Document:

exv4w1

 

Exhibit 4.1

USD 45,000,000

TERM LOAN AGREEMENT

for

Kommandor LLC

as Borrower

provided by

The Financial Institutions

listed in Schedule 1

as Lenders

with

Nordea Bank Norge ASA

as Arranger

Nordea Bank Norge ASA

as Agent

and

Nordea Bank Finland Plc.

as Swap Bank

Dated 13 June 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	1
	 	DEFINITIONS AND INTERPRETATION	 	 	4	 
	2
	 	THE FACILITY	 	 	14	 
	3
	 	PURPOSE	 	 	15	 
	4
	 	CONDITIONS PRECEDENT	 	 	15	 
	5
	 	DRAWDOWN	 	 	15	 
	6
	 	REPAYMENT	 	 	16	 
	7
	 	PREPAYMENT AND CANCELLATION	 	 	16	 
	8
	 	INTEREST	 	 	18	 
	9
	 	INTEREST PERIODS	 	 	19	 
	10
	 	CHANGES TO THE CALCULATION OF INTEREST	 	 	19	 
	11
	 	FEES	 	 	20	 
	12
	 	TAX GROSS-UP AND INDEMNITIES	 	 	20	 
	13
	 	INCREASED COSTS	 	 	21	 
	14
	 	OTHER INDEMNITIES	 	 	22	 
	15
	 	MITIGATION BY THE LENDERS	 	 	23	 
	16
	 	COSTS AND EXPENSES	 	 	24	 
	17
	 	SECURITY	 	 	24	 
	18
	 	REPRESENTATIONS AND WARRANTIES	 	 	25	 
	19
	 	INFORMATION UNDERTAKINGS	 	 	29	 
	20
	 	FINANCIAL COVENANTS	 	 	30	 
	21
	 	GENERAL UNDERTAKINGS	 	 	31	 
	22
	 	VESSEL COVENANTS	 	 	33	 
	23
	 	EVENTS OF DEFAULT	 	 	37	 
	24
	 	CHANGES TO THE PARTIES	 	 	40	 
	25
	 	ROLE OF THE AGENT AND THE ARRANGER	 	 	42	 
	26
	 	SHARING AMONG THE FINANCE PARTIES	 	 	46	 
	27
	 	PAYMENT MECHANICS	 	 	48	 
	28
	 	SET-OFF	 	 	49	 
	29
	 	NOTICES	 	 	49	 
	30
	 	CALCULATIONS	 	 	49	 
	31
	 	MISCELLANEOUS	 	 	51	 
	32
	 	GOVERNING LAW AND ENFORCEMENT	 	 	52	 

2

 

SCHEDULES

	1	 	Lenders and Commitments
	 
	2	 	Conditions Precedent
	 
	3	 	Form of Drawdown Notice
	 
	4	 	Form of Selection Notice
	 
	5	 	Form of Compliance Certificate
	 
	6	 	Form of Transfer Certificate
	 
	7	 	Form of Assignment Agreement

3

 

THIS TERM LOAN AGREEMENT is dated 13 June 2007 and made between:

	(1)	 	Kommandor LLC of Corporation Trust Center, 1209 Orange Street, City of Wilmington, Delaware,
USA, as borrower (the “Borrower”);

	(2)	 	The banks and financial institutions listed in Schedule 1, as original lenders
(together, the “Lenders”);

	(3)	 	Nordea Bank Norge ASA of Middelthunsgate 17, N-0368 Oslo, Norway, organisation number 911 044
110, as facility agent (the “Agent”);

	(4)	 	Nordea Bank Norge ASA of Middelthunsgt. 17, N-0368 Oslo, Norway, organisation number 911 044
110, as arranger (the “Arranger”); and

	(5)	 	Nordea Bank Finland Plc. of TO1, FIN-00020 Nordea, Helsinki, Finland, as swap bank (the “Swap
Bank”).

IT IS AGREED as follows:

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions

	In this Agreement, unless the context otherwise requires:	 	 
	 
	“Account Pledge” means the pledge over the Earnings Account and any other accounts as agreed
between the Borrower and the Agent (on behalf of the Finance Parties and the Swap Bank) as security
for the Borrower’s obligations under this Agreement and any Swap Agreement, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Swap Bank).	 	 
	 
	“Additional Conversion” means the Bareboat Charterer’s conversion of the Vessel into a floating
production unit by installing the TPF on top of the Vessel’s deck.	 	 
	 
	“Agreement” means this term loan facility agreement, as it may be amended, supplemented and varied
from time to time, including its Schedules and any Transfer Certificate.	 	 
	 
	“Assignment Agreement” means the assignment agreement collateral to this Agreement to be made
between the Borrower and the Agent (on behalf of the Finance Parties and the Swap Bank) for the
first priority assignment of the Earnings and Insurances, as security for all amounts due from time
to time under this Agreement and any Swap Agreement, substantially in the form set out in
Schedule 7 (Form of Assignment Agreement).	 	 
	 
	“Availability Period” means the period from and including the date of this Agreement up to and
including 31 March 2008.	 	 
	 
	“Available Commitment” means a Lender’s Commitment less the amount of its participation in the Loan
outstanding.	 	 
	 
	“Bareboat Agent” means Bank of America N.A., as Administrative Agent for the Bareboat Lenders.	 	 
	 
	“Bareboat Charterer” means Helix Energy Solutions Group, Inc., a Minnesota corporation	 	 .

4

 

“Bareboat Charterer Security” means:

	a)	 	the Bareboat Charterer Share Pledge;

	b)	 	the UCCI Charge; and

	c)	 	the Second Mortgage.

	 “Bareboat Charterer Share Pledge” means the pledge (such pledge to have first priority if required
by the Bareboat Agent (on behalf of the Bareboat Lenders) by the Bareboat Charterer of all of its
shares in the Borrower in favour of the Bareboat Agent (on behalf of the Bareboat Lenders) as
security for its obligations under the Bareboat External Funding.	 	 
	 
	“Bareboat Charterer Undertaking” means an undertaking from the Bareboat Charterer in favour of the
Agent (on behalf of the Finance Parties) relating to certain matters relating to the Bareboat
Charterer, the Vessel and the operation of the Vessel, in form and substance satisfactory to the
Agent.	 	 
	 
	“Bareboat Charterparty” means the bareboat charterparty to be made between the Borrower (as owner)
and the Bareboat Charterer prior to the Drawdown Date for the bareboat charter of the Vessel to the
Bareboat Charterer for a period of ten (10) years, commencing on the Delivery Date at a daily net
charter hire in USD of not less than zero point four per thousand (0.4 ‰) of the Project Cost, in
form and substance as approved by the Agent (on behalf of the Finance
Parties and the Swap Bank).	 	 
	 
	“Bareboat Charterparty Assignment” means the deed of assignment collateral to this Agreement for
the first priority assignment of the Bareboat Charterparty to be made between the Borrower and the
Agent (on behalf of the Finance Parties and the Swap Bank) as security for the Borrower’s
obligations under this Agreement and any Swap Agreement(s), in form and substance as approved by
the Agent (on behalf of the Finance Parties and the Swap Bank).	 	 
	 
	“Bareboat External Funding” means the Credit Agreement dated as of 30 July 2006 among the Bareboat
Charterer as borrower, the Bareboat Lenders and the Bareboat Agent.	 	 
	 
	“Bareboat Facility” means the facility provided by the Bareboat Charterer to the Borrower as a part
of the pre-delivery financing of the Vessel, in form and substance satisfactory to the Agent (on
behalf of the Finance Parties and the Swap Bank).	 	 
	 
	“Bareboat Lenders” means the lenders providing the Bareboat External Funding.	 	 
	 
	“Break Costs” means
the amount (if any) by which:	 	 

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

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

5

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business
in Oslo, New York and London (or any other relevant place of payment under Clause 27 (Payment
mechanics)).

“Closing Date” means a date on which all Finance Documents have been agreed and signed, however no
later than 15 March 2007.

“Commitment” means:

	a)	 	in relation to a Lender, the amount set opposite its name under the heading “Commitments” in
Schedule 1 (Lenders and Commitments) and the amount of any other Commitment
transferred to it pursuant to Clause 24.2 (Assignments and transfers by the Lenders); and

	b)	 	in relation to any New Lender, the amount of any Commitment transferred to it pursuant to
Clause 24.2 (Assignments and transfers by the Lenders),

	to the extent not cancelled, reduced or transferred by it under this Agreement.	 	 
	 
	“Company” means, at any given time in relation to the Vessel, the company responsible for the
Vessel’s compliance with the ISM Code pursuant to paragraph 1.1.2 of the ISM Code.	 	 
	 
	“Compliance Certificate” means a certificate substantially in the form as set out in Schedule
5 (Form of Compliance Certificate).	 	 
	 
	“Conversion Contract” means the conversion contract dated 7 April 2006 as subsequently amended and
assigned from time to time between Hays Maritime DK ApS (and subsequently assigned to the Borrower)
and the Yard for the conversion of the Vessel into an offshore construction vessel and for the
redelivery by the Yard of the Vessel following the conversion.	 	 
	 
	“Default” means an Event of Default or any event or circumstance specified in Clause 23 (Events of
Default) which would (with the expiry of a grace period, the giving of notice, the making of any
determination under the Finance Documents or any combination of any of the foregoing) be an Event
of Default.	 	 
	 
	“Delivery Date” means the date the Vessel is actually redelivered to the Borrower under the
Conversion Contract, such redelivery being scheduled to occur in October 2007.	 	 
	 
	“DOC” means in relation to the Technical Manager (if any) or the Bareboat Charterer a valid
document of compliance issued to the Technical Manager (if any) of the Bareboat Charterer pursuant
to paragraph 13.2 of the ISM Code.	 	 
	 
	“Drawdown Date” means the Delivery Date or, as the context requires, the date on which the Loan is
actually made.	 	 
	 
	“Drawdown Notice” means the notice substantially in the form set out in Schedule 3 (Form of
Drawdown Notice).	 	 
	 
	“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or
contingently) to the Borrower and which arise out of the use of or operation of the Vessel,
including (but not limited to):	 	 

6

 

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

	b)	 	any claim under any guarantees related to freight and hire payable to the Borrower as a
consequence of the operation of the Vessel;

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

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

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

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

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

	h)	 	any other money whatsoever due or to become due to the Borrower from third parties in
relation to the Vessel, or otherwise.

“Earnings Account” means USD account no. 8911013002 with Nordea Bank Finland Plc, New York Branch
and USD account no. 8911012002 with Nordea Bank Finland Plc, Grand Cayman Branch, or any other
account agreed between the Borrower and the Agent, of the Borrower with the Agent to which all the
Earnings shall be paid.

“Environmental Approval” means any permit, licence, consent, approval and other authorisations and
the filing of any notification, report or assessment required under any Environmental Law for the
operation of the Vessel.

“Environmental Claim” means any claim, proceeding or investigation by any party in respect of any
Environmental Law or Environmental Approval.

“Environmental Law” means any applicable law, regulation, convention or treaty in any jurisdiction
in which the Borrower and/or the Bareboat Charterer conduct business which relates to the pollution
or protection of the environment or to the carriage of material which is capable of polluting the
environment.

“Event of Default” means any event or circumstance specified as such in Clause 23 (Events of
Default).

“Facility” means the term loan facility made available under this Agreement as described in Clause
2.1 (Facility).

“Fee Letter” means the letter dated 28 September 2006 between the Arranger and the Borrower (or the
Agent and the Borrower) setting out any fees referred to in Clause 11 (Fees).

7

 

“Final Maturity Date” means the day falling seven (7) years (eighty-four (84) months) after the
Delivery Date.

“Finance Documents” means this Agreement, the Security Documents, the Intercreditor Agreement, the
Fee Letter, the Bareboat Charterer Undertaking and any other document (whether creating a Security
Interest or not) which is executed at any time by the Borrower or any other person as security for,
or to establish any form of subordination to the Finance Parties under this Agreement or any of the
other documents referred to herein or therein.

“Finance Party” means the Agent, the Arranger and the Lenders.

“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 instruments;

	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;

	i)	 	any amount raised by the issue of redeemable shares;

	j)	 	any amount of any liability under an advance or deferred purchase agreement if one of the
primary reasons behind the entry into such agreement is to raise finance; and

	k)	 	(without double counting) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (j) above.

“Financial Support” means the making of any (whether actual or contingent) loans, credit or
guarantee, indemnity or other assurance against financial loss to or for the benefit of any person,
or otherwise voluntarily assume any liability in respect of any obligation of any other person.

“FPU Equipment” means, following the Additional Conversion, the TPF and other assets attached,
installed or rigged on the Vessel from time to time.

8

 

“Free Cash” means the amounts (expressed in USD or USD equivalent) which are standing to the credit
of current and deposit accounts with the Agent, excluding any amounts to which the right of access
or use is blocked or restricted (whether by way of encumbrances or otherwise).

“GAAP” means generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.

“Insurances” means, in relation to the Vessel, all policies and contracts of insurance (which
expression includes all entries of the Vessel in a protection and indemnity or war risk
association) which are from time to time during the Security Period in place or taken out or
entered into by or for the benefit of the Borrower (whether in the sole name of the Borrower or in
the joint names of the Borrower and any other person) in respect of the Vessel or otherwise in
connection with the Vessel and all benefits thereunder (including claims of whatsoever nature and
return of premiums).

“Intercreditor Agreement” means the intercreditor agreement made or to be made between the
Borrower, the Agent, the Lenders, the Arranger, the Swap Bank, the Bareboat Charterer and the
Bareboat Agent on behalf of the Bareboat Lenders, covering among other things the matters set forth
in Clause 17.3 (Intercreditor Agreement) hereof.

“Interest Payment Date” means the last Business Day of each Interest Period.

“Interest Period” means, in relation to the Loan, each of the successive periods determined in
accordance with Clause 9.1 (Selection of Interest Periods), and, in relation to an Unpaid Sum, each
period determined in accordance with Clause 8.3 (Default interest).

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

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the
International Maritime Organization’s (IMO) Diplomatic Conference of December 2002.

“Lenders” means the banks and financial institutions listed in Schedule 1 (Lenders and
Commitments) and any New Lender, which in each case has not ceased to be a Party in accordance with
the terms of this Agreement.

“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’ page LIBOR01, published or reported by Reuter’s through its monitor service or any
equivalent successor to such service at or about 11:00 hours (London time) on the applicable
Quotation Day; or

	b)	 	if no such rate is available, the rate per annum at which the Lenders are able to acquire USD
for the relevant Interest Period in the London interbank Euro-currency market at or about
11:00 hours (London time) on the applicable Quotation Day, as conclusively certified by the
Agent to the Borrower.

9

 

“Loan” means the lower amount of (i) the amount equal to sixty per cent (60%) of the Project Cost
and (ii) USD 45,000,000, or as the context requires, the aggregate principal amount outstanding
under this Agreement from time to time.

“Majority Lenders” means:

	a)	 	if there is no Loan outstanding, a Lender or Lenders whose Commitments aggregate more than
51% of the Total Commitments (or, if the Total Commitments have been reduced to zero,
aggregated more than 51% of the Total Commitments immediately prior to the reduction); or

	b)	 	at any time, a Lender or Lenders whose participations in the Loan then outstanding aggregate
more than 51% of the Loan then outstanding.

“Margin” means zero point ninety-five per cent (0.95%) per annum.

“Market Value” means the aggregate fair market value of the Vessel, being the average of valuations
of the Vessel obtained from two (2) reputable and independent ship brokers, to be appointed by the
Agent, with or without physical inspection of the Vessel (as the Agent may require, but no physical
inspection shall be required following the Additional Conversion) on the basis of a sale for prompt
delivery for cash at arm’s length on normal commercial terms as between a willing buyer and a
willing seller, on an “as is, where is” basis, free of any existing charter or other contract of
employment and/or pool arrangement.

“Material Adverse Effect” means a change in the business, assets or financial position of the
Borrower which in the Majority Lenders’ reasonable opinion will adversely affect the ability of
the Borrower to comply with its obligations under the relevant Finance Documents.

“Mortgage” means the first priority mortgage (and any deed of covenants collateral thereto), to be
executed and recorded by the Borrower against the Vessel in the Ship Registry in favour of the
Agent (on behalf of the Finance Parties and the Swap Bank), in form and substance satisfactory to
the Agent (on behalf of the Finance Parties and the Swap Bank).

“New Lender” has the meaning set out in Clause 24 (Changes to the Parties).

“Operating Agreement” means the operating agreement dated 5 October 2006 between the Partners
regarding their joint ownership of the Borrower.

“Original Financial Statements” means the opening balance sheet of the Borrower as of 31 December
2006 prepared in accordance with GAAP.

“Partners” means Rømø and the Bareboat Charterer.

“Party” means a party to this Agreement (including its successors and permitted transferees).

“Project Cost” means the project cost for the purchase price of the Vessel, the conversion of the
Vessel under the Conversion Contract, owner’s delivery and related costs (including, but not
limited to, finance, insurance and supervision costs), such project cost estimated at USD
75,000,000 and with any project costs in excess of USD 75,000,000 to be covered by capital
contributions from the Partners, subject to the limits set forth in the Operating Agreement.

“Quotation Day” means the day occurring two (2) Business Days prior to the commencement of an
Interest Period.

10

 

“Rømø” means Kommandør Rømø A/S of Denmark.

“Second Mortgage” means the second priority mortgage and any deed of covenants collateral thereto,
to be executed and recorded by the Borrower against the Vessel in the Ship Registry in favour of
the Bareboat Agent as security for the Bareboat External Funding, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Swap Bank).

“Security Documents” means all or any security documents as may be entered into from time to time
pursuant to Clause 17 (Security).

“Security Interest” means any mortgage, charge (whether fixed or floating), encumbrance, pledge,
lien, assignment by way of security, finance lease, sale and repurchase or sale and leaseback
arrangement, sale of receivables on a recourse basis or other security interest or any other
agreement or arrangement having the effect of conferring security.

“Security Period” means the period commencing on the date of this Agreement and ending the date on
which the Agent notifies the Borrower, the other Finance Parties and the Swap Bank that:

	a)	 	all amounts which have become due for payment by the Borrower or any other party under the
Finance Documents and any Swap Agreement have been paid;

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

	c)	 	the Borrower has no future or contingent liability under any provision of this Agreement, the
other Finance Documents and/or any Swap Agreement; and

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

“Selection Notice” means a notice substantially in the form set forth in Schedule 4 (Form
of Selection Notice) given in accordance with Clause 9.1 (Selection of Interest Periods).

