subsidiaries, certified by a Responsible Officer, including adequate disclosures in accordance with GAAP and showing, among other things, all non-Chapter 537 debt of Shipowner to the extent required to be disclosed in accordance with GAAP; and (2) a detailed consolidated pro forma balance sheet for the Affiliate Guarantor and its subsidiaries, certified by a Responsible Officer of the Affiliate Guarantor.  Each balance sheet described in this Subsection (l) shall be dated as of the Second Closing Date, reflect the completion of the Financing under Chapter 537, and demonstrate compliance with the Qualifying Financial Tests of Shipowner and the Qualifying Financial Tests of Affiliate Guarantor;
(m)       the Administrator shall have received the most recent annual Audited Financial Statements or quarterly Unaudited Financial Statements of Shipowner and the Affiliate Guarantor prepared in accordance with GAAP, each certified by a Responsible Officer of the Shipowner and the Affiliate Guarantor and showing, among other things, all non-Chapter 537 debt of the Shipowner and of the Affiliate Guarantor;
Second Closing Date Certifications
(n)      the Shipowner and Affiliate Guarantor, to the extent applicable, shall have executed and delivered to the Administrator an Officer’s Certificate representing and warranting that the following statements are true and correct in all material respects as of the Second Closing Date:
(1)        each of the representations and warranties set forth at Article X of the Agreement;
(2)        to such officer’s knowledge the Shipowner is not in violation of any Federal laws having a substantial adverse effect on the interests of the United States;
(3)        there have been no occurrences that would adversely and materially affect the condition of the Second Vessel, its hull or any of its component parts, or, in the event such occurrences exist, a detailed description of such occurrence, in which event the Administrator may take such action as it deems appropriate, including not issuing the Guarantee;
(4)        since the Closing Date, there have not been any materially adverse changes in the financial or legal condition of the Shipowner or the Affiliate Guarantor or in the economic conditions in the intended trade for the Second Vessel;
(5)        there are no Liens on the Second Vessel or its component parts, except Permitted Liens;
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(6)        no Default or event after any period of time or any notice, or both, would constitute, a Default has occurred;
(7)        the amount of Actual Cost Paid with respect to the Second Vessel is true and correct;
(8)        each item in the amount of Actual Cost Paid is properly included in the Actual Cost of the Second Vessel;
(9)        each of the Shipowner and the Affiliate Guarantor is in compliance with the Qualifying Financial Tests of Shipowner and the Qualifying Financial Tests of Affiliate Guarantor, respectively, in accordance with GAAP, as adjusted by 46 CFR § 298.13(d), and detailing such compliance; and
(10)     all non-Chapter 537 debt of the Shipowner relating to the Vessels has been discharged or subordinated in a manner satisfactory to the Administrator, provided, however, it is agreed that any debt under the Existing Credit Agreement or under existing unsecured long term notes issued by the Affiliate Guarantor (in each case, including any guarantees thereof by Shipowner) does not constitute “debt of the Shipowner relating to the Vessels” for purposes of the Agreement;
(o)        at least ten (10) days prior to the Closing Date, or such shorter period as the Administrator may agree, the Shipowner’s Accountant shall have provided a certification or other evidence satisfactory to the Administrator as to the amounts paid by the Shipowner with respect to Section 2.03(n) (7) and (8) of the Agreement with respect to the Second Vessel;
Fees and Deposits
(p)        the Administrator shall have received the Guarantee Fee payable under 46 U.S.C. §53714(b) and the Investigation Fee due under 46 U.S.C. §53713(a), either (i) by wire transfer or (ii) by a check of the Shipowner payable to the Administrator, such Guarantee Fee to be held by the Administrator in escrow until such time as the FFB makes the Initial Advance on the Second Vessel Note, whereupon it shall be released to the Administrator for deposit, provided that if the Initial Advance has not been made by the date that is 10 Business Days after the Second Closing Date, the Guarantee Fee previously received by the Administrator referenced in clause (i) above or the check referenced in clause (ii) above shall be promptly returned to the Shipowner;
(q)        the Shipowner shall have made (1) the Interest Escrow Fund Deposit, unless waived by the Administrator as indicated in Annex A of this Amendment, and (2) the Late Charges Reserve Subfund Deposit in the amount set forth in Annex A hereto;
Other Conditions
(r)        the Shipowner shall have complied in all material respects with its agreements under the Agreement and all other requirements of Chapter 537 and the applicable regulations, as determined in the sole judgment of the Administrator;
(s)        there have not been any occurrences which have or would adversely and materially affect the condition of the Second Vessel, its hull or any of its component parts, as determined in the sole judgment of the Administrator;
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(t)         there shall not have occurred a Default or event after any period of time or any notice, or both, which would constitute a Default;
(u)        all documentation and legal opinions relating to the transactions contemplated by this Amendment and the Second Vessel Note Purchase Agreement shall be in form and substance satisfactory to the Administrator and all security interests in the Second Vessel Collateral shall be fully perfected and of first priority as of the Second Closing Date;
(v)        since the Closing Date, there have not been any materially adverse changes in the financial or legal condition of the Shipowner or the Affiliate Guarantor or in the economic conditions in the intended trade for the Second Vessel, each as determined in the sole judgment of the Administrator;
(w)       the Second Closing Date shall have occurred by June 28, 2020;
(x)        A copy certified by the Shipowner of resolutions adopted by the Shipowner authorizing the execution, delivery, and performance of the transactions contemplated by this Amendment;
(y)        The Shipowner shall have complied with the requirements of Section 13.03 of the Agreement with respect to the Second Vessel.
ARTICLE IV
The Second Administrator’s Note
SECTION 4.01. Second Administrator’s Note.  On the Second Closing Date, the Shipowner has duly executed and delivered, and the Administrator has accepted, the Second Administrator’s Note in an amount equal to the Maximum Principal Amount of the Second Vessel Note. The Second Administrator’s Note, and any endorsement thereof executed and delivered to the Administrator in accordance with Section 12.01(h) or otherwise shall be secured by the Agreement, the Mortgage as amended by Amendment No. 1 to the Mortgage, and the other Transaction Documents.
ARTICLE V
Security Agreement
SECTION 5.01.  Granting Clause.  (a) In order to secure the payment and performance of the obligations of the Shipowner under the Agreement and the other Transaction Documents to which it is a party, the Shipowner does hereby grant, sell, convey, assign, transfer, mortgage, pledge, set over and confirm unto the Administrator a first priority continuing security interest in, Lien on and right of setoff against, all of the right, title and interest of the Shipowner in and to all of the following, whether now owned or existing or hereafter arising or acquired:
(1)        the Construction Contract and the Rights Under the Construction Contract and Related Contracts with respect to the Second Vessel;
(2)        Moneys Due to Shipowner with Respect to the Construction of the Second Vessel;
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(3)       the Second Vessel and each Existing Vessel and all Goods, including, without limitation, Accessions, fuel, Equipment, and Inventory, and all Accounts, including, without limitation, any bareboat charters, time charters, charter hire, voyage or other charters except slot charters, earnings, affreightments, and all Commercial Tort Claims described on the Disclosure Schedule or notified to the Administrator pursuant to Section 11.04 (all terms are defined as set forth in Annex B of the Agreement or in the UCC as applicable) in each case only to the extent the same appertain or relate solely to the Second Vessel or Existing Vessels or their operation, whether or not on board or ashore and not covered by the Mortgage, and further provided that shipping containers and Goods that are not specifically identified exclusively for use on one of the Second Vessel or Existing Vessels are not included in this grant;
(4)        the Late Charges Reserve Subfund and all sums, moneys, securities and proceeds of the Late Charges Reserve Subfund currently on deposit or hereafter deposited in said account, including, without limitation, Financial Assets;
(5)        the Chapter 537 Reserve Fund and all sums, moneys, securities and proceeds of the Chapter 537 Reserve Fund currently on deposit or hereafter deposited in said account, including, without limitation, Financial Assets;
(6)        the Interest Escrow Fund and all sums, moneys, securities and proceeds of the Interest Escrow Fund currently on deposit or hereafter deposited in said account, including, without limitation, Financial Assets;
(7)        the No-Call Prepayment Fund and all sums, moneys, securities and proceeds of the No-Call Prepayment Fund hereafter deposited in said fund, including, without limitation, the No-Call Prepayment Collateral;
(8)        all policies and contracts of insurance solely to the extent the same relate to the Second Vessel, including, without limitation, the Shipowner’s rights under all entries in any protection and indemnity or war risks associations or clubs, which are from time to time taken out by or for the Shipowner in respect of the Second Vessel, their hull, machinery, freights, disbursements, profits or otherwise, and all the benefits thereof and all other rights of the Shipowner in respect thereof, including, without limitation, all claims of whatsoever nature including without limitation any general  average claims or loss of hire claims, as well as return premium; and
(9)       all cash and non-cash Products and Proceeds of the collateral described in Clauses (1) through (8) of this Section 5.01 (a).
The Administrator shall have, upon execution and delivery of Amendment No. 1 to the Mortgage, as further security, certain right, title and interest in and to the Mortgage, to be executed and delivered by the Shipowner to the Administrator, as mortgagee, on the date hereof, covering the Second Vessel.
(b)        The Shipowner’s right, title and interest in each of the assets and property described in Section 5.01 (a) of this Amendment are herein, collectively, called the "Second Vessel Collateral."  The Administrator shall hold the Second Vessel Collateral as collateral security for all of the obligations and liabilities of the Shipowner under the Agreement, the Administrator's
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Notes, the Mortgage and the other Transaction Documents and as collateral security, whether now made or hereafter entered into, for and with respect to the Guarantees.
ARTICLE VI
Insurance
SECTION 6.01.  Insurance.  From and after the Second Closing Date and at all times thereafter, the Shipowner shall, without cost to the Administrator, keep the Second Vessel insured in accordance with Section 11.10 (b) of the Agreement.
ARTICLE VII
Discharge of Agreement
SECTION 7.01.  Discharge of Agreement; Partial Discharge.  Section 16.01 of the Agreement is hereby amended to read in its entirety as follows:
“Except as set forth in Section 5.03 of the Agreement with respect to a release of Lien on the Interest Escrow Fund, if either the Note or the Second Vessel Note and the related Administrator's Note shall have been satisfied and discharged, and if the Shipowner shall pay or cause to be paid all other sums that may have become secured under this Agreement and the other Transaction Documents with respect thereto, then with respect to such Note and the related Administrator’s Note this Agreement and the Liens, estate and rights and interests hereby and thereby granted, shall cease, terminate, and become null and void, and the Administrator, on the Shipowner’s Request and at the Shipowner's cost and expense, shall forthwith cause satisfaction and discharge and duly acknowledge such satisfaction and discharge of this Agreement to be entered upon its and other appropriate records, and shall execute and deliver to the Shipowner such instruments as may be necessary, and forthwith the estate, right, title and interest of the Administrator in and to the Collateral related to such Note and the related Administrator’s Note, and any other securities, cash, and any other property held by it under this Agreement, shall thereupon cease, determine and become null and void, and the Administrator shall transfer, deliver and pay the same to the Shipowner.”
ARTICLE VIII
Miscellaneous
SECTION 8.01.  Interpretation; Execution in Counterparts; Effectiveness.  This Amendment is executed as and shall constitute and be construed with and as part of the Agreement and may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Amendment shall become effective when it shall have been executed by the Administrator and when the Administrator shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.
(SIGNATURE PAGE ON FOLLOWING PAGE)
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized representatives of the parties hereto as of the Second Closing Date.
	

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	(SEAL) 
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	SHIPOWNER

	Attest:
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	By:
	/s/ Rachel C. Lee
	​
	By:
	/s/ Joel M. Wine

	Name:
	Rachel C. Lee
	​
	Name:
	Joel M. Wine

	Title:
	Assistant Secretary
	​
	Title:
	Senior Vice President and Chief Financial Officer

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	(SEAL)
Attest:
​
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	UNITED STATES OF AMERICA,
MARITIME ADMINISTRATOR
​

	By:
	/s/ Michael C. Pucci
	​
	By:
	/s/ T. Mitchell Hudson, Jr.

