Document:

ddr-ex1040_967.htm

Exhibit 10.40

 

December 1, 2016

PERSONAL AND CONFIDENTIAL

[Name]

 

Re:Special Bonus Award

 

Dear [Name]:

In recognition of your continued service to DDR Corp. ( “Company”), the Company hereby provides to you an opportunity to earn a one-time, special bonus award (the “Bonus”) if you meet certain requirements.  This letter agreement (“Bonus Letter”) sets forth the terms and conditions of your Bonus opportunity, including the requirements that you must meet to receive any Bonus payout.  You must sign and return the enclosed copy of this Bonus Letter within seven (7) days of the date of this Bonus Letter to be eligible for the Bonus.

1.Bonus Opportunity.  Subject to Section 2 below, if you remain in the continuous employ of the Company through January 1, 2018, you will be entitled to a Bonus payout in an amount equal to your Company-provided target annual cash incentive opportunity as in effect on March 1, 2017.  If earned, the Bonus will be paid to you in a lump sum (less applicable tax withholdings) within 30 days following January 1, 2018.  Except as otherwise provided in Section 2, this Bonus Letter will automatically terminate, and no Bonus will be earned, if your employment with the Company terminates for any reason prior to January 1, 2018. In the event that you are on an approved leave of absence as of January 1, 2018, the Bonus will be earned as of the date of your return from leave and paid to you in a lump sum (less applicable tax withholdings) within 30 days following your return.

2.Certain Terminations of Employment.  If, prior to January 1, 2018 and at a time when this Bonus Letter is still in effect, your employment with the Company is terminated (i) by the Company without Cause (as defined below), (ii) by the Company due to Disability (as defined below) or (iii) by reason of death, then you will be entitled to a Bonus in an amount equal to (a) if the termination occurs prior to March 1, 2017, your Company-provided target annual cash incentive opportunity as in effect on the date of such termination of employment, or (b) if the termination occurs on March 1, 2017 or thereafter through January 1, 2018, your Company-provided target annual cash incentive opportunity as in effect on March 1, 2017.  If earned, the Bonus will be paid to you in a lump sum (less applicable tax withholdings) within 30 days following the date of such termination of employment.

3.Not in Lieu of Annual Cash Incentive Opportunity.  For the avoidance of doubt, the Bonus opportunity described in this Bonus Letter is in addition to, and not in lieu of, any annual cash incentive opportunity with the Company that may otherwise be applicable to you.

4.Certain Defined Terms.  

	
 
	
(a)
	
Cause.  For purposes of this Bonus Letter, “Cause” has both the meaning ascribed to such term in your change in control or similar agreement with 

 

 

	
 
		
the Company or any subsidiary of the Company (an “Individual Agreement”), if any, plus “Cause” also means the occurrence of any of the following circumstances:  (i) your indictment for, or plea of guilty or nolo contendere to, a felony or a crime involving dishonesty, fraud, or moral turpitude; (ii) conduct by you that brings the Company or any subsidiary or affiliate of the Company into public disgrace or disrepute; (iii) you commit an act that is not, or a series of acts that are not, taken in good faith and the commission of such act or series of acts results in material injury to the business reputation of the Company; (iv) gross negligence or gross misconduct by you with respect to the Company or any subsidiary or affiliate of the Company; (v) you commit an act or series of repeated acts of dishonesty that are materially inimical to the best interests of the Company; (vi) you fail to follow the lawful directions of your direct supervisor, which is not cured within three days after written notice thereof to you; (vii) other than as a result of Disability, you consistently fail to perform your duties and responsibilities to the Company and the failure continues for 15 days after the Company has advised you in writing of that failure; or (viii) you have materially breached any provision of this Bonus Letter or any other agreement between you and the Company or any subsidiary or affiliate of the Company and the breach has not been cured in all substantial respects within 30 days after the Company has advised you in writing of the nature of the breach.

The Company will, unless otherwise provided in your Individual Agreement, have the sole discretion to determine whether Cause exists for purposes of this Bonus Letter, and its reasonable determination will be final.

	
 
	
(b)
	
Disability.  For purposes of this Bonus Letter, “Disability” means permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

5.Tax Withholding.  The Company may withhold from any payments owed to you under this Bonus Letter all federal, state, city or other taxes as may be required to be withheld pursuant to any law or governmental regulation or ruling.  Notwithstanding any other provision of this Bonus Letter, the Company is not obligated to guarantee any particular tax result for you with respect to any payment provided to you hereunder, and you will be responsible for any taxes imposed on you with respect to any such payment.