“Share Pledge” means the first priority pledge by Rømø of all of its shares in the Borrower in
favour of the Agent (on behalf of the Finance Parties and the Swap Bank) as security for all
amounts due from time to time under this Agreement and any Swap Agreement, in form and substance
satisfactory to the Agent (on behalf of the Finance Parties and the Swap Bank) (such pledge (i) not
to apply to or (ii) only to rank second priority, in respect of the Bareboat Charterer’s shares in
the Borrower).

“Ship Registry” means the Bahamas Ship Registry, in which the Vessel shall be registered, or such
other ship registry as approved by the Agent in writing.

“SMC” means a valid safety management certificate issued for the Vessel pursuant to paragraph 13.7
of the ISM Code.

11

 

“SMS” means a safety management system for the Vessel developed and implemented in accordance with
the ISM Code and including the functional requirements duties and obligations that follow from the
ISM Code.

“Subordinated Loan Agreement” means the subordinated loan agreement dated 31 October 2006 between
Rømø and the Borrower whereby Rømø has made available a loan in the amount of USD 5,000,000 to the
Borrower as a part of the pre-delivery financing of the Vessel.

“Swap Agreement” means any interest rate or currency swap agreement or agreements, hereunder any
ISDA Master Agreement and any schedules and confirmations thereto, to be made between the Borrower
and the Swap Bank in relation to interest and currency hedging for a hedging line of up to USD
3,000,000.

“Tax on Overall Net Income” means a Tax imposed on a Finance Party by the jurisdiction under the
laws of which it is incorporated, or in which it is located or treated as resident for tax
purposes, on:

	a)	 	the net income, profits or gains of that Finance Party world wide; or

	b)	 	such of the net income, profits or gains of that Finance Party as are considered to arise in
or relate to or are taxable in that jurisdiction.

“Taxes” means all present and future taxes, levies, imposts, duties, charges, fees, deductions and
withholdings, and any restrictions and or conditions resulting in a charge together with interest
thereon and penalties in respect thereof and “tax” and “taxation” shall be construed accordingly.

“Technical Management Agreement” means any agreement entered into between the Bareboat Charterer
and the Technical Manager for the technical management of the Vessel.

“Technical Manager” means such technical manager as approved by the Agent (on behalf of the
Lenders) (if any).

“Total Commitments” means the aggregate of the Commitments, being the lower amount of (i) the
amount equal to sixty per cent (60%) of the Project Cost and (ii) USD 45,000,000, at the date of
this Agreement.

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

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

	b)	 	any expropriation, confiscation, requisition or acquisition of the Vessel, whether for full
consideration, a consideration less than its proper value, a nominal consideration or without
any consideration, which is effected by any government or official authority or by any person
or persons claiming to be or to represent a governmental or official authority (excluding a
requisition for hire for a fixed period not exceeding one (1) year without any right to
extension) unless it is within one (1) month from the Total Loss Date redelivered to the full
control of the Borrower.

“Total Loss Date” means:

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

12

 

	b)	 	in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the
earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a
claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit
such a claim, at the date at which either a total loss is subsequently admitted by the
insurers or a total loss is subsequently adjudged by a competent court of law or arbitration
panel to have occurred or, if earlier, the date falling six (6) months after notice of
abandonment of the Vessel was given to the insurers; and (ii) the date of compromise,
arrangement or agreement made by or on behalf of the Borrower with the Vessel’s insurers in
which the insurers agree to treat the Vessel as a total loss; or

	c)	 	in the case of any other type of total loss, on the date (or the most likely date) on which
it appears to the Agent that the event constituting the total loss occurred.

“TPF” means the production facility to be installed on the top of the Vessel’s deck by the Bareboat
Charterer for separation of oil and gas, following the Delivery Date

“Transaction Documents” means the Finance Documents, the Conversion Contract, the Bareboat
Charterparty, the Technical Management Agreement (if any), the Subordinated Loan Agreement, the
Operating Agreement and the Swap Agreement, together with the other documents contemplated herein
or therein.

“Transfer Certificate” means a certificate substantially in the form as set out in Schedule
6 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

“Transfer Date” means, in respect of a Transfer (as defined in Clause 24.2 (Assignments and
transfers by Lenders)), the proposed Transfer Date as set out in the Transfer Certificate relating
to the Transfer.

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

“UCCI Charge” means the first priority charge to be executed and registered by the Borrower over
the FPU Equipment in favour ofthe Bareboat Agent as security for the Bareboat External Funding.

“USD” means United States Dollars, being the lawful currency of the United States of America.

“VAT” means value added tax.

“Vessel” means MV “Karl” (t/b/r “Helix Producer 1”), a 1986 built train ferry to be rebuilt to an
offshore construction support vessel of 18,800 dwt, 161m length and 29m beam to be delivered to the
Borrower from the Yard under the Conversion Contract in October 2007 and registered in the name of
the Borrower in the Ship Registry.

“Yard” means Brodogradiliste Viktor Lenac d.d. u. stecaju, Croatia.

	1.2	 	Construction

In this Agreement, unless the context otherwise requires:

	a)	 	Clause and Schedule headings are for ease of reference only;

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	b)	 	words denoting the singular number shall include the plural and vice versa. In particular,
for so long as Nordea Bank Norge ASA is the only Lender, references to “Lenders” or “Majority
Lenders” shall be construed as a reference to Nordea Bank Norge ASA;

	c)	 	references to Clauses and Schedules are references, respectively, to the Clauses and
Schedules of this Agreement;

	d)	 	references to a provision of law is a reference to that provision as it may be amended or
re-enacted, and to any regulations made by the appropriate authority pursuant to such law;

	e)	 	references to “control” means the power to appoint a majority of the board of directors or to
direct the management and policies of an entity, whether through the ownership of voting
capital, by contract or otherwise;

	f)	 	a Default is “continuing” if it has not been remedied or waived;

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

	h)	 	references to a “person” shall include any individual, firm, partnership, joint venture,
company, corporation, trust, fund, body, corporate, unincorporated body of persons, or any
state or any agency of a state or association (whether or not having separate legal
personality).

	2	 	THE FACILITY

	2.1	 	Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrower a USD secured
term loan facility in the aggregate amount equal to the Total Commitments.

	2.2	 	Finance Parties’ rights and obligations

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance
Party to perform its obligations under the Finance Documents does not affect the obligations of any
other Party under the Finance Documents. No Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.

The rights of each Finance Party under or in connection with the Finance Documents are separate and
independent rights and any debt arising under the Finance Documents to a Finance Party from the
Borrower shall be a separate and independent debt. A Finance Party may, except as otherwise stated
in the Finance Documents, separately enforce its rights under the Finance Documents with respect to
notices to the Borrower in respect of Events of Default and the prosecution of claims for a
deficiency judgement if the proceeds from the Security Interest provided to the Finance Parties is
insufficient to repay the Unpaid Sum due to such Finance Party in full. The Finance Parties agree
that unless and until the Agent has transferred its rights and obligations to the Finance Parties
in writing, the Finance Parties shall not seek to enforce any Security Interest hereunder except to
exercise any right of setoff such Finance Party may have in respect to deposits of the Borrower.

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	3	 	PURPOSE

	3.1	 	Purpose

The Borrower shall apply all amounts borrowed by it hereunder towards refinancing the subordinated
loan under the Subordinated Loan Agreement and the Bareboat Facility and for the long term
financing of the Vessel, however always limited to an amount equal to the lower of (i) USD
45,000,000 and (ii) 60% of the Project Costs.

	3.2	 	Monitoring

Without prejudice to the obligations of the Borrower under this Clause 3, no Finance Party is bound
to monitor or verify the application of any amount borrowed pursuant to this Agreement.

	4	 	CONDITIONS PRECEDENT

	4.1	 	Initial conditions precedent

	a)	 	At the time of signing of this Agreement, the Borrower shall deliver the documents and other
evidence listed in Schedule 2 Part I (Condition precedent – Signing) to the Agent, in
form and substance satisfactory to the Agent (acting reasonably).

	b)	 	The Borrower may not deliver a Drawdown Notice unless the Agent has received originals or
certified copies of all of the documents and other evidence listed in Schedule 2 Part
II (Conditions precedent — Drawdown) other than the documents listed in items 3a, 3g) and 4g)
which shall be delivered at the Drawdown Date at the latest, in form and substance
satisfactory to the Agent (acting reasonably). The Agent shall notify the Borrower and the
Lenders promptly upon being so satisfied.

	4.2	 	Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on the date
of the Drawdown Notice and on the proposed Drawdown Date:

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

	b)	 	the representations and warranties contained in Clause 18 (Representations and warranties)
deemed to be repeated on those dates are true and correct in all material respects.

	4.3	 	Maximum number of drawings

The Facility may be drawn in one amount only.

	4.4	 	Waiver of conditions precedent

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

	5	 	DRAWDOWN

	5.1	 	Delivery of the Drawdown Notice

The Borrower may utilise the Loan by delivering to the Agent the duly completed Drawdown Notice no
later than 10:00 hours (London time) three (3) (and if parts of the Facility is syndicated to
lenders other than Nordea Bank Norge ASA, four (4)) Business Days prior to the proposed Drawdown
Date.

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	5.2	 	Completion of the Drawdown Notice

The Drawdown Notice is irrevocable and will not be regarded as having been duly completed unless:

	a)	 	the proposed Drawdown Date is a Business Day within the Availability Period;

	b)	 	the currency specified is USD and the amount of the proposed Loan is an amount which is not
more than the Total Commitments; and

	c)	 	the proposed Interest Period complies with Clause 9 (Interest Periods).

	5.3	 	Availability

Any amount of the Total Commitments not utilised by the expiry of the Availability Period shall
automatically be cancelled at close of business in Oslo on such date.

	5.4	 	Lenders’ participation

Upon receipt of the Drawdown Notice, the Agent shall notify each Lender of the details of the
requested Loan and the amount of each Lender’s participation in the Loan. If the conditions set out
in this Agreement have been met, each Lender shall no later than 10:00 hours (London time) on the
Drawdown Date make available to the Agent for the account of the Borrower an amount equal to its
participation in the Loan to be advanced pursuant to the Drawdown Notice.

	6	 	REPAYMENT

	6.1	 	Repayment

The Borrower shall repay the Loan in twenty-eight (28) quarterly consecutive instalments, each
being in an amount equal to 1/28 of the amount of the Facility, the first instalment falling due
three (3) months after the Delivery Date. Any principal amount outstanding shall be due and payable
together with the final instalment at the Final Maturity Date, as well as all other sums due and
outstanding hereunder at such date.

	6.2	 	Re-borrowing

The Borrower may not re-borrow any part of the Loan which is repaid.

	7	 	PREPAYMENT AND CANCELLATION
	 
	7.1	 	Mandatory prepayment – Total Loss or sale

If the Vessel is sold (or otherwise disposed of), becomes a Total Loss, the Bareboat Charterparty
is terminated for whatever reason or early termination fees are paid under the Bareboat
Charterparty, the Borrower shall be obliged to prepay the Loan:

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

	b)	 	in the case of a Total Loss, on the earlier of the date falling one hundred and twenty (120)
days after the Total Loss Date and the receipt by the Agent (on behalf of the Finance Parties
and the Swap Bank) of the proceeds of Insurance relating to such Total Loss (or in the event
of a requisition for title of the Vessel, within sixty (60) days after the occurrence of such
requisition of title); or

	c)	 	in the case of early termination fees under the Bareboat Charterparty, at the payment date
for such early termination fees.

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	7.2	 	Mandatory prepayment – illegality

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

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

	b)	 	the Agent shall promptly notify the Borrower (specifying the obligations the performance of
which is thereby rendered unlawful and the law giving rise to the same) upon receipt of
notification in accordance with litra a) above;

	c)	 	upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately
cancelled; and

	d)	 	the Borrower shall prepay that Lender’s participation in the Loan made to the Borrower on the
last day of the Interest Period occurring after the Agent has notified the Borrower or, if
earlier, the date specified by the Lender in the notice delivered to the Agent (being no
earlier than the last day of any applicable grace period permitted by law).

	7.3	 	Voluntary prepayment

The Borrower may, on the last day of an Interest Period, if it gives the Agent not less than ten
(10) Business Days’ prior written notice, prepay the whole or any part of the Loan (but if in part,
being an amount of minimum USD 250,000 and in integral multiples of USD 250,000).

	7.4	 	Voluntary cancellation

The Borrower may, on the last day of an Interest Period, if it gives the Agent not less than ten
(10) Business Days’ prior notice, cancel the whole or any part (but if in part, being in a minimum
amount of USD 250,000 and in integral multiples of USD 250,000) of the Total Commitments.

Any cancellation under this Clause 7.4 shall reduce the Commitments of the Lenders rateably under the Facility.

	7.5	 	Terms and conditions for prepayments and cancellation
	 
	7.5.1	 	Irrevocable notice

Any notice of prepayment or cancellation by the Borrower under this Clause 7 shall be irrevocable
and, unless a contrary indication appears in this Agreement, shall specify the date upon which the
prepayment or cancellation is to be made.

	7.5.2	 	Additional payments

Any prepayment under this Agreement shall be made together with accrued interest on the amount
prepaid and, subject to Clause 10.3 (Break Costs), without premium or penalty.

	7.5.3	 	No re-borrowing

The Borrower may not re-borrow any part of the Loan which is prepaid.

	7.5.4	 	Time of prepayment and cancellation

The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the
Commitments except at the times and in the manner expressly provided for in this Agreement.

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	7.5.5	 	No reinstatement

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

	7.5.6	 	Forwarding of notice of prepayment and cancellation

If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice
to the Borrower or the affected Lender, as appropriate.

	7.5.7	 	Application

Any amount prepaid pursuant to this Clause 7 shall be applied against the remaining instalments set
forth in Clause 6.1 (Repayment) in inverse order of maturity and shall reduce rateably each
Lender’s participation in the Loan.

	8	 	INTEREST

	8.1	 	Calculation of interest

The rate of interest for the Loan for each Interest Period is the percentage rate per annum which
is the aggregate of:

	a)	 	the Margin; and

	b)	 	LIBOR.

Effective interest pursuant to the Norwegian Financial Agreement Act 1999 has been calculated by
the Agent as set out in a separate notice from the Agent to the Borrower.

	8.2	 	Payment of interest

The Borrower shall pay accrued interest on the Loan on each Interest Payment Date (and if the
Interest Period is longer than three (3) months, on the date falling at three (3) monthly intervals
after the first day of the Interest Period).

	8.3	 	Default interest

If the Borrower fails to pay any amount payable by it under the Finance Documents on its due date,
interest shall accrue on the overdue amount from the due date and up to the date of actual payment
(both before and after judgment) at a rate determined by the Agent to be two per cent (2.00%)
higher than the rate which would have been payable if the overdue amount had, during the period of
non-payment, constituted the Loan in the currency of the overdue amount for successive Interest
Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under
this Clause 8.3 shall be immediately payable by the Borrower on demand by the Agent. Default
interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the
end of each Interest Period applicable to that overdue amount but will remain immediately due and
payable.

	8.4	 	Notification of rates of interest

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

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	9	 	INTEREST PERIODS
	 
	9.1	 	Selection of Interest Periods

	a)	 	The Borrower may select an Interest Period for the Loan in the Drawdown Notice or (if the
Loan has already been borrowed) in a Selection Notice.

	b)	 	Each Selection Notice is irrevocable and must be received by the Agent not later than 11:00
hours (London time) one (1) Business Day before the Quotation Day for that Interest Period.

	c)	 	If the Borrower fails to deliver a Selection Notice to the Agent in accordance with litra b)
above, the relevant Interest Period will be three (3) months.

	d)	 	The Borrower may select an Interest Period of one (1), three (3) or six (6) months or any
such other period agreed between the Borrower and the Agent (on behalf of the Lenders).

	e)	 	An Interest Period for the Loan shall not extend beyond the Final Maturity Date, but shall be
shortened so that it ends on the Final Maturity Date.

	f)	 	Each Interest Period for the Loan shall start on the Drawdown Date or (if already made) on
the first day after its preceding Interest Period.

	9.2	 	Non-Business Day

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

	9.3	 	Notification of Interest Periods

The Agent will notify the Borrower and the Lenders of the Interest Periods determined in accordance
with this Clause 9.

	10	 	CHANGES TO THE CALCULATION OF INTEREST

	10.1	 	Market disruption

	a)	 	If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the
rate of interest on each Lender’s share of the Loan for the Interest Period shall be the rate
per annum which is the sum of:

	 	(i)	 	the Margin; and

	 	(ii)	 	the rate notified to the agent by that Lender as soon as
practicable and in any event 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 that Lender of funding its
participation in the Loan from whatever source it may reasonably
select.

	b)	 	In this Agreement, “Market Disruption Event” means:

	 	(i)	 	at or about 11:00 hours (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 (whose

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	 	 	 	participations in the Loan exceed fifty per cent (50.00%) of the Loan) that the cost
to it or them of obtaining matching deposits in the London interbank market would be
in excess of LIBOR.

	10.2	 	Alternative basis of interest or funding

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 (30) days) with a view
to agreeing a substitute basis for determining the rate of interest. Any alternative basis agreed
pursuant to this Clause 10.2 shall, with the prior consent of all the Lenders and the Borrower, be
binding on all Parties.

	10.3	 	Break Costs

The Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to that
Finance Party its Break Cost attributable to all or any part of the Loan or Unpaid Sum being paid
by the Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.
If the Lender(s) receives a gain as a result of the breaking of the Lender’s financing in
connection with a prepayment of the Facility or a part thereof under Clause 7.1 (Mandatory
prepayment – Total loss or sale) or 7.2 (Mandatory prepayment – illegality), the Lender(s) shall
pay such gain to the Borrower when the gain is received by the Lender(s).

Each Lender shall, as soon as reasonably practicable after a demand by the Agent (and the Agent
shall be obliged to make such demand upon the Borrower’s request), provide a certificate confirming
and documentation for the amount of its Break Cost for any Interest Period in which they accrue.

	11	 	FEES

	11.1	 	Arrangement fee

The Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter.

