Document:

EX-10.7

 Exhibit 10.7 
 DATED 1 December 2009 
 (as amended by a supplemental
agreement dated 14 February 2011, a second supplemental 
 agreement dated 14 September 2012, a third
supplemental agreement dated 27 February 2013 
 and as amended and restated by an amendment and restatement deed
dated [—] March 2013) 
 KNUTSEN SHUTTLE TANKERS XII KS

 as Borrower 
 DNB BANK ASA 
 NORDEA BANK NORGE ASA 

as Mandated Lead Arrangers and Bookrunners 
 DNB BANK ASA 
 NORDEA BANK NORGE ASA 

as Lenders 

DNB BANK ASA 
 NORDEA BANK FINLAND PLC 
 as Swap Providers 

- and - 
 DNB
BANK ASA 
 as Agent and Security Trustee 

 
  

LOAN AGREEMENT 
  

 
 relating to a
junior pre- and post-delivery loan facility 
 of up to US$19,000,000 to assist finance the 

construction and acquisition of “FORTALEZA KNUTSEN” and 
 “RECIFE KNUTSEN” 
  
 

 

 INDEX 

 

							
	 NO.
	  	 DESCRIPTION
	  	 PAGE
	 
			
	 1.
	  	 DEFINITIONS AND INTERPRETATION
	  	 	2	  
			
	 2.
	  	 THE LOAN
	  	 	17	  
			
	 3.
	  	 DRAWDOWN
	  	 	18	  
			
	 4.
	  	 REPAYMENT
	  	 	19	  
			
	 5.
	  	 PREPAYMENT AND CANCELLATION
	  	 	20	  
			
	 6.
	  	 INTEREST
	  	 	22	  
			
	 7.
	  	 PAYMENTS
	  	 	24	  
			
	 8.
	  	 NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
	  	 	26	  
			
	 9.
	  	 EARNINGS
	  	 	27	  
			
	 10.
	  	 REPRESENTATIONS AND WARRANTIES
	  	 	28	  
			
	 11.
	  	 GENERAL UNDERTAKINGS
	  	 	31	  
			
	 12.
	  	 INFORMATION UNDERTAKINGS
	  	 	34	  
			
	 13
	  	 PROVISIONS RELATING TO THE CHARTERS
	  	 	35	  
			
	 14.
	  	 EVENTS OF DEFAULT
	  	 	37	  
			
	 15.
	  	 FEES, EXPENSES AND INDEMNITIES
	  	 	41	  
			
	 16.
	  	 THE AGENT
	  	 	43	  
			
	 17.
	  	 THE SECURITY TRUSTEE
	  	 	47	  
			
	 18.
	  	 RETIREMENT OF A SERVICE BANK
	  	 	50	  
			
	 19.
	  	 LIMITS OF THE SERVICE BANKS’ OBLIGATIONS
	  	 	51	  
			
	 20.
	  	 SHARING OF PAYMENTS
	  	 	53	  
			
	 21.
	  	 ASSIGNMENT, TRANSFER AND RELEASE
	  	 	55	  
			
	 22.
	  	 SET-OFF
	  	 	58	  
			
	 23.
	  	 MISCELLANEOUS
	  	 	58	  
			
	 24.
	  	 NOTICES
	  	 	59	  
			
	 25.
	  	 APPLICABLE LAW AND JURISDICTION
	  	 	60	  
		
	 Schedule 1 - LENDERS AND CONTRIBUTIONS
	  	 	62	  
		
	 Schedule 2 - SWAP PROVIDERS
	  	 	63	  
		
	 Schedule 3 - INTENTIONALLY OMITTED
	  	 	64	  
		
	 Schedule 4 - INTENTIONALLY OMITTED
	  	 	65	  
		
	 Schedule 5 - FORM OF TRANSFER CERTIFICATE
	  	 	66	  
		
	 Schedule 6 - INTENTIONALLY OMITTED
	  	 	71	  
		
	 Schedule 7 INTENTIONALLY OMITTED
	  	 	72	  

 THIS AGREEMENT BETWEEN: 

 

	1.	KNUTSEN SHUTTLE TANKERS XII KS, a limited partnership established under the laws of Norway with organisation number 991959610 and having its registered office at
Smedasundet 40, 5529 Haugesund, Norway (the “Borrower”); 

  

	2.	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway and NORDEA BANK NORGE
ASA, a company incorporated under the laws of Norway acting through its office at Middelthuns gate 17, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway, in their capacity as mandated lead arrangers (the “Mandated Lead Arrangers”) and
bookrunners (the “Bookrunners”); 

  

	3.	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway and NORDEA BANK NORGE
ASA, a company incorporated under the laws of Norway acting through its office at Middelthuns gate 17, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway as lenders (the “Original Lenders”); 

 

	4.	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway and NORDEA BANK FINLAND
PLC, a company incorporated under the laws of Finland acting through its office at Aleksanterinkatu 36, FIN-00020 Nordea, Helsinki, Finland as swap providers (the “Swap Providers”); 

 

	5.	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway in its capacity as agent for
the Lenders (the “Agent”); and 

  

	6.	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway in its capacity as security
trustee for the Banks (the “Security Trustee”). 

 was originally made on 1 December 2009 and was amended by
a supplemental agreement dated 14 February 2011, a second supplemental agreement dated 14 September 2012, a third supplemental agreement dated 27 February 2013 and was amended and restated by the Amendment and Restatement Deed.

 WHEREAS: 
  

	(A)	The Bookrunners and the Mandated Lead Arrangers arranged, and the Lenders agreed to make available to the Borrower, a secured term loan facility of up to $19,000,000
for the purpose of providing pre- and post-delivery finance to assist the Borrower in financing the construction and acquisition of the Vessels. 

  

	(B)	Pursuant to the Amendment and Restatement Deed, it was agreed that the Original Loan Agreement should be amended and restated on the basis set out in this Agreement.

 IT IS AGREED AS FOLLOWS: 

 

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Definitions 

 In this
Agreement, including the Recitals, the following expressions shall have the following meanings: 
 “Account
Pledge” means a second priority Norwegian law instrument of pledge creating security in respect of the Earnings Accounts dated 30 March 2011 executed by the Borrower as security for the Borrower’s obligations under the Finance
Documents; 
 “Advance” has the meaning given in Clause 2.1; 

“Agency Fee Letter” means the fee letter agreement dated 1 December 2009 made between the Agent and the Borrower in
respect of the agency fee payable under Clause 0; 
 “Amendment and Restatement Deed” means the deed of
amendment and restatement dated [—] March 2013 and made between (1) the Borrower, (2) the Sponsor as original guarantor, (3) the Lenders, (4) the Mandated Lead Arrangers and
Bookrunners, (5) the Swap Providers, (6) the Agent and (7) the Security Trustee setting out the terms and conditions upon which (amongst other things) the Lenders consented to the change of ownership of the Borrower and this Agreement
was amended and restated; 
 “Amendment Date” means the date on which the Agent has notified each of the other
parties to this Agreement that the conditions precedent in Clause 5.2 of the Amendment and Restatement Deed are satisfied; 

“Amendment Fee Letter” means the fee letter agreement dated the same date as the Amendment and Restatement Deed made
between the Agent and the Borrower in respect of the amendment fee payable under Clause 15.1; 
 “Applicable
Margin” means 4.50% per annum; 
 “Bank” means any of the Mandated Lead Arrangers, the
Bookrunners, the Lenders, the Swap Providers, the Agent and the Security Trustee; 
 “Banking Day” means a day
(excluding Saturdays and Sundays) on which banks are open in London and Bergen and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City; 

“Borrower Shares Security” means a second priority Norwegian law instrument of pledge creating security in respect of the
partnership shares in the Borrower owned by 

  
 2 

 
the Limited Partner dated 27 February 2013 executed by the Limited Partner in favour of the Security Trustee as security for the Borrower’s obligations under the Finance Documents;

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

 

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

 exceeds: 
  

	 	(b)	the amount which that Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the London
interbank market for a period starting on the Banking Day of receipt or recovery and ending on the last day of the current Interest Period; 

 “Charter” means, in relation to a Vessel, the bareboat charter in respect of that Vessel dated 14 November 2007 (as amended and novated from time to time) now made between the
Borrower and the Charterers pursuant to which the Charterers have agreed to take such Vessel on bareboat charter for a period of 12 years at a net rate of $33,300 per day (exclusive of deductions for brokerage commission); 

“Charter Assignment” means, in relation to a Vessel, the second priority assignment of the Charter in respect of that
Vessel dated 6 July 2012 and executed by the Borrower in favour of the Security Trustee; 
 “Charter
Period” means, in relation to a Vessel, the period during which that Vessel is in the possession and control of the Charterers (or either of them) under and in accordance with the Charter relating to it (whether or not off hire);

 “Charter Termination Event” means, in relation to a Vessel, any of the following events or circumstances:

  

	 	(a)	it becomes impossible or unlawful for any party to the Charter in respect of that Vessel to fulfil any of its obligations thereunder or to exercise any rights vested in
it thereby; or 

  

	 	(b)	the Charter in respect of that Vessel being breached in any material respect by any party thereto or being terminated or for any reason becoming invalid or
unenforceable or otherwise ceases to be in full force and effect; or 

  

	 	(c)	the Charter in respect of that Vessel being repudiated in accordance with any applicable law; 

“Charterers” means Fronape and Transpetro; 
 “Classification Society” means, in relation to a Vessel, Det Norske Veritas or such other classification society as may from time to time be approved in writing by the Lenders;

  
 3 

 “Contribution” means, in relation to a Lender, the amount set out opposite
its name in Schedule 1 or, as the case may be, in any relevant Transfer Certificate, as reduced by any relevant term of this Agreement, and, as the context may require, means such other amount owing to that Lender at any relevant time, and
“Total Contributions” means the aggregate of the Contributions of all the Lenders; 
 “Coordination
Agreement” means the coordination agreement dated 1 December 2009 (as amended and supplemented from time to time) and made between (1) the Borrower, (2) the Senior Security Trustee and (3) the Security Trustee setting
out the terms on which the Security Documents are subordinated to the Senior Security Documents; 
 “Deed of
Covenant” means, 
  

	 	(a)	in relation to Vessel A, the second priority deed of covenants collateral to the Mortgage on that Vessel dated 30 March 2011 and executed by the Borrower in favour
of the Security Trustee as security for the Borrower’s obligations under the Finance Documents; and 

  

	 	(b)	in relation to Vessel B, the second priority deed of covenants collateral to the Mortgage on that Vessel dated 3 August 2011 and executed by the Borrower in favour
of the Security Trustee as security for the Borrower’s obligations under the Finance Documents; 

“Default Rate” means the annual rate of interest determined in accordance with Clause 6.3; 

“Deregistration Document” has the meaning given to it in Clause 13.3.5; 

“Designated Transaction” means a transaction: 

 

	 	(a)	which is entered into by the Borrower with a Swap Provider pursuant to a Master Agreement; and 

 

	 	(b)	whose purpose is the hedging of all or part of any interest rate risk or foreign exchange risk of the Borrower arising from the funding of the Senior Loan or the Loan
(or any part thereof) or any other purpose approved by that Swap Provider; and 

  

	 	(c)	which is for a period expiring no later than the last Repayment Date; and 

  

	 	(d)	which the Borrower agrees with the relevant Swap Provider is a Designated Transaction; 

“Dollars” and “$” means the lawful currency for the time being of the United States of America;

  
 4 

 “Drawdown Date” means, in respect of an Advance, the date of drawing of
that Tranche as specified in Clause 2.1; 
 “Dual Registration” has the meaning given to it in Clause 13.1.1;

 “Earnings” means, in relation to a Vessel, all moneys whatsoever (and all claims for such moneys), present
and future, which are earned or recoverable by, or become payable to or for the account of, the Borrower at any time during the Security Period arising (whether in contract, tort or otherwise howsoever), directly or indirectly, out of the ownership,
use or operation of that Vessel, including (but not limited to) all freight, hire and passage moneys, compensation payable in the event of requisition of that Vessel for hire, remuneration for salvage and towage services, demurrage and detention
moneys, contributions in general average, damages for breach (or payments for variation or termination) of any charterparty or other contract for employment of that Vessel, and all moneys (other than in respect of Insurances or Requisition
Compensation) arising from a Total Loss, together with the benefit of any guarantee, indemnity or other security which may at any time be given as security for the payment of such moneys; 

“Earnings Accounts” means, together, the Dollar denominated earnings account with account number 1250.04.13857, the Euro
denominated earnings account with account number 1250.60.20814 and the Norwegian Kroner denominated earnings account with account number 1503.01.88559, each opened by the Borrower with the Agent as required under Clause 9.1; 

“Encumbrance” means any mortgage, charge, (whether fixed or floating), pledge, lien, hypothecation, assignment, trust
arrangement or security interest or other encumbrance of any kind securing any obligation of any person or having the effect of conferring security or any type of preferential arrangement (including, without limitation, title transfer and/or
retention arrangements having a similar effect); 
 “Euro” and “€” mean the lawful
currency of the participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time; 
 “Event of Default” means any of the events listed in Clause 14.1; 

“Execution Date” means 1 December 2009; 
 “Factoring Agreement” means the second priority Norwegian law factoring agreement and collateral declaration of pledge in respect thereof dated 3 December 2009 and executed by the
Borrower in favour of the Security Trustee as security for the Borrower’s obligations under the Finance Documents; 

“Fee Letters” means the Agency Fee Letter and the Amendment Fee Letter; 

“Final Maturity Date” means 3 August 2016 or, if earlier, the date on which the final Repayment Instalment falls
due; 

  
 5 

 “Finance Documents” means this Agreement, the Fee Letters, the Master
Agreements, the Security Documents and any other documents designated as such by the Agent and the Borrower; 

“Financial Indebtedness” means any indebtedness in respect of: 

 

	 	(a)	moneys borrowed; 

  

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

 

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

 

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

  

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

 

	 	(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; 

 

	 	(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any
derivative transaction, only the marked to market value shall be taken into account); 

  

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

  

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

 “Fronape” means Fronape International Company B.V. a company incorporated under the laws of the
Netherlands with registered number 53561767 and having its registered office at Prins Bernhardplein 200, 1097JBM, Amsterdam; 

“GAAP” means the Norwegian accounting requirements, practices and regulations as set out in the Norwegian Accounting Act
of 17 July 1998 no. 56, and as recommended by the guidelines and standards from time to time issued by Norsk Regnskapsstiftelse, and the regulations and guidelines of the IFRS (all as amended or supplemented from time to time); 

  
 6 

 “General Assignment” means, 

 

	 	(a)	in relation to Vessel A, the second priority assignment of the Insurances, Earnings and Requisition Compensation of that Vessel dated 30 March 2011 and executed by
the Borrower in favour of the Security Trustee as security for the Borrower’s obligations under the Finance Documents; and 

  

	 	(b)	in relation to Vessel B, the second priority assignment of the Insurances, Earnings and Requisition Compensation of that Vessel dated 3 August 2011 and executed by
the Borrower in favour of the Security Trustee as security for the Borrower’s obligations under the Finance Documents; 

 “General Partner” means Knutsen Shuttle Tankers XII AS, a company incorporated under the laws of Norway with organisation number 991959556 and having its registered office at Smedasundet
40, 5529 Haugesund, Norway; 
 “General Partner Shares Security” means a second priority Norwegian law
instrument of pledge creating security in respect of the shares in the General Partner dated 27 February 2013 and executed by KNOT Shuttle Tankers as security for the Borrower’s obligations under the Finance Documents; 

“Group” means the Parent Guarantor and its subsidiaries for the time being; 

“Guarantees” means the KNOT Shuttle Tankers Guarantee and the Parent Guarantee; 

“IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent
applicable to the relevant financial statements; 
 “Insurances” means, in relation to a Vessel, all policies
and contracts of insurance (including all entries of that Vessel in a protection and indemnity association and a war risks association) which are from time to time taken out or entered into in respect of that Vessel or her Earnings or otherwise
howsoever and all benefits of such policies and contracts, including all claims of whatsoever nature and return of premiums; 

“Interest Date” means, in relation to a Tranche or any part thereof (as the case may be), a date upon which interest is
due and payable in accordance with Clause 6.1; 
 “Interest Period” means, in relation to a Tranche or any part
thereof (as the case may be), each period determined in accordance with Clause 6.4; 
 “Interest Rate” means, in
relation to a Tranche or any part thereof (as the case may be), the annual rate of interest which is determined by the Agent in accordance with Clause 6.2; 
 “IPO Repayment Date” means the Banking Day falling no later than 5 Banking Days after the Amendment Date; 
 “ISM Code” means The International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organisation as Resolutions
A.741(18) and A.913(22) (as amended, supplemented or replaced from time to time); 

  
 7 

 “ISPS Code” means The International Ship and Port Facility Security Code as
adopted by the International Maritime Organisation (as amended, supplemented or replaced from time to time); 
 “KNOT
Shuttle Tankers” means KNOT Shuttle Tankers AS, a company incorporated under the laws of Norway with organisation number 998 942 829 and having its registered office at Smedasundet 40, 5529 Haugesund, Norway; 

“KNOT Shuttle Tankers Guarantee” means the irrevocable and unconditional deed of guarantee and indemnity of the
Borrower’s obligations under the Finance Documents executed by KNOT Shuttle Tankers in favour of the Security Trustee as required by the Amendment and Restatement Deed; 
 “Lenders” means: 
  

	 	(a)	any Original Lender; and 

  

	 	(b)	any bank, financial institution or other entity which has become a Party in accordance with Clause 21, 

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

“Lending Office” means, in respect of a Lender, the office through which it will perform its obligations under this
Agreement being, in the case of an Original Lender, the office set out against its name in Schedule 1 and, in the case of each other Lender, the office specified in the relevant Transfer Certificate by which it becomes a Party (or such other office
in respect of any Lender as may be selected by it in accordance with Clause 21.11); 
 “LIBOR” means, in
relation to an Interest Period or any other relevant period: 
  

	 	(a)	the applicable Screen Rate; or 

  

	 	(b)	(if no Screen Rate is available for that period) the rate quoted to the Agent by leading banks in the London interbank market, 

at or about 11.00 a.m. London time on the Quotation Day for the offering of deposits in Dollars and for a period comparable to that period
provided that, if any such rate is below zero, LIBOR will be deemed to be zero; 
 “Limited Partner” means KNOT
Shuttle Tankers 12 AS, a company incorporated under the laws of Norway with organisation number 999 328 024 and having its registered office at Smedasundet 40, 5529, Haugesund, Norway; 

“Limited Partnership Agreement” means the partnership agreement dated
[—] in respect of the Parent Guarantor limited partnership; 

“Liquidity” mean the aggregate net amount of all cash beneficially owned by the Borrower and which is free from
Encumbrances (other than Permitted Encumbrances and any bankers’ ordinary rights of set-off); 

  
 8 

 “Loan” means the sum of originally up to $19,000,000 advanced by the
Lenders to the Borrower under this Agreement and, as the context may require, means the aggregate principal amount of the Advances from time to time outstanding under this Agreement being $18,237,5001 as at the date of the Amendment and Restatement Deed 

“Loan Indebtedness” means the aggregate of the Loan, all interest accrued on the Loan and all other sums of money
whatsoever (other than in respect of the Master Agreement Liabilities) from time to time due or owing actually or contingently to the Banks (or any of them) under or pursuant to the Finance Documents; 

“Majority Lenders” means the Lenders the aggregate of whose Contributions at any relevant time exceeds 50% of the Total
Contributions at such time; 
 “Market Disruption Event” has the meaning given to it in Clause 6.6; 

“Master Agreement” means, in relation to a Swap Provider, any ISDA Master Agreement (or any other form of master
agreement relating to interest or currency exchange transactions) entered or to be entered into by the Borrower with that Swap Provider and includes all Designated Transactions from time to time entered into, and all confirmations from time to time
exchanged or deemed exchanged, thereunder; 
 “Master Agreement Liabilities” means, as at any relevant date, all
liabilities of the Borrower to the Swap Providers under or pursuant to the Master Agreements, whether actual or contingent, present or future; 
 “Material Adverse Change” or “Material Adverse Effect” means a material adverse change in or a material adverse effect on: 

 

	 	(a)	the financial condition or business of any Obligor; 

  

	 	(b)	the ability of any Obligor to perform and comply with its obligations under any Finance Document or Charter; 

 

	 	(c)	the validity, legality or enforceability of any Finance Document or Charter; or 

 

	 	(d)	the validity, legality or enforceability of any Encumbrance expressed to be created pursuant to any Finance Document or the priority or ranking of that Encumbrance;

 “Material of Environmental Concern” means and includes chemicals, pollutants, contaminants,
waste, toxic or hazardous substances, oil, petroleum and oil and petroleum products and any other polluting substances, the release, discharge, disposal or emission of which into the environment is regulated, prohibited or penalised by or pursuant
to any applicable environmental law; 
  

	1 	Note: This assumes that the Amendment and Restatement Deed is executed and dated before 28 March 2013. 

  
 9 

 “MLP General Partner” means KNOT Offshore Partners GP LLC, a company
incorporated under the laws of the Marshall Islands and having its registered office at [Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands]; 
 “Mortgage” means, 
  

	 	(a)	in relation to Vessel A, the second priority Bahamian statutory ship mortgage on that Vessel dated 30 March 2011 and executed by the Borrower in favour of the
Security Trustee as security for the Borrower’s obligations under the Finance Documents; and 

  

	 	(b)	in relation to Vessel B, the second priority Bahamian statutory ship mortgage on that Vessel dated 3 August 2011 and executed by the Borrower in favour of the
Security Trustee as security for the Borrower’s obligations under the Finance Documents; 

 “Norwegian
Kroner” and “NOK” means the lawful currency for the time being of Norway; 
 “Obligor”
means any party from time to time to any of the Finance Documents, other than (a) any Bank, (b) the Senior Security Trustee and (c), for the avoidance of doubt, a Charterer; 

“Original Guarantee” means the irrevocable and unconditional deed of guarantee and indemnity dated 14 September 2012
executed by the Sponsor in favour of the Security Trustee which shall be released by the Security Trustee subject to the terms of the Amendment and Restatement Deed; 
 “Original Loan Agreement” means this Agreement as originally executed on 1 December 2009 as amended by a supplemental agreement dated 14 February 2011, a second supplemental
agreement dated 14 September 2012 and a third supplemental agreement dated 27 February 2013; 
 “Outstanding
Indebtedness” means the aggregate of the Loan Indebtedness and the Master Agreement Liabilities; 
 “Parent
Guarantee” means the irrevocable and unconditional deed of guarantee and indemnity of the Borrower’s obligations under the Finance Documents executed by the Parent Guarantor in favour of the Security Trustee as required by the
Amendment and Restatement Deed; 
 “Parent Guarantor” means KNOT Offshore Partners LP, a limited partnership
organised under the laws of the Marshall Islands and having its registered office at Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands and its principal executive office at 2 Queen’s Cross, Aberdeen, Aberdeenshire AB15 4YB, United
Kingdom; 

  
 10 

 “Partners” means the General Partner and the Limited Partner; 

“Party” means a party to this Agreement; 
 “Permitted Encumbrance” means: 
  

	 	(a)	any Encumbrance created by or pursuant to the Finance Documents; 

  

	 	(b)	any Encumbrance created by or pursuant to the Senior Security Documents (provided that the Coordination Agreement has been executed by all of the parties thereto);

  

	 	(c)	liens on a Vessel for crew’s wages or salvage and possessory liens on a Vessel for work carried out on that Vessel which has been approved by the Agent;

  

	 	(d)	any other lien on a Vessel arising in the ordinary course of trading by statute or by operation of law in respect of obligations which are not more than 14 days overdue
or which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided) so long as any such proceedings or the continued existence of such lien do not involve any likelihood of the
sale, forfeiture or loss of, or of any interest in, that Vessel; 

 “Potential Event of Default”
means any event or circumstance specified in Clause 14 which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of
Default; 
 “Quiet Enjoyment Letter” means, in relation to a Vessel, the quiet enjoyment letter relating thereto
dated 17 September 2012 and issued by the Security Trustee in favour of the Charterers as referred to in Clause 11 of the relevant Charter; 
 “Quotation Day” means, in relation to any period for which an interest rate is to be determined, the day falling 2 Banking Days before the first day of that period; 

“Repayment Date” means, in relation to a Tranche, each of the Banking Days upon which a Repayment Instalment is due and
payable in accordance with Clause 4.1; 
 “Repayment Instalment” means, in relation to a Tranche, each of the
instalments of that Tranche becoming due on a Repayment Date in accordance with Clause 4.1; 
 “Requisition
Compensation” means, in relation to a Vessel, all moneys or other compensation payable during the Security Period by reason of requisition for title or other compulsory acquisition of that Vessel otherwise than by requisition for hire;

 “Screen Rate” means, in respect of LIBOR for any period, the British Bankers’ Association Interest
Settlement Rate for Dollars for the relevant period, displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate
rate after consultation with the Borrower; 

  
 11 

 “Security Documents” means the Original Guarantee (until released under the
Amendment and Restatement Deed), the Guarantee, the Charter Assignments, the Borrower Shares Security, the General Partner Shares Security, the Mortgages, the Deeds of Covenant, the General Assignments, the Factoring Agreement, the Account Pledge
and any and every other document from time to time executed to secure, or to establish a subordination or priorities arrangement in relation to, all or any of the obligations of any person to the Banks (or any of them) under this Agreement, the
Master Agreements or any other Finance Document; 
 “Security Period” means the period from the Execution Date
until the discharge of the security created by the Security Documents by final and irrevocable repayment or payment in full of the Outstanding Indebtedness; 
 “Senior Agent” means DNB Bank ASA acting in its capacity as agent under and in relation to the Senior Loan Agreement; 

“Senior Finance Documents” means the Senior Loan Agreement, the Senior Loan Original Guarantees, the Senior Loan
Guarantees and the Senior Security Documents; 
 “Senior Lenders” means DNB Bank ASA, Nordea Bank Norge ASA, The
Export Import Bank of China, Crédit Agricole Corporate and Investment Bank and Sumitomo Mitsui Banking Corporation Europe Limited; 
 “Senior Loan” means the principal amount from time to time drawn and outstanding under the Senior Loan Agreement; 
 “Senior Loan Agreement” means the loan facility agreement dated 1 December 2009 (as amended and supplemented from time to time) made between, amongst others, (1) the Borrower,
(2) the Senior Lenders, (3) the Senior Agent and (4) the Senior Security Trustee setting out the terms and conditions on which the Senior Loan Facility is to be made available to the Borrower; 

“Senior Loan Facility” means the loan facility in the amount of up to $160,000,000 to be made available to the Borrower
by the Senior Lenders under the Senior Loan Agreement; 
 “Senior Loan Guarantees” means: 

 

	 	(a)	the irrevocable and unconditional deed of guarantee and indemnity dated 1 December 2009 executed by TSSI in favour of the Security Trustee; and

  

	 	(b)	the irrevocable and unconditional deed of guarantee and indemnity dated 30 January 2012 executed by the Sponsor in favour of the Security Trustee,

  
 12 

 both of which shall be released on or around the date of the release of the Original
Guarantee; 
 “Senior Parent Guarantee” means the irrevocable and unconditional deed of guarantee and indemnity
of the Borrower’s obligations under the Senior Finance Documents executed by the Parent Guarantor in favour of the Senior Security Trustee as required by the Senior Loan Agreement; 

“Senior Security Documents” means the following documents executed in favour of the Senior Security Trustee as security
for repayment of the Senior Loan and payment of all other amounts from time to time due under the Senior Loan Agreement: 
  

	 	(a)	in relation to each Vessel, a first priority mortgage (and, if relevant, deed of covenants) on that Vessel executed by the Borrower; 

 

	 	(b)	in relation to each Vessel, a first priority assignment of the Insurances and Requisition Compensation of that Vessel executed by the Borrower;

  

	 	(c)	in relation to each Vessel, a first priority assignment of the Charter in respect of that Vessel executed by the Borrower; 

 

	 	(d)	a first priority Norwegian law instrument of pledge creating security in respect of the Earnings Account executed by the Borrower; 

 

	 	(e)	a first priority Norwegian law factoring agreement and collateral declaration of pledge in respect thereof executed by the Borrower; 

 

	 	(f)	a first priority Norwegian law instrument of pledge creating security in respect of the partnership shares in the Borrower owned by the Limited Partner executed by the
Limited Partner; and 

  

	 	(g)	a first priority Norwegian law instrument of pledge creating security in respect of the shares in the General Partner executed by KNOT Shuttle Tankers;

 “Senior Security Trustee” means DNB Bank ASA acting in its capacity as security trustee under
and in relation to the Senior Loan Agreement; 
 “Service Bank” means the Agent or the Security Trustee;

 “Sponsor” means Knutsen NYK Offshore Tankers AS, a company incorporated under the laws of Norway with
organisation number 995 221 713 and having its registered office at Smedasundet 40, 5529 Haugesund, Norway; 
 “Total
Loss” means, in relation to a Vessel, (a) actual, constructive, compromised, agreed or arranged total loss of that Vessel; or (b) requisition for title or other 

  
 13 

 compulsory acquisition of that Vessel, otherwise than by requisition for hire; or
(c) capture, seizure, arrest, detention or confiscation of that Vessel by any government or by any persons acting or purporting to act on behalf of any government, unless the Vessel be released and restored to its owner within 30 days
thereafter; 
 “Total Loss Date” means, in relation to a Vessel, the date upon which a Total Loss of that Vessel
shall be deemed to have occurred, being: 
  

	 	(a)	if it consists of an actual loss, at noon London time on the actual date of loss or, if that is not known, on the date when the Vessel was last heard of;

  

	 	(b)	if it consists of a requisitioning for title, at noon London time on the date on which the requisition is expressed to take effect by the person requisitioning the
Vessel; and 

  

	 	(c)	if it consists of a constructive or compromised or arranged or agreed Total Loss, at noon London time on the earliest of: 

 

	 	(i)	the date on which notice of abandonment of the Vessel is given to its insurers; 

 

	 	(ii)	if her insurers do not admit the claim for Total Loss, the actual date of loss or alleged loss; and 

 

	 	(iii)	the date of any compromise, arrangement or agreement entered into by or on behalf of the Borrower with the Vessel’s insurers in respect of the Total Loss;

 “Tranches” means: 

 

	 	(a)	the amount of $9,500,000 advanced by the Lenders to the Borrower in respect of the construction and acquisition of Vessel A and, as the context may require, means the
principal amount from time to time drawn in respect of Vessel A and outstanding under this Agreement, being
$9,062,5002 as at the date of the Amendment and
Restatement Deed (“Tranche A”); 

  

	 	(b)	the amount of $9,500,000 advanced by the Lenders to the Borrower in respect of the construction and acquisition of Vessel B and, as the context may require, means the
principal amount from time to time drawn in respect of Vessel B and outstanding under this Agreement, being $9,175,000 as at the date of the Amendment and Restatement Deed (“Tranche B”); 

“Transaction Documents” means the Charters and the Limited Partnership Agreement; 

“Transfer Certificate” means a transfer certificate in the form set out in Schedule 5 with any modifications or
amendments approved or required by the Agent; 
  

	2 	Note: This assumes that the Amendment and Restatement Deed is executed and dated before 28 March 2013 when the next Repayment Instalment falls due.

  
 14 

 “Transpetro” means Petrobras Transporte S.A., a company incorporated under
the laws of Brazil and having its principal place of business at Av. Presidente Vargas 328, 20091-060 Rio de Janeiro - RJ, Brazil; 
 “Trust Property” has the meaning given in Clause 17.1; 

“TSSI” means TS Shipping Invest AS, a company incorporated under the laws of Norway with organisation number 975 883 914
and having its registered office at Smedasundet 40, 5529 Haugesund, Norway; 
 “Vessels” means: 

 

	 	(c)	the 105,000 dwt shuttle tanker named “FORTALEZA KNUTSEN” registered in the ownership of the Borrower under the laws and flag of the Bahamas at the port of
Nassau with official number 8001830 and IMO number 9499876 (“Vessel A”); 

  

	 	(d)	the 105,000 dwt shuttle tanker named “RECIFE KNUTSEN” registered in the ownership of the Borrower under the laws and flag of the Bahamas at the port of Nassau
with official number 8001832 and IMO number 9499888 (“Vessel B”); 

 (but, unless the context
otherwise requires, shall not include either such vessel which has been sold or become a Total Loss); and 
 “Working
Capital” means, at the date of calculation, the current assets less current liabilities of the Borrower on the basis of GAAP (but excluding from the current liabilities instalments on long-term debt and capital lease payments falling within
6 months after the date of calculation). 
  

	1.2	Construction of certain expressions 

 The following expressions shall be construed in the following manner: 

“affiliate” means, in relation to any person, a subsidiary of that person or a holding company of that person or any
other subsidiary of that holding company; 
 “certified copy” means, in respect of any document, a copy thereof
certified as a true and complete and up to date copy of the original by a director or the secretary of the Borrower or other relevant Obligor or by its lawyers or by another person acceptable to the Agent; 

“environmental law” means all national and international laws, ordinances, rules, regulations, rules of common law,
conventions and agreements pertaining to pollution or protection of human health or the environment; 
 “person”
includes a corporate entity and any body of persons (including a partnership) whether corporate or unincorporate; 

  
 15 

 “subsidiary” and “holding company” have the meanings given
to them by 1159 of the Companies Act 2006; 
 “taxes” includes all present and future income, corporation and
value-added taxes and all stamp and other taxes, duties, levies, imposts, deductions, charges and withholdings whatsoever, together with interest thereon and penalties with respect thereto, if any, and any payments of principal, interest, charges,
fees or other amounts made on or in respect thereof, and references to “tax” and “taxation” shall be construed accordingly. 
  

	1.3	General interpretation 

In this Agreement: 
  

	 	1.3.1	unless the context otherwise requires, words in the singular include the plural and vice versa; 

 

	 	1.3.2	references to any document include the same as varied, supplemented or replaced from time to time; 

 

	 	1.3.3	references to any enactment include re-enactments, amendments and extensions thereof; 

 

	 	1.3.4	references to any person include that person’s successors and permitted assigns; 

 

	 	1.3.5	clause headings are for convenience of reference only and are not to be taken into account in construction; 

 

	 	1.3.6	unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Agreement;

  

	 	1.3.7	references to a period of one or more “months” shall mean a period beginning in one calendar month and ending in the relevant calendar month on the day
numerically corresponding to the day of the calendar month in which such period started, provided that (a) if such period started on the last day in a calendar month, or if there is no such numerically corresponding day, such period shall end
on the last Banking Day in the relevant calendar month and (b) if such numerically corresponding day is not a Banking Day, such period shall end on the next following Banking Day in the same calendar month, or if there is no such Banking Day,
such period shall end on the preceding Banking Day (and “month” and “monthly” shall be construed accordingly). 

  

	1.4	Third party rights 

 A
person who is not a Party may not enforce, or otherwise have the benefit of, any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999. 

  
 16 

	2.	THE LOAN 

  

	2.1	Agreement to advance and purpose 

 Under the terms of the Original Loan Agreement, the Lenders agreed to make Tranche A available to the Borrower in up to 2 separate drawings and to make Tranche B available to the Borrower in up to 2
separate drawings (each such drawing of a Tranche being an “Advance”). Each Advance was made available by the Lenders to the Borrower in the amounts and on the dates set out below: 

Tranche A 
  

							
	Advance	  	Amount	 	  	Drawdown Date
			
	 First Advance
	  	$	3,000,000	  	  	10.02.2010
			
	 Second Advance
	  	$	6,500,000	  	  	03.08.2011

 Tranche B 
  

							
	Advance	  	Amount	 	  	Drawdown Date
			
	 First Advance
	  	$	3,000,000	  	  	01.02.2010
			
	 Second Advance
	  	$	6,500,000	  	  	18.03.2011

 As at the date of the Amendment and Restatement Deed, an amount of $18,237,5003 was outstanding. No further amounts shall be advanced to the Borrower
by the Lenders under this Agreement. 
  

	2.2	[Intentionally omitted] 

  

	2.3	[Intentionally omitted] 

  

	2.4	[Intentionally omitted] 

  

	2.5	Obligations of Banks several 

 The obligations of each Bank under this Agreement and the other Finance Documents are several and, accordingly: 
  

	 	2.5.1	no Bank shall be liable for the failure of any other Bank to perform its obligations under this Agreement or any of the other Finance Documents; and

  

	 	2.5.2	the failure of a Bank to perform any of its obligations under this Agreement or any of the other Finance Documents shall not relieve any other Bank or any Obligor from
any of their respective obligations hereunder or thereunder. 

  

	3 	Note: This assumes that the Amendment and Restatement Deed is executed and dated before 28 March 2013. 

  
 17 

	2.6	Rights of Banks several 

The rights and interests of each Bank under this Agreement and the other Finance Documents are several and, accordingly, notwithstanding
any provision to the contrary herein or therein: 
  

	 	2.6.1	the aggregate of the amounts outstanding at any time under this Agreement and the other Finance Documents to each Bank shall be due as a separate and independent debt;
and 

  

	 	2.6.2	each Bank shall have the right to sue for any amount due and payable to it from the Borrower or any other Obligor under this Agreement or any of the other Finance
Documents and it shall not be necessary for any other Bank to be joined as an additional party in any proceedings to that end. 

  

	2.7	Restrictions on other proceedings by individual Banks 

 Except as provided in Clause 2.6, no Bank shall, except with the prior written consent of the Majority Lenders, bring any proceedings against the Borrower or any other Obligor in respect of any other
claim (whether in contract, tort or otherwise) which that Bank may have under or in connection with this Agreement or any of the other Finance Documents. For the avoidance of doubt, this Clause 2.7 applies to any proceedings against the Borrower or
any other Obligor to enforce any Encumbrance created in favour of the Security Trustee by any Security Document. 
  

	3.	DRAWDOWN 

  

	3.1	Notice of Drawdown 

 The
Borrower drew each Advance in the amounts and on the Drawdown Dates specified in Clause 2.1. 
  

	3.2	[Intentionally omitted] 

  

	3.3	[Intentionally omitted] 

  

	3.4	[Intentionally omitted] 

  

	3.5	[Intentionally omitted] 

  

	3.6	[Intentionally omitted] 

  
 18 

	4.	REPAYMENT 

  

	4.1	Repayment by instalments and Repayment Dates 

 Subject to the provisions of this Agreement, the Borrower shall repay the Loan in instalments as follows 
  

	 	4.1.1	the Borrower shall repay the remaining outstanding balance of Tranche A in the amount of $4,512,500 on the IPO Repayment Date and as to the remainder in the following
amounts on the following dates: 

  

					
	Repayment Date	  	Amount	 
		
	 27 March 2013
	  	$	112,500	  
		
	 28 June 2013
	  	$	212,500	  
		
	 30 September 2013
	  	$	212,500	  
		
	 30 December 2013
	  	$	212,500	  
		
	 28 March 2014
	  	$	212,500	  
		
	 30 June 2014
	  	$	325,000	  
		
	 30 September 2014
	  	$	325,000	  
		
	 30 December 2014
	  	$	325,000	  
		
	 30 March 2015
	  	$	325,000	  
		
	 30 June 2015
	  	$	450,000	  
		
	 30 September 2015
	  	$	450,000	  
		
	 30 December 2015
	  	$	450,000	  
		
	 30 March 2016
	  	$	937,500	  

  

	 	4.1.2	the Borrower shall repay the remaining outstanding balance of Tranche B in the amount of $4,512,500 on the IPO Repayment Date and as to the remainder in the following
amounts on the following dates: 

  

					
	Repayment Date	  	Amount	 
		
	 3 May 2013
	  	$	112,500	  
		
	 5 August 2013
	  	$	112,500	  
		
	 4 November 2013
	  	$	212,500	  
		
	 3 February 2014
	  	$	212,500	  
		
	 5 May 2014
	  	$	212,500	  
		
	 4 August 2014
	  	$	212,500	  
		
	 3 November 2014
	  	$	325,000	  
		
	 3 February 2015
	  	$	325,000	  
		
	 4 May 2015
	  	$	325,000	  
		
	 3 August 2015
	  	$	325,000	  
		
	 3 November 2015
	  	$	450,000	  
		
	 3 February 2016
	  	$	450,000	  
		
	 3 May 2016
	  	$	450,000	  
		
	 3 August 2016
	  	$	937,500	  

  
 19 

	4.2	[Intentionally omitted] 

  

	4.3	Final repayment 

 On the
Final Maturity Date the Borrower shall additionally pay to the Agent all sums which are then accrued or owing to any Bank under any Finance Document. 
  

