Document:

Exhibit 4.68

US$35,000,000

FACILITY AGREEMENT

Dated 29 January 2018

for

QUORA OWNERS INC.

PHOENIX OWNERS INC. and

ROSCOE MARINE LTD.

 as joint and several Borrowers

guaranteed by

DRYSHIPS INC.

 as Guarantor

arranged by

DVB BANK SE, AMSTERDAM BRANCH

 as Arranger

with

DVB BANK SE, AMSTERDAM BRANCH

 acting as Facility Agent

and

DVB BANK SE, AMSTERDAM BRANCH

 acting as Security Agent

and

DVB BANK SE

 acting as Account Bank

relating to the financing of

 m.vs. "VALADON", "MATISSE" and "RAPALLO"

 

 

 

WATSON FARLEY

&

 WILLIAMS

Index

	
Clause

	
Page

	
Section 1

	
Interpretation

	
 2

	
1

	
Definitions and Interpretation

	
2

	
Section 2

	
The Facility

	
 26

	
2

	
The Facility

	
 26

	
3

	
Purpose

	
26

	
4

	
Conditions of Drawdown

	
27

	
Section 3

	
Drawdown

	
28

	
5

	
Drawdown

	
28

	
Section 4

	
Repayment, Prepayment and Cancellation

	
30

	
6

	
Repayment

	
30

	
7

	
Prepayment and Cancellation

	
 31

	
Section 5

	
Costs of Drawdown

	
34

	
8

	
Interest

	
34

	
9

	
Interest Periods

	
35

	
10

	
Changes to the Calculation of Interest

	
36

	
11

	
Fees

	
38

	
Section 6

	
Additional Payment Obligations

	
40

	
12

	
Tax Gross Up and Indemnities

	
40

	
13

	
Increased Costs

	
45

	
14

	
Other Indemnities

	
46

	
15

	
Costs and Expenses

	
49

	
Section 7

	
Guarantee and Joint and Several Liability of Borrowers

	
51

	
16

	
Guarantee and Indemnity

	
51

	
17

	
Joint and Several Liability of the Borrowers

	
54

	
Section 8

	
Representations, Undertakings and Events of Default

	
56

	
18

	
Representations

	
 56

	
19

	
Information Undertakings

	
 62

	
20

	
Financial Covenants

	
67

	
21

	
General Undertakings

	
69

	
22

	
Insurance Undertakings

	
75

	
23

	
Post-Delivery Vessel Undertakings

	
 81

	
24

	
Security Cover

	
86

	
25

	
Accounts and Application of Earnings

	
 88

	
26

	
Events of Default

	
91

	
Section 9

	
Changes to Parties

	
97

	
27

	
Changes to the Lenders

	
97

	
28

	
Changes to the Transaction Obligors

	
 102

	
Section 10

	
The Finance Parties

	
 103

	
29

	
The Facility Agent, the Arranger and the Reference Banks

	
103

	
30

	
The Security Agent

	
114

	
31

	
Conduct of Business by the Finance Parties

	
 129

	
32

	
Sharing among the Finance Parties

	
 129

	
Section 11

	
Administration

	
 132

	
33

	
Payment Mechanics

	
 132

	
34

	
Set-Off

	
 135

	
35

	
Bail-in

	
 135

	
36

	
Notices

	
 136

	
37

	
Calculations and Certificates

	
 138

	
38

	
Partial Invalidity

	
 138

	
39

	
Remedies and Waivers

	
 138

	
40

	
Settlement or Discharge Conditional

	
 138

	
41

	
Irrevocable Payment

	
139

	
42

	
Amendments and Waivers

	
 139

	
43

	
Confidential Information

	
141

	
44

	
Confidentiality of Funding Rates and Reference Bank Quotations

	
145

	
45

	
Counterparts

	
146

	
Section 12

	
Governing Law and Enforcement

	
147

	
46

	
Governing Law

	
147

	
47

	
Enforcement

	
147

	 	 	 
	
Schedules

	 
	 	 
	
Schedule 1 The Parties

	
148

	
Part A The Obligors

	
148

	
Part B The Original Lenders

	
150

	
Part C The Servicing Parties

	
151

	
Schedule 2 Conditions Precedent and Subsequent

	
154

	
Part A Conditions precedent to Drawdown Request

	
154

	
Part B Conditions Precedent to Drawdown

	
156

	
Part C Conditions Subsequent

	
158

	
Schedule 3 Requests

	
159

	
Part A Drawdown Request

	
159

	
Part B Selection Notice

	
161

	
Schedule 4 Form of Transfer Certificate

	
162

	
Schedule 5 Form of Assignment Agreement

	
165

	
Schedule 6 Form of Compliance Certificate

	
167

	
Schedule 7 Timetables

	
169

	 	 
	