	Name:
	Michael C. Pucci
	​
	Name:
	T. Mitchell Hudson, Jr.

	Title:
	Assistant Secretary, Maritime Administration
	​
	Title:
	Secretary, Maritime Administration

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This Amendment has been duly executed and delivered by the duly authorized representatives of the Affiliate Guarantor as of the Second Closing Date solely to indicate the Affiliate Guarantor’s agreement to be bound by the provisions of this Amendment to the extent applicable to the Affiliate Guarantor as provided in the Agreement.
	

	

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	(SEAL)
Attest:
​
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	AFFILIATE GUARANTOR

	By:
	/s/ Rachel C. Lee
	​
	By:
	/s/ Joel M. Wine

	Name:
	Rachel C. Lee
	​
	Name:
	Joel M. Wine

	Title:
	Corporate Secretary
	​
	Title:
	Senior Vice President and Chief Financial Officer

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ANNEX A
INFORMATION SPECIFIC TO THE SHIPOWNER, THE AFFILIATE GUARANTOR AND THE SECOND VESSEL GUARANTEE TRANSACTION
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	Actual Cost (See Section 8.01 of Annex C of the Agreement):
	$210,797,012
(See Table A below for Calculation and Itemization)
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	Administrator’s Address for Notices:
	MARITIME ADMINISTRATOR
Maritime Administration
1200 New Jersey Avenue, S.E.
Washington, D.C. 20590
ATTN: Office of Marine Financing
Telephone Number:  (202) 366-5737
Email Address: marinefinancing@dot.gov
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	Affiliate Guarantor(s):
	Name: Matson, Inc.
Organizational Form: Corporation
Jurisdiction of Organization: Hawaii
□ None

	Affiliate Guarantor(s)’ Address for Notices: 
	Street Address:  555 12th Street, Oakland, CA  94607
Name of Contact: Treasurer
Telephone Number:  (510) 628-4000
Email Address: bbowler@matson.com
With a copy to:
Street Address:  555 12th Street, Oakland, CA  94607
Name of Contact: General Counsel
Telephone Number:
Email Address:
□ Not Applicable

	Aggregate Original Equity Investment (See Section 6.04 of Annex C of the Agreement):
	Name of Vessels/Aggregate Original Equity Investment:
KAIMANA HILA: $71,213,012
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	Amount of the Administrator’s Guarantee (See Section 2.01 of Annex C of the Agreement):
	$139,584,000, plus an additional amount as the Administrator or the Deputy Maritime Administrator may approve, up to, but not exceeding, 10% of the Actual Cost or Depreciated Actual Cost (plus interest to the date of payment)

	Amount of Administrator’s Note (See Section 3.01 of Annex C and Annex E of the Agreement):
	$139,584,000, plus an additional amount as the Administrator or the Deputy Maritime Administrator may approve, up to, but not exceeding, 10% of the Actual Cost or Depreciated Actual Cost

	Applicable Guarantee Percentage:
	X Not more than 77.5 % of the Depreciated Actual Cost or the Actual Cost of both Vessels
□ Not more than 87.5 % of the Depreciated Actual Cost or the Actual Cost of the Vessels
(See Table A of Annex A below for itemization and calculation)

	Application Date (See Recital E of Introduction of the Agreement):
	September 25, 2014 and amended as of August 11, 2016 

	Approved Interest Rate (See Section 14.02 of Annex C and Annex E of the Agreement):
	For each deemed Advance under the Administrator’s Note, the basic interest rate per annum applicable to the corresponding Advance under the Note plus, in the event the Shipowner elects a Par Prepayment/Refinancing Privilege with respect to such Advance under such Note, a fee (expressed in terms of a basis point incremental to the applicable interest rate) determined by FFB on the basis set forth in the Note.

	Charter Hire and Rent Limitation (See Section 12.02(i) of Annex C of the Agreement):
	6% of Consolidated Revenue (calculated in accordance with GAAP) for such fiscal year.

	Construction Contract (See Section 2.03(a) and other Sections of Annex C of the Agreement):
	With respect to the Vessel KAIMANA HILA: Shipbuilding Contract made as of November 6, 2013, between the Shipyard and the Shipowner, for the construction of one Aloha Class containership, Hull No. 30

	Depreciated Actual Cost (See Table A of Annex A to this Amendment):
	$201,277,564

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	Annex A (Information Specific to the Shipowner and the Second Vessel Guarantee Transaction)
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	(See Table A below for Calculation and Itemization)
□ Not Applicable

	FFB Address for Notices:
	Federal Financing Bank
Main Treasury Building
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Attention: Chief Financial Officer
Telephone Number: (202) 622-2470
Facsimile Number: (202) 622-0707

	Financial Information of Affiliate Guarantors on Closing Date (See Section 13.02 of Annex C of the Agreement) 
	i)    Working Capital $N/A
ii)   Net Worth $799.5 million
iii)  Long Term Debt to Net Worth N/A
iv)  Consolidated Leverage Ratio 3.44

	Financial Information of Shipowner on Closing Date (See Section 13.01 of Annex C of the Agreement) 
	i)   Working Capital $0.1 million
ii)  Net Worth $1,298.8 million
iii) Long Term Debt to Net Worth 0.79:1.00

	Financing (See Article I of Annex C of the Agreement): 
	X Mortgage Period Financing
□ Construction Period Financing

	First Principal Payment Date (See Annex E of this Amendment):
	March 15, 2021

	Foreign Item Waivers (See Table A of Annex A of this Amendment):
	X Specify: $54,687,590
□ None

	Governing Law State (See Section 18.10(a) of Annex C of the Agreement):
	California law to be applied absent applicable federal law, including federal common law

	Guarantee Fee (See Section 2.03(p) of Annex C of the Agreement):
	$6,655,785
X Shipowner Elects to Include Guarantee Fee as Item of Actual Cost of Vessels

	Insurance Requirements (See Section 11.10(e) of Annex C of the Agreement):
	Oil pollution liability subject to a sub-limit of $1 billion any one accident or occurrence. P&I War Risk Clause $500 million. Contractual extension, through transport extension and cargo deviation $5m combined single limit.

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	Interest Escrow Fund Deposit (See Sections 2.03(q) and 5.01 of Annex C of the Agreement):
	□ Six Months Interest Payment of $_____________
X Waived

	Investigation Fee (See Section 2.03(p) of Annex C of the Agreement):
​
	$446,773, less the $5,000 filing fee and $102,421 paid for conducting an external review, equal to a total net amount of $339,352

	Jurisdiction State/City (See Section 18.10(b) of Annex C of the Agreement):
	Washington, D.C. 

	Late Charges Reserve Subfund Deposit (See Section 6.09 of Annex C of the Agreement):
	$10,000

	Letter Commitment Date (See Recital H of Introduction of the Agreement):
	March 23, 2020

	Mandatory Progress Prepayment Amount (See Section 3.02 of Annex C of the Agreement):
	□ ____% of Reserve Fund Net Income over Mandatory Progress Prepayment Threshold
X Not Applicable

	Mandatory Progress Prepayment Threshold (See Section 3.02 of Annex C of the Agreement)
	□ Reserve Fund Net Income > $_______
X Not Applicable

	Maximum Payment Amount of Losses Directly to Shipowner (See Section 11.10(c) of Annex C of the Agreement): 
	$2,500,000

	Maximum Self-Insurance Amount (See Section 11.10(b)(4) and 11.10(e) of Annex C of the Agreement): 
	$2,500,000

	Second Vessel Note (See Article II of this Amendment): 
	The future advance promissory note of Shipowner to FFB in the Maximum Principal Amount of $139,584,000
Note Identifier: [MATNAV 0002]

	Second Vessel Note Purchase Agreement (See Article II of this Amendment):
	Date: June 22, 2020.

	Payment Dates:
	X Semi Annual Payment Dates: March 15th and September 15th of each year; or

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	Page 4

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	□ Quarterly Payment Dates: _______, _______, ________ and ______ of each year

	Qualifying Financial Tests of Affiliate Guarantor(s) (See Section 13.02 of Annex C of the Agreement): 
	(i) Net Worth ≥ 90% of amount shown on the Affiliate Guarantor’s Audited Financial Statements that are most recent prior to the Closing Date
(ii) Comply with the Maximum Consolidated Leverage Ratio Covenant set forth in the Existing Credit Agreement
(iii) Other: N/A
□ None

	Qualifying Financial Tests of Shipowner (See Section 13.01 of Annex C of the Agreement):
	(i) Working Capital ≥ $1.00
(ii) Net Worth ≥ N/A
(iii) Long-Term Debt to Net Worth ≤ two (2):one (1)
(iv) Other: N/A

	Required Equity Amount (See Section 8.03(a) of Annex C of the Agreement):
	$61,693,564, which is not less than 30.65% of the Depreciated Actual Cost of the KAIMANA HILA as of the Second Closing Date

	Shipyard:
	Philly Shipyard, Inc. (formerly, Aker Philadelphia Shipyard, Inc.)

	Shipyard Project (See Section 6.06 of Annex C of the Agreement):
	□ [Insert description and location of Shipyard Project]
X Not Applicable

	Special Provisions (See Annex X of the Agreement)
	X Applicable
□ Not Applicable

	Special Security Default (See Section 14.01(b)(9) of Annex C of the Agreement):
	X Not Applicable

	Special Subordinated Liens (See Annex B definition of Permitted Liens):
	None

	Stated Maturity Date (See Sections 7.08 and 13.13 of Annex C of the Agreement and Annex E to this Amendment):
	□ Twenty (20) years from Closing Date
□ Twenty-Five (25) years from Closing Date
X Other: March 15, 2044_______________

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	Supplemental Financial Tests of Affiliate Guarantor(s) (See Section 12.02 of Annex C of the Agreement): 
	(i) Net Worth ≥ 90% of amount shown on the Affiliate Guarantor’s Audited Financial Statements that are most recent prior to the Second Closing Date
(ii) Comply with the Maximum Consolidated Leverage Ratio Covenant
(iii) Other: Maintain a Qualifying Credit Agreement, unless maintained by the Shipowner (30-day grace period applies)
□ None

	Supplemental Financial Tests of Shipowner (See Section 12.02 of Annex C of the Agreement):
	(i) Working Capital ≥ $1.00
(ii) Long-Term Debt to Net Worth ≤ 2:1
(iii) Other: Maintain a Qualifying Credit Agreement, unless maintained by the Affiliate Guarantor (30-day grace period applies)
□ None

	UCC Filing State (State where UCC-1 was filed):
	Hawaii

	Vessels (See Section 2.03(d) of Annex C of the Agreement):
	Type: Aloha class containership
Number of Vessels: 1
Hull Identification Number, if available, Name, if available, and USCG Documentation Number, if applicable:
KAIMANA HILA, Official Number: 1274135

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	Page 6

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TABLE A
As determined by the Administrator (a) the aggregate Actual Cost of the Second Vessel is $210,797,012 representing (1) the amounts paid by or for the account of the Shipowner as of the date hereof for the Construction of the Second Vessel, plus (2) the amount which the Shipowner is on the date hereof obligated to pay under the Construction Contract or is otherwise from time to time hereafter obligated to pay for the Construction of the Second Vessel; and (b) the aggregate Depreciated Actual Cost of the Second Vessel as of the Closing Date is $201,277,564 representing (1) the aggregate Actual Cost of the Second Vessel as of the date hereof, less (2) the depreciation of the Second Vessel as of the date hereof, both calculated and itemized as follows:
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	Item of Cost
	Amount Paid
	Amount Obligated to be Paid
	Total

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	[1]
	[2]
	[3]
	[4]