	5.	PREPAYMENT AND CANCELLATION 

  

	5.1	Voluntary prepayment 

 The
Borrower shall have the right to prepay any Tranche, in whole or in part, on any Banking Day subject to the following conditions: 
  

	 	5.1.1	any prepayment of part of a Tranche must be in a minimum amount or an integral multiple of $1,000,000; and 

 

	 	5.1.2	the Agent must receive not less than 21 days’ notice specifying the amount to be prepaid and the date on which the prepayment is to be made.

 The Agent shall promptly notify the Lenders of any notice which is received from the Borrower under this Clause
5.1. 
  

	5.2	Mandatory prepayment and cancellation upon illegality 

 If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its Contributions: 

 

	 	5.2.1	that Lender shall promptly notify the Agent upon becoming aware of that event and the Agent shall immediately notify the Borrower thereof; and 

 

	 	5.2.2	the Borrower shall repay that Lender’s Contribution in respect of each Tranche on the next Interest Date for that Tranche falling after the date of the
Agent’s notice to the Borrower or, if earlier, the date specified by the Lender in its notice to the Agent (being no earlier than the last day of any applicable grace period permitted by law). 

  
 20 

	5.3	Other mandatory prepayment and cancellation events 

 If any of the following events occurs, the Borrower shall prepay the Loan (or relevant part thereof) as follows: 
  

	 	5.3.1	if a Vessel is sold the Borrower shall simultaneously with the completion of such sale prepay the whole of that Tranche; 

 

	 	5.3.2	if a Vessel becomes a Total Loss, the Borrower shall prepay the whole of the Tranche relating to that Vessel on the date which is the earlier of (a) the date
falling 90 days after the Total Loss Date and (b) the date upon which the insurance proceeds or Requisition Compensation in respect of the relevant Vessel are received by the Security Trustee pursuant to the relevant Security Documents unless
that Vessel was not insured at the time of the Total Loss in accordance with the Finance Documents or an insurer has refused to meet or has disputed the claim for the Total Loss, in which case the Borrower shall prepay the whole of the relevant
Tranche within 10 Banking Days of its receipt of a demand from the Agent for prepayment of that amount; and 

  

	 	5.3.3	if a Charter Termination Event occurs in respect of a Vessel the Borrower shall prepay the whole of that Tranche within 90 days of its receipt of a demand from the
Agent for prepayment of that amount. 

  

	5.4	Conditions of prepayment and cancellation 

 The following shall apply to any prepayment under this Agreement: 
  

	 	5.4.1	each prepayment must be made together with the accrued interest on the amount prepaid and all other sums payable in respect thereof under the provisions of this
Agreement and, in the case of prepayment of the whole of the Loan, shall be accompanied by payment of all other Outstanding Indebtedness; 

  

	 	5.4.2	unless otherwise specifically stated herein, any partial prepayment of the Loan made hereunder shall be applied as follows: 

 

	 	(a)	any partial prepayment of a Tranche made pursuant to Clause 5.1 shall be applied towards the discharge of the remaining Repayment Instalments of that Tranche in inverse
order of maturity; and 

  

	 	(b)	any partial prepayment of the Loan made pursuant to Clause 5.2 or any other relevant provision of this Agreement shall be paid to the relevant Lender or Lenders and all
of the remaining Repayment Instalments shall be reduced pro rata accordingly; 

  

	 	5.4.3	any notice of prepayment or cancellation given by the Borrower shall be given in writing, shall be effective on receipt by the Agent and shall be irrevocable once given
and, in the case of a notice of prepayment, the Borrower shall be bound to make the relevant prepayment in accordance with it; 

  

	 	5.4.4	except as specifically provided in this Agreement, in the absence of an Event of Default and demand for repayment by the Agent, the Lenders shall not be obliged to
accept any other prepayment of the whole or any part of the Loan; 

  
 21 

	 	5.4.5	any part of the Loan which is repaid or prepaid by the Borrower may not be redrawn; and 

 

	 	5.4.6	any prepayment made on a day other than the last day of an Interest Period applicable to the whole amount prepaid shall be made together with any Break Costs.

  

	5.5	Unwinding of Designated Transactions 

 On or prior to any prepayment or repayment of all or any part of the Senior Loan or the Loan under any relevant provision of the Senior Loan Agreement or this Agreement, the Borrower shall wholly or
partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future
(taking into account scheduled amortisation) exceed the aggregate amount of the Senior Loan and the Loan. 
  

	6.	INTEREST 

  

	6.1	Payment of interest 

Subject to the provisions of this Agreement, the Borrower shall pay interest on each Tranche or any part thereof (as the case may be) at
the Interest Rate applicable thereto in arrears on the last day of each Interest Period, except in the case of an Interest Period longer than 3 months where interest shall be paid every 3 months during that Interest Period and on the last day of
that Interest Period. 
  

	6.2	Interest Rate 

 Subject to
Clause 6.3, the Interest Rate applicable in respect of a Tranche for each Interest Period relating to that Tranche will be the annual rate of interest determined by the Agent to be the aggregate of: 

 

	 	6.2.1	the Applicable Margin; and 

  

	 	6.2.2	LIBOR (or, if a Market Disruption Event has occurred, the rate determined in accordance with the substitute basis agreed by the Parties under Clause 6.6 or, if no
substitute basis has been agreed under such Clause, the rate notified by the Agent to be that which expresses as a percentage rate per annum the aggregate cost to the Lenders of funding their Contributions from whatever sources they may each
reasonably select). 

  

	6.3	Default Rate 

 If the
Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of 

  
 22 

 
actual payment (both before and after judgment) at a rate which is 2% higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted
the Loan for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 6.3 shall be immediately payable by the Borrower on demand by the Agent. If unpaid, any such interest
will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. 
  

	6.4	Borrower’s selection of Interest Periods 

 Subject to Clauses 6.4.1 to 6.4.6 and the other provisions of this Agreement, the Borrower may, by giving notice in writing to the Agent not later than 10.00 a.m. London time 3 Banking Days before the
first day of each Interest Period, select the duration of that Interest Period (being a period of 3 or 6 months or such other period for which a Screen Rate is published as the Borrower may select and the Lenders may agree). 

The following shall apply in determining the duration of an Interest Period in respect of a Tranche: 

 

	 	6.4.1	except as provided in this Clause 6.4, the Borrower may select the duration of an Interest Period only in relation to the whole of the Tranche to which it relates;

  

	 	6.4.2	each Interest Period in respect of a Tranche shall commence on the last day of the immediately preceding Interest Period for that Tranche; 

 

	 	6.4.3	the Borrower shall make each selection under this Clause 6.4 (and in the case of the duration of the Interest Period being determined in accordance with Clause 6.4.4
below shall be deemed to have selected the period so determined) in such manner as to ensure that, in the event that any Repayment Date in respect of the relevant Tranche falls within the Interest Period so selected, a separate Interest Period is
selected in respect of the part of the Tranche due to be repaid under Clause 4.1 on such Repayment Date, the expiry of which period coincides with the relevant Repayment Date (and for this purpose alone the Borrower shall be entitled to select
Interest Periods of different lengths in relation to a Tranche); 

  

	 	6.4.4	in the absence of any such selection by the Borrower of the duration of an Interest Period, or if the Agent shall certify to the Borrower that the funds requested are
not available for an Interest Period of the duration selected by the Borrower, the duration of that Interest Period shall (subject as provided in this Clause 6.4) be 3 months or such other period as the Lender may specify; 

 

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

  

	 	6.4.6	no Interest Period in respect of a Tranche shall extend beyond the final Repayment Date of that Tranche. 

  
 23 

	6.5	Agent’s notification 

The Agent shall promptly notify the Borrower and the Lenders of each determination under this Agreement of (a) the duration of an
Interest Period and/or (b) a rate of interest. 
  

	6.6	Market disruption 

 In
this Agreement a “Market Disruption Event” shall occur if: 
  

	 	6.6.1	at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and the Agent is unable to supply a rate to determine LIBOR for
the relevant Interest Period; or 

  

	 	6.6.2	before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notification from a Lender or Lenders whose Contributions
exceed 50% of the Total Contributions that the cost to it or them of obtaining matching deposits in the London interbank market for that Interest Period would be in excess of LIBOR. 

If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations
(for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest for the Loan. Any substitute basis so agreed shall, with the prior consent of the Borrower and all the Lenders, be binding on all
of the Parties. In the absence of such agreement, the Interest Rate for the Loan shall be determined in accordance with Clause 6.2 provided that the Borrower shall have the right, upon giving 5 Banking Days notice to the Agent, to prepay the whole
of the Loan. 
  

	7.	PAYMENTS 

  

	7.1	Place, time and manner of payment 

 Unless otherwise specified by the Agent, all moneys to be paid by the Lenders to the Agent or by the Borrower to any Bank under this Agreement, the Fee Letters and the Security Documents shall be paid to
the Agent in Dollars by not later than 10.00 a.m. (London time) on the due date and in same day funds to such account as the Agent may from time to time notify the Borrower. The Borrower waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. 

  
 24 

	7.2	Order of application 

Except as otherwise specifically provided in this Agreement or in any other of the Finance Documents (and subject always to the
Coordination Agreement), all moneys received or recovered by any Bank under the Security Documents will, after discharging the cost (if any) incurred in collecting such moneys, be applied as follows: 

 

	 	7.2.1	first, in or towards payment of any Loan Indebtedness which is then due and payable, whether by reason of payment demanded or otherwise, pro rata between the relevant
Banks in such order of application as the Agent may, with the Majority Lenders’ approval, think fit; 

  

	 	7.2.2	secondly, in or towards payment of any Master Agreement Liabilities due but unpaid under the Master Agreements, pro rata between the Swap Providers;

  

	 	7.2.3	thirdly, at the Agent’s discretion, in retention on a suspense account of such amount as the Agent may consider appropriate to secure the discharge of any part of
the Outstanding Indebtedness not then due and payable, and, upon the same becoming due and payable, in or towards the discharge thereof in accordance with the foregoing provisions of this Clause 7.2; 

 

	 	7.2.4	lastly, the surplus (if any) shall be paid to the Borrower or whomsoever else shall be entitled thereto. 

The provisions of this Clause 7.2 will override any appropriation made by the Borrower. 

 

	7.3	Availability of funds conditional upon receipt by Agent 

 The Agent shall not be obliged to make available to any other Party any amount which it is due to receive for the account of that Party unless it is satisfied that it has unconditionally received the
funds concerned. 
  

	7.4	Refunds by Borrower 

Without prejudice to Clause 7.3, if the Agent makes an amount available to the Borrower which has not (but should have) been made
unconditionally available to the Agent by a Lender, the Borrower shall on demand refund such amount to the Agent. 
  

	7.5	Refunds by Banks 

 Without
prejudice to Clause 7.3, if the Agent makes an amount available to a Bank which has not (but should have) been paid to the Agent by the Borrower, such Bank shall: 
  

	 	7.5.1	on demand refund such amount to the Agent; and 

  

	 	7.5.2	pay to the Agent on demand such further amount (as conclusively certified by the Agent) as shall indemnify the Agent against any cost, loss, liability or expense
suffered or incurred by the Agent as a result of its having made available such amount to that Bank before receiving it from the Borrower. 

  
 25 

	7.6	Non-Banking Days 

 Any
payment which is due to be made on a day that is not a Banking Day shall be made on the next Banking Day in the same calendar month (if there is one) or the preceding Banking Day (if there is not). 

 

	7.7	Accrual of interest and periodic payments 

 All payments of interest and other payments of an annual or periodic nature to be made by the Borrower shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and
a 360 day year. 
  

	8.	NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION 

  

	8.1	No set-off or counterclaim 

All payments to be made by the Borrower under this Agreement and the other Finance Documents shall be made without set-off or counterclaim
free and clear of, and without deduction for or on account of, any present or future taxes, unless the Borrower is compelled by law to make payment subject to any such tax. 

 

	8.2	Gross up 

 If the Borrower
is compelled by law to make any tax deduction from any payment due under any of the Finance Documents, the Borrower will: 
  

	 	8.2.1	promptly notify the Agent upon becoming aware of such requirement; 

  

	 	8.2.2	pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; 

 

	 	8.2.3	pay the Bank to which such payment is made such additional amount as is necessary to ensure that such Bank receives a net amount equal to the full amount which it would
have received had such tax deduction not been required to be made; and 

  

	 	8.2.4	as soon as reasonably practicable after making the relevant tax deduction, deliver to the Agent a copy of the receipt from the relevant taxation authority evidencing
that the tax had been paid to such authority. 

  

	8.3	Tax credit 

 If, following
any such tax deduction as is referred to in Clause 8.1 from any payment by the Borrower, the recipient of that payment shall receive or be granted a credit against or remission for any taxes payable by it, such recipient shall, subject to the
Borrower having made any increased payment in accordance with Clause 8.2.3 and to the extent that such recipient can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of such
recipient to obtain any other relief or allowance which may be available to it, reimburse the Borrower with such amount as such recipient shall in its absolute discretion certify to be the proportion of such credit or remission as will leave it
(after such 

  
 26 

 
reimbursement) in no worse position than it would have been in had there been no such deduction or withholding from the payment to such recipient as aforesaid. Such reimbursement shall be made
forthwith upon the recipient certifying that the amount of such credit or remission has been received by it. Nothing contained in this Agreement shall oblige any Bank to rearrange its tax affairs or to disclose any information regarding its tax
affairs and computations. Without prejudice to the generality of the foregoing, the Borrower shall not by virtue of this Clause 8.3 be entitled to enquire about the tax affairs of any Bank. 

 

	8.4	Double tax treaties 

Where the Borrower is or may be obliged to withhold tax from any payment to a Bank under the Finance Documents and its obligation to
withhold such tax may be eliminated or reduced under any applicable double taxation agreement or treaty, the relevant Bank will promptly comply with all appropriate formalities required to be performed by it under such double taxation agreement or
treaty (save as may depend on action being taken by a third party which has not been taken) so that it can receive payments from the Borrower under the Finance Documents without deduction of such tax or with deduction at the reduced level permitted
by such double taxation agreement or treaty. 
  

	9.	EARNINGS 

  

	9.1	Earnings Account 

 The
Borrower has established and undertakes to maintain with the Senior Agent (free of Encumbrances and rights of set off other than Permitted Encumbrances) (i) a Dollar denominated earnings account, (ii) a Euro denominated earnings account
and (iii) a Norwegian Kroner denominated earnings account for the purpose of collecting the Earnings of the Vessels. 
  

	9.2	Payment of Earnings 

 The
Borrower undertakes to procure that throughout the Security Period, unless and until the Agent shall otherwise direct in accordance with Clause 9.3.2, all Earnings due to the Borrower in respect of a Vessel shall be paid and credited to the
applicable Earnings Account. 
  

	9.3	Withdrawals; appropriation 

Any amounts from time to time credited to the Earnings Accounts may be withdrawn by the Borrower without restriction unless and until an
Event of Default has occurred in which case (subject always to the Coordination Agreement): 
  

	 	9.3.1	the Borrower shall not be entitled to make any further withdrawal without the prior consent of the Majority Lenders; and 

 

	 	9.3.2	 the Agent shall forthwith become entitled to direct that the Earnings be paid to such place and account as the Agent may think fit, and following such

  
 27 

	 	
Event of Default (without prejudice to the Banks’ rights under Clause 14.1.7) at any time and, without notice to the Borrower, to appropriate all or any of the moneys standing to the credit
of the Earnings Accounts and any Earnings which may thereafter be received by the Security Trustee or Agent and apply the same in or towards the discharge of the Outstanding Indebtedness in accordance with Clause 7.2. 

 

	9.4	Continuing obligations of Borrower 

 Nothing in this Clause 9 or in the Account Pledge, whether express or implied, shall relieve the Borrower of its absolute and unconditional obligation to repay the Loan, to pay interest thereon and to pay
all other sums from time to time due, owing or payable hereunder and under any of the other Finance Documents. 
  

	10.	REPRESENTATIONS AND WARRANTIES 

  

	10.1	Date of representations and warranties 

 The Borrower represents and warrants that the following matters are true at the date of the Amendment and Restatement Deed. 
  

	10.2	Existence, powers, compliance and solvency 

 The Borrower: 
  

	 	10.2.1	is a limited liability partnership which is duly established, validly existing and in good standing under the laws of Norway; 

 

	 	10.2.2	has full power to own its property and assets and to carry on its business as it is now being conducted; 

 

	 	10.2.3	has complied with all statutory and other requirements relative to its business; 

 

	 	10.2.4	is solvent and not in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator,
trustee or analogous officer has been appointed in respect of it or all or any part of its assets. 

  

	10.3	Capacity and authorisation 

The entry into and performance by the Borrower of this Agreement and the other Finance Documents and the Charters to which it is (or is to
become) a party are within the corporate powers of the Borrower and have been duly authorised by all necessary corporate actions and approvals. In entering into this Agreement and the other relevant Finance Documents and Charters the Borrower is
acting on its own account and not as agent or nominee of any person. 

  
 28 

	10.4	No contravention of laws or contractual restrictions 

 The entry into and performance by the Borrower of this Agreement and the other Finance Documents and the Charters to which it is (or is to become) a party do not and will not: 

 

	 	10.4.1	contravene in any respect the constitutional documents of the Borrower or any law, regulation or contractual restriction which does, or may, bind the Borrower or any of
its assets; or 

  

	 	10.4.2	result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) on any of its assets in favour of any party. 

 

	10.5	Licences and approvals in force 

 All licences, authorisations, approvals and consents necessary for the entry into, performance, validity, enforceability or admissibility in evidence of this Agreement, the other Finance Documents and the
Charters have been obtained and are in full force and effect and there has been no breach of any condition or restriction imposed in this respect. 
  

	10.6	Validity and enforceability 

 When duly executed and delivered, and where applicable registered, each of the Finance Documents will constitute the legal, valid and binding obligations of each Obligor which is a party thereto
enforceable against such Obligor in accordance with its terms, except insofar as enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws affecting creditors’ rights generally.

  

	10.7	Status of Transaction Documents 

 The copies of the Transaction Documents delivered to the Agent are true and complete copies. The Transaction Documents constitute legal, valid, binding and enforceable obligations of the parties thereto
in accordance with their respective terms. No material amendments or additions to the Transaction Documents have been agreed nor has any party thereto waived any of its respective rights under any of the Transaction Documents. 

 

	10.8	No litigation current or pending 

 No litigation, arbitration, tax claim or administrative proceeding is current or pending or (to the knowledge of the Borrower) threatened, which, if adversely determined, would have a Material Adverse
Effect. 
  

	10.9	No default 

  

	 	10.9.1	No Event of Default or Potential Event of Default is continuing or might reasonably be expected to result from the advance of all or any part of the Loan.

  

	 	10.9.2	The Borrower is not in default under any other agreement where such default would or might have a Material Adverse Effect. 

  
 29 

	10.10	Governing law and enforcement 

 The choice of English law as the governing law of any Finance Document expressed to be governed by English law will be recognised and enforced in the jurisdiction of incorporation of each relevant
Obligor, and any judgment obtained in England in relation to any such Finance Document will be recognised and enforced in the jurisdiction of incorporation of each relevant Obligor. 

 

	10.11	Truth of financial and other information 

 All factual information furnished in writing to any Bank by or on behalf of the Borrower or any other Obligor in connection with the negotiation and preparation of this Agreement, the Amendment and
Restatement Deed and the other Finance Documents was (when given) true and correct in all material respects and there are no other facts or considerations the omission of which would render any such information materially misleading. 

 

	10.12	No liability to deduction or withholding 

 All payments to be made by the Borrower under this Agreement and the other Finance Documents may be made free and clear of and without deduction or withholding for or on account of any taxes, and neither
this Agreement nor any of the other Finance Documents is liable to any registration charge or any stamp, documentary or similar taxes imposed by any authority, including without limitation, in connection with the admissibility in evidence of any
thereof. 
  

	10.13	Tax compliance 

 The
Borrower has complied in all material respects with all relevant tax laws and regulations applicable to it and its business. 
  

	10.14	Ownership of Borrower and Partners 

  

	 	10.14.1	All of the partnership shares in the capital of the Borrower are wholly owned, legally and beneficially, as to 10% by the General Partner and as to 90% by the Limited
Partner. 

  

	 	10.14.2	Each of the Partners is legally and beneficially owned as to 100% directly or indirectly by the Parent Guarantor. 

 

	 	10.14.3	The Parent Guarantor is legally and beneficially owned as to at least one-third directly or indirectly by the Sponsor. 

 

	 	10.14.4	The MLP General Partner is legally and beneficially owned as to 100% directly or indirectly by the Sponsor. 

  
 30 

	10.15	Pari passu obligations 

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

	10.16	No commissions or rebates 

There are no commissions, rebates, premiums or other payments by or to or for the account of any Obligor, its shareholders or partners (as
the case may be) or directors in connection with the transactions contemplated by this Agreement, other than as disclosed to the Agent in writing. 
  

	10.17	Continuing nature of representations and warranties 

 The Borrower agrees that the representations set out in this Clause 10 (other than the ones in Clauses 10.5, 10.8, 10.9.1, 10.12 and 10.14) shall survive the execution of this Agreement and shall be
deemed to be repeated on each Interest Date with reference to the facts and circumstances then subsisting, as if made on such date. 
  

	11.	GENERAL UNDERTAKINGS 

  

	11.1	Duration of undertakings 

The undertakings in this Clause 11 shall remain in force from the date of the Amendment and Restatement Deed to the end of the Security
Period. 
  

	11.2	General undertakings 

 The
Borrower shall: 
  

	 	11.2.1	perform and observe the several covenants and obligations imposed upon it under the Finance Documents; 

 

	 	11.2.2	without affecting its obligations under the applicable provisions of the Finance Documents, perform and observe its obligations under the Charters and use its best
endeavours to procure that each of the other parties to the Charters performs and observes its obligations thereunder; 

  

	 	11.2.3	maintain its corporate existence as a limited liability partnership duly established, validly existing and in good standing in Norway; 

 

	 	11.2.4	obtain and maintain in force, and promptly furnish certified copies to the Agent of, all licences, authorisations, approvals and consents, and do all other acts and
things, which may from time to time be necessary or desirable for the continued due performance of its obligations under the Finance Documents and the Transaction Documents or which may be required for the validity, enforceability or admissibility
in evidence of the Finance Documents and the Transaction Documents; 

  

	 	11.2.5	ensure that its obligations under the Finance Documents rank at least pari passu with all its other present, future and/or contingent unsecured and unsubordinated
obligations; 

  
 31 

	 	11.2.6	conduct its business in a proper and efficient manner and not change the nature, organisation or conduct of its business or conduct any business other than that of
ownership of the Vessels; 

  

	 	11.2.7	manage its business in compliance with all relevant applicable laws and regulations (including, without limitation, all relevant environmental laws and regulations) and
shall notify the Agent immediately upon becoming aware of any breach of the same; 

  

	 	11.2.8	pay all taxes, assessments and other governmental charges as they fall due, except to the extent that it is contesting the same in good faith by appropriate proceedings
and has set aside adequate reserves for their payment if such proceedings fail; 

  

	 	11.2.9	keep proper books of account in respect of its business in accordance with GAAP consistently applied and whenever so requested by the Agent make the same available for
inspection by or on behalf of the Agent; and 

  

	 	11.2.10	be permitted to declare or pay any dividends upon any of its partnership shares or stock or otherwise distribute any assets to any of the Partners whether in cash or
otherwise, provided that: 

  

	 	(a)	no Event of Default has occurred and is continuing at the time of payment of such dividend; and 

 

	 	(b)	the Agent is satisfied that, after payment of such dividend, the remaining Liquidity of the Borrower will equal or exceed the aggregate amount of (i) the Repayment
Instalments falling due in the next 6 months after the dividend payment date and (ii) the amount estimated by the Agent as being the amount of interest on the Loan which will fall due for payment by the Borrower under Clause 6 during that 6
month period. 

  

	11.3	Consent of Lenders required 

 The Borrower shall not without the prior consent of the Lenders: 
  

	 	11.3.1	except as contemplated by this Agreement: 

  

	 	(a)	sell or agree to sell or otherwise dispose of a Vessel or any share therein other than a sale upon the completion of which the Tranche relating to that Vessel is
prepaid in full in accordance with Clause 5.3.1; or 

  

	 	(b)	convey, assign, transfer, sell or otherwise dispose of or deal with any of its other real or personal property, assets or rights, whether present or future;

  
 32 

	 	11.3.2	create or permit to exist any Encumbrance (other than a Permitted Encumbrance) over any part of its undertaking, property, assets or rights, whether present or future
(provided that where any such Encumbrance arises in the ordinary course of business, the Borrower shall promptly discharge the same); 

  

	 	11.3.3	incur any Financial Indebtedness (except for the Loan, the Senior Loan, any Master Agreement Liabilities and any loans or advances made to it by any member of the
Group) nor incur any obligations as lessee under leases; 

  

	 	11.3.4	except as contemplated by this Agreement, assume, guarantee or endorse, or otherwise become or remain liable for, any obligation of any other person (other than a
member of the Group); 

  

	 	11.3.5	authorise or accept any capital commitment (except for any capital commitments made by any other member of the Group); 

 

	 	11.3.6	issue any further shares or stock or register any transfer of any of its shares or stock, or admit any new partner, whether by subscription or transfer (except to any
member of the Group); 

  

	 	11.3.7	consolidate, amalgamate or merge with any other entity or demerge or enter into any form of reconstruction or reorganisation or do anything analogous thereto;

  

	 	11.3.8	form or acquire any subsidiary; 

  

	 	11.3.9	alter or extend its financial year for the purposes of the preparation of its accounts, or change its auditors; 

 

	 	11.3.10	make any loans or advances to, or any investments in, any person (including, without limitation, any officer, director, stockholder, employee or customer of the
Borrower) except for loans made in the ordinary course of the Borrower’s business in respect of the Vessels; 

  

	 	11.3.11	if a Potential Event of Default or Event of Default has occurred, make any payment of principal or interest to any of the Partners or their affiliates in respect of any
loans or loan capital made available to it by the Partners or their affiliates; 

  

	 	11.3.12	consolidate or subdivide or alter any of the rights attached to, or reduce, any of its share capital, or capitalise, repay or otherwise distribute any amount
outstanding to the credit of any capital or revenue reserves, redeem any of its share capital in any way or enter into any arrangement with its creditors; 

  

	 	11.3.13	charter-in any vessel; 

  
 33 

	 	11.3.14	undertake any transaction with any person, company or other entity which is an affiliate of the Borrower unless such transaction is conducted at arm’s length on
normal commercial terms; 

  

	 	11.3.15	change its name or its place of incorporation or its domicile or alter its legal status as a limited liability partnership (and the Borrower undertakes to procure that,
except with the prior consent of the Lenders, no other Obligor shall change its name or its place of incorporation or its domicile or alter its legal status as a limited liability company or limited liability partnership, as the case may be).

  

	12.	INFORMATION UNDERTAKINGS 

  

	12.1	Duration of undertakings 

The undertakings in this Clause 12 shall remain in force from the date of this Agreement to the end of the Security Period. 

 

	12.2	Financial information 

The Borrower will provide to the Agent: 
  

	 	12.2.1	within 150 days of the end of each financial year of the Borrower, certified copies (in a sufficient number for each of the Banks) of the profit and loss accounts and
balance sheets of the Borrower for that financial year, prepared in accordance with GAAP and audited by auditors previously approved in writing by the Agent; 

 

	 	12.2.2	within 90 days of 31 March, 30 June, 30 September and 31 December in each year, certified copies (in a sufficient number for each of the Banks) of
the unaudited profit and loss accounts and balance sheets of the Borrower for the relevant financial year to date, prepared in accordance with GAAP; 

  

	 	12.2.3	as at 31 March, 30 June and 30 September in each year (and within 90 days of each such date) and as at 31 December in each year (and within 150 days
of each such date), a compliance certificate in the form set out in the Parent Guarantee signed by the chief financial officer or chief executive officer of the Parent Guarantor and the Borrower confirming that they and the other Obligors are, as at
the date of such certificate, in compliance with their respective obligations under the Finance Documents and that no Event of Default or Potential Event of Default has occurred, or, if any has occurred, that none is continuing;

  

	 	12.2.4	within 60 days after 31 December in each year, a certified copy of the financial projections of the Borrower for that year and the next 5 years (including profit
and loss, balance sheet and cash flow forecasts with supporting schedules and calculations); 

  

	 	12.2.5	promptly, such further information in the possession or control of the Borrower regarding its financial condition and operations as the Agent may reasonably request.

  
 34 

	12.3	Notification of material litigation 

 The Borrower will inform the Agent promptly of any litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other occurrence of which it
becomes aware which, in any such case, might have a Material Adverse Effect. 
  

	12.4	Notification of default 

The Borrower will 
  

	 	12.4.1	promptly after the happening of any Event of Default or a Potential Event of Default, notify the Agent of such event and of the steps (if any) which are being taken to
remedy it; and 

  

	 	12.4.2	without prejudice to Clause 12.4.1, promptly upon a request by the Agent if an Event of Default or a Potential Event of Default has occurred and is continuing (or the
Agent reasonably believes that an Event of Default or a Potential Event of Default may have occurred and then be continuing), supply to the Agent a certificate signed on behalf of the Borrower by any two of its directors and/or executive officers
identifying all of the Events of Default and Potential Events of Default, if any, of which the Borrower is aware and which are then continuing (and specifying the steps, if any, being taken to remedy them). 

 

	12.5	“Know your customer” checks 

 The Borrower will provide the Agent with any information requested by a Lender in order for it to comply with any anti-money laundering or “know your customer” legislation, regulation or
procedures applicable to that Lender from time to time. 
  

	12.6	Provision of further information 

 The Borrower will promptly provide the Agent with such other financial and other information concerning itself and its affairs and the Vessels as the Agent, for itself or on behalf of any Lender, may from
time to time require. 
  

	13.	PROVISIONS RELATING TO THE CHARTERS 

  

	13.1	Banks’ acknowledgment of Charter requirements 

 The Banks acknowledge that under the terms of the Charters: 
  

	 	13.1.1	during the Charter Period in respect of a Vessel, the Charterers are entitled to register that Vessel in the name of a Charterer in the Brazilian bareboat registry and
that during the period of such registration (“Dual Registration”) the Vessel will fly the Brazilian flag and her right to fly the flag of the Bahamas will be suspended; 

  
 35 

	 	13.1.2	the Borrower is required to procure a letter of quiet enjoyment from the Security Trustee as mortgagee in respect of each Vessel, such letter of quiet enjoyment to be
in a form approved by the Charterers and the Lenders; 

  

	 	13.1.3	the terms of the Mortgage and Deed of Covenant for each Vessel are to be approved by the Charterers. 

The Banks further acknowledge that, notwithstanding the provisions of Clause 11 of the Charters which require the Charterers to
countersign the Deed of Covenant in respect of each Vessel (a) to acknowledge that they are acquainted with its terms and (b) to undertake that they will comply with all instructions or directions in regard to the employment, insurance,
repair and maintenance of that Vessel as laid down in the Deed of Covenant or as may be directed by the Security Trustee during the relevant Charter Period in conformity with the Deed of Covenant, the Charterers may not in fact be willing to
countersign the Deeds of Covenant and that all direct agreements between the Security Trustee and the Charterers may be set out in the Quiet Enjoyment Letter instead. 
  

	13.2	Consent to Dual Registration 

 Subject to satisfaction of the conditions specified in Clause 13.3, the Banks consent to the Dual Registration of each Vessel at any time on or after the commencement of the Charter Period relating to it
and irrevocably authorise the Security Trustee to give any requisite consents required by any applicable ship registrar or other official in the Bahamas and/or Brazil to permit such Dual Registration. 

 

	13.3	Conditions of consent to Dual Registration 

 The Banks’ consent to the Dual Registration of a Vessel is subject to the following conditions precedent being satisfied on or prior to the commencement of such Dual Registration: 

 

	 	13.3.1	receipt by the Agent of opinions satisfactory to the Agent from lawyers qualified to advise on the laws of the Bahamas and Brazil that the Dual Registration is
permitted by their respective laws for the duration of the relevant Charter Period and that the Mortgage over the relevant Vessel and the Borrower’s title thereto remain duly registered under the laws of the Bahamas following the Dual
Registration and that on termination of the relevant Charter or a judicial sale of that Vessel the Dual Registration will be terminated without unreasonable delay and without any discretionary consents from any authorities in Brazil;

  

	 	13.3.2	receipt by the Agent of evidence that the Bahamian ship registry has consented to (a) the suspension of the relevant Vessel’s right to fly the flag of that
state and (b) the temporary registration of that Vessel in the Brazilian bareboat registry during the relevant Charter Period in the name of a Charterer; 

  
 36 

	 	13.3.3	receipt by the Agent of evidence that the Brazilian bareboat registry has consented to the temporary registration of the relevant Vessel in the Brazilian bareboat
registry during the relevant Charter Period in the name of a Charterer and that such registration has been effected; 

  

	 	13.3.4	evidence that details of (a) the Borrower’s ownership title in the relevant Vessel and (b) the Mortgage on that Vessel have been noted or registered
against the Vessel in the Brazilian bareboat registry and that no other Encumbrances are registered against the Vessel in such registry; 

  

	 	13.3.5	receipt by the Agent in form and substance acceptable to the Lenders of any powers of attorney, instruction letters or other documents as the Lenders may reasonably
require from the Borrower and the Charterers (but, in the case of the Charterers, only if and to the extent that the Charterers agree to provide the same) in order to enable the Agent or Security Trustee, upon termination of the relevant Charter or
a judicial sale of that Vessel, to apply for cancellation of that Vessel’s registration in the Brazilian bareboat registry and the reinstatement of her full registry under the laws and flag of the Bahamian ship registry (each such document, if
any, being a “Deregistration Document”). 

  

	13.4	Quiet enjoyment 

 Each of
the other Banks confirms that it has authorised and instructed the Security Trustee to execute and perform the Quiet Enjoyment Letter in respect of each Vessel. 
  

	13.5	Charter Assignments 

 The
Borrower has executed on 6 July 2012 and delivered to the Agent the Charter Assignment in respect of each Vessel. 
  

	14.	EVENTS OF DEFAULT 

  

	14.1	Defaults 

 Each of the
following events or circumstances is an Event of Default: 
  

	 	14.1.1	Non-payment An Obligor does not pay on the due date any amount payable pursuant to the Finance Documents at the place and in the currency in which it is
expressed to be payable or, in respect of moneys payable on demand, (unless otherwise specifically provided) within 3 Banking Days from the date of such demand. 

 

	 	14.1.2	 Other obligations An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 14.1.1)
provided that no Event of Default will occur under this Clause 14.1.2 if (a) the failure 

  
 37 

	 	
to comply does not relate to the Insurances, (b) is capable of remedy and (c) is remedied within 10 Banking Days of the Agent giving notice to the Borrower or the Borrower becoming
aware of the failure to comply. 

  

	 	14.1.3	Misrepresentation Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on
behalf of an Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made. 

 

	 	14.1.4	Cross default 

  

	 	(a)	Any Event of Default (as therein defined) occurs under the Senior Loan Agreement; or 

 

	 	(b)	Any Financial Indebtedness of any member of the Group: 

  

	 	(i)	is not paid when due or within any originally applicable grace period; or 

  

	 	(ii)	is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); or

  

	 	(iii)	becomes capable of being declared due and payable prior to its specified maturity as a result of an event of default (however described). 

 

	 	14.1.5	Insolvency 

  

	 	(a)	An Obligor is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated
financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; or 

  

	 	(b)	the value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities); or 

 

	 	(c)	a moratorium is declared in respect of any indebtedness of an Obligor. 

  

	 	14.1.6	Insolvency proceedings Any corporate action, legal proceedings or other procedure or step is taken in relation to: 

 

	 	(a)	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of an Obligor; or 

  
 38 

	 	(b)	a composition, compromise, assignment or arrangement with any creditor of an Obligor; or 

 

	 	(c)	the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of an Obligor or any of its
assets; or 

  

	 	(d)	enforcement of any Encumbrance over any assets of an Obligor, 

 or any analogous procedure or step is taken in any jurisdiction. 
  

	 	14.1.7	Creditors’ process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of an Obligor having an aggregate value
of at least $500,000 and is not discharged within 14 days. 

  

	 	14.1.8	Change of ownership Except with the prior consent of the Lenders: 

  

	 	(a)	the Borrower is not or ceases to be wholly-owned directly or indirectly by the Parent Guarantor; or 

 

	 	(b)	the MLP General Partner is not or ceases to be wholly-owned directly or indirectly by the Sponsor; or 

 

	 	(c)	the Sponsor does not own or ceases to own at least one-third of the share capital and voting rights (subject to the limitations on voting rights relating to election of
board members, amendments and certain other matters as set out in the Limited Partnership Agreement) of the Parent Guarantor; or 

  

	 	(d)	any person or group of persons acting in concert (other than the Sponsor or any wholly-owned subsidiaries thereof) acquires more than 33% of the share capital or voting
rights (subject to the limitations on voting rights relating to election of board members, amendments and certain other matters as set out in the Limited Partnership Agreement) of the Parent Guarantor. 

 

	 	14.1.9	Change or cessation of business An Obligor ceases, or threatens to cease, to carry on its business, or disposes or threatens to dispose of what the Agent
considers a material part of its properties, assets or undertakings, or such a part is seized or nationalised, appropriated or compulsorily purchased by or under the authority of any government 

 

	 	14.1.10	Unlawfulness, impossibility or repudiation It becomes impossible or unlawful for an Obligor to fulfil any of its obligations under the Finance Documents, or for
any Bank to exercise any of the rights vested in it by, or to enforce the security constituted by, the Finance Documents, or any of the Finance Documents for any reason becomes invalid or unenforceable or ceases to be in full force and effect or an
Obligor repudiates or evidences an intention to repudiate any of the Finance Documents. 

  

	 	14.1.11	Revocation or modification of authorisations Any licence, approval, consent, authorisation or registration at any time necessary or desirable for the validity,
enforceability or admissibility in evidence of the Finance Documents, or for an Obligor to comply with its obligations thereunder, or in 

  
 39 

	 	
connection with the ownership or operation of any Vessel, is revoked, withheld or expires, or is modified in what the Agent considers a material respect. 

 

	 	14.1.12	Material litigation Any final and conclusive judgment, order or award is made by any court, arbitration board or other tribunal against any Obligor or any other
member of the Group the effect of complying with which would, in the opinion of the Agent, have a Material Adverse Effect. 

  

	 	14.1.13	Material Adverse Change There is any Material Adverse Change. 

  

	 	14.1.14	Working Capital The Borrower has a negative Working Capital at any time. 

 

	 	14.1.15	Breach of financial covenants The Parent Guarantor fails at any time to comply with the financial covenants set out in Clause 11 of the Parent Guarantee.

  

	 	14.1.16	Listing of the Parent Guarantor The Parent Guarantor ceases to be listed on the New York Stock Exchange. 

 

	 	14.1.17	MLP General Partner The MLP General Partner ceases to: 

  

	 	(a)	be the general partner of the Parent Guarantor; and/or 

  

	 	(b)	own a minimum of 2% of the interests in the Parent Guarantor; and/or 

  

	 	(c)	have the right to appoint 3 out of 7 directors to the board of directors in the Parent Guarantor (provided that if the total number of directors is increased or
decreased, this number shall be increased or decreased pro rata to the total number of directors). 

  

	14.2	Banks’ remedies 

Upon the occurrence of an Event of Default and at any time thereafter without prejudice to any of the rights and remedies of the Agent
and/or the other Banks under any of the other Finance Documents or otherwise: 
  

	 	14.2.1	the Agent may, and shall if so requested by the Majority Lenders, take any one or more of the following actions: 

 

	 	(a)	by written notice to the Borrower demand the immediate repayment of the Loan, all interest accrued thereon and all other Outstanding Indebtedness, whereupon the same
shall become immediately due and payable; and 

  

	 	(b)	take steps to exercise the rights and remedies conferred upon the Agent and/or the other Banks by this Agreement and the other Finance Documents and exercisable on or
after the occurrence of an Event of Default; and 

  

	 	14.2.2	the Security Trustee may, and shall if so requested by the Majority Lenders, take steps to enforce the security created by the Security Documents and/or otherwise
exercise the rights and remedies conferred on the Security Trustee by this Agreement and the Security Documents and exercisable on or after the occurrence of an Event of Default. 

  
 40 

	15.	FEES, EXPENSES AND INDEMNITIES 

  

	15.1	[Intentionally omitted] 

  

	15.2	Amendment fee 

 The
Borrower shall pay to the Agent for distribution to the Lenders in such proportions as they may agree with the Agent a non-refundable amendment fee on such date and in such amount as is specified in the Amendment Fee Letter. 

 

	15.3	Agency fee 

 The Borrower
shall pay to the Agent for its own account a non-refundable agency fee on such dates and in such amount as is specified in the Agency Fee Letter. 
  