	11.2	 	Commitment fee

The Borrower shall pay to the Agent (for distribution among the Lenders) a commitment fee of fifty
per cent (50%) per annum of the Margin on the Lenders’ Available Commitment accruing from the
Closing Date and up until the Drawdown Date, payable quarterly in arrears, and on the Drawdown
Date.

	12	 	TAX GROSS-UP AND INDEMNITIES
	 
	12.1	 	Taxes

	12.1.1	 	No withholding

All payments by the Borrower under the Finance Documents shall be made free and clear of and
without deduction or withholding for or on account of any Tax or any other governmental or public
payment imposed by the laws of any jurisdiction from which or through which such payment is made,
unless a Tax deduction or withholding is required by law.

	12.1.2	 	Tax gross-up

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

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	b)	 	If a Tax deduction or withholding is required by law to be made by the Borrower:

	 	(i)	 	the amount of the payment due from the Borrower shall be increased to an
amount which (after making any Tax deduction or withholding) leaves an amount equal
to the payment which would have been due if no Tax deduction or withholding had been
required; and
	 
	 	(ii)	 	the Borrower shall make that Tax deduction or withholding within the time
allowed and in the minimum amount required by law.

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

	12.2	 	Tax indemnity

The Borrower shall (within three (3) Business Days of demand by the Agent) pay to the Agent for the
account of the relevant Finance Party an amount equal to the loss, liability or cost which a
Finance Party determines will be or has been (directly or indirectly) suffered for or on account of
any Tax by such Finance Party in respect of a Finance Document, save for (a) any Tax on Overall Net
Income assessed on a Finance Party, (b) to the extent such loss, liability or cost is compensated
under Clause 12.1 (Tax gross-up), (c) any taxes that may arise from a Finance Party’s gross
negligence or wilful misconduct.

	12.3	 	VAT

All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance
Document shall be deemed to be exclusive of any VAT. If VAT is chargeable, the Borrower shall pay
to the Agent for the account of such Finance Party (in addition to the amount required pursuant to
the Finance Documents) an amount equal to such VAT.

	12.4	 	Exemptions

Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other Transaction Document
shall, at the cost of the Borrower, deliver to the Borrower (with a copy to the Agent), at the time
or times reasonably requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law and as advised by the Borrower as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by
the Borrower and at the cost of the Borrower, shall deliver such other documentation reasonably
requested and advised by the Borrower as will enable the Borrower or the Agent to determine whether
or not such Lender is subject to backup withholding or information reporting requirements.

	13	 	INCREASED COSTS

	13.1	 	Increased Costs

	a)	 	The Borrower shall, upon demand from the Agent, pay for the account of a Finance Party the
amount of any Increased Cost incurred by that Finance Party or any of its affiliates as a
result of (i) the introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation (including any laws and regulations implementing new

21

 

	 	 	or modified capital adequacy requirements but excluding any effect of the Basel II Accord) or
(ii) compliance with any law or regulation made after the date of this Agreement.

	b)	 	In this Agreement, the term “Increased Costs” means:

	 	(i)	 	a reduction in the rate of return from the Loan or on a Finance Party’s (or
its affiliate’s) overall capital;
	 
	 	(ii)	 	an additional or increased cost; or
	 
	 	(iii)	 	a reduction of any amount due and payable under any Finance Document,

	 	 	which is incurred or suffered by a Finance Party or any of its affiliates to the extent
that it is attributable to that Finance Party having entered into its Commitments or
funding or performing its obligations under any Finance Document.
	 
	c)	 	A Finance Party intending to make a claim pursuant to this Clause 13.1 shall notify the Agent
of the event giving rise to the claim, following which the Agent shall promptly notify the
Borrower. Each Finance Party shall as soon as practicable after a demand by the Agent (and the
Agent shall be obliged to make such a demand upon the Borrower’s request), provide a
confirmation for and documentation showing the amount of its Increased Costs.

	13.2	 	Exceptions

Clause 13.1 (Increased Costs) does not apply to the extent any Increased Cost is:

	a)	 	attributable to a Tax deduction or withholding required by law to be made by the Borrower;

	b)	 	compensated for by Clause 12.1 (Tax gross-up) or Clause 12.2 (Tax indemnity);

	c)	 	attributable to the wilful breach by the relevant Finance Party or its affiliates of any law
or regulation;

	d)	 	attributable to the financial rating of the Lender’s parent company or companies; or

	e)	 	attributable to the gross negligence of a Finance Party.

	14	 	OTHER INDEMNITIES

	14.1	 	Currency indemnity

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

	 	(i)	 	making or filing a claim or proof against the Borrower;
	 
	 	(ii)	 	obtaining or enforcing an order, judgement or award in relation to any
litigation or arbitration proceedings,

	 	 	the Borrower shall as an independent obligation, within three (3) Business Days of demand,
indemnify each Finance Party to whom that Sum is due against any cost, loss or liability
arising out of or as a result of the conversion including any discrepancy between (A) the
rate of exchange used to convert that Sum from the First Currency into the Second 

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	 	 	Currency
and (B) the rate or rates of exchange available to that person at the time of its receipt
of that Sum.
	 	 	 
	b)	 	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.
	 
	c)	 	Notwithstanding the foregoing, the Lenders acknowledge that, where feasible, all borrowings
and payments hereunder shall be calculated and made in USD.
	 
	14.2	 	Other indemnities

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

	a)	 	the occurrence of any Event of Default;

	b)	 	a failure by the Borrower to pay any amount due under the Finance Documents on its due date;

	c)	 	the funding, or making arrangements to fund, its participation in the Loan requested by the
Borrower in a Drawdown Notice but not made by reason of the operation of any one or more of
the provisions of this Agreement (other than by reason of default or negligence by the
Lender(s) or the Agent); or

	d)	 	the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment
given by the Borrower (other than by reason of default or gross negligence by the Lender(s) or
the Agent.

	14.3	 	Indemnity to the Agent

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

	a)	 	investigating any event which it reasonably believes is a possible Event of Default; or

	b)	 	acting or verifying any notice, request or instruction which it reasonably believes to be
genuine, correct or appropriately authorised.

	15	 	MITIGATION BY THE LENDERS

	15.1	 	Mitigation

Without in any way limiting the obligations of the Borrower hereunder, each Finance Party shall, in
consultation with the Borrower, take all reasonable steps for a period of fifteen (15) Business
Days to mitigate any circumstances which arise and which would result in any amount becoming
payable under or pursuant to, or cancelled pursuant to, any of:

	a)	 	Clause 7.2 (Mandatory prepayment – illegality);
	 
	b)	 	Clause 12 (Tax gross-up and indemnities); and
	 
	c)	 	Clause 13 (Increased costs),

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including (but not limited to) transferring its rights and obligations under the Finance Documents
to another affiliate.

A Finance Party is not obliged to take any steps under this Clause 15.1 if, in the opinion of that
Finance Party (acting reasonably), to do so might be prejudicial to it.

	15.2	 	Indemnity

The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by
that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

If a Finance Party after attempts at mitigation cannot avoid the effect of the matters listed
above, the Borrower may ask for (but without any obligation on the Lender) such Lender transferring
its interest and obligations hereunder to another Lender or to a third party that shall become a
Lender, upon written notice to the Agent.

	16	 	COSTS AND EXPENSES

	16.1	 	Transaction expenses

The Borrower shall promptly on demand pay to the Agent and the Arranger the amount of all
reasonable costs and expenses (including legal fees) reasonably incurred by any of them in
connection with the negotiation, preparation, printing, perfection, execution, registration and
legal costs of syndication of:

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

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

	16.2	 	Amendment and enforcement costs, etc

The Borrower shall, within three (3) Business Days of demand, reimburse the Agent or another
Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred
by it in connection with:

	a)	 	the granting of any release, waiver or consent under the Finance Documents;

	b)	 	any amendment or variation of any of the Finance Documents requested by or related to the
Borrower; and

	c)	 	the preservation, protection, enforcement or maintenance of, or attempt to preserve or
enforce, any of the rights of the Finance Parties under the Finance Documents.

	17	 	SECURITY

	17.1	 	Security — Loan

The Borrower’s obligations and liabilities under this Agreement, including (without limitation) the
Borrower’s obligation to repay the Loan together with all unpaid interest, default interest,
commissions, charges, expenses and any other derived liability whatsoever of the Borrower towards
the Lenders and the Agent in connection with this Agreement, shall at any time until all amounts
due to the Lenders and the Agent hereunder have been paid and/or repaid in full, be secured by:

	a)	 	the Mortgage (including the deed of covenants (if any));

	b)	 	the Assignment Agreement;

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	c)	 	the Account Pledge;

	d)	 	the Bareboat Charterparty Assignment; and

	e)	 	the Share Pledge.

The Borrower undertakes to ensure that the above Security Documents are being duly executed by the
parties thereto in favour of the Agent (on behalf of the Finance Parties and the Swap Bank) on or
about the date of this Agreement, legally valid and in full force and effect, and to execute or
procure the execution of such further documentation as the Agent may reasonably require in order
for the relevant Finance Parties to maintain the security position envisaged hereunder.

	17.2	 	Security – Swap Agreement(s)

The Agent and the Lenders have agreed that the Borrower’s obligations under the Swap Agreement(s),
if any, shall be secured by the Security Documents with the rights of the Swap Bank ranking pari
passu with the rights of the Agent (on behalf of the Finance Parties) under the Security Documents
as set out in Clause 17.1 (Security – Loan).

	17.3	 	Intercreditor Agreement

The Borrower shall enter into the Intercreditor Agreement which inter alia shall regulate the
rights and obligations between the Finance Parties, the Swap Bank and the Bareboat Charterer with
regard to inter alia the various Securities Interest under the Finance Documents, the Swap
Agreement and the Bareboat External Funding.

The Security Interest granted in favour of the Bareboat Agent (on behalf of the Bareboat Lenders)
shall be fully subordinated to and rank in priority after the Security Interest granted in favour
of the Agent (on behalf of the Finance Parties and the Swap Bank) under the Finance Documents and
the Swap Agreement(s). In case the Bareboat Agent (on behalf of the Bareboat Lenders) seeks to
enforce its Security Interest in the FPU Equipment and such enforcement is not contested by the
Bareboat Charterer, the Bareboat Agent (on behalf of the Bareboat Lenders) shall, by ten (10) days
prior written notice to the Agent, inform the Agent of such enforcement and its intention either
to:

	a)	 	have the FPU Equipment removed from the Vessel, in which case the parties shall jointly
arrange for the Vessel to be sailed to a pre-agreed safe harbour, whereafter the Bareboat
Agent (on behalf of the Bareboat Lenders) shall be entitled, at its sole expense and risk, to
safely remove the FPU Equipment from the Vessel within sixty (60) days and restore the Vessel
to such condition as it was delivered to the Bareboat Charterer under the Bareboat Charter; or

	b)	 	prepay any outstanding amounts under the Finance Documents and Swap Agreement(s) with a right
of subrogation into the Security Interests granted under the Finance Documents and the Swap
Agreement.
	 
	18	 	REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to each Finance Party as follows at the date of this Agreement:

	18.1	 	Status

The Borrower is a limited liability company, duly organised and validly existing under the laws of
Delaware, USA and has the power to own its assets and carry on its business as it is currently
being conducted. The Borrower has no subsidiaries.

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	18.2	 	Binding obligations

Subject to the legal reservations in the legal opinions referred to in Schedule 2
(Condition precedents), the Transaction Documents to which the Borrower is a party constitute
legal, valid, binding and enforceable obligations, and save as provided herein or therein and/or as
have been or shall be completed prior to the Drawdown Date, no registration, filing, payment of tax
or fees or other formalities are necessary or desired to render the Transaction Documents
enforceable against the Borrower, and in respect of the Vessel, for the Mortgage to constitute a
valid and enforceable first priority mortgage over the Vessel, save for the registration of the
Mortgage with the Ship Registry.

	18.3	 	No conflict with other obligations

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

	a)	 	any law or regulation or any order or decree of any governmental agency or court by which it
is bound;

	b)	 	any constitutional documents of the Borrower; or

	c)	 	any agreement or document to which it is a party or by which it or any of its assets are
bound.

	18.4	 	Power and authority

The Borrower has the power to enter into, perform and deliver, and has taken all necessary actions
to authorise its entry into, performance and delivery of, the Transaction Documents to which it is
a party and the transactions contemplated by those Transaction Documents.

	18.5	 	Authorisations and consents

All authorisations, approvals, consents and other matters, official or otherwise, required by the
Borrower in connection with the entering into, performance, validity and enforceability of the
Transaction Documents and the transactions contemplated hereby and thereby have been obtained or
effected and are in full force and effect.

	18.6	 	Taxes

The Borrower has complied with all material taxation laws in all jurisdictions where it is subject
to taxation and has paid all material Taxes and other amounts due to governments and other public
bodies. No material claims are being asserted against it with respect to any Taxes or other
payments due to public or governmental bodies. The Borrower is not required to make any
withholdings or deductions for or on account of Tax from any payment it may make under any of the
Finance Documents.

	18.7	 	No Default

No Event of Default is continuing or might reasonably be expected to result from the making of the
Loan. No other event or circumstances is outstanding which constitutes a default or (with the
expiry of a grace period, giving of notice or the making of any determination or any combination of
the foregoing) might constitute a default under any other agreement or instrument which is binding
on the Borrower or to which the Borrower’s assets are subject will have a Material Adverse Effect.

26

 

	18.8	 	No misleading information

Any factual information, documents, exhibits or reports relating to the Borrower and which have
been furnished to the Finance Parties by or on behalf of the Borrower are complete and correct in
all material respects and do not contain any misstatement of fact or omit to state a fact making
such information, exhibits or reports misleading in any material respect.

	18.9	 	Original Financial Statements

	a)	 	Complete and correct. The Original Financial Statements fairly and accurately represent the
assets, liabilities and the financial condition of the Borrower as of the Original Financial
Statements.

	b)	 	No undisclosed liabilities. As of the date of the Original Financial Statements, the Borrower
had no material liabilities, direct or indirect, actual or contingent, and there is no
material, unrealised or anticipated losses from any unfavourable commitments not disclosed by
or reserved against in the Original Financial Statements.

	c)	 	No material change. Since the date of the Original Financial Statements, there has been no
material adverse change in the business, operations, assets or condition (financial or
otherwise) of the Borrower.

	18.10	 	Pari passu ranking

The Borrower’s payment obligations under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors, except for obligations preferred by
mandatory law or principles of equity applying to companies generally.

	18.11	 	No existing Security Interest

No Security Interest exists over the Vessel except:

	a)	 	as described in Clause 17 (Security); and

	b)	 	the Bareboat Charterer Security.

	18.12	 	No immunity

The execution and delivery by the Borrower of each Transaction Document to which it is a party
constitute, and its exercise of its rights and performance of its obligations under each
Transaction Document will constitute, private and commercial acts performed for private and
commercial purposes, and the Borrower will not (except for bankruptcy or any similar proceedings)
be entitled to claim for itself or any or all of its assets immunity from suit, execution,
attachment or other legal process in any other proceedings in relation to any Transaction Document.

	18.13	 	No winding-up

The Borrower has not taken any corporate action nor have any other steps been taken or legal
proceedings been started or threatened against it for its reorganisation, winding-up, dissolution
or administration or for the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of it or any or all of its assets.

	18.14	 	Environmental compliance

The Borrower has performed and observed in all material respects all Environmental Laws,
Environmental Approvals and all other material covenants, conditions, restrictions or agreements
directly or indirectly concerned with any contamination, pollution or waste or the release or
discharge of any toxic or hazardous substance in connection with the Vessel.

27

 

	18.15	 	Environmental Claims

No Environmental Claim has been commenced or is threatened against the Borrower where that claim
would be reasonably likely, if adversely determined, to have a Material Adverse Effect on the
Borrower.

	18.16	 	ISM Code and ISPS Code compliance

Following the Delivery Date, all requirements of the ISM Code and the ISPS Code as they relate to
the Borrower, the Technical Manager (if any), the Charterer and the Vessel have been complied with
in all material respects.

	18.17	 	The Vessel

The Vessel will:

	a)	 	on the Drawdown Date be in the absolute ownership of the Borrower free and clear of all
encumbrances (other than current crew wages, the Mortgage and liens permitted under the
Mortgage) and the Borrower will be the sole, legal and beneficial owner of the Vessel;

	b)	 	on the Drawdown Date be registered in the name of the Borrower with the Ship Registry under
the laws and flag of the relevant jurisdiction;

	c)	 	following the Additional Conversion be operationally seaworthy in every way and fit for
service (following the conversion under the Conversion Contract); and

	d)	 	on the Drawdown Date be interim classed with Lloyd’s Register of Shipping free of all
overdue requirements and recommendations and following the Additional Conversion finally
classed with Lloyd’s Register of Shipping free of all overdue requirements and
recommendations.

	18.18	 	No money laundering

The Borrower is acting for its own account in relation to the Loan and in relation to the
performance and the discharge of its obligations and liabilities under the Finance Documents and
the transactions and other arrangements effected or contemplated by the Finance Documents to which
the Borrower is a party, and the foregoing will not involve or lead to contravention of any law,
official requirement or other regulatory measure or procedure implemented to combat money
laundering (as defined in Article 1 of the Directive (91/308/EEC) and Directive 2001/97 of the
European Parliament and of 4 December 2001 amending Council Directive 91/308).

	18.19	 	Repetition

The representations and warranties set out in this Clause 18 are deemed to be made by the Borrower
on the date of this Agreement and shall be deemed to be repeated:

	a)	 	on the date of the Drawdown Notice;
	 
	b)	 	on the Drawdown Date;
	 
	c)	 	on the first day of each Interest Period; and
	 
	d)	 	in each Compliance Certificate forwarded to the Agent pursuant to Clause 19.2 (Compliance
certificate) (or, if no such Compliance Certificate is forwarded, on each day such certificate
should have been forwarded to the Agent at the latest).

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	18.20	 	No other Financial Indebtedness or Financial Support

Except as permitted by this Agreement:

	a)	 	no Financial Indebtedness is outstanding with the Borrower; and

	b)	 	no Financial Support has been granted by the Borrower.

	19	 	INFORMATION UNDERTAKINGS

The Borrower gives the undertakings set out in this Clause 19 to each Finance Party and such
undertakings shall remain in force throughout the Security Period.