Execution

	 
	 	 
	
Execution Pages

	
170

THIS AGREEMENT is made on 29 January 2018

PARTIES

	(1)	
QUORA OWNERS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower A")

	(2)	
PHOENIX OWNERS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower B")

	(3)	
ROSCOE MARINE LTD., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower C")

	(4)	
DRYSHIPS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as guarantor (the "Guarantor")

	(5)	
DVB BANK SE, AMSTERDAM BRANCH, as arranger (the "Arranger")

	(6)	
THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the "Original Lenders")

	(7)	
DVB BANK SE, AMSTERDAM BRANCH, as agent of the other Finance Parties (the "Facility Agent")

	(8)	
DVB BANK SE, AMSTERDAM BRANCH, as security agent for the Creditor Parties (the "Security Agent")

	(9)	
DVB BANK SE, acting through its office at Platz der Republik 6, 60325, Frankfurt/Main, Germany as account bank (the "Account Bank")

SECTION 1

INTERPRETATION

	1	
DEFINITIONS AND INTERPRETATION

	1.1	
Definitions

In this Agreement:

"Accounts" means:

		(a)	
the Earnings Accounts;

		(b)	
the Time Deposit Accounts; and

		(c)	
with the express written consent of the Facility Agent, any other accounts opened by any Borrower with the Account Bank, the Facility Agent or the Security Agent for the purposes of the Finance Documents.

"Account Security" means a document creating Security over any Account in agreed form. 

"Advance" means a borrowing of all or any part of a Tranche under this Agreement.

"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

"Approved Broker" means any firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorisation of the Lenders.

"Approved Classification" means, as at the date of this Agreement, in relation to:

		(a)	
Vessel A, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, CPS, CSR AB-CM and additional notations POT, PMA, UWILD, TCM, CRC, GRAB (20);

		(b)	
Vessel B, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, CPS, CSR AB-CM and additional notations POT, PMA, UWILD, TCM, CRC, GRAB (20); and

		(c)	
Vessel C, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, SH, SHCM and additional notations UWILD, TCM, CRC, GRAB (20),

in each case, with the relevant Approved Classification Society or the equivalent classification with another Approved Classification Society.

"Approved Classification Society" means, in relation to a Vessel, as at the date of this Agreement, American Bureau of Shipping or any other classification society approved in writing by the Facility Agent acting with the authorisation of the Lenders.

"Approved Commercial Manager" means, in relation to a Vessel, as at the date of this Agreement, TMS Bulkers Ltd., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any management company in the same beneficial ownership as

5

TMS Bulkers Ltd. or any other person approved in writing by the Facility Agent, acting with the authorisation of the Lenders, as the commercial manager of that Vessel.

"Approved Flag" means, in relation to a Vessel, the flag of Malta, the Marshall Islands, the Cayman Islands or any other flag acceptable to Facility Agent acting on the authorisation of the Lenders.

"Approved Manager" means, in relation to a Vessel, the Approved Commercial Manager and/or the Approved Technical Manager in respect of that Vessel.

"Approved Technical Manager" means, in relation to a Vessel, as at the date of this Agreement, TMS Bulkers Ltd., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any management company in the same beneficial ownership as TMS Bulkers Ltd. or any other person approved in writing by the Facility Agent, acting with the authorisation of the Lenders, as the technical manager of that Vessel.

"Approved Valuer" means any one of Arrow Valuations Ltd., Compass Maritime Services, Fearnleys Shipping AS, Barry Rogliano and Salles (BRS), Golden Destiny S.A., Maritime Strategies International Ltd., VesselsValue.com, Braemar ACM Shipbroking, Galbraiths Limited Shipbrokers, Clarksons Platou, Simpson Spence & Young Shipbrokers Ltd., Howe Robinson and Lorentzen & Stemoco AS (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent, acting with the authorisation of the Lenders.

"Assignable Charter" means, in relation to a Vessel, any Charter in respect of that Vessel having a duration of 12 months or more (or capable of exceeding, by virtue of any optional extensions or renewals, a duration of 12 months) on terms approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.