	15.4	Indemnity against costs 

The Borrower shall pay to the Agent on demand, and the Borrower shall indemnify and keep each Bank indemnified against, all costs,
charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by that Bank: 

 

	 	15.4.1	in the negotiation, preparation, printing, execution and registration of the Amendment and Restatement Deed and the other Finance Documents; 

 

	 	15.4.2	in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Banks (or any of them) under this Agreement and
the other Finance Documents or of the security constituted by the Finance Documents; 

  

	 	15.4.3	in connection with any actual or proposed amendment of or supplement to this Agreement or any other Finance Document, or with any request to the Banks (or any of them)
to grant any consent or waiver in respect of any provision of this Agreement or any other Finance Document, whether or not the same is given; 

  

	 	15.4.4	arising out of any act or omission made by the Banks (or any of them) in good faith in connection with any of the matters dealt with in the Finance Documents;

  

	 	15.4.5	in the case of a Lender, resulting from its compliance with any requirement of the Bank of England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or, as the case may be, the European Central Bank to pay fees calculated by reference to liabilities used to fund its Contribution. 

  
 41 

	15.5	Tax indemnity 

 The
Borrower shall pay all taxes imposed in relation to the Finance Documents (other than tax on any Bank’s overall net income) and shall on the Agent’s written demand indemnify the Banks against any and all liabilities with respect to, or
resulting from, delay or omission on the part of the Borrower to pay such taxes. 
  

	15.6	Break costs and other general indemnities 

 The Borrower shall pay to the Agent on demand, and shall indemnify each Bank against, any Break Costs and/or other losses, expenses or liabilities whether actual or contingent (as to the amount of which
the Agent’s certificate shall be conclusive and binding upon the Borrower, except in case of manifest error) suffered or incurred by that Bank in connection with or as a result of: 

 

	 	15.6.1	any repayment or prepayment of the whole or any part of a Tranche being made on any date other than the last day of the Interest Period applicable to it;

  

	 	15.6.2	any default in payment by the Borrower of any sum due under the Finance Documents on its due date; or 

 

	 	15.6.3	the occurrence or continuance of an Event of Default and/or a Potential Event of Default. 

 

	15.7	Currency indemnity 

 If
any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum
is payable into another currency (the “Second Currency”) for the purpose of making or filing a claim or proof against that Obligor or obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration
proceedings, the Borrower shall as an independent obligation, within 3 Banking Days of demand, indemnify each Bank to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy
between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Bank at the time of its receipt of that Sum. 

 

	15.8	Increased costs 

 The
Borrower shall, within 3 Banking Days of a demand by the Agent, pay for the account of a Bank the amount of any Increased Cost incurred by that Bank or any of its affiliates as a result of (a) the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation or (b) compliance with any law or regulation made after the date of this Agreement except that this Clause does not apply to the extent any Increased Cost is: 

 

	 	15.8.1	compensated for by a payment under Clause 8.2 or Clause 15.5; or 

  

	 	15.8.2	attributable to the wilful breach by that Bank or its affiliates of any law or regulation. 

  
 42 

 In this Agreement “Increased Cost” means, in respect of a Bank, (a) a
reduction in the rate of return from that Bank’s (or its affiliate’s) overall capital, (b) an additional or increased cost or (c) a reduction of any amount due and payable under any Finance Document, which is incurred or suffered
by that Bank or any of its affiliates to the extent that it is attributable to that Bank funding or performing its obligations under any Finance Document. 
  

	15.9	Environmental indemnity 

Without prejudice to or limitation of any other rights or remedies that may at any time be available to or exercisable by the Agent or any
of the other Banks, the Borrower shall indemnify and hold harmless the Agent and each of the other Banks on demand against all costs, expenses, liabilities, losses, damages, and injury, personal or economic, sustained or incurred by any of them or
their property (real or personal) for any reason as a result of or in connection with any release or the emission, presence, discharge of Material of Environmental Concern on, from, affecting or caused by a Vessel under any applicable environmental
laws including, but not limited to, costs and expenses incurred to clean up or remove discharged oil or other Material of Environmental Concern, damages to third parties, natural resource damage, assessments or penalties, and whether sustained or
incurred during or after the Security Period. 
  

	15.10	Survival of indemnities 

The indemnities contained in the Finance Documents shall continue in full force and effect after the full and final discharge of the
Outstanding Indebtedness with respect to matters arising prior to such discharge. 
  

	16.	THE AGENT 

  

	16.1	Appointment of Agent 

Each Lender hereby irrevocably appoints and authorises the Agent to act as its agent under this Agreement and the other Finance Documents.

  

	16.2	Agent’s powers and discretions 

 The Agent shall have such powers and discretions: 
  

	 	16.2.1	which are expressly delegated to the Agent by the terms of this Agreement and the other Finance Documents; 

 

	 	16.2.2	which the Majority Lenders consider appropriate and give to the Agent (generally or in a particular case) with the Agent’s consent; and 

 

	 	16.2.3	 which the Agent considers to be reasonably incidental to the discharge and performance of any of its functions under this Agreement or any of the other

  
 43 

	 	
Finance Documents or otherwise appropriate in the context of those functions, including the exercise of any powers given to it by the Majority Lenders. 

 

	16.3	Agent is agent only 

 The
relationship between the Agent and each Lender is that of agent and principal only. Nothing in this Agreement or the other Finance Documents shall constitute the Agent a trustee or fiduciary for any Lender or any other person and no action taken by
the Lenders pursuant hereto or thereto, shall be deemed to constitute the Lenders a partnership, association, joint venture or other entity. 
  

	16.4	Agent to have no responsibility to Borrower 

 In performing its functions and duties under this Agreement and the other Finance Documents, the Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed
any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or relationship of agency or trust with or for, the Borrower or any other Obligor in any circumstances whatsoever. 

 

	16.5	Matters within Agent’s authority 

 Subject to Clause 16.6 and the other provisions of this Agreement and the other Finance Documents, the Agent is hereby irrevocably authorised by the Lenders in their name and on their behalf (and shall,
if so directed by written notice from the Majority Lenders after the Lenders shall have consulted for a period of not less than 5 days, which direction shall be binding on all the Lenders): 

 

	 	16.5.1	to waive, modify, vary or otherwise amend or excuse performance of any provisions of this Agreement or any of the other Finance Documents; and 

 

	 	16.5.2	to enforce or take or refrain from taking any other action or proceedings with regard to this Agreement or any of the other Finance Documents, 

 

	16.6	Notification of proposed waivers and amendments 

 Except in cases where the Agent is of the opinion that the Lenders would be prejudiced by any delay in the Agent enforcing or taking action, in which event the Agent may, but shall not be obliged to,
enforce or take action without prior notification to the Lenders, the Agent shall be obliged to notify the Lenders if it proposes to waive, modify, vary or otherwise amend or excuse performance of any provision of this Agreement or any of the other
Finance Documents or to enforce or take or refrain from taking any action under Clause 14.2 and the Agent shall not be entitled to proceed with that proposal unless the Majority Lenders shall give notice to the Agent agreeing to that proposal. The
Agent shall be entitled to cancel that proposal if written notice pursuant to this Clause 16.6 is not received within 5 days of the Lenders being so notified by the Agent. 

  
 44 

	16.7	Agent to act in accordance with instructions of Majority Lenders 

 Subject to the provisions of this Agreement and the other Finance Documents, the Agent agrees to act with respect to this Agreement and the other Finance Documents in accordance with the written
instructions of the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the Banks. In the absence of any such instructions, the Agent shall not be obliged to act. 

 

	16.8	Agent not required to act 

In no event shall the Agent be required to take any action which exposes, or is likely to expose, the Agent to personal liability or which
is contrary to the provisions of: 
  

	 	16.8.1	this Agreement or any of the other Finance Documents; or 

  

	 	16.8.2	any law, regulation or directive. 

  

	16.9	Provision of copy documents to Lenders 

 The Agent shall furnish each Lender: 
  

	 	16.9.1	with copies of any documents received by it under Clause 12 (but the Agent shall not be obliged to review or check the accuracy or completeness thereof);

  

	 	16.9.2	with details of any communication received from the Borrower or any other Obligor referring to this Agreement and which: 

 

	 	(a)	contains a request for a consent or waiver which, under the terms of this Agreement or any other Security Document, requires the consent of the Lenders or the Majority
Lenders; or 

  

	 	(b)	states that an Event of Default or Potential Event of Default has occurred and is continuing; or 

 

	 	(c)	contains any other request or information which, in the reasonable opinion of the Agent, is of a material nature. 

 

	16.10	Provision of copy communications to Agent 

 Each Lender will, promptly after receipt or despatch thereof, forward to the Agent a copy of any communication: 
  

	 	16.10.1	sent by that Lender to the Borrower or any other Obligor in relation to this Agreement or any other Finance Document; or 

 

	 	16.10.2	received by that Lender from the Borrower or any other Obligor and, in each case, relating to this Agreement or any of the Finance Documents. 

 

	16.11	Distributions of sums received and deductions by Agent 

 The Agent shall (subject to Clause 7.3) distribute promptly to each Lender its due proportion of all sums received by the Agent on behalf of the Lenders under this

  
 45 

 
Agreement or any of the other Security Documents, subject to the Agent’s right to deduct and withhold from any such payment any amount which is then (or which will, upon demand by the Agent,
become) due and payable to the Agent from that Lender. 
  

	16.12	Agent’s retention of fees and expenses 

 The Agent may retain for its own use and benefit (and shall not be liable to account to any Lender for all or any part of) any sums received by it by way of fees (and not payable to any Lender) or by way
of reimbursement of expenses incurred by it. 
  

	16.13	Waiver on instructions of Majority Lenders 

 Subject to Clause 16.14, the provisions of this Agreement and any of the Security Documents may be waived, and (subject to the written agreement of each of the other parties thereto, other than the
Lenders) varied or amended, by the Agent acting on the written instructions of the Majority Lenders, in each case evidenced by an instrument in writing, and any such waiver, variation or amendment shall be binding upon all the Lenders. 

 

	16.14	Consent of Agent and all Lenders required 

 Nothing in Clause 16.13 shall authorise the effecting, without the prior written consent of the Agent and all the Lenders, of: 

 

	 	16.14.1	any change in the Applicable Margin or in the definitions of “Majority Lenders”, “Finance Documents” or “Security
Documents”; 

  

	 	16.14.2	any change in the date for, or alteration in the amount (or the basis of determining the amount) of, any payment of principal, interest, fees, or other amounts payable
under this Agreement; 

  

	 	16.14.3	any change to Clauses 2, 3, 4, 5, 6, 7.2, 9, 11.3, 20 and 25; 

  

	 	16.14.4	any change to this Clause 16.14; 

  

	 	16.14.5	the release of any of the security created by or pursuant to the Security Documents (or any of them); or 

 

	 	16.14.6	any other matter in respect of which the terms of this Agreement or any other of the Finance Documents expressly requires the agreement of all the Lenders.

  

	16.15	Borrower’ reliance upon Agent 

 At all times throughout the Security Period the Borrower shall be entitled to rely upon the advice of the Agent as to the giving of any approvals or consents or the exercise of any discretions by the
Lenders or any other act of the Lenders as required by this Agreement and/or the Security Documents or any of them. 

  
 46 

	16.16	Consultation by Agent with Lenders 

 The Agent shall, subject to Clause 16.6, at all times keep the Lenders informed of each and every approval or consent given and each exercise of any such discretion and each performance of any such other
act which the Agent may have performed on behalf of the Lenders as required by this Agreement or any of the Security Documents. 
  

	16.17	Consent of Agent required 

Notwithstanding the provisions of Clauses 16.13 and 16.14, no provision of this Agreement or of any other of the Finance Documents which
in any way relates to the duties, functions, powers or responsibilities of the Agent may be amended, waived or suspended without the prior consent of the Agent. 
  

	17.	THE SECURITY TRUSTEE 

  

	17.1	Trust Property defined 

In this Clause 17, “Trust Property” means: 

 

	 	17.1.1	all rights, title and interests that may be mortgaged, charged, pledged or assigned in favour of the Security Trustee under or by virtue of the Security Documents;

  

	 	17.1.2	all rights granted to, or held or exercisable by, the Security Trustee by virtue of this Agreement and the Security Documents; 

 

	 	17.1.3	all moneys and other assets, which are received or recovered by or on behalf of the Security Trustee under or by virtue of any of the foregoing rights, including as a
result of the enforcement or exercise of any such right; and 

  

	 	17.1.4	all moneys and other assets accrued in respect of or derived from any of the foregoing. 

 

	17.2	Duties of Security Trustee 

The Security Trustee shall: 
  

	 	17.2.1	hold the Trust Property on trust for the Banks in accordance with provisions of this Agreement and the Security Documents; and 

 

	 	17.2.2	perform and exercise the rights and benefits vested in it and deal with the Trust Property in accordance with the provisions of this Agreement and the Security
Documents. 

  

	17.3	Security Trustee to have no responsibility to Borrower 

 The Security Trustee does not assume and shall not be deemed to have assumed any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or relationship of agency or trust with
or for, the Borrower or any other Obligor in any circumstances whatsoever. 

  
 47 

	17.4	Security Trustee’s powers and discretions 

 The Security Trustee shall have such powers and discretions: 
  

	 	17.4.1	which are expressly delegated to the Security Trustee by the terms of this Agreement and the Security Documents; 

 

	 	17.4.2	which the Majority Lenders consider appropriate and give to the Security Trustee (generally or in a particular case) with the Security Trustee’s consent;

  

	 	17.4.3	which the Security Trustee considers to be reasonably incidental and conducive to the discharge and performance of any of its functions under this Agreement or any of
the Security Documents or otherwise appropriate in the context of those functions, including the exercise of any powers given to it by the Majority Lenders; and 

 

	 	17.4.4	which are conferred on a trustee by the Trustee Act 1925 and any other applicable law for the time being in force. 

 

	17.5	Security Trustee to act in accordance with instructions of Majority Lenders 

Subject to the provisions of the Agreement and the Security Documents, the Security Trustee agrees to act with respect to this Agreement
and the Security Documents in accordance with the written instructions of the Agent, or, if the Agent and the Security Trustee are the same person, the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the
Banks. In the absence of any such instructions, the Security Trustee shall not be obliged to act. 
  

	17.6	Security Trustee not required to act 

 In no event shall the Security Trustee be required to take any action which exposes, or is likely to expose, the Security Trustee to personal liability or which is contrary to the provisions of:

  

	 	17.6.1	this Agreement or any of the Security Documents; or 

  

	 	17.6.2	any law, regulation or directive. 

  

	17.7	Provision of copy documents to Banks 

 The Security Trustee shall furnish the Agent, or, if the Agent and the Security Trustee are the same person, each Lender, with copies of any documents received by it under or in connection with this
Agreement or any Security Documents which it considers to be of material importance to the Banks. 

  
 48 

	17.8	Transfer of moneys to Agent 

 The Security Trustee shall, except as expressly stated to the contrary in this Agreement or any Security Document, transfer any moneys forming part of the Trust Property to the Agent for application in
accordance with the relevant provisions of this Agreement and the Security Documents, subject to the Security Trustee’s right to deduct and withhold from any such payment any amount which is then (or which will, upon demand by the Security
Trustee, become) due and payable to it, or to any receiver or agent appointed by it, under this Agreement and the Security Documents. 
  

	17.9	Security Trustee’s retention of fees and expenses 

 The Security Trustee may retain for its own use and benefit (and shall not be liable to account to any other Bank for all or any part of) any sums received by it by way of fees (and not payable to any
other Bank) or by way of reimbursement of expenses incurred by it. 
  

	17.10	Release of security 

 At
the end of the Security Period the Security Trustee shall release without any recourse, warranty or covenants for title whatsoever, all security granted to it pursuant to the Security Documents then held by it, whereupon the Security Trustee shall
be discharged from all liabilities and obligations under this Agreement and the Security Documents. 
  

	17.11	Perpetuity period 

 The
perpetuity period applicable to the trusts created by this Clause 17 is 125 years from the date of this Agreement. 
  

	17.12	Parallel debt 

  

	 	17.12.1	Notwithstanding any other provision of this Agreement the Borrower hereby irrevocably and unconditionally undertakes to pay to the Security Trustee, as creditor in its
own right and not as representative of the Banks, sums equal to and in the currency of each amount payable by the Borrower to each of the Banks under or by virtue of this Agreement and the other Finance Documents as and when that amount falls due
for payment under the relevant Finance Document or would have fallen due but for any suspension of payment, moratorium, discharge by operation of law or analogous event. 

 

	 	17.12.2	The Security Trustee shall have its own independent right to demand payment of the amounts payable by the Borrower under this Clause 17.12, irrespective of any
suspension, extinction or any other discharge for any reason whatsoever (otherwise than by payment) of the Borrower’s obligation to pay those amounts to the Banks other than a discharge by virtue of payment which those Banks are entitled to
retain. 

  
 49 

	 	17.12.3	Any amount due and payable by the Borrower to the Security Trustee under this Clause 17.12 shall be decreased to the extent that the Banks have received (and are able
to retain) payment in full of the corresponding amount under the other provisions of the Finance Documents and any amount due and payable by the Borrower to the Banks under those provisions shall be decreased to the extent that the Security Trustee
has received (and is able to retain) payment in full of the corresponding amount under this Clause 17.12. 

  

	 	17.12.4	The rights of the Banks (other than the Security Trustee) to receive payment of amounts payable by the Borrower under the Finance Documents are several and are separate
and independent from, and without prejudice to, the rights of the Security Trustee to receive payment under this Clause 17.12. 

  

	 	17.12.5	Any amounts received by the Security Trustee shall, to the extent permitted by the mandatory provisions of the applicable law, be applied in accordance with Clause 7.2.

  

	17.13	Coordination Agreement 

Each of the Banks authorises and instructs the Security Trustee to execute and perform the Coordination Agreement. 

 

	18.	RETIREMENT OF A SERVICE BANK 

  

	18.1	Resignation of Service Bank 

 Each Service Bank may at any time resign its appointment under this Agreement by giving the Obligors and the other Banks not less than 30 days’ prior written notice to that effect. 

 

	18.2	Appointment of successor by Majority Lenders 

 After the giving by any Service Bank of a notice of termination the Majority Lenders may in writing appoint a successor. 
  

	18.3	Appointment by retiring Service Bank 

 If no such successor is appointed within the period specified in Clause 18.1, the relevant Service Bank may appoint as its successor any reputable bank or financial institution with an office in Bergen,
Oslo or London. 
  

	18.4	Consequence of change of Service Bank 

 Upon the acceptance by a successor to a Service Bank of its appointment, which acceptance shall be in such form as the Majority Lenders shall approve: 

 

	 	18.4.1	that successor shall become bound by all the obligations of that Service Bank and become entitled to all the rights, privileges, powers, authorities and discretions of
that Service Bank under this Agreement and the Security Documents; 

  
 50 

	 	18.4.2	the obligations of that Service Bank under this Agreement and the Security Documents shall terminate but without prejudice to any liabilities which that Service Bank
may have incurred prior to that termination; 

  

	 	18.4.3	that Service Bank shall be discharged from any further liability or obligations under this Agreement and the Security Documents; and 

 

	 	18.4.4	the provisions of this Agreement and the Security Documents shall continue in effect for the benefit of that Service Bank in respect of any action taken or omitted to
be taken by it or any event occurring before the termination of its obligations pursuant to this Clause 18. 

  

	19.	LIMITS OF THE SERVICE BANKS’ OBLIGATIONS 

  

	19.1	No duty to enquire 

Neither Service Bank shall be obliged to ascertain or enquire: 

 

	 	19.1.1	either initially or on a continuing basis, as to the credit or financial condition or affairs of the Borrower, any other Obligor or any other person;

  

	 	19.1.2	as to the performance or observance by the Borrower or any other Obligor of any of the terms and conditions of this Agreement or any of the other Finance Documents or
any other agreement; or 

  

	 	19.1.3	whether any Event of Default or Potential Event of Default has occurred, and until it shall have actual knowledge or express notice to the contrary, the Agent shall be
entitled to assume that no Event of Default or Potential Event of Default has occurred. 

  

	19.2	Responsibilities excluded 

Neither Service Bank and none of their respective officers, employees or agents shall be responsible to any other Bank for: 

 

	 	19.2.1	any failure or delay in performance, or breach by the Borrower, of its obligations under this Agreement or any of the other Finance Documents or any other agreement or
any failure or delay in performance, or breach by any of the other Obligors, of their respective obligations under any of the Finance Documents or any other agreement; or 

 

	 	19.2.2	any recitals, statements, representations or warranties in, or for the legality, validity, effectiveness, enforceability, admissibility in evidence or sufficiency of,
this Agreement or any of the other Finance Documents or any other agreement; or 

  

	 	19.2.3	the legality, validity, effectiveness or enforceability of any of the security created, or purported to be created, pursuant to any of the Security Documents.

  
 51 

	19.3	Limitation of liability 

  

	 	19.3.1	Neither Service Bank and none of its respective officers, employees or agents shall be liable for any loss, damage or expense suffered or incurred by the Borrower or
any other Bank or any other person in consequence of any action taken or omitted to be taken by it under this Agreement or any of the other Finance Documents or in connection herewith or therewith unless caused by its gross negligence or wilful
misconduct. 

  

	 	19.3.2	Without prejudice to the provisions of Clause 19.3.1, none of the other Parties shall take any proceedings against any officer, employee or agent of a Service Bank in
respect of any claim which it may have against that Service Bank or in respect of any act or omission (including, without limitation, negligence or wilful misconduct) by that officer, employee or agent in relation to this Agreement or any of the
other Finance Documents. 

  

	19.4	Other Banks’ representations and undertakings 

 Each Lender and Swap Provider: 
  

	 	19.4.1	severally represents and warrants to the Service Banks that it has made its own independent investigation of the financial condition and affairs of the Borrower and the
other Obligors in connection with the entry by it into this Agreement and the other relevant Finance Documents and in that respect has not relied on any information provided to it by either Service Bank; and 

 

	 	19.4.2	undertakes that it will continue to make its own independent appraisal of the creditworthiness of the Borrower and the other Obligors and will not rely on any
information provided to it by either Service Bank. 

  

	19.5	Indemnification by other Banks of the Service Banks 

 The Lenders and the Swap Providers agree (which agreement shall survive payment of all sums due under this Agreement) to indemnify each Service Bank (to the extent not reimbursed by the Borrower)
rateably: 
  

	 	19.5.1	in the case of the Lenders, according to their respective Contributions; and 

 

	 	19.5.2	in the case of the Swap Providers, according to the respective maximum net exposures of the Borrower to the Swap Providers determined in accordance with the terms of
the relevant Master Agreements as if the Master Agreement Liabilities were terminated and/or closed out at that time or, as the case may be, if they have actually been terminated and/or closed out, the aggregate amounts (whether actual or
contingent) payable thereunder, 

 from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against that Service Bank in performing its functions or duties under this Agreement or any of
the other 

  
 52 

 
Finance Documents, or in connection with any action taken or omitted to be taken by that Service Bank in enforcing or preserving or attempting to enforce or preserve the rights of the Banks under
this Agreement or any of the other Finance Documents or any other documents or security. 
  

	19.6	Service Banks’ rights 

Each Service Bank may: 
  

	 	19.6.1	engage and pay for the advice and services of any lawyers, accountants or other experts whose advice or services may to that Service Bank seem necessary or desirable
and that Service Bank shall be entitled to rely on the advice and opinions of such lawyers, accountants and other experts and shall not be liable to any of the other parties hereto for any of the consequences of any such reliance;

  

	 	19.6.2	perform all or any of its functions and duties hereunder or under the Security Documents through employees or agents or any office or branch of that Service Bank from
time to time selected by it and notified to the other parties hereto; 

  

	 	19.6.3	rely on any communication or document believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be
communicated or signed and shall not be liable to any of the other parties hereto for any of the consequences of such reliance; and 

  

	 	19.6.4	without liability to account, make loans to, accept deposits from and generally engage in any kind of banking or trust business with the Borrower or the other Obligors
as though that Service Bank was not a Service Bank. 

  

	19.7	Service Banks as Lender and/or Swap Provider 

 If and for so long as it is also a Lender and/or a Swap Provider each Service Bank shall have the same rights and powers under this Agreement as any other Lender or Swap Provider (as the case may be) and
may exercise those rights and powers as though it were not a Service Bank. 
  

	20.	SHARING OF PAYMENTS 

  

	20.1	Relevant circumstances 

This Clause 20 applies if any Lender (the “Sharing Lender”) at any time receives or recovers (whether by way of voluntary
or involuntary payment, by virtue of the exercise of its legal rights including but not limited to the right of set-off, counterclaim or otherwise howsoever) the whole or any part of any amounts due to it from the Borrower under this Agreement or
any of the other relevant Finance Documents otherwise than by distribution from the Agent in accordance with the terms of this Agreement. 

  
 53 

	20.2	Payment by Sharing Lender to Agent 

 Subject to Clauses 20.3 and 20.4: 
  

	 	20.2.1	the Sharing Lender shall forthwith pay to the Agent the full amount or (as the case may be) an amount equal to the equivalent of the full amount so received or
recovered; 

  

	 	20.2.2	as between the Borrower and the Sharing Lender, the Borrower shall remain or again become indebted to such Sharing Lender under this Agreement in the amount so paid as
if it had not been received or recovered as aforesaid; and 

  

	 	20.2.3	the Agent shall treat the amount so paid as if it were a payment by the Borrower on account of amounts due from the Borrower under this Agreement or any of the other
Finance Documents for distribution to the Sharing Lender and such of the other Lenders in the proportions in which the Sharing Lender and the other Lenders would have been entitled to receive such amount had it been paid by the Borrower to the Agent
hereunder or under such Finance Documents. 

  

	20.3	Refund by Agent 

 Any
payment and adjustment made pursuant to Clause 20.2 shall be subject to the condition that, if the amount (or any part thereof) so paid by the Sharing Lender to the Agent subsequently falls to be repaid by the Sharing Lender to the Borrower or any
other person, then each of the Lenders who has received any part thereof from the Agent shall repay the amount received by it to the Sharing Lender, together with such amount (if any) as is necessary to reimburse the Sharing Lender the appropriate
portion of any interest it has been obliged to pay when repaying such amount as aforesaid, and the relevant adjustments pursuant to Clause 20.2 shall be cancelled. 
  

	20.4	No sharing required 

 A
Sharing Lender which has commenced or joined in an action or proceeding in any court to recover sums due to it under this Agreement or any of the other Finance Documents, and pursuant to a judgment obtained therein or a settlement or compromise of
that action or proceeding shall have received any amount, shall not be required to share any proportion of that amount with a Lender which has the legal right to, but does not, join such action or proceeding or commence and diligently prosecute a
separate action or proceeding to enforce its rights under this Agreement or any of the other Finance Documents in the same or another court. 
  

	20.5	Matters notifiable 

 Each
Lender shall promptly give notice to the Agent of: 
  

	 	20.5.1	the institution by that Lender of a legal action or proceedings against the Borrower under this Agreement or under any of the other relevant Finance Documents or in
connection therewith as soon as practicable thereafter (and, in any event, within 5 Banking Days); and 

  
 54 

	 	20.5.2	the receipt or recovery by that Lender of any amount due and payable by the Borrower under this Agreement or under any of the other relevant Finance Documents which is
received or recovered otherwise than through the Agent. 

 Upon receipt of any such notice the Agent will as soon
as practicable thereafter notify the other Banks. 
  

	21.	ASSIGNMENT, TRANSFER AND RELEASE 

  

	21.1	Successors and assigns 

This Agreement shall be binding upon and inure to the benefit of each Party and its successors and assigns. 

 

	21.2	No assignment by Borrower 

The Borrower may not assign or transfer all or any of its rights, benefits or obligations under this Agreement or under any of the other
Finance Documents without the prior written consent of the Majority Lenders. 
  

	21.3	Transfer by Lenders 

Subject to obtaining the prior consent of the Borrower, which shall not be unreasonably withheld or delayed, any Lender (the
“Transferor Lender”) may transfer all or any of its rights and obligations in its capacity as a Lender under this Agreement and under the other Finance Documents to another bank or financial institution (the “Transferee
Lender”), provided that no such consent shall be required if the transfer is made to an affiliate of the Transferor Lender or to another Lender (or any affiliate thereof) or if the transfer is made after an Event of Default has occurred and
has been continuing for 30 days. No assignment or transfer by a Lender of any of its rights or obligations under this Agreement and the other Finance Documents shall be binding on, or effective in relation to, any other Party unless it is effected,
evidenced and perfected by the delivery by the Transferor Lender to the Agent of a Transfer Certificate executed by the Transferor Lender and the Transferee Lender. 
  

	21.4	Signature of Transfer Certificate 

 The Agent shall as soon as practicable, but not later than the 5th Banking Day after receipt by it of a Transfer Certificate, sign the Transfer Certificate on behalf of the Obligors, itself and each of
the other Banks and give notice to the Obligors and the Banks of its receipt of that Transfer Certificate (attaching a copy of it). 
  

	21.5	Authorisation of Agent to sign Transfer Certificate 

 Each of the other Parties irrevocably authorises the Agent to sign any Transfer Certificate on its behalf. 

  
 55 

	21.6	Effective date of Transfer Certificate 

 A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, provided always that it is signed by the Agent under Clause 21.4 on or before
that date. 
  

	21.7	Effect of Transfer Certificate 

 A Transfer Certificate shall have effect in accordance with the following: 
  

	 	21.7.1	to the extent that in that Transfer Certificate the Transferor Lender seeks to transfer its rights and/or its obligations under this Agreement and the other Finance
Documents, each Obligor and the Transferor Lender shall each be released from further obligations to the other under this Agreement and the other Finance Documents and their respective rights against each other shall be cancelled (such rights and
obligations being referred to in this Clause 21.7 as “discharged rights and obligations”); 

  

	 	21.7.2	each Obligor, the Transferee Lender and the other Banks shall each assume obligations towards each other and/or acquire rights against each other which differ from the
discharged rights and obligations only insofar as the Transferee Lender has assumed and/or acquired the same in place of the Transferor Lender; and 

  

	 	21.7.3	the Transferee Lender and the other Banks shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had
the Transferee Lender been an original party to this Agreement as a Lender with the rights and/or obligations acquired or assumed by it as a result of that transfer. 

 

	21.8	Transfer fee 

 The
Transferee Lender shall pay to the Agent for its own account a transfer fee of $2,000 on the date on which the transfer effected by the relevant Transfer Certificate becomes effective. 

 

	21.9	Sub-participation by Lenders 

 Any Lender may at any time without the consent of the Borrower or any other Obligor sub-participate all or any of its rights and/or obligations under this Agreement and the other Finance Documents.

  

	21.10	Disclosure of information 

Any Lender may disclose to any potential Transferee Lender, assignee or sub-participant, or to any other party with whom it may propose to
enter into contractual relations in connection with this Agreement or any other of the Finance Documents, such information about the Borrower and the other Obligors and their respective businesses, assets or financial condition as that Lender shall
consider appropriate. 

  
 56 

	21.11	Change of Lending Office 

Any Lender may at any time and from time to time change its Lending Office by giving notice to the Agent and that change shall be
effective on the later of (a) the date specified in that notice and (b) the date of receipt by the Agent of that notice from that Lender. The Agent shall promptly notify the Obligors and the other Banks of any notice received by it
pursuant to this Clause 21.11. 
  

	21.12	Mitigation 

 If:

  

	 	21.12.1	a Lender transfers any of its rights and obligations under this Agreement and the other Finance Documents in accordance with Clause 21.3 or changes its Lending Office
in accordance with Clause 21.11; and 

  

	 	21.12.2	as a result of circumstances existing at the date the transfer or change occurs, an Obligor would be obliged to make a payment to the Transferee Lender or Lender acting
through its new Lending Office under Clause 8.2 or Clause 15.8, 

 then the Transferee Lender or Lender acting
through its new Lending Office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or Lender acting through its previous Lending Office would have been if the transfer or change had not occurred.

  

	21.13	Delegation 

 Any Bank may
at any time and from to time to time delegate any one or more of its rights, powers and/or obligations under this Agreement and the other Finance Documents to any person. 

 

	21.14	Register 

 The Agent shall
keep a register of all the Lenders for the time being with details of their respective Contributions and Lending Office and shall provide any other Party (at that Party’s expense) with a copy of the register on request. 

 

	21.15	Swap Providers 

 Any Swap
Provider may at any time assign or transfer all or any of its rights, benefits or obligations under this Agreement and the other Finance Documents to any person to whom it assigns or transfers all or any of its rights under the Master Agreement to
which it is a party. 

  
 57 

	22.	SET-OFF 

  

	22.1	A Bank may set off any matured obligation due from the Borrower under this Agreement or any other Finance Document (to the extent beneficially owned by that Bank)
against any matured obligation owed by that Bank to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the set-off. 

  

	23.	MISCELLANEOUS 

  

	23.1	Remedies and waivers 

 No
failure to exercise, nor any delay in exercising, on the part of any Bank, any right or remedy under the Finance Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or
other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law. 

 

	23.2	Waivers and amendments to be in writing 

 Any waiver by any Bank of any provision of this Agreement or any other of the Finance Documents, and any consent or approval given by any Bank, shall only be effective if given in writing and then only
strictly for the purpose and upon the terms for which it is given. Neither this Agreement nor any of the other Finance Documents may be amended or varied orally but only by an instrument signed by or on behalf of each of the parties thereto.

  

	23.3	Severability 

 If at any
time one or more of the provisions of this Agreement or any other of the Finance Documents is or becomes invalid, illegal or unenforceable in any respect under any law by which it may be governed or affected, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or impaired as a result. 
  

	23.4	Counterparts 

 This
Agreement may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute but one and the same instrument. 
  

	23.5	Conclusiveness of Bank’s certificates 

 The certificate or determination of a Bank of a rate or amount under this Agreement and any other Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it
relates and is binding on the Borrower. 

  
 58 

	23.6	Force majeure 

 No Lender
will be liable for any failure on its part to maintain its Contributions or any part thereof resulting, directly or indirectly, from any action, inaction or purported action of any government or governmental agency or any strike, boycott or blockade
or any cause whatsoever outside its control. 
  

	23.7	Further assurance 

 The
Borrower shall, upon demand, and at its own expense, sign, perfect, do, execute and register all such further assurances, documents, acts and things as the Agent may require for the purpose of more effectually accomplishing or perfecting the
transaction or security contemplated by this Agreement and the other Finance Documents. 
  

	24.	NOTICES 

  

	24.1	Addresses 

 All notices
(which expression includes any demand, request, consent or other communication) to be given by one Party to another under this Agreement shall be in writing and (unless delivered personally) shall be given by telefax or first class pre-paid post
(airmail if sent internationally) and be addressed: 
  

	 	24.1.1	in the case of the Agent and the Security Trustee, to it at: 

 Lars Hillesgt. 30 
 N-5020 Bergen 

Norway 

Telefax No: +47 55 21 19 24 
 Attn: Shipping Department 
  

	 	24.1.2	in the case of an Original Lender, Mandated Lead Arranger or Bookrunner to it at the address set out beneath its name in Schedule 1 and, in the case of any other
Lender, to it at the address specified in the relevant Transfer Certificate; 

  

	 	24.1.3	in the case of a Swap Provider, to it at the address set out beneath its name in Schedule 2; 

 

	 	24.1.4	in the case of the Borrower, to it at: 

 Smedasundet 40 
 5529 Haugesund 

Norway 

Telefax No: +47 52 70 40 40 
 Attn: Trygve Seglem 
 or to such other address and/or number as is notified by any
Party to the others under this Agreement. 

  
 59 

	24.2	Deemed receipt of notices 

Notices addressed as provided above shall be deemed to have been duly given when despatched (in the case of telefax), when delivered (in
the case of personal delivery), 2 days after posting (in the case of letters sent within the same country), or 5 days after posting (in the case of letters sent internationally), provided that any notice to the Agent or the Security Trustee shall be
effective only upon its actual receipt by the Agent or the Security Trustee (as appropriate) and then only if it is expressly marked for the attention of the relevant department or officer named above (or any substitute from time to time notified by
the Agent or the Security Trustee, as the case may be). In each of the above cases any notice received on a non-working day or after business hours in the country of receipt shall be deemed to be given at the opening of business hours on the next
working day in such country. 
  

	24.3	English language 

 All
notices and documents to be given or delivered pursuant to or otherwise in relation to this Agreement and the Finance Documents shall be in the English language or be accompanied by a certified English translation. 

 

	25.	APPLICABLE LAW AND JURISDICTION 

  

	25.1	Governing law 

 This
Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law. 
  

	25.2	Submission to jurisdiction 

The Borrower hereby irrevocably agrees for the exclusive benefit of the Banks that the English courts shall have jurisdiction in relation
to any dispute and any suit, action or proceeding (referred to together in this Clause 25 as “Proceedings”) which may arise out of or in connection with this Agreement and/or any of the other Finance Documents, and for such purposes
irrevocably submits to the jurisdiction of such courts. 
  

	25.3	Service of process 

 The
Borrower hereby irrevocably agrees: 
  

	 	25.3.1	that, for the purpose of Proceedings in England, any legal process may be served upon SH Process Agents Limited whose registered office is presently at 1 Finsbury
Circus, London EC2M 7SH (Ref: 748/47-03533) who are hereby authorised to accept service on behalf of the Borrower, which shall be deemed to be good service on such Borrower; and 

 

	 	25.3.2	that throughout the Security Period it will maintain a duly appointed process agent in England, duly notified to the Agent, and that failure by any such process agent
to give notice thereof to it shall not impair the validity of such service or of a judgment or order based thereon. 

  
 60 

	25.4	Choice of forum 

 Nothing
in this Clause 25 shall affect the right of any Bank to serve process in any manner permitted by law or limit the right of any Bank to take Proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of
Proceedings in one or more jurisdictions preclude the taking of Proceedings by any Bank in any other jurisdiction, whether concurrently or not. 
 The Borrower shall not commence any Proceedings in any country other than England in relation to any matter arising out of or in connection with this Agreement and/or any of the other Finance Documents.

  

	25.5	Forum convenience 

 The
Borrower irrevocably waives any objection which it may now or hereafter have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any such court as is referred to in this Clause 25, and further irrevocably agrees that a
judgment or order in any Proceedings brought in the English courts shall be conclusive and binding upon the Borrower and may be enforced without review in the courts of any other jurisdiction. 

 

	25.6	Consent 

 The Borrower
consents generally in respect of any Proceedings arising out of or in connection with this Agreement to the giving of any relief or the issue of any process in connection with such Proceedings, including without limitation, the making, enforcement
or execution against any property or assets whatsoever of any order or judgment which may be made or given in such Proceedings. 
 AS
WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first before written. 

  
 61 

 Schedule 1 
 LENDERS AND CONTRIBUTIONS 
  

											
	 Lender
	  	 Lending Office
	  	 Tranche A

Contribution
($)
	 	  	 Tranche B
Contribution

($)
	 
				
	 DNB Bank ASA
	  	 Lars Hillesgt. 30
 N-5020
Bergen
 Norway
 Fax: +47 55 21 19
24
 Attn: Shipping Department
	  	 	4,531,250	  	  	 	4,587,500	  
				
	 Nordea Bank Norge ASA
	  	 Middelthuns gate 17
 P.O.
Box 1166 Sentrum
 NO-0107 Oslo

Norway
 Fax: +47 22 48 66 68

Attn: Shipping, Offshore and Oil Services
	  	 	4,531,250	  	  	 	4,587,500	  
		  		  	  
	  
	 	  	  
	  
	 
		  		  	 	9,062,500	  	  	 	9,175,000	  
		  		  	  
	  
	 	  	  
	  
	 

  
 62 

 Schedule 2 
 SWAP PROVIDERS 
  

			
	 Swap Provider
	  	 Address

		
	 DNB Bank ASA
	  	 Lars Hillesgt. 30
 N-5020
Bergen
 Norway
 Fax: +47 55 21 19
24
 Attn: Shipping Department

		
	 Nordea Bank Finland plc
	  	 c/o Nordea Bank Norge ASA

Middelthuns Gate 17
 P.O. Box 1166
Sentrum
 NO-0107 Oslo

Norway
 Fax: +47 22 48 66 68

Attn: Shipping, Offshore and Oil Services

  
 63 

 Schedule 3 
 [INTENTIONALLY OMITTED] 

  
 64 

 Schedule 4 
 [INTENTIONALLY OMITTED] 

  
 65 

 Schedule 5 
 FORM OF TRANSFER CERTIFICATE 
 TRANSFER CERTIFICATE

 The Transferor Lender and the Transferee Lender accept exclusive responsibility for ensuring that this Transfer Certificate and
the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively. 
  