	19.1	 	Financial statements

The Borrower shall and shall procure that the Partners and the Bareboat Charterer shall, supply to
the Agent in sufficient copies for all of the Lenders:

	a)	 	as soon as the same become available, but in any event within one hundred and twenty (120)
days after the end of each of the Borrower’s, the Partners’ and the Bareboat Charterer’s
financial years their audited financial statements for that financial year; and

	b)	 	as soon as the same become available, but in any event within ninety (90) days after the end
of each quarter of each of the Borrower’s, the Partners’ and the Bareboat Charterer’s
financial years, each of their unaudited consolidated financial statements for that financial
quarter.

Documents required to be delivered pursuant to this Clause 19.1 with respect to the Bareboat
Charterer may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Bareboat Charterer posts such documents, or provides a link
thereto on the Bareboat Charterer’s website on the Internet at its website address and has notified
the Agent and the Lenders thereof; or (ii) on which such documents are posted on the Bareboat
Charterer’s behalf on an Internet or intranet website, if any, to which each Lender and the Agent
have access (whether commercial, third-party website or whether sponsored by the Agent) and the
Agent having been notified thereof; provided that: the Bareboat Charterer shall, upon the request
of the Agent, deliver paper copies of such documents to the Agent for any Lender that requests
paper copies.

	19.2	 	Compliance Certificate

The Borrower shall and shall procure that the Bareboat Charterer shall, supply to the Agent, with
each set of financial statements delivered pursuant to Clause 19.1 (Financial statements), a
Compliance Certificate signed by an authorised officer of the Borrower, the Bareboat Charterer,
respectively, setting out (in reasonable detail) inter alia computations as to compliance with
Clause 20 (Financial covenants) as at the date at which those financial statements were drawn up.

	19.3	 	Requirements as to financial statements

The Borrower shall insure that each set of financial statements delivered pursuant to Clause 19.1
(Financial statements) is prepared using GAAP, accounting practices and financial reference
periods. In relation to any set of financial statements, the Borrower shall notify the Agent that
there has been a change in GAAP, the accounting practices or reference periods and in such case its
auditors shall deliver to the Agent:

	a)	 	a description of any change necessary for those financial statements to reflect GAAP,
accounting practices and reference periods; and

29

 

	b)	 	sufficient information, in form and substance as may be reasonably required by the Agent, to
enable the Lenders to determine whether Clause 20 (Financial covenants) has been complied with
and make an accurate comparison between the financial position indicated in those financial
statements and the previous financial statements of the Borrower (if any).

	19.4	 	Information — miscellaneous

The Borrower shall notify the Agent and/or supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):

	a)	 	all material documents dispatched by the Borrower to its shareholders, its creditors
generally at the same time as they are dispatched;
	 
	b)	 	immediately upon becoming aware of them, the details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending against the Borrower
and/or the Bareboat Charterer, and which might, if adversely determined, have a Material
Adverse Effect on the Borrower;
	 
	c)	 	immediately upon becoming aware of them, of any breach by the Bareboat Charterer of any
financial covenants under any financing agreement to which the Bareboat Charterer is a party;
	 
	d)	 	immediately, such further information regarding the business, operations, assets and
operations (financial or otherwise) of the Borrower and/or the
Bareboat Charterer as any Finance Party (through the Agent) may reasonably request.
	 
	19.5	 	Notification of default

The Borrower shall notify the Agent of any Default (and the steps, if any, being taken to remedy
it) promptly upon becoming aware of its occurrence.

	19.6	 	Notification of Environmental Claims

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

	a)	 	if any Environmental Claim has been commenced or (to the best of the Borrower’s knowledge and
belief) is threatened against the Borrower, the Bareboat Charterer or the Vessel; and

	b)	 	of any fact and circumstances which will or are reasonably likely to result in any
Environmental Claim being commenced or threatened against the Borrower, the Bareboat Charterer
or the Vessel,

where the claim would be reasonably likely, if determined against the Borrower or the Vessel, to
have a Material Adverse Effect on the Borrower.

	20	 	FINANCIAL COVENANTS
	 
	20.1	 	Free Cash

The Borrower shall at all times ensure that it has Free Cash of at least USD 250,000.

30

 

	20.2	 	Financial testing

The financial covenants set out in Clauses 20.1 (Free Cash) shall be calculated in accordance with
GAAP and tested by reference to the latest financial statements (whether audited or unaudited)
and/or each Compliance Certificate delivered pursuant to Clause 19.2 (Compliance Certificate).

	21	 	GENERAL UNDERTAKINGS

The Borrower gives the undertakings set out in this Clause 21 to each Finance Party and such
undertakings shall remain in force throughout the Security Period.

	21.1	 	Authorisations etc.

The Borrower shall promptly:

	a)	 	obtain, comply and do all that is necessary to maintain in full force and effect; and

	b)	 	supply certified copies to the Agent (if so requested) of,

any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or
registration required under any law or regulation of its jurisdiction of incorporation which is
necessary or required to enable it to perform its obligations under the Transaction Documents and
to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction
of incorporation of any Transaction Document.

	21.2	 	Compliance with laws

The Borrower shall comply in all respects with all laws to which it may be subject, if failure so
to comply would materially impair its ability to perform its obligations under the Transaction
Documents.

	21.3	 	Pari passu ranking

The Borrower shall ensure that its obligations under the Finance Documents do and will rank at
least pari passu with all its other present and future unsecured and unsubordinated obligations,
except for those obligations which are preferred by mandatory law or principles of equity applying
to companies generally in the jurisdictions of their incorporation or in the jurisdiction in the
ports of calls.

	21.4	 	Title

The Borrower will hold legal title to and own the entire beneficial interest in the Vessel, the
Insurances and the Earnings, free of all Security Interest and other interests and rights of every
kind, except for those created by the Finance Documents and as set out in Clause 21.5 (Negative
pledge).

	21.5	 	Negative pledge

The Borrower shall not create or permit to subsist any Security Interest over the Vessel or its
equipment (including the FPU Equipment), the Earnings, the Insurances, the shares (or other equity
interest) in the Borrower) other than the Security Interest under the Security Documents, the
Bareboat Charterer Security, liens permitted under the Mortgage and Security Interests consented to
in writing by the Agent (acting upon instruction from the Majority Lenders).

	21.6	 	Shareholder loans

Any shareholder loans shall be fully subordinated to and rank in priority to the Loan and shall be
on such terms and conditions as approved in writing by the Agent (on behalf of the Lenders).

31

 

	21.7	 	Disposals

The Borrower shall not sell, transfer or otherwise dispose of the whole or any part of its interest
in the Vessel or its equipment or the Earnings nor otherwise dispose of all or any part of its
assets for an amount exceeding USD 1,000,000 in the aggregate, without the prior written consent of
the Agent (on behalf of the Lenders).

	21.8	 	Shareholders and change of control

The Borrower shall not agree to any transfer of shares, the granting of options of ownership or
change in ownership of the Borrower without the prior written consent of the Agent (on behalf of
the Lenders), save for the exercise of put and call options by the Partners set out in the
Operating Agreement.

	21.9	 	Dividend restrictions

Save for the repayment of the loans granted under the Bareboat Facility and the Subordinated Loan
Agreement (both with shall be repaid at the Drawdown Date), the Borrower shall not pay, make or
declare any dividend whether in cash or in kind or make any other payments (including distribution
of cash), grant or repay any loans (including payment of interest and amortisation) or issue any
guarantees or otherwise to any of its shareholders (or any affiliates thereof) in respect of any
financial year, unless:

	a)	 	in respect of the Bareboat Charterer, the Bareboat Charterer is, and will continue to be upon
making such distributions, in compliance with the financial covenants of any of its financial
arrangements and the Bareboat Charterer having provided the Agent with a Compliance
Certificate with regard to its compliance with such financial covenants; and

	b)	 	in respect of the Borrower, the Borrower has and will maintain Free Cash of at least USD
250,000 following such distributions.

	21.10	 	Change of business, etc.

The Borrower shall ensure that:

	a)	 	no substantial change is made to the general nature of the business of the Borrower;

	b)	 	no change is made to its legal name, organisation or jurisdiction of incorporation; and

	c)	 	no change is made to its fiscal year end date,

than that existing at the date of this Agreement (unless consented to in writing by the Agent (on
behalf of the Lenders)).

	21.11	 	No mergers etc.

The Borrower shall not enter into any merger, amalgamation, de-merger, split-up, divest,
consolidation with or into any other person or be the subject of any reconstruction without the
prior consent of the Agent (on behalf of the Lenders).

	21.12	 	Environmental compliance

The Borrower shall (and shall procure that the Bareboat Charterer shall) comply in all material
respects with all Environmental Laws subject to the terms and conditions of any Environmental
Approval and obtain and maintain any Environmental Approval.

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	21.13	 	Commercial and technical management

The Borrower shall procure that the Technical Manager (if any) shall continue as technical manager
of the Vessel, and there shall be no change to such technical management and/or the Technical
Management Agreement (if any) without the prior written consent of the Agent.

	21.14	 	Transaction Documents

The Borrower shall procure that none of the Transaction Documents are amended or terminated, or any
waiver or any material terms thereof are agreed thereunder without the prior written consent of the
Agent (on behalf of the Finance Parties and the Swap Bank) unless such amendment, termination,
waiver or term does not in all material respects affect the Lenders’ rights under the Finance
Documents.

	21.15	 	Acquisitions

The Borrower shall not make any acquisition of any shares or securities of a person, or the assets
or business of a person, other than in the ordinary course of business or as consented to in
writing by the Agent (on behalf of the Majority Lenders).

	21.16	 	Financial Support restrictions

	a)	 	The Borrower shall not incur or allow to subsist any Financial Support.

	b)	 	The restrictions in paragraph a) above do not apply to any Financial Support:

	 	(i)	 	made, granted or given in the ordinary course of business;
	 
	 	(ii)	 	consented to in writing by the Majority Lenders.

	21.17	 	Financial Indebtedness restrictions

	a)	 	The Borrower shall not incur, create or permit to subsist any Financial Indebtedness (whether
secured or unsecured) other than as incurred under the Finance Documents, the Subordinated
Loan Agreement and the Bareboat Facility (which shall, together with any outstanding amount
under the Subordinated Loan Agreement, be repaid at the Drawdown Date at the latest).

	b)	 	The restrictions in paragraph a) above do not apply to any Financial Indebtedness consented
to in writing by the Majority Lenders.

	21.18	 	Bank accounts

The Borrower shall hold and maintain all its bank accounts (hereunder the Earnings Account) with
the Agent or Nordea Bank Finland Plc, New York Branch and ensure that all Earnings are paid to the
Earnings Account.

	22	 	VESSEL COVENANTS

The Borrower gives the undertakings set out in this Clause 22 to each Finance Party from the
Drawdown Date and such undertakings shall remain in force throughout the Security Period.

	22.1	 	Insurance

	a)	 	The Borrower shall maintain or ensure that the Vessel is insured against such risks,
including but not limited to, Hull and Machinery, Protection & Indemnity (including maximum
cover for pollution liability as normally adopted by the industry for similar vessels), Hull
Interest and/or Freight Interest, War Risk insurances, in such amounts, on 

33

 

	 	 	such terms and with
such insurers as the Agent shall approve. If the Vessel is operated outside of the United
States Gulf of Mexico, the Borrower shall, if requested by the Agent, procure appropriate war
risk insurance for the area of the Vessel’s operation,

	b)	 	The value of the Hull and Machinery insurance shall cover at least eighty per cent (80.00%)
of the Market Value of the Vessel (excluding the FPU Equipment) and the aggregate insurance
value of the Vessel (except Protection & Indemnity), shall be at least equal to the higher of
the Market Value (excluding the FPU Equipment) and one hundred and twenty per cent (120.00%)
of the Loan.

	c)	 	The Borrower shall procure that the Agent (on behalf of the Finance Parties and the Swap
Bank) is noted as first priority mortgagee in the insurance contracts, together with the
confirmation from the underwriters to the Agent thereof that the notice of assignment with
regards to the Insurances and the loss payable clauses are noted in the insurance contracts
and that standard letters of undertaking are executed by the insurers.

	d)	 	Not later than seven (7) days prior to the expiry date of the relevant Insurances, the
Borrower shall procure the delivery to the Agent of a certificate from the insurance broker(s)
through whom the Insurances referred to in litra a) have been renewed and taken out in respect
of the Vessel with insurance values as required by litra b), that such Insurances are in full
force and effect and that the Agent (on behalf of the Finance Parties and the Swap Bank) have
been noted by the relevant insurers.

	e)	 	The Agent will, for the account of the Borrower, take out a Mortgagee’s Interest Insurance
and a Mortgagees’ Interest Insurance Additional Perils Insurance (both covering one hundred
and ten per cent (110.00%) of the Loan) relevant to the Vessel.

	f)	 	If any of the Insurances referred to in litra a) form part of a fleet cover, the Borrower
shall procure that the insurers shall undertake to the Agent that they shall neither set-off
against any claims in respect of the Vessel any premiums due in respect of other vessels under
such fleet cover or any premiums due for other insurances, nor cancel this Insurance for
reason of non-payment of premiums for other vessels under such fleet cover or of premiums for
such other insurances, and shall undertake to issue a separate policy in respect of the Vessel
if and when so requested by the Agent.

	g)	 	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.

	h)  The Borrower will not make any material change to the Insurances described under litra a) and
b) above without the prior 
     written consent of the Agent (on behalf of the Lenders).
	 
	22.2 Classification and repairs	 	 

The Borrower shall keep or shall procure that the Vessel is kept in a good, safe and efficient
condition consistent with first class ownership and management practice and in particular:

	a)	 	so as to maintain its class at the highest level with Lloyd’s Register of Shipping or another
classification society approved by the Agent, free of overdue recommendations and
qualifications; and

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	b)	 	so as to comply with the laws and regulations (statutory or otherwise) applicable to vessels
registered under the flag state of the Vessel or to vessels trading to any jurisdiction to
which the Vessel may trade from time to time.
	 
	22.3	 	Notification of certain events

The Borrower shall, and shall ensure that the Bareboat Charterer shall, immediately notify the
Agent of:

	a)	 	any accident to the Vessel involving repairs where the costs will or is likely to exceed USD
1,000,000 (or the equivalent in any other currency);
	 
	b)	 	any requirement or recommendation made by any insurer or classification society or by any
competent authority which is not, or cannot be, immediately complied with;
	 
	c)	 	any exercise or, to the extent the Borrower has knowledge thereof, purported exercise of any
arrest or lien on the Vessel, its Earnings or the Insurances;
	 
	d)	 	any occurrence as a result of which the Vessel has become or is, by the passing of time or
otherwise, likely to become a Total Loss; and
	 
	e)	 	any claim for a material breach of the ISM Code or the ISPS Code being made against the
Borrower, the Technical Manager (if any), the Bareboat Charterer
or otherwise in connection
with the Vessel.

	 	22.4	 	Operation of the Vessel

	a)	 	The Borrower shall comply, or procure the compliance in all material respects with the ISM
Code and the ISPS Code, all Environmental Laws and all other laws or regulations relating to
the Vessel, its ownership, operation and management or to the business of the Borrower and
shall not employ the Vessel nor allow its employment:

	 	(i)	 	in any manner contrary to law or regulation in any relevant jurisdiction
including but not limited to the ISM Code; and
	 
	 	(ii)	 	in the event of hostilities in any part of the world (whether war is
declared or not), in any zone which is declared a war zone by any government or by
the war risk insurers of the Vessel unless the Borrower has (at its expense) effected
any special, additional or modified insurance cover which shall be necessary or
customary for first class shipowners trading vessels within the territorial waters of
such country at such time and has provided evidence of such cover to the Agent.

	 	 	Without limitation to the generality of this Clause 22.4, the Borrower shall comply or
procure compliance, with, as applicable, all requirements of the International Convention
for the 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 or the ISPS Code.
	 
	b)	 	The Vessel shall be employed under the Bareboat Charterparty and, except as contemplated
under the Operating Agreement, the Borrower shall not, without the prior written consent of
the Agent (on behalf of the Majority Lenders), neither terminate, cancel, make any [material]
amendments or supplements to the Bareboat Charterparty nor assign the Bareboat Charterparty to
any of the person (save for the Bareboat Charterparty Assignment).

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	22.5	 	ISM Code compliance

The Borrower will:

	a)	 	procure that the Vessel remains subject to a SMS for the duration of the Loan;

	b)	 	procure that a valid and current SMC is maintained for the Vessel for the duration of the
Loan;

	c)	 	procure that the Technical Manager (if any) or Bareboat Charterer maintains a valid and
current DOC for the duration of the Loan;

	d)	 	immediately notify the Agent in writing of any actual or threatened withdrawal, suspension,
cancellation or modification of the SMC of the Vessel or of the DOC of the Technical Manager
(if any) or the Bareboat Charterer; and

	e)	 	immediately notify the Agent in writing of any “accident” or “major non-conformity”, each as
those terms is defined in the Guidelines in the application of the IMO International Safety
Management Code issued by the International Chamber of Shipping and International Shipping
Federation.

	22.6	 	Inspections, on site reports and class records

	a)	 	Prior to the Delivery Date, the Borrower shall provide the Agent with on site reports at
times requested by the Agent and in a form acceptable to the Agent (acting reasonably), and
shall permit, and shall procure that the Yard shall permit one or more persons appointed by
the Agent to inspect the Vessel on site for the reasonable account of the Borrower upon the
Agent giving reasonable prior notice.

	b)	 	From and including the Delivery Date but prior to the commencement of the Additional
Conversion, the Borrower shall permit, and shall procure that any charterers permit, one
person appointed by the Agent to inspect the Vessel once a year for the reasonable account of
the Borrower upon the Agent giving prior reasonable written notice.

	c)	 	Following the completion of the Additional Conversion, the Borrower shall permit, and shall
procure that any charterers permit, one person appointed by the Agent to inspect the Vessel
visually once a year (provided that the Vessel is employed under the Bareboat Charter, is in
class and insured in accordance with Clause 22.1 (Insurances)) and a full physical inspection
when the Vessel is in drydock or in port, for the reasonable account of the Borrower upon the
Agent giving reasonable prior written notice to the Borrower and always to be conducted in a
manner not to interfere with the operative production of the Vessel.

	d)	 	The Borrower shall instruct the classification society to send to the Agent, following a
written request from the Agent, copies of all class records held by the classification society
in relation to the Vessel.