	[A]
	Shipyard Contract Price (excluding unpaid amounts held in escrow as of October 17, 2019) 
	$198,113,963
	​
	$198,113,963

	[B]
	Contract Changes and Extras 
	(1,648,150)
	​
	(1,648,150)

	[C]
	Owner Furnished Items
	2,703,417
	​
	2,703,417

	[D]
	Design, Engineering and Inspection
	657,897
	​
	657,897

	[E]
	Foreign Items Exclusions (unless Foreign Item Waivers applicable)
	(188,632)
	​
	(188,632)

	[F]
	Subtotal
([4A] + [4B] + [4C] + [4D] - [4E]) = [4F])
	$199,638,495
	​
	$199,638,495

	[G]
	Estimated Guarantee Fee
	6,655,785
	​
	6,655,785

	[H]
	Construction Period Interest
	6,883,217
	​
	6,883,217

	[I]
	Approved Construction Contract Escalation and Other Adjustments
	(2,380,485)
	​
	(2,380,485)

	[J]
	Total Actual Cost
([4F] + [4G] + [4H] + [4I] = [4J])
	$210,797,012
	​
	$210,797,012

	[K]
	Depreciation Recognized from Vessel Delivery Date to Second Closing Date
	(9,519,449)
	​
	(9,519,449)

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	[L]
	Total Depreciated Actual Cost
([4J] – [4K]) = [4L])
	$201,277,564
	​
	$201,277,564

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(END OF ANNEX A)
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ANNEX D
DISCLOSURE SCHEDULE
This Disclosure Schedule is delivered by Matson Navigation Company, Inc., a Hawaii corporation (the “Shipowner”), to THE UNITED STATES OF AMERICA (the “United States”), represented by the Maritime Administrator (the “Administrator”) of the Maritime Administration, pursuant to Amendment No. 1 to the Consolidated Agreement, Contract No. 14454, by and between the Shipowner and the Administrator (as so amended, the “Agreement”).  
Capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Agreement.
This Disclosure Schedule is intended to be read in conjunction with the Agreement, of which this Disclosure Schedule is an integral part.  This Disclosure Schedule and the information and disclosures contained herein are intended to qualify and limit the representations, warranties and covenants of the Shipowner contained in the Agreement and shall not be deemed to expand in any way the scope or effect of any such representations, warranties or covenants.  This Disclosure Schedule is not intended to constitute, and shall not be construed as constituting, representations, warranties, covenants or agreements of the Shipowner, except as and to the extent provided in the Agreement.  The disclosures set forth in this Disclosure Schedule have been drafted subject to and in response to the language used in the Agreement, including qualifications that limit certain required disclosures to materiality or are subject to stated monetary thresholds, as applicable. 
Inclusion of any item, information or matter in this Disclosure Schedule (i) does not represent an admission or determination by the Shipowner that such item, information or matter is or is reasonably likely to be material or would constitute a material adverse effect, nor shall it be deemed to establish a standard for materiality or a Shipowner material adverse effect, (ii) shall not constitute, or be deemed to be, an admission of liability concerning such items, information or matters by the Shipowner, and (iii) shall not be used in any dispute or controversy between the parties to determine whether any obligation, item or matter (whether or not described herein or included in any schedule) is or is not material for purposes of the Agreement.  In cases where a representation or warranty is qualified by a reference to materiality or a Shipowner material adverse effect the disclosure of any item, information or matter in this Disclosure Schedule shall not imply that any other undisclosed item, information or matter that has a greater value or could otherwise be deemed more significant (i) is or is reasonably likely to be material or (ii) has had or is reasonably likely to result in a Shipowner material adverse effect.  The items, information and matters in this Disclosure Schedule include brief descriptions of certain aspects of the assets, business, agreements, documents or condition of Shipowner, and such descriptions are necessarily not complete. 
Inclusion of any item, information or matter in this Disclosure Schedule shall not constitute, or be deemed to be, an admission by any person of any information, matter or item whatsoever with respect to any violation of Law (or that disclosure is required under Law) or any breach of, or default under, any contract.
Any matter disclosed in a section of this Disclosure Schedule shall be deemed disclosed
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for the purposes of the Section of the Agreement to which such section relates and any other Sections of the Agreement to the extent it is reasonably apparent that such disclosure also qualifies or applies to such other Sections.
Items, information and matters reflected in this Disclosure Schedule are not necessarily limited to items, information or matters required by the Agreement to be reflected in the Schedules.  Such additional items, information and matters are set forth for information purposes and do not necessarily include other items, information or matters of a similar nature or impose any duty or obligation to disclose any items, information or matters beyond what is required by the Agreement. 
The headings used in the Schedules are for reference only and shall not affect the disclosures contained herein. 
Any references to “we”, “us”, or “our” in the Schedules shall mean the Shipowner.
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		1.	List any exceptions to the representation and warranty set forth in Annex C - General Terms and Conditions.  

SECTION 10.17. Subsidiaries; Equity Interest. 
		1.	The Shipowner has the following subsidiaries:

a.See the attached Exhibit A

		2.	The Shipowner has the following equity investments:

a.SSA Terminals, LLC
b.Pension and Post-Retirement Plans include investments in equity securities
c.Investments in Mutual Funds

		2.	List any Commercial Tort Claim, including a description of the commercial tort claim with specificity (See Section 4.01(a)(3) – Commercial Tort Claims).  If none, please so indicate by checking the box:  x.

		3.	As of the Closing Date, the binding agreements referred to in Sections 12.01(f), 12.02(e), (j) and (l) are the following:

a.Amended and Restated Guaranty Agreement dated as of June 29, 2017 by and among Matson Navigation Company, Inc., certain other subsidiaries of Matson, Inc. and Bank of America, N.A., as agent, pursuant to the Amended and Restated Credit Agreement dated as of June 29, 2017 by and among Matson, Inc., certain lenders, and Bank of America, N.A., as agent, as amended to the date hereof.
b.Multiparty Guaranty Dated as of June 29, 2012 by Matson Navigation Company, Inc. and certain other subsidiaries of Matson, Inc. pursuant to the Third Amended and Restated Note Purchase and Private Shelf Agreement dated as of September 14, 2016 by and among Matson, Inc. and the purchasers party thereto, as amended to the date hereof.
c.Multiparty Guaranty dated as of December 21, 2016 by Matson Navigation Company, Inc. and certain other subsidiaries of Matson, Inc. pursuant to the Note Purchase Agreement dated as of December 21, 2016 by and among Matson, Inc. and the purchasers party thereto, as amended to the date hereof.
d.Parent Company Agreement dated as of April 24, 2002 by Matson Navigation Company, Inc. and certain other parties thereto pursuant to the Amended and Restated Limited Liability Company Agreement of SSA Terminals, LLC dated as of April 24, 2002 by and among SSA Ventures and Matson Ventures, Inc., as amended to the date hereof.

(End of Annex d)

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EXHIBIT A to ANNEX D
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	Matson Navigation Company, Inc.
	Hawaii

	Subsidiaries:
	​

	Matson Alaska, Inc.
	Delaware

	Subsidiaries:
	​

	Horizon Lines Holding Corp.
	Delaware

	Subsidiaries:
	​

	Horizon Lines of Puerto Rico, LLC
	Delaware

	HLPR Holding Corp.
	Delaware

	Horizon Logistics, LLC
	Delaware

	Subsidiaries:
	​

	Horizon Services Group, LLC
	Delaware

	Aero Logistics, LLC
	Delaware

	Horizon Lines, LLC
	Delaware

	Subsidiaries:
	​

	Horizon Lines of Guam, LLC
	Delaware

	Horizon Lines Vessels, LLC
	Delaware

	H-L Distribution Service, LLC
	Delaware

	Matson Navigation Company of Alaska, LLC
	Delaware

	Subsidiaries:
	​

	Horizon Lines Merchant Vessels, LLC
	Delaware

	Subsidiaries:
	​

	Horizon Lines Alaska Vessels, LLC
	Delaware

	Horizon Lines Alaska Terminals, LLC
	Delaware

	Matson Logistics, Inc.
	Hawaii

	Subsidiaries:
	​

	Matson Logistics Services, LLC
	Hawaii

	Matson Logistics Warehousing, Inc.
	Hawaii

	Span Intermediate, LLC
	Delaware

	Subsidiary:
	​

	Span Acquisition Co., LLC
	Delaware

	Subsidiaries:
	​

	Span Alaska Transportation, LLC
	Washington

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	Alaska Freight Express, LLC
	Washington