	To:	DNB Bank ASA as agent on its own behalf and for and on behalf of the Obligors and Banks defined in the Agreement referred to below: 

 

	1.	This Transfer Certificate relates to a $19,000,000 junior loan agreement (the “Loan Agreement”) dated 1 December 2009 (as amended and supplemented
from time to time) and made between (1) Knutsen Shuttle Tankers XII KS as borrower (the “Borrower”), (2) DNB Bank ASA and Nordea Bank Norge ASA as mandated lead arrangers and bookrunners, (3) the banks and financial
institutions defined therein as lenders (the “Lenders”), (4) the banks and financial institutions defined therein as swap providers, (5) DNB Bank ASA as agent and (6) DNB Bank ASA as security trustee (as the same may
from time to time be amended or varied). 

  

	2.	Terms defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used in this Transfer Certificate. 

 

	3.	In this Certificate: 

“Relevant Party” means each Obligor and each Bank (other than the Transferor Lender and the Transferee Lender);

 “Transferor Lender” means [full name] of [lending office]; and 

“Transferee Lender” means [full name] of [lending office]. 

 

	4.	The Transferor Lender as beneficial owner hereby transfers to the Transferee Lender absolutely in accordance with Clause 21 of the Loan Agreement all its rights and
benefit (present, future or contingent) under the Loan Agreement and the other Finance Documents to the extent of [—]% of the Transferor Lender’s Contributions outstanding, details of which are
set out below: 

  

					
	 Transferor Lender’s Contribution
	  	Amount to be Transferred	 
	 Tranche A
	  	$	[—	] 
	 Tranche B
	  	$	[—	] 

  

	5.	By virtue of this Transfer Certificate and Clause 21 of the Loan Agreement the Transferor Lender is discharged [entirely from its Contributions][from [—]% of its Contributions]. 

  
 66 

	6.	The Transferee Lender hereby requests the Agent and the other Banks to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for
the purposes of Clause 21 of the Loan Agreement so as to take effect in accordance with the terms thereof on [—]. 

 

	7.	The Transferee Lender: 

  

	 	7.1	confirms that it has received copies of the Loan Agreement and the other Finance Documents together with such other documents and information as it has required in
connection with the transaction contemplated thereby; 

  

	 	7.2	confirms that it has not relied and will not hereafter rely on the Transferor Lender or any other Bank to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of the Loan Agreement, any of the other Finance Documents or any such other documents or information; 

  

	 	7.3	agrees that it has not relied and will not rely on the Transferor Lender or any other Bank to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Borrower or any other party to the Loan Agreement or any of the other Finance Documents (save as otherwise expressly provided therein); 

 

	 	7.4	warrants to the Transferor Lender and each Relevant Party that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to
authorise execution of this Transfer Certificate and to obtain all necessary approvals and consents to the assumption of its obligations under the Loan Agreement and the other Finance Documents; 

 

	 	7.5	if not already a Lender, appoints the Agent to act as its agent as provided in the Loan Agreement and the other Finance Documents and agrees to be bound by the terms
thereof; and 

  

	 	7.6	confirms the accuracy of the administrative details set out in the Schedule to this Transfer Certificate. 

 

	8.	The Transferor Lender: 

  

	 	8.1	warrants to the Transferee Lender and each Relevant Party that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to
authorise it to do so; and 

  

	 	8.2	undertakes with the Transferee Lender that it will, at its own expense, execute any documents which the Transferee Lender reasonably requests for perfecting in any
relevant jurisdiction the Transferee Lender’s title under this Transfer Certificate or for a similar purpose. 

  
 67 

	9.	The Transferee Lender hereby undertakes with the Transferor Lender and each Relevant Party that it will perform all those obligations which by the terms of the Loan
Agreement will be assumed by it after this Transfer Certificate takes effect. 

  

	10.	If this Transfer Certificate takes effect during an Interest Period, the Agent shall make all payments which would have become due to the Transferor Lender under the
Loan Agreement during that Interest Period if no such transfer had been effected to the Transferor Lender and the Transferee Lender according to the percentages of the Transferor Lender’s Contributions transferred and retained pursuant to
Clauses 4 and 5 of this Transfer Certificate, and the Transferor Lender and the Transferee Lender shall be responsible for paying to each other pro rata all amounts (if any) due to them from each other for that Interest Period. On and from the
commencement of the immediately succeeding Interest Period, the Agent shall make all payments due under the Loan Agreement for the account of the Transferor Lender to the Transferor Lender and shall make all payments due under the Loan Agreement for
the account of the Transferee Lender to the Transferee Lender. This provision is for administrative convenience only and shall not affect the rights of the Transferor Lender and the Transferee Lender under the Loan Agreement.

  

	11.	Neither the Transferor Lender nor any other Bank: 

  

	 	11.1	makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Loan
Agreement or any of the other Finance Documents or any other document relating thereto; 

  

	 	11.2	assumes any responsibility for the financial condition of the Borrower or any other party to the Loan Agreement or any of the other Finance Documents or any other
document relating thereto or for the performance and observance thereof by (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether expressed or implied by law or otherwise, are hereby excluded (except
as aforesaid). 

  

	12.	The Transferor Lender and the Transferee Lender undertake that they will on demand fully indemnify the Agent and the Security Trustee in respect of any claim,
proceeding, liability or expense which relates to or results from this Transfer Certificate or any matter connected with or arising out of it unless caused by the Agent’s or Security Trustee’s gross negligence or wilful misconduct, as the
case may be. 

  

	13.	The agreements and undertaking of the Transferee Lender in this Transfer Certificate are given to and for the benefit of and made with each of the Relevant Parties.

  

	14.	This Transfer Certificate shall be governed by, and construed in accordance with, English law. 

  
 68 

 Transferor Lender 
 By: [—] 
 Dated: [—] 
 Transferee Lender 
 By: [—] 
 Dated: [—] 
 Agent (for and on behalf of itself and for every other Relevant Party)

 By: [—] 
 Dated: [—] 

  
 69 

 Schedule 
 ADMINISTRATIVE DETAILS OF TRANSFEREE LENDER 
 Name of Transferee Lender: 

Lending Office: 
 Contact Person 

(Loan Administration Department): 
 Telephone:

 Fax: 
 Contact Person 

(Credit Administration Department): 

Telephone: 
 Fax: 

Account for Payments: 

  
 70 

 Schedule 6 
 [INTENTIONALLY OMITTED] 

  
 71 

 Schedule 7 
 [INTENTIONALLY OMITTED] 

  
 72 

 [EXECUTION PAGES INTENTIONALLY OMITTED] 

  
 73 

 DATED
                     2013 
 KNOT OFFSHORE PARTNERS LP 
 as Guarantor 

- and - 
 DNB
BANK ASA 
 as Security Trustee 
  

 
 GUARANTEE AND
INDEMNITY 
  
  

in respect of the obligations of Knutsen Shuttle Tankers XII KS 
 under a US$19,000,000 loan facility relating to 
 “FORTALEZA KNUTSEN” and
“RECIFE KNUTSEN” 
  
 

 

 CONTENTS 

 

							
	Clause	 	 	  	Page	 
			
	 1.
	 	 DEFINITIONS AND INTERPRETATION
	  	 	1	  
			
	 2.
	 	 GUARANTEE AND INDEMNITY
	  	 	2	  
			
	 3.
	 	 CONTINUING SECURITY
	  	 	2	  
			
	 4.
	 	 RESTRICTIONS ON GUARANTOR
	  	 	3	  
			
	 5.
	 	 WAIVER BY GUARANTOR
	  	 	4	  
			
	 6.
	 	 PAYMENTS AND APPLICATION OF FUNDS
	  	 	4	  
			
	 7.
	 	 NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
	  	 	4	  
			
	 8.
	 	 PROVISO TO RELEASE OF THIS GUARANTEE
	  	 	5	  
			
	 9.
	 	 REPRESENTATIONS AND WARRANTIES
	  	 	5	  
			
	 10.
	 	 UNDERTAKINGS
	  	 	7	  
			
	 11.
	 	 FINANCIAL COVENANTS
	  	 	9	  
			
	 12.
	 	 INDEMNITIES AND EXPENSES
	  	 	11	  
			
	 13.
	 	 ASSIGNMENTS AND TRANSFERS
	  	 	11	  
			
	 14.
	 	 SET-OFF
	  	 	12	  
			
	 15.
	 	 MISCELLANEOUS
	  	 	12	  
			
	 16.
	 	 NOTICES
	  	 	13	  
			
	 17.
	 	 APPLICABLE LAW AND JURISDICTION
	  	 	14	  
		
	 EXECUTION PAGE
	  	 	15	  
		
	 SCHEDULE 1 - FORM OF COMPLIANCE CERTIFICATE
	  	 	16	  

 THIS GUARANTEE is made on
                     2013 
 BETWEEN:

  

	(1)	KNOT OFFSHORE PARTNERS LP, a limited partnership organised under the laws of the Marshall Islands and having its registered office at Ajeltake Road, Ajeltake
Island, Majuro, the Marshall Islands (the “Guarantor”); and 

  

	(2)	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway in its capacity as security
trustee for the Banks (the “Security Trustee”). 

 WHEREAS: 

 

	(A)	By a loan agreement dated 1 December 2009 (as amended by a supplemental agreement dated 14 February 2011, a second supplemental agreement dated
14 September 2012, a third supplemental agreement dated 27 February 2013 and as amended and restated by an amendment and restatement deed dated [—] March 2013, the
“Agreement”) now made between (1) Knutsen Shuttle Tankers XII KS as borrower (the “Borrower”), (2) DNB Bank ASA and Nordea Bank Norge ASA as lenders (the “Lenders”), (3) DNB Bank
ASA and Nordea Bank Norge ASA as mandated lead arrangers and bookrunners, (4) DNB Bank ASA and Nordea Bank Finland plc as swap providers (6) DNB Bank ASA as agent (the “Agent”) and (6) the Security Trustee, the
Lenders agreed to make available to the Borrower a term loan facility of up to $19,000,000. 

  

	(B)	At the request of the Borrower and as additional security for the repayment of the Loan and the payment of interest thereon and all other moneys from time to time due
or owing to the Banks or any of them under or pursuant to the Finance Documents, the Guarantor has agreed to enter into this Guarantee. 

  

	(C)	This Guarantee forms part of the Trust Property which pursuant to the Agreement the Security Trustee holds on trust for itself and the other Banks.

 IT IS AGREED as follows: 
  

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Words and expressions defined in the Agreement shall, unless otherwise expressly provided herein or the context otherwise requires, have the same meanings when used in
this Guarantee, including the Recitals. In addition: 

 “US GAAP” means accounting principles
generally accepted in the United States of America. 
  

	1.2	In this Guarantee: 

  

	 	1.2.1	unless the context otherwise requires, words in the singular include the plural and vice versa; 

 

	 	1.2.2	references to any document include the same as varied, supplemented or replaced from time to time; 

 

	 	1.2.3	references to any enactment include re-enactments, amendments and extensions thereof; 

	 	1.2.4	references to any person include that person’s successors and permitted assigns; 

 

	 	1.2.5	clause headings are for convenience of reference only and are not to be taken into account in construction; and 

 

	 	1.2.6	unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Guarantee.

  

	1.3	Except for the Banks, a person who is not a party to this Guarantee may not enforce, or otherwise have the benefit of, any provision of this Guarantee under the
Contracts (Rights of Third Parties) Act 1999. 

  

	2.	GUARANTEE AND INDEMNITY 

  

	2.1	The Guarantor irrevocably and unconditionally: 

  

	 	2.1.1	guarantees the due and punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents; 

 

	 	2.1.2	undertakes as primary obligor and not as surety only that whenever the Borrower does not pay any part of the Outstanding Indebtedness when due under or in connection
with any Finance Document, the Guarantor shall immediately on demand by the Security Trustee pay that amount to the Security Trustee; and 

  

	 	2.1.3	agrees, as a separate and independent stipulation, that if any amounts intended to be guaranteed hereby are not recoverable on the footing of a guarantee, whether by
reason of any legal limitation, disability or incapacity on or of the Borrower or any other fact or circumstance, whether or not known to any Bank or the Guarantor, then such amounts shall nevertheless be recoverable from the Guarantor as sole or
principal debtor by way of indemnity and shall be payable by the Guarantor to the Security Trustee on demand. 

  

	2.2	If the Guarantor fails to pay on the due date any sum (whether of principal, interest or otherwise) due under this Guarantee, interest will accrue, and become payable
by it upon the Security Trustee’s demand, upon the sum unpaid from and including the date upon which it fell due for payment until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be
2% higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted part of the Loan for successive periods, each of a duration selected by the Agent (acting reasonably). Any such interest
shall accrue from day to day, be calculated on the basis of the actual number of days elapsed and a 360 day year and be compounded at the end of each such period determined by the Agent for so long as it remains unpaid. 

 

	2.3	The guarantee contained in this Clause 2 is a guarantee of payment and performance and not of collection. 

 

	3.	CONTINUING SECURITY 

  

	3.1	This Guarantee: 

  

	 	3.1.1	is and shall at all times be a continuing security for the payment of the full amount of the Outstanding Indebtedness from time to time; 

  
 2 

	 	3.1.2	shall not be satisfied by any intermediate payment or satisfaction of any part of the Outstanding Indebtedness; 

 

	 	3.1.3	shall be in addition to and shall not merge with or be prejudiced or affected by any other security for the Outstanding Indebtedness which may have been, or may at any
time hereafter be, given to the Banks (or any of them) by the Borrower or any other person. 

  

	3.2	The obligations of the Guarantor under this Guarantee shall not be reduced, discharged or otherwise adversely affected by reason of any act, omission, matter or thing
(whether or not known to the Guarantor and/or any Bank) which, but for this provision, might operate to release the Guarantor from all or part of its liability under this Guarantee including, without limitation: 

 

	 	3.2.1	any time or indulgence granted to, or composition with, the Borrower or any other person; or 

 

	 	3.2.2	any termination, renewal, extension or variation of any credit, accommodation or facility granted by the Banks (or any of them) to the Borrower or any other person or
any amendment of, or the making of any supplement to, any Finance Document or any other document or security; or 

  

	 	3.2.3	the taking, variation, compromise, renewal, enforcement, realisation or release of, or refusal or neglect or failure to take, perfect, release or enforce, any rights,
remedies or securities against, or granted by, any Obligor or other person; or 

  

	 	3.2.4	any incapacity, disability, or defect in powers of any Obligor or other person, or any irregular exercise thereof by, or lack of authority of, any person purporting to
act on behalf of any Obligor or other person; or 

  

	 	3.2.5	any illegality, invalidity, avoidance or unenforceability on any grounds whatsoever of, or of any obligations of any Obligor or other person under, any Finance Document
or any other document or security; or 

  

	 	3.2.6	the death, liquidation, administration, insolvency, amalgamation, reorganisation or dissolution, or any change in the constitution, name or style, of any Obligor, any
Bank or any other person. 

  

	4.	RESTRICTIONS ON GUARANTOR 

  

	4.1	Until the moneys and liabilities hereby guaranteed have been paid and discharged in full, the Guarantor shall not be entitled, nor shall the Guarantor claim, by virtue
of any payment made by it under this Guarantee: 

  

	 	4.1.1	to exercise any right of subrogation or indemnity or any other right or remedy in relation to any rights, security or moneys held by or recovered or receivable by the
Security Trustee or any other Bank under the Finance Documents; or 

  

	 	4.1.2	to exercise any right of set-off or counterclaim against the Borrower or any other Obligor; or 

 

	 	4.1.3	to exercise any right of contribution from any other Obligor in respect of the Outstanding Indebtedness; or 

  
 3 

	 	4.1.4	to receive, claim or have the benefit of any payment, distribution or security from the Borrower or any other Obligor; or 

 

	 	4.1.5	unless so directed by the Security Trustee (in which case the Guarantor shall prove in accordance with the Security Trustee’s directions), to rank as a creditor or
have any right of proof in the bankruptcy, liquidation or insolvency of the Borrower or any other Obligor in competition with the Security Trustee. 

  

	4.2	The Guarantor hereby represents and warrants that it has not taken, and undertakes that it will not take, without the prior written consent of the Security Trustee (as
directed by the Lenders), any security from the Borrower or any other Obligor in respect of the Guarantor’s liability under this Guarantee. 

  

	4.3	If the Guarantor is required by the Security Trustee to prove in the bankruptcy, liquidation or insolvency of the Borrower or any other Obligor, or receives any
payment, distribution or security from the Borrower or any other Obligor, or exercises any right of set-off or counterclaim, or otherwise acts in breach of any provision of this Clause 4, then in each such case the Guarantor shall hold on trust for
the Security Trustee and forthwith pay or transfer (as may be appropriate) to the Security Trustee any such payment, amount set off, distribution or benefit of such security received by it. 

 

	5.	WAIVER BY GUARANTOR 

  

	5.1	The Guarantor hereby waives any rights which the Guarantor may have to require the Security Trustee first to enforce any of the other Finance Documents or claim payment
from the Borrower or any other person, before enforcing any rights of the Security Trustee against the Guarantor under this Guarantee. 

  

	6.	PAYMENTS AND APPLICATION OF FUNDS 

  

	6.1	Unless otherwise specified by the Security Trustee, all moneys to be paid by the Guarantor under this Guarantee shall be paid to the Security Trustee in Dollars on the
due date and in same day funds to such account as the Security Trustee may from time to time notify the Guarantor. 

  

	6.2	Subject as provided below, all moneys received or recovered by the Security Trustee pursuant to this Guarantee shall be held by it upon trust, in the first place to pay
or make good all costs, expenses and liabilities whatsoever incurred by the Security Trustee in or about or incidental to the recovery of such moneys, and the balance shall be applied in accordance with Clause 7.2 of the Agreement. The Security
Trustee may at its discretion place and keep any moneys so received or recovered to the credit of a suspense account for so long as the Security Trustee may think fit with a view to preserving the rights of the Security Trustee to prove for the
whole of its claims against the Borrower or other person liable. 

  

	6.3	The Guarantor hereby irrevocably waives any rights of appropriation to which it may be entitled. 

 

	7.	NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION 

  

	7.1	All payments to be made by the Guarantor under this Guarantee shall be made without set-off or counterclaim and free and clear of, and without deduction for or on
account of, any present or future taxes, unless the Guarantor is compelled by law to make payment subject to any such tax. 

  
 4 

	7.2	If the Guarantor is compelled by law to make payment subject to such taxes, the Guarantor will: 

 

	 	7.2.1	promptly notify the Security Trustee upon becoming aware of such requirement; 

 

	 	7.2.2	pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; 

 

	 	7.2.3	pay the Security Trustee such additional amount as is necessary to ensure that the Security Trustee or (if the payment is not due to the Security Trustee for its own
account) the Bank beneficially interested in the payment (the “relevant recipient”) receives a net amount equal to the full amount which it would have received had such tax deduction not been required to be made; and

  

	 	7.2.4	as soon as reasonably practicable after making the relevant tax deduction, deliver to the Security Trustee for forwarding to the relevant recipient a copy of the
receipt from the relevant taxation authority evidencing that the tax had been paid to such authority. 

  

	7.3	If, following any such tax deduction as is referred to in Clause 7.2 from any payment by the Guarantor, the relevant recipient shall receive or be granted a credit
against or remission for any taxes payable by it, the relevant recipient shall, subject to the Guarantor having made any increased payment in accordance with Clause 7.2 and to the extent that the relevant recipient can do so without prejudicing the
retention of the amount of such credit or remission and without prejudice to the right of the relevant recipient to obtain any other relief or allowance which may be available to it, reimburse the Guarantor with such amount as the relevant recipient
shall in its absolute discretion certify to be the proportion of such credit or remission as will leave the relevant recipient (after such reimbursement) in no worse position than it would have been in had there been no such deduction or withholding
from the payment to the relevant recipient as aforesaid. Such reimbursement shall be made forthwith upon the relevant recipient certifying that the amount of such credit or remission has been received by it. Nothing contained in this Guarantee shall
oblige any Bank to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Guarantor shall not by virtue of this Clause 7.3 be entitled to enquire
about the tax affairs of any Bank. 

  

	8.	PROVISO TO RELEASE OF THIS GUARANTEE 

  

	8.1	Any release, discharge or settlement between the Guarantor and the Security Trustee in relation to this guarantee shall be conditional on no right, security,
disposition or payment to the Banks (or any of them) by the Guarantor, the Borrower or any other person in respect of the Outstanding Indebtedness being avoided, set aside or ordered to be refunded pursuant to any enactment or law relating to breach
of duty by any person, bankruptcy, liquidation, administration, protection from creditors generally or insolvency or for any other reason. If any such right, security, disposition or payment is avoided, set aside or ordered to be refunded, the
Security Trustee shall be entitled subsequently to enforce this Guarantee against the Guarantor as if such release, discharge or settlement had not occurred and any such security, disposition or payment had not been made. 

 

	9.	REPRESENTATIONS AND WARRANTIES 

  

	9.1	The Guarantor represents and warrants that the following matters are true at the date of this Guarantee. 

 

	9.2	The Guarantor: 

  

	 	9.2.1	is a limited liability partnership which is duly organised, validly existing and in good standing under the laws of the Marshall Islands; 

  
 5 

	 	9.2.2	has full power to own its property and assets and to carry on its business as it is now being conducted; 

 

	 	9.2.3	has complied with all statutory and other requirements relative to its business; 

 

	 	9.2.4	is solvent and not in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator,
trustee or analogous officer has been appointed in respect of it or all or any part of its assets. 

  

	9.3	The entry into and performance by the Guarantor of this Guarantee are within the corporate powers of the Guarantor and have been duly authorised by all necessary
corporate actions and approvals. In entering into this Guarantee the Guarantor is acting on its own account and not as agent or nominee of any person. 

  

	9.4	The entry into and performance by the Guarantor of this Guarantee do not and will not: 

 

	 	9.4.1	contravene in any respect the constitutional documents of the Guarantor or any law, regulation or contractual restriction which does, or may, bind the Guarantor or any
of its assets; or 

  

	 	9.4.2	result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) on any of its assets in favour of any party. 

 

	9.5	All licences, authorisations, approvals and consents necessary for the entry into, performance, validity, enforceability or admissibility in evidence of this Guarantee
have been obtained and are in full force and effect and there has been no breach of any condition or restriction imposed in this respect. 

  

	9.6	This Guarantee constitutes the legal, valid and binding obligations of the Guarantor enforceable against the Guarantor in accordance with its terms, except insofar as
enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws affecting creditors’ rights generally. 

 

	9.7	No litigation, arbitration, tax claim or administrative proceeding is current or pending or (to the knowledge of the Guarantor) threatened, which, if adversely
determined, would have a Material Adverse Effect. 

  

	9.8	No continuing Event of Default or Potential Event of Default has occurred. 

 

	9.9	All factual information furnished in writing to any Bank by or on behalf of the Guarantor in connection with the negotiation and preparation of the Finance Documents
was (when given) true and correct in all material respects and there are no other facts or considerations the omission of which would render any such information materially misleading. 

 

	9.10	All payments to be made by the Guarantor under this Guarantee may be made free and clear of and without deduction or withholding for or on account of any taxes, and
this Guarantee is not liable to any registration charge or any stamp, documentary or similar taxes imposed by any authority, including without limitation, in connection with the admissibility in evidence of any thereof. 

  
 6 

	9.11	The Guarantor has complied in all material respects with all relevant tax laws and regulations applicable to it and its business. 

 

	9.12	The payment obligations of the Guarantor under this Guarantee rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except
for obligations mandatorily preferred by law applying to companies generally. 

  

	9.13	The Guarantor has received a copy of the Agreement and is familiar with and has approved its terms and conditions. 

 

	9.14	The Guarantor agrees that the representations set out in this Clause 9 (other than the ones in Clauses 9.5, 9.7, 9.8 and 9.10) shall survive the execution of this
Guarantee and shall be deemed to be repeated on each Interest Date with reference to the facts and circumstances then subsisting, as if made on such date. 

 

	10.	UNDERTAKINGS 

  

	10.1	The undertakings in this Clause 10 shall remain in force from the date of this Guarantee to the end of the Security Period. 

 

	10.2	The Guarantor shall: 

  

	 	10.2.1	procure the performance and observance by the Borrower of the covenants and obligations imposed upon it under the Finance Documents; 

 

	 	10.2.2	maintain its corporate existence as a limited liability partnership duly organised, validly existing and in good standing in the Marshall Islands;

  

	 	10.2.3	obtain and maintain in force, and promptly furnish certified copies to the Security Trustee of, all licences, authorisations, approvals and consents, and do all other
acts and things, which may from time to time be necessary or desirable for the continued due performance of its obligations under this Guarantee or which may be required for the validity, enforceability or admissibility in evidence of this
Guarantee; 

  

	 	10.2.4	ensure that its obligations under this Guarantee rank at least pari passu with all its other present, future and/or contingent unsecured and unsubordinated obligations;

  

	 	10.2.5	conduct its business in a proper and efficient manner and not change the nature, organisation or conduct of its business; 

 

	 	10.2.6	pay all taxes, assessments and other governmental charges as they fall due, except to the extent that it is contesting the same in good faith by appropriate proceedings
and has set aside adequate reserves for their payment if such proceedings fail; 

  

	 	10.2.7	keep proper books of account in respect of its business in accordance with US GAAP consistently applied and whenever so requested by the Security Trustee make the
same available for inspection by or on behalf of the Agent; 

  

	 	10.2.8	provide to the Security Trustee: 

  

	 	(a)	 within 150 days of the end of each financial year of the Guarantor, certified copies (in a sufficient number for each of the Banks) of the consolidated
profit and loss 

  
 7 

	 	
accounts and balance sheets of the Group for that financial year, prepared in accordance with US GAAP and audited by auditors previously approved in writing by the Agent;

  

	 	(b)	within 90 days of 31 March, 30 June, 30 September and 31 December in each year, certified copies (in a sufficient number for each of the Banks) of
the unaudited consolidated profit and loss accounts and balance sheets of the Group for the relevant financial year to date, prepared in accordance with US GAAP; 

 

	 	(c)	as at 31 March, 30 June and 30 September in each year (and within 90 days of each such date) and as at 31 December in each year (and within 150 days
of each such date), a compliance certificate in the form set out in Schedule 1 signed by the chief financial officer or chief executive officer of the Guarantor and the Borrower confirming that they and the other Obligors are, as at the date of such
certificate, in compliance with their respective obligations under the Finance Documents and that no Event of Default or Potential Event of Default has occurred, or, if any has occurred, that none is continuing; 

 

	 	(d)	within 60 days after 31 December in each year, a certified copy of the financial projections of the Group for that year and the next 5 years (including
consolidated profit and loss, balance sheet and cash flow forecasts with supporting schedules and calculations); and 

  

	 	(e)	promptly, such further information in the possession or control of the Guarantor regarding the financial condition and operations of the Group as the Security Trustee
may reasonably request. 

  

	 	10.2.9	inform the Security Trustee promptly of any litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other
occurrence of which it becomes aware which, in any such case, might have a Material Adverse Effect; 

  

	 	10.2.10	promptly after the happening of any Event of Default or a Potential Event of Default, notify the Security Trustee of such event and of the steps (if any) which are
being taken to remedy it; 

  

	 	10.2.11	without prejudice to Clause 10.2.10, promptly upon a request by the Security Trustee if an Event of Default or a Potential Event of Default has occurred and is
continuing (or the Security Trustee reasonably believes that an Event of Default or a Potential Event of Default may have occurred and then be continuing), supply to the Security Trustee a certificate signed on behalf of the Guarantor by any two of
its directors and/or executive officers identifying all of the Events of Default and Potential Events of Default, if any, of which the Guarantor is aware and which are then continuing (and specifying the steps, if any, being taken to remedy them);

  

	 	10.2.12	promptly provide the Security Trustee with such other financial and other information concerning the Group and its affairs as the Security Trustee may from time to time
require; and 

  

	 	10.2.13	ensure that: 

  

	 	(a)	the Borrower is wholly-owned directly or indirectly by the Guarantor; and 

  
 8 

	 	(b)	the MLP General Partner is wholly-owned directly or indirectly by the Sponsor; and 

 

	 	(c)	the MLP General Partner is the general partner of the Guarantor; and 

  

	 	(d)	the Sponsor owns not less than one-third of the share capital and voting rights (subject to the limitations on voting rights relating to election of board members,
amendments and certain other matters as set out in the Limited Partnership Agreement) of the Guarantor; and 

  

	 	(e)	no person or group of persons acting in concert (other than the Sponsor or any wholly-owned subsidiaries thereof) owns more than 33% of the share capital or voting
rights (subject to the limitations on voting rights relating to election of board members, amendments and certain other matters as set out in the Limited Partnership Agreement) of the Guarantor; and 

 

	 	(f)	the Guarantor is and remains listed on the New York Stock Exchange, 

 except as agreed in writing by the Security Trustee (acting on the instructions of the Lenders). 
  

	10.3	The Guarantor shall not without the prior consent of the Security Trustee (as directed by the Lenders): 

 

	 	10.3.1	consolidate, amalgamate or merge with any other entity; 

  

	 	10.3.2	alter or extend its financial year for the purposes of the preparation of its accounts, or change its auditors; or 

 

	 	10.3.3	undertake any transaction with any person, company or other entity which is an affiliate of the Guarantor unless such transaction is conducted at arm’s length on
normal commercial terms. 

  

	11.	FINANCIAL COVENANTS 

  

	11.1	The Guarantor shall ensure that at all times from the date of this Guarantee until the end of the Security Period: 

 

	 	11.1.1	the amount of Free Liquidity is not less than the aggregate of: 

  

	 	(a)	$15,000,000; plus 

  

	 	(b)	$1,500,000 for each Long-term Charter Free Group Vessel on the date of computation; plus 

 

	 	(c)	$1,000,000 for each of the Additional Group Vessels on the date of computation; 

 

	 	11.1.2	the Book Equity is not less than 30% of the Total Assets; and 

  

	 	11.1.3	EBITDA is not less than 250% of Interest Expense. 

  

	11.2	For the purposes of this Guarantee: 

 “Additional Group Vessels” means the number of Group Vessels at any relevant time by which the total number of Group Vessels exceeds 8; 

  
 9 

 “Book Equity” means the book value of equity of the Group determined on a
consolidated basis in accordance with US GAAP; 
 “EBITDA” means the earnings before interest, depreciation,
amortisation and taxes for the Group determined on a consolidated basis in accordance with US GAAP for each period of twelve months ending on the last day of each quarter of the financial year; 

“Free Liquidity” means, in respect of the Group on a consolidated basis, the aggregate value of: 

 

	 	(a)	cash in hand and unencumbered bank deposits; and 

  

	 	(b)	unencumbered liquid bonds and other debt instruments with an “A”- rating or better of Standard & Poor’s Ratings Group or Moody’s
Investor’s Service, Inc. and liquid equities listed on any major stock exchange; and 

  

	 	(c)	any other bond or debt instrument accepted by the Agent on instructions of the Lenders in writing; 

provided, however, that the Free Liquidity shall not include undrawn amounts under any loan agreement with a lender which is not a member
of the Group to which the Borrower, the Guarantor and/or any other member of the Group is a party; 
 “Group
Vessel” means a vessel which is either: 
  

	 	(a)	in the registered ownership of a member of the Group; 

  

	 	(b)	on bareboat charter to a member of the Group; 

  

	 	(c)	subject to a time charterparty to a member of the Group which has a remaining duration (excluding optional periods which have not been declared) of at least 12 months;
or 

  

	 	(d)	leased to a member of the Group or is subject to any other operating agreement which would be treated as a finance or capital lease. 

“Interest Expense” means the interest expense of the Group determined on a consolidated basis in accordance with US GAAP;

 “Long-term Charter Free Group Vessel” means a Group Vessel which, as at any relevant date, is not subject to
a charterparty which: 
  

	 	(e)	is with a charterer which is not a member of the Group; 

  

	 	(f)	is on terms approved by the Security Trustee (acting on the instructions of the Majority Lenders); and 

 

	 	(g)	has a remaining duration (excluding optional periods which have not been declared) of at least 12 months; 

“Total Assets” means the total assets of the Group determined on a consolidated basis in accordance with US GAAP.

  
 10 

	12.	INDEMNITIES AND EXPENSES 

  

	12.1	The Guarantor shall pay to the Security Trustee on demand, and indemnify and keep each Bank indemnified against, all costs, charges, expenses, claims, liabilities,
losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by the Security Trustee: 

 

	 	12.1.1	in the negotiation, preparation, printing, execution and registration of this Guarantee and the other Security Documents; 

 

	 	12.1.2	in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Security Trustee under this Guarantee or of the
security constituted by the Security Documents; 

  

	 	12.1.3	in connection with any actual or proposed amendment or release of or supplement to this Guarantee, or with any request to the Security Trustee to grant any consent or
waiver in respect of any provision of this Guarantee, whether or not the same is given; 

  

	 	12.1.4	arising out of any act or omission made by the Banks (or any of them) in good faith in connection with any of the matters dealt with in this Guarantee.

  

	12.2	The Guarantor shall pay any and all stamp, documentary, registration and like taxes or charges imposed by governmental authorities in relation to this Guarantee and
shall indemnify each Bank against any and all liabilities with respect to, or resulting from, delay or omission on the part of the Guarantor to pay such taxes or charges. 

 

	12.3	If any sum due from the Guarantor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of making or filing a claim or proof against the Guarantor or obtaining
or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, the Guarantor shall as an independent obligation, within 3 Banking Days of demand, indemnify each Bank to whom that Sum is due against any cost, loss
or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange
available to that Bank at the time of its receipt of that Sum. 

  

	12.4	The indemnities contained in the Finance Documents shall continue in full force and effect after the full and final discharge of the Outstanding Indebtedness with
respect to matters arising prior to such discharge. 

  

	13.	ASSIGNMENTS AND TRANSFERS 

  

	13.1	This Guarantee shall be binding upon the Guarantor and shall inure to the benefit of the Security Trustee and the other Banks. 

 

	13.2	The Guarantor may not assign or transfer all or any of its rights, benefits or obligations under this Guarantee. 

  
 11 

	13.3	Any Bank may freely assign or transfer or sub-participate all or any of its rights, benefits or obligations under this Guarantee in accordance with the relevant
provisions of the Agreement as if the same were, mutatis mutandis, set out in full in this Guarantee. 

  

	13.4	Any Bank may disclose to any potential transferee, assignee or sub-participant, or to any other party with whom it may propose to enter into contractual relations in
connection with this Guarantee, such information about the Guarantor and its business, assets or financial condition as that Bank shall consider appropriate. 

 

	13.5	Any Bank may at any time and from time to time change its lending office and/or delegate any one or more of its rights, powers and/or obligations under this Guarantee
to any person. 

  

	13.6	The Guarantor undertakes to do or to procure all such acts and things and to sign, execute and deliver or procure the signing, execution and delivery of all such
instruments and documents as the Security Trustee may reasonably require for the purpose of perfecting any such assignment, transfer, sub-participation, change or delegation as aforesaid. 

 

	13.7	Without prejudice to Clause 13.6, the Guarantor irrevocably authorises the Agent to sign any Transfer Certificate on its behalf. 

 

	14.	SET-OFF 

  

	14.1	A Bank may set off any matured obligation due from the Guarantor under this Guarantee (to the extent beneficially owned by that Bank) against any matured obligation
owed by that Bank to the Guarantor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off. 

  

	15.	MISCELLANEOUS 

  

	15.1	No failure to exercise, nor any delay in exercising, on the part of the Security Trustee, any right or remedy under this Guarantee shall operate as a waiver thereof,
nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Guarantee are cumulative and not exclusive of any
rights or remedies provided by law. 

  

	15.2	Any waiver by the Security Trustee of any provision of this Guarantee, and any consent or approval given by the Security Trustee hereunder, shall only be effective if
given in writing and then only strictly for the purpose and upon the terms for which it is given. This Guarantee may not be amended or varied orally but only by an instrument signed by or on behalf of each of the parties hereto.

  

	15.3	If at any time one or more of the provisions of this Guarantee is or becomes invalid, illegal or unenforceable in any respect under any law by which it may be governed
or affected, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or impaired as a result. 

  

	15.4	This Guarantee may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute but one and the same instrument.

  
 12 

	15.5	A certificate or determination by the Security Trustee or any other Bank as to the amount of the Outstanding Indebtedness or any part thereof, without limitation as to
any other matter provided for in this Guarantee or the other Security Documents, shall (save in case of manifest error) for all purposes be conclusive and binding upon the Guarantor. 

 

	15.6	The Guarantor shall, upon demand, and at its own expense, sign, perfect, do, execute and register all such further assurances, documents, acts and things as the
Security Trustee may require for the purpose of more effectually accomplishing or perfecting the transaction or security contemplated by this Guarantee. 

  

	16.	NOTICES 

  

	16.1	All notices (which expression includes any demand, request, consent or other communication) to be given by one party to the other under this Guarantee shall be in
writing and (unless delivered personally) shall be given by telefax or first class pre-paid post (airmail if sent internationally) and be addressed: 

  

	 	16.1.1	in the case of the Security Trustee, to it at: 

  

			
	Lars Hillesgt. 30	  	
	N-5020 Bergen	  	
	Norway	  	
		
	Telefax No:	  	+47 55 21 19 24
	Attn:	  	Shipping Department

  

	 	16.1.2	in the case of the Guarantor, to it at: 

  

			
	[2 Queen’ Cross	  	
	Aberdeen	  	
	Aberdeenshire	  	
	AB15 4YB	  	
	United Kingdom]	  	
		
	Telefax No:	  	++44 1224 [—]
	Attn:	  	[—]

 or to such other address and/or number as is notified by one party to the other under this Guarantee.

  

	16.2	Notices addressed as provided above shall be deemed to have been duly given when despatched (in the case of telefax), when delivered (in the case of personal delivery),
2 days after posting (in the case of letters sent within the same country), or 5 days after posting (in the case of letters sent internationally), provided that any notice to the Security Trustee shall be effective only upon its actual receipt by
the Security Trustee and then only if it is expressly marked for the attention of the relevant department or officer named above (or any substitute from time to time notified by the Security Trustee). In each of the above cases any notice received
on a non-working day or after business hours in the country of receipt shall be deemed to be given at the opening of business hours on the next working day in such country. 

 

	16.3	All notices and documents to be given or delivered pursuant to or otherwise in relation to this Guarantee shall be in the English language or be accompanied by a
certified English translation. 

  
 13 

	17.	APPLICABLE LAW AND JURISDICTION 

  

	17.1	This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.

  

	17.2	The Guarantor hereby irrevocably agrees for the exclusive benefit of the Security Trustee that the English courts shall have jurisdiction in relation to any dispute and
any suit, action or proceeding (referred to together in this Clause 17 as “Proceedings”) which may arise out of or in connection with this Guarantee and/or any of the other Finance Documents to which the Guarantor may be party, and
for such purposes irrevocably submits to the jurisdiction of such courts. 

  

	17.3	The Guarantor hereby irrevocably agrees: 

  

	 	17.3.1	that, for the purpose of Proceedings in England, any legal process may be served upon SH Process Agents Limited whose registered office is presently at 1 Finsbury
Circus, London EC2M 7SH (Ref: 748/47-03533) who are hereby authorised to accept service on behalf of the Guarantor, which shall be deemed to be good service on the Guarantor; and 

 

	 	17.3.2	that throughout the Security Period the Guarantor will maintain a duly appointed process agent in England, duly notified to the Security Trustee, and that failure by
any such process agent to give notice thereof to the Guarantor shall not impair the validity of such service or of a judgment or order based thereon. 

  

	17.4	Nothing in this Clause 17 shall affect the right of the Security Trustee to serve process in any manner permitted by law or limit the right of the Security Trustee to
take Proceedings against the Guarantor in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings by the Security Trustee in any other jurisdiction, whether
concurrently or not. 

 The Guarantor shall not commence any Proceedings in any country other than England in
relation to any matter arising out of or in connection with this Guarantee and/or any of the other Security Documents. 
  

	17.5	The Guarantor irrevocably waives any objection which it may now or hereafter have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any
such court as is referred to in this Clause 17, and further irrevocably agrees that a judgment or order in any Proceedings brought in the English courts shall be conclusive and binding upon the Guarantor and may be enforced without review in the
courts of any other jurisdiction. 

  

	17.6	The Guarantor consents generally in respect of any Proceedings arising out of or in connection with this Guarantee and/or any of the other Finance Documents to the
giving of any relief or the issue of any process in connection with such Proceedings, including, without limitation, the making, enforcement or execution against any property or assets whatsoever of any order or judgment which may be made or given
in such Proceedings. 

 IN WITNESS of which the parties to this Guarantee have executed this Guarantee as a deed the day
and year first before written. 