	22.7	 	Surveys

The Borrower shall submit to or cause the Vessel to be submitted to such periodic or other surveys
as may be required for classification purposes and to ensure full compliance with regulations of
the flag state of the Vessel and to supply or to cause to be supplied to the Agent copies of all
survey reports and confirmations of class issued in respect thereof whenever such is required by
the Agent, however limited to once a year.

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	22.8	 	Arrest

The Borrower shall or shall procure that the Bareboat Charterer shall, promptly pay and discharge:

	a)	 	all liabilities which give or may give rise to maritime or possessory liens on or claims
enforceable against the Vessel and its equipment (including the FPU Equipment), the Earnings
or the Insurances;

	b)	 	all tolls, taxes, dues, fines, penalties and other amounts charged in respect of the Vessel,
the Earnings or the Insurances; and
	 
	c)	 	all other outgoings whatsoever in respect of the Vessel, the Earnings and the Insurances,

and forthwith upon receiving a notice of arrest of the Vessel, or its detention in exercise or
purported exercise of any lien or claim, the Borrower shall or shall procure that the Bareboat
Charterer shall procure its release by providing bail or providing the provision of security or
otherwise as the circumstances may require.

	22.9	 	Total Loss

In the event that the Vessel shall suffer a Total Loss, the Borrower shall, within a period of one
hundred and twenty (120) days after the Total Loss Date (or sixty (60) days in the event of a
requisition for hire), 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, and the insurance
proceeds shall be applied in prepayment of the Loan in accordance with Clause 7.1 (Mandatory
prepayment — Total Loss or sale).

	22.10	 	Flag, name and registry

The Borrower shall not, without the prior written consent of the Agent (on behalf of the Lenders),
such consent not to be unreasonably withheld, change the flag, name or Ship Registry of the Vessel.

	22.11	 	Additional Conversion

Notwithstanding this Clause 22, the Lenders agree that the Bareboat Charterer may complete the
Additional Conversion without the prior consent of the Lenders or the Agent, provided that (i) the
Intercreditor Agreement is in full force and effect and (ii) the Bareboat Charterer gives the Agent
twenty (20) Business Days prior written notice that the Vessel is to be delivered to the shipyard
where the Additional Conversion is to take place.

	22.12	 	Subsidiaries

The Borrower shall not incorporate or acquire any subsidiaries for the duration of the Security Period.

	23	 	EVENTS OF DEFAULT

Each of the events or circumstances set out in this Clause 23 is an Event of Default.

	23.1	 	Non-payment

The Borrower does not pay on the due date any amount payable to a Finance Party pursuant to a
Finance Document at the place and in the currency in which it is expressed to be payable unless:

	a)	 	its failure to pay is caused by administrative or technical error affecting the transfer of
funds despite timely payment instructions by the Borrower; and

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	b)	 	payment is made within three (3) Business Days of its due date.

	23.2	 	Financial covenants

Any requirement in Clause 20 (Financial covenants) is not satisfied.

	23.3	 	Other obligations

	a)	 	The Borrower does not comply with any provision of the Finance Documents (other than those
referred to in Clause 23.1 (Non-payment) and Clause 23.2 (Financial covenants)).

	b)	 	No Event of Default under litra a) above will occur if the failure to comply is capable of
remedy and is remedied within ten (10) Business Days of the earlier of the Agent giving notice
to the Borrower or the Borrower becoming aware of the failure to comply. The remedy period as
set out in this Clause 23.3 b) shall not apply to any Event of Default under Clause 22.1.
(Insurances) and 22.10 (Flag, name and registry).

	23.4	 	Misrepresentations

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

	23.5	 	Cross default

	a)	 	Any Financial Indebtedness of the Borrower and/or the Bareboat Charterer and/or the Bareboat
Charterer’s subsidiaries (as the case may be) is not paid when due nor within any originally
applicable grace period or have not been waived, or the Bareboat Charterer is not in
compliance with its financial covenants under any of its Financial Indebtedness (however
taking into consideration waiver(s) provided to the Bareboat Charterer from its financiers
with regard to a breach of such financial covenants);
	 
	b)	 	any Financial Indebtedness of the Borrower and/or the Bareboat Charterer and/or the Bareboat
Charterer’s subsidiaries (as the case may be) 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);
	 
	c)	 	any commitment for any Financial Indebtedness of the Borrower and/or the Bareboat Charterer
and/or the Bareboat Charterer’s subsidiaries (as the case may be) is cancelled or suspended by
a creditor of the Borrower and/or the Bareboat Charterer and/or the Bareboat Charterer’s
subsidiaries (as the case may be) as a result of an event of default (however described).
	 
	d)	 	any creditor of the Borrower and/or the Bareboat Charterer and/or the Bareboat Charterer’s
subsidiaries (as the case may be) entitled to declare any Financial Indebtedness of the
Borrower and/or the Bareboat Charterer and/or Bareboat Charterer’s subsidiaries (as the case
may be) due and payable prior to its specified maturity as a result of an event of default
(however described),

in circumstances where the aggregate amount of all such Financial Indebtedness referred to in all
or any of sub-clauses (a) to (d), in respect of the Borrower is USD 1,000,000 (or its equivalent in
other currencies) or more, and in respect of the Bareboat Charterer together with its subsidiaries,
is USD 20,000,000 (or its equivalent in other currencies) or more.

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	23.6	 	Insolvency

	a)	 	The Borrower 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.
	 
	b)	 	The value of the assets of the Borrower is less than its liabilities (taking into account
contingent and prospective liabilities).
	 
	c)	 	A moratorium is declared in respect of any indebtedness of the Borrower.
	 
	23.7	 	Insolvency proceedings

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

	a)	 	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution,
administration or reorganisation (by way of voluntary arrangement, scheme or arrangement or
otherwise) of the Borrower;
	 
	b)	 	a composition, compromise, assignment or arrangement with any creditor of the Borrower;
	 
	c)	 	the appointment of a liquidator, receiver, administrative receiver, administrator or other
similar officer in respect of the Borrower; or
	 
	d)	 	enforcement of any Security Interest over any assets of the Borrower [that is not bonded
within ten (10) Business Days].
	 
	23.8	 	Creditor’s process

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of
the Borrower having an aggregate value of USD 500,000.

	23.9	 	Unlawfulness

It is or becomes unlawful or impossible for the Borrower or any of the parties to any of the
Security Documents to perform any of their respective obligations under the Finance Documents.

	23.10	 	Material adverse change

Any event or series of events occur which, in the opinion of the Agent (on behalf of the Lenders),
might have a Material Adverse Effect on the Borrower.

	23.11	 	Permits

Any licence, consent, permission or approval required in order to enforce, complete or perform any
of the Transaction Documents is revoked, terminated or modified having a Material Adverse Effect on
the Borrower.

	23.12	 	Litigation

There is current or pending any claims, litigation, arbitration or administrative proceedings
before any court, arbitral body or agency against the Borrower which might, if adversely
determined, have a Material Adverse Effect on the Borrower.

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	23.13	 	Acceleration

Upon the occurrence of an Event of Default and the expiry of the applicable remedy period without
remedy and any time thereafter for as long as such Event of Default is continuing, the Agent may,
and shall if so directed by the Majority Lenders, by written notice to the Borrower:

	a)	 	cancel the Total Commitments whereupon they shall immediately be cancelled;

	b)	 	declare that all or part of the Loan together with accrued interest, and all other amounts
accrued or outstanding under the Finance Documents, be either immediately due and payable
and/or payable upon demand, whereupon they shall become either immediately due and payable or
payable on demand; and/or

	c)	 	start enforcement in respect of the Security Interests established by the Security
Documents; and/or

	d)	 	take any other action, with or without notice to the Borrower, exercise any other right or
pursue any other remedy conferred upon the Agent or the Finance Parties by any of the Finance
Documents or by any applicable law or regulation or otherwise as a consequence of such Event
of Default.

	24	 	CHANGES TO THE PARTIES
	 
	24.1	 	Assignment by the Borrower

	24.1.1	 	No Assignment by the Borrower

	a)	 	The Borrower may not assign, transfer, novate, dispose or have assumed any part of, or any
interest in, its rights and/or obligations under the Finance Documents.

	24.2	 	Assignments and transfers by the Lenders

	a)	 	A Lender (the “Existing Lender”) may, upon prior written consent of the Borrower (such
consent is not required in case an Event of Default has occurred and is continuing), at any
time assign, transfer or have assumed its rights or obligations under the Finance Documents (a
“Transfer”) to another bank or financial institution or to a trust, fund or other entity which
is regularly engaged in or established for the purpose of making, purchasing or investing in
loans, securities or other financial assets (the “New Lender”).

	b)	 	A Lender may at any time transfer a participation to another bank or financial institution or
to a trust, fund or other entity which is regularly engaged in or established for the purpose
of making, purchasing or investing in loans, securities or other financial assets.

	24.3	 	Limitations of responsibility of Existing Lenders

	24.3.1	 	Borrower’s performance, etc

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and
assumes no responsibility to the New Lender for:

	a)	 	the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or
any other documents;

	b)	 	the financial condition of the Borrower;

	c)	 	the performance and observance by the Borrower of its obligations under the Finance Documents
or any other documents; or

40

 

	d)	 	the accuracy of any statements (whether written or oral) made in or in connection with the
Finance Documents or any other document.

	24.3.2	 	New Lender’s own credit appraisal, etc

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

	a)	 	has made (and will continue to make) its own independent investigation and assessment of the
financial condition and affairs of the Borrower and its related entities in connection with
its participation in this Agreement and has not relied exclusively on any information provided
to it by the Existing Lender in connection with any Finance Document; and

	b)	 	will continue to make its own independent appraisal of the creditworthiness of the Borrower
and its related entities whilst any amount is or may be outstanding under the Finance
Documents or any Commitment is in force.

	24.3.3	 	Re-transfer to an Existing Lender, etc

Nothing in any Finance Document obliges an Existing Lender to:

	a)	 	accept a re-transfer from a New Lender of any of the rights and obligations assigned or
transferred under this Clause 24; or

	b)	 	support any losses directly or indirectly incurred by the New Lender by reason of the
non-performance by the Borrower of its obligations under the Finance Documents or otherwise.

	24.4	 	Procedure for transfer

Any Transfer shall be effected as follows:

	a)	 	the Existing Lender must notify the Agent of its intention to Transfer all or part of its
rights and obligations by delivering a duly completed Transfer Certificate to the Agent duly
executed by the Existing Lender and the New Lender;

	b)	 	subject to Clause 24.2 (Assignments and transfers by the Lenders), the Agent shall as soon as
reasonable possible after receipt of a Transfer Certificate execute the Transfer Certificate
and deliver a copy of the same to each of the Existing Lender and the New Lender; and

	c)	 	subject to Clause 24.2 (Assignments and transfers by the Lenders), the Transfer shall become
effective on the Transfer Date.

	24.5	 	Effects of the Transfer

On the Transfer Date:

	a)	 	to the extent that in the Transfer Certificate the Existing Lender seeks to transfer its
rights and obligations under the Finance Documents, the Borrower and the Existing Lender shall
be released from further obligations to one another under the Finance Documents and their
respective rights against one another under the Finance Documents shall be cancelled (the
“Discharged Rights and Obligations”);

	b)	 	the Borrower and the New Lender shall assume obligations towards one another and/or acquire
rights against one another which differ from the Discharged Rights and Obligations only
insofar as the Borrower and the New Lender have assumed and/or acquired the same in place of
the Borrower and the Existing Lender;

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	c)	 	the Agent, the Arranger, the New Lender and the other Lenders shall acquire the same rights
and assume the same obligations between themselves as they would have acquired and assumed had
the New Lender been an original Lender hereunder with the rights and/or obligations acquired
or assumed by it as a result of the Transfer and to that extent the Agent, the Arranger and
the Existing Lender shall each be released from further obligations to each other under the
Finance Documents; and
	 
	d)	 	the New Lender shall become a Party as a “Lender”.

	24.6	 	Further assurances

The Borrower undertakes to procure that in relation to any Transfer, the Borrower shall (at its own
cost provided that an Event of Default has occurred at such time) at the request of the Agent
execute such documents as may in the discretion of the Agent be necessary to ensure that the New
Lender attains the benefit of the Finance Documents.

	24.7	 	Disclosure of information

Any Lender may disclose:

	a)	 	to any of its affiliates and a potential assignee;

	b)	 	to whom that Lender enters into (or may potentially enter into) any sub-participation in
relation to, or any other transaction under which payments are to be made by reference to,
this Agreement or the Borrower; and
	 
	c)	 	to whom, to the extent that, information is required to be discloses by any applicable law,

such information about the Borrower and the Finance Documents as that Lender shall consider
appropriate, provided that such disclosure shall be subject to the prior written approval by the
Borrower and the signing by such potential assignee of a separate confidentiality agreement prior
to the disclosure of any such information, if such potential assignee is not an affiliate of any of
the Lenders.

	25	 	ROLE OF THE AGENT AND THE ARRANGER

	25.1	 	Appointment and authorisation of the Agent

	a)	 	Each other Finance Party and the Swap Bank appoints the Agent to act as its agent under and
in connection with the Finance Documents.

	b)	 	Each other Finance Party and the Swap Bank authorises the Agent to exercise the rights,
powers, authorities and discretions specifically given to the Agent under or in connection
with the Finance Documents together with any other incidental rights, powers, authorities and
discretions.

	25.2	 	Duties of the Agent

The Agent shall not have any duties or responsibilities except those expressly set forth in the
Finance Documents, and the Agent’s duties under the Finance Documents are solely mechanical and
administrative in nature. The Agent shall:

	a)	 	promptly forward to a Party the original or a copy of any document which is delivered to it
in its capacity as Agent for the attention of that Party by another Party;

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	b)	 	supply the other Finance Parties with all material information which the Agent receives from
the Borrower;

	c)	 	if it receives notice from a Party referring to this Agreement, describing an Event of
Default and stating that the circumstance is an Event of Default, promptly notify the Finance
Parties; and

	d)	 	from it receives sufficient information; promptly notify the Lenders of the occurrence of any
Event of Default arising under Clause 23 (Events of Default).

	25.3	 	Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any
kind to any other Party under or in connection with any Finance Document.

	25.4	 	Relationship

The relationship between the Agent and the other Finance Parties is that of agent and principal
only. Nothing in this Agreement shall be construed as to constitute the Agent or the Finance
Parties as trustee or fiduciary for any other person, and neither the Agent nor the Finance Parties
shall be bound to account to any Finance Party for any sum or the profit element of any sum
received by it for its own account.

	25.5	 	Business with the Borrower

The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind
of banking or other business with the Borrower.

	25.6	 	Rights and discretions of the Agent

	a)	 	The Agent may rely on:

	 	(i)	 	any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and
	 
	 	(ii)	 	any statement made by a director, authorised signatory or employee of any
person regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.

	b)	 	The Agent may assume (unless it has received notice to the contrary in its capacity as Agent
for the Majority Lenders) that:

	 	(i)	 	no Event of Default has occurred (unless it has actual knowledge of an
Event of Default under Clause 23.1 (Non-payment)); and
	 
	 	(ii)	 	any right, power, authority or discretion vested in any Party or the
Lenders have not been exercised.

	c)	 	The Agent may engage, pay for and rely on the advise or services of any lawyers, accountants,
surveyors or other experts.

	d)	 	The Agent may act in relation to the Finance Documents through its personnel and agents.

	e)	 	The Agent may disclose to any other Party any information it reasonably believes it has
received as agent under this Agreement.

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	f)	 	Notwithstanding any other provision of any Finance Document to the contrary, neither the
Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its
reasonable opinion constitute a breach of any law or regulation or a breach of duty of
confidentiality or render it liable to any person.

	25.7	 	Majority Lenders’ instructions

	a)	 	Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any
right, power, authority or discretion vested in it as Agent in accordance with any
instructions given to it by the Majority Lenders (or, if so instructed by the Lenders, refrain
from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not
be liable for any act (or omission) if it acts in accordance with an instruction of the
Majority Lenders.

	b)	 	Unless a contrary indication appears in a Finance Document, any instructions given by the
Majority Lenders will be binding on all the Finance Parties.

	c)	 	The Agent may refrain from acting in accordance with the instructions of the Majority Lenders
(or, if appropriate, the Lenders) until it has received such security as it may require for
any cost, loss or liability (together with any associated VAT) which it may incur in complying
with the instructions.

	d)	 	In the absence of instructions from the Majority Lenders (or, if appropriate, the Lenders)
the Agent may act (or refrain from acting) as it considers to be in the best interest of the
Lenders.

	e)	 	The Agent is not authorised to act on behalf of a Lender (without first obtaining that
Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

	25.8	 	Responsibility for documentation

Neither the Agent nor the Arranger:

	a)	 	is responsible for the adequacy, accuracy and/or completeness of any information (whether
oral or written) supplied by the Agent, the Arranger, the Borrower or any other person in or
in connection with any Finance Document; or

	b)	 	is responsible for the legality, validity, effectiveness, adequacy or enforceability of any
Finance Document or any other agreement, arrangement or document entered into, made in
anticipation of or in connection with any Finance Document.

	25.9	 	Exclusion of liability

	a)	 	Without limiting litra b) below, the Agent will not be liable for any action taken by it
under or in connection with any Finance Document, unless directly caused by its gross
negligence or wilful misconduct.

	b)	 	No Party (other than the Agent) may take any proceedings against any officer, employee or
agent of the Agent in respect of any claim it might have against the Agent or in respect of
any act or omission of any kind by that officer, employee or agent in relation to any Finance
Document and any officer, employee and agent of the Agent may rely on this Clause.

	c)	 	The Agent will not be liable for any delay (or any related consequences) in crediting an
account with an amount required under the Finance Documents to be paid by the Agent if 

44

 

	 	 	the
Agent has taken all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or settlement system used by
the Agent for that purpose.

	d)	 	Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any “know your
customer” or other checks in relation to any person on behalf of any Lender and each Lender
confirms to the Agent and the Arranger that it is solely responsible for any such checks it is
required to carry out and that it may not rely on any statement in relation to such checks
made by the Agent or the Arranger.