6.Confidentiality.  The provisions of this Bonus Letter are confidential.  You may not disclose, publicize or discuss any of the terms or conditions of this Bonus Letter with anyone except your spouse, if any, or your attorney, financial advisor and/or tax advisor to the extent necessary for such advisor to render appropriate legal, financial and tax advice.  If you disclose, publicize, or discuss any of the terms or conditions of this Bonus Letter with any other person (including any current or former employee of the Company, but excluding your spouse, attorney, financial advisor and/or tax advisor), you will forfeit your right to any Bonus opportunity.  Further, if you disclose, publicize, or discuss any of the terms or conditions of this Bonus Letter 

2

 

with your spouse, attorney, financial advisor and/or tax advisor and such individual discloses the terms or conditions of this Bonus Letter to any other person, you will forfeit your right to any Bonus opportunity.

7.Complete Agreement.  This Bonus Letter embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

8.Successors and Assigns. This Bonus Letter will bind and inure to the benefit of and be enforceable by you, the Company and your and the Company’s respective heirs, executors, personal representatives, successors and assigns, except that neither party may assign any rights or delegate any obligations hereunder without the prior written consent of the other party.  Notwithstanding the foregoing, you hereby consent to the assignment by the Company of all of its rights and obligations hereunder to (a) any successor to the Company by merger or consolidation or purchase of all or substantially all of the Company’s assets or (b) any affiliate of the Company, provided such successor or affiliate assumes the liabilities of the Company hereunder.

9.Amendment and Waiver.  The provisions of this Bonus Letter may be amended or waived only with the prior written consent of the Company and you.

10.Governing Law. The parties to this Bonus Letter agree that this Bonus Letter shall be construed in accordance with Ohio law, that any action brought by any party hereunder may be instituted and maintained only in the appropriate court having jurisdiction over Cuyahoga County, Ohio, and that this Bonus Letter shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any party.

11.Counterparts.  This Bonus Letter may be executed in separate counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE LEFT BLANK]

 

 

3

 

Please be aware that this Bonus Letter does not constitute an offer or guarantee of employment with the Company or any of its subsidiaries or affiliates.  

Very truly yours,

 

 

DDR CORP.

 

 

By: _______________________

Name: Craig A. Schultz
Title:   Senior Vice President of Strategic

            Finance & Tax

 

 

ACKNOWLEDGED AND AGREED, with the effect set forth above,

 

 

 

Recipient Name: [Name]Date

 

 

 

 

4Exhibit 10.28

 

 

 

 

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    	 	7Exhibit 10.29

 

 

 

 

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    	 	7Exhibit
10.30 

 

  

     

     

    

 

THIS HEADS OE AGREEMENT
made effective the 31 day of August, 2010 is entered into:

  

	BY
    AND BETWEEN:	PACIFIC
                                                                                     GREEN TECHNOLOGIES MARINE LIMITED, a company registered in England & Wales whose registered address is 2 - 6 Cannon St. London EC4M6YH (“PGTM”)
	 
	 	 	 
	AND:	UML
                                         Westminster Limited

                                                                         Portland
                                         House. 69-71. Wembley Hill Road. Wembley, Middlesex. HA9 8BU United Kingdom ("UML
                                         WESTMINSTER")
	 
	 	 	 
	AND:	UNION
                                         MARITIME LIMITED

        5
Welbeck Street

        London,
        WIG 9YQ

        United
        kingdom ("Union")
	

 

	A.	WHEREAS
    PGTM is engaged in the business of marketing and sales of its patented emission control technologies called ENVI-CleanTM
    and ENV1-MarineTM scrubbing systems (the "System") which are capable of removing sulphur
    dioxide and other acid gases from exhaust gas emissions to a level that meets the regulatory requirements of the International
    Maritime Organization (the "IMO”):

 

	B.	WHEREAS
    the System's effective scrubbing of regulated emissions enables ship owners to achieve cost savings by allowing the continued
    use of lower cost heavy fuel oil ("HFO") when operating in Sulphur Emission Control Areas ("SECA").

 

	C.	WHERE
    AS UML WESTMINSTER is the wholly-owned subsidiary of Union.

 

	D.	WHEREAS
    Union intends to purchase the System for up to an additional ten vessels over the following eighteen months subject to
    the Systems performance.

 

	E.	WHEREAS
    PGTM proposes to supply UML WESTMINSTFR with the System for the main engine of the vessel named "Westminster
    ("Candidate Vessel"). The System will operate in accordance with the terms and specifications contained
    herein.

 

	F.	WHEREAS
    UML WESTMINSTER presently desires to acquire an emission control system to: (a) meet the IMO sulphur emission regulations
    within the SECA's in which it operates: (b) to minimize the cost of air emission compliance: and (c) to minimize the operating
    changes within its ship's systems.