	Midnight Sun Transportation Services, LLC
	Alaska

	Matson Logistics Limited
	Hong Kong

	Matson Navigation Vessels, LLC
	Delaware

	Matson Terminals, Inc.
	Hawaii

	Matson Ventures, Inc.
	Hawaii

	Matson Logistics (Shanghai) Co., Ltd.
	China

	Matson Shipping (Hong Kong) Limited
	Hong Kong

	Matson Shipping (Shanghai) Co., Ltd.
	China

	Matson South Pacific Holdco Limited
	New Zealand

	Subsidiary:
	​

	Matson South Pacific Limited
	New Zealand

	Subsidiaries:
	​

	Matson Cook Islands Limited
	Cook Islands

	Tranz Pacific Ship Management Limited
	New Zealand

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ANNEX E
FORM OF ADMINISTRATOR’S NOTE
PROMISSORY NOTE TO UNITED STATES OF AMERICA
(“Second Administrator’s Note”)
KAIMANA HILA
Matson Navigation Company, Inc., a Hawaii corporation (the “Shipowner”), for value received, promises to pay THE UNITED STATES OF AMERICA (the “United States”), represented by the Maritime Administrator of the Maritime Administration (the “Administrator”), at the office of the Maritime Administration, U.S. Department of Transportation, Washington, D.C., in lawful money of the United States of America, the aggregate principal amount of up to $139,584,000, together with interest thereon until such principal sum has been paid, as and to the extent that after a Default has occurred and is continuing the Administrator makes payments under the Guarantee with respect to the Second Vessel or expressly assumes the Shipowner’s right and duties under the Second Vessel Note hereinafter referred to.  This Administrator's Note (the “Second Administrator’s Note”) is subject to mandatory prepayment on the same terms and conditions as the Second Vessel Note.  Capitalized terms used herein have the meaning defined herein or in the Consolidated Agreement, Contract No. MA-14454, dated April 27, 2020, between the Shipowner and the Administrator, as amended by Amendment No. 1 dated as of the Second Closing Date (as so amended, the “Agreement”).
This Second Administrator’s Note is given (1) in consideration of the Administrator’s issuance, pursuant to the provisions of 46 U.S.C. Chapter 537 of a Guarantee (the “Guarantee”) of payment of the unpaid interest on and the unpaid balance of the principal amount of the Future Advance Promissory Note (FFB Note Identifier MATNAV 0002, Maximum Principal Amount $139,584,000), dated as of the Second Closing Date (the “Second Vessel Note”), issued by the Shipowner to the Federal Financing Bank, a body corporate and instrumentality of the United States (“FFB”), pursuant to the Second Vessel Note Purchase Agreement, by and among FFB, the Shipowner and the Administrator, in order to finance a portion of the cost of construction of the Second Vessel, and (2) to evidence the Shipowner’s obligation to pay the Administrator, after a Default has occurred and is continuing, any amount that the Administrator (i) actually pays to the Holder of the Second Vessel Note under said Guarantee or (ii) becomes obligated to pay the Holder after the Administrator expressly assumes the Shipowner’s right and duties under the Second Vessel Note.
This Second Administrator’s Note is issued pursuant to the provisions of the Agreement.  The Agreement contemplates that on the date hereof, an amendment to the first preferred fleet mortgage on the Vessel (as so amended, the “Mortgage”) adding the Second Vessel to the lien thereof will be executed and delivered by and between the Shipowner, as mortgagor, and the Administrator, as mortgagee, covering the Shipowner's interest in such Second Vessel.  The definitions used in, and the provisions of, the Agreement and the Mortgage are incorporated herein by reference.
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This Second Administrator’s Note has been negotiated and received by the Administrator, is secured by the Agreement and the Mortgage, and is subject to all the terms of the Agreement and the Mortgage, to the same extent as if said documents were set out herein in full.
To the extent that the Second Vessel Note is Outstanding and until the Guarantee on the Second Vessel Note has been terminated pursuant to the provisions of Section 2.04(b) of Annex C to the Agreement, this Second Administrator’s Note shall remain outstanding and unpaid, subject, however, to the last paragraph hereof.  Payments on the Second Vessel Note shall be deemed a payment of principal and interest on this Second Administrator’s Note, if any, and shall reduce any liability of the Shipowner under this Second Administrator’s Note when paid in the following manner:
(1) by payment of principal of and interest on the Second Vessel Note in accordance with the provisions thereof;
(2) by any prepayment of the Second Vessel Note in accordance with the provisions thereof; and
(3) when the Second Vessel Note has been Paid in full, other than by payment of the Guarantee.
If payment on the Second Vessel Note is made with moneys advanced or loaned to the Shipowner by the Administrator, such payment on the Second Vessel Note shall not, as to such amount, constitute payment of principal or interest on this Second Administrator’s Note and the same shall not in any way be discharged as to such amount.  In the event that the Administrator assumes the Shipowner’s rights and duties under the Second Vessel Note and makes any payments thereunder, such payments shall not, as to such amounts, constitute payment of principal and interest on this Second Administrator’s Note and the same shall not in any way discharge such amounts until such time as this Second Administrator’s Note is paid in full or otherwise discharged in an appropriate proceeding in a court of competent jurisdiction as established by the final order of a court of last resort or the final order of an inferior court which is not appealed.
The unpaid balance of the principal of this Second Administrator’s Note and the interest hereon may be declared or may become immediately due and payable by declaration of the Administrator at any time after (i) a Default has occurred and is continuing under the terms of the Agreement and (ii) the Administrator has made payment under the Guarantee or the Second Vessel Note or has expressly assumed the Shipowner’s right and duties under the Second Vessel Note. Upon such declaration, the unpaid balance of the principal of and the interest on this Second Administrator’s Note shall become due and payable, together with interest thereon at the rate set forth in the Second Vessel Note plus two percent.
Notwithstanding anything to the contrary contained in this Second Administrator’s Note, the Second Vessel Note, the Agreement or any other Transaction Document with respect to the Second
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Vessel, (i) the obligations of the Shipowner under this Second Administrator’s Note to make any payment hereunder shall come into effect solely following (x) a Default by the Shipowner and (y) in the event that the Administrator shall have made payment to the FFB under the Administrator’s Guarantee of the Second Vessel Note or in the event that the Administrator shall have expressly assumed the Shipowner’s rights and duties under the Second Vessel Note (such assumption referred to herein as an “Administrator Assumption”), (ii) any liability of Shipowner under this Second Administrator’s Note shall not be in addition to the Shipowner’s obligations under the Second Vessel Note and shall be reduced by any payments made by Shipowner or Affiliate Guarantor under the Second Vessel Note, (iii) this Second Administrator’s Note shall evidence solely the Shipowner’s obligation to pay the Administrator any amount that the Administrator may be required to pay to the Holder of the Second Vessel Note under said Guarantee, (iv) the amounts due and owing by Shipowner under the Second Vessel Note and this Second Administrator’s Note shall constitute a single indebtedness in a maximum collective principal amount not in excess of the face amount of this Second Administrator’s Note, (v) the Administrator waives any rights of subrogation, contribution, agreement, or otherwise arising under the Second Vessel Note, it being the intent of the parties that the Administrator’s right to recover from the Shipowner any payments it makes under the Guarantee shall be solely as set forth in this Second Administrator’s Note (it being acknowledged and agreed that the obligations of the Shipowner under this Second Administrator’s Note are secured by the Collateral), (vi) the maximum liability of Shipowner and Affiliate Guarantor, collectively, under the Transaction Documents with respect to principal payments on the Second Vessel Note and this Second Administrator’s Note, collectively, shall in no event be in excess of the face amount of this Second Administrator’s Note and (vii) in the event of an Administrator Assumption, then the Shipowner shall be automatically and by operation of law discharged from any further liability under the Second Vessel Note.  In the event the Administrator becomes the “Holder” of the Second Vessel Note, the Second Vessel Note shall be deemed amended to become consistent with the terms of this paragraph.  Upon any Administrator Assumption or any payment by the Administrator under its Guarantee of the Second Vessel Note, (i) the Administrator shall provide prompt written notice of such assumption and/or payment to the Shipowner and (ii) regardless of when such notice is provided, the Administrator shall upon the written request of the Shipowner confirm payment of any such obligations assumed or paid by the Administrator under the Second Vessel Note.
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IN WITNESS THEREOF, the Shipowner has caused this Second Administrator’s Note to be signed on the Second Closing Date.
	

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	(SEAL)
Attest:
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	Matson Navigation Company, Inc.,
Shipowner

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	By:
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	By:
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	Name:
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	Name:
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	Title:
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	Title:
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ANNEX F
FORM OF AMENDMENT AND SUPPLEMENT NO. 1 TO PREFERRED FLEET 
MORTGAGE
​
Contract No. MA-14455
AMENDMENT AND SUPPLEMENT NO. 1 TO FIRST PREFERRED FLEET
MORTGAGE
THIS AMENDMENT AND SUPPLEMENT NO. 1, dated June 12, 2020 (this “Amendment No. 1”), to FIRST PREFERRED FLEET MORTGAGE, dated the 16th day of April, 2020 (as so amended, the “Mortgage”), is made by Matson Navigation Company, Inc., (the “Shipowner” or “Mortgagor”), a Hawaii corporation, having offices located at 555 12th Street, Oakland, California  94607, and THE UNITED STATES OF AMERICA (the "United States"), represented by the Maritime Administrator of the Maritime Administration (the “Mortgagee” or the “Administrator”), having offices located at the United States Department of Transportation, 1200 New Jersey Avenue, S.E., Washington, D.C. 20590.  Capitalized terms used herein, unless otherwise defined herein, have the respective meanings set forth in the Agreement referred to below or in Appendix 1 to the Mortgage.
RECITALS
A.        The Mortgagor has authorized the execution and delivery of the Second Vessel Note Purchase Agreement and the issuance of the Second Vessel Note in the Maximum Principal Amount of $139,584,000, to finance, in part, the construction costs of the construction of the KAIMANA HILA, Official Number 1274135 (the “Second Vessel”).
B.         The Mortgagor is the sole owner of the whole of the Second Vessel which has been duly documented under the laws of the United States;
C.         In connection with the Financing, the Mortgagee and the Mortgagor intend to enter into an Amendment No. 1 to the Consolidated Agreement, Contract No. MA-14454 (the “Agreement”), in which the United States, represented by the Mortgagee, commits to guarantee to the Holder the due payment of the unpaid interest on, and the unpaid balance of the principal of, the Second Vessel Note up to the Amount of Administrator’s Guarantee;
D.        In connection with the Financing, the Mortgagor intends to issue the Second Administrator’s Note payable to the Mortgagee in the amount equal to the Amount of the Administrator’s Guarantee;
E.         To secure the Guarantee of the Second Vessel Note and the payment of the Second Administrator’s Note and the other obligations of the Mortgagor under this Mortgage, the Agreement and the other Transaction Documents, the Mortgagor and the Mortgagee have executed and delivered this Amendment No. 1 to Mortgage; and
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F.         The Mortgage, as amended and supplemented hereby, covers the whole of the Vessels listed on Schedule 1 hereto.
NOW, THEREFORE, THIS AMENDMENT WITNESSETH:
ARTICLE FIRST
The Mortgage is in all respects confirmed, affirmed, reaffirmed, and continued, including all of the covenants and agreements on the part of the Shipowner which are set forth therein or incorporated therein by reference and all the rights, privileges, powers and immunities of the Mortgagee which are provided for in the Mortgage.
ARTICLE SECOND
FURTHER, THIS AMENDMENT WITNESSETH THAT, in consideration of the premises and of the additional covenants herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and as security for the Guarantee of the Note and the Second Vessel Note and in order to secure the payment of the Administrator’s Note and the Second Administrator’s Note, and the other obligations of the Mortgagor under the Transaction Documents related to the Vessels, including the Mortgage and the Agreement, and the due performance and observance of all the agreements and covenants in the Second Vessel Note and the Second Administrator’s Note and the Transaction Documents related to the Vessels, including the Mortgage and the Agreement, the Mortgagor has granted, conveyed, mortgaged, pledged, confirmed, assigned, transferred and set over, and by these presents does grant, convey, mortgage, pledge, confirm, assign, transfer and set over unto the Mortgagee a hundred percent interest in the whole of the Second Vessel which is more fully described in its certificate of documentation, together with all of its boilers, engines, motors, machinery, masts, spares, rigging, boats, anchors, cables, chains, tools, pumps and pumping equipment, apparel, furniture, skiffs, sails, fittings, navigation equipment, propulsion equipment, and all other equipment, electronics, computers, software, electronic records, records and papers whether on board or not, together with all accessions, substitutions, additions, replacements, improvements, parts and accessions, now existing or hereafter made of, in or to said Second Vessel or said appurtenances (collectively, the “Second Vessel Collateral”).  From and after the Second Closing Date, the term “Vessel Collateral” as defined in the Mortgage shall include the Second Vessel Collateral.
TO HAVE AND TO HOLD, all and singular, the above-mortgaged and described property unto the Mortgagee, to its use, benefit and advantage forever.
PROVIDED ALWAYS, that if the Mortgagor shall pay, or cause to be paid, the principal of, interest on and other amounts due under the Second Vessel Note or the Second Administrator’s Note in accordance with the terms thereof, and shall pay any and all other sums that may hereinafter become secured by this Mortgage in accordance with the terms hereof, and shall keep, perform and observe all of the covenants and promises contained in the Second Vessel Note, the Second Administrator’s Note, and the Transaction Documents, including the Mortgage and the Agreement, or expressed, or implied therein and herein to be kept, performed, and observed by or on the part of the Mortgagor, then the Mortgage and the estate and rights hereby granted shall
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cease and be void; otherwise to remain in full force and effect.
The Mortgagor hereby covenants and agrees with the Mortgagee that the Second Vessel subject to the lien of this Mortgage is to be held by the Mortgagor subject to the further agreements and conditions set forth in the Mortgage.
ARTICLE THIRD
The total principal amount of the obligations that is secured by the Mortgage, as amended and supplemented hereby, is THREE HUNDRED TWENTY FIVE MILLION FIVE HUNDRED TWENTY SEVEN THOUSAND AND NO/100’S UNITED STATES DOLLARS ($325,527,000), excluding interest, expenses, and fees. The date of maturity is March 15, 2044, and the discharge amount is the same as the total amount of the outstanding obligations plus unpaid accrued interest.
ARTICLE FOURTH
SECTION 1. All of the covenants and agreements on the part of the Shipowner which are set forth in, and all the rights, privileges, powers and immunities of the Mortgagee which are provided for in, the Mortgage are incorporated herein and shall apply to the Second Vessel and otherwise with the same force and effect as though set forth at length in this Amendment.
SECTION 2. This Amendment is executed as and shall constitute an instrument supplemental to and amending and shall be construed with and as part of the Mortgage.
SECTION 3. This Amendment may be executed in any number of counterparts and all such counterparts executed and delivered each as an original shall constitute but one and the same instrument.
SECTION 4. Except as modified and expressly amended by this Amendment and any other supplement or amendment, the Mortgage is in all respects ratified and confirmed and all the terms, provisions and conditions thereof shall be and remain in full force and effect.
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IN WITNESS WHEREOF, the Shipowner has executed this instrument on the date indicated in the acknowledgment below, effective as of the day and year first above written.
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ACKNOWLEDGMENT
	

	A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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State of California
County of Alameda
On _______________________ before me, __________________________________________, personally appeared _____________________________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
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	I certify under PENALTY OF PERJURY under the 
laws of the State of California that the foregoing
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	WITNESS my hand and official seal.