"Assignment Agreement" means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.

"Availability Period" means the period from and including the date of this Agreement to and including the earlier of:

		(a)	
31 March 2018; and

		(b)	
the date on which the Available Facility is fully borrowed, cancelled or terminated in accordance with the terms of this Agreement.

"Available Commitment" means a Lender's Commitment minus:

		(a)	
the amount of its participation in the outstanding Loan; and

		(b)	
in relation to the proposed Drawdown, the amount of its participation in any Advance that is due to be made on or before the proposed Drawdown Date.

6

"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.

"Bail-In Action" means the exercise of any Write-down and Conversion Powers.

"Bail-In Legislation" means:

		(a)	
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

		(b)	
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

"Borrower" means each of Borrower A, Borrower B and Borrower C and in the plural means all of them.

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

(a)

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

exceeds

		(ii)	
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, or

		(b)	
where a Lender is providing a fixed interest rate under Clause 8.3 (Fixed rate of interest) and only for the period for which the fixed rate of interest shall apply, any claim, expense, liability or loss incurred by a Lender in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure in connection with the Lender providing a fixed interest rate under Clause 8.3 (Fixed rate of interest) or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the claim, expense, liability or loss incurred by it in terminating, or otherwise in connection with, a number of transactions for which this Agreement is one.

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Amsterdam and Athens and:

7

		(a)	
(in relation to funding of the Loan only) Frankfurt;

		(b)	
(in relation only to any date for payment or purchase of dollars) New York; and

		(c)	
(in relation only to any date for the fixing of an interest rate using LIBOR) London.

"Charter" means, in relation to a Vessel, any charter relating to that Vessel, or other contract for its employment, whether or not already in existence.

"Charterer" means any person approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders, who, as charterer, is a party to a Charter.

"Charter Guarantee" means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.

"Charterparty Assignment" means, in relation to any Assignable Charter, the assignment creating Security over the rights of the relevant Borrower under that Assignable Charter and any Charter Guarantee relative thereto in agreed form.

"Code" means the US Internal Revenue Code of 1986.

"Commercial Management Agreement" means, in relation to a Vessel, the agreement entered into between the relevant Borrower and the relevant Approved Commercial Manager regarding the commercial management of that Vessel.

"Commitment" means:

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

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

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

"Compliance Certificate" means a certificate in the form set out in Schedule 6 (Form of Compliance Certificate) or in any other form agreed between the Guarantor, the Borrowers and the Facility Agent.

"Confidential Information" means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

		(a)	
any member of the Group or any of its advisers; or

		(b)	
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

8

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:

		(i)	
information that:

		(A)	
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 43 (Confidential Information); or

		(B)	
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

		(C)	
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

		(ii)	
any Funding Rate or Reference Bank Quotation.

"Confidentiality Undertaking" means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Facility Agent.

"Corresponding Debt" means any amount, other than any Parallel Debt, which an Obligor owes to a Creditor Party under or in connection with the Finance Documents.

"Creditor Party" means each Finance Party from time to time party to this Agreement, a Receiver or any Delegate.

"Deed of Covenant" means, in relation a Vessel, the deed of covenant collateral to the Mortgage on that Vessel if required under the laws of the jurisdiction of the relevant Approved Flag, in agreed form.

"Default" means an Event of Default or a Potential Event of Default.

"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

"Disruption Event" means either or both of:

		(a)	
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or

		(b)	
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if

9

applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:

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

		(ii)	
from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.

"Document of Compliance" has the meaning given to it in the ISM Code.

"dollars" and "$" mean the lawful currency, for the time being, of the United States of America.

"Drawdown" means the drawdown of an Advance.

"Drawdown Date" means the date of the Drawdown, being the date on which the relevant Advance is to be made.

"Drawdown Request" means a notice substantially in the form set out in Part A of Schedule 3 (Requests).

"Earnings" means, in relation to a Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Security Agent and which arise out of or in connection with or relate to the use or operation of that Vessel, including (but not limited to):

		(a)	
the following, save to the extent that any of them is, with the prior written consent of the Facility Agent, pooled or shared with any other person:

		(i)	
all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;

		(ii)	
the proceeds of the exercise of any lien on sub-freights;

		(iii)	
compensation payable to a Borrower or the Security Agent in the event of requisition of that Vessel for hire or use;

		(iv)	
remuneration for salvage and towage services;

		(v)	
demurrage and detention moneys;

		(vi)	
without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Vessel;

		(vii)	
all moneys which are at any time payable under any Insurances in relation to loss of hire;

		(viii)	
all monies which are at any time payable to a Borrower in relation to general average contribution; and

10

		(b)	
if and whenever that Vessel is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Vessel.