  

     

     

    

 

NOW
THEREFORE in consideration of the covenants contained herein, PGTM, Union and UML WESTMINSTER mutually agree as follows:

 

	1. 	DEFINITIONS
    AND INTERPRETATION

 

	1. 	In
    this Heads of Agreement the following terms shall have the following meanings:

 

"Accepted"
means that PGTM and the System have met the IMO's performance standards for vessels operating within a SECA;

 

"Candidate
Vessel" means the vessel nominated by Union to receive the ENVI-MarineTM
scrubbing system. It is agreed that this is the Westminster. Union have the option to substitute the Candidate Vessel for
another vessel on or before 17.00 Hrs BST on the 5th of September 2016 on the same terms as this Agreement at which time UML Westminster
Limited will also be substituted for another Union subsidiary.

 

"Emission
Control Technology" means the integrated technology, techniques and processes proposed to be adopted onboard the Candidate
Vessel for the purpose of achieving the required level of air emissions reduction. The System will be a key component of the emission
control technology;

 

"Energy
Management Lease Agreement" means the definitive agreement in regards to the purchase option finance lease to be entered
into between PGTM and UML WESTMINSTER on substantially the same terms set out in this Heads of Agreement;

 

"Fuel
Cost Savings per Hour" as detailed in Schedule 3 shall mean the difference in cost/tonne of HFO 380 and LSMGO less the average
operating cost/tonne multiplied by the number of tonnes of fuel consumed per day divided by 24 hours to yield the hourly fuel
cost savings.

 

"LSMGO"
means 0.1% sulphur fuel specified by the IMO as the basis for SECA sulphur emission compliance;

 

"Operating
Quarter" shall mean each period of three (3) months commencing from the date on which the System is successfully tested and
is accepted by UML WESTMINSTER;

 

"Open
Mode" shall mean the operating mode where raw seawater is pumped through the System and discharged into the sea with a minimum
of processing. This is considered the standard operating mode for open sea operations. See Schedule 2 for a detailed description.

 

"Closed
Mode" shall mean the operating mode whereby the seawater is recirculated through the scrubber in a closed loop. This mode
would be used for main engines in circumstances where effluent discharge regulations or lack of seawater alkalinity require this
operating mode. See Schedule 2 for a detailed description.

  

    	 	2	 

     

    

 

"Scrubber
Operating Hours" shall mean the number of hours of scrubber operation logged in open and closed modes by the ENVI-MarineTM
system's computerized data logger.

 

	 	2.	The
    singular includes the plural and vice versa.

 

	 	3.	The
    clause headings do not form part of this Heads of Agreement and should not be taken into account in its construction or interpretation.

 

	 	4.	References
    in this Heads of Agreement to the "Schedule" are to the Schedules to this Heads of Agreement.

 

	2.	ENTRY INTO AN ENERGY MANAGEMENT
    LEASE AGREEMENT

 

	1.	Subject to
    the System being Accepted, UML WESTMINSTER agrees to enter an Energy Management Lease Agreement with PGTM for the System for
    the total sum of US$1,995,000 plus sales taxes (the "Purchase Price").

  

	2.	The Purchase
    Price shall be payable by UML WESTMINSTER in variable installments for each Operating Quarter, until the Purchase Price
    has been paid in full. The amount payable in respect of each Operating Quarter shall be calculated on the basis of the terms
    set out in the Energy Management Lease Agreement (as outlined in Schedule 4).

 

	3. 	From the
    date that the System is Accepted, PGTM shall grant to UML Westminster and UML Westminster shall acquire the right from PGTM
    to purchase the System:

 

	 	a.	at
    a cash discount of $80,000 to the balance outstanding of the Purchase Price during the first three years from the date that
    the System is Accepted; or

 

	 	b.	at
    a cash discount of $40,000 to the balance outstanding of the Purchase Price during the fourth and subsequent years from the
    date that the System is Accepted.

 

	4.	The following
    assumptions shall be used when calculating the amount payable for each Operating Quarter:

 

	 	a.	UML
    Westminster guarantees a minimum of 870 Scrubber Operating Hours, per Operating Quarter (3,480 hours per annum or 145 days
    per year in the SECA). The Scrubber Operating Hours for each Operating Quarter, shall be the greater of the average number
    of hours of scrubber operation for each Operating Quarter for the previous 12 months

 

	 	b.	The
    Parties will use the relevant Operating Quarter's average LSMGO and IFO 380 HFO price as published by Bunker
    Times for Rotterdam to make the calculation for the quarterly Energy Management Lease Agreement payment.

  

    	 	3	 

     

    

 

	 	c.	The Parties agree to the scrubber operating
    mode costs that are incorporated into the scrubber cost savings contained in Schedule 3 for the duration of the full
    term of the Energy Management Lease Agreement which are summarized as:

 

	 	 	OPEN
    MODE	CLOSED
    MODE
	 	 	LADEN	BALLAST	LADEN	BALLAST
	 	WESTMINSTER	$14.00/t	15.00/t	$33.00/t	$33.00/t
	 	MODE
    AVERAGE	$14.50/t	$33.00
    /t

 

	4.	Lease
    Payment Due Date: lease payments are due to PGTM within fourteen (14) calendar days of the end of each Operating Quarter.