  
 14 

 EXECUTION PAGE 

 

					
	SIGNED AND DELIVERED as a DEED	 	)	 	
	by	 	)	 	
	duly authorised for and on behalf of	 	)	 	  

	KNOT OFFSHORE PARTNERS LP	 	)	 	
	in the presence of:	 	)	 	
			
	Signature:	 		 	
			
	Name:	 		 	
			
	Occupation:	 		 	
			
	Address:	 		 	
			
	SIGNED AND DELIVERED as a DEED	 	)	 	
	by	 	)	 	
	duly authorised for and on behalf of	 	)	 	  

	DNB BANK ASA	 	)	 	
	in the presence of:	 	)	 	
			
	Signature:	 		 	
			
	Name:	 		 	
			
	Occupation:	 		 	
			
	Address:	 		 	

  
 15 

 SCHEDULE 1 
 FORM OF COMPLIANCE CERTIFICATE 
  

	To:	DNB Bank ASA 

 Lars Hillesgt. 30

 N-5020 Bergen 
 Norway 
 Attn: Shipping Department 

Telefax No: +47 55 21 19 24 
 Date: [—] 201[—] 
 Dear Sirs 
 $160,000,000 Loan to Knutsen Shuttle Tankers XII KS 

We refer to: 
  

	(A)	the loan agreement dated 1 December 2009 (as amended and restated, the “Loan Agreement”) now made between (1) Knutsen Shuttle Tankers
XII KS as borrower (the “Borrower”), (2) DNB Bank ASA and Nordea Bank Norge ASA as lenders (the “Lenders”), (3) DNB Bank ASA and Nordea Bank Norge ASA as mandated lead arrangers and bookrunners,
(4) DNB Bank ASA and Nordea Bank Finland plc as swap providers (5) DNB Bank ASA as agent and (6) DNB Bank ASA as security trustee providing for the making available to the Borrower of a secured term loan in the amount of up to
$19,000,000; and 

  

	(B)	the deed of guarantee and indemnity dated [—] 2013 (the “Guarantee”) made by KNOT Offshore Partners
LP (the “Parent Guarantor”) in favour of the Security Trustee as security for the performance by the Borrower of its obligations under the Loan Agreement. 

 This certificate is issued to you pursuant to Clause 12.2.3 of the Loan Agreement and Clause 10.2.8(c) of the Guarantee and we hereby certify that, as of [31 March][30 June][30 September][31 December]
201[—]: 
  

	1.	The amount of Free Liquidity was $[—] and there were [—] Long-term
Charter Free Group Vessels and [no][—] Additional Group Vessels. Accordingly, the minimum required amount of Free Liquidity on that date was $[—],
being: 

  

	 	(a)	$15,000,000; plus 

  

	 	(b)	$1,500,000 x [—]; plus 

  

	 	(c)	$1,000,000 x [—] 

 Requirement: Free Liquidity to be not less than $[—]. 
 Satisfied: Yes/No 
  

	2.	The Book Equity was $[—] and the Total Assets were $[—]

  
 16 

 Requirement: Book Equity to be not less than 30% of the Total Assets at any time.

 Satisfied: Yes/No 
  

	3.	EBITDA was $[—] and the Interest Expense was $[—]

 Requirement: EBITDA to be not less than 250% of the Interest Expense at any time. 

Satisfied: Yes/No 
  

	4.	The Working Capital of the Borrower was $[—] based on current assets of
$[—] less current liabilities (excluding instalments on long-term debt and capital lease payments falling within 6 months after the date of calculation) of
$[—] 

 Requirement: The Borrower not to have a negative
Working Capital at any time. 
 Satisfied: Yes/No 

We also certify that, as of the date of this certificate, we and the other Obligors are in compliance with our respective obligations under the Security
Documents and that no Potential Event of Default or Event of Default has occurred and is continuing. 
 Words and expressions whose meanings are
defined in the Loan Agreement and/or the Guarantee shall have the same meanings when used herein. 
 Yours faithfully, 

 

	
	For and on behalf of
	KNOT Offshore Partners LP
	
	  

	By:
	Chief [Financial][Executive] Officer
	
	For and on behalf of
	Knutsen Shuttle Tankers XII KS
	
	  

	By:
	Chief [Financial][Executive] Officer

  
 17 

 DATED
                     2013 
 KNOT SHUTTLE TANKERS AS 
 as Guarantor 

- and - 
 DNB
BANK ASA 
 as Security Trustee 
  

 
 GUARANTEE AND
INDEMNITY 
  
  

in respect of the obligations of Knutsen Shuttle Tankers XII KS 
 under a US$19,000,000 loan facility relating to 
 “FORTALEZA KNUTSEN” and
“RECIFE KNUTSEN” 
  
 

 

 CONTENTS 

 

							
	Clause	 	 	  	Page	 
			
	 1.
	 	 DEFINITIONS AND INTERPRETATION
	  	 	1	  
			
	 2.
	 	 GUARANTEE AND INDEMNITY
	  	 	2	  
			
	 3.
	 	 CONTINUING SECURITY
	  	 	3	  
			
	 4.
	 	 RESTRICTIONS ON GUARANTOR
	  	 	4	  
			
	 5.
	 	 WAIVER BY GUARANTOR
	  	 	4	  
			
	 6.
	 	 PAYMENTS AND APPLICATION OF FUNDS
	  	 	4	  
			
	 7.
	 	 NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
	  	 	5	  
			
	 8.
	 	 PROVISO TO RELEASE OF THIS GUARANTEE
	  	 	5	  
			
	 9.
	 	 REPRESENTATIONS AND WARRANTIES
	  	 	6	  
			
	 10.
	 	 UNDERTAKINGS
	  	 	7	  
			
	 11.
	 	 INDEMNITIES AND EXPENSES
	  	 	8	  
			
	 12.
	 	 ASSIGNMENTS AND TRANSFERS
	  	 	9	  
			
	 13.
	 	 SET-OFF
	  	 	10	  
			
	 14.
	 	 MISCELLANEOUS
	  	 	10	  
			
	 15.
	 	 NOTICES
	  	 	11	  
			
	 16.
	 	 APPLICABLE LAW AND JURISDICTION
	  	 	11	  
		
	 EXECUTION PAGE
	  	 	13	  

 THIS GUARANTEE is made on
                     2013 
 BETWEEN:

  

	(1)	KNOT SHUTTLE TANKERS AS, a company incorporated under the laws of Norway with organisation number 998 942 829 and having its registered office at Smedasundet 40,
5529 Haugesund, Norway (the “Guarantor”); and 

  

	(2)	DNB BANK ASA, a company incorporated under the laws of Norway acting through its office at Lars Hillesgt. 30, N-5020 Bergen, Norway in its capacity as security
trustee for the Banks (the “Security Trustee”). 

 WHEREAS: 

 

	(A)	By a loan agreement dated 1 December 2009 (as amended by a supplemental agreement dated 14 February 2011, a second supplemental agreement dated
14 September 2012, a third supplemental agreement dated 27 February 2013 and as amended and restated by an amendment and restatement deed dated [—] March 2013, the
“Agreement”) now made between (1) Knutsen Shuttle Tankers XII KS as borrower (the “Borrower”), (2) DNB Bank ASA and Nordea Bank Norge ASA as lenders (the “Lenders”), (3) DNB Bank
ASA and Nordea Bank Norge ASA as mandated lead arrangers and bookrunners, (4) DNB Bank ASA and Nordea Bank Finland plc as swap providers (5) DNB Bank ASA as agent (the “Agent”) and (6) the Security Trustee, the
Lenders agreed to make available to the Borrower a term loan facility of up to $19,000,000. 

  

	(B)	At the request of the Borrower and as additional security for the repayment of the Loan and the payment of interest thereon and all other moneys from time to time due
or owing to the Banks or any of them under or pursuant to the Finance Documents, the Guarantor has agreed to enter into this Guarantee. 

  

	(C)	This Guarantee forms part of the Trust Property which pursuant to the Agreement the Security Trustee holds on trust for itself and the other Banks.

 IT IS AGREED as follows: 
  

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Words and expressions defined in the Agreement shall, unless otherwise expressly provided herein or the context otherwise requires, have the same meanings when used in
this Guarantee, including the Recitals. 

  

	1.2	In this Guarantee: 

  

	 	1.2.1	unless the context otherwise requires, words in the singular include the plural and vice versa; 

 

	 	1.2.2	references to any document include the same as varied, supplemented or replaced from time to time; 

 

	 	1.2.3	references to any enactment include re-enactments, amendments and extensions thereof; 

 

	 	1.2.4	references to any person include that person’s successors and permitted assigns; 

	 	1.2.5	clause headings are for convenience of reference only and are not to be taken into account in construction; and 

 

	 	1.2.6	unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Guarantee.

  

	1.3	Except for the Banks, a person who is not a party to this Guarantee may not enforce, or otherwise have the benefit of, any provision of this Guarantee under the
Contracts (Rights of Third Parties) Act 1999. 

  

	2.	GUARANTEE AND INDEMNITY 

  

	2.1	The Guarantor irrevocably and unconditionally: 

  

	 	2.1.1	guarantees the due and punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents; 

 

	 	2.1.2	undertakes as primary obligor and not as surety only that whenever the Borrower does not pay any part of the Outstanding Indebtedness when due under or in connection
with any Finance Document, the Guarantor shall immediately on demand by the Security Trustee pay that amount to the Security Trustee; and 

  

	 	2.1.3	agrees, as a separate and independent stipulation, that if any amounts intended to be guaranteed hereby are not recoverable on the footing of a guarantee, whether by
reason of any legal limitation, disability or incapacity on or of the Borrower or any other fact or circumstance, whether or not known to any Bank or the Guarantor, then such amounts shall nevertheless be recoverable from the Guarantor as sole or
principal debtor by way of indemnity and shall be payable by the Guarantor to the Security Trustee on demand, 

provided that: 
  

	 	(a)	the aggregate amount in respect of the Outstanding Indebtedness recoverable from the Guarantor under this Guarantee shall not exceed $18,125,0001; and 

 

	 	(b)	the foregoing limitation of liability shall not apply in respect of any interest which accrues under Clause 2.2 or any amounts payable under Clauses 7.2 and 11.

  

	2.2	If the Guarantor fails to pay on the due date any sum (whether of principal, interest or otherwise) due under this Guarantee, interest will accrue, and become payable
by it upon the Security Trustee’s demand, upon the sum unpaid from and including the date upon which it fell due for payment until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be
2% higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted part of the Loan for successive periods, each of a duration selected by the Agent (acting reasonably). Any such interest
shall accrue from day to day, be calculated on the basis of the actual number of days elapsed and a 360 day year and be compounded at the end of each such period determined by the Agent for so long as it remains unpaid. 

 

	1 	Note: This assumes that the Guarantee is executed and dated before 28 March 2013. 

  
 2 

	2.3	The guarantee contained in this Clause 2 is a guarantee of payment and performance and not of collection. 

 

	3.	CONTINUING SECURITY 

  

	3.1	This Guarantee: 

  

	 	3.1.1	is and shall at all times be a continuing security for the payment of the full amount of the Outstanding Indebtedness from time to time; 

 

	 	3.1.2	shall not be satisfied by any intermediate payment or satisfaction of any part of the Outstanding Indebtedness; 

 

	 	3.1.3	shall be in addition to and shall not merge with or be prejudiced or affected by any other security for the Outstanding Indebtedness which may have been, or may at any
time hereafter be, given to the Banks (or any of them) by the Borrower or any other person. 

  

	3.2	The obligations of the Guarantor under this Guarantee shall not be reduced, discharged or otherwise adversely affected by reason of any act, omission, matter or thing
(whether or not known to the Guarantor and/or any Bank) which, but for this provision, might operate to release the Guarantor from all or part of its liability under this Guarantee including, without limitation: 

 

	 	3.2.1	any time or indulgence granted to, or composition with, the Borrower or any other person; or 

 

	 	3.2.2	any termination, renewal, extension or variation of any credit, accommodation or facility granted by the Banks (or any of them) to the Borrower or any other person or
any amendment of, or the making of any supplement to, any Finance Document or any other document or security; or 

  

	 	3.2.3	the taking, variation, compromise, renewal, enforcement, realisation or release of, or refusal or neglect or failure to take, perfect, release or enforce, any rights,
remedies or securities against, or granted by, any Obligor or other person; or 

  

	 	3.2.4	any incapacity, disability, or defect in powers of any Obligor or other person, or any irregular exercise thereof by, or lack of authority of, any person purporting to
act on behalf of any Obligor or other person; or 

  

	 	3.2.5	any illegality, invalidity, avoidance or unenforceability on any grounds whatsoever of, or of any obligations of any Obligor or other person under, any Finance Document
or any other document or security; or 

  

	 	3.2.6	the death, liquidation, administration, insolvency, amalgamation, reorganisation or dissolution, or any change in the constitution, name or style, of any Obligor, any
Bank or any other person. 

  
 3 

	4.	RESTRICTIONS ON GUARANTOR 

  

	4.1	Until the moneys and liabilities hereby guaranteed have been paid and discharged in full, the Guarantor shall not be entitled, nor shall the Guarantor claim, by virtue
of any payment made by it under this Guarantee: 

  

	 	4.1.1	to exercise any right of subrogation or indemnity or any other right or remedy in relation to any rights, security or moneys held by or recovered or receivable by the
Security Trustee or any other Bank under the Finance Documents; or 

  

	 	4.1.2	to exercise any right of set-off or counterclaim against the Borrower or any other Obligor; or 

 

	 	4.1.3	to exercise any right of contribution from any other Obligor in respect of the Outstanding Indebtedness; or 

 

	 	4.1.4	to receive, claim or have the benefit of any payment, distribution or security from the Borrower or any other Obligor; or 

 

	 	4.1.5	unless so directed by the Security Trustee (in which case the Guarantor shall prove in accordance with the Security Trustee’s directions), to rank as a creditor or
have any right of proof in the bankruptcy, liquidation or insolvency of the Borrower or any other Obligor in competition with the Security Trustee. 

  

	4.2	The Guarantor hereby represents and warrants that it has not taken, and undertakes that it will not take, without the prior written consent of the Security Trustee (as
directed by the Lenders), any security from the Borrower or any other Obligor in respect of the Guarantor’s liability under this Guarantee. 

  

	4.3	If the Guarantor is required by the Security Trustee to prove in the bankruptcy, liquidation or insolvency of the Borrower or any other Obligor, or receives any
payment, distribution or security from the Borrower or any other Obligor, or exercises any right of set-off or counterclaim, or otherwise acts in breach of any provision of this Clause 4, then in each such case the Guarantor shall hold on trust for
the Security Trustee and forthwith pay or transfer (as may be appropriate) to the Security Trustee any such payment, amount set off, distribution or benefit of such security received by it. 

 

	5.	WAIVER BY GUARANTOR 

 The
Guarantor hereby waives any rights which the Guarantor may have to require the Security Trustee first to enforce any of the other Finance Documents or claim payment from the Borrower or any other person, before enforcing any rights of the Security
Trustee against the Guarantor under this Guarantee. 
  

	6.	PAYMENTS AND APPLICATION OF FUNDS 

  

	6.1	Unless otherwise specified by the Security Trustee, all moneys to be paid by the Guarantor under this Guarantee shall be paid to the Security Trustee in Dollars on the
due date and in same day funds to such account as the Security Trustee may from time to time notify the Guarantor. 

  

	6.2	Subject as provided below, all moneys received or recovered by the Security Trustee pursuant to this Guarantee shall be held by it upon trust, in the first place to pay
or make good all costs, expenses and liabilities whatsoever incurred by the Security Trustee in or about or incidental to the recovery of such moneys, and the balance shall be applied in accordance with Clause 7.2 of the Agreement. The Security
Trustee may at its discretion place and keep any moneys so received or recovered to the credit of a suspense account for so long as the Security Trustee may think fit with a view to preserving the rights of the Security Trustee to prove for the
whole of its claims against the Borrower or other person liable. 

  
 4 

	6.3	The Guarantor hereby irrevocably waives any rights of appropriation to which it may be entitled. 

 

	7.	NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION 

  

	7.1	All payments to be made by the Guarantor under this Guarantee shall be made without set-off or counterclaim and free and clear of, and without deduction for or on
account of, any present or future taxes, unless the Guarantor is compelled by law to make payment subject to any such tax. 

  

	7.2	If the Guarantor is compelled by law to make payment subject to such taxes, the Guarantor will: 

 

	 	7.2.1	promptly notify the Security Trustee upon becoming aware of such requirement; 

 

	 	7.2.2	pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; 

 

	 	7.2.3	pay the Security Trustee such additional amount as is necessary to ensure that the Security Trustee or (if the payment is not due to the Security Trustee for its own
account) the Bank beneficially interested in the payment (the “relevant recipient”) receives a net amount equal to the full amount which it would have received had such tax deduction not been required to be made; and

  

	 	7.2.4	as soon as reasonably practicable after making the relevant tax deduction, deliver to the Security Trustee for forwarding to the relevant recipient a copy of the
receipt from the relevant taxation authority evidencing that the tax had been paid to such authority. 

  

	7.3	If, following any such tax deduction as is referred to in Clause 7.2 from any payment by the Guarantor, the relevant recipient shall receive or be granted a credit
against or remission for any taxes payable by it, the relevant recipient shall, subject to the Guarantor having made any increased payment in accordance with Clause 7.2 and to the extent that the relevant recipient can do so without prejudicing the
retention of the amount of such credit or remission and without prejudice to the right of the relevant recipient to obtain any other relief or allowance which may be available to it, reimburse the Guarantor with such amount as the relevant recipient
shall in its absolute discretion certify to be the proportion of such credit or remission as will leave the relevant recipient (after such reimbursement) in no worse position than it would have been in had there been no such deduction or withholding
from the payment to the relevant recipient as aforesaid. Such reimbursement shall be made forthwith upon the relevant recipient certifying that the amount of such credit or remission has been received by it. Nothing contained in this Guarantee shall
oblige any Bank to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Guarantor shall not by virtue of this Clause 7.3 be entitled to enquire
about the tax affairs of any Bank. 

  

	8.	PROVISO TO RELEASE OF THIS GUARANTEE 

  

	8.1	Any release, discharge or settlement between the Guarantor and the Security Trustee in relation to this guarantee shall be conditional on no right, security,
disposition or payment to the Banks (or any of them) by the Guarantor, the Borrower or any other person in respect of the Outstanding Indebtedness being avoided, set aside or ordered to be refunded pursuant to any enactment or law relating to breach
of duty by any person, bankruptcy, liquidation, administration, protection from creditors generally or insolvency or for any other reason. If any such right, security, disposition or payment is avoided, set aside or ordered to be refunded, the
Security Trustee shall be entitled subsequently to enforce this Guarantee against the Guarantor as if such release, discharge or settlement had not occurred and any such security, disposition or payment had not been made. 

  
 5 

	9.	REPRESENTATIONS AND WARRANTIES 

  

	9.1	The Guarantor represents and warrants that the following matters are true at the date of this Guarantee. 

 

	9.2	The Guarantor: 

  

	 	9.2.1	is a limited liability company which is duly incorporated, validly existing and in good standing under the laws of Norway; 

 

	 	9.2.2	has full power to own its property and assets and to carry on its business as it is now being conducted; 

 

	 	9.2.3	has complied with all statutory and other requirements relative to its business; 

 

	 	9.2.4	is solvent and not in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator,
trustee or analogous officer has been appointed in respect of it or all or any part of its assets. 

  

	9.3	The entry into and performance by the Guarantor of this Guarantee are within the corporate powers of the Guarantor and have been duly authorised by all necessary
corporate actions and approvals. In entering into this Guarantee the Guarantor is acting on its own account and not as agent or nominee of any person. 

  

	9.4	The entry into and performance by the Guarantor of this Guarantee do not and will not: 

 

	 	9.4.1	contravene in any respect the constitutional documents of the Guarantor or any law, regulation or contractual restriction which does, or may, bind the Guarantor or any
of its assets; or 

  

	 	9.4.2	result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) on any of its assets in favour of any party. 

 

	9.5	All licences, authorisations, approvals and consents necessary for the entry into, performance, validity, enforceability or admissibility in evidence of this Guarantee
have been obtained and are in full force and effect and there has been no breach of any condition or restriction imposed in this respect. 

  

	9.6	This Guarantee constitutes the legal, valid and binding obligations of the Guarantor enforceable against the Guarantor in accordance with its terms, except insofar as
enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws affecting creditors’ rights generally. 

 

	9.7	No litigation, arbitration, tax claim or administrative proceeding is current or pending or (to the knowledge of the Guarantor) threatened, which, if adversely
determined, would have a Material Adverse Effect. 

  

	9.8	No continuing Event of Default or Potential Event of Default has occurred. 

  
 6 

	9.9	All factual information furnished in writing to any Bank by or on behalf of the Guarantor in connection with the negotiation and preparation of the Finance Documents
was (when given) true and correct in all material respects and there are no other facts or considerations the omission of which would render any such information materially misleading. 

 

	9.10	All payments to be made by the Guarantor under this Guarantee may be made free and clear of and without deduction or withholding for or on account of any taxes, and
this Guarantee is not liable to any registration charge or any stamp, documentary or similar taxes imposed by any authority, including without limitation, in connection with the admissibility in evidence of any thereof. 

 

	9.11	The Guarantor has complied in all material respects with all relevant tax laws and regulations applicable to it and its business. 

 

	9.12	All of the issued shares in the share capital of the Guarantor are wholly owned, legally and beneficially, directly or indirectly by the Parent Guarantor.

  

	9.13	The payment obligations of the Guarantor under this Guarantee rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except
for obligations mandatorily preferred by law applying to companies generally. 

  

	9.14	The Guarantor has received a copy of the Agreement and is familiar with and has approved its terms and conditions. 

 

	9.15	The Guarantor agrees that the representations set out in this Clause 9 (other than the ones in Clauses 9.5, 9.7, 9.8 and 9.10) shall survive the execution of this
Guarantee and shall be deemed to be repeated on each Interest Date with reference to the facts and circumstances then subsisting, as if made on such date. 

 

	10.	UNDERTAKINGS 

  

	10.1	The undertakings in this Clause 10 shall remain in force from the date of this Guarantee to the end of the Security Period. 

 

	10.2	The Guarantor shall: 

  

	 	10.2.1	procure the performance and observance by the Borrower of the covenants and obligations imposed upon it under the Finance Documents; 

 

	 	10.2.2	maintain its corporate existence as a limited liability company duly organised, validly existing and in good standing in Norway; 

 

	 	10.2.3	obtain and maintain in force, and promptly furnish certified copies to the Security Trustee of, all licences, authorisations, approvals and consents, and do all other
acts and things, which may from time to time be necessary or desirable for the continued due performance of its obligations under this Guarantee or which may be required for the validity, enforceability or admissibility in evidence of this
Guarantee; 

  

	 	10.2.4	ensure that its obligations under this Guarantee rank at least pari passu with all its other present, future and/or contingent unsecured and unsubordinated obligations;

  

	 	10.2.5	conduct its business in a proper and efficient manner and not change the nature, organisation or conduct of its business; 

  
 7 

	 	10.2.6	pay all taxes, assessments and other governmental charges as they fall due, except to the extent that it is contesting the same in good faith by appropriate proceedings
and has set aside adequate reserves for their payment if such proceedings fail; 

  

	 	10.2.7	keep proper books of account in respect of its business in accordance with GAAP consistently applied and whenever so requested by the Security Trustee make the same
available for inspection by or on behalf of the Agent; 

  

	 	10.2.8	inform the Security Trustee promptly of any litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other
occurrence of which it becomes aware which, in any such case, might have a Material Adverse Effect; 

  

	 	10.2.9	promptly after the happening of any Event of Default or a Potential Event of Default, notify the Security Trustee of such event and of the steps (if any) which are
being taken to remedy it; 

  

	 	10.2.10	promptly provide the Security Trustee with such financial and other information concerning the Group and its affairs as the Security Trustee may from time to time
require; and 

  

	 	10.2.11	ensure that the Borrower remains its wholly-owned subsidiary. 

  

	10.3	The Guarantor shall not without the prior consent of the Security Trustee (as directed by the Lenders): 

 

	 	10.3.1	consolidate, amalgamate or merge with any other entity; 

  

	 	10.3.2	alter or extend its financial year for the purposes of the preparation of its accounts, or change its auditors; or 

 

	 	10.3.3	undertake any transaction with any person, company or other entity which is an affiliate of the Guarantor unless such transaction is conducted at arm’s length on
normal commercial terms. 

  

	11.	INDEMNITIES AND EXPENSES 

  

	11.1	The Guarantor shall pay to the Security Trustee on demand, and indemnify and keep each Bank indemnified against, all costs, charges, expenses, claims, liabilities,
losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by the Security Trustee: 

 

	 	11.1.1	in the negotiation, preparation, printing, execution and registration of this Guarantee and the other Security Documents; 

 

	 	11.1.2	in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Security Trustee under this Guarantee or of the
security constituted by the Security Documents; 

  

	 	11.1.3	in connection with any actual or proposed amendment or release of or supplement to this Guarantee, or with any request to the Security Trustee to grant any consent or
waiver in respect of any provision of this Guarantee, whether or not the same is given; 

  

	 	11.1.4	arising out of any act or omission made by the Banks (or any of them) in good faith in connection with any of the matters dealt with in this Guarantee.

  
 8 

	11.2	The Guarantor shall pay any and all stamp, documentary, registration and like taxes or charges imposed by governmental authorities in relation to this Guarantee and
shall indemnify each Bank against any and all liabilities with respect to, or resulting from, delay or omission on the part of the Guarantor to pay such taxes or charges. 

 

	11.3	If any sum due from the Guarantor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of making or filing a claim or proof against the Guarantor or obtaining
or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, the Guarantor shall as an independent obligation, within 3 Banking Days of demand, indemnify each Bank to whom that Sum is due against any cost, loss
or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange
available to that Bank at the time of its receipt of that Sum. 

  

	11.4	The indemnities contained in the Finance Documents shall continue in full force and effect after the full and final discharge of the Outstanding Indebtedness with
respect to matters arising prior to such discharge. 

  

	12.	ASSIGNMENTS AND TRANSFERS 

  

	12.1	This Guarantee shall be binding upon the Guarantor and shall inure to the benefit of the Security Trustee and the other Banks. 

 

	12.2	The Guarantor may not assign or transfer all or any of its rights, benefits or obligations under this Guarantee. 

 

	12.3	Any Bank may freely assign or transfer or sub-participate all or any of its rights, benefits or obligations under this Guarantee in accordance with the relevant
provisions of the Agreement as if the same were, mutatis mutandis, set out in full in this Guarantee. 

  

	12.4	Any Bank may disclose to any potential transferee, assignee or sub-participant, or to any other party with whom it may propose to enter into contractual relations in
connection with this Guarantee, such information about the Guarantor and its business, assets or financial condition as that Bank shall consider appropriate. 

 

	12.5	Any Bank may at any time and from time to time change its lending office and/or delegate any one or more of its rights, powers and/or obligations under this Guarantee
to any person. 

  

	12.6	The Guarantor undertakes to do or to procure all such acts and things and to sign, execute and deliver or procure the signing, execution and delivery of all such
instruments and documents as the Security Trustee may reasonably require for the purpose of perfecting any such assignment, transfer, sub-participation, change or delegation as aforesaid. 

 

	12.7	Without prejudice to Clause 12.6, the Guarantor irrevocably authorises the Agent to sign any Transfer Certificate on its behalf. 

  
 9 

	13.	SET-OFF 

  

	13.1	A Bank may set off any matured obligation due from the Guarantor under this Guarantee (to the extent beneficially owned by that Bank) against any matured obligation
owed by that Bank to the Guarantor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off. 

  

	14.	MISCELLANEOUS 

  

	14.1	No failure to exercise, nor any delay in exercising, on the part of the Security Trustee, any right or remedy under this Guarantee shall operate as a waiver thereof,
nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Guarantee are cumulative and not exclusive of any
rights or remedies provided by law. 

  

	14.2	Any waiver by the Security Trustee of any provision of this Guarantee, and any consent or approval given by the Security Trustee hereunder, shall only be effective if
given in writing and then only strictly for the purpose and upon the terms for which it is given. This Guarantee may not be amended or varied orally but only by an instrument signed by or on behalf of each of the parties hereto.

  

	14.3	If at any time one or more of the provisions of this Guarantee is or becomes invalid, illegal or unenforceable in any respect under any law by which it may be governed
or affected, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or impaired as a result. 

  

	14.4	This Guarantee may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute but one and the same instrument.

  

	14.5	A certificate or determination by the Security Trustee or any other Bank as to the amount of the Outstanding Indebtedness or any part thereof, without limitation as to
any other matter provided for in this Guarantee or the other Security Documents, shall (save in case of manifest error) for all purposes be conclusive and binding upon the Guarantor. 

 

	14.6	The Guarantor shall, upon demand, and at its own expense, sign, perfect, do, execute and register all such further assurances, documents, acts and things as the
Security Trustee may require for the purpose of more effectually accomplishing or perfecting the transaction or security contemplated by this Guarantee. 

  

	15.	NOTICES 

  

	15.1	All notices (which expression includes any demand, request, consent or other communication) to be given by one party to the other under this Guarantee shall be in
writing and (unless delivered personally) shall be given by telefax or first class pre-paid post (airmail if sent internationally) and be addressed: 

  

	 	15.1.1	in the case of the Security Trustee, to it at: 

  

			
	Lars Hillesgt. 30
	N-5020 Bergen
	Norway
		
	Telefax No:	 	+47 55 21 19 24
	Attn:	 	Shipping Department

  
 10 

	 	15.1.2	in the case of the Guarantor, to it at: 

  

			
	[Smedasundet 40
	5529 Haugesund
	Norway
		
	Telefax No:	  	+47 52 70 40 40
	Attn:	  	Trygve Seglem]

 or to such other address and/or number as is notified by one party to the other under this Guarantee.

  

	15.2	Notices addressed as provided above shall be deemed to have been duly given when despatched (in the case of telefax), when delivered (in the case of personal delivery),
2 days after posting (in the case of letters sent within the same country), or 5 days after posting (in the case of letters sent internationally), provided that any notice to the Security Trustee shall be effective only upon its actual receipt by
the Security Trustee and then only if it is expressly marked for the attention of the relevant department or officer named above (or any substitute from time to time notified by the Security Trustee). In each of the above cases any notice received
on a non-working day or after business hours in the country of receipt shall be deemed to be given at the opening of business hours on the next working day in such country. 

 

	15.3	All notices and documents to be given or delivered pursuant to or otherwise in relation to this Guarantee shall be in the English language or be accompanied by a
certified English translation. 

  

	16.	APPLICABLE LAW AND JURISDICTION 

  

	16.1	This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.

  

	16.2	The Guarantor hereby irrevocably agrees for the exclusive benefit of the Security Trustee that the English courts shall have jurisdiction in relation to any dispute and
any suit, action or proceeding (referred to together in this Clause 16 as “Proceedings”) which may arise out of or in connection with this Guarantee and/or any of the other Finance Documents to which the Guarantor may be party, and
for such purposes irrevocably submits to the jurisdiction of such courts. 

  

	16.3	The Guarantor hereby irrevocably agrees: 

  

	 	16.3.1	that, for the purpose of Proceedings in England, any legal process may be served upon SH Process Agents Limited whose registered office is presently at 1 Finsbury
Circus, London EC2M 7SH (Ref: 748/47-03533) who are hereby authorised to accept service on behalf of the Guarantor, which shall be deemed to be good service on the Guarantor; and 

 

	 	16.3.2	that throughout the Security Period the Guarantor will maintain a duly appointed process agent in England, duly notified to the Security Trustee, and that failure by
any such process agent to give notice thereof to the Guarantor shall not impair the validity of such service or of a judgment or order based thereon. 

  
 11 

	16.4	Nothing in this Clause 16 shall affect the right of the Security Trustee to serve process in any manner permitted by law or limit the right of the Security Trustee to
take Proceedings against the Guarantor in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings by the Security Trustee in any other jurisdiction, whether
concurrently or not. 

 The Guarantor shall not commence any Proceedings in any country other than England in
relation to any matter arising out of or in connection with this Guarantee and/or any of the other Security Documents. 
  

	16.5	The Guarantor irrevocably waives any objection which it may now or hereafter have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any
such court as is referred to in this Clause 16, and further irrevocably agrees that a judgment or order in any Proceedings brought in the English courts shall be conclusive and binding upon the Guarantor and may be enforced without review in the
courts of any other jurisdiction. 

  

	16.6	The Guarantor consents generally in respect of any Proceedings arising out of or in connection with this Guarantee and/or any of the other Finance Documents to the
giving of any relief or the issue of any process in connection with such Proceedings, including, without limitation, the making, enforcement or execution against any property or assets whatsoever of any order or judgment which may be made or given
in such Proceedings. 

 IN WITNESS of which the parties to this Guarantee have executed this Guarantee as a deed the day
and year first before written. 

  
 12 

 EXECUTION PAGE 

 

					
	SIGNED AND DELIVERED as a DEED	 	)	 	
	by	 	)	 	
	duly authorised for and on behalf of	 	)	 	  

	KNOT SHUTTLE TANKERS AS	 	)	 	
	in the presence of:	 	)	 	
			
	Signature:	 		 	
			
	Name:	 		 	
			
	Occupation:	 		 	
			
	Address:	 		 	
			
	SIGNED AND DELIVERED as a DEED	 	)	 	
	by	 	)	 	
	duly authorised for and on behalf of	 	)	 	  

	DNB BANK ASA	 	)	 	
	in the presence of:	 	)	 	
			
	Signature:	 		 	
			
	Name:	 		 	
			
	Occupation:	 		 	
			
	Address:	 		 	

  
 13EX-10.8

 Exhibit 10.8 
 FORM OF 
 AMENDED AND RESTATED 

USD 120,000,000.- LOAN AND GUARANTEE 
 FACILITY AGREEMENT 
 between 

KNOT SHUTTLE TANKERS 17 AS 
 as Borrower 
 and 

EKSPORTFINANS ASA 
 as lender for Loan A 
 and 

KNUTSEN NYK OFFSHORE TANKERS AS 
 as Parent Guarantor 
 and 

KNOT OFFSHORE PARTNERS LP 
 KNOT SHUTTLE TANKERS AS 
 as Guarantors 

and 
 DNB BANK
ASA 
 NORDEA BANK NORGE ASA 
 as lenders for Loan B and the Revolving Credit Facility, Bookrunners and Mandated Lead Arrangers 
 and 
 NORDEA BANK NORGE ASA 

as Agent 
  

 
 Relating to a
USD 120,000,000.- 
 Loan and Guarantee 
 Facility Agreement 
  

 
  

 

 TABLE OF CONTENTS 

 

					
	CLAUSE	  	PAGE	 
	 1. DEFINITIONS AND INTERPRETATION
	  	 	5	  
		
	 2. THE COMMITMENT AND NATURE OF OBLIGATIONS
	  	 	19	  
		
	 3. PURPOSE
	  	 	19	  
		
	 4. CONDITIONS PRECEDENT
	  	 	20	  
		
	 5. DRAWDOWN
	  	 	20	  
		
	 6. REPAYMENT
	  	 	22	  
		
	 7. PREPAYMENT
	  	 	23	  
		
	 8. INTEREST PERIODS
	  	 	25	  
		
	 9. INTEREST
	  	 	26	  
		
	 10. PAYMENTS
	  	 	28	  
		
	 11. SECURITY
	  	 	29	  
		
	 12. TAXES
	  	 	31	  
		
	 13. MARKET DISRUPTION
	  	 	31	  
		
	 14. INCREASED COSTS
	  	 	32	  
		
	 15. ILLEGALITY
	  	 	33	  
		
	 16. GUARANTEE AND INDEMNITY
	  	 	34	  
		
	 17. PAYMENT AND INDEMNITY
	  	 	38	  
		
	 18. REPRESENTATIONS AND WARRANTIES
	  	 	39	  
		
	 19. UNDERTAKINGS
	  	 	42	  
		
	 20. DEFAULT
	  	 	48	  
		
	 21. THE AGENT
	  	 	54	  
		
	 22. FEES
	  	 	56	  
		
	 23. EXPENSES
	  	 	58	  
		
	 24. INDEMNITIES
	  	 	58	  
		
	 25. CALCULATIONS
	  	 	59	  
		
	 26. AMENDMENTS AND WAIVERS
	  	 	59	  
		
	 27. CHANGES TO THE PARTIES
	  	 	60	  
		
	 28. PRO RATA SHARING
	  	 	61	  
		
	 29. SEVERABILITY
	  	 	62	  
		
	 30. NOTICES
	  	 	62	  
		
	 31. JURISDICTION
	  	 	63	  
		
	 32. GOVERNING LAW
	  	 	64	  

  
 2/74

					
	 SCHEDULES
	  	PAGE	 
		
	 (1) Lenders and commitments
	  	 	65	  
		
	 (2) Conditions precedent documents
	  	 	66	  
		
	 (3) Form of Drawdown Notice
	  	 	67	  
		
	 (4) Form of Renewal Notice
	  	 	69	  
		
	 (5) Form of Compliance Certificate
	  	 	70	  

  
 3/74

 THIS AGREEMENT (the “Agreement”) is made the 11 February 2011 as amended by
first supplemental agreement dated 6 June 2011, a second supplemental dated 20 September 2012, as amended and restated by a third supplemental agreement dated 22 February 2013 and as amended and restated by a fourth supplemental
agreement dated [            ] 2013 (the “Fourth Supplemental Agreement”) between: 
  

	(1)	KNOT SHUTTLE TANKERS 17 AS, P.O Box 2017, 5504 Haugesund, Norway, (organisation no 998 942 969) as borrower (the “Borrower”);

  

	(2)	EKSPORTFINANS ASA, P.O. Box 1601 Vika, 0119 Oslo, Norway (organisation no 816 521 432) as Loan A lender (“Eksportfinans”);

  

	(3)	KNUTSEN NYK OFFSHORE TANKERS AS, P.O Box 2017, 5504 Haugesund, Norway, (organisation no 995 221 713) as parent guarantor (the “Parent
Guarantor”) 

  

	(4)	KNOT OFFSHORE PARTNERS LP, [            ], and 

KNOT SHUTTLE TANKERS AS P.O Box 2017, 5504 Haugesund, Norway, (organisation no 998 942
829)[            ] as guarantors (together the “ Guarantors”) 
  

	(5)	DNB BANK ASA, Lars Hillesgt. 30, P.O. Box 7100, 5020 Bergen, Norway, (organisation no 984 851 006) and 

NORDEA BANK NORGE ASA, P.O. Box 1166 Sentrum, 0107 Oslo, Norway (organisation no 911 044 110) as Loan B lenders and lenders under a
Revolving Credit Facility (together the “Commercial Lenders”) and as bookrunners and mandated lead arrangers 
  

	(6)	NORDEA BANK NORGE ASA, P.O. Box 1166 Sentrum, 0107 Oslo, Norway (organisation no 911 044 110) as agent for Eksportfinans and the Commercial Lenders (the
“Agent”). 

 This loan and guarantee facility agreement sets out the terms and conditions upon and subject to
which 
  

	(i)	Eksportfinans will continue to make available to the Borrower a term loan in the amount of up to USD 46,666,667.- (to be reduced to USD 40,000,000.- subject to the
IPO Prepayment – Loan A); 

  

	(ii)	the Commercial Lenders will continue to make available to the Borrower a term loan in the amount of up to USD 55,466,667.- (to be reduced to USD 10,000,000.-
subject to the IPO Prepayment – Loan B). 

  

	(iii)	the Commercial Lenders will make available to the Borrower a revolving credit facility in the maximum amount of up to USD 20,000,000.-. 

  
 4/74

 IT IS HEREBY AGREED as follows: 
 1. DEFINITIONS AND INTERPRETATION 
 1.1 Definitions 

In this Agreement and the preamble hereof; 

“Accounts” 
 means the
Earnings Account and the Retention Account. 
 “Approved Register” 

means the Isle of Man Ship Register, the Bahamian Ship Register or the Norwegian International Ship Register or a ship register to be approved by the
Lenders. 
 “Approved Shipbrokers” 
 means R.S. Platou Shipbrokers A.S, Fearnleys, Lorentzen & Stemoco, Clarkson, Nordic Shipping and any other shipbroker(s) the Lenders may approve. 

“Availability Period” 

means in respect of; 
  

	(i)	Loan A the period from and including the date when all conditions precedent under this Agreement have been satisfied and until and including 1 March 2011;

  

	(ii)	Loan B the period from and including the date when all conditions precedent under this Agreement have been satisfied and until and including 1 March 2011.

  

	(iii)	in respect of the Revolving Credit Facility, a period up to and including the date falling one month prior to the Final Maturity Date—Revolving Credit Facility.

 “Book Equity” 
 means the book value of equity as determined in accordance with NORGAAP. 
 “Break
Costs” 
 means 
  

	(i)	in respect of Loan A; 

 the
aggregate of the Break Cost for Fixed Margin and LIBOR Break Cost. 
  