"Earnings Account" means, in relation to:

		(a)	
Borrower A, an account in the name of the Borrower A with the Account Bank with account number 2910068510;

		(b)	
Borrower B, an account in the name of the Borrower B with the Account Bank with account number 2910068501; or

		(c)	
Borrower C, an account in the name of the Borrower C with the Account Bank with account number 2910068528,

and, in the plural, means all of them.

"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.

"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.

"Environmental Claim" means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

"Environmental Incident" means:

		(a)	
any release, emission, spill or discharge into any Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from any Vessel; or

		(b)	
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than any Vessel and which involves a collision between any Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Transaction Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

		(c)	
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise

11

liable to any legal or administrative action, other than in accordance with an Environmental Approval.

"Environmental Law" means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

"Environmentally Sensitive Material" means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

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

"Facility" means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

"Facility Office" means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

"FATCA" means:

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

		(b)	
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

		(c)	
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

"FATCA Application Date" means:

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

		(b)	
in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or

		(c)	
in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019,

12

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

"Finance Document" means:

		(a)	
this Agreement;

		(b)	
the Drawdown Request;

		(c)	
any Security Document;

		(d)	
any Subordination Deed;

		(e)	
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

		(f)	
any other document designated as such by the Facility Agent and the Borrowers.

"Finance Party" means the Facility Agent, the Security Agent, the Arranger, the Account Bank or a Lender.

"Financial Indebtedness" means any indebtedness for or in relation to:

		(a)	
moneys borrowed;

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

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

		(d)	
the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);

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

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

		(g)	
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is

13

due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);

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

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

"Fleet Vessel" has the meaning given in Clause 20.2 (Guarantor's financial covenants).

"Funding Rate" means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.4 (Cost of funds).

"GAAP" means generally accepted accounting principles in including IFRS.

"General Assignment" means, in relation to a Vessel, the general assignment creating Security over that Vessel's Earnings, its Insurances and any Requisition Compensation in agreed form.

"Group" means the Guarantor and its Subsidiaries for the time being (including, but not limited to, the Borrowers and the Shareholder) and "member of the Group" shall be construed accordingly.

"Guarantee" means the guarantee of the Guarantor contained in this Agreement.

"Holding Company" means, in relation to a person, any other person in relation to which it is a Subsidiary.

"IAPPC" means a valid international air pollution prevention certificate issued under MARPOL Annex VI;

"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

"Indemnified Person" has the meaning given to it in Clause 14.2 (Other indemnities).

"Initial Market Value" means, in respect of a Vessel, the Market Value of that Vessel determined in accordance with the valuations provided pursuant to paragraph 3.6 of Schedule 2, Part B.

"Insurances" means, in relation to a Vessel:

		(a)	
all policies and contracts of insurance, including entries of that Vessel in any protection and indemnity or war risks association, effected in relation to that Vessel, the Earnings or otherwise in relation to that Vessel whether before, on or after the date of this Agreement; and

		(b)	
all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.

14

"Interest Payment Date" has the meaning given to it in paragraph (a) of Clause 8.2 (Payment of interest).

"Interest Period" means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 8.3 (Fixed rate of interest), Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.4 (Default interest).

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

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

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

each as of the Specified Time for dollars.

"ISM Code" means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.

"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, as the same may be amended or supplemented from time to time.

"ISSC" means an International Ship Security Certificate issued under the ISPS Code.

"Lender" means:

		(a)	
any Original Lender; and

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

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

"LIBOR" means, in relation to an Advance, the Loan or any part of the Loan:

		(a)	
the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of that Advance, the Loan or that part of the Loan; or

		(b)	
as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate), and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

"LMA" means the Loan Market Association.

15

"Loan" means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a "part of the Loan" means an Advance, a Tranche or any other part of the Loan as the context may require.

"Major Casualty" means, in relation to a Vessel, any casualty to that Vessel in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $750,000 or the equivalent in any other currency.

"Majority Lenders" means:

		(a)	
if no Advance has yet been made, a Lender or Lenders whose Commitments aggregate more than 66 2/3 per cent. of the Total Commitments; or

		(b)	
at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66 2/3 per cent. of the amount of the Loan then outstanding or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66 2/3 per cent. of the Loan immediately before such repayment.