 

	5.	The
    title to the System shall be transferred to UML WESTMINSTER in consideration for US$1 upon completion of payments equal to
    the Purchase Price. Simultaneously with the transfer of title, PGTM shall provide UML WESTMINSTER with the necessary documentation
    to evidence the transfer of title and shall take all necessary steps with the Classification Society and any other authorities
    to evidence the transfer of title.

 

	3.	CONDITIONS

 

	3.1	The obligations
    of UML WESTMINSTER and PGTM to complete the transactions provided for herein are subject to the satisfaction of the following
    conditions or the waiver of same by the Parties on or before 21 days after the date of this Heads of Agreement:

 

	 	a)	The
    Parties agreeing and entering into a binding Energy Management Lease Agreement, the main commercial terms of which are summarized
    in Schedule 4 of this Heads of Agreement. PGTM shall provide a draft of the Energy Management Lease Agreement within
    7 days after the date of this Heads of Agreement.

 

	 	b)	PGTM
    providing full specification of the ENVI-MarineTM Emissions Control System.

 

	 	c)	The
    Parties agree that the rate of fuel consumption in tonnes/day (t/d) shall be the arithmetic average of the MACR (19 t/d) and
    NCR (17 t/d) fuel consumption rates.

 

	 	d)	UML
    WESTMINSTER providing the itinerary of the Candidate Vessel and UML WESTMINSTER providing and PGTM agreeing to a scheduled
    installation date for the ENVI-MarineTM Emissions Control System.

  

    	 	4	 

     

    

 

	 	e)	PGTM
    confirming that the necessary certificates required for the ENVI-MarineTM Emissions Control System to be installed
    and Accepted have been provided by the Classification Society or the relevant authority (as the case may be).

 

	3.2	SCRUBBER OPERATION

 

	 	a)	The
    scrubber will be turned on upon instruction from the ship's officers when the Candidate Vessel's GPS (or alternative positioning
    instrument) determines that the Candidate Vessel is within a SECA or the Candidate Vessel's operating protocol requires compliance
    with IMO emission regulation limits.

 

	 	b)	The
    Scrubber Operating Hours will be logged, in open and closed mode, by the ENVI-MarineTM computerized data logger
    control system. The logged hours will be used to determine the Scrubber Operating Hours, in open and closed mode, in the calculation
    of the payment due for each Operating Quarter.

 

	 	c)	In
    case of any discrepancy regarding Scrubber Operating Hours in a SECA, the ship's GPS data and log books will be used to resolve
    the discrepancy.

 

	 	d)	In
    case of failure of one of the System's essential components, the scrubber is to be shut down and by-passed until repairs and/or
    replacement can be completed.

 

	4.	GUARANTEES AND WARRANTIES PROVIDED
    BY PGTM

 

	4.1	On such
    date title to the System is transferred to UML WESTMINSTER pursuant to section 2.6 of this Heads of Agreement, PGTM
    shall grant UML WESTMINSTER an irrevocable exclusive worldwide royalty free licence in perpetuity in respect of the System
    and all the equipment and materials used to support the patented technology as more particularly described in the List of
    Principal Components set out at Schedule 1, to the extent required to enable UML WESTMINSTER and each and every subsequent
    owner, charterer or operator of the Candidate Vessel to use the System.

 

	4.2      	PGTM
    will design, engineer, manufacture and install the System such that it operates in accordance with: (i) the specifications
    and emission regulations identified in this Heads of Agreement and the Energy Management Lease Agreement; and (ii) the specifications
    of the Candidate Vessel.
	 	 
	4.3     	PGTM
    provides the expressed warranties as to the operational performance of the System that are specifically identified in Annex
    VI - Regulation 14 of MARPOL. Other than the expressed warranties as to the operational performance of the System identified
    in this Heads of Agreement and as shall be identified in the Energy Management Lease Agreement, PGTM shall make no other warranties,
    whether expressed or implied.
	 	 
	4.4     	PGTM
    confirms that the System shall comply with the current IMO regulations in effect as of the date of this Heads of Agreement
    and the world ocean limit set to go into effect on January 1, 2020.
	 	 
	4.5       	PGTM
    to confirm that the System will not put more than 6" of back pressure on the main engine exhaust of the Candidate Vessel.

 

    	 	5	 

     

    

 

	5    	OBLIGATIONS
    OF UML WESTMINSTER
	 	 
	5.1   	UML
    WESTMINSTER shall use reasonable endeavours to assist PGTM by providing data, information and materials to PGTM as is necessary
    for the operation and installation of the System in an efficient and punctual manner.
	 	 