	(ii)	in respect of Loan B; 

  
 5/74

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

exceeds: 
  

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

 

	(iii)	in respect of the Revolving Credit Facility; 

  

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

 exceeds: 
  

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

 “Break Cost for Fixed Margin” 
 means the amount (if any) determined by
Eksportfinans by which: 
  

	(a)	the net present value of the interest which Eksportfinans should have received by applying Base Rate 1 on the Loan A or part thereof for the period starting on the date
of receipt of the Loan A or part thereof to (and including) the last day of the Fixed Margin Period for the Loan A (such amount to be calculated to take into account all of the scheduled Repayment Dates of the Loan A and following the agreed
repayment schedule of the Loan A, as if the Loan A had been paid on all of the scheduled Repayment Dates to and including the last day of the Fixed Margin Period for the Loan A; 

 exceeds: 
  

	(b)	the net present value of the amount the Lender would be able to obtain by applying Base Rate 2 on the Loan A or a part thereof for the period starting on the date of
receipt of the Loan A or a part thereof to (and including) the last day of the Fixed Margin Period (such amount to be calculated to take into account all of the scheduled Repayment Dates of the Loan A or part thereof and following the agreed
repayment schedule of the Loan A). 

 For the purpose of this paragraph; “Base Rate 1” is (non disclosed)
Eksportfinans’ internal base rate applied to loans with fixed margins determined for the Fixed Margin Periods and/or New Fixed Margin Periods as of the start of the Fixed Margin Periods and/or New Fixed Margin Periods, respectively; and
“Base Rate 2” is (non disclosed) Eksportfinans’ internal base rate applied to loans with fixed margins determined for the Fixed Margin Periods and/or New Fixed Margin Periods, at the time of receipt of the prepaid Loan A.

  
 6/74

 “Bridge Loans” 
 means (i) a loan in the amount of USD 10,000,000.- granted by Nordea Bank Norge ASA and DNB Bank ASA pursuant to a loan agreement dated 4 December 2007 (as amended) and (ii) a loan in
the amount of USD 10,000,000.- granted by Nordea Bank Norge ASA and DNB Bank ASA pursuant to a loan agreement dated 10 September 2008 (as amended). 
 “Builder” 
 means Daewoo Shipbuilding & Marine Engineering Co.
Ltd., Korea. 
 “Business Day” 
 means a day upon which banks and foreign exchange markets are open for business of the nature required by this Agreement in Oslo, London and New York. 

“Charterer” 
 means
Statoil ASA, Forusbeen 50, 4035 Stavanger, Norway. 
 “Charterparty” 

means the time charterparty dated 7 October 2010 entered into between the Charterer and Knutsen Bøyelaster VI KS and novated to the Borrower
by Knutsen Bøyelaster VI KS by a novation agreement dated 18 February 2013 with a period of 60 months from the delivery date under the Charterparty at a net t/c-rate of USD 60,000.- per day. 

“Charterparty Assignment” 
 means a first priority assignment of the Charterparty executed or to be executed by the Borrower in favour of the Agent (on behalf of the Finance Parties and the Swap Banks) as security for the Loans, in
the terms and form as the Agent may require. 
 “Commercial Lenders” 

means DNB Bank ASA and Nordea Bank Norge ASA. 

“Commercial Loans” 

means together Loan B and the Revolving Credit Facility. 
 “Commitment” 
 means, in relation to a Lender, the amount set opposite its
name in Schedule 1 to the extent not cancelled, reduced or transferred under this Agreement. 

  
 7/74

 “Compliance Certificate” 
 means a certificate to be issued (and certified by CFO) by the Borrower and the Guarantors in respect of financial covenants, in the terms and form as set out in Schedule 5 (Form of Compliance
Certificate). 
 “Co-ordination Agreement” 
 means a co-ordination agreement entered or to be entered into between the Lenders and the Borrower’s other financiers in respect of the Factoring Agreement and the factoring agreements registered in
favour of other financiers and earnings related to the Vessel and vessels (financed by the other financiers) in the terms and form as the Agent on behalf of the Lenders may require. 
 “Deed of Covenants” 
 means a deed of covenants collateral to the Mortgage
executed by the Borrower in respect of the Mortgage (if relevant), in the terms and form as the Agent on behalf of the Lenders and the Swap Banks may require. 
 “Default” 
 means an Event of Default or an event which, with the giving of
notice, lapse of time, or fulfilment of any other applicable condition (or any combination of the foregoing), might constitute an Event of Default. 
 “Delivery Date” 
 means the date the Vessel is actually delivered by the
Builder to the Borrower under the Shipbuilding Contract, however not later than 1 March 2011. 
 “Drawdown Date”

 means the date on which Loan A and Loan B are advanced to the Borrower and the date of disbursement of any Drawing under the Revolving
Credit Facility in accordance with a Drawdown Notice. 
 “Drawdown Notice” 

means a request made by the Borrower for the drawdown of Loan A, Loan B and the Revolving Credit Facility, substantially in the form set out in Schedule 3
(Form of Drawdown Notice). 
 “Drawing” 
 means each borrowing by the Borrower under the Revolving Credit Facility being made available under this Agreement, or the principal amount outstanding of any such borrowing from time to time. 

“Earnings Account” 

means the Borrower’s account no 60050494910 with the Agent. 

  
 8/74

 “EBITDA” 
 means the consolidated earnings for the MLP Group in accordance with US GAAP for each period of twelve months ending on the last day of each quarter of the financial year, before (i) any
provision on account of taxation, (b) any interest, discount or other fees incurred or payable, by any member of the Group in respect of Financial Indebtedness, (c) any items treated as exceptional or extraordinary items; and (d) any
amount attributable to the amortisation of intangible assets and depreciation of tangible assets, provided that for the purposes of the calculation of EBITDA, the earnings of a newbuilding (following its delivery and provided it has a committed
third party charterparty of at least one year duration, at the date of reporting the covenant) shall be annualised (by reference to annual earnings of similar vessels acceptable to the Agent for this purpose) until it has operated for a period of
twelve months. 
 “Effective Date” 
 means the effective date as defined in the Fourth Supplemental Agreement. 
 “Event of
Default” 
 means any of the events specified as such in Clause 20 (Default). 

“Factoring Agreement” 

means an agreement including a declaration of pledge entered or to be entered into between the Borrower and the Agent (on behalf of the Finance Parties
and the Swap Banks) whereby the Borrower pledges to the Agent on behalf of the Finance Parties all claims arising from the Borrower’s business operation as security for the Loans, in the terms and form as the Agent may require. 

“Final Maturity Date Loan A” 
 means the date falling twelve (12) years after the Drawdown Date or the date as per Clause 6.3. 
 “Final Maturity Date Loan B” 
 means the date falling five (5) years
after the Drawdown Date. 
 “Final Maturity Date Revolving Credit Facility” 

means 15 February 2016. 

“Finance Documents” 

means this Agreement and the Security Documents. 

“Finance Parties” 

means the Agent, the Mandated Lead Arrangers, the Lenders and GIEK. 

  
 9/74

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

	(a)	moneys borrowed; 

  

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

  

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

 

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

  

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

 

	(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; 

 

	(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any
derivative transaction, only the market to market value shall be taken into account); and 

  

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

 “Fixed Margin Period” 
 means a period of 36 months commencing on the Drawdown Date for Loan A from which the Margin Loan A shall be fixed. 
 “Free Liquidity” 
 means the aggregate value of; 

 

	(i)	cash in hand and unencumbered bank deposits; and 

  

	(ii)	unencumbered liquid bonds and other debt instruments with an “A”—rating or better of Standard & Poors or Moody’s and liquid equities listed
on any major stock exchange; and 

  

	(iii)	any other bond or debt instrument accepted by the Agent on instructions of the Lenders in writing. 

PROVIDED, HOWEVER, that the Free Liquidity shall not include undrawn amounts under this Agreement or any other loan agreement to which any of the
Borrowers is a party. 

  
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 “General Partner” 
 means KNOT Partners GP LLC, a company incorporated under the laws of the Marshall Islands and having its registered office at [ ] being the general partner in KNOT Offshore Partners LP 

“GIEK” 
 means the
Guarantee Institute for Export Credits (“Garanti-Instituttet for Eksportkreditt”), being the Norwegian central governmental agency responsible for furnishing guarantees and insurance of export credits, having its registered address at
Dronning Mauds gate 15, N-0250 Oslo, Norway. 
 “GIEK Co-ordination Agreement” 

means a co-ordination agreement to be entered into between GIEK and the Lenders in relation to the Loans, providing, inter alia, for certain procedures
and mechanisms coming into effect upon the occurrence of a Default under this Agreement. 
 “GIEK Guarantee” 

means guarantee policy no.101612, as amended at any time, which, subject to its terms, will be issued by GIEK in favour of Eksportfinans to guarantee the
payment obligations of the Borrower in relation to Loan A, limited, however, always to USD 56,000,000,- plus any interest, fees and expenses under Loan A. 
 “Guarantees” 
 means the irrevocable and unconditional on-demand guarantees
issued by each of the Guarantors, as security for the Borrower’s obligations under this Agreement. 
 “Guarantors”

 means KNOT Offshore Partners L.P [            ] and KNOT Shuttle Tankers
AS [ ]. 
 “Insurances Assignment” 
 means a first priority assignment executed or to be executed by the Borrower in favour of the Agent (on behalf of the Finance Parties and the Swap Banks), whereby the Borrower assigns the benefits of all
insurances taken out related to the Vessel as security for the Loans and exposure under any Swap Agreements, in the terms and form as the Agent may require. 
 “Interest Bearing Debt” 
 means at the date of calculation the aggregate of
all interest bearing debt (hereunder but not limited to the Loan) and lease obligations which would in accordance with NORGAAP be included in total debt in a balance sheet. 
 “Interest Payment Day” 
 means the last day of each Interest Period.

  
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 “Interest Period” 
 means each period determined in accordance with Clause 8. 
 “IPO
Prepayment—Loan A” 
 means the prepayment set out in Clause 7.6 subject to which the Borrower will prepay Loan A with USD
6,666,667.-. 
 “IPO Prepayment—Loan B” 
 means the prepayment set out in Clause 7.7 subject to which the Borrower will prepay Loan B with USD 45,466,667.-. 
 “KNOT Group” 
 means the Parent Guarantor and its Subsidiaries. 

“Lenders” 
 means
together Eksportfinans and the Commercial Lenders and Lender means any of them. 
 “LIBOR” 

means for any Interest Period: 
  

	(a)	the rate per annum equal to the offered quotation for deposits in USD ascertained by the Agent to be the rate established by the British Bankers’ Association and
appearing on the, Reuters LIBO 01 published or reported by Reuters through its monitor service or any equivalent successor to such service at or about 11:00 a.m. (London time) on the applicable Quotation Date; or 

 

	(b)	if no such rate is available, the rate per annum at which the Agent in accordance with its normal practise is able to acquire USD for comparable borrowings for the
relevant Interest Period in the London Interbank Euro-currency Market at about 11:00 a.m. (London time) on the applicable Quotation Date, as conclusively certified by the Agent to the Borrower. 

“LIBOR Break Cost” 

means the amount (if any) determined by Eksportfinans by which: 
 the net present value of the interest excluding the Margin Loan A Eksportfinans would have received for the period from the date of receipt of Loan A or part thereof to the last day of current Interest
Period of Loan A had Loan A been paid on the last day of the Interest Period; 
 exceeds: 

the net present value of the amount Eksportfinans would be able to obtain by placing an amount equal to the prepaid amount of Loan A with
a leading bank in the London Interbank Market for the period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. 

  
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 “Limited Partnership Agreement” 

means the partnership agreement dated [            ] in respect of the limited partnership
KNOT Offshore Partners LP. 
 “Loan A” 
 means an amount of up to but not exceeding USD 46,666,667.-, or as reduced to USD 40,000,000.- subject to the IPO Prepayment—Loan A. 
 “Loan B” 
 means an amount of up to but not exceeding
USD 55,466,667.-, or as reduced to USD 10,000,000.- subject to the IPO Prepayment – Loan B. 
 “Loans”

 means, at any time, the aggregate amount outstanding under Loan A, Loan B and the Revolving Credit Facility. 

“Loan Period” 
 means
the period commencing on the date of this Agreement and ending on the day the Loans and all amounts outstanding under this Agreement have been indefeasibly and in full repaid to the Lenders. 
 “Majority Lenders” 
 means, at any time, Lenders whose participation in the
outstanding Total Commitment aggregate at least 66 2/3 per cent at any relevant time. 
 “Management Agreement”

 means a management agreement to be entered into between the Borrower and the Manager in a form and substance acceptable to the Agent.

 “Manager” 

means KNOT Management AS, Smedasundet 40, P.O.Box 2017, 5504 Haugesund (enterprise no 996 124 916). 

“Manager Subordination Letter” 
 means a letter from the Manager to the Agent in a form and substance required by the Lenders in which the Manager agrees, inter alia, to subordinate all claims against the Borrower to the Borrower’s
obligation to repay the Loans and any other amount owing to the Lenders under this Agreement. 

  
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 “Margin Loan A” 
 means 0.60 % per annum, or after the expiry of the Fixed Margin Period as calculated in accordance with Clause 9.3 (b). 
 “Margin Loan B” 
 means 3.00 % per annum. 

“Margin Revolving Credit Facility” 
 means 3.00 % per annum. 
 “Market Value” 

means with respect to the Vessel, the fair market value of the Vessel in USD determined by calculating the arithmetic mean of two independent valuations
of the Vessel obtained from two Approved Shipbrokers at the Borrower’s cost. Such valuations to be made – on charter free basis—with or without physical inspection of the Vessel (as the Agent may require), on the basis of a sale for
prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and seller. 
 “Material Adverse
Effect” 
 means, in the reasonable opinion of any of the Lenders, a material adverse effect on: 

 

	(a)	the financial condition, assets or operations of any of the Obligors (on a consolidated basis); or 

 

	(b)	the ability of any Obligor to perform and comply with its obligations under the Finance Documents; or 

 

	(c)	the validity, legality or enforceability of the Finance Documents. 

 “MLP Group” 
 means KNOT Offshore Partners LP and its Subsidiaries.

 “Mortgage” 

a first priority Isle of Man ship mortgage over the Vessel in the amount of USD 150,000,000.- executed by the Borrower in favour of the Agent (on
behalf of the Finance Parties and the Swap Banks), substantially in the terms and form as the Agent on behalf of the Lenders and the Swap Banks may require. 
 “New Fixed Margin” 
 means related to Loan A the new margin as set out in
Clause 9.4 (b). 

  
 14/74

 “New Fixed Margin Period” 
 means related to Loan A the period set out in Clause 9.4 (b). 
 “NOK”

 means the lawful currency for the time being of the Kingdom of Norway. 
 “NORGAAP” 
 means the Norwegian accounting requirements, practices and
regulations as set out in the Norwegian Accounting Act of 17 July 1998 no. 56, and as recommended by the guidelines and standards from time to time issued by Norsk Regnskapsstiftelse, and the regulations and guidelines of the IFRS (if relevant)
(all as amended or supplemented from time to time). 
 “NYK” 
 means Nippon Yusen Kabushiki Kaisha with registered address 3-2, Marunouchi 2 Chome, Chiyoda-Ku, Tokyo 100-0005, Japan. 
 “Obligors” 
 means, collectively, the Borrower, the Parent Guarantor (until
released pursuant to the IPO Prepayment – Loan A and the IPO Prepayment – Loan B), KNOT Shuttle Tankers AS and KNOT Offshore Partners LP. 
 “Party” 
 means a party to this Agreement. 

“Pledge of Accounts” 

means a first priority pledge of the Accounts entered or to be entered into between the Borrower and the Agent (on behalf of the Finance Parties and Swap
Banks), in the terms and form as the Agent may require. 
 “Project Cost” 

means the contract price of the Vessel interest cost prior to Delivery, building supervision, spares and fees, all as evidenced to the satisfaction of the
Lenders estimated to USD 162,000,000.-. 
 “Quotation Date” 

means, in relation to any Interest Period, the Business Day on which quotations would ordinarily be given in the London Interbank Euro-currency Market for
USD deposits for delivery on the first day of that Interest Period. 

  
 15/74

 “Renewal Notice” 
 means a request made by the Borrower for renewal of the Loan B, substantially in the form set out in Schedule 4 (Form of Renewal Notice). 
 “Repayment Date” 
 means a date for repayment of an instalment as
determined according to Clause 6.1 and 6.2 (Repayment). 
 “Retention Account” 

means the Borrower’s account no 60050494929 with the Agent. 
 “Revolving Credit Facility” 
 means the revolving credit facility made
available under Clause 2.1 (c) (Revolving Credit Facility), the total amount of which shall be limited to USD 20,000,000.-. 

“Security Documents” 

means the documents referred to in Clause 11 (Security) and all or any documents having the effect of conferring security granted or entered into by
the Obligors in favour of or with the Agent (on behalf of the Finance Parties) as security for the Borrower’s obligation under the Finance Documents. 
 “Security Interest” 
 means any mortgage, pledge, lien, charge (whether
fixed or floating), assignment by way of security, finance lease, sale-and-repurchase or sale-and-leaseback arrangement, sale of receivables on a recourse basis or security interest or any other agreement or arrangement having the effect of
conferring security, except for liens arising solely by operation of law and/or in the ordinary course of business securing amounts not more than 30 days overdue. 
 “Share Pledge” 
 a first priority pledge over all of the shares in the
Borrower executed by KNOT Shuttle Tankers AS in favour of the Agent (on behalf of the Finance Parties and the Swap Banks), substantially in the terms and form as the Agent on behalf of the Lenders and the Swap Banks may require. 

“Shipbuilding Contract” 

means the shipbuilding contract dated 12 September 2007 as amended by an amendment dated 20 March 2009 between the Builder and the Borrower in
respect of the Vessel. 
 “Sponsor” 
 means Knutsen NYK Offshore Tankers AS, P.O Box 2017, 5504 Haugesund, Norway, (organisation no 995 221 713). 

  
 16/74

 “Subsidiary” 
 means an entity of which a person has direct or indirect control or owns directly or indirectly more than 50 per cent of the voting capital or similar right of ownership, and control for this
purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise. 
 “Swap Agreements” 
 means an agreement or agreements to be entered into by
any of the Swap Banks and the Borrower for the purpose of interest and currency swap transactions related to the Loans. 
 “Swap
Banks” 
 means DNB Bank ASA and Nordea Bank Finland Plc or any of them. 
 “Swap Banks Subordination Statement” 
 means a statement executed or to be
executed by the Swap Banks in favour of the Finance Parties, subordinating the Swap Banks’ rights under the Security Documents to be the Finance Parties’ rights. 
 “Tax on Overall Net Income” 
 of a Lender shall be construed as a reference
to tax imposed on that Lender by the jurisdiction under the laws of which it has been incorporated or in which it is located on (i) the net income, profits or gains of that Lender world wide or (ii) such of the net income, profits or gains
of that Lender as are considered to arise in or to relate to or are taxable in that jurisdiction. 
 “Taxes” 

includes any present or future taxes, levies, duties, imposts, withholdings, deductions, fees or charges of any nature, together with interest thereon and
penalties in respect thereof, and “tax” and “taxation” shall be construed accordingly. 
 “Total
Assets” 
 means the book value of all assets owned which would in accordance with NORGAAP be included in the balance sheet.

 “Total Commitment” 
 means the aggregate of the Lenders’ Commitments. 
 “Total Revolving Credit
Facility Commitments” 
 means the aggregate of the Commitments of the Commercial Lenders under the Revolving Credit Facility, being
USD 20,000,000.- at the date of this Agreement. 

  
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 “Total Loss” 
 means any event which will entitle the Borrower to claim payment of the total insured value under the hull and machinery or the war risk insurance taken out pursuant to Clause 19.5 (Insurances).

 “Total Loss Date” 
 means; 
  

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

 

	(b)	in the case of a constructive, compromised or agreed total loss of the Vessel, the earlier of: (a) the date on which a notice of the abandonment is given to the
insurers; and (b) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Vessel’s insurers pursuant to which the insurers agree to treat the Vessel as a total loss; and 

 

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

 “Transaction Documents” 
 means this Agreement, the Security Documents, the Management Agreement, the Manager Subordination Letter, the Swap Agreements, the Charterparty, the GIEK Co-ordination Agreement, the Limited Partnership
Agreement and the agreements or documents contemplated herein or therein. 
 “TSSI” 

means TS Shipping Invest AS, business enterprise number 975 883 914, P.O.Box 2017, 5504 Haugesund, Norway. 

“USD” 
 means the lawful
currency for the time being of the United States of America. 
 “US GAAP” 

means accounting principles generally accepted in the United States of America. 
 “Vessel” 
 means the 160,000 dwt Suezmax and named “Bodil
Knutsen”. 
 “Working Capital”  
 means at the date of calculation the current assets less current liabilities on the basis of NORGAAP. Next year’s instalment and balloons on long term debt and capital lease payments not to be
included in current liabilities. 

  
 18/74

 1.2 Construction 
  

	(a)	The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement. 

 

	(b)	Words importing the singular shall (unless the contrary intention appears) include the plural and vice versa. 

 

	(c)	A Clause or a Schedule respectively is a reference to a clause of or schedule to this Agreement. 

 

	(d)	A provision of law is a reference to that provision as amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law.

  

	(e)	References to any document are to be construed as references to such documents as amended or supplemented from time to time, but without prejudice to the
Borrower’s obligations to obtain necessary consent in respect of such amendment or supplement. 

 2. THE COMMITMENT AND
NATURE OF OBLIGATIONS 
 2.1 Commitment 
 Subject to the terms of this Agreement: 
  

	(a)	Eksportfinans will continue to make available to the Borrower a term loan facility in the amount of up to USD 46,666,667.- (to be reduced to USD 40,000,000.-
subject to the IPO Prepayment – Loan A) (Loan A), and 

  

	(b)	the Commercial Lenders will continue to make available a term loan facility in the amount of up to USD 55,466,667.- (to be reduced to USD 10,000,000.- subject to
the IPO Prepayment – Loan B) (Loan B). 

  

	(c)	the Commercial Lenders will make available a revolving credit facility in the amount of up to USD 20,000,000.- (Revolving Credit Facility).

 2.2 Nature of rights and obligations of the Lenders 

 

	(a)	The obligations of the Lenders under this Agreement are several. Failure of a Lender to carry out its obligations under this Agreement shall not relieve any other party
hereto of any of its obligations under this Agreement. No Lender shall be responsible for the obligations of any other Lender hereunder. 

  

	(b)	The rights of each Lender under this Agreement are separate and independent rights. 

 

	3.	PURPOSE 

  

	(a)	The purpose of Loan A and Loan B is to assist the Borrower in the financing of the Vessel and to repay the Bridge Loans. 

  
 19/74

	(b)	The Revolving Credit Facility shall be used by the Obligors for general corporate purposes. 

 

	(c)	Without affecting the obligations of the Borrower in any way, no Finance Party is bound to monitor or verify the application of any amounts drawn under this Agreement.

 4. CONDITIONS PRECEDENT 
 4.1 Documentary conditions precedent 
 The obligations of each Lender to make the Loans
available hereunder shall be subject to the condition precedent that the Agent has notified the Borrower and the Lenders that it has received all the documents set out in Clause 3.01 in the Fourth Supplemental Agreement (Conditions) in a form,
content and substance satisfactory to the Agent. 
 4.2 Further conditions precedent 

The obligation of each of the Lenders to participate in the Loans, is subject to the further conditions precedent that on both the date of the Drawdown
Notice and the Drawdown Date: 
  

	(a)	the representations and warranties in Clause 18 (Representations and warranties) deemed to be repeated on those dates are correct and not misleading and will be
correct and not misleading immediately after disbursement of the Loans is made with reference to the facts and circumstances then prevailing, unless otherwise informed to the Agent in writing and, if not permitted under this Agreement, waived by the
Lenders prior to such dates; and 

  

	(b)	no Default is outstanding or would result from the disbursement of the Loans. 

 4.3 The General Partner 
 The obligation of each of the Lenders to participate in the Loans,
is subject to the further conditions that the Lenders in all respect have approved the General Partner. 
 5. DRAWDOWN 

5.1 Drawdown Notice 
  

	(a)	The Borrower shall not later than 10:00 a.m. (London time) three Business Days prior to a requested Drawdown Date, or on such later date as may be agreed by the
Lenders, serve to the Agent the Drawdown Notice which, once received by the Agent, shall be irrevocable. 

  

	(b)	The Lenders shall upon confirmation from the Agent that the Agent has received a duly completed Drawdown Notice and subject to the terms and conditions of this
Agreement, and provided that no Default has occurred and is continuing or is threatened, make Loan A and Loan B to the Borrower through the Agent in one disbursement on the requested Drawdown Date. 

  
 20/74

	(c)	The giving of the Drawdown Notice by the Borrower shall be deemed to constitute a representation and warranty by the Borrower that all the representations and
warranties set forth in Clause 18 (Representations and warranties) hereof are true and correct as of such date as if made on such date, that the conditions specified in Clause 4 (Conditions precedent) have been or will upon the Drawdown
Date be fully performed, and that no Default has occurred and is continuing or is threatened. 

  

	(d)	The Borrower shall only be entitled to serve a Drawdown Notice to the Agent during the Availability Period. 

5.2 Drawings – Revolving Credit Facility 
 Subject to Clause 4 (Conditions Precedent), a Drawing under this Agreement will be made available to the Borrower if: 
  

	 	(i)	not later than 10:00 hours (London time) three (3) Business Days prior to the requested Drawdown Date of such Drawing, the Agent has received a properly completed
Drawdown Notice; 

  

	 	(ii)	the requested Drawdown Date is a Business Day during the Availability Period; and 

 

	 	(iii)	the sum of such Drawing is for (a) a minimum amount of USD 1,000,000 or integral multiples thereof, or (b) the balance of the undrawn portion of the Revolving
Credit Facility Commitment (whichever may be relevant) on the requested Drawdown Date. 

  

	 	(iv)	The IPO Prepayment – Loan A and the IPO Prepayment – Loan B have both occurred. 

 

	(b)	Subject to the terms of this Agreement, each Drawdown Notice shall be irrevocable and the Borrower shall be bound to accept each Drawing in accordance with each such
Drawdown Notice. 

  

	(c)	During the Availability Period the Borrower may utilise the Revolving Credit Facility on a fully revolving basis so that any amount repaid during the Availability
Period may be redrawn by the Borrower, but the aggregate number of Drawings outstanding hereunder at any one time shall not exceed ten (10). 

  

	(d)	Any amount of the Revolving Credit Facility not drawn by the expiry of the Availability Period shall be cancelled forthwith. 

5.3 Each Commercial Lender’s participation in Drawings under the Revolving Credit Facility 

The amount of a Commercial Lender’s participation in any Drawing will be the proportion of that Drawing which such Commitment as each Commercial
Lender bears under the Revolving Credit Facility to the Total Revolving Credit Facility Commitments from time to time. 

  
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 6. REPAYMENT 
 6.1 Repayment / Reduction Loan A 
 Without prejudice to Eksportfinans’ rights under
this Agreement, the Loan A shall be repaid by 20 consecutive semi-annual instalments each in the amount of USD 2,000,000.-, the first instalment falling due 26 August 2013. 
 6.2 Repayment / Reduction Loan B 
 Without prejudice to the Commercial Lenders’ rights
under this Agreement, the Loan B shall be repaid by (i) 6 consecutive semi-annual instalments each in the amount of USD 384,615.- the first instalment falling due 26 August 2013 and (ii) by one final instalment (balloon)
corresponding to the outstanding amount under Loan B falling due simultaneously as the 6th instalment referred to under (i) above. 

6.3. Non-refinancing of Loan B 
 In the
event that the Loan B is not refinanced within five Business Days prior to the Final Maturity Date Loan B, the Loan A becomes due and payable at the Final Maturity Date Loan B. 
 6.4 Repayment / Reduction Revolving Credit Facility 
 Each Drawing shall be repaid by the
Borrower to the Agent on behalf of the Commercial Lenders on the last day of its Interest Period unless the Borrower selects a further Interest Period for that Drawing. The Borrower unconditionally agrees and confirms that (i) (unless it has
advised the Agent in writing to the contrary upon not less than three (3) prior Business Days’ notice) it shall on the last day of an Interest Period be deemed to have automatically selected a further three (3) month Interest Period
for the maturing Drawing, and (ii) the Agent on behalf of the Commercial Lenders shall (without any further consent or approval from the Borrower) be entitled to rely upon the Borrower’s agreement and confirmation contained in this Clause
6.4, provided that the Borrower shall not be permitted to select such further Interest Period if an Event of Default has occurred which is continuing. The Borrower shall on the Final Maturity Date Revolving Credit Facility repay to the Agent as
agent for the Commercial Lenders all Drawings then outstanding under this Agreement in full. 
 6.5 Final Maturity Date Loan A

 On the Final Maturity Date Loan A the Borrower shall pay to the Agent on behalf of Eksportfinans all amounts then still outstanding under
Loan A. 
 6.6 Final Maturity Date Loan B 
 On the Final Maturity Date Loan B the Borrower shall pay to the Agent on behalf of the Commercial Lenders all amounts then still outstanding under Loan B. 

6.7 Final Maturity Date Revolving Credit Facility 
 On the Final Maturity Date Revolving Credit Facility the Borrower shall pay to the Agent on behalf of the Commercial Lenders all amounts then still outstanding under the Revolving Credit Facility.

  
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 6.8 Reduction of Guarantees 
 For each instalment paid pursuant to Clause 6.1 above, GIEK’s obligations under the GIEK Guarantee shall be reduced accordingly subject always to the provisions of the GIEK Guarantee. 

7. PREPAYMENT 
 7.1 Voluntary
prepayment and cancellation 
  

	(a)	The Borrower may, subject to a handling fee of USD 7,500.- (for Loan A payable to Eksportfinans) from and including the Business Day falling two (2) years
after the Drawdown Date for the Loans, by giving not less than twenty (20) Business Days prior written notice to the Agent, prepay the Loans in whole or in part on any Business Day subject to Break Costs, if any in an amount being a minimum of
USD 10,000,000.- and an integral multiple of USD 10,000,000.- in each case. 

  

	(b)	The Borrower may, by giving not less than 3 Business Days prior written notice to the Agent without penalty, cancel the whole or any undrawn part of the Total
Commitment, but if in part, in an amount being a minimum of USD 10,000,000 and an integral multiple of USD 10,000,000 in each case. Any such cancellation shall reduce each Lender’s Commitment on a pro rata basis.

  

	(c)	The Borrower may (without penalty or premium), by giving not less than 3 Business Days prior written notice to the Agent, cancel any undrawn portion of the Revolving
Credit Facility in an amount equal to the unutilised commitment. 

 7.2 Additional right of prepayment 

If: - 
  

	(a)	the Borrower is required to pay to a Lender any additional amounts under Clause 12 (Taxes); or 

 

	(b)	the Borrower is required to pay to a Lender any amount under Clause 14 (Increased costs); 

 then, without prejudice to the obligations of the Borrower under those Clauses, the Borrower may, subject to Clause 7.4 (Miscellaneous provisions) and Clause 24.2 (Other indemnities) whilst the
circumstances continue, serve a notice of prepayment and cancellation on that Lender through the Agent. On the date falling five Business Days after the date of service of the notice: - 

 

	(a)	the Borrower shall prepay that Lenders’ participation in the Loans; and 

 

	(b)	that Lenders’ undrawn participation in the Commitment (if any) shall be cancelled. 

  
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 7.3 Mandatory prepayment due to a sale or Total Loss 

Upon the sale (after the Lenders’ written consent) of the Vessel or a Total Loss of the Vessel, the Loans shall, upon payment of the sales proceeds
or the insurance money (within 90 days from the Total Loss Date), be repaid in full. 
 7.4 Mandatory prepayment – Market Value

 If the Market Value falls below 100% or 125% (as the case may be according to Clause 19.19) of the Loans at any time, the Borrower shall,
unless otherwise agreed with the Agent (on behalf of the Lenders) within 30 days after being notified in writing by the Agent of such non-compliance, either: 
  

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

  

	b)	provide the Lenders with such additional security, in form and substance satisfactory to the Majority Lenders (it being agreed that cash collateral comprised of USD is
satisfactory and that it shall be valued at par), 

 required to restore the aforesaid ratio. 

7.5 Mandatory prepayments due to Clause 9.4 (b) and (c)
 If a situation described in Clause 9.4 (b) or 9.4 (c) occurs, the Loans shall be prepaid in full. 
 7.6 Mandatory prepayment – Loan A 
 Loan A shall be prepaid with USD 6,666,667.- within
five (5) Business Days after the Effective Date. 
 7.7 Mandatory prepayment – Loan B 

Loan B shall be prepaid with USD 45,466,667.- within five (5) Business Days after the Effective Date. 

7.8 Miscellaneous provisions 
  

	(a)	Any notice of prepayment under this Agreement is irrevocable and shall specify the date on which the prepayment is to become effective and the amount to be prepaid. The
Agent shall notify the Lenders promptly of receipt and contents of any such notice. 

  

	(b)	All prepayments under this Agreement shall be made together with accrued interest on the amount prepaid and any amounts due in respect of such prepayment under
Clause 24.2 (Other indemnities) including Break Costs. 

  

	(c)	An amount prepaid pursuant to this Clause 7 may not be drawn again. 

  

	(d)	Any amount prepaid shall be applied as payment of the instalments in inverse order of maturity and pro rata between Loan A, Loan B and the Revolving Credit Facility.

  
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 8. INTEREST PERIODS 
 8.1 Duration and selection Loan A 
 Each Interest Period in respect of the Loan A shall be
for a period of six (6) months. 
 8.2 Duration and selection Loan B 

 

	(a)	The Borrower shall select the first Interest Period for Loan B in the Drawdown Notice for Loan B, and the first Interest Period for Loan B shall commence on its
Drawdown Date. 

  

	(b)	The Borrower shall, by serving the Renewal Notice to the Agent not later than 10:00 a.m. (London time) five Business Days before the beginning of each Interest Period,
specify the duration of that Interest Period. The Renewal Notice shall constitute a representation and warranty to the effect that, on the date of that notice, the representations and warranties in Clause 18 remain true and correct and that no
Default has occurred and is continuing or is threatening. 

  

	(c)	Subject to the following provisions of this Clause 8.2, each Interest Period shall be for a period of three or six months, or such other period acceptable to the
Commercial Lenders. 

  

	(d)	If the Borrower fails to select an Interest Period in accordance with paragraph (a) above, that Interest Period will, subject to the other provisions of this
Clause 8, be six (6) months. 

  

	(e)	If the Borrower selects an Interest Period of more than six (6) months (after the Commercial Lenders’ consent) interest accruing during such period shall be
paid every six (6) months in arrears. 

 8.3 Duration and selection Revolving Credit Facility 

The Borrower shall select the Interest Period for each Drawing in each relevant Drawdown Notice for the Revolving Credit Facility, and the Interest Period
shall commence on the Drawdown Date of each such Drawing. Each Interest Period shall be for a period of three (3) or six (6) months, or such other period acceptable to the Commercial Lenders. 

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

8.5 No overrunning 
 If an Interest
Period for the Loans at any time would otherwise overrun a Repayment Date, it shall be shortened so that it ends on the Repayment Date for a portion of the Loans corresponding to the amount of the Loans to be repaid on that Repayment Date.

  
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 8.6 Notification 
 The Agent shall notify the Lenders of the duration of each Interest Period promptly after ascertaining its duration. 
 9. INTEREST 
 9.1 Payment of interest – Loan A 

 

	(a)	The Borrower shall pay accrued interest on Loan A on the last day of each Interest Period in respect of Loan A. 

 

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

 

	 	(i)	The Margin Loan A or the New Fixed Margin as applicable; and 

  

	 	(ii)	LIBOR. 

 9.2 Payment of interest – Loan
B 
  

	(a)	The Borrower shall pay accrued interest on Loan B on the last day of each Interest Period in respect of Loan B. 

 

	(b)	The rate of interest on Loan B is the rate per annum determined by the Agent to be the aggregate of: 

 

	 	(i)	The Margin Loan B; and 

  

	 	(ii)	LIBOR. 

 9.3 Payment of interest –
Revolving Credit Facility 
  

	(a)	The Borrower shall pay accrued interest on the Revolving Credit Facility on the last day of each Interest Period in respect of the Revolving Credit Facility.

  

	(b)	The rate of interest on the Revolving Credit Facility is the rate per annum determined by the Agent to be the aggregate of: 

 

	 	(i)	The Margin Revolving Credit Facility; and 

  

	 	(ii)	LIBOR. 

 9.4 Fixing of the Margin Loan A

  

	(a)	The Margin Loan A shall be fixed for a period of 36 months from the Drawdown Date for Loan A (the “Fixed Margin Period”). 

  
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	(b)	Eksportfinans may within sixty (60) Business Days prior to the Interest Payment Date falling nearest to the expiry of the Fixed Margin Period (the “Margin
Review Date”), give an offer to the Borrower for a fixed margin (“New Fixed Margin”) for an additional period and so on (the “New Fixed Margin Period”). No later than thirty (30) Business Days prior to the relevant
Interest Payment Date falling nearest to the expiry of the Fixed Margin Period, the Borrower may accept or reject the margin offer. If the Borrower rejects the margin offer, Loan A shall terminate and all outstanding amounts under Loan A shall be
due and payable by the Borrower on the expiring of the Fixed Margin Period. 

  

	(c)	If Eksportfinans at the time of the Margin Review Date at its discretion determines that it is or will not be able to obtain funds to a sufficient extent and/or on
terms that can support continuous lending and/or lending terms or practices, no new margin will be offered and whereupon Loan A will be cancelled and all outstanding amounts will become immediately due and payable. The Agent shall, on behalf of
Eksportfinans, notify the Borrower without undue delay. 

 9.5 Default interest 

In the event of the Borrower not making payment of any amounts due under this Agreement on the due date thereof, the Borrower shall pay interest on such
amounts from the due date up to the date of actual payment at a rate to be determined by the Agent to be the aggregate sum of 2.0 per cent per annum and the Margin Loan A and the Margin Loan B respectively plus costs the Lenders will incur in
financing such sums for such periods as the Lenders shall determine. Interest under this Clause 9.4 shall be payable by the Borrower upon written demand from the Agent. 
 9.5 Notification 
 The Agent shall promptly notify each relevant Party of the determination
of a rate of interest under this Agreement. 
 9.6 Effective Interest Rate 
 It is not possible to calculate the effective interest rate on this Agreement in advance. The Lenders are nevertheless, according to the Finance Contracts Act (Finansavtaleloven) obliged to give a
representative example. LIBOR for six months was at 21 December 2010 0.45719 % per annum. Provided unaltered LIBOR and (i) Margin Loan A for the duration of the Loan A, the effective interest rate will be 2.98 % for the Loan
A and (ii) Margin Loan B for the duration of the Loan B, the effective interest rate will be 3.59 % for Loan B. 
 9.7 Break Costs

  

	(a)	The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the relevant
Loans being paid by the Borrower on a day other than agreed day for the Loans. 

  

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

  
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 10. PAYMENTS 
 10.1 Place 
 All payments by the Borrower or a Lender under this Agreement shall be made to
the Agent to its account at such office or bank as it may notify to the Borrower or such Lender for this purpose. 
 10.2 Funds

 Payments under this Agreement to the Agent shall be made for value on the due date at such times and in such funds as the Agent may
specify to the Party concerned as being customary at the time for the settlement of transactions in the relevant currency in the place for payment. 
 10.3 Distribution 
  

	(a)	Each payment received by the Agent under this Agreement for another Party shall, subject to paragraphs (b) and (c) below, be made available by the Agent to
that Party by payment (on the date and in the currency and funds of receipt) to its account with such office or bank as it may notify to the Agent for this purpose by not less than five Business Days prior written notice. In case of payment by the
Agent to the Lenders under this Agreement each Lender shall receive an amount corresponding to its respective Commitment related to the Total Commitment. 

  

	(b)	The Agent may apply any amount received or held by it for the Borrower in or towards payment (on the date and in the currency and funds of receipt) of any amount due
from the Borrower under this Agreement or in or towards the purchase of any amount of any currency to be so applied. 

  

	(c)	Where a sum is to be paid to the Agent under this Agreement for distribution to another Party, the Agent is not obliged to pay that sum to that Party until it has
established that it has actually received that sum. The Agent may, however, assume that the sum has been paid to it in accordance with this Agreement and, in reliance on that assumption, make available to that Party a corresponding amount. If the
sum has not been made available but the Agent has paid a corresponding amount to another Party and the Party liable does not forthwith on demand pay such amount to the Agent together with interest on that amount from the date of payment to the date
of receipt, calculated at a rate determined by the Agent to reflect its cost of funds, that Party shall forthwith on demand by the Agent refund such amount to the Agent together with interest on such amount calculated as above.