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IN WITNESS WHEREOF, the Administrator has executed this instrument on the date indicated in the acknowledgment below, effective as of the day and year first above written..
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	MARITIME ADMINISTRATOR

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ACKNOWLEDGMENT
DISTRICT OF COLUMBIA)
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CITY OF WASHINGTON   )
I, the undersigned, a Notary Public in and for the District of Columbia, do hereby certify that, __________________________ known to me to be the Secretary, Maritime Administration, Department of Transportation, the United States of America, personally appeared before me in said District, and executed as Secretary, Maritime Administration, the foregoing instrument, and acknowledged the same to be his or her free act and deed in such official capacity.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ___ day of __________, 2020.
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SCHEDULE 1
TO
AMENDMENT AND SUPPLEMENT NO. 1
TO
FIRST PREFERRED FLEET MORTGAGE
Vessels subject to Mortgage
KAIMANA HILA, Official Number 1274135
DANIEL K. INOUYE, Official Number 1274136
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ANNEX G
FORM OF ASSIGNMENT OF CONSTRUCTION CONTRACT

ASSIGNMENT OF CONSTRUCTION CONTRACT
THIS ASSIGNMENT OF CONSTRUCTION CONTRACT (this “Assignment”) is made as of the Second Closing Date, by Matson Navigation Company, Inc., a Hawaii corporation (the “Shipowner”), to and in favor of the United States of America (the “United States”), represented by the Maritime Administrator of the Maritime Administration (the “Administrator”), pursuant to Chapter 537 of Title 46 of the United States Code (“Chapter 537”). 
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For value received, the Shipowner, as of the Second Closing Date, pursuant to the Consolidated Agreement, Contract No. MA-14454, dated as of April 27, 2020, between the Shipowner and the Administrator, as amended by Amendment No. 1 dated as of the Second Closing Date (as the same may be further amended, supplemented, or modified, the “Agreement”) in which the Administrator agreed to guarantee, subject to the terms and conditions thereof, a loan to Shipowner up to the Amount of Administrator’s Guarantee with respect to the Second Vessel, hereby sells, grants, assigns, transfers and sets over to the United States, represented by the Administrator, all of its rights, title and interest in and to that certain Construction Contract between Shipowner and Philly Shipyard, Inc. (f/k/a Aker Philadelphia Shipyard, Inc., the “Shipyard”) dated November 6, 2013 (the “Construction Contract”), annexed hereto as Exhibit A, and as may be amended, in connection with the construction of the KAIMANA HILA, Official Number 1274135.  Capitalized terms not defined herein, unless otherwise defined herein, shall have the respective meanings set forth in the Agreement. 
This Assignment is made to aid the Administrator in appropriate circumstances to better protect its security for the obligations of the Shipowner under the Agreement and the other Transaction Documents.  The Shipowner represents and warrants to the Administrator that it has not made any previous assignment of its interest in the Construction Contract, that to the knowledge of the Responsible Officers of the Shipowner, the Construction Contract has not been terminated and that all covenants, conditions and agreements have been performed as required therein, except those not due to be performed until after the date hereof.  No change in the terms of the Construction Contract shall be valid without the written approval of Administrator provided that the Administrator’s prior written consent shall not be necessary, but prior written notice to the Administrator shall be given, for any mandatory changes to the Construction Contract as a result of any requirements of any governmental agency.  The Shipowner agrees not to assign, sell, pledge, mortgage or otherwise transfer or encumber its interest in the Construction Contract so long as this Assignment is in effect.  
The Shipowner agrees that the Administrator shall not be under any obligation or liability with respect to the Construction Contract.  No request by the Administrator to the Shipyard shall be honored unless in writing.  
This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors in interest of the Shipowner, the Administrator and the Shipyard.  
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This Assignment shall be governed by, and construed and interpreted in accordance with the laws of the United States of America, including federal common law, and absent applicable federal law, the laws of the Governing Law State, notwithstanding its conflict of laws rules.
The term of this Assignment shall expire at such time as the Shipowner’s obligations under the Transaction Documents are paid in full and performed in full.
This Assignment may be executed in counterparts, each of which shall be deemed an original but all of which when taken together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Shipowner has executed this Assignment as of the date first written above.  
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	(SEAL)
Attest:
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	SHIPOWNER

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	Rachel C. Lee
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	Joel M. Wine

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EXHIBIT A
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EXECUTED COPY OF CONSTRUCTION CONTRACT
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ANNEX H-1
FORM CONSENT OF SHIPYARD
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CONSENT OF SHIPYARD
THIS CONSENT OF SHIPYARD (this “Consent”) is made as of the Second Closing Date, by Philly Shipyard, Inc. (f/k/a Aker Philadelphia Shipyard, Inc.), a Pennsylvania corporation (the “Shipyard”), to and in favor of THE UNITED STATES OF AMERICA (the “United States”), represented by the Maritime Administrator of the Maritime Administration (the “Administrator”), pursuant to Chapter 537 of Title 46 of the United States Code (“Chapter 537”).
RECITALS:
A.        Matson Navigation Company, Inc., a Hawaii corporation (the “Shipowner”) and the Administrator are parties to the Consolidated Agreement, Contract No. MA-14454, dated as of April 27, 2020, as amended by Amendment No. 1 thereto (as so amended, the “Agreement”);
B.         It is a condition of the Agreement that the Shipyard consents, acknowledges and agrees to the assignment by the Shipowner of all of the right, title and interest of the Shipowner in and to the certain Shipbuilding Contract dated as of November 6, 2013, as amended, between the Shipyard and the Shipowner (the “Construction Contract”), for the construction of Hull 30, now known as the KAIMANA HILA, Official Number 1274135 (the “Second Vessel”).
NOW, THEREFORE, in consideration of the premises herein contained, to induce the Administrator to issue a guarantee of the Second Vessel Note dated on or about the date hereof, issued by the Shipowner to the Federal Financing Bank, a body corporate and instrumentality of the United States (“FFB”), pursuant to the Second Vessel Note Purchase Agreement, dated on or about the date hereof, by and among FFB, the Shipowner and the Administrator pursuant to Chapter 537 (the “Administrator’s Guarantee”), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.         As used herein, (a) capitalized terms defined above have the respective meanings given such terms above; and (b) unless otherwise defined herein, with respect to Uniform Commercial Code (“UCC”) terms, all other capitalized terms contained in this Consent shall have the meanings provided for by the UCC, as adopted in the State of California.
2.        The Shipyard acknowledges that it has received a true copy of the form of the Assignment of Construction Contract, dated on or about the date hereof (the “Assignment”), executed by the Shipowner.
3.        The Shipyard hereby acknowledges receipt of notice of, and hereby consents and agrees to the assignment and grant by the Shipowner to the Administrator pursuant to the Assignment of a continuing security interest, lien and right of setoff in and to all of the Shipowner’s right, title and interest in the Construction Contract and the proceeds thereof, if any such exist, or shall exist in the future.  Such proceeds include any amounts that may be due to be refunded to the
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Shipowner by the Shipyard or by any subcontractor or supplier to the Shipyard arising out of the Construction Contract and any subcontracts or supply contracts into which the Shipyard has entered into.  In the event of a default of the Shipyard under the Construction Contract, the Administrator may enforce the Shipowner’s rights thereunder.
4.         The Shipyard hereby acknowledges, understands and agrees that:
(a)        The Administrator shall, by virtue of the Agreement, have no obligation or duty under the Construction Contract and shall not be required to make any payment due and owing by the Shipowner under the Construction Contract (it being understood that nothing in the Assignment diminishes the Shipowner’s obligations or duties to perform under the Construction Contract);
(b)        The Shipyard shall promptly pay any amount coming due to the Shipowner under the Construction Contract to the Shipowner, except that during any period after the Shipyard shall have received written notice from the Administrator indicating the existence of a Default as defined in the Agreement and until the Administrator shall have notified the Shipyard in writing that such Default has been cured or waived, the Shipyard shall pay any amount coming due to the Shipowner under the Construction Contract promptly to the Administrator for application pursuant to the Agreement;
(c)        Except during any period after the Shipyard shall have received written notice from the Administrator indicating the existence of a Default under the Agreement and until the Administrator shall have notified the Shipyard in writing that such Default has been cured or waived, the Shipowner shall be entitled to exercise all of its rights under the Construction Contract with respect to the Vessel and to receive all of the benefits thereunder, subject to Paragraph 4(b) hereof, to the same extent as if the Construction Contract had not in any way been subjected to a continuing security interest, lien and right of setoff under the Agreement.
5.         The title of this Consent and the headings of the sections are not a part of this Consent and shall not be deemed to affect the meaning or construction of any of its provisions.
6.         Any and all notices to the Shipyard in connection with this Consent shall be given in accordance with the notice provisions of the Construction Contract.
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IN WITNESS WHEREOF, the Shipyard has caused this Consent to be duly executed as of the day and year first above written.
	

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	PHILLY SHIPYARD, INC.