	5.2     	Within
    7 calendar days of the Parties entering into the Energy Management Lease Agreement, UML WESTMINSTER shall specify a shipyard
    for the installation of the System in either Dubai or Turkey and UML WESTMINSTER shall confirm the intended date of installation.
	 	 
	5.3    	UML
    WESTMINSTER will make reasonable adjustments to the Emission Control Technology, and will also make reasonable changes to
    operational policy as may be reasonably required by the installation on the Candidate Vessel of the System. UML WESTMINSTER
    shall not be obliged to adopt commercially unrealistic solutions whereby the profitability of the operation of the Candidate
    Vessel is affected.
	 	 
	5.4     	UML
    WESTMINSTER will permit:

 

	 	(a)	PGTM,
    its contractors and agents to bring testing consultants, government and agency representatives and advisors for tours of the
    Candidate Vessel where reasonable access will be provided for inspection (and limited and reasonable testing) to all aspects
    of the Candidate Vessel connected to the System; and

 

	 	(b)	PGTM,
    its contractors, subcontractors, agents, equipment suppliers, consultants and inspectors to access the vessel for the purposes
    of construction, installation, inspection, commissioning and evaluation of the System,

 

provided
always that: (i) PGTM shall give not less than 10 days' prior written notice to UML WESTMINSTER of such visits; (ii) such visits
shall not cause any unreasonable interference or delay to UML WESTMINSTER's operation, maintenance and use of the Candidate Vessel;
and (iii) such visitors shall sign UML WESTMINSTER's letter of indemnity prior to their embarkation.

  

	5.5	UML
    WESTMINSTER agrees to operate the System in accordance with the emission control system process specifications as defined
    by PGTM. UML WESTMINSTER acknowledges that this may change within reason once the System is operational and PGTM shall notify
    UML WESTMINSTER of such changes, in writing, prior to such changes taking effect. Changes will be designed to achieve compliance
    with the IMO sulphur dioxide regulations as long as any such design changes do not impair the safe operation of the Candidate
    Vessel.

 

    	 	6	 

     

    

 

	5.6	UML
    WESTMINSTER will cooperate with PGTM and its agents to determine all the requirements necessary to ensure the successful design
    and operation of the System, to include, but not limited to, specific operating information, engine requirements, emissions
    limits/requirements and regulations to air and water. This information will be transmitted in a timely manner to assist PGTM
    in complying with the terms of the Energy Management Lease Agreement and any other conditions relating to the performance
    of the System.
	 	 
	5.7	If
    the Candidate Vessel is sold, UML WESTMINSTER shall use reasonable commercial endeavours to procure that the buyer shall enter
    into an agreement with PGTM on the same or substantively the same terms as the Energy Management Lease Agreement. If the Candidate
    Vessel is sold and the buyer does not enter into an agreement with PGTM on the same or substantively the same terms as the
    Energy Management Lease Agreement, UML WESTMINSTER shall pre-pay any outstanding amount with a cumulative annual deduction
    of 7.5% of such outstanding amount
	 	 
	6.	ASSIGNMENT,
    BINDING ON SUCCESSORS IN TITLE
	 	 
	6.1	 Neither
    party may assign any of its rights or obligations under this Heads of Agreement without the prior written consent of the other
    Party, such consent not to be unreasonably withheld or delayed.
	 	 
	6.2	In
    the event that UML WESTMINSTER shall part with possession or control of the Candidate Vessel, and in order to secure the value
    of the investment being made by PGTM, UML WESTMINSTER shall use reasonable commercial endeavours to procure that a novation
    agreement is entered into with any assignee, transferee, lessee or contractor/operator (as the case may be) whereby the obligations
    of UML WESTMINSTER are novated to the assignee, transferee, lessee or contractor/operator (as the case may be) such that the
    resulting obligations are between PGTM and the assignee, transferee, lessee of contractor/operator.
	 	 
	7.	 ENTIRE
    AGREEMENT AND WAIVER
	 	 
	7.1	This
    Heads of Agreement contains the entire agreement of the Parties with respect to the subject matter of this Heads of Agreement
    and supersedes all prior agreements and arrangements (whether written or oral) in relation to such subject matter between
    the Parties and may only be varied by the written agreement of both Parties.
	 	 
	7.2	A
    waiver by either Party of a breach of any term or condition of this Heads of Agreement shall be in writing, and shall not
    be deemed as a continuing waiver or a waiver of any subsequent breach unless so provided by written notice.
	 	 
	8.	GENERAL
	 	 
	8.1	No
Partnership. Nothing contained in this Heads of Agreement shall be deemed to create any relationship of agency, partnership
or joint venture between the parties.

 

    	 	7	 

     

    

 

	8.2	Applicable
    Law. This Heads of Agreement shall be governed by and construed in all respects in accordance with the laws of England
    and Wales.
	 	 