 10.4 Currency 
  

	(a)	Any amount payable under this Agreement is, except as otherwise provided in this Agreement, payable in USD. 

 

	(b)	Amounts payable in respect of costs, expenses, taxes and the like are payable in the currency in which they are incurred. 

  
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 10.5 Set-off and counterclaim 
 All payments made by the Borrower under this Agreement shall be made without set-off or counterclaim. 
 10.6 Non-Business Days 
 If a payment under this Agreement is due on a day which is not a
Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month provided that (i) if there is no next Business Day in the same calendar month or (ii) if the day on which that payment was
otherwise due was the Final Maturity Date Loan A and/or Final Maturity Date Loan B and/or Final Maturity Date Revolving Credit Facility respectively, the due date for that payment shall instead be the preceding Business Day. 

10.7 Partial payments 
 If the Agent
receives a payment insufficient to discharge all the amounts then due and payable by the Borrower under this Agreement, the Agent shall apply that payment towards the discharge of the obligations of the Borrower under this Agreement in the following
order: 
  

	(a)	firstly, in or towards payment pro rata of any unpaid costs and expenses of the Finance Parties under this Agreement; 

 

	(b)	secondly, in or towards payment pro rata of any accrued fees due but unpaid under Clause 22 (Fees); 

 

	(c)	thirdly, in or towards payment pro rata of any accrued interest under this Agreement; 

 

	(d)	fourthly, in or towards payment pro rata of any principal due from the Borrower but unpaid under this Agreement; and 

 

	(e)	fifthly, in or towards payment pro rata of any other sum due but unpaid under this Agreement 

11. SECURITY 
 11.1 Security

 The Borrower’s obligations under this Agreement, including without limitation the obligation to repay the Loans together with all
unpaid interest, default interest, commissions, charges, expenses and any derived liability whatsoever of the Borrower in connection with the Finance Documents shall be secured pari passu and on a pro-rata basis as follows: 

 

	 	(i)	the Mortgage; 

  

	 	(ii)	the Deed of Covenants; 

  

	 	(iii)	the Insurances Assignment; 

  

	 	(iv)	the GIEK Guarantee (for Loan A); 

	 	(v)	the Charterparty Assignment; 

  

	 	(vi)	the Factoring Agreement; 

  
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	 	(vii)	the Pledge of Accounts; 

  

	 	(viii)	the Share Pledge; 

  

	 	(ix)	the Guarantees; 

	 	(x)	the Parent Guarantee (to the extent not released pursuant to Clause 16.9). 

 11.2 Co-ordination Agreements 
 The Lenders will, subject to the Swap Banks Subordination
Statement allow the Swap Banks to participate in the Security Documents on a subordinated basis. Further the Lenders and GIEK will enter into the GIEK Co-ordination Agreement. 
 11.3 Right of subrogation 
  

	(a)	Each Party acknowledges and accepts that GIEK, without any notice or formalities of any kind, shall have an automatic pari passu pro rata right of subrogation into the
rights, entitlements and powers of Eksportfinans under this Agreement and the Security Documents immediately upon, and in each case to the extent of, any and all payments made by GIEK under the GIEK Guarantee. The Guarantors and the Parent Guarantor
shall have no right of subrogation under this Agreement. 

  

	(b)	For the avoidance of doubt, but subject as set forth in paragraph (a) above, the effect of such subrogation shall be the sharing of all rights, entitlements and
powers conferred upon or otherwise vested in Eksportfinans under this Agreement and the Security Documents among GIEK and Eksportfinans in proportion to the amount of their respective claims and receivables from time to time under or in respect of
this Agreement. 

  

	(c)	Upon receipt by Eksportfinans of payment in full from GIEK under the GIEK Guarantee a written notice confirming the same shall be given by the Agent to all the Parties
hereto. Following such notice, GIEK (or its respective nominees) shall accede to this Agreement as an additional lender. Following such accession, GIEK (or its respective nominees) shall for the purposes of this Agreement be included in the new
definition of “Lender” and the rights, entitlements and powers of GIEK (or nominee) and Eksportfinans under this Agreement and the Security Documents shall be as set forth in paragraphs (a) and (b) above.

  

	(d)	As a third party undertaking for the benefit of GIEK each of the Obligors confirms and agrees that GIEK shall be entitled, save for manifest error, but not obliged, to
accept any claim or demand made by Eksportfinans under the GIEK Guarantee as conclusive evidence that the amount claimed pursuant to any such demand is due and payable to Eksportfinans from the Borrower under this Agreement and covered by the GIEK
Guarantee. Each of the Obligors waives any right to dispute or delay any subrogation of all or part of the rights of Eksportfinans under this Agreement and the Security Documents to GIEK (or its respective nominees), and each of the Obligors and
Eksportfinans undertakes to sign and execute any documents reasonably required by GIEK in connection with any subrogation as aforesaid, and/or enforcement of the Security Documents. 

11.4 Further documentation or acts upon request 
 Each Obligor undertakes during the Loan Period to execute or procure the execution of such further documentation and does and performs such further acts and things as the Agent, the Lenders or GIEK may
reasonably require in order for the Lenders or GIEK to perfect and maintain the security position envisaged above. 

  
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 11.5 Set-off 
 Following the occurrence of an Event of Default, the Agent (acting on its own behalf and on behalf of the Finance Parties) and each of the Finance Parties individually (acting on its own behalf and on
behalf of the Agent and the other Finance Parties) shall to the extent permitted by applicable law, have a separate right of set-off in respect of any credit balance, in any currency, on any account the Borrower might have with the Agent and each of
the Finance Parties individually (branches included) against any sum due to the Agent and the Finance Parties under any Finance Document. 

12. TAXES 
 All payments by the Borrower
under this Agreement shall be made free and clear of and without deduction for or on account of any taxes, except to the extent that the Borrower is required by law to make payment subject to any taxes. If by requirement of law any tax or amounts in
respect of tax must be deducted or withheld from any amounts payable or paid by the Borrower, or paid or payable by the Agent to a Lender, under this Agreement, the Borrower (or the Agent, if required) shall pay such tax to the relevant authority
and the Borrower shall pay such additional amounts as may be necessary to ensure that the relevant Lender and/or Guarantor receives (free from any liability in respect of any such deduction or withholding) a net amount equal to the full amount which
it would have received had payment not been made subject to tax or other deduction. The Borrower shall promptly deliver to the Agent any receipts, certificates or other proof evidencing the amounts paid or payable in respect of any deduction or
withholding as aforesaid. 
 13. MARKET DISRUPTION 
 13.1 Market Disruption 
  

	(a)	If a Market Disruption Event occurs for any Interest Period, then the rate of interest on the Loan A for the Interest Period shall be the rate per annum, which is the
sum of: 

  

	 	(i)	the Margin Loan A; and 

  

	 	(ii)	the rate notified to the Agent by Eksportfinans as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that
which expresses as a percentage rate per annum the cost to Eksportfinans of funding its participation in the Loan A from whatever source it may reasonably select. 

 If a Market Disruption Event occurs for any Interest Period, then the rate of interest on the Loan B for the Interest Period shall be the rate per annum, which is the sum of: 

 

	 	(i)	the Margin Loan B; and 

  

	 	(ii)	the rate notified to the Agent by a Commercial Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to Commercial Lenders of funding its participation in the Loan B from whatever source it may reasonably select. 

  
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 If a Market Disruption Event occurs for any Interest Period, then the rate of interest on
the Revolving Credit Facility for the Interest Period shall be the rate per annum, which is the sum of: 
  

	 	(i)	the Margin Revolving Credit; and 

  

	 	(ii)	the rate notified to the Agent by a Commercial Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to Commercial Lenders of funding its participation in the Revolving Credit Facility from whatever source it may reasonably select. 

 

	(b)	In this Agreement “Market Disruption Event” means: 

  

	 	(i)	at or about 11.00 a.m. London time on the Quotation Day for the relevant Interest Period LIBOR is not available; or 

 

	 	(ii)	before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders that the cost to it
of obtaining matching deposits in the London interbank market would be in excess of LIBOR; 

  

	(c)	The Agent will notify the Borrower as soon as reasonably possible after becoming aware of a Market Disruption Event. 

13.2 Alternative basis of interest or funding 
  

	(a)	If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than
thirty days) with a view to agreeing a substitute basis for determining the rate of interest. 

  

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

 14. INCREASED COSTS 
 14.1 Increased costs 
  

	(a)	Subject to Clause 14.2 (Exceptions) and the relevant Lender notifying the Borrower of any event referred to below promptly upon becoming aware thereof, the
Borrower shall, promptly after demand by a Lender, pay to that Lender the amount of any increased cost relating to this Agreement incurred by it as a result of: 

 

	(i)	any change in, or any change in the interpretation or application by any competent authority of, any relevant law or regulation after the date of this Agreement
(including but not limited to any law or regulation relating to taxation, or reserve asset, special deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control); or 

  
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	 	(ii)	Compliance with any regulation made by a competent authority of the jurisdiction in which it is incorporated and/or in which its principal office is located after the
date of this Agreement, (including but not limited to any law or regulation relating to taxation, or reserve asset, special deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control).

  

	(b)	In this Agreement “increased cost” means: 

  

	 	(i)	an additional cost incurred by a Lender as a result of the Lender having entered into, or performing, maintaining or funding its obligations under this Agreement; or

  

	 	(ii)	that portion of an additional cost incurred by a Lender as a result of the Lender making, funding or maintaining all or any advances comprised in a class of advances
formed by or including its participation in the Loans made or to be made under this Agreement as is attributable to it making, funding or maintaining those participations; or 

 

	 	(iii)	a reduction in any amount payable to a Lender; or 

  

	 	(iv)	the amount of any payment made by a Lender, or the amount of any interest or other return foregone by a Lender, calculated by reference to any amounts received or
receivable by that Lender from the Agent or the Borrower under this Agreement, 

 all as certified by the relevant
Lender, such certificate to set out in reasonable detail the circumstances giving rise to the claim for payment of increased costs and the calculations of the amount claimed and shall be conclusive evidence, save for manifest error, of the amount
due from the Borrower. 
 14.2 Exceptions 
 Clause 14 (Increased costs) does not apply to any increased cost: 
  

	(a)	provided for by the operation of Clause 12 (Taxes); or 

  

	(b)	attributable to any change in the rate of Tax on Overall Net Income of a Lender. 

 15. ILLEGALITY 
 If it becomes unlawful in any jurisdiction by virtue of any law which is
binding upon such Lender for it to give effect to any of its obligations as contemplated by this Agreement, then: 
  

	(a)	that Lender may notify the Borrower through the Agent accordingly (specifying the obligations the performance of which is thereby rendered unlawful and the law giving
rise to the same); and 

  
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	(b)	the Borrower shall forthwith (or at such later date as may be permitted by the relevant law) without premium or penalty other than as set out in Clause 24.2 (Other
indemnities), prepay that Lender’s participation in all amounts payable by it to that Lender under this Agreement; and 

  

	(c)	that Lender’s Commitment shall forthwith be cancelled. 

 16. GUARANTEE AND INDEMNITY 
 16.1 Guarantee obligations 

The Parent Guarantor irrevocably and unconditionally: 
  

	(a)	guarantees to the Agent and the Lenders as and for its own debt and not merely as surety the due and punctual observance and performance by the Borrower of the Loans;

  

	(b)	undertakes with the Lenders that whenever the Borrower does not pay any amount when due under or in connection with this Agreement, to pay that amount on first demand
(“No: “påkravsgaranti”) as if it were the principal obligor; and 

  

	(c)	agrees to indemnify the Lenders immediately on demand against any cost, loss or liability suffered by the Lenders if any obligation guaranteed by it hereunder is or
becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which each of the Lenders would otherwise have been entitled to recover. 

16.2 Demands 
 The Parent Guarantor
undertakes unconditionally and irrevocably immediately upon receipt of any written demand by the Agent from time to time to make payment(s) in accordance with its guarantee obligations (the “Guarantee Obligations”) under Clause 16.1
(Guarantee obligations) where such demand is accompanied by a statement of the Agent that a payment has fallen due under this Agreement, that the Borrower has failed to make such payment when due and that notice of such non-payment has been issued.
Each such payment so demanded shall be made by the Parent Guarantor to such account as the Agent may from time to time notify in writing. 

16.3 Scope of liability 
 The liability
of the Parent Guarantor hereunder shall be limited to the at any time outstanding Loans, however limited to USD 120,000,000.- plus any unpaid amount of interest, fees, liability and expenses under this Agreement. 

16.4 Number of claims 
 There is no limit
on the number of claims that may be made by the Agent (on behalf of the Lenders) against the Parent Guarantor under this Agreement. 

  
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 16.5 Continuing Guarantee 
 The obligations of the Parent Guarantor hereunder are continuing guarantee obligations and will extend to the ultimate balance of sums payable by the Borrower under this Agreement, regardless of any
intermediate payment or discharge in whole or in part. 
 16.6 Survival of the Parent Guarantor’s liability 

 

	(a)	The Parent Guarantor’s liability to the Agent and the Lenders under this Agreement (including for avoidance of doubt the obligation to make payment on first
written demand) shall not be discharged, impaired or otherwise affected by reason of any of the following events or circumstances (regardless of whether any such events or circumstances occur with or without the Parent Guarantor’s knowledge or
consent): 

  

	 	(i)	any time, waiver, consent, forbearance or other indulgence given or agreed by the Agent or any of the Lenders with the Borrower in respect of any of the Borrower’s
obligations under this Agreement; or 

  

	 	(ii)	any legal limitation, disability or incapacity of the Borrower related to this Agreement; or 

 

	 	(iii)	any amendments to or variations of this Agreement agreed by the Agent or any of the Lenders with the Borrower; or 

 

	 	(iv)	the liquidation, bankruptcy or dissolution (or proceedings analogous thereto) of the Borrower; or 

 

	 	(v)	any conflict, dispute, challenge or defence between or made by, any of the parties to the Agreement or the Security Documents, that the Parent Guarantor could otherwise
be entitled to invoke. 

  

	(b)	The Parent Guarantor specifically waives all rights under the provisions of the Norwegian Financial Agreements Act of 25 June 1999 No. 46 not being mandatory
provisions, including the following provisions (the main contents of the relevant provisions being as indicated in the brackets): 

  

	 	(i)	§ 63 (1)—(2) (the right of the Parent Guarantor to be notified of any Default or Event of Default under this Agreement and to be kept informed
thereof, since no such obligation to notify the Parent Guarantor shall apply to the Lenders or the Agent); 

  

	 	(ii)	§ 63 (3) (the right of the Parent Guarantor to be notified of any extension granted by the Lenders to the Borrower in respect of any payment of
principal and/or interest under this Agreement, since no such obligation to notify the Parent Guarantor shall apply to the Lenders or the Agent); 

  

	 	(iii)	§ 63 (4) (the right of the Parent Guarantor to be notified of the Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any
application or court filings in respect of the latter, since no such obligation to notify the Parent Guarantor shall apply to the Lenders or the Agent); 

  
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	 	(iv)	§ 67 (2) (the right of the Parent Guarantor to deem their liabilities hereunder to be reduced over time irrespective of any possible non-performance by
the Borrower of its payment obligations under this Agreement, since no such reduction of liability shall apply as long as any amount is outstanding under this Agreement); 

 

	 	(v)	§ 67 (4) (the right of the Parent Guarantor to deem their liabilities hereunder to expire ten years after the date of this Agreement, since the Parent
Guarantor shall remain liable hereunder for as long as any amount is outstanding under this Agreement); 

  

	 	(vi)	§ 70 (the right of the Parent Guarantor to be subrogated into the rights of the Lenders under this Agreement, since no such right of subrogation shall apply
unless and until the Lenders have received payment of all amounts due or to become due to them under this Agreement); 

  

	 	(vii)	§ 71 (the right of the Parent Guarantor to demand that any claim under this Agreement first be made against the Borrower, since no such obligation shall
apply to the Lenders or the Agent); 

  

	 	(viii)	§ 72 (the right of the Parent Guarantor to exclude from their liability hereunder interest and default interest accrued on the Loans prior to the date of
any demand being made against it under this Agreement, since the Parent Guarantor’s liability for securing payment of interest and default interest under this Agreement shall include all interest and default interest accrued under this
Agreement, both before and after the date of any such demand being made against it hereunder); 

  

	 	(ix)	§ 73 (1)—(2) (the right of the Parent Guarantor to exclude certain costs and expenses from their liability hereunder, since
the Parent Guarantor’s liability for securing costs and expenses under this Agreement shall include all costs and expenses which may be incurred by the Lenders and/or the Agent following the occurrence of a Default or an Event of Default under
this Agreement); and 

  

	 	(x)	§ 74 (1)—(2) (the right of the Parent Guarantor to make claims for payment against the Borrower, since no such claim shall be
made by it unless and until the Lenders first shall have received all amounts due or to become due to them under this Agreement). 

16.7 Deferral of the Parent Guarantor’s rights 
 The Parent Guarantor further undertakes to the Agent and the Lenders that as long as this Agreement is effective; 
  

	(a)	following receipt by the Parent Guarantor of a notice from the Agent of the occurrence of any Event of Default which is unremedied, the Parent Guarantor will not make
demand for or claim payment of any moneys due to the Parent Guarantor from the Borrower, or exercise any other right or remedy to which the Parent Guarantor are entitled in respect of such moneys unless and until all moneys owing or due and payable
by the Borrower and the Parent Guarantor to the Lenders and the Agent under this Agreement have been irrevocably paid in full; 

  
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	(b)	if the Borrower shall become the subject of an insolvency proceeding or shall be wound up or liquidated, the Parent Guarantor shall not (unless so instructed by the
Agent and then only on condition that the Parent Guarantor holds the benefit of any claim in such insolvency or liquidation to pay any amounts recovered thereunder to the Agent) make any claim in such insolvency, winding-up or liquidation until all
moneys owing or due and payable by the Borrower and the Parent Guarantor to the Lenders and the Agent under this Agreement have been irrevocably paid in full; 

 

	(c)	if the Parent Guarantor, in breach of paragraphs (i) and/or (ii) above of this Clause 16.7 receives or recovers any money pursuant to any such exercise, claim
or proof as therein referred to, such money shall be held by the Parent Guarantor in custody for the Agent and immediately be paid to the Agent so as for the Agent to apply the same as if they were moneys received or recovered by the Agent under
this Agreement; and 

  

	(d)	the Parent Guarantor has not taken and will not take from the Borrower any security whatsoever for the moneys hereby guaranteed. 

16.8 Enforcement 
  

	(a)	The Agent, the Lenders and/or GIEK shall not be obliged before taking steps to enforce the Guarantee Obligations of the Parent Guarantor under this Agreement:

  

	 	(i)	to obtain judgement against the Borrower or any third party in any court or other tribunal; 

 

	 	(ii)	to make or file any claim in a bankruptcy or liquidation of the Borrower or any third party; or 

 

	 	(iii)	to take any action whatsoever against the Borrower or any third party under this Agreement or the Security Documents, except the giving notice of any payment due
hereunder, 

 and the Parent Guarantor hereby waives all such formalities or rights to which it would otherwise be
entitled or which the Agent and the Lenders would otherwise first be required to satisfy or fulfil before proceeding or making any demand against the Parent Guarantor hereunder, except as required hereunder or by law. 

 

	(b)	Any release, discharge or settlement between the Parent Guarantor, the Agent and the Lenders (or any of them) in relation to this Agreement shall be conditional upon no
payment made by the Borrower to the Agent or the Lenders hereunder being void, set aside or ordered to be refunded pursuant to any enactment or law relating to breach of duty by any person, bankruptcy, liquidation, administration, protection from
creditors generally or insolvency or for any other reason whatsoever. If any payment is void or at any time set aside or ordered to be refunded, the Agent and the Lenders shall be entitled subsequently to enforce the Guarantee Obligations of the
Parent Guarantor hereunder as if such release, discharge or settlement had not occurred and any such payment had not been made. 

  
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 16.9 Release of Parent Guarantor’s Guarantee Obligations 

The Parent Guarantor’s Guarantee Obligations shall be released in writing by the Agent when the IPO Prepayment – Loan A and the IPO Prepayment
– Loan B have occurred to the Lenders’ satisfaction. 
 17. PAYMENT AND INDEMNITY 

17.1 Borrower’s indemnity 
 The
Borrower hereby irrevocably and unconditionally; 
  

	(a)	authorises and directs GIEK to pay upon any demand made by Eksportfinans under this Agreement on first request or demand being made without requiring proof that the
amounts so demanded are or were due and notwithstanding that the Borrower may dispute the validity of any such request, demand or payments; 

  

	(b)	undertakes to reimburse GIEK immediately after payment has been made, any and all sums which GIEK may pay Eksportfinans under this Agreement, in the currency paid,
together with interest, being the aggregate of the cost of funds as conclusively specified by Eksportfinans and three (3) per cent per annum from the date such payment is made until payment of such reimbursement has been received in full;

  

	(c)	undertakes to keep the Lenders, GIEK and the Agent indemnified against any and all liabilities, losses, damages, claims, demands, expenses (including, without
limitation, legal fees and VAT) or actions which the Agent on its own account and/or on behalf of the Lenders and/or GIEK, or any of them may suffer or incur in any way whatsoever or which may be made against any of the Lenders, GIEK and the Agent
under or in connection with or arising out of this Agreement; 

  

	(d)	agrees that GIEK shall be entitled to pay upon any demand by Eksportfinans which appears on its face to be in order and agrees that, in respect of the GIEK Guarantee,
GIEK shall not be concerned with the legality of any claim or any underlying transaction or any set-off or counter-claim or defence as between the Borrower and Eksportfinans or any other person, and GIEK shall not be obliged to make inquiries of any
kind and may assume that any request, demand, certificate or statement from Eksportfinans is correct and properly made. 

 17.2
Continuing indemnity 
 This indemnity shall be a continuing indemnity, and shall extend to the ultimate balance of all amounts which may be
or become due, owing or payable under this indemnity and shall continue in force notwithstanding any intermediate payment in whole or in part of any such amounts. 
 17.3 Certificate from Eksportfinans 
 A certificate in writing signed by Eksportfinans,
certifying any amount due from the Borrower under this indemnity shall be conclusive evidence of the matter so certified, save in the case of manifest error. 

  
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 17.4 Additional nature of obligations 
 The obligations of the Borrower under this indemnity shall be in addition to and shall not, in any way, be prejudiced by any collateral or other security now or hereafter held by the Agent on behalf of
the Lenders and GIEK as security for the Borrower’s obligation hereunder or any lien to which the Agent on behalf of the Lenders and GIEK may be entitled. 
 17.5 Invalidity 
 No invalidity or unenforceability of all or any part of this Clause 17
shall affect any rights of indemnity or otherwise which GIEK would or may have in absence of or in addition to this Clause 17. 
 18.
REPRESENTATIONS AND WARRANTIES 
 18.1 Representations and warranties 
 Each Obligor makes the representations and warranties set out in this Clause 18 to each of the Finance Parties. 
 18.2 Status and ownership 
  

	(a)	the Borrower is a duly constituted and properly incorporated private company with limited liability under Norwegian law. 

 

	(b)	the General Partner is a duly constituted and properly incorporated company with limited liability under Marshall Islands law, wholly-owned by the Sponsor.

  

	(c)	KNOT Offshore Partners LP is a duly constituted and properly incorporated company with limited liability under Marshall Islands law, owned at least33.3% by the Sponsor
(directly or indirectly). 

  

	(d)	KNOT Shuttle Tankers AS is a duly constituted and properly incorporated company with limited liability under Norwegian law, owned 100% by KNOT Offshore Partners LP
(directly or indirectly). 

 18.3 Powers and authority 
 Each Obligor has the power to enter into and perform, and have taken all necessary corporate actions to authorise the entry into, performance and delivery of, the Finance Documents and/or the Transaction
Documents to which it is party, and the transactions contemplated herein and therein. 
 18.4 Legal validity and enforceability

 The Finance Documents and the Transaction Documents will, subject always to mandatory law, when executed by the respective parties thereto
constitute legal, valid and binding obligations of such parties, enforceable in accordance with their respective terms and conditions, and save as provided for herein or therein, including nominal fees related to registration and enforcement of any
of the Finance Documents, no registration, filing, payment of tax or fees or other formalities are necessary or desirable to render the Finance Documents and/or the Transaction Documents enforceable against the parties thereto, and for the Security
Documents to constitute valid and enforceable first priority Security Documents as contemplated therein or herein. 

  
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 18.5 Non-conflict 
 The entry into and performance by each of the Obligors of the Finance Documents and the Transaction Documents to which it is a party, and the transactions contemplated herein and therein, do, in the
opinion of any of the Obligors, not and will not conflict with: 
  

	(a)	any articles of association or other constitutional documents of any of the Obligors; and 

 

	(b)	any document or agreement which is binding upon the Obligors, or any of their assets. 

 18.6 No Money Laundering 
 In relation to the borrowing by the Borrower of the Loans, the
performance and discharge of its obligations and liabilities under this Agreement or any of the Security Documents and the transactions and other arrangements effected or contemplated by this Agreement or any of the Security Documents to which the
Borrower is a party, it is acting for its own account and the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat “money
laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Community) and which is applicable to the Borrower. 
 18.7 No Default 
  

	(a)	No Default is outstanding or might result from the disbursement of the Loans; 

 

	(b)	no other event is outstanding which constitutes or, (with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable
condition, or any combination of the foregoing,) might constitute an event of default under any document which is binding on the Borrower or any of its assets, and which may have a material effect on the Borrower’s ability to perform its
obligations under this Agreement or the Security Documents (as the case may be); and 

  

	(c)	no amendments or waivers have been made under any of the Transaction Documents, and no event of default has occurred and is continuing or is threatening thereunder.

 18.8 Authorisations 
 All authorisations required in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents and the Transaction Documents have
been obtained or effected (as appropriate) and are in full force and effect, as and so required thereunder. 
 18.9 Environmental issues

 There are no conditions or circumstances known to it associated with the operation of the Vessel, which may give rise to any environmental
liability of any of the Obligors. 

  
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 18.10 Financial information 

 

	(a)	The audited consolidated accounts of the Obligors: 

  

	 	(i)	have (save as stated therein) been prepared in accordance with NORGAAP or USGAAP (as relevant) consistently applied; and 

 

	 	(ii)	fairly represent the financial condition of the Borrower and the consolidated financial condition of the Guarantors as at the date to which they were drawn up,

 and there has been no material adverse change in the consolidated financial condition of the Borrower and/or the
Guarantors since the date on which those accounts were drawn up, which might reasonably be expected to have a material adverse effect on the ability of the Borrower and/or the Guarantors to perform their respective obligations under the Finance
Documents and the Transaction Documents to which they are a party. 
  

	(b)	All financial documents and information relating to the Borrower or the Guarantors or otherwise relevant to the matters contemplated by this Agreement which have been
supplied to the Agent or the Lenders are complete and correct in all material respects, and the Borrower has not omitted to disclose to the Finance Parties any information, documents or agreements known to the Borrower which, if disclosed, could in
the Borrower’s opinion reasonably be expected to affect the decision of the Finance Parties to enter into this Agreement. 

18.11 Litigation 
 No litigation,
arbitration or administrative proceedings are current or, to the Obligors’ knowledge, pending or threatened against any of the Obligors which might, if adversely determined, be reasonably expected to have a material adverse effect on the
ability of any of the Obligors to perform their respective obligations under the Finance Documents or the Transaction Documents (as the case may be). 
 18.12 Pari passu 
 Each Obligors’ obligations under the Finance Documents to which it
is a party are its direct, general and unconditional obligations and rank at least pari passu with all its other present and future unsecured and unsubordinated indebtedness. 
 18.13 No withholding Taxes 
 No Taxes are imposed by withholding or otherwise on any payment
to be made by the Borrower under the Finance Documents or are imposed on or by virtue of the execution or delivery by the Borrower of the Finance Documents to which it is or is to be a party or any other document or instrument to be executed or
delivered under the Finance Documents. 

  
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 18.14 No material adverse change 
 There has been no material adverse change in the financial position of the Borrower or the Guarantors from that described to the Lenders during the negotiation of this Agreement. 

18.15 Times for making representations and warranties 
 The representations and warranties set out in this Clause 18 are made by the Borrower on the Effective Date and are deemed to be repeated by the Borrower on the date of each Drawdown Notice, Drawing
and each Renewal Notice, as well as the first day in each Interest Period, with reference to the facts and circumstances then existing, unless otherwise notified to the Agent in writing, and if not permitted under this Agreement, waived by the
Majority Lenders prior to such dates. 
 19. UNDERTAKINGS 
 19.1 Duration 
 The undertakings in this Clause 19 remain in force throughout the Loan
Period. 
 19.2 Financial information 
  

	(a)	Each Obligor shall supply to the Agent in sufficient copies for all of the Lenders: 

 

	 	(i)	as soon as reasonably practicable after the same are available (and in any event no later than 150 days after each year-end) the audited unconsolidated and consolidated
accounts of the Obligors for that financial year; and 

  

	 	(ii)	as soon as reasonably practicable after the same are available (and in any event no later than 90 days after the end of each quarter) the unaudited unconsolidated and
consolidated accounts of the Obligors, and 

  

	 	(iii)	as soon as practicable (but in any event within 60 days after 31 December each year) financial projections including profit and loss, balance sheet and cash flow
forecasts including supporting schedules and calculations for the MLP Group and the Borrower. 

  

	 	(iv)	the Compliance Certificate on a quarterly basis within 150 days after each year-end and 90 days after each 30 March, 30 June and 30 September.

  

	 	(v)	appraisal reports from two Approved Brokers on a semi-annual basis stating the Market Value of the Vessel. 

 

	(b)	The financial statements which shall be delivered to the Agent pursuant to sub-paragraphs (ii) and (iii) above shall have been prepared in accordance with
NORGAAP or USGAAP (as relevant) or, if not, such financial statements shall be accompanied by a certificate setting out the adjustments to be made, and showing such adjustments as having been made, as are necessary to produce the amounts and totals
in such accounts that would have been produced if NORGAAP or USGAAP (as relevant) had been applied. 

  
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 19.3 Information – Miscellaneous 
 Each Obligor shall supply to the Agent, in sufficient copies for all of the Lenders: 
  

	(a)	promptly, such specific financial or other information regarding the financial condition and operations or other information of the Obligors or the Vessel (hereunder
but not limited to technical data) as the Agent (or any Lender through the Agent) may reasonably request; 

  

	(b)	promptly upon becoming aware of them, relevant details of any material litigation, arbitration or administrative proceedings which are current or, to its knowledge,
threatened or pending against the Obligors and which might, if adversely determined, be reasonably expected to have a Material Adverse Effect on the ability of the Obligors to perform their respective obligations under this Agreement or the
Transaction Documents (as the case may be), and further details of any such matters previously disclosed to the Agent, if the likelihood of an adverse determination has increased, as the Agent or any Lender acting through the Agent may reasonably
request; 

  

	(c)	all documents dispatched by it to all of its shareholders containing information relevant to any of the Transaction Documents, at the same time as they are dispatched;

  

	(d)	all information needed by the Lenders in order to comply with money laundering provisions and KYC requirements. 

19.4 Notification of Default 
 Each
Obligor shall notify the Agent of any Default which is continuing (and the steps, if any, being taken to remedy it) promptly upon its occurrence. 
 19.5 Insurances 
  

	(a)	The Borrower shall maintain the Vessel insured against such risks (including, but not limited) to Hull and Machinery, Hull Interest, Freight Interest,
Protection & Indemnity (including highest possible maximum cover of at least USD 1,000,000,000 for the Vessel for pollution), Loss of Hire (cover at least 180 days with a maximum of 14 days deductible) and War Risk insurances
(including War Risks, P & I and terrorism to the maximum extent), in such amount, on such terms (always applying Norwegian law and including the terms of the Norwegian Marine Insurance Plan of 1996 version 2010 and/or the Nordic Marine Insurance
Plan of 2013 or equivalent terms in relation to losses payable thereunder) and with such insurers and through such brokers as the Agent on behalf of the Lenders shall approve. 

 

	(b)	The insurance value of the Vessel (Hull and Machinery (includs Hull Interest and Freight Interest) and war risk) shall be equal to or higher than the Market Value of
the Vessel and 125 per cent of the Loans. 

 The aggregate Hull and Machinery insurance values of the Vessel
shall furthermore, at all times, cover the higher of the Loan and 80 per cent of the Vessel’s insurable value, while the remaining cover may be taken out by way of Hull Interest and Freight Interest insurances. 

  
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	(c)	Not later than 14 days prior to the expiry date of the relevant insurances the Borrower shall deliver to the Agent a certificate from the insurance broker(s) through
whom the insurances relevant to the Vessel has been placed, evidencing that all insurances referred to in item (a) have been renewed and taken out in respect of each Vessel with insurance values as required by item (b), that such insurances are
in full force and effect and that the Agent on behalf of the Lenders’ interest therein have been noted by the relevant insurers. 

  

	(d)	The Agent shall (at the Borrower’s expense) take out a Mortgagee Interest Insurance (covering 120 per cent. of the principal amount outstanding hereunder) and
may at request of any of the Lenders (at the Borrower’s expense) take out a Mortgagee Interest—Additional Perils Insurance (Pollution Cover) insurance relevant to the Vessel in a form and substance satisfactory to the Agent, such policy to
be made in favour of the Agent (acting on its own behalf and on behalf of the Lenders), or, if so directed by the Agent, arrange for such insurance cover to be taken out in accordance with instructions from the Agent. 

 

	(e)	The Borrower shall procure that the Vessel always is employed in conformity with the terms of the instruments of insurances (including any warranties expressed or
implied therein) and comply with such requirements as to extra premium or otherwise as the insurers may prescribe. 

  

	(f)	The Borrower shall before the Vessel is entering any US territory provide for the Vessel to be in Compliance with all US regulations relevant to such Vessel, including
oil pollution regulations and requirements with respect to certificate of financial responsibility (“COFR”) which shall be arranged with insurers and on terms approved by the Agent. 

 

	(g)	The Agent may (at the Borrower’s expense) obtain a favourable insurance report by an independent broker acceptable to the Agent. 

19.6 Notification 
 The Borrower shall
immediately notify the Agent of: 
  

	(a)	any accident to the Vessel involving repairs the cost of which is likely to exceed USD 5,000,000.-; 

 

	(b)	any Total Loss relevant to the Vessel; and 

  

	(c)	any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel, the earnings or any of the Accounts; and 

 

	(d)	any environmental matters in respect of the Vessel. 

 19.7 Total loss 
 In the event that the Vessel shall suffer a Total Loss, the Borrower
shall, within a period of 90 days after the Total Loss Date, obtain and present to the Agent, a written confirmation from the relevant insurers that the claim relating to the Total Loss has been accepted in full, or – if sooner – promptly
upon receipt of insurance proceeds in respect of the Total Loss, apply such proceeds as prepayment of the Loans. 

  
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 19.8 Class and International Regulations 

 

	(a)	The Borrower shall procure that the Vessel is classified and maintained in class with the highest possible class notation, free of overdue recommendations, with a
classification society that is a member of the International Association of Classification Societies, and at all times comply with the rules and regulations of the relevant class society. Furthermore, the Borrower shall at all times ensure
Compliance with all requirements of the International Convention for Safety of Life at Sea (SOLAS) 1974 as adopted, amended or replaced from time to time including, but not limited to, the STCW 95, the ISM Code and/or the ISPS Code (as each is
defined in the respective amendments to SOLAS). Upon receipt of the Agent’s written request, the Borrower shall instruct the classification society to send to the Agent, copies of all information, documents and class records held by the
classification society in relation to the Vessel. 

  

	(b)	The Borrower shall not change the Vessel’s class without the prior written consent of the Lenders. 

19.9 Flag and register 
  

	(a)	The Borrower will at the Delivery Date register the Vessel in an Approved Register, and 

 

	(b)	The Borrower shall not change the flag or the ship registry of the Vessel or allow the Vessel to be dual registered. 

19.10 Environmental regulations 
 The
Obligors shall indemnify and hold each of the Finance Parties harmless from and against any damages, losses or expenses which any of them may sustain or incur as a consequence of any claim by any governmental, judicial or regulatory authority which
arises out of an environmental incident or an alleged environmental incident in connection with the operation of the Vessel or which relates to any environmental law in any jurisdiction. 
 19.11 Sale of Vessel 
 The Borrower shall not sell the Vessel without the prior written
consent of the Lenders unless the sale proceed covers the Loans and subject to Clause 7.3. 
 19.12 Management Agreement 

The Borrower shall not substantially amend or terminate the Management Agreement or enter into any further agreements related to the management of the
Vessel provided however that the management of the Vessel can be transferred to another company acceptable to the Majority Lenders. 
 19.13
Charterparty 
 The Borrower shall not make any material amendment or supplement to, or waiver of the terms of, the Charterparty without the
prior written consent of the Majority Lenders. 

  
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 At the expiry date of the Charterparty, the Borrower will not enter into any new charterparty without the
prior written consent of the Lenders. 
 19.14 Negative Pledge 
 Except as contemplated by this Agreement and/or the Security Documents, the Borrower shall not: 
  

	(a)	undertake any other activity than owning and operating vessels; 

  

	(b)	create, incur or assume any Security Interest on the Vessel or any of its other assets, and not make any assignment of right to receive earnings or proceeds of
insurance policies covering the Vessel; 

  

	(c)	make any intercompany loans or deposits to any company or person outside the MLP Group. As long as no Event of Default has occurred or is threatening, the Borrower
shall be allowed to incur and to make intercompany loans or deposits and to freely accept and grant equity contributions in any form to or from companies in the MLP Group, such intercompany loans, deposits or equity contributions to be subordinated
to the Lenders’ rights. 

 19.15 Dividend and other payments 
 The Borrower may declare or pay any dividends or otherwise make any other distribution of assets to any shareholder whether in cash or otherwise, provided that (a) no Event of Default has occurred or
will occur at the time of payment of such dividend and (b) the Agent is satisfied that, after payment of such dividend, the remaining liquidity of the Borrower will equal or exceed the aggregate amount of (i) the instalments falling due in
the next 6 months after the dividend payment date and (ii) the amount estimated by the Agent as being the amount of interest on the Loans which will fall due for payment by the Borrower under Clause 9 during that 6 month period. 

19.16 Accounts 
  

	(a)	The Borrower shall maintain all its bank accounts related to the Vessel with the Agent. 

 

	(b)	The Borrower shall procure that all money whatsoever due under the operations of the Vessel (hereunder payment of hire under the Charterparty) shall be paid to the
Earnings Account. 

  

	(c)	The Borrower shall on a monthly basis transfer 1/6 of the next instalments and interest payments to the Retention Account for service of the Loans.

  

	(d)	The Earnings Account shall, until an Event of Default has occurred, be at the Borrower’s free disposal, provided however that moneys on the Earnings Account only
shall be used related to the Vessel. The Retention Account shall be blocked. 

  

	(e)	The Borrower shall procure that all its bank accounts in respect of the Vessel at any time are pledged to the Agent on behalf of the Lenders. 

  
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 19.17 Transactions with affiliates 
 The Borrower will ensure that all transactions and agreements with companies affiliated to the Borrower shall be on a commercial basis and done on an arms-length-basis. 

19.18 Maintenance and change of business 
  

	(i)	The Borrower shall remain a private limited company under Norwegian law, with no other activity than the ownership of the vessels. 

 

	(ii)	The Borrower shall not enter into any form of amalgamation, merger or demerger, divest or consolidate with any other entity or any form of reconstruction or
reorganisation without the prior written consent of the Majority Lenders. 

  

	(iii)	The Borrower will not change end of its fiscal year. 

  

	(iv)	The Borrower will not change its legal name. 

19.19 Market Value 
 Subject to Clause
7.4 (Mandatory prepayment – Market Value): 
  

	(a)	The Borrower shall ensure that until the 4 anniversary of the Delivery Date the Market Value of the Vessel covers at all times at least 100 % of the Loans.

  

	(b)	The Borrower shall ensure that at the last year prior to the Final Maturity Date Loan B the Market Value of the Vessel covers at all times at least 125 % of the
Loans. 

 19.20 Laws, regulations and statutes 

 

	(a)	Each Obligor shall promptly obtain such registrations, certificates, licences, consents and approvals as may be required under applicable law or regulation to enable it
to perform its obligations hereunder. 

  

	(b)	Each Obligor shall promptly obtain such registrations, certificates, licences, consents and approvals as may be required under applicable law or regulation in respect
of its ongoing offshore supply and support operations. 

  

	(c)	The Borrower shall at all times comply with all environmental laws and all other laws and regulations relating to the Vessel, its ownership, operation and management,
and take all reasonable precautions to ensure that the crews, employees, agents or representatives of the Borrower at all times comply with all applicable environmental laws and all laws and restrictions of every relevant jurisdiction concerning the
use of drugs, alcohol or other illegal substances in connection with the offshore supply and support operations of the Borrower. 