	25.10	 	Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments
are then reduced to zero, to its share of the Total Commitments immediately prior to their
reduction to zero) indemnify the Agent, within three (3) Business Days of demand, against any cost,
loss or liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence
or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been
reimbursed by the Borrower pursuant to a Finance Document).

	25.11	 	Resignation of the Agent

	a)	 	The Agent may resign and appoint one of its affiliates as successor by giving notice to the
other Finance Parties and the Borrower.

	b)	 	Alternatively the Agent may resign by giving notice to the other Finance Parties and the
Borrower in which case the Majority Lenders (after consultation with the Borrower) may appoint
a successor Agent.

	c)	 	If the Majority Lenders have not appointed a successor Agent in accordance with litra b)
above within thirty (30) days after notice of resignation was given, the Agent (after
consultation with the Borrower) may appoint a successor Agent.

	d)	 	The retiring Agent shall, at its own cost, make available to the successor Agent such
documents and records and provide such assistance as the successor Agent may reasonably
request for the purposes of performing its functions as Agent under the Finance Documents.
	 
	e)	 	The Agent’s resignation notice shall only take effect upon appointment of a successor.

	f)	 	Upon the appointment of a successor, the retiring Agent shall be discharged from any further
obligation in respect of the Finance Documents but shall remain entitled to the benefit of
this Clause 25. Its successor and each of the other Parties shall have the same rights and
obligations amongst themselves as they would have had if such successor had been an original
Party.

	g)	 	After consultation with the Borrower, the Majority Lenders may, by notice to the Agent,
require it to resign in accordance with litra b) above. In this event, the Agent shall resign
in accordance with litra b) above.

	25.12	 	Confidentiality

	a)	 	In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its
agency division which shall be treated as a separate entity from any other of its divisions or
departments.

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	b)	 	If information is received by another division or department of the Agent, it may be treated
as confidential to that division or department and the Agent shall not be deemed to have
notice of it.

	25.13	 	Credit appraisal by the Lenders

Without affecting the responsibility of the Borrower for information supplied by it or on its
behalf in connection with any Finance Document, each Lender confirms to the Agent and the Arranger
that it has been, and will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with any Finance Document,
including (without limitation):

	a)	 	the financial condition, status and nature of the Borrower;

	b)	 	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and
any other agreement, arrangement or document entered into, made or executed in anticipation
of, under or in connection with any Finance Document; and

	c)	 	whether that Lender has recourse, and the nature and extent of that recourse, against any
Party or any of its respective assets under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any other agreement, arrangement or
document, entered into, made or executed in anticipation of, under or in connection with any
Finance Document.

	25.14	 	Conduct of business of the Finance Parties

No provision of this Agreement will:

	a)	 	interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in
whatever manner it thinks fit;

	b)	 	oblige any Finance Party to investigate or claim any credit, relief, remission or repayment
available to it or to the extent, order or manner of any claim; or

	c)	 	oblige any Finance Party to disclose any information relating to its affairs (tax or
otherwise) or any computations in respect of Tax.

	26	 	SHARING AMONG THE FINANCE PARTIES

	26.1	 	Payment to Finance Parties

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from the Borrower
other than in accordance with Clause 27 (Payment mechanics) and applies that amount to a payment
due under the Finance Documents then:

	a)	 	the Recovering Finance Party shall promptly, within three (3) Business Days, notify details
of the receipt or recovery to the Agent;

	b)	 	the Agent shall determine whether the receipt or recovery is in excess of the amount the
Recovering Finance Party would have been paid had the receipt or recovery been received by or
made by the Agent and distributed in accordance with Clause 27 (Payment mechanics), without
taking account of Tax which would be imposed on the Agent in relation to the receipt, recovery
or distribution; and

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	c)	 	the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent,
pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any
amount which the Agent determines may be retained by the Recovering Finance Party as its share
of any payment to be made, in accordance with Clause 27.5 (Partial payments).

	26.2	 	Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it
between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause
27.5 (Partial payments).

	26.3	 	Recovering Finance Party’s rights

	a)	 	On a distribution by the Agent under Clause 26.2 (Redistribution of payments), the Recovering
Finance Party will be subrogated to the rights of the Finance Parties which have shared in the
redistribution.

	b)	 	If and to the extent that the Recovering Finance Party is not able to rely on its rights
under litra a) above, the Borrower shall be liable to the Recovering Finance Party for a debt
equal to the Sharing Payment which is immediately due and payable.

	26.4	 	Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes
repayable and is repaid by that Recovering Finance Party, then:

	a)	 	each Finance Party which has received a share of the relevant Sharing Payment pursuant to
Clause 26.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent
for the account of that Recovering Finance Party an amount equal to the appropriate part of
its share of the Sharing Payment (together with an amount as is necessary to reimburse that
Recovering Finance Party for its proportion of any interest on the Sharing Payment which that
Recovering Finance Party is required to pay); and

	b)	 	that Recovering Finance Party’s rights of subrogation in respect of any reimbursement shall
be cancelled and the Borrower will be liable to the reimbursing Finance Party for the amount
so reimbursed.

	26.5	 	Exceptions

	a)	 	This Clause 26 shall not apply to the extent that the Recovering Finance Party would not,
after making any payment pursuant to this Clause, have a valid and enforceable claim against
the Borrower.

	b)	 	A Recovering Finance Party is not obliged to share with any other Finance Party any amount
which the Recovering Finance Party has received or recovered as a result of taking legal
proceedings, if:

	 	(i)	 	it notified that other Finance Party of the legal proceedings; and
	 
	 	(ii)	 	that other Finance Party had an opportunity to participate in those legal
or arbitration proceedings but did do so as reasonably practicable having received
notice and did not take separate legal or arbitration proceedings.

47

 

	27	 	PAYMENT MECHANICS

	27.1	 	Payments to the Agent

All payments by the Borrower or a Lender under the Finance Documents shall be made:

	a)	 	to the Agent to its account with such office or bank as the Agent may from time to time
designate in writing to the Borrower or a Lender for this purpose; and

	b)	 	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 settlement of transactions in the relevant
currency in the place of payment.

	27.2	 	Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to
Clause 27.3 (Distributions to the Borrower) and 27.4 (Clawback), be made available by the Agent as
soon as practicable after receipt to the Party entitled to receive payment in accordance with this
Agreement, to such account as that Party may notify to the Agent by not less than five (5) Business
Days’ notice.

	27.3	 	Distributions to the Borrower

The Agent may (with the consent of the Borrower or in accordance with Clause 28 (Set-off)), apply
any amount received 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 the Finance Documents or in or
towards purchase of any amount of currency to be so applied.

	27.4	 	Clawback

	a)	 	Where a sum is to be paid to the Agent under the Finance Documents for distribution to
another Party, the Agent is not obliged to pay that sum to that other Party until it has been
able to establish to its satisfaction that it has actually received that sum.

	b)	 	If the Agent pays an amount to another Party and it proves to be the case that the Agent had
not actually received that amount, then the Party to whom that amount was paid by the Agent
shall on demand refund the same amount to the Agent, together with interest on that amount
from the date of payment to the date of receipt by the Agent, calculated by the Agent to
reflect its cost of funds.

	27.5	 	Partial payments

If the Agent receives a payment that is insufficient to discharge all the amounts then due and
payable by the Borrower under the Finance Documents, the Agent shall apply that payment towards the
obligations of the Borrower under the Finance Documents in the following order:

	a)	 	firstly, in or towards payment pro rata of any unpaid fees, costs and expenses of the
Agent under the Finance Documents;

	b)	 	secondly, in or towards payment pro rata of any accrued interest (including default
interest), fee or commissions due but unpaid under this Agreement;

	c)	 	thirdly, in or towards payment pro rata of any principal due but unpaid under this
Agreement; and

	d)	 	fourthly, in or towards payment pro rata of any other sum due but unpaid under the
Finance Documents.

48

 

	27.6	 	Application following an Event of Default

On either (i) the completion of a sale of the Vessel, either by forced auction or private treaty,
or (ii) the receipt of any monies by the Agent pursuant to the sale proceeds of the Vessel (as the
case may be), such monies shall be applied in the following order:

	a)	 	firstly, in respect of all costs and expenses whatsoever incurred in connection with
or about incidental to the said sale;

	b)	 	secondly, in or towards satisfaction of all prior claims (being any claims,
liabilities or debts owed or taking priority in respect of such proceeds over the Security
Interests constituted by the Security Documents) secured on the Vessel;

	c)	 	thirdly, in or towards payment pro rata of all sums owed to the Finance Parties under
the Finance Documents; and
	 
	d)	 	fourthly, the balance, if any to the Borrower or to its order.

	27.7	 	No set-off by the Borrower

All payments to be made by the Borrower under the Finance Documents shall be calculated and be made
without (and free and clear of any deduction for) set-off or counterclaim.

	27.8	 	Payment on non-Business Days

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

	b)	 	During any extension of the due date for payment of any principal or Unpaid Sum under this
Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.

	27.9	 	Currency of account

The Borrower shall pay:

	a)	 	any amount payable under this Agreement, except as otherwise provided for herein, in USD; and

	b)	 	all payments of Costs and Taxes in the currency in which the same were incurred.

	28	 	SET-OFF

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

	29	 	NOTICES

	29.1	 	Communication in writing

Any communication to be made under or in connection with the Finance Documents shall be made in
writing and, unless otherwise stated, may be made by fax or letter. Any such notice or

49

 

communication addressed as provided in Clause 29.2 (Addresses) will be deemed to be given or made
as follows:

	a)	 	if by letter, when delivered at the address of the relevant Party;

	b)	 	if by fax, when received.

However, a notice given in accordance with the above but received on a day which is not a Business
Day or after 16:00 hours in the place of receipt will only be deemed to be given at 9:00 hours on
the next Business Day in that place.

	29.2	 	Addresses

Any communication or document to be made under or in connection with the Finance Documents shall be
made or delivered to the address, fax number or e-mail address of each Party and marked for the
attention of the department or persons set out below and, in case of any New Lender, to the address
notified to the Agent:

	 	 	 
	If to the Agent:

	 	Nordea Bank Norge ASA
	 

	 	Middelthunsgate 17, N-0368 Oslo, Norway
	 

	 	P.O. Box 1166 Sentrum, N-0107 Oslo, Norway
	 

	 	Att: Shipping, Offshore and Oil Services
	 

	 	Fax No: +47 22 48 66 68
	 

	 	E-mail: oddbjorn.warpe@nordea.com
	 
	 	 
	If to the Borrower:

	 	Kommandor LLC
	 

	 	400 N. Sam Houston Parkway East, Suite 400
	 

	 	Houston, Texas 77060
	 

	 	USA
	 

	 	Fax No: +1 281 618 0505
	 

	 	E-mail: cbuster@helixesg.com
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Kromann Reumert
	 

	 	Sundkrogsgade 5
	 

	 	DK-2100 København Ø
	 

	 	Denmark
	 

	 	Fax No: + 45 70 12 13 11
	 

	 	E-mail: jbe@kromannreumert.com

or any substitute address and/or fax number and/ro e-mail address and/or marked for such other
attention as the Party may notify to the other Agent (or the Agent may notify the other Parties if
a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

	29.3	 	Communication with the Borrower

All communication from or to the Borrower shall be sent through the Agent.

	29.4	 	Language

Communication to be given by one Party to another under the Finance Documents shall be given in the
English language or, if not in English and if so required by the Agent, be accompanied by a

50

 

certified English translation and, in this case, the English translation shall prevail unless the
document is a statutory or other official document.

	30	 	CALCULATIONS

All sums falling due by way of interest, fees and commissions under the Finance Documents accrue
from day-to-day and shall be calculated on the basis of the actual number of days elapsed and a
calendar year of 360 days.

	31	 	MISCELLANEOUS

	31.1	 	Partial invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or enforceability of such
provisions under any law of any other jurisdiction will in any way be affected or impaired.

	31.2	 	Remedies and waivers

No failure to exercise, nor any delay in exercising on the part of any Finance Party, any right or
remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise 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.

	31.3	 	Amendments and waivers

	31.3.1	 	Required consents

	a)	 	Subject to Clause 31.3.2 (Exceptions), any term of the Finance Documents may be amended or
waived only with the written consent of the Majority Lenders and the Borrower and any such
amendment will be binding on all Parties.

	b)	 	The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause.

	31.3.2	 	Exceptions

An amendment to or waiver that has the effect of changing or which relates to:

	a)	 	The definition of “Majority Lenders”;
	 
	b)	 	an extension of the date of any payment of any amount under the Finance Documents;
	 
	c)	 	a reduction in Margin or a reduction in the amount of any payment of principal, interest,
fees or commission payable;
	 
	d)	 	an increase in or extension of any Commitment;
	 
	e)	 	a term of the Finance Documents which expressly requires the consent of all the Lenders;
	 
	f)	 	a proposed substitution or replacement of the Borrower; or
	 
	g)	 	a change of Clauses 2.2 (Finance parties’ rights and obligations), 17 (Security), 22.1
(Insurance), 24 (Changes to the Parties) and this Clause 31,

51

 

shall not be made without the prior written consent of all the Lenders.

An amendment or waiver which relates to the rights or obligations of the Agent or the Arranger may
not be effected without the consent of the Agent or the Arranger.

	31.4	 	Disclosure of information and confidentiality

Each of the Finance Parties may disclose to each other or to their professional advisers any kind
of information which the Finance Parties have acquired under or in connection with any Finance
Document. The Parties are obliged to keep confidential all information in respect of the terms and
conditions of this Agreement. This confidentiality obligation shall not apply to any information
which:

	a)	 	is publicised by a Party as required by applicable laws and regulations;

	b)	 	has entered the public domain or is publicly known, provided that such information is not
made publicly known by the receiving Party of such information; or

	c)	 	was or becomes, as the Party is able to demonstrate by supporting documents, available to the
such Party on a non-confidential basis prior to the disclosure thereof.

	31.5	 	Conflicting provisions

In case of conflict between this Agreement and the terms of any of the Security Documents, the
terms and conditions of this Agreement shall prevail.

	32	 	GOVERNING LAW AND ENFORCEMENT

	32.1	 	Governing law

This Agreement shall be governed by Norwegian law.

	32.2	 	Jurisdiction

	a)	 	For the benefit of each Finance Party, the Borrower agrees that the courts of Oslo, Norway,
have jurisdiction to settle any disputes arising out of or in connection with the Finance
Documents including a dispute regarding the existence, validity or termination of this
Agreement, and the Borrower accordingly submits to the non-exclusive jurisdiction of the Oslo
District Court (Oslo tingrett).

	b)	 	Nothing in this Clause 32.2 shall limit the right of the Finance Parties to commence
proceedings against the Borrower in any other court of competent jurisdiction. To the extent
permitted by law, the Finance Parties may take concurrent proceedings in any number of
jurisdictions.

	32.3	 	Service of process

Without prejudice to any other mode of service, the Borrower:

	a)	 	irrevocably appoints Marinelaw AS of Olav Kyrresgt. 11, P.O. Box 1233, N-5811 Bergen, Norway
(att.: Mona Hausvik) as its agent for service of process relating to any proceedings before
Norwegian courts in connection with the Finance Documents to which it is a party; and

	b)	 	agrees that failure by its process agent to notify it of the process will not invalidate the
proceedings concerned.

* * *

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SCHEDULE 1

LENDERS AND COMMITMENTS

	 	 	 	 	 
	Lender:	 	Total Commitment:	 	Per cent:
	Nordea Bank Norge ASA
	 	USD 45,000,000	 	100.00 per cent
	Total
	 	USD 45,000,000	 	100.00 per cent

53

 

SCHEDULE 2

CONDITIONS PRECEDENT

PART I – AT SIGNING

	1	 	CORPORATE AUTHORISATION
	 
	1.1	 	In respect of the Borrower:
	 
	a)	 	Certificate of Formation;
	 
	b)	 	Operating Agreement;
	 
	c)	 	Resolutions passed by the Managers of the Borrower evidencing:

	 	 (i)	 	the approval of the terms of, and the transactions contemplated by, the
Transaction Documents to which it is a party and the registration the Mortgage; and
	 
	 	 (ii)	 	the authorisation of its appropriate officer or officers or other
representatives to execute the Transaction Documents to which it is a party and any
other documents necessary for the transactions contemplated by the Transaction
Documents to which it is a party, on its behalf;

	d)	 	Resolution by the members of the Borrower evidencing approval of the Finance Documents in
accordance with Clause 3.8 of the Operating Agreement;
	 
	e)	 	Secretary’s Certificate; and
	 
	f)	 	Power of Attorney (notarised and legalised if requested by the Agent).

SCHEDULE 2

CONDITIONS PRECEDENT

PART II – AT DRAWDOW

	1	 	CORPORATE AUTHORISATION
	 
	1.1	 	In respect of the Borrower:
	 
	a)	 	A Director’s Certificate stating inter alia that all corporate documents and resolutions
provided to the Agent (on behalf of the Finance Parties and Swap Bank) at the time of signing
of this Agreement remain in full force and effect and that no amendments, supplements or
waives have been made thereto.
	 
	1.2	 	In respect of the Bareboat Charterer:
	 
	a)	 	Articles of Incorporation;
	 
	b)	 	Bylaws;
	 
	c)	 	Resolutions passed at a board meeting of the Bareboat Charterer evidencing:

	 	 (i)	 	the approval of the terms of, and the transactions contemplated by, the
Transaction Documents to which it is a party; and

54

 

	 	(ii)	 	the authorisation of its appropriate officer or officers or other
representatives to executed the Transaction Documents to which it is a party and any
other documents necessary for the transactions contemplated by the Transaction
Documents to which it is a party, on its behalf; and

	d)	 	Power of Attorney.
	 