	8.3	Dispute
    Resolution. All disputes arising out of or in connection with this Heads of Agreement shall be finally settled under the
    Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the
    said Rules.
	 	 
	8.4	Publication
    Rights. Except as required by law or by any regulatory authority, each Party may, with the prior written consent of the
    other, publicise the terms of this Heads of Agreement and UML WESTMINSTER shall allow PGTM to use UML WESTMINSTER's name and
    title in any such media placement as directed by PGTM.
	 	 
	8.5	Definitive
    Agreement. The Parties agree to act in good faith in negotiating the terms of the Energy Management Lease Agreement that
    will embody the terms and conditions of this Heads of Agreement and will include covenants and conditions customarily included
    in transactions of this kind. PGTM will provide specific representations and warranties and indemnities concerning the title
    and sufficiency of the System. Subject to Clause 3 of this Heads of Agreement, unless the Parties agree otherwise in writing,
    if the Energy Management Lease Agreement has not been entered into within 21 days following the date of this Heads of Agreement,
    this Heads of Agreement shall terminate, without any further liability or obligation on either Party.
	 	 
	8.6	Intention
    of the Parties. This Heads of Agreement is intended to be binding on both Parties.

 

    	 	8	 

     

    

 

SIGNATURE
PAGE

 

IN
WITNESS WHEREOFthe parties hereto have caused this Heads of Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.

 

	 	This
    Heads of Agreement was executed as a binding act of PACIFIC GREEN TECHNOLOGIES MARINE LIMITED in the presence of:	 	Per:

	 	 	 	/s/
    N.P. Carmichael
	 		 	Dr.
                                         N.P. Carmichael

                                                                                Chairman
                                         and Director

                                                                                Signatory
                                         of PACIFIC GREEN TECHNOLOGIES MARINE LIMITED

	 	Signature	 
	 	 	 
	 	Print
    name of Witness	 
	 	DANIEL	 
	 	 	 
	 	Address	 
	 	HILTON
    SINGAPORE	 
	 	 	 
	 	Occupation	 
	 	NIGHT
    MANAGER	 

 

	 	This
    Heads of Agreement was executed as a binding act of UML WESTMINSTER LIMITED in the presence of:	 	Per:

         

        

	 	 	 	/s/
    Lewis Cadji
	 	/s/
    Mary Braganza	 	Lewis
                                         Cadji

                                                                                                                                                     Director

	 	Signature	 
	 	 	 
	 	Print
    name of Witness	 
	 		 
	 	 	 
	 	Address	 
	 	Mary
                                         Braganza

                                                                                26
                                         Ballards Road

                                                                                London
                                         NW27UG
	 
	 	 	 
	 	Occupation	 
	 	SECRETARY	 

  

	 	This
    Heads of Agreement was executed as a binding act of UNION MARITIME LIMITED in the presence of:	 	Per:

         

        

	 	 	 	/s/
    Lewis Cadji
	 	/s/
    Mary Braganza	 	Lewis
                                         Cadji

                                                                                                                                                     Director

	 	Signature	 
	 	 	 
	 	Print
    name of Witness	 
	 		 
	 	 	 
	 	Address	 
	 	Mary
                                         Braganza

                                                                                26
                                         Ballards Road

                                                                                London
                                         NW27UG
	 
	 	 	 
	 	Occupation	 
	 	SECRETARY	 

 

    	 	9	 

     

    

  

SCHEDULE
1

 

PRINCIPAL
COMPONENTS OF THE ENVI-MARINETM SYSTEM

 

PGTM
proposes to supply and install an ENVI-MarineTM SO2 scrubbing system which is comprised of the
following principal components:

 

Gas
Conditioning Chamber (GCC) — This engine exhaust gas inlet chamber uses seawater or recirculated water spray to quench the
exhaust gas to approximately 35°C.

 

Scrubber
— The scrubber body combines PGTM's patent-pending scrubber head with a volume of packed bed media (PBM) located above the
head. Demisters dry the gas prior to exit to atmosphere. The footprint of the scrubber body is variable depending on the configuration
of space available. In general, the scrubber is to be positioned at deck level corresponding to the base of the external stack
enclosure.

 

Because
the scrubber heads are horizontal, the scrubber can be configured into any shape. The marine scrubbers are to be made from stainless
steel selected for corrosion and acid resistance. To make the best use of space it is planned to make the bodies rectangular in
shape. The footprint required is approximately 1m2 for each MW of main engine propulsion.

 

Dissolved
Air Flotation (DAF) Tank — The DAF tank receives water from the scrubber and subjects it to DAF treatment, whereby soot, light
particulate and oil droplets are separated from the scrubber water by flotation. The oily particulate is then skimmed from the
tank and sent to the Oil Water Separator system. The rest of the water, which may still contain some heavier particulate, is directed
to the Recirculation Tank.