  

	(d)	Each Obligor shall at all times comply with all applicable competition laws and regulations relating to the Vessel, its ownership, operation and management or to its
business. 

  
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	(e)	The Obligors shall not, and shall procure that none of their respective managers, agents or representatives shall breach any criminal laws or regulations passed for the
combat of corruption or bribing (howsoever described), including laws similar or identical to the provisions set out in Sections 276 a. through 276 c. of the Norwegian Penal Act of 22 May 1902 No. 10. 

 

	(f)	Each Obligor will at all times comply with its partnership agreement and articles of association. 

 

	(g)	Each Obligor will pay all taxes when due and payable. 

 19.21 Acceptable Guarantees 
 Each of the Obligors shall at all times during the Loan Period
maintain Loan A fully secured by guarantees acceptable to Eksportfinans. 
 20. DEFAULT 

20.1 Events of Default 
 Each of the
events set out in Clauses 20.2 to 20.32 (inclusive) is an Event of Default (whether or not caused by any reason whatsoever outside the control of the Borrower or any other person). 
 20.2 Non-payment 
 Each of the Obligors does not pay on the due date an amount payable by it
under this Agreement at the place at, and in the currency in which it is expressed to be payable, provided that if such failure to pay has arisen as a consequence of an administrative or technical error only then such event shall not be an Event of
Default unless such failure continues for a period in excess of three Business Days. 
 20.3 Breach of other obligations 

The Borrower does not comply with any provision of any Finance Document (other than those referred to in Clause 20.2 (Non-payment)), provided that it
shall not constitute an Event of Default: 
  

	(a)	if 

  

	 	(i)	such non-Compliance is, in the opinion of the Majority Lenders, capable of remedy; and 

 

	 	(ii)	the Agent notifies the Obligors or the Obligors notify the Agent of such non-Compliance; and 

 

	 	(iii)	such non-Compliance does not exceed 14 Business Days from the date of its occurrence, 

or 
  

	(b)	if such non-Compliance is in the sole discretion of the Majority Lenders of a minor nature and does not prejudice the security constituted by the Security Documents.

  
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 For the avoidance of doubt and without prejudicing whether any other breach is or is not capable of remedy,
a breach of Clause 19.5 (Insurances) shall in any event be deemed not to be capable of remedy. 
 20.4 Breach under the Security Documents

 Either of the Obligors does not comply with any obligation, undertaking or provision of any of the Security Documents or any document
referred to therein. 
 20.5 Misrepresentation 
 A representation, warranty or statement made or repeated in or in connection with any Finance Document or in any document delivered by or on behalf of the Obligors under or in connection with any Finance
Document was incorrect or misleading in any respect when made or deemed to be made or repeated. 
 20.6 Cross-default 

 

	a)	An event of default howsoever described (or any event which with the giving of notice, lapse of time, determination of materiality or fulfilment of any other applicable
condition or any combination of the foregoing would constitute such an event of default) occurs with respect to any of the Obligors and/or the MLP Group under any of the Transaction Documents to which any of the Obligors and/or the MLP Group is a
party and such event of default may have effect on the financial condition of any of the Obligors or its/their ability to perform their respective obligation hereunder or under the Security Documents to which they are a party (as case may be).

  

	b)	Any Financial Indebtedness of an Obligor and/or any member of the MLP Group: 

 

	 	(i)	is not paid when due or within any originally applicable grace period; or 

  

	 	(ii)	is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); or

  

	 	(ii)	becomes capable of being declared due and payable prior to its specified maturity as a result of an event of default (however described). 

20.7 Liens 
 A maritime or other lien,
arrest, distress or similar charge is levied upon, or against the Vessel, the Pledged Accounts or any other part of the assets of any of the Obligors (save for as contemplated by this Agreement and/or the Security Documents) and is not discharged
within 14 Business Days after the Borrower became aware of the same. 

  
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 20.8 Insolvency 
 An order of a competent court is made or an event analogous thereto occurs or any effective resolution is passed with a view to the bankruptcy, commencement of composition proceedings, debt negotiations,
liquidation, winding-up or similar event with respect to any of the Obligors. 
 20.9 Admittance of non-payment 

Any of the Obligors is unable or admits in writing its inability to pay its lawful debts as they fall due. 

20.10 Termination of business 
 Any of
the Obligors ceases or threatens to cease to carry on its business or materially change its business, whether by one or a series of transactions. 
 20.11 Permits 
 Any licence, consent, permission or approval required in order to enforce,
complete or perform the Agreement and/or any of the Transaction Documents is revoked, terminated or modified. 
 20.12 Impossibility or
illegality 
 It becomes impossible or unlawful for any of the Obligors to fulfil any of the terms of the Finance Documents or for the Agent
to exercise any right or power vested in the Agent under the Security Documents, or the security created by any of the Security Documents is imperilled, or for any reason whatsoever ceases to be valid and enforceable with its intended priority.

 20.13 Transaction Documents 

Without the prior written consent of the Agent on behalf of the Lenders any of the Transaction Documents 

 

	(i)	is (in the Lenders’ sole discretion) materially amended or terminated, 

 

	(ii)	ceases in whole or part to be valid, binding and enforceable, or 

  

	(iii)	any waivers are agreed thereunder. 

 20.14
Material adverse change 
 Any event or series of events occurs in relation to any of the Obligors which, in the reasonable opinion of any of
the Lenders, have a Material Adverse Effect. 
 20.15 Events in Security Documents 

Any of the events of default specified in any of the Security Documents arise or occur. 

  
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 20.16 Mergers, demerger and reconstructions 
 Any of the Obligors effects any demerger, merger, joint venture, reconstruction, splitup or divest without the prior written consent of the Lenders. 

20.17 Change of ownership—the Borrower 
 The Borrower ceases to be a direct or indirect wholly owned (share capital and voting rights) subsidiary of KNOT Offshore Partners LP. 
 20.18 Change of ownership—KNOT Offshore Partners LP 
 KNOT Offshore Partners LP ceases
to be in the 33.1/3 % ownership (share capital and voting rights subject to the limitations on voting rights relating to election of board members, amendments and certain other matters as set out in the Limited Partnership Agreement) of the
Sponsor or if any person or group of persons acting in concert (other than the Sponsor (or any wholly owned Subsidiaries thereof)) acquires more than 33.1/3 % of the share capital or voting rights of KNOT Offshore Partners LP. 

20.19 Change of ownership—the General Partner 
 The General Partner ceases to be a direct or indirect wholly owned (share capital and voting rights) subsidiary of the Sponsor. 
 20.20 Change of ownership—the Parent Guarantor 
 The Parent Guarantor ceases to be in
the 50 % ownership of TSSI, or ceases to be in the 50 % (directly or indirectly) ownership of NYK. 
 This Clause 20.20 shall not be
applicable after the IPO Prepayment – Loan A and the IPO Prepayment – Loan B have occurred. 
 20.21 Free Liquidity – KNOT
Offshore Partners LP 
 KNOT Offshore Partners LP (on a consolidated basis) at any time during the Loan Period has a Free Liquidity of less
than USD 15,000,000.- plus USD 1,500,000.- for each owned vessel with employment contract with less than 12 months remaining tenor. From the time KNOT Offshore Partners LP and its Subsidiaries own in total 8 vessels, the Free Liquidity shall be
increased by USD 1,000,000.- for each additional vessel acquired (including vessels chartered in on bareboat charterparties, vessels on long term financial leases and vessels on long term time charter parties (exceeding 12 months)) by KNOT
Offshore Partners LP or any Subsidiary, plus USD 1,500,000.- for each owned vessel with employment contract with less than 12 months remaining tenor. 
 20.22 Free Liquidity – The Parent Guarantor 
 The Parent Guarantor at any time during
the Loan Period has a Free Liquidity of less than USD 25,000,000.-, 

  
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 This Clause 20.22 shall not be applicable after the IPO Prepayment – Loan A and the IPO Prepayment
– Loan B have occurred. 
 20.23 Free Liquidity – The KNOT Group 
 The KNOT Group (on a consolidated basis (including shipowning companies owned more than 10 % on the gross method (actual share of EBITDA—KNOT Group, interest and debt)) any time during the Loan
Period has a Free Liquidity of less than 4% of its Interest Bearing Debt measured quarterly. 
 This Clause 20.23 shall not be applicable after
the IPO Prepayment – Loan A and the IPO Prepayment – Loan B have occurred. 
 20.24 Working Capital – the Borrower

 The Borrower at any time in the Loan Period has a negative Working Capital. 
 20.25 Working Capital – the KNOT Group 
 The KNOT Group (on a consolidated basis
(including shipowning companies owned more than 10 % on the gross method (actual share of EBITDA—KNOT Group, interest and debt)) at any time in the Loan Period has a negative Working Capital. 

This Clause 20.25 shall not be applicable after the IPO Prepayment – Loan A and the IPO Prepayment – Loan B have occurred. 

20.26 Minimum Equity Ratio 
 The Book
Equity of KNOT Offshore Partners LP (on a consolidated basis) to Total Assets is less than 30 %. 
 20.27 Minimum Equity Ratio—the KNOT
Group 
 The Book Equity of the KNOT Group (on a consolidated basis (including shipowning companies owned more than 10 % on the gross
method (actual share of EBITDA—KNOT Group, interest and debt)) to Total Assets until 31 January 2014 is less than 19%, from 1 February 2014 until 31 December 2014 is less than 22.5%, and thereafter less than 25%, measured
quarterly. 
 This Clause 20.27 shall not be applicable after the IPO Prepayment – Loan A and the IPO Prepayment – Loan B have
occurred. 
 20.28 EBITDA 
 KNOT
Offshore Partners LP (on a consolidated basis) at any time has an EBITDA (after payment of actual docking costs) of less than 2.5 x interest costs (including interest rate swap costs). EBITDA shall be measured on a quarterly rolling basis (last 4
quarters). 

  
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 20.29 EBITDA—KNOT Group 

The KNOT Group (on a consolidated basis (including shipowning companies owned more than 10 % on the gross method (actual share
of EBITDA—KNOT Group, interest and debt)) at any time has an EBITDA (after payment of actual docking costs) of less than interest costs (including interest rate swap costs), instalments and hire in respect of any vessels on bareboat charter (if
not already deducted in the EBITDA). EBITDA shall be measured on a quarterly rolling basis (last 4 quarters) and first time 31 January 2014 (based on unaudited 4th quarter accounts). 
 Any breach of this Clause 20.29 shall automatically be repaired if the KNOT Group’s consolidated Free Liquidity is more than USD 75,000,000.-. However, the maximum repair period is limited to four
(4) consecutive quarters. 
 This Clause 20.29 shall not be applicable after the IPO Prepayment – Loan A and the IPO Prepayment –
Loan B have occurred. 
 20.30 Charterparty 
  

	(a)	The Charterparty for any reason whatsoever is terminated or cancelled, or 

  

	(b)	The Vessel is not delivered and accepted by the Charterer under the Charterparty within 31 March 2011. 

20.31 Listing 
 KNOT Offshore Partners LP
ceases to be listed on the New York Stock Exchange (NYSE). 
 20.32 General Partner 

 

	a)	The General Partner ceases to be the general partner in KNOT Offshore Partners LP, and/or 

 

	b)	the General Partner ceases to own minimum 2% of the interests in KNOT Offshore Partners LP, and/or 

 

	c)	the General Partner ceases the right to appoint three (3) out of seven (7) board directors to the board of directors in KNOT Offshore Partners LP (or if there
is a change in the number of directors, the corresponding numbers). 

 20.33 Acceleration 

On and at any time after the occurrence of an Event of Default and whilst such Event of Default is continuing unremedied and unwaived, the Agent may, and
shall (or shall refrain from) if so directed by the Majority Lenders, by notice to the Borrower:- 
  

	(a)	without prejudice to any parts of the Loans advanced hereunder cancel the Total Commitment; and 

  
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	(b)	declare that all or part of the Loans, together with accrued interest, and all other amounts accrued under the Finance Documents are immediately due and payable,
whereupon they shall become immediately due and payable. 

  

	(c)	without prejudice to any of the Finance Parties’ other rights, with or without notice to the Borrower, take such other action as is available to the Finance
Parties under the Finance Documents or by law. 

  

	21.	THE AGENT 

  

	21.1	Appointment and duties of the Agent 

 The
Lenders authorize the Agent to take such action on its behalf and to exercise such powers as are specifically delegated to it by the terms of this Agreement together with all such powers as are reasonably incidental thereto. In performing its duties
and functions hereunder, the Agent shall exercise the same care as it normally exercises in making and handling loans and guarantee facilities for its own account. Any reference to the Agent in the Agreement or the Security Documents shall be
understood as the Agent on behalf of the Lenders unless otherwise specifically stated. Notwithstanding anything to the contrary, the Agent shall always follow the instructions from the Lenders. 

In relation to the Security Documents, the Lenders hereby irrevocably: 
  

	(a)	appoints the Agent to act as its agent and security trustee under and in connection with the Security Documents; 

 

	(b)	authorises the Agent on its behalf to sign, execute and enforce the Security Documents; 

 

	(c)	authorises the Agent on its behalf to perform the duties and to exercise the rights, powers, authorities and discretions that are specifically given to it under or in
connection with the Security Documents, together with any other incidental rights, powers, authorities and discretions; 

 or to a
nominee who shall be approved by the Lenders. The Agent shall act as security agent for and behalf of the Lenders and Swap Banks, provided however that in relation to the Security Documents the Agent shall receive instructions from the Lenders only.

  

	21.2	Relationship 

 The relationship between
the Agent and the Lenders is that of agent and principal only, and nothing herein shall be construed so as to constitute the Agent as a trustee for the Lenders or impose on any of them any duties or obligations other than those for which express
provision is made in this Agreement. 
  

	21.3	Information 

 The Agent will promptly
advise the Lenders of each notice received by it from the Obligors hereunder. The Agent shall not be under any obligation towards the Lenders to ascertain or enquire as to the performance or observance of any of the terms or conditions hereof, other
than a failure to make payment of sums due. 

  
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	21.4	Default 

 The Agent shall not (with the
exception of the Borrower’s failure to pay sums due) be deemed to have knowledge of the occurrence of any Event of Default unless the Agent has received notice thereof from an Obligor or the Lenders. In the event the Agent receives such notice,
the Agent shall promptly give notice thereof to the Lenders and GIEK. The Agent shall take such action with respect to such Event of Default as may be directed by the Lenders and GIEK provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obliged to) take such action or refrain from taking such action, with respect to such Event of Default as the Agent shall in its absolute discretion deem advisable in the best interest of the Lenders
and GIEK, provided always that the Agent shall advise the Lenders and GIEK of such action and shall consult with them as soon as possible thereafter in order to determine future action. 

 

	21.5	Rely on communication 

 In performing its
duties and exercising its powers hereunder, the Agent shall be entitled to rely on any communication believed by it to be genuine and to have been sent or signed by the person by whom it purports to have been sent or signed. 

 

	21.6	Responsibility of the Agent 

 The Agent
takes no responsibility for the truth of any covenants, representations or undertakings given or made herein or for the validity, effectiveness, adequacy, legality or enforceability of this Agreement or any of the Security Documents. Neither the
Agent nor any of its directors, officers, employees or attorneys-in-fact shall be responsible for any action taken or omitted to be taken by it or them under or in connection herewith, except for its or their own gross negligence or willful
misconduct. 
  

	21.7	Exclusion of liability 

 In respect of
Eksportfinans, the Agent will not be liable for any action taken by it under or in connection with the Agreement or the Security Documents, unless directly caused by negligence. 

 

	21.8	Responsibility of the Lenders 

 Each of
the Lenders shall be responsible for making its own independent investigation of the financial condition and affairs of the Obligors in connection with the making and continuance of the Loans and has made its own appraisal of the creditworthiness of
the Obligors. 
  

	21.9	Set-off 

 If any of the Lenders at any
time receives or recovers by set-off or otherwise any sum which it is obliged (or being so entitled has elected) to apply towards payment of any amount due to it hereunder (otherwise than amounts specifically payable to any of the Lenders under the
terms of this Agreement) then Eksportfinans or the Commercial Lenders shall be obliged to offer to the other party through the Agent such payment by way of adjustment as may be necessary to ensure that at all times Eksportfinans or the Commercial
Lenders receives the portion of principal, interest, fees and commissions due to it under this Agreement, however, that such offer shall be conditional upon Eksportfinans or the Commercial Lenders who may accept such offer (the “Accepting
Finance Party”) 

  
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agreeing to indemnify Eksportfinans or the Commercial Lenders making such offer (the “Offering Finance Party”) on terms reasonably acceptable to the Offering Finance Party against any
loss (other than the loss suffered by such payment by way of adjustment) which the Offering Finance Party may subsequently suffer by reason of having made such payment by way of adjustment to such Accepting Finance Party. 

 

	21.10	Distribution of payments 

 The Agent shall
pay with funds having same day value as the funds received to the order of each of the Lenders each such party’s proportionate share of every sum of money received by the Agent pursuant to the Agreement or the Security Documents (with the
exception of any amounts, which by the terms of the Agreement or the Security Documents, are paid to the Agent for the account of the Agent alone or specifically for the account of any of the Lenders) and until so paid such amount shall be held by
the Agent on trust absolutely for the relevant party. 
  

	21.11	Reimbursement of cost 

 The Lenders shall
ratably in accordance with its respective participation in the Loans (as the case may be), indemnify and hold the Agent harmless against any and all costs, claims, expenses (including legal fees), loss or liability, which the Agent may suffer or
incur by reason of any action taken or omitted by it as the Agent hereunder to the extent that the Agent shall not have been reimbursed therefore by the Obligors, unless and to the extent such loss or liability is caused by the gross negligence
(negligence in respect of the Lenders) or willful misconduct of the Agent. 
  

	21.12	Resignation 

 The Agent may and shall upon
request from any of the Lenders and with the consent of the Borrower resign its appointment hereunder by giving written notice to that effect to each of the Lenders and to the Borrower, provided that no such resignation shall be effective until a
successor for the Agent is appointed in accordance with the succeeding provisions of this clause. If the Agent gives notice of its resignation, then any of the Lenders or any reputable and experienced bank or other financial institution may be
appointed as a successor to the Agent by the Lenders during the period of such notice. If no such successor is so appointed then (A) the outgoing Agent shall be discharged from any further obligation under this Agreement but shall remain
entitled to the benefit of the provisions of this clause and (B) its successor and each of the other parties hereto shall have the same rights and obligations amongst themselves as they would have had if such successor had been a party hereto.
The change of Agent shall be at no cost to the Borrower. 
  

	22.	FEES 

  

	22.1	Commitment fee—Loan A 

 The Borrower
shall pay to the Agent (for distribution to Eksportfinans) a commitment fee equal to 40 % of the Margin Loan A calculated on the undrawn portion of Loan A. Such commitment fee shall be calculated from 16 December 2010 and be payable at the
Drawdown Date. 

  
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	22.2	Commitment fee—Loan B 

 The Borrower
shall pay to the Agent (for distribution to the Commercial Lenders) a commitment fee equal to 40 % of the Margin Loan B calculated on the undrawn portion of Loan B. Such commitment fee shall be calculated from 16 December 2010 and be
payable at the Drawdown Date. 
  

	22.3	Commitment fee – Revolving Credit Facility 

 The Borrower shall pay to the Agent (for distribution to the Commercial Lenders) a commitment fee equal to 40 % of the Margin Revolving Credit Facility calculated on the daily undrawn portion of the
Revolving Credit Facility. Such commitment fee shall be calculated from the Effective Date and be payable quarterly in arrears on the last day of each fiscal quarter (or such earlier date which the Revolving Credit Facility is terminated).

  

	22.4	Arrangement fee—Loan A 

 The Borrower
shall pay to the Agent (for further distribution to Eksportfinans and GIEK) a non-refundable fee of USD 448,000.- (USD 28,000.- to Eksportfinans and USD 420,000.- to GIEK) payable on the date hereof. The arrangement fee shall be
payable whether or not Loan A is ever drawn pursuant to this Agreement upon demand from the Agent. 
  

	22.5	Arrangement fee—Loan B 

 The Borrower
shall pay to the Agent (for further distribution to the Commercial Lenders) a non-refundable fee of USD 512,000.- payable on the date hereof. The Arrangement fee shall be payable whether or not the Loans are ever drawn pursuant to this
Agreement upon demand from the Agent. 
  

	22.6	Arrangement fee – Revolving Credit Facility 

 The Borrower shall pay to the Agent (for further distribution to the Commercial Lenders on a prorate basis) a non-refundable fee of USD 200,000.- payable on the Effective Date. The Arrangement fee
shall be payable whether or not the Revolving Credit Facility is ever drawn pursuant to this Agreement upon demand from the Agent. 
  

	22.7	Structuring fee 

 The Borrower shall pay
to the Agent a structuring fee in accordance with a fee letter to be entered into between the Borrower and the Agent. 
  

	22.8	Guarantee commission 

 The Borrower shall
pay to the Agent (for distribution to GIEK) a guarantee commission of 1.75% per annum of the outstanding amounts under the GIEK Guarantee, payable semi-annually in arrears, the first time6 months after the Drawdown Date. 

  
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	22.9	Agency fee 

 The Borrower shall pay to the
Agent a non-refundable annual agency fee in accordance with a fee letter to be entered into between the Borrower and the Agent. 
  

	23.	EXPENSES 

  

	23.1	Initial and special costs 

 The Borrower
shall promptly following demand pay the Agent the amount of all reasonable costs and expenses (including legal fees) reasonably and properly incurred by the Agent, the Mandated Lead Arrangers and/or the Lenders in connection with: 

 

	(a)	the negotiation, preparation, printing and execution of the Finance Documents and any other documents referred to in the Finance Documents; 

 

	(b)	execution and registration of the Security Documents; 

  

	(c)	any amendment, waiver, consent or suspension of rights (or any proposal for any of the foregoing) requested (or, in the case of a proposal, made) by or on behalf of the
Borrower and relating to the Finance Documents or a document referred to in the Finance Documents; and 

  

	(d)	any other matter, not being of an ordinary administrative nature and arising out of or in connection with the Finance Documents. 

 

	23.2	Enforcement costs 

 Following an Event of
Default, the Borrower shall promptly following demand pay to the Finance Parties the amount of all costs and expenses (including legal fees) properly incurred by it in connection with the enforcement of or the preservation of, any rights under the
Finance Documents. 
  

	24.	INDEMNITIES 

  

	24.1	Currency indemnity 

  

	(a)	If a Finance Party receives an amount in respect of the Borrower’s liability under the Finance Documents or if that liability is converted into a claim, proof,
judgement or order in a currency other than the currency in which the amount is expressed to be payable under the Finance Documents, the Borrower shall indemnify that the Finance Party as an independent obligation against any loss or liability
arising out of or as a result of the conversion of the other currency into the currency owed under the Finance Documents. 

  

	(b)	The Borrower waives any right it may have by law to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.

  
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	24.2	Other indemnities 

 The Borrower shall
forthwith on demand indemnify each Finance Party against any loss or liability (including funding breakage costs) which that Lender reasonably and properly incurs and which the Finance Party certifies (in a certificate containing reasonable detail)
that it has incurred as a consequence of: 
  

	(a)	the occurrence of any Event of Default; 

  

	(b)	the operation of Clause 20.33 (Acceleration); 

  

	(c)	any repayment or prepayment of principal or payment of an overdue amount being made otherwise than on the last day of a relevant Interest Period relative to the amount
so repaid, prepaid or paid; and 

  

	(d)	investigation(s) of a potential Event of Default, and 

  

	(e)	a disbursement of a Loan not being made after the Borrower has delivered a Drawdown Notice or the Loans (or part of the Loans) not being prepaid in accordance with a
notice of prepayment. 

 The liability of the Borrower in each case includes any loss of margin or other loss or expense on
account of funds borrowed, contracted for or utilised to fund any amount payable under the Finance Documents, but the Borrower’s liability shall in no circumstances extend to any loss or expense to the extent that it arises as a consequence of
any gross negligence or wilful default of a Finance Party. 
  

	25.	CALCULATIONS 

 Interest and fees payable
under Clauses 9 (Interest) and 22 (Fees) accrue from day to day and are calculated on the basis of the actual number of days elapsed and a year of 360 days. 
  

	26.	AMENDMENTS AND WAIVERS 

  

	26.1	Majority Lenders 

  

	(a)	Subject to Clause 26.2 (All Lenders), any term of this Agreement and the Security Documents may only be amended or waived with the written agreement of the Borrower
and, if authorised by the Majority Lenders, the Agent. The Agent shall effect, on behalf of the Majority Lenders, any amendment or waiver to which they have agreed. 

 

	(b)	The Agent shall promptly notify the Lenders of any amendment or waiver effected under paragraph (a) above and any such amendment or waiver shall be binding on all
the Lenders. 

  

	26.2	All Lenders 

 An amendment or waiver which
relates to: 
  

	(a)	reduction of the Margin Loan A and/or the Margin Loan B and the commitment fees, 

  
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	(b)	extension of the due date for or the reduction of the amount of any payment of principal, interest or other amount payable under this Agreement,

  

	(c)	change in the currency in which any amount is payable under this Agreement, 

 

	(d)	extension of the Availability Period, 

  

	(e)	change of this Clause 26.2, 

  

	(f)	any release of any security created by any Security Document, any changes in any Security Document or the security requirements evidenced by the Security Documents or
this Agreement 

  

	(g)	a term of this Agreement which expressly requires the consent of each Lender and/or 

 

	(h)	a change of the definition of “Majority Lenders “, 

 may not be effected without the consent of each Lender. 
  

	26.3	Waivers and remedies cumulative 

 The
rights of the Finance Parties under the Finance Documents: 
  

	(a)	may be exercised as often as necessary; 

  

	(b)	are cumulative and not exclusive of its rights under the general law; and 

  

	(c)	may be waived only in writing and specifically. 

Delay in exercising or non-exercise of any such right is not a waiver of that right. 

 

	27.	CHANGES TO THE PARTIES 

  

	27.1	Transfer by the Borrower 

 The Obligors
may not assign, transfer, novate or dispose of any of, or any interest in, its rights and/or obligations under the Finance Documents. 
  

	27.2	Transfers by Lenders 

 Any of the Lenders
(the “Existing Lender”) may at any time assign, transfer or novate any of its rights and obligations under this Agreement to another bank or financial institution (such bank or institution being the “New Lender”), provided that
(save at any time when an Event of Default exists and has not been waived or remedied) no such assignment, transfer or novation may be made without the prior written consent also of the Borrower), such consent not to be unreasonably withheld or
delayed and to be deemed given in the event of no adverse response thereto from the Borrower within five (5) Business Days of its receipt of a request for approval of any such assignment, transfer or novation to any New Lender. The Borrower
shall not be liable for the transactions costs incurred in connection with any such transfers from the Existing Lender to a New Lender. 

  
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	28.	PRO RATA SHARING 

  

	28.1	Redistribution 

 If any amount owing by
the Borrower under this Agreement to a Lender (the “Recovering Lender”) is discharged by payment, set-off or any other manner other than through the Agent in accordance with Clause 10 (Payments) (a “recovery”),
then: 
  

	(a)	the recovering Lender shall, within three Business Days, notify details of the recovery to the Agent; 

 

	(b)	the Agent shall determine whether the recovery is in excess of the amount which the recovering Lender would have received had the recovery been received by the Agent
and distributed in accordance with Clause 10 (Payments); 

  

	(c)	subject to Clause 28.3 (Exceptions), the recovering Lender shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the
“redistribution”) equal to the excess; 

  

	(d)	the Agent shall treat the redistribution as if it were a payment by the Borrower under this Agreement and shall pay the redistribution to the Lender (other than the
recovering Lender) in accordance with Clause 10.7 (Partial payments); and 

  

	(e)	after payment of the full redistribution to the Agent, the recovering Lender will be subrogated to the portion of the claims paid under paragraph (d) above and the
Borrower will owe the recovering Lender a debt which is equal to the redistribution, immediately payable and of the type originally discharged. 

  

	28.2	Reversal of redistribution 

 If under
Clause 28.1 (Redistribution): 
  

	(a)	a recovering Lender must subsequently return a recovery, or an amount measured by reference to a recovery, to the Borrower; and 

 

	(b)	the recovering Lender has paid a redistribution in relation to that recovery, 

 each Lender shall, within three Business Days of demand by the recovering Lender through the Agent, reimburse the recovering Lender all or the appropriate portion of the redistribution paid to that
Lender. Thereupon, the subrogation in Clause 28.1 (e) will operate in reverse to the extent of the reimbursement. 

  
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	28.3	Exception 

  

	(a)	A recovering Lender needs not to pay a redistribution to the extent that it would not, after the payment, have a valid claim against the Borrower in the amount of the
redistribution pursuant to Clause 28.1 (e). 

  

	(b)	A Lender is not entitled to participate in a redistribution if the redistribution results from the proceeds of a judicial enforcement order obtained by the recovering
Lender and the other Lenders had adequate notice of and opportunity to participate in the proceedings concerned or bring their own proceedings but did not do so. 

 

	29.	SEVERABILITY 

 If a provision of this
Agreement is or becomes illegal, invalid or unenforceable in any competent jurisdiction, that shall not affect the validity or enforceability in that jurisdiction of any other provision of this Agreement or the validity or enforceability in other
jurisdictions of that or any other provision of this Agreement. 
  

	30.	NOTICES 

  

	30.1	Giving of notices 

 All notices or other
communications under or in connection with this Agreement shall be given or made in writing, by letter, telefax or S.W.I.F.T. Any such notice or communication will be deemed to be given or made as follows: 

 

	(a)	if by letter, when delivered at the address of the relevant Party; and 

  

	(b)	if by telefax or S.W.I.F.T., when received. 

However, a notice given in accordance with the above but received on a day which is not a Business Day or after 4:00 p.m. in the place of receipt will
only be deemed to be given at 9:00 a.m. on the next Business Day in that place. 
  

	30.2	Addresses for notices 

  

	(a)	The address, the telefax number and the S.W.I.F.T. code of each Party (other than the Agent and the Borrower) for all notices or other communications under or in
connection with this Agreement are those notified by that Party for this purpose to the Agent on or before the date it becomes a Party; or any other notified by that Party for this purpose to the Agent by not less than five Business Days’
notice. 

  
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	(b)	The address, the telefax number and the S.W.I.F.T. code: 

  

	 	(i)	of the Agent is: 

 Nordea Bank
Norge ASA 
 P.O.Box 1166 Sentrum 
 N – 0107 Oslo—Norway 
 Tel.: +47 22 48 49 71 

Fax.: +47 22 48 66 68 
 S.W.I.F.T. Code: NDEANOKK 
 Attn.: Shipping Department 

 

	 	(ii)	of the Borrower is: 

 KNOT
Shuttle Tankers 17 AS 
 Smedasundet 40 
 P.O.Box 2017 
 N – 5504 Haugesund 

Norway 
 Telefax:
+47 52 70 40 40 
 Attn.: Chairman of the Board 
 or such other address and/or telefax number and/or marked for such other attention as the Agent may notify to the other Parties by not less than five (5) Business Days’ prior notice. 

 

	(c)	All notices from or to the Borrower related to this Agreement shall be sent through the Agent. 

 

	(d)	The Agent shall, promptly upon request from any Party, give to that Party the address and/or the telefax number of any other Party applicable at the time for the
purposes of this Clause 30.2. 

  

	31.	JURISDICTION 

 For the benefit of the
Agent and each Lender, the Borrower agrees that the courts of Norway have jurisdiction to settle any disputes in connection with this Agreement. 
 The Borrower herewith submits to the non-exclusive jurisdiction of the Oslo district court. Nothing in this Clause 30 shall limit the right of the Agent or any Lender to start proceedings against the
Borrower in any other court of competent jurisdiction. 

  
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	32.	GOVERNING LAW 

 This Agreement shall be
governed by and construed in accordance with Norwegian law. 
 o o o O o o o 

  
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 SCHEDULE 1 
 LENDERS AND COMMITMENTS 
  

									
	 Loan A
	  	Amount	 	  	Share	 
	 Eksportfinans ASA

P.O.Box 1601 Vika

0119 Oslo
 Norway
	  	 	USD 40,000,000.-	  	  	 	100 	% 
	 Loan B
	  				  			
	 DNB Bank ASA

P.O.Box 7100 Sentrum

5020 Bergen
 Norway
	  	 	USD 5,000,000.-	  	  	 	50 	% 
	 Nordea Bank Norge ASA

P.O.Box 1166 Sentrum

0107 Oslo
 Norway
	  	 	USD 5,000,000.-	  	  	 	50 	% 
	 Total Loan B
	  	 	USD 10,000,000.-	  	  	 	100 	% 
	 Revolving Credit Facility
	  				  			
	 DNB Bank ASA

P.O.Box 7100 Sentrum

5020 Bergen
 Norway
	  	 	USD 10,000,000.-	  	  	 	50 	% 
	 Nordea Bank Norge ASA

P.O.Box 1166 Sentrum

0107 Oslo
 Norway
	  	 	USD 10,000,000.-	  	  	 	50 	% 
	 Total Revolving Credit Facility
	  	 	USD 20,000,000.-	  	  	 	100 	% 

  
 65/74

 SCHEDULE 2 
 Intentionally left blank 

  
 66/74

 SCHEDULE 3 
 FORM OF 
 DRAWDOWN NOTICE 

 

	To:	Nordea Bank Norge ASA as Agent 

P.O.Box 1166 Sentrum 
 N – 0107 Oslo - Norway 
 Tel.: +47 

Fax.: +47 

Attn.: [ ] 

S.W.I.F.T. Code: [ ] 

Date:    2011 

USD 120,000,000 LOAN AGREEMENT DATED 11 FEBRUARY 2011 (THE “AGREEMENT”) 
 We refer to Clause 5 of the Agreement. Capitalized terms used in this Drawdown Notice and not defined herein shall have the same meaning given to them in the Agreement. 

 

	l.	A.   We wish to draw Loan A as follows: 

  

	 	(a)	Drawdown Date:                      

 

	 	(b)	Instructions for payment of Loan A:                     

  

	 	B.	We wish to draw Loan B as follows: 

  

	 	(a)	Drawdown Date:                      

 

	 	(b)	Interest Period:                      

 

	 	(c)	Instructions for payment of Loan B:                     

  

	 	C.	We wish to draw the Revolving Credit Facility as follows: 

  

	 	(a)	Amount USD:                      

 

	 	(b)	Drawdown Date:                      

 

	 	(c)	Interest Period:                      

 

	 	(d)	Instructions for payment of the Revolving Credit Facility :
                     

  

	2.	We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Drawdown Notice. 

  
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	3.	We further confirm that: 

  

	 	(a)	no event or circumstance has occurred and is continuing, which constitutes, or which with the giving of notice or lapse of time or both, would constitute an Event of
Default under the Agreement; and that 

  

	 	(b)	the representations and warranties contained in Clause 18 (Representation and Warranties) of the Agreement are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such date. 

 By: 
 KNOT SHUTTLE TANKERS 17 AS 
 Authorised Signatory 

  
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 SCHEDULE 4 
 FORM OF 
 RENEWAL NOTICE 

 

	To:	Nordea Bank Norge ASA as Agent 

P.O.Box 1166 Sentrum 
 N – 0107 Oslo—Norway 
 Tel.: +47 

Fax.: +47 

Attn.: [    ] 
 S.W.I.F.T. Code: [    ] 
 Date:
         2011 
 USD 120,000,000 LOAN AGREEMENT DATED 11 FEBRUARY 2011 (THE
“AGREEMENT”) 
 We refer to Clause 8.1 (a) in the Agreement. Capitalized terms used in this Renewal Notice and not defined
herein shall have the meaning given to them in the Agreement. 
 We hereby: 

 

	1.	request an Interest Period for Loan B in respect of [•] months from the next Interest Payment Day; and 

 

	2.	confirm that 

  

	 	(i)	no event or circumstance has occurred and is continuing, which constitutes, or which with the giving of notice or lapse of time or both, would constitute an Event of
Default under the Agreement; and that 

  

	 	(ii)	the representations and warranties contained in Clause 17 (Representations and warranties) of the Agreement are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such date. 

  

			
	By:
	
	KNOT SHUTTLE TANKERS 17 AS
	
	Authorised signatory

  
 69/74

 SCHEDULE 5 
 FORM OF 
 COMPLIANCE CERTIFICATE 

 

	To:	Nordea Bank Norge ASA 

 Attn:

 Telefax No. 
 Date:
[{day}] [{month}] [{year}] 
 SECURED TERM LOAN FACILITY AGREEMENT DATED 11 FEBRUARY 2011 (THE “AGREEMENT”) 

With reference to the Agreement we hereby confirm as follows: 
  

					
	 FREE LIQUIDITY—KNOT Offshore Partners LP
  

Requirement > USD 15,000,000.-
  

(plus USD 1,500,000.- for each owned vessel with employment contract with less than 12 months remaining tenor.

 
 From the time KNOT Offshore Partners LPand its subsidiaries own in total eight (8)
vessels, the minimum free liquidity requirement of USD 15,000,000.- set out above shall be increased by USD 1,000,000.- for each additional vessel acquired by KNOT Offshore Partners LPor any subsidiary, plus USD1,500,000.- for each owned vessel with
employment contract with less than 12 months remaining tenor.)
	  	 NOK
  
 ==>
	  	  
  
  

Compliance: Yes / No

			
	 WORKING CAPITAL—the Borrower
  

Requirement > 0
	  	 NOK
  
 ==>
	  	Compliance: Yes / No
			
	 EBITDA—KNOT Offshore Partners LP (consolidated)
  

A      EBITDA
	  	 NOK
  
 ==>
	  	Compliance: Yes / No
			
	 B      Interest costs

 
 Requirement A/B>2.5
	  		  	

  
 70/74

							
			
	 MINIMUM EQUITY RATIO—MLP Group

 
 A      Book
Equity
  

B      Total Assets

 
 Requirement A/B >
30 %
	  	 NOK
  

==>
	  	  
  
	  
 Compliance: Yes / No
	  
   

			
	 MARKET VALUE VESSEL—ref Clause 18.20

 
 A = Market Value Vessel

 
 B = Loans

 
 Requirement :

(i) Year 4 A > 100 % of B

(ii) Year 5 A > 125 % of B

 
 Valuation report from
[            ] dated [            ] enclosed
  

Valuation report from [            ] dated
[            ] enclosed
	  	  
  
 USD
  

USD
	  			

  

			
	CHANGES IN MANAGEMENT, BOARD OF DIRECTORS AND AUDITORS	  	
		
	Changes in management and/or board of directors in the Borrower	  	Yes / No
		  	give info if yes
		
	Changes in management and/or board of directors in KNOT Offshore Partners LP	  	Yes / No
		  	give info if yes
		
	Changes in management and/or board of directors in KNOT Shuttle Tankers AS	  	Yes / No
		  	give info if yes
		
	Changes of auditors	  	Yes / No
		  	give info if yes

 It is hereby certified, by the undersigned, that there are no known or pending Events of Default as of this date.
Furthermore, it is hereby certified that the above representations are true and correct. 
 The above covenant calculations are made as of, and
in respect of the 3 months period ending on                    . 

  
 71/74

 Certified on this
                    day of                     

  

			
	KNOT SHUTTLE TANKERS 17 AS
		
	By	 	 
		
	Date	 	 
	
	KNOT OFFSHORE PARTNERS L.P
		
	By	 	 
		
	Date	 	 
	
	KNOT SHUTTLE TANKERS AS
		
	By	 	 
		
	Date	 	 

  
 72/74

 EXECUTION PAGE 
 The Borrower: 
  

			
	KNOT SHUTTLE TANKERS 17 AS
	
	 
	
	 
	Name in block letters
	
	The Guarantor:
	
	KNOT OFFSHORE PARTNERS LP
	
	 
	
	 
	Name in block letters
	
	The Guarantor:
	
	KNOT SHUTTLE TANKERS AS
	
	 
	
	 
	Name in block letters
	
	The Parent Guarantor:
	
	KNUTSEN NYK OFFSHORE TANKERS AS
	
	 
	
	 
	Name in block letters

  
 73/74

			
	The Lender for Loan A:
	
	EKSPORTFINANS ASA
	
	 
	
	 
	Name in block letters
	
	As lender for Loan B and the Revolving Credit Facility, Bookrunner and Mandated Lead Arrangers
	
	DNB BANK ASA
	
	 
	
	 
	Name in block letters
	
	As lender for Loan B and the Revolving Credit Facility, Bookrunner, Mandated Lead Arrangers and Agent
	
	NORDEA BANK NORGE ASA
	
	 
	
	 
	Name in block letters

  
 74/74

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