"Management Agreement" means each of the Technical Management Agreements and the Commercial Management Agreements.

"Manager's Undertaking" means, in relation to a Vessel, each of the letter of undertaking from the relevant Approved Technical Manager and the letter of undertaking from the relevant Approved Commercial Manager subordinating the rights of that Approved Technical Manager and that Approved Commercial Manager respectively against that Vessel and the relevant Borrower to the rights of the Finance Parties and assigning the rights and interests of that Approved Technical Manager and that Approved Commercial Manager in the Insurances in relation to that Vessel to the Finance Parties in agreed form.

"Margin" means 2.50 per cent. per annum.

"Market Value" means, in relation to a Vessel or any other vessel, at any date, the market value of that Vessel or vessel determined in accordance with Clause 24.7 (Provision of valuations) and prepared:

		(a)	
unless otherwise specified, as at a date not more than 14 days previously;

		(b)	
by an Approved Valuer or Approved Valuers;

		(c)	
without physical inspection of that Vessel or vessel; and

		(d)	
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter,

after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

"Material Adverse Effect" means in the reasonable opinion of the Majority Lenders a material adverse effect on:

		(a)	
the business, operations, property, condition (financial or otherwise) or prospects of any member of the Group or the Group as a whole; or

16

		(b)	
the ability of any Transaction Obligor to perform its obligations under any Finance Document; or

		(c)	
the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

"Maturity Date" means, in relation to each Tranche, the earlier of (i) the date falling on the sixth anniversary of the Drawdown Date and (ii) 31 March 2024.

"Minimum Liquidity Amount" has the meaning given to it in Clause 20.1 (Borrowers' minimum liquidity).

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

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

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

		(c)	
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

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

"Mortgage" means, in relation to a Vessel, a first priority or preferred (as the case may be) ship mortgage on that Vessel in agreed form.

"Mortgaged Vessel" means each Vessel subject to a Mortgage at any relevant time.

"Obligor" means a Borrower or the Guarantor.

"Original Financial Statements" means:

		(a)	
in relation to the Guarantor the audited consolidated financial statements of the Group for its financial year ended 31 December 2016; and

		(b)	
in relation to each Borrower its unaudited financial statements for its financial year ended 31 December 2016.

"Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement.

"Overseas Regulations" means the Overseas Companies Regulations 2009 (SI 2009/1801).

"Parallel Debt" means any amount which an Obligor owes to the Security Agent under Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) or under that clause as incorporated by reference or in full in any other Finance Document.

17

"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

"Party" means a party to this Agreement.

"Permitted Ultimate Beneficial Ownership Change" means the Ultimate Beneficial Owner becoming the ultimate legal, direct or indirect, beneficial owner of the total issued share capital of each Borrower by way of transfer of all the shares of each Borrower to an entity which is wholly beneficially owned by the Ultimate Beneficial Owner and approved by all the Lenders in their sole discretion, subject to paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder).

"Permitted Charter" means, in relation to a Vessel, a Charter:

		(a)	
which is a time, voyage or consecutive voyage charter;

		(b)	
the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 12 months plus a redelivery allowance of not more than 30 days;

		(c)	
which is entered into on bona fide arm's length terms at the time at which that Vessel is fixed; and

		(d)	
in relation to which not more than two months' hire is payable in advance,

and any other Charter which is approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders.

"Permitted Financial Indebtedness" means:

		(a)	
any Financial Indebtedness incurred under the Finance Documents;

		(b)	
any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Subordination Deed or otherwise and which is, in the case of any such Financial Indebtedness of a Borrower, the subject of Subordinated Debt Security.

"Permitted Security" means:

		(a)	
Security created by the Finance Documents;

		(b)	
any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

		(c)	
liens for unpaid master's and crew's wages in accordance with first class ship ownership and management practice;

		(d)	
liens for salvage;

		(e)	
liens for master's disbursements incurred in the ordinary course of trading; and

18

		(f)	
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Vessel and not as a result of any default or omission by any Borrower and subject, in the case of liens for repair or maintenance, to Clause 23.17 (Restrictions on chartering, appointment of managers etc.).

"Potential Event of Default" means any event or circumstance specified in Clause 26 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

"Prohibited Person" means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed.

"Protected Party" has the meaning given to it in Clause 12.1 (Definition).

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

"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.

"Reference Bank Quotation" means any quotation supplied to the Facility Agent by a Reference Bank.