	2	 	AUTHORISATIONS

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

	3	 	THE VESSEL

In respect of the Vessel:

	a)	 	Evidence (by way of transcript of registry) that the Vessel is, or will be, registered in the
name of the Borrower in the Ship Registry, that the Mortgage has been, or will in connection
with the utilisation of the Loan be, executed and recorded with its intended first priority
against the Vessel and that no other encumbrances, maritime liens, mortgages or debts
whatsoever are registered against the Vessel;

	b)	 	An updated interim class certificate related to the Vessel from the relevant classification
society, confirming that the Vessel is classed with the class notation (at the relevant
Drawdown Date): OI 100A(1), Floating Production Unit, Multipurpose Support Unit, OIWS, PC LI
LMC, UMS, DP(AA), PCR in accordance with Clause 22.2 (Classification and repairs), free of
extensions and overdue recommendations;

	c)	 	Copies of insurance policies/cover notes documenting that insurance cover has been taken out
in respect of the Vessel in accordance with Clause 22.1 (Insurance), and evidencing that the
Agent’s (on behalf of the Finance Parties and the Swap Bank) Security Interest in the
insurance policies have been noted in accordance with the relevant notices as required under
the Assignment Agreement;

	d)	 	The SMC;
	 
	e)	 	The DOC;
	 
	f)	 	The ISPS Code Certificate; and
	 
	g)	 	The Builder’s Certificate (related to the conversion) from the Yard.
	 
	4	 	FINANCE DOCUMENTS
	 
	a)	 	The Agreement;
	 
	b)	 	The Assignment Agreement;
	 
	c)	 	Notice of Assignment of Earnings and the Bareboat Charterer’s acknowledgement thereof;
	 
	d)	 	Notice of Assignment of Insurances and the insurers’ acknowledgement thereof;
	 
	e)	 	The Bareboat Charterparty Assignment;

55

 

	f)	 	Notice of Assignment of the Bareboat Charterparty and the Bareboat Charterer’s acknowledgment
thereof;
	 
	g)	 	The Mortgage (including the deed of covenants (if applicable));
	 
	h)	 	The Account Pledge;
	 
	i)	 	The Share Pledge (and any documents related thereto);
	 
	j)	 	The Intercreditor Agreement; and
	 
	k)	 	The Bareboat Charterer Undertaking.
	 
	5	 	TRANSACTION DOCUMENTS
	 
	a)	 	The Technical Management Agreement (if any);
	 
	b)	 	the Conversion Contract;
	 
	c)	 	the Bareboat Charterparty;
	 
	d)	 	the Subordinated Loan Agreement;
	 
	e)	 	the Operating Agreement;
	 
	f)	 	the Bareboat Charterer Share Pledge;
	 
	g)	 	the UCCI Charge;
	 
	h)	 	the Second Mortgage; and
	 
	i)	 	the Swap Agreement.
	 
	6	 	MISCELLANEOUS
	 
	a)	 	The Drawdown Notice at least three (3) Business Days prior to the Drawdown Date;

	b)	 	Evidence that all fees referred to in Clause 11 (Fees), as are payable on or prior to the
Drawdown Date, have or will be paid on its due date;

	c)	 	Evidence of all of the Bareboat Charterer’s external Financial Indebtedness including
documentation of all financial covenants thereto;

	d)	 	Evidence that the Borrower has been capitalized with a minimum of USD 30,000,000 in equity
contributions and pre-delivery financing in the form of (i) the subordinated loan under the
Subordinated Loan Agreement and (i) the Bareboat Facility;

	e)	 	A Compliance Certificate confirming that the Borrower is in compliance with the financial
covenants set out in Clause 20.1 (Free Cash);

	f)	 	The effective interest letter; and

	g)	 	Any other documents as reasonably requested by the Agent.

56

 

	7	 	LEGAL OPINIONS

	a)	 	A legal opinion from Higgs & Johnson relating to Bahamas law issues;
	 
	b)	 	A legal opinion from legal counsel acceptable to the Agent relating to Delaware law issues;
	 
	c)	 	A legal opinion from legal counsel acceptable to the Agent relating to English law issues;
	 
	d)	 	A legal opinion from Thommessen Krefting Greve Lund AS relating to Norwegian law issues; and
	 
	e)	 	Any such other favourable legal opinions in form and substance satisfactory to the Agent from
lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

57

 

SCHEDULE 3

FORM OF DRAWDOWN NOTICE

	 	 	 
	To:

	 	Nordea Bank Norge, as Agent
	 
	 	 
	From:

	 	Kommandor LLC
	 
	 	 
	Date:

	 	[•]

KOMMANDOR LLC – USD 45,000,000 TERM LOAN AGREEMENT DATED 13 JUNE 2007 (THE “AGREEMENT”)

We refer to Clause 5.1 (Delivery of the Drawdown Notice) of the Agreement. Terms defined in the
Agreement shall have the same meaning when used in this Drawdown Notice.

	a)	 	You are hereby irrevocably notified that we wish to make the following drawdown of the Loan:

	 	 	 
	Proposed Drawdown Date:

	 	[     ]
	 
	 	 
	Principal Amount:

	 	[     ]
	 
	 	 
	Interest Period:

	 	[     ]

	b)	 	The proceeds of the Loan shall be credited to [•] [insert name and number of account].

	c)	 	We confirm that, as of the date hereof (i) each condition specified in Clause 4 (Conditions
Precedent) of the Agreement is satisfied; (ii) each of the representations and warranties set
out in Clause 18 (Representations and warranties) of the Agreement deemed to be repeated on
the date hereof is true and correct; and (iii) no event or circumstance has occurred and is
continuing which constitutes or would constitute an Event of Default with the passage of time.

Yours sincerely

for and on behalf of

Kommandor LLC

By:                                         

Name:

Title: [authorised officer]

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SCHEDULE 4

FORM OF SELECTION NOTICE

	 	 	 
	To:

	 	Nordea Bank Norge ASA, as Agent
	 
	 	 
	From:

	 	Kommandor LLC
	 
	 	 
	Date:

	 	[•]

KOMMANDOR LLC – USD 45,000,000 TERM LOAN AGREEMENT DATED 13 JUNE 2007 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement shall have the same meaning when used in
this Selection Notice.

	a)	 	We refer to the amount outstanding under the Loan with an Interest Period ending on [•].

	b)	 	We request that the next Interest Period for the Loan is [•].

This Selection Notice is irrevocable.

Yours sincerely

for and on behalf of

Kommandor LLC

By:                                         

Name:

Title:

59

 

SCHEDULE 5

FORM OF COMPLIANCE CERTIFICATE

	 	 	 
	To:

	 	Nordea Bank Norge ASA, as Agent
	 
	 	 
	From:

	 	Kommandor LLC
	 
	 	 
	Date:

	 	[•] [To be delivered no later than [one hundred and fifty (150)]/ninety (90) days after each reporting date]

KOMMANDOR LLC – USD 45,000,000 TERM LOAN AGREEMENT DATED 13 JUNE 2007 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement shall have the same meaning when used in
this Compliance Certificate. With reference to Clauses 19.2 (Compliance certificate) and 20.1
(Free Cash Balance) of the Agreement, we confirm that as at [•] [insert relevant reporting date]:

	a)	 	Free Cash. The Free Cash was USD [•].
	 
	 	 	The Borrower shall at all times ensure that it has Free Cash of at least USD 250,000. The
covenant set out in Clause 20.1 (Minimum cash balance) is thus [not] satisfied.
	 
	b)	 	We confirm that, as of the date hereof (i) each of the representations and warranties set out
in Clause 18 (Representations and warranties) of the Agreement deemed to be repeated on the
date hereof is true and correct, and (ii) no event or circumstances has occurred and is
continuing which constitute or would constitute and Event of Default with the passage of time.

Yours sincerely

for and on behalf of

Kommandor LLC

By:                                         

Name:

Title:

60

 

SCHEDULE 6

FORM OF

TRANSFER CERTIFICATE

	 	 	 
	To:

	 	Nordea Bank Norge ASA, as Agent
	 
	 	 
	From:

	 	[•] (the ”Existing Lender” and [•] (the ”New Lender”)
	 
	 	 
	Date:

	 	[•]

KOMMANDOR LLC – USD 45,000,000 TERM LOAN AGREEMENT DATED 13 JUNE 2007 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement have the same meaning in this Transfer
Certificate unless given a different meaning in this Transfer Certificate.

With reference to Clause 24 (Changes to the Parties):

	a)	 	The Existing Lender, in its capacity as Lender under the
Agreement, confirms that it participates with [  ] per cent of the Total Commitments.
	 
	b)	 	The Existing Lender hereby transfers to the New Lender [  ] per cent of the Total Commitments as specified in
the Schedule hereto, and of the equivalent rights and interest in all Finance Documents, and the New Lender
hereby accepts such transfer from the Existing Lender in accordance with the terms set out herein and Clause
24 (Changes to the Parties) of the Agreement and assumes the same obligations to the other Finance Parties
as it would have been under if it was an original Lender.
	 
	c)	 	The proposed Transfer Date is [  ], as from which date the Transfer of such portion of the Total
Commitments shall take full legal effect.

	d)	 	The New Lender confirms that it has received a copy of the Agreement, together with such
other information as it has required in connection with this transaction. The New Lender
expressly acknowledges and agrees to the limitations on the Existing Lender’s responsibility
set out in Clause 24.3 (Limitations of responsibility of Existing Lenders) of the Agreement.

	e)	 	The New Lender hereby undertakes to the Existing Lender and the Borrower that it will perform
in accordance with the terms and conditions of the Agreement all those obligations which will
be assumed by it upon execution of this Transfer Certificate.

	f)	 	The address, fax number and attention details for notices, as well as the account details of
the New Lender, are set out in the Schedule.

	g)	 	This Transfer Certificate is governed by Norwegian law, with Oslo City Court (Oslo tingrett)
as legal venue.

61

 

The Schedule

Commitments/rights and obligations to be transferred

	 	 	 	 	 
	I

	 	Existing Lender:
	 	[     ]
	 
	 	 	 	 
	II

	 	New Lender:
	 	[     ]
	 
	 	 	 	 
	III

	 	Total Commitments of Existing Lender:
	 	USD [     ]
	 
	 	 	 	 
	IV

	 	Aggregate amount transferred:
	 	USD [     ]
	 
	 	 	 	 
	V

	 	Total Commitments of New Lender:
	 	USD [     ]
	 
	 	 	 	 
	VI

	 	Transfer Date:
	 	[     ]

Administrative Details / Payment Instructions of New Lender

Notices to New Lender:

[     ]

[     ]

Att: [     ]

Fax no: + [     ]

[Insert relevant office address, fax number and attention details for notices and payments to the
New Lender.]

Account details of New Lender: [Insert relevant account details of the New Lender.]

	 	 	 
	Existing Lender:

	 	New Lender:
	[•]

	 	[•]
	 
	 	 
	By:                                         

	 	By:                                         
	Name:

	 	Name:
	Title:

	 	Title:

This Transfer Certificate is accepted and agreed by the Agent and the Borrower and the Transfer
Date is confirmed as [   ].

	 	 	 
	Agent:

	 	Borrower:
	Nordea Bank Norge ASA

	 	Kommandor LLC
	 
	 	 
	By:                                         

	 	By:                                         
	Name:

	 	Name:
	Title:

	 	Title:

62

 

SCHEDULE 7

FORM OF ASSIGNMENT AGREEMENT

THIS ASSIGNMENT AGREEMENT (the “Assignment Agreement”) is made on [ ] between:

	(1)	 	Kommandor LLC of [•], as borrower (the “Borrower”); and

	(2)	 	Nordea Bank Norge ASA of Middelthunsgate 17, N-0368 Oslo, Norway, organisation number 911 044
110 as agent on behalf of the Finance Parties and the Swap Bank (each as defined in the
Agreement as referred to below) (the “Agent”).

Background:

	(A)	 	Pursuant to the terms and conditions of a term loan agreement dated 13 June 2007 (as the same
may be amended, supplemented and restated from time to time, the “Agreement”) between the
Borrower as borrower, the banks and financial institutions listed in schedule 1 thereto as
lenders (the “Lenders”) and Nordea Bank Norge ASA as agent for the Lenders (the “Agent”), the
Lenders have agreed to make available to the Borrower a term loan facility in the aggregate
amount of up to USD 45,000,000 (the “Loan”); and

	(B)	 	it is a condition precedent to the Lenders making the Loan available to the Borrower that the
Borrower executes and delivers, inter alia, this Assignment Agreement and grants the Security
Interests set out herein as security for its obligations towards the Finance Parties under the
Agreement.

NOW THEREFORE:

	1	 	INTERPRETATION
	 
	1.1	 	Definitions

In this Assignment Agreement, including the preamble hereto (unless the context otherwise
requires), any term or expression defined in the preamble shall have the meanings ascribed to it
therein. In addition, terms and expressions not defined herein but whose meanings are defined in
the Agreement shall have the meanings set out therein.

	1.2	 	Construction

In this Assignment Agreement, unless the context otherwise requires:

	a)	 	reference to Clauses or Appendices are to be construed as references to clauses or appendices
of this Assignment Agreement unless otherwise stated;

	b)	 	references to (or to any specified provision of) this Assignment Agreement or any other
document shall be construed as references to this Assignment Agreement, that provision or that
document as from time to time amended; and

	c)	 	words importing the plural shall include the singular and vice versa.

63

 

	2	 	ASSIGNMENT OF EARNINGS AND INSURANCES

	2.1	 	Assignment

To secure the payment and the discharge of the Borrower’s obligations under the Agreement and the
payment of all sums which from time to time may become due thereunder, and to secure the
performance and observance of and compliance with all the covenants, terms and conditions contained
in the Agreement, the Borrower hereby assigns to the Agent (on behalf of the Finance Parties and
the Swap Bank) with first priority:

	a)	 	the Earnings; and

	b)	 	the Insurances.

Subject to no Event of Default having occurred and which is continuing (unremedied and unwaived),
any insurance proceeds received by the Agent resulting from a casualty (other than a Total Loss) in
excess of USD 1,000,000 per incident shall be released to the Borrower for application against the
repaid and/or replacement of the casualty causing the insurance payment. Upon completion, such
repairs and/or replacements shall be verified by an independent surveyor in writing to the Agent.

	2.2	 	Notice and acknowledgement, etc.

	a)	 	The Borrower undertakes promptly to give notice of the assignment of the Earnings to the
Bareboat Charterer and any other third party from which any of the Earnings or amounts may
become payable substantially in the form set out in Appendix 1A hereto and procure
that any recipient of such notice acknowledges receipt of the notice as set out therein
substantially in the form set out in Appendix 1B.

	b)	 	In the event that the Insurances, or any one of them, have been taken out on conditions other
than the Norwegian Marine Insurance Plan of 1996, version 2003 (as amended from time to time)
(the “Plan”), to give all the relevant insurers notice substantially in the form of
Appendix 2(A) hereto, and procure that the said insurers acknowledge receipt of such
notice in the form of Appendix 2(B) hereto or give such other form of notice and
procure such other form of acknowledgement as the Agent shall require in writing to the
Borrower and/or the Bareboat Charterer; and

	c)	 	In the event that the Insurances, or any one of them, have been taken out according to the
Plan, to procure written statements from all the relevant insurers and/or approved brokers
confirming that the Agent (on behalf of the Finance Parties and the Swap Bank) has been duly
registered as co-insured first priority mortgagee on all such insurance policies taken out for
the Vessel and that notice according to the Plan has been duly received by all the relevant
insurers.

	2.3	 	Loss Payable

Claims related to the Insurances in respect of an actual or constructive or agreed or arranged or
compromised total loss or requisition for title or other compulsory acquisition of the Vessel and
claims payable in respect of a major casualty, that is to say any claim (or the aggregate of which)
exceeding USD 1,000,000, shall be payable to the Agent. Subject thereto all other claims, unless
and until the insurers have received notice from the Agent of an Event of Default which is
unremedied under the Agreement in which event all claims shall be payable directly to the Agent up
to the Lenders’ mortgage interest, shall be released directly for the repair, salvage or other
charges involved or to the Borrower as reimbursement if it has fully repaired the damage and paid
all of the salvage or other charges or otherwise in respect of Borrower’s actual costs in
connection with repair,

64

 

salvage and/or other charges. Any amounts paid to the Borrower directly
shall be paid to the Earnings Account.

	3	 	PERFECTION

The Borrower agrees that at any time and from time to time upon the written request of the Agent,
it will promptly and duly execute and deliver to the Agent any and all such further instruments and
documents as the Agent (on behalf of the Finance Parties and the Swap Bank) may reasonably deem
necessary or desirable to register this Assignment Agreement in any applicable registry, and to
maintain and/or perfect the Security Interest created by this Assignment Agreement and the rights
and powers herein granted.

	4	 	ASSIGNMENT

The Agent may assign or transfer its rights hereunder to any person to whom the rights and
obligations of the Agent and the Lenders under the Agreement are wholly or partially assigned in
accordance with Clause 24 (Changes to the Parties) of the Agreement.

	5	 	NO FURTHER ASSIGNMENT OR PLEDGE

The Borrower shall not, unless prior written consent has been obtained from the Agent, be entitled
to further assign or pledge the Earnings and the Insurances.

	6	 	ADDITIONAL AND CONTINUING SECURITY

The Security Interest contemplated by this Assignment Agreement shall be in addition to any other
Security Interest granted in accordance with the Agreement, and shall be a continuing security in
full force and effect as long as any obligations are outstanding under the Agreement.

	7	 	NOTICES

Any notice, demand or other communication to be made or delivered by any party pursuant to this
Assignment Agreement shall (unless the addressee has by five (5) Business Days’ written notice to
that party specified another address) be made or delivered as set out in Clause 29 (Notices) of the
Agreement.

	8	 	GOVERNING LAW – JURISDICTION

	a)	 	This Assignment Agreement shall be governed by and construed in accordance with the laws of
Norway.

	b)	 	The Borrower and the Finance Parties accept Oslo City Court (Oslo tingrett) as non-exclusive
venue, but this choice shall not prevent the Agent (on behalf of the Finance Parties and the
Swap Bank) to enforce any of the Finance Documents against the Vessel or other assets of the
Borrower wherever they may be found.

65

 

	 	 	 
	Borrower:

	 	Agent:
	Kommandor LLC

	 	Nordea Bank Norge ASA
	 
	 	 
	By:                                         

	 	By:                                         
	Name:

	 	Name:
	Title:

	 	Title:

[•], ___2007

We, Helix Energy Solutions Corp., Inc., being the bareboat charterer of the Vessel and being
responsible for insuring the Vessel as per the Bareboat Charterparty, hereby confirm that we have
full knowledge of the assignment of insurances as set out in this Assignment of Insurances and that
we will notify any insurers of the Vessel of such assignment.