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ANNEX I
FORM OF ASSIGNMENT OF EARNINGS
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ASSIGNMENT OF EARNINGS
THIS ASSIGNMENT OF EARNINGS (this “Assignment”) is made as of the Second Closing Date, by Matson Navigation Company, Inc., a Hawaii corporation (the "Shipowner"), to and in favor of THE UNITED STATES OF AMERICA (the "United States"), represented by the Maritime Administrator of the Maritime Administration (the "Administrator"), pursuant to Chapter 537 of Title 46 of the United States Code (“Chapter 537”).
RECITALS:
A.        The Shipowner and the Administrator are parties to that certain Consolidated Agreement, Contract No. MA-14454, dated as of April 27th, 2020, as amended by Amendment No. 1 thereto, dated the date hereof (as so amended, the “Agreement”);
B.         The Shipowner intends to issue the Second Administrator’s Note pursuant to the Agreement;
C.         The Agreement requires the Shipowner to secure the payment of the Administrator’s Note by Liens on, among other things, the Collateral (as defined in the Agreement), including the Earnings (as herein defined); and
D.        This Assignment sets forth the terms on which the Shipowner grants an assignment of and a Lien on Earnings (as hereinafter defined) in favor of the Administrator as collateral security for the Obligations.
NOW, THEREFORE, in consideration of the premises herein and to induce the Administrator to issue the Guarantee, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used herein:
(a)        Unless otherwise defined herein, capitalized terms used herein have the respective meanings set forth in the Agreement;
(b)        Unless otherwise defined herein, with respect to Uniform Commercial Code (“UCC”) terms, all other capitalized terms contained in this Assignment and not otherwise defined herein shall have, when the context so indicates, the meanings provided for by the UCC, as adopted in the UCC State, to the extent the same are used or defined therein; and
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(c)        Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Assignment:
“Contract” means each rental agreement, lease, charter (excluding all slot charters), exchange, transfer or sale agreement relating to the Second Vessel to which the Shipowner is a party from time to time.
“Earnings” means: (a) all the Shipowner’s right, title and interest to and in whatever is received (whether voluntary or involuntary, whether cash or non-cash, including proceeds of insurance and condemnation awards, rental or lease payments, accounts, chattel paper, instruments, documents, contract rights, general intangibles, equipment and/or inventory) upon the lease, sale, charter (excluding all slot charters), exchange, transfer, or other disposition of any of the Second Vessel Earnings Collateral; (b) all claims for damages for any breach by any charterer or other party thereto of any bareboat or time charter, or lease of the Second Vessel; and (c) all remuneration payable by or on behalf of a governmental authority in respect of any detention of the Second Vessel.
“Obligations” means all of the obligations and liabilities of the Shipowner under the Agreement, the Administrator's Note, the Mortgage and the other Transaction Documents with respect to the Vessels and with respect to the Guarantee of the Note and the Second Vessel Note whether now made or hereafter entered into.
“Proceeds" means (A) whatever is acquired upon the sale, lease, license, exchange, or other disposition of Earnings; (B) whatever is collected on, or distributed on account of, Earnings; (C) rights arising out of Earnings; (D) to the extent of the value of Earnings, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to, the Earnings; or (E) to the extent of the value of Earnings and to the extent payable to the Shipowner or the Administrator, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the Earnings.
“Second Vessel” means the KAIMANA HILA, Official Number 1274135.
ARTICLE II
ASSIGNMENT
SECTION 2.01. Assignment. As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, the Shipowner does hereby assign, transfer and convey to the Administrator, its successors and assigns, and does hereby grant to the Administrator, its successors and assigns, a first priority continuing security interest in, lien on and right of setoff against, all of the following, wherever located, whether now owned or at any time hereafter acquired by the Shipowner or in which the Shipowner now has or at any time in the future may acquire any right, title or interest in (collectively, the “Second Vessel Earnings Collateral”):
(a)        the Earnings of the Second Vessel from any source;
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(b)        all moneys or other compensation payable by reason of requisition of title or for hire or other compulsory acquisition of the Second Vessel or the Second Vessel’s capture, seizure, arrest, detention or confiscation by any governmental authority or Persons acting on behalf of any governmental authority; and
(c)        all Proceeds and products of the foregoing.
Upon the occurrence and continuation of a Default, the Shipowner hereby authorizes and directs any party to a Contract and their respective successors and assigns to treat and regard the Administrator as the party entitled, in the Shipowner’s place and stead, to receive said Proceeds and amounts and to exercise all rights of the Shipowner with respect thereto; and said parties shall be fully protected in so treating and regarding the Administrator and shall be under no obligation to see to the application by the Administrator of any such Proceeds received by it. In addition to the rights granted to the Administrator hereunder, the Shipowner hereby further transfers and assigns to the Administrator by way of security any and all such Liens, financing statements or similar interests of the Shipowner attributable to its interest in the Second Vessel Earnings Collateral arising under or created by any statutory provision, judicial decision or otherwise.
SECTION 2.02. Account Debtors. No Person making payments to the Administrator at its request under the assignment contained herein shall have any responsibility to see to the application of any of such funds, and any party paying or delivering Proceeds or amounts to the Administrator under such assignment shall be released thereby from any and all liability to the Administrator and the Shipowner to the full extent and amount of all payments or Proceeds so delivered. Should the Administrator bring suit against any third party for collection of any amount or sums included within this Assignment (and the Administrator shall have the right to bring any such suit), it may sue either in its own name or in the name of the Shipowner, or both.
SECTION 2.03. Performance under Charters; No Duty of Inquiry. The Shipowner hereby undertakes that it shall punctually perform all of its obligations under all Contracts to which it is a party. It is hereby expressly agreed that, anything contained herein to the contrary notwithstanding, the Shipowner shall remain liable under all Contracts to perform the obligations assumed by it thereunder, and the Administrator shall have no obligation or liability of any nature whatsoever under any Contract by reason of, or arising out of, this Assignment, nor shall the Administrator be required to assume or be obligated in any manner to perform or fulfill any obligation of the Shipowner under or pursuant to any Contract. Nothing in this Assignment shall be deemed or construed to create a delegation to or assumption by the Administrator, of the duties and obligations of the Shipowner under any Contract. All of the parties to any Contract shall continue to look to the Shipowner for performance of all covenants and other obligations and the satisfaction of all representations and warranties of the Shipowner thereunder, notwithstanding the rights granted to the Administrator hereunder and the assignment herein made or the exercise by the Administrator of any such rights hereunder or under applicable law. The Administrator shall not be required to make any payment or make any inquiry as to the nature or sufficiency of any payment received by the Administrator, or, unless and until indemnified to its satisfaction, to present or file any claim, or to take any other action to collect or enforce the payment of any
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amounts which may have been assigned to it or to which it may be entitled hereunder or pursuant hereto at any time or times.
SECTION 2.04. No Modification of Obligations. Nothing herein contained shall modify or otherwise alter the obligation of the Shipowner to make prompt payment of all Obligations, including principal and interest owing thereon, when and as the same become due regardless of whether the Second Vessel Earnings Collateral is sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Obligations. Nothing in this Assignment is intended to be an acceptance of collateral in satisfaction of or in discharge of the Obligations.
SECTION 2.05. Affirmative Covenants. Until all of the Obligations have been fully and finally paid and the Agreement and the other Transactions Documents with respect to the Second Vessel have been terminated, the Shipowner hereby covenants and agrees with the Administrator to:
(a)        promptly notify the Administrator in writing of the commencement and termination of any period during which the Second Vessel is requisitioned; and
(b)      during the continuance of a Default, use its best efforts to cause any counterparty to any Contract to execute a Consent and Agreement to this Assignment in substantially the form attached hereto as Exhibit B and deliver such Consent and Agreement to the Administrator.
SECTION 2.06. Negative Pledge. The Shipowner does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the Second Vessel Earnings Collateral hereby assigned to anyone other than the Administrator, and it will not take or omit to take any action, the taking or omission of which might result in an alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment.
SECTION 2.07. Attorney-in-Fact. The Administrator shall not be liable for any delay, neglect, or failure to effect collection of any Proceeds or to take any other action in connection therewith or hereunder; but the Administrator shall have the right, at its election, in the name of the Shipowner or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Administrator in order to collect such Proceeds and to protect the interests of the Administrator, and/or the Shipowner, with all costs, expenses and attorneys’ fees incurred in connection therewith being paid by the Shipowner. The Shipowner does hereby irrevocably appoint and constitute the Administrator as the Shipowner’s true and lawful attorney-in-fact with full power (in the name of the Shipowner or otherwise), to ask, require, demand, receive, compound, and give acquittance for any and all Proceeds, to endorse any checks or other instruments or orders in connection therewith, to file any claims or take any action or institute any proceedings which the Administrator may deem to be necessary or advisable in the premises, and to file, without the signature of the Shipowner, any and all financing statements or similar
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documents, other instruments, documents or agreements or renewals thereof arising from this Assignment which the Administrator may deem to be reasonably necessary or advisable in order to perfect or maintain the security interest granted hereby; provided, however, the Administrator shall not take any action pursuant to the power granted by this Section unless a Default shall have occurred and be continuing. Such appointment of the Administrator as attorney-in-fact is irrevocable and is coupled with an interest. The parties agree that the grant of the power of attorney set forth in this Section shall not be deemed to create any obligation on the part of the Administrator to take any one or more of the actions described herein.
SECTION 2.08. Application of Proceeds. All Proceeds collected or received by the Administrator pursuant to this Assignment during the existence and continuance of a Default shall be applied as provided in Section 14.04 of Annex C of the Agreement and, in the absence of the existence and continuance of a Default, shall be paid by the Administrator to Shipowner promptly following receipt thereof.
SECTION 2.09. Remedies Cumulative and Not Exclusive; No Waiver. Each and every right, power and remedy given herein, in the Agreement and the other Transaction Documents to the Administrator shall be cumulative and shall be in addition to every other right, power and remedy of the Administrator now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Administrator, and the exercise or the commencement of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. Without limitation of the foregoing, during the continuation of a Default, the Administrator shall have the rights and remedies of a secured party under the UCC.  No delay or omission by the Administrator in the exercise of any right or power in the pursuance of any remedy accruing upon any breach or default by the Shipowner shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Administrator of any security or of any payment of or on account of any of the amounts due from the Shipowner to the Administrator and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach or default not completely cured thereby.
SECTION 2.10. Invalidity. If any provision of this Assignment shall at any time for any reason be declared or decided to be invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Assignment, or the validity of this Assignment as a whole. In the event that by reason of any law or regulation in force or to become in force, or by reason of a ruling of any court of competent jurisdiction, or by any other reason whatsoever, this Assignment is rendered either wholly or partly defective, the Shipowner shall furnish the Administrator with an alternative assignment or security and do all such other acts as are reasonably required in order to ensure and give effect to the full intent of this Assignment.
SECTION 2.11. Continued Security. It is declared and agreed that the security created by this Assignment shall be held by the Administrator as a continuing security for the payment
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of all moneys which may at any time and from time to time be or become payable by the Shipowner in connection with the Obligations and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby secured and that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Administrator for all or any part of the moneys hereby secured.
SECTION 2.12. Termination. The Administrator shall terminate this Assignment and release the Second Vessel Earnings Collateral subject to the provisions of Article XVI of Annex C of the Agreement and the relevant provisions of this Assignment. Except as may be expressly applicable pursuant to Section 9-620 of the UCC, no action taken or omission to act by the Administrator shall be deemed to constitute a retention of the Second Vessel Earnings Collateral in satisfaction of the Obligations or otherwise to be in full satisfaction of the Obligations, and the Obligations shall remain in full force and effect, until the Administrator and the Holder(s) shall have applied payments (including, without limitation, collections from any Second Vessel Earnings Collateral) towards the Obligations in the full amount then outstanding or until such subsequent time as is provided in the Agreement. If this Assignment has terminated and any payment actually received by the Administrator is subsequently invalidated, rescinded, declared to be fraudulent or preferential or set aside and is required to be repaid under any bankruptcy or other similar law, then this Assignment shall be reinstated and its provisions will continue in effect for the benefit of the Administrator and the holder(s) of the Second Administrator’s Note until such amounts are fully and finally paid in cash.
SECTION 2.13. Notices. Any notices or communications hereunder shall be made in accordance with Section 18.03 of Annex C of the Agreement.
SECTION 2.14. Waiver; Amendment. No amendment, modification, or waiver of any provision of this Assignment, and no consent with respect to any departure of the Shipowner therefrom, shall be effective unless the same is in writing executed by the Shipowner and the Administrator.
SECTION 2.15. Further Assurances. The Shipowner agrees that at any time and from time to time, upon the written request of the Administrator, the Shipowner will promptly and duly execute and deliver any and all such further instruments and documents as the Administrator may deem desirable in obtaining the full benefits of this Assignment (including, without limitation, in connection with the perfection of the security interest created hereby) and of the rights and powers herein granted.
SECTION 2.16. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the United States of America, including federal common law, and, absent applicable federal law, the laws of the Governing Law State, notwithstanding its conflict of laws rules.
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IN WITNESS WHEREOF, the Shipowner has caused this Assignment to be executed as of the day and year first above written.
	

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	(SEAL)
	    
	Matson Navigation Company, Inc.