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks:

		(a)	
if:

		(i)	
the Reference Bank is a contributor to the Screen Rate; and

		(ii)	
it consists of a single figure,

as the rate (applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator; or

		(b)	
in any other case, as the rate at which the relevant Reference Bank could fund itself in dollars for the relevant period with reference to the unsecured wholesale funding market.

"Reference Banks" means the principal London offices of any three banks from the ICE LIBOR panel or such other entities as may be appointed by the Facility Agent in consultation with the Borrowers.

"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment

19

manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

"Relevant Interbank Market" means the London interbank market.

"Relevant Jurisdiction" means, in relation to a Transaction Obligor:

		(a)	
its Original Jurisdiction;

		(b)	
any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;

		(c)	
any jurisdiction where it conducts its business; and

		(d)	
the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

"Repayment Date" means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).

"Repayment Instalment" has the meaning given to it in Clause 6.1 (Repayment of Loan).

"Repeating Representation" means each of the representations set out in Clause 18 (Representations) except Clause 18.10 (Insolvency), Clause 18.11 (No filing or stamp taxes), Clause 18.12 (Deduction of Tax) and Clause 18.17 (No proceedings pending or threatened) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.

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

"Requisition" means, in relation to a Vessel:

		(a)	
any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of that Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and

		(b)	
any capture or seizure of that Vessel (including any hijacking or theft) by any person whatsoever.

"Requisition Compensation" includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of the Vessel owned by that Borrower in the exercise or purported exercise of any lien or claim.

"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.

"Safety Management Certificate" has the meaning given to it in the ISM Code.

"Safety Management System" has the meaning given to it in the ISM Code.

20

"Sanctions" means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

		(a)	
imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America; or

		(b)	
otherwise imposed by any law or regulation.

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

"Secured Liabilities" means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to any Creditor Party under or in connection with each Finance Document.

"Security" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

"Security Assets" means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

"Security Cover Ratio" means, at any relevant time, the aggregate of (i) the aggregate Market Value of the Mortgaged Vessels and (ii) the net realisable value of any additional security provided at that time under Clause 24.2 (Provision of additional security; prepayment), at that time expressed as a percentage of the amount of the Loan.

"Security Document" means:

		(a)	
any Shares Security;

		(b)	
any Mortgage;

		(c)	
any Deed of Covenant;

		(d)	
any General Assignment;

		(e)	
any Account Security;

		(1)	
any Charterparty Assignment;

		(g)	
any Manager's Undertaking;

		(h)	
any Subordinated Debt Security;

		(i)	
any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or

21

		(j)	
any other document designated as such by the Facility Agent and the Borrowers.

"Security Period" means the period starting on the date of this Agreement and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

"Security Property" means:

		(a)	
the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Creditor Parties and all proceeds of that Transaction Security;

		(b)	
all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Security Agent as trustee for the Creditor Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Security Agent as trustee for the Creditor Parties;

		(c)	
the Security Agent's interest in any turnover trust created under the Finance Documents;

		(d)	
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Creditor Parties,

except:

		(i)	
rights intended for the sole benefit of the Security Agent; and

		(ii)	
any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

"Selection Notice" means a notice substantially in the form set out in Part B of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).

"Servicing Party" means the Facility Agent or the Security Agent.

"Shareholder" means Drybulk Investments Inc., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

"Shares Security" means, in relation to a Borrower, a document creating Security over the share capital in that Borrower in agreed form.

"Specified Time" means a day or time determined in accordance with Schedule 7 (Timetables).

"Subordinated Creditor" means:

		(a)	
a Transaction Obligor; or

		(b)	
any other person who becomes a Subordinated Creditor in accordance with this Agreement.

22

"Subordinated Debt Security" means a Security over Subordinated Liabilities entered into or to be entered into by a Subordinated Creditor in favour of the Security Agent in an agreed form.

"Subordinated Finance Document" means:

		(a)	
a Subordinated Loan Agreement; and

		(b)	
any other document relating to or evidencing Subordinated Liabilities.

"Subordinated Liabilities" means all indebtedness owed or expressed to be owed by a Borrower to a Subordinated Creditor whether under the Subordinated Finance Documents or otherwise.

"Subordinated Loan Agreement" means any loan agreement made or to be made between (i) a Borrower and (ii) a Subordinated Creditor.

"Subordination Deed" means a subordination deed entered into or to be entered into by each Subordinated Creditor and the Security Agent in agreed form.