Helix Energy Solutions Corp., Inc.

By:                                         

Name:

Title:

66

 

Appendix 1(A)

FORM OF NOTICE OF ASSIGNMENT

(Assignment of Earnings)

To: Helix Energy Solutions Corp, Inc

M/V “HELIX PRODUCER 1”

We refer to the bareboat charter party dated [•], (the “Bareboat Charterparty”) made between you
and us, whereby we agreed to let and you agreed to take on bareboat charter for the period and upon
the terms and conditions therein mentioned M/V “Helix Producer 1” (the “Vessel”).

We hereby give you notice that:

	a)	 	by an agreement dated [   ] 2007 (as the same may be
amended, supplemented or
restated from time to time,
the “Assignment Agreement”)
made between us and Nordea
Bank Norge, Middelthunsgate
17, N-0368 Oslo, Norway,
acting as agent on behalf of
certain other banks (the
“Agent”), related to a loan
agreement dated [•] (as the same may be amended,
supplemented or restated
from time to time, the
“Agreement”), we have
assigned absolutely and have
agreed to assign absolutely
to and in favour of the
Agent all our rights, title
and interest, present and
future, to all payments to
be made to us under the
Bareboat Charterparty,
including in respect of any
breach by you thereunder;

	b)	 	you are herby irrevocably authorised and instructed to make all payments under the Bareboat
Charterparty to our USD account with Nordea Bank Finland Plc, New York Branch account no
6004.04.43099 (free of any set-off or other deduction) until such time as the Agent shall
direct to the contrary whereupon all instructions or demands for actions shall be made by the
Agent and payments are due to the Agent or as it may direct; and

	c)	 	the Agreement includes provisions that no amendments, termination or cancellation shall be
made to the Bareboat Charterparty (nor shall you be released from any of your obligations
thereunder without the prior written consent of the Agent) and that we shall remain liable to
perform all our obligations under the Bareboat Charterparty and that the Agent shall be under
no obligations of any kind whatsoever in respect thereof.

The authority and instructions herein contained cannot be revoked or varied by us without the
written consent of the Agent. The provisions of this notice shall be governed by Norwegian law.

[Place and date:] [•], [•]

Yours sincerely

for and on behalf of

Kommandor LLC

By:                                         

Name:

Title: [authorised officer]

67

 

Appendix 1(B)

FORM OF ACKNOWLEDGEMENT

(Assignment of Earnings)

	 	 	 
	To:

	 	Nordea Bank Norge ASA
	 

	 	N-0368 Oslo, Norway
	 

	 	Att: Shipping, Offshore and Oil Services
	 

	 	Fax No: +47 22 48 66 68

MV “HELIX PRODUCER 1”

We acknowledge receipt of the above Notice of Assignment dated [•] from Kommandor LLC. Terms used
herein shall have the same meaning as defined therein.

We agree to the assignment set out therein and undertake to be bound by the terms thereof. We
confirm that we have received no notice of any previous assignment or pledge of all or any part of
the charter hire and any monies payable thereunder.

We further confirm that all written statements containing instructions or demanding actions or
payments under the Bareboat Charterparty may until further notice from the Agent to the contrary be
made by Kommandor LLC and after such notice these instructions shall be given or demands shall be
made by the Agent.

This acknowledgement and confirmation shall be governed by Norwegian law.

Place and date: [•]

	 	 	 
	Yours sincerely 	 
	 
	for and on behalf of 	 

	 
	HELIX ENERGY SOLUTIONS CORP,
INC	 

	 
	 
	By:             
                               	  

	 
	Name:	 

	 
	Title: [authorised
officer]	 

	 

68

 

Appendix 2(A)

FORM OF NOTICE OF ASSIGNMENT

(Assignment of Insurances)

To: The Insurers

M/V “HELIX PRODUCER 1”

Kommandor LLC as owner (the “Owner”) of M/V “[   ]” (the “Vessel”) hereby gives you notice that all
payments due to any of us from you in respect of the Vessel have been (by way of security) assigned
to Nordea Bank Norge ASA, Middelthunsgate 17, N-0368 Oslo, Norway, as Agent for certain other banks
(the “Mortgagee”) according to an Assignment of Insurances dated [   ] 2007 (as amended, supplemented
or restated from time to time, the “Assignment Agreement”) related to a loan agreement dated
[ • ] (as amended, supplemented or restated from time to time, the “Agreement”), and that all
payments due to us under our policy(-ies) with yourselves must be made in accordance with the
instruction, from time to time, of the Mortgagee.

Please note that all claims related to the insurances in respect of claims payable in respect of a
major casualty, that is to say any claim (or the aggregate of which) exceeding USD 1,000,000, shall
be payable to the Mortgagee and be applied by the Mortgagee in accordance with the terms of the
Agreement. Subject thereto all other claims, unless and until the insurers have received notice
from the Mortgagee of a default which is unremedied under the Agreement in which event all claims
shall be payable directly to the Mortgagee up to its mortgage interest, shall be released directly
for the repair or other charges involved or to the Owner as reimbursement if any of them has fully
repaired the damage and paid all of the charges or otherwise in respect of the Owner’s actual costs
in connection with repair and/or other charges. Any amounts paid to the Owner directly shall be
paid to USD account no 6004.04.43099 with Nordea Bank Finland Plc, New York Branch.

Please note that this instruction may not be varied except with the prior written consent of the
Mortgagee.

Please confirm your acknowledgement of the terms of this notice by completing the Acknowledgement
attached hereto. Please return the signed and dated Acknowledgement to the Mortgagee at the address
set out above.

Place and date: [•], [•]

Owner:

	 	 	 
	Kommandor LLC

	 	Helix Energy Solutions Corp., Inc.
	 
	 	 
	By:                                         

	 	By:                                         
	Name:

	 	Name:
	Title: [authorised officer]

	 	Title:

69

 

Appendix 2(B)

FORM OF ACKNOWLEDGEMENT

(Assignment of Insurances)

	 	 	 
	To:

	 	Nordea Bank Norge ASA
	 

	 	Middelthunsgate 17
	 

	 	N-0368 Oslo, Norway
	 

	 	Att: Shipping, Offshore and Oil Services
	 

	 	Fax No: +47 22 48 66 68

MV “HELIX PRODUCER 1”

We hereby acknowledge receipt of a Notice of Assignment (the “Notice”) from Kommandor LLC (the
“Owner”) dated [•] related to MV “Helix Producer 1” (the “Vessel”).

We have duly noted and do accept that our payments due to the Owner under the insurance
policy(-ies) taken out for the Vessel as an Owners’ Entry pursuant to our rules, shall be made in
accordance with the instructions set out in the Notice, including the Loss Payable clause therein,
and payment due to the mortgagees will be made to such account as from time to time instructed by
Nordea Bank Norge ASA, Middelthunsgate 17, N-0368 Oslo, Norway, which bank has been duly noted by
ourselves as the first priority mortgagee of the said Vessel on its own behalf and on behalf of
certain other banks as agent therefore.

Further, we will give the Mortgagee notice in case of any variation, termination or cancellation of
the insurances and any non-payment of any insurance premium. We will give the Mortgagee fourteen
(14) Business Days to remedy such an event.

Place and date: [•]

Yours sincerely

for and on behalf of

[INSURERS]

By:                                         

Name:

Title: [authorised officer]

70

 

SIGNATORIES

Borrower:

Kommandor LLC

	 	 	 	 	 
	By:

	 	/s/ Bart H. Herjermans
	 	 
	 

	 	 	 	 
	Name: Bart H. Heijermans

Title: President	 	 

Lenders:

Nordea Bank Norge ASA

	 	 	 	 	 
	By:

	 	/s/ Siri Wennevik
	 	 
	 

	 	 	 	 
	Name: Siri Wennevik

Title: Attorney-in-Fact	 	 

Agent:

Nordea Bank Norge ASA

	 	 	 	 	 
	By:

	 	/s/ Siri Wennevik
	 	 
	 

	 	 	 	 
	Name: Siri Wennevik

Title: Attorney-in-Fact	 	 

Arranger:

Nordea Bank Norge ASA

	 	 	 	 	 
	By:

	 	/s/ Siri Wennevik
	 	 
	 

	 	 	 	 
	Name: Siri Wennevik

Title: Attorney-in-Fact	 	 

71exv10w4

 

Exhibit 10.4

RIATA ENERGY, INC.

WELL PARTICIPATION PROGRAM

     1. Purpose This Well Participation Program (the “Program”) has been adopted by the Board of Directors
of Riata Energy, Inc. (the “Company”) and is intended to foster and promote the development and
execution of the Company’s business by: (a) retaining and motivating the principal executive
officers of the Company, Tom L. Ward and Malone Mitchell 3rd (the “Executives”); (b)
aligning the financial rewards and risks of the Executives with the Company more effectively than
overriding royalty, carried interest or other performance incentive programs maintained by many of
the Company’s peers; and (c) imposing on the Executives the same risk incurred by the Company in
its core operations.

     2. Effective Date. The Program will be effective on June 8, 2006 (the “Effective Date”). The Board
of Directors will have the right to terminate the Program after December 31, 2016 by providing
written notice of termination to the Executives at least one year before the effective date of such
termination.

     3. Administration. The Program will be administered and interpreted by the Board of Directors of the
Company or a Compensation Committee thereof (the “Committee”). The Committee will have the power
to: (1) employ attorneys, consultants, accountants and other advisors as deemed necessary or
appropriate by the Committee; (2) to establish, adopt, or revise such rules and regulations and to
make all such determinations relating to the Program as the Committee may deem necessary or
advisable for the administration of the Program; and (3) take any and all action the Committee
deems necessary or advisable for the proper operation or administration of the Program. The
Committee’s interpretations of this Program or any instruments executed in connection with the
Program and all decisions and determinations by the Committee with respect thereto will be final,
binding and conclusive on all parties.

     4. Well Participation. Each Executive will be permitted to acquire and agrees to acquire an interest
in the governmental, spacing or production unit for each Program Well (as hereafter defined)
spudded during a Participation Period (as hereafter defined) equal to the Minimum Participation (as
hereafter defined). The term “Program Well” means any new well in which any of the Company Entities
(as hereafter defined) participates as a working interest owner but expressly excludes: (a) any
well in which the Company Entities own an interest and has not elected to participate as a working
interest owner with respect to such interest; (b) any well which constitutes a re-entry of an
existing producing well; (c) any well drilled in a multi-unit secondary or tertiary recovery unit
in which the Executives do not already have a working interest by virtue of participation in a well
or well(s) that have been combined into the unit; (d) any other wells which the Company reasonably
determines the Executives should not participate in given the objectives of the Program; and (e)
any other well subject to a preferential right to purchase or other contractual restriction that
would limit the Company’s ability to transfer an interest to the Executives. The Company will
provide a semi-annual report regarding the Program to the Committee.

     5. Participation Election. On or before the date which is thirty (30) days before the first (1st) day
of each Participation Period, each Executive will provide written notice to the Committee of such
Executive’s election to participate in Program Wells during the succeeding

     

			
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	 	Page 1 of 4

 

 

Participation Period and the percentage working interest which the Executive proposes to
participate with during such Participation Period (the “Acquisition Percentage”). Notwithstanding
anything herein to the contrary, the Acquisition Percentage for any Participation Period may not
exceed three percent (3.0%) on an eight-eighths (8/8) basis for Tom L. Ward and two percent (2.0%)
on an eight-eighths (8/8) basis for Malone Mitchell 3rd. If prior to the date specified herein, an
Executive fails to provide notice of such Executive’s election to participate or the Acquisition
Percentage for such Participation Period, the amount of the Acquisition Percentage for such
Participation Period will be deemed to be equal to the Acquisition Percentage for the immediately
preceding Participation Period. The initial Participation Period will run from the Effective Date
until December 31, 2006.

     6. Amount of Participation. On an election to participate and the designation of the Acquisition
Percentage for a Participation Period in accordance with this Program, the Executive will be deemed
to have elected to participate in each Program Well spudded during the applicable Participation
Period with a working interest equal to the greater of the following determined on a well-by-well
basis (the “Minimum Participation”): (a) the Acquisition Percentage for such Program Well (as
adjusted for any well under paragraph 6.2 of this Program); or (b) the prior interest owned by the
Executive in the drilling unit for such Program Well.

     6.1 Interest Assigned. If the foregoing clause (a) is applicable to a Program Well, the Company
will assign or allocate to the Executive a unit working interest in the Program Well
sufficient to cause such Executive’s combined interest in such Program Well to equal the
Acquisition Percentage (including in such computation any prior interests owned by the
Executive). If the foregoing clause (b) is applicable because the Executive’s prior interest
in the well exceeds the Acquisition Percentage, the Company will not assign or allocate any
interest in the Program Well. The interest to be assigned or allocated under this paragraph
to cause the Executive’s participation in a Program Well to be equal to the Acquisition
Percentage will be derived proportionately from all the interests owned by the Company
Entities in the Program Well (including non-consenting interests, back-in interests, leased
royalty interests, overriding royalty interests or other similar interests) so that the
total interest in the Program Well assigned or allocated to the Executive is substantially
similar to the interests retained by the Company Entities. The Executive’s prior interests
in a Program Well for purposes of this paragraph expressly includes any interests owned by
the Executive or the Executive’s Affiliates in the unit for such Program Well.

     6.2 Minimum Company Participation. If the interests to be assigned or allocated to the
Executives under this Program in a specific Program Well causes the aggregate working
interest of the Company Entities (determined after consideration of any carried or
reversionary interests) on the spud date for such Program Well to be less than twelve and
one-half percent (12.5%) on an eight-eighths (8/8ths) basis, then the Acquisition Percentage
for that Program Well will be equal to zero and neither Executive will be entitled to
participate in such Program Well, except with respect to prior interests in such Program
Well owned by the Executive or the Executive Affiliates.

     

			
	Riata Energy Well Participation Program
	 	Page 2 of 4

 

 

     7. Conditions of Participation. Each Executive’s participation in the Program is independent of the
other Executive’s participation in the Program. An Executive’s Acquisition Percentage cannot be
changed during any Participation Period without the prior approval of the Committee. Any
participation by the Executive under this Program is conditioned on the Executive’s participation
in each Program Well spudded during such Participation Period in an amount equal to the Minimum
Participation. Each Executive hereby: (a) agrees to execute and deliver any documents reasonably
requested by the Company in connection with the Program, including, but not limited to a joint
operating agreement in the Company’s customary form and providing for general and administrative
well overhead fees customarily charged by the Company; (b) appoints the Company as such Executive’s
agent and attorney-in-fact to execute and deliver such documents if such Executive fails or refuses
to execute such documents; (c) agrees to pay all joint interest billings immediately on receipt of
the Company’s invoice issued by the Company in the ordinary conduct of its business; and (d) agrees
to prepay to the Company amounts attributable to the Executive’s interest in a Program Well
operated by a third party to the extent that a Company Entity is required to prepay any costs in
connection with such Program Well.

     8. Well Charges. The amount to be paid by each Executive for the acreage to be assigned in connection
with the participation in the Program Wells during a Participation Period will be computed as of
the first day of such Participation Period and will be equal to the following amount computed on a
per acre basis: (a) all direct third party costs and relevant allocable costs of exploration wells,
if any, paid by the Company Entities and capitalized in the appropriate accounting pool in
accordance with the Corporation’s accounting procedures (including capitalized interest, leasehold
payments, acquisition costs, landman charges and seismic charges); divided by (b) the acreage in
the applicable pool. The acreage charge amount will be recomputed as of the first day of each
Participation Period by the Company and submitted to the Committee for approval. All other costs
for Program Wells will be billed in accordance with the Company’s accounting procedures applicable
to third party participants pursuant to any applicable joint operating agreement or exploration
agreement relating to a particular Program Well. Notwithstanding anything herein to the contrary,
in each case the Executive’s participation in a Program Well will be on no better terms than the
terms agreed to by unaffiliated third party participants in connection with the participation in
such Program Well or similar wells operated by the Company Entities.

     9. Definitions. For purposes of this Agreement, the term:

     (1) “Participation Period” means the period commencing on the first (1st) day
of each January (except for the initial Participation Period which will commence on
the Effective Date) and ending on the earlier of (i) December 31 of such year; and
(ii) the termination of the Executive’s employment with the Company for any reason;

     (2) “Company Entities” means the Company, any affiliate or successor to the
Company, any entity which controls, subsequently owns or is under common control
with the Company and any subsidiary corporation, partnership, limited liability
company or other entity owned by, controlled by or under common control with any of
the foregoing (whether direct or indirect); and

     

			
	Riata Energy Well Participation Program
	 	Page 3 of 4

 

 

     (3) “Executive Affiliate” means TLW Investments, Inc., an Oklahoma corporation,
with respect to Tom L. Ward and Duet 8, L.P. with respect to Malone Mitchell 3rd,
and any entity owned solely by such Executive and such Executive’s immediate family
members designated as a Executive Affiliate in writing and approved by the
Committee.

     10. General. The following additional terms apply:

     10.1 Amendment or Termination of Program. The Board may suspend or terminate this Program at any
time after December 31, 2016 and after providing a minimum of one (1) year’s prior written
notice to the Executives of the Board’s intentions.

     10.2 Nonassignability. The right to participate in the Program can only be assigned by a
Executive to a Executive Affiliate designated as such in accordance with this Program. This
Program does not limit the sale, mortgage, gift or assignment by a Executive of an interest
in a Program Well once the interest has been assigned of record by the Company Entities.

     10.3 Right to Continued Employment. Participation in this Program will not give any Executive
any right to remain in the employ of or continue serving as a director of the Company or any
Company Entity.

     10.4 Reliance on Reports. Each member of the Committee and each member of the Board may rely and
act in good faith on any report made by the independent public accountants of any Company
Entity and on any other information furnished in connection with the Program by any person
or persons other than the Executives. In no event will any person who is or will have been a
member of the Committee or of the Board be liable for any determination made or other action
taken or any omission to act in reliance upon any such report or information or for any
action taken or failure to act if such person acted in good faith.

     10.5 Titles. The titles and headings of the paragraphs in this Program are for convenience of
reference only, and in the event of any conflict, the text of this document, rather than
such titles or headings, will control.

     10.6 Governing Law. This Program will be governed by and construed in accordance with the laws
of the state of Texas, except as superseded by applicable federal law.

     

			
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