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	Rachel C. Lee
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	Name:
	Joel M. Wine

	Title:
	Assistant Secretary
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	Title:
	Senior Vice President and Chief Financial Officer

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EXHIBIT A
[RESERVED]
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EXHIBIT B
TO ASSIGNMENT OF EARNINGS
CONSENT AND AGREEMENT
The undersigned, ________________, a counterparty to a contract (“Contract”) with Matson Navigation Company, Inc. (“Shipowner”) to which the Notice of Assignment delivered pursuant to the foregoing Assignment refers (terms defined in the Assignment are used herein with the same meaning), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby acknowledges notice of and consents and agrees to the Assignment and to all of the terms thereof, and agrees that: (1) it will make payment directly to the account of the Administrator, at [                                ], of all moneys due and to become due from it under the Contract until receipt of written notice from the Administrator that all obligations to it secured by said Assignment have been paid in full; and (2) any such payment shall be final and the undersigned will not seek to recover from the Administrator for any reason whatsoever any moneys paid by the undersigned to the Administrator by virtue of the foregoing Assignment and this Consent and Agreement but this shall not prevent the set off or credit against or deduction from any moneys payable to the Administrator by virtue of said Assignment of amounts owing to the undersigned by the Shipowner under the Contract.
The undersigned, as a counterparty to the Contract, confirms and agrees that the Contract is in full force and effect and is enforceable in accordance with its terms and the Shipowner is not in default thereunder.
This Consent and Agreement shall be governed by and construed in accordance with the laws of the Governing Law State.
Dated:  ________________, 20___                         [NAME]
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ANNEX J
FORM OF ASSIGNMENT OF INSURANCES
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ASSIGNMENT OF INSURANCES
THIS ASSIGNMENT OF INSURANCES (this “Assignment”) is made as of the Second Closing Date, by Matson Navigation Company, Inc., a Hawaii corporation (the "Shipowner"), to and in favor of THE UNITED STATES OF AMERICA (the "United States"), represented by the Maritime Administrator of the Maritime Administration (the "Administrator"), pursuant to Chapter 537 of Title 46 of the United States Code (“Chapter 537”).
RECITALS:
A.        The Shipowner and the Administrator are parties to the Consolidated Agreement, Contract No. MA-14454, dated as of April 27th, 2020, as amended by Amendment No. 1 thereto, dated as of the date hereof (as so amended, the “Agreement”);
B.         The Shipowner intends to issue the Second Administrator’s Note in the Amount of the Second Note pursuant to the Agreement;
C.         The Agreement requires the Shipowner to secure the payment of the Administrator’s Notes by Liens on, among other things, the Second Vessel Collateral (as herein defined), including the Insurances (as herein defined); and
D.        This Assignment sets forth the terms on which the Shipowner grants an assignment of, and a Lien on, the Second Vessel Collateral in favor of the Administrator as collateral security for the Obligations.
NOW, THEREFORE, in consideration of the premises herein and to induce the Administrator to issue the Guarantee and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used herein:
(a)         Unless otherwise defined herein, capitalized terms used herein have the respective meanings set forth in the Agreement;
(b)         Unless otherwise defined herein, with respect to Uniform Commercial Code (“UCC”) terms, all other capitalized terms contained in this Assignment and not otherwise defined herein shall have, when the context so indicates, the meanings provided for by the UCC, as adopted in the UCC State, to the extent the same are used or defined therein; and
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(c)      Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Assignment:
“Second Vessel Collateral” has the meaning set forth in Section 2.01 of this Assignment.
“Insurances” has the meaning set forth in Section 2.01 of this Assignment.
“Obligations” means all of the obligations and liabilities of the Shipowner under the Agreement, the Second Administrator's Note, the Mortgage and the other Transaction Documents and as collateral security for and with respect to the Guarantee whether now made or hereafter entered into.
“Second Vessel” means the KAIMANA HILA, Official Number 1274135.
ARTICLE II
ASSIGNMENT
SECTION 2.01. Assignment. As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, the Shipowner does hereby assign, transfer and convey to the Administrator, its successors and assigns, and does hereby grant to the Administrator, its successors and assigns, a first priority continuing security interest in, lien on, and right of setoff against, all policies and contracts of insurance, including, without limitation, the Shipowner’s rights under all entries in any protection and indemnity or war risks associations or clubs, which are from time to time taken out by or for the Shipowner in respect of the Second Vessel, its hull, machinery, freights, disbursements, profits or otherwise, and all the benefits thereof and all other rights of the Shipowner in respect thereof, including, without limitation, all claims of whatsoever nature, as well as return premiums (all of which are herein collectively called the “Insurances”), and in and to all moneys and claims for moneys in connection therewith and all proceeds and products of all of the foregoing, wherever located, whether now owned or at any time hereafter acquired by the Shipowner or in which the Shipowner now has or at any time in the future may acquire any right, title or interest (collectively, the “Second Vessel Collateral”).
In addition to the rights granted to the Administrator, the Shipowner hereby further transfers and assigns to the Administrator by way of security any and all such Liens, financing statements or similar interests of the Shipowner attributable to its interest in the Second Vessel Collateral arising under or created by any statutory provision, judicial decision or otherwise.
SECTION 2.02. Payments. During the continuance of a Default, the Administrator shall be entitled to receive all payments of Insurances in respect of the Second Vessel payable to the Shipowner and assigned hereby. The Shipowner shall cause all sums so payable to the Shipowner and assigned hereby to be paid directly to the Administrator to an account designated by the Administrator for such purpose. THE SHIPOWNER AGREES TO INDEMNIFY AND HOLD HARMLESS ANY AND ALL PARTIES (INCLUDING FOR SUCH PERSONS’ OWN ORDINARY NEGLIGENCE) MAKING PAYMENTS TO THE ADMINISTRATOR UNDER THE ASSIGNMENT CONTAINED HEREIN, AGAINST ANY AND ALL
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LIABILITIES, ACTIONS, CLAIMS, JUDGMENTS, COSTS, CHARGES AND ATTORNEYS’ FEES RESULTING FROM THE DELIVERY OF SUCH PAYMENTS TO THE ADMINISTRATOR, AND ALL SUCH AMOUNTS TOGETHER WITH SUCH INTEREST THEREON SHALL BE PART OF THE OBLIGATIONS. THE INDEMNITY AGREEMENT CONTAINED IN THE PREVIOUS SENTENCE IS MADE FOR THE DIRECT BENEFIT OF AND SHALL BE ENFORCEABLE BY ALL SUCH PERSONS. Should the Administrator bring suit against any third party for collection of any amount or sums included within this Assignment (and the Administrator shall have the right to bring any such suit), it may sue either in its own name or in the name of the Shipowner, or both.
SECTION 2.03. Performance under Insurances; No Duty of Inquiry. The Shipowner hereby undertakes that it shall punctually perform all of its obligations under all Insurances pertaining to the Second Vessel to which it is a party. It is hereby expressly agreed that, anything contained herein to the contrary notwithstanding, the Shipowner shall remain liable under all Insurances pertaining to the Second Vessel to perform the obligations assumed by it thereunder, and the Administrator shall have no obligation or liability of any nature whatsoever under any such Insurances (including, without limitation, any obligation or liability with respect to the payment of premiums, calls or assessments) by reason of, or arising out of, this Assignment, nor shall the Administrator be required to assume or be obligated in any manner to perform or fulfill any obligation of the Shipowner under or pursuant to any such Insurances. Nothing in this Assignment shall be deemed or construed to create a delegation to or assumption by the Administrator, of the duties and obligations of the Shipowner under any agreement or contract relating to the Second Vessel or the Insurances. All of the parties to any such Insurances or contracts shall continue to look to the Shipowner for performance of all covenants and other obligations and the satisfaction of all representations and warranties of the Shipowner thereunder, notwithstanding the rights granted to the Administrator hereunder or the exercise by the Administrator of any such rights hereunder or under applicable law. The Administrator shall not be required to make any payment or make any inquiry as to the nature or sufficiency of any payment received by the Administrator, or, unless and until indemnified to its satisfaction, to present or file any claim, or to take any other action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled hereunder or pursuant hereto at any time or times.
SECTION 2.04. No Modification of Obligations. Nothing herein contained shall modify or otherwise alter the obligation of the Shipowner to make prompt payment of all Obligations, including principal and interest owing thereon, when and as the same become due regardless of whether the Second Vessel Collateral is sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Obligations. Nothing in this Assignment is intended to be an acceptance of collateral in satisfaction of or in discharge of the Obligations.
SECTION 2.05. Affirmative Covenants. Until all of the Obligations have been fully and finally paid and the Agreement and the other Transaction Documents have been terminated, the Shipowner hereby covenants and agrees with the Administrator to:
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(a)    do, cause to be done or permit to be done each and every act or thing which the Administrator may from time to time reasonably require to be done for the purpose of enforcing the Administrator’s rights under this Assignment and the Shipowner will allow its name to be used as and when required by the Administrator for that purpose; and
(b)   forthwith give notice in the form attached to this Assignment as Exhibit D of this Assignment, or cause its insurance brokers to give notice, of this Assignment to all insurers, underwriters, clubs and associations providing insurance in connection with the Second Vessel and procure that such notice is endorsed on all the policies and entries of insurances in respect of the Second Vessel and are endorsed to provide that the Administrator shall be named in a manner such that it is afforded the stature of additional insured, as its interest may appear, and the Administrator shall be named loss payee.
SECTION 2.06. Negative Pledge. The Shipowner does hereby warrant and represent that it has not assigned or pledged, and hereby covenants that it will not assign or pledge so long as this Assignment shall remain in effect, any of its right, title or interest in the whole or any part of the Second Vessel Collateral hereby assigned to anyone other than the Administrator, and it will not take or omit to take any action, the taking or omission of which might result in an alteration or impairment of the rights hereby assigned or any of the rights created in this Assignment.
SECTION 2.07. Notices; Loss Payable Clauses.
(a)    All Insurances, except entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries, relating to the Second Vessel shall contain a loss payable and notice of cancellation clause in the form attached to this Assignment as Exhibit B or in such other form as the Administrator may agree; and
(b)   All entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries relating to the Second Vessel shall contain a loss payable and notice of cancellation clause in the form attached to this Assignment as Exhibit C or in such other form as the Administrator may agree.
SECTION 2.08. Attorney-in-Fact. The Administrator shall not be liable for any delay, neglect, or failure to effect collection of any proceeds or to take any other action in connection therewith or hereunder; but the Administrator shall have the right, at its election, in the name of the Shipowner or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Administrator in order to enforce this Assignment and to protect the interests of the Administrator and the holder(s) of the Second Administrator’s Note, and/or the Shipowner, with all costs, expenses and attorneys’ fees incurred in connection therewith being paid by the Shipowner. The Shipowner does hereby irrevocably appoint and constitute the Administrator as the Shipowner’s true and lawful attorney-in-fact with full power (in the name of the Shipowner or otherwise), to ask, require, demand, receive, compound, and give acquittance for any and all moneys and claims for moneys assigned hereby, to endorse any checks or other instruments or orders in connection therewith, to file any claims or take any action or institute any proceedings which the Administrator may deem to be necessary or advisable in the premises, and to file, without the signature of the Shipowner, any and all financing statements or similar
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documents, other instruments, documents or agreements or renewals thereof arising from this Assignment which the Administrator may deem to be reasonably necessary or advisable in order to perfect or maintain the security interest granted hereby; provided, however, the Administrator shall not take any action pursuant to the power granted by this Section 2.08 unless a Default shall have occurred and be continuing. Such appointment of the Administrator as attorney-in-fact is irrevocable and is coupled with an interest. Nothing contained in this Section 2.08 shall be deemed or considered as creating any obligation on the part of the Administrator to take any of the actions described herein.
SECTION 2.09. Application of Proceeds. All moneys collected or received by the Administrator pursuant to this Assignment during the existence and continuance of a default shall be applied as provided in Section 14.04 of Annex C of the Agreement and, in the absence of the existence and continuance of a Default, shall be paid by the Administrator to Shipowner promptly following receipt thereof.
SECTION 2.10. Remedies Cumulative and Not Exclusive; No Waiver. Each and every right, power and remedy given herein, in the Agreement and the other Transaction Documents to the Administrator shall be cumulative and shall be in addition to every other right, power and remedy of the Administrator now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed necessary by the Administrator, and the exercise or the commencement of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. Without limitation of the foregoing, during the continuation of a Default, the Administrator shall have the rights and remedies of a secured party under the UCC. No delay or omission by the Administrator in the exercise of any right or power in the pursuance of any remedy accruing upon any breach or default by the Shipowner shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Administrator of any security or of any payment of or on account of any of the amounts due from the Shipowner to the Administrator and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right to take advantage of any future breach or default or of any past breach or default not completely cured thereby.
SECTION 2.11. Invalidity. If any provision of this Assignment shall at any time for any reason be declared or decided to be invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Assignment, or the validity of this Assignment as a whole. In the event that by reason of any law or regulation in force or to become in force, or by reason of a ruling of any court of competent jurisdiction, or by any other reason whatsoever, this Assignment is rendered either wholly or partly defective, the Shipowner shall furnish the Administrator with an alternative assignment or security and do all such other acts as are reasonably required in order to ensure and give effect to the full intent of this Assignment.
SECTION 2.12. Continued Security. It is declared and agreed that the security created by this Assignment shall be held by the Administrator as a continuing security for the payment of all
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moneys which may at any time and from time to time be or become payable by the Shipowner in connection with the Obligations and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby secured and that the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Administrator for all or any part of the moneys hereby secured.
SECTION 2.13. Termination. The Administrator shall terminate this Assignment and release the Second Vessel Collateral subject to the provisions of Article XVI of Annex C of the Agreement and the relevant provisions of this Assignment. Except as may be expressly applicable pursuant to Section 9-620 of the UCC, no action taken or omission to act by the Administrator shall be deemed to constitute a retention of the Second Vessel Collateral in satisfaction of the Obligations or otherwise to be in full satisfaction of the Obligations, and the Obligations shall remain in full force and effect, until the Administrator and the Holder(s) shall have applied payments (including, without limitation, collections from Second Vessel Collateral) towards the Obligations in the full amount then outstanding or until such subsequent time as is provided in the Agreement. If this Assignment has terminated and any payment actually received by the Administrator is subsequently invalidated, rescinded, declared to be fraudulent or preferential or set aside and is required to be repaid under any bankruptcy or other similar law, then this Assignment shall be reinstated and its provisions will continue in effect for the benefit of the Administrator until such amounts are fully and finally paid in cash.
SECTION 2.14. Notices. Any notices or communications hereunder shall be made in accordance with Section 18.03 of Annex C of the Agreement.
SECTION 2.15. Waiver; Amendment. No amendment, modification, or waiver of any provision of this Assignment, and no consent with respect to any departure of the Shipowner therefrom, shall be effective unless the same is in writing executed by the Shipowner and the Administrator.
SECTION 2.16. Further Assurances. The Shipowner agrees that at any time and from time to time, upon the written request of the Administrator, the Shipowner will promptly and duly execute and deliver any and all such further instruments and documents as the Administrator may deem desirable in obtaining the full benefits of this Assignment (including, without limitation, in connection with the perfection of the security interest created hereby) and of the rights and powers herein granted.
SECTION 2.17. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the United States of America, including federal common law, and, absent applicable federal law, the laws of the Governing Law State, notwithstanding its conflict of laws rules.
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IN WITNESS WHEREOF, the Shipowner has caused this Assignment to be executed as of the day and year set forth above.
	