"Subsidiary" means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

"Tax Credit" has the meaning given to it in Clause 12.1 (Definitions).

"Tax Deduction" has the meaning given to it in Clause 12.1 (Definitions).

"Tax Payment" has the meaning given to it in Clause 12.1 (Definitions).

"Technical Management Agreement" means, in relation to a Vessel, the agreement entered into between the relevant Borrower and the relevant Approved Technical Manager regarding the technical management of that Vessel.

"Terms and Conditions" means the Special Conditions for Time Deposit Accounts for Commercial Clients (including but not limited to the Account Bank's General Terms and Conditions of Business) as set out in the Application for Opening of each Time Deposit Account.

"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).

"Time Deposit Account" means, in relation to each Borrower, an account opened or to be opened in the name of that Borrower with the Account Bank designated "[name of relevant Borrower] — Time Deposit Account" and, in the plural, means all of them.

"Total Commitments" means the aggregate of the Commitments, being $35,000,000 at the date of this Agreement.

"Total Loss" means, in relation to a Vessel:

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

23

		(b)	
any Requisition of a Vessel unless that Vessel is returned to the full control of the relevant Borrower within 30 days of such Requisition.

"Total Loss Date" means, in relation to the Total Loss of a Vessel:

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

		(b)	
in the case of a constructive, compromised, agreed or arranged total loss of that Vessel, the earlier of:

		(i)	
the date on which a notice of abandonment is given to the insurers; and

		(ii)	
the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with that Vessel's insurers in which the insurers agree to treat that Vessel as a total loss; and

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

"Tranche" means each of Tranche A, Tranche B and Tranche C, and, in the plural, means all of them.

"Tranche A" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel A in a principal amount not exceeding $13,500,000.

"Tranche B" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel B in a principal amount not exceeding $13,500,000.

"Tranche C" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel C in a principal amount not exceeding $8,000,000.

"Transaction Document" means:

		(a)	
a Finance Document;

		(b)	
a Subordinated Finance Document;

		(c)	
any Charter; or

		(d)	
any other document designated as such by the Facility Agent and the Borrowers.

"Transaction Obligor" means an Obligor, the Shareholder, any Approved Manager or any other member of the Group who executes a Transaction Document.

"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.

"Transfer Certificate" means a certificate in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrowers.

24

"Transfer Date" means, in relation to an assignment or a transfer, the later of:

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

		(b)	
the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

"UK Establishment" means a UK establishment as defined in the Overseas Regulations.

"Ultimate Beneficial Owner" means Mr. George Economou, a citizen of Greece residing, as at the date of this Agreement, at 38 Boulevard du Jardin Exotique, 98000 Monaco, and/or any of his linear descendants;

"Unpaid Sum" means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.

"US" means the United States of America.

"US Tax Obligor" means:

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

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

"VAT" means:

		(a)	
any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

		(b)	
any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

"VAT Group" means two or more companies or limited liability partnerships which register as a single taxable entity for VAT purposes.

"Vessel" means each of Vessel A, Vessel B and Vessel C and in the plural means all of them.

"Vessel A" means the 2014-built 81,198.70 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower A with IMO No. 9677387 under an Approved Flag (which at the date of this Agreement is the flag of the Marshall Islands) with the name "VALADON".

"Vessel B" means the 2014-built 81,128.60 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower B with IMO No. 9677375 under an Approved Flag (which at the date of this Agreement is the flag of the Marshall Islands) with the name "MATISSE".

"Vessel C" means the 2009-built 75,123 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower C with IMO No. 9413690 under an Approved Flag (which at the date of this Agreement is the flag of Malta) with the name "RAPALLO".

25

"Write-down and Conversion Powers" means:

		(a)	
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

		(b)	
in relation to any other applicable Bail-In Legislation:

		(I0	
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

		(ii)	
any similar or analogous powers under that Bail-In Legislation.

	1.2	
Construction

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

		(i)	
the "Account Bank", the "Arranger", the "Facility Agent", any "Finance Party", any "Lender", any "Obligor", any "Party", any "Creditor Party", the "Security Agent", any "Transaction Obligor" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;

		(ii)	
"assets" includes present and future properties, revenues and rights of every description;

		(iii)	
a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;

		(iv)	
"document" includes a deed and also a letter, fax or telex;

		(v)	
"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

		(vi)	
a "Finance Document", a "Security Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended or novated;

		(vii)	
"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;

		(viii)	
"law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

26

		(ix)	
"proceedings" means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

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

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

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

		(xiii)	
a time of day is a reference to Central European Time;

		(xiv)	
any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

		(xv)	
words denoting the singular number shall include the plural and vice versa; and

		(xvi)	
"including" and "in particular" (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

	(b)	
The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

	(c)	
Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.