 

Oil
Water Separator (OWS) System — The oily waste skimmed from the DAF tank is mainly comprised of water. The OWS system is designed
to concentrate the oily waste for storage in the Oily Waste Tank, and discharge the clean water. The water may be directed to
the Recirculation Tank during Open Mode operation or to the Effluent Holding Tank during Closed Mode operation.

 

Oily
Waste Tank — The Oily Waste Tank holds the residue from the OWS system for removal at a land based facility.

 

Recirculation
Tank — The Recirculation Tank receives water from various sources and aggregates it for recirculation by pumps to the
GCC water sprayers, the Hydrocyclone System, and the PBM water distributor. The tank is partitioned so that water from the DAF
tank potentially containing heavier particulate is directed to the Hydrocyclone System, and clean water returning from hydrocyclone
treatment is sent back to the scrubber. In Open Mode operation, excess water overflows from the Recirculation Tank to the Effluent
Holding Tank prior to being discharged to sea.

 

Heat
Exchangers — In Closed Mode operation, recirculated scrubber water is cooled using heat exchangers supplied with cold
seawater by the seawater pumps.

 

Hydrocyclone
System - Banks of hydrocyclones are used for heavier solids separation. Each system draws from a section of the partitioned
Recirculation Tank. The underflow containing the particulate is sent to the Disc Centrifuge for further concentration, and the
clean overflow water is sent back to the clean water side of the Recirculation Tank.

 

Disc
Centrifuge — The Disc Centrifuge subjects the underflow from the hydrocyclones to high inertial forces to concentrate
solids to a high degree for storage in the Centrifuge Sludge Tank.

 

Effluent
Holding Tank — When at sea the overflow from the Recirculation Tank is held briefly in the Effluent Holding Tank before being
discharged to the sea. The Effluent Holding Tank is equipped with an Effluent Monitor for analysis of pH, turbidity and phenanthrene
PAH. When in port or when regulations restrict discharge the tank is used to hold the small flow of effluent water from the OWS
system during Closed Mode operation for later discharge at sea.

  

    	 	10	 

     

    

 

Caustic
Soda Tank  — Caustic soda is to be stored on deck in a 20-foot ISO tank configured as a 20-foot bulk container. The
tank will act as a reservoir for a small caustic soda surge tank located in the water processing area below decks. Injection
pumps to provide alkalinity to the scrubber water during closed mode or hybrid open mode are installed with the surge
tank.

 

Continuous
Emissions Monitoring System (CEMS)  — The system includes a Continuous Emissions Monitoring System (CEMS) to
monitor and record sulphur dioxide emissions on a continuous basis. Access to this information is required by regulatory
authorities.

 

Effluent
Monitor  — A tamper-proof system to monitor the pH, turbidity and phenanthrene PAH of the effluent will be part
installed on the Effluent Holding Tank discharge line.

 

Programmable
Logic Controller (PLC)  — The system will be controlled by a small programmable logic controller (PLC) with a
graphic user interface at the operations station or control room. The system will normally operate in automatic mode, but
manual control, data logging and trend screens will also be available. Depending on the ship's communication capabilities,
the system could also be monitored and controlled remotely. This would allow the shipping company and/or PGTM staff to
troubleshoot any problems from land-based offices.

  

    	 	11	 

     

    

  

SCHEDULE
2

 

DESCRIPTION
OF OPEN AND CLOSED OPERATING MODES

 

Open
Mode Operation

 

In
open operating mode raw seawater is pumped through the scrubber system. This is considered the standard operating mode for most
open sea operations. The seawater is pumped directly to the scrubber water distribution manifolds at the gas conditioning inlet,
and the top of the packed bed media. Scrubber water draining from the packed bed media supplies water to the turbulent scrubbing
zone above the patented scrubbing head.

 

SO2
is removed and neutralized as the exhaust gases pass counter-current through the water flows. The water drains from the scrubber
base to a flotation skimmer tank which uses air and dissolved air flotation to separate unburned carbon and oil from the scrubber
water. This material is skimmed from the flotation skimmer tank and directed to the Oil Water Separation (OWS) system, which concentrates
the oily waste into a sludge and stores it in a sludge tank.

 

The
excess clean water from the OWS system is then combined with the remainder of the water flow from the flotation skimmer tank and
directed to the recirculation tank and then to the effluent holding tank. If high turbidity is an issue, then some of the water
can be processed through the hydrocyclone system and disc centrifuge to reduce the overall levels. The cleaned water from this
operation may be sent to the GC inlet or directly to the effluent storage tank.