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	Matson Navigation Company, Inc.

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	Rachel C. Lee
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	Joel M. Wine

	Title:
	Assistant Secretary
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	Senior Vice President and Chief Financial Officer

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EXHIBIT A
TO ASSIGNMENT OF INSURANCE
SECOND VESSEL
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[Reserved]
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EXHIBIT B
TO ASSIGNMENT OF INSURANCES
LOSS PAYABLE CLAUSE
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Hull and Machinery (War Risks)
For any loss in excess of $2,500,000, underwriters shall make all payments hereunder directly to THE UNITED STATES OF AMERICA, represented by the Maritime Administrator of the Maritime Administration (the “Administrator”) pursuant to its instructions. Notwithstanding the preceding sentence, unless otherwise required by the Administrator by notice to the underwriters stating that a default is continuing, although losses hereunder are payable to the Administrator, any loss (other than an actual or constructive total loss) with respect to a Vessel involving any damage to a Vessel, may be paid directly for the repair, salvage or other charges involved or, if Matson Navigation Company, Inc. (the “Shipowner”) shall have first fully repaired the damage or paid all of the salvage or other charges, may pay Shipowner as reimbursement therefor; provided, however, that if such damage involves a loss in excess of $2,500,000, the underwriters shall not make such payment without first obtaining the written consent thereto of the Administrator.
In the event of the actual total loss or agreed, compromised or constructive total loss of a Vessel, payment shall be made to the Administrator, for deposit into an account designated for such purpose by the Administrator.
The Administrator shall be advised:
1.         at least 10 days before cancellation of this insurance may take effect;
2.         of any failure to renew any such insurance at least 10 days prior to the date of renewal thereof;
3.         of any act or omission or of any event of which the insurer has knowledge and which might invalidate or render unenforceable in whole or in part any such insurance; and
4.         of any default in the payment of any premium with respect to, or the material alteration of, any such insurances.
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EXHIBIT C
TO ASSIGNMENT OF INSURANCES
LOSS PAYABLE CLAUSE
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Protection and Indemnity
Payment of any recovery in excess of $2,500,000 that Matson Navigation Company, Inc. (the “Shipowner”) is entitled to make out of the funds of the Insurer in respect of any liability, costs or expenses incurred by it shall be made to THE UNITED STATES OF AMERICA, represented by the Maritime Administrator of the Maritime Administration (the “Administrator”), and all recoveries shall thereafter be paid directly to the Administrator. Notwithstanding the preceding sentence, unless otherwise required by the Administrator by notice to the underwriters stating that a default is continuing, although losses hereunder are payable to the Administrator, any loss under any insurance on a Vessel with respect to protection and indemnity risks may be paid directly to Shipowner to reimburse it for any loss, damage or expense incurred by it and covered by such insurance or to the person to whom any liability covered by such insurance has been incurred; provided, however, that if any such payment is in excess of $2,500,000, the underwriters shall not make such payment without first obtaining the written consent thereto of the Administrator.
The Administrator shall be advised:
1.         at least 10 days before cancellation of this insurance may take effect;
2.         of any failure to renew any such insurance at least 10 days prior to the date of renewal thereof;
3.         of any act or omission or of any event of which the insurer has knowledge and which might invalidate or render unenforceable in whole or in part any such insurance; and
4.         of any default in the payment of any premium with respect to, or the material alteration of, any such insurances.
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EXHIBIT D
TO ASSIGNMENT OF INSURANCES
NOTICE OF ASSIGNMENT OF INSURANCES
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TO:
TAKE NOTICE:
1.         that by an Assignment of Insurances (the “Assignment”) dated April 27, 2020 (“Effective Date”) made by us to THE UNITED STATES OF AMERICA, represented by the Maritime Administrator of the Maritime Administration (the “Administrator”), a copy of which is attached hereto, we have collaterally assigned to the Administrator as of the Effective Date, inter alia, all our right, title and interest in, to and under all policies and contracts of insurance, including our rights under all entries in any protection and indemnity or war risk association or club, which are from time to time taken out by us in respect of the US flag Vessel the KAIMANA HILA, Official Number 1274135 (the “Vessel”), and all the benefits and earnings of such insurances thereof including all claims of whatsoever nature (all of which together are hereinafter called the “Insurances”).
2.         that you are hereby irrevocably authorized and instructed to pay as from the Effective Date hereof all payments under all Insurances, except entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries, relating to the Vessel in accordance with the loss payable clause in Exhibit B of the Assignment of Insurances.
3.         all entries in protection and indemnity associations or clubs or insurances affected in lieu of such entries relating to the Vessel in accordance with the loss payable clause in Exhibit C of the Assignment of Insurances.
4.         that you are hereby instructed to endorse the Assignment, notice of which is given to you herein, on all policies or entries relating to the Vessel.
DATED AS OF THE      day of                     , 20___.
(SIGNATURE PAGE ON FOLLOWING PAGE)
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	Annex J - (Form of Assignment of Insurances) - Relating to Amendment No. 1 to Contract No. MA-14454
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	Matson Navigation Company, Inc.

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We hereby acknowledge receipt of the foregoing Notice of
Assignment and agree to act in accordance with the terms thereof:
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[END OF ANNEX J]
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	Annex J - (Form of Assignment of Insurances) - Relating to Amendment No. 1 to Contract No. MA-14454
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ANNEX K
FORM OF AMENDMENT NO. 1 TO AFFILIATE GUARANTY
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AMENDMENT NO. 1 TO AFFILIATE GUARANTY
THIS AMENDMENT NO. 1 (the “Amendment”), dated as of the Second Closing Date, to AFFILIATE GUARANTY, dated as of April 27th, 2020 (the “Affiliate Guaranty”), is made by and between MATSON, INC., a Hawaii corporation (the “Affiliate Guarantor”) and consented to by THE UNITED STATES OF AMERICA, represented by the Maritime Administrator of the Maritime Administration (the “Administrator”).
RECITALS:
A.        Matson Navigation Company, Inc., a Hawaii corporation (the "Shipowner") and the Administrator are parties to Amendment No. 1, dated as of the date hereof, to the Consolidated Agreement, Contract No. MA-14454, dated as of April 27, 2020 (as so amended, the “Agreement”) and the other Transaction Documents;
B.         The Shipowner, in connection with the financing of the Second Vessel, on the date hereof, borrowed certain funds and created and authorized the issuance of the Second Vessel Note issued pursuant to the Second Vessel Note Purchase Agreement and the Administrator issued the Guarantee of the Second Vessel Note.
C.         The Shipowner has, in consideration of the issuance of the Guarantee on the Second Vessel Note, issued and delivered, the Second Administrator’s Note to the Administrator.
D.        The Affiliate Guarantor is directly and materially interested in the financial success of the Shipowner, and maintains significant business relationships with the Shipowner, and the Affiliate Guaranty as amended hereby may be expected to benefit, directly or indirectly, the Affiliate Guarantor.
E.         The Administrator has required this Amendment to the Affiliate Guaranty from the Affiliate Guarantor as an integral part of the consideration offered by or on behalf of the Shipowner as a condition of the Administrator's decision to enter into the Agreement and to issue the Guarantee on the Second Vessel Note, and the Affiliate Guarantor has entered into this Amendment for the purpose of guaranteeing the Shipowner’s obligations to the Administrator under the Agreement with respect to the Second Administrator's Note, and the Assignment of Construction Contract, Assignment of Earnings, Assignment of Insurances, and Mortgage, all relating to the Second Vessel (each of which are hereafter included in the definition of “Matson Guaranteed Document” and the “Matson Guaranteed Documents”, as defined in the Affiliate Guaranty).
Now, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Affiliate Guarantor hereby agrees as follows:
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	Amendment No. 1 to Affiliate Guaranty - Relating to Amendment No. 1 to Contract No. MA-14454
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1.        Amendment.  The Affiliate Guaranty is amended by amending the term “Matson Guaranteed Documents” as set forth in Recital E. of the Affiliate Guaranty to include the Second Administrator’s Note, and the related Assignment of Construction Contract, Assignment of Earnings, Assignment of Insurances, and Mortgage, each of which relates to the Second Vessel.
2.        Ratification.  The Affiliate Guarantor hereby confirms its obligations under the Affiliate Guaranty, as amended hereby, and that the Affiliate Guaranty as amended hereby continues in full force and effect.
3.        Miscellaneous.
(a)      This Amendment may be executed in one or more counterparts. All such counterparts shall be deemed to be originals and shall together constitute but one and the same instrument.
(b)      Unless otherwise specifically defined herein, the capitalized terms used herein are defined in the Agreement and any reference therein to other instruments shall have the respective meaning stated in the Agreement or such other instruments.
(c)      This Amendment is executed as and shall constitute an instrument supplemental to and amending and shall be construed with and as part of the Affiliate Guaranty.
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	Amendment No. 1 to Affiliate Guaranty - Relating to Amendment No. 1 to Contract No. MA-14454
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IN WITNESS WHEREOF, this Amendment has been executed on the day and year first above written.
	

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	(SEAL)
	    
	AFFILIATE GUARANTOR

	Attest:
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	Rachel C. Lee
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	Joel M. Wine

	Title:
	Corporate Secretary
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	Senior Vice President and Chief Financial Officer

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	Amendment No. 1 to Affiliate Guaranty - Relating to Amendment No. 1 to Contract No. MA-14454
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Consented to by:
Maritime Administrator
	

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	Maritime Administration
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	Amendment No. 1 to Affiliate Guaranty - Relating to Amendment No. 1 to Contract No. MA-14454
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