 

The
water held in the effluent holding tank is monitored continuously and then combined with reaction water for pH balancing prior
to being released to the sea. In the event that the monitor measures a high reading for pH, turbidity or phenanthrene PAH, the
system will take a series of actions to respond, depending on which parameter is high. High acidity can be remedied by adding
NaOH to the seawater and excess turbidity or phenanthrene PAH can be remedied by operating the hydrocyclone system and disc centrifuge.
If these steps do not solve the problem, the system can be switched to closed mode operation where there is no discharge to the
sea.

 

Closed
Mode Operation

 

In
closed mode operation the seawater is recirculated through the scrubber in a closed loop. This mode is used for auxiliary generators
and boilers while in port, and for main engines in circumstances where regulations require that no effluent can be discharged.
Three aspects of the scrubber's operation are altered in this mode. First, the loss of seawater alkalinity is made up by the addition
of NaOH to the recirculation tank. Second, heat added through the cooling of the exhaust gas is removed by heat exchangers cooled
with raw seawater. Third, the overflow from the flotation skimmer tank, hydrocyclone system and disc centrifuge are returned to
the recirculation tank for recirculation to the scrubber.

 

The
raw seawater used to cool the scrubbing fluid makes a single pass through both the scrubber distribution and GC heat exchangers
before being discharged. This water is not in contact with the engine exhaust gases, so it does not require any treatment.

 

In
closed mode the scrubbing fluid takes the same path through the scrubber but at a reduced flow rate since alkalinity can be made
up by NaOH addition. The closed system requires continuous cleaning so as to not build up oil or solids, so the flotation skimmer
tank, OWS system, hydrocyclone system and disc centrifuge are all fully operational. A certain amount of bleed is necessary to
eliminate dissolved solids, and this is taken from the OWS clean water overflow, which is directed to the effluent storage tank.
As this is treated effluent, it will meet discharge criteria once the vessel is back in the open ocean where discharge is allowed.

 

Oily
sludge is sent to the Oily Waste tank and centrifuge sludge may be sent there as well or to a separate tank. Fresh water is added
to the recirculation tank to make up for water lost to evaporation in the scrubber and effluent sent to storage. NaOH is added
as required to maintain the pH of the scrubber water.

  

    	 	12	 

     

    

  

SCHEDULE
3

 

OPERATIONAL
SAVINGS

 

Fuel
Savings for the Westminster with a Main Engine S02 Scrubber

 

	 	 	SECA
    Hours	 	 	Open	 	 	Closed	 
	Quarterly HFO 380 cost (US$
    / tonne)	 	 	 	 	 	$	205	 	 	$	205	 
	Quarterly MGO LS cost (US$ / tonne)	 	 	 	 	 	$	400	 	 	$	400	 
	Quarterly Price Difference (US$ / tonne)	 	 	 	 	 	$	195	 	 	$	195	 
	Average Operating Cost (US$ / tonne
    HFO)	 	 	 	 	 	$	14.50	 	 	$	33.00	 
	Fuel Cost Savings (US$ / tonne HFO)	 	 	 	 	 	$	180.50	 	 	$	162.00	 
	HFO Consumption - Main Engine (tonnes
    I day)	 	 	 	 	 	 	15.0	 	 	 	15.0	 
	Current Fuel Cost Savings (US$ / day)	 	 	 	 	 	$	2,707.50	 	 	$	2,430.00	 
	Current Fuel Cost Savings (US$ / hour)	 	 	 	 	 	$	112.81	 	 	$	101.25	 
	Quarterly Savings for 145 SECA Days
    / year	 	 	870	 	 	$	98,147	 	 	$	88,088	 
	Annual Savings for 145 SECA Days / year	 	 	3,480	 	 	$	392,588	 	 	$	352,350	 

  

    	 	13	 

     

    

  

SCHEDULE
4

 

ENERGY
MANAGEMENT LEASE AGREEMENT SUMMARY

"WESTMINSTER"

 

The
terms of the Energy Management Lease Agreement are summarized below.

 

	 	Purchase
    Price:	US$1,995,000
	 	Interest
    Rate:	None
	 	Lease
    Term:	Variable
	 	Payments:	Quarterly
	 	Agreed
    Purchase Price at End of Lease:	US$1
	 	Quarterly
    Payment	Per
    calculation below

 

Quarterly
Lease Payment =

 

Open
Mode Fuel Cost Savings per Hour x Open Hours of Scrubber Operation

 +

Closed
Mode Fuel Cost Savings per Hour x Closed Hours of Scrubber Operation

 

(total
hours of operation not less than the guaranteed minimum hours per quarter)

 

Payment
for any hours which are deemed to be Scrubber Operating Hours in order to fulfill the operating hours for the relevant Operating
Quarter pursuant to section 2.3(a) of this Heads of Agreement , shall be calculated at the open:closed ratio of hours logged in
such Operating Quarter.

 

 

14

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