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

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

	1.3	
Construction of insurance terms

In this Agreement.

"approved" means, for the purposes of Clause 22 (Insurance Undertakings), approved in writing by the Facility Agent;

"excess risks" means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of a Vessel in consequence of its insured value being less than the value at which that Vessel is assessed for the purpose of such claims;

27

"obligatory insurances" means all insurances effected, or which each Borrower is obliged to effect, under Clause 22 (Insurance Undertakings) or any other provision of this Agreement or of another Finance Document;

"policy" includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83)(1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and

"war risks" includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls)(1/10/83).

	1.4	
Agreed forms of Finance Documents

References in Clause 1.1 (Definitions) to any Finance Document being in "agreed form" are to that Finance Document:

	(a)	
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrowers and the Facility Agent); or

	(b)	
in any other form agreed in writing between the Borrowers and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 42.2 (All Lender matters) applies, all the Lenders.

	1.5	
Third party rights

	(a)	
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.

	(b)	
Subject to Clause 42.3 (Other exceptions) but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

	(c)	
Any Receiver, Delegate, Affiliate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 29.11 (Exclusion of liability), Clause 29.21 (Role of Reference Banks), Clause 29.22 (Third Party Reference Banks) or paragraph (b) of Clause 30.11 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

28

SECTION 2

 THE FACILITY

	2	
THE FACILITY

	2.1	
The Facility

Subject to the terms of this Agreement, the Lenders agree to make available to the Borrowers in three Tranches a dollar term loan facility in an aggregate amount not exceeding the Total Commitments.

	2.2	
Finance Parties' rights and obligations

	(a)	
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.

	(b)	
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 a Transaction Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by a Transaction Obligor which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Transaction Obligor.

	(c)	
A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

	3	
PURPOSE

	3.1	
Purpose

The Borrowers shall apply all amounts borrowed by them under the Facility only for the purpose of financing part of the aggregate Initial Market Value of the Vessels, in an aggregate principal amount not exceeding the lower of:

	(a)	
55 per cent. of the aggregate Initial Market Value of the Vessels; and

	(b)	
US$35,000,000.

	3.2	
Monitoring

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

29

	4	
CONDITIONS OF DRAWDOWN

	4.1	
Conditions precedent to delivery of the Drawdown Request

The Borrowers may not deliver the Drawdown Request unless the Facility Agent has received all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent.

	4.2	
Conditions precedent to Drawdown

The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if:

	(a)	
on the date of the Drawdown Request and on the proposed Drawdown Date and before an Advance is made available:

		(i)	
no Default is continuing or would result from the proposed Advance; and

		(ii)	
the Repeating Representations to be made by each Transaction Obligor are true; and

	(b)	
on the Drawdown Date, the Facility Agent has received, or is satisfied that it will receive when the relevant Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent (acting on the instructions of all the Lenders).

	4.3	
Conditions subsequent

The Borrowers undertake to deliver or cause to be delivered to the Facility Agent within five Business Days after the Drawdown Date (or such later date agreed by the Facility Agent, acting with the authorisation of the Lenders), the additional documents and other evidence listed in Part C of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent.

	4.4	
Notification of satisfaction of conditions precedent

	(a)	
The Facility Agent shall notify the Borrowers and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent and subsequent referred to in Clause 4.1 (Conditions precedent to delivery of the Drawdown Request), Clause 4.2 (Conditions precedent to Drawdown) and Clause 4.3 (Conditions subsequent).

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

	4.5	
Waiver of conditions precedent

If the Lenders, at their discretion, permit an Advance to be released before any of the conditions precedent referred to in Clause 4 (Conditions of Drawdown) or Clause 4.2 (Conditions precedent to Drawdown) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the Drawdown Date or such later date as the Facility Agent, acting with the authorisation of the Lenders, may agree in writing with the Borrowers.

30

SECTION 3

DRAWDOWN

	5	
DRAWDOWN

	5.1	
Delivery of Drawdown Request

The Borrowers may utilise the Facility by delivery to the Facility Agent of a duly completed Drawdown Request not later than the Specified Time.

	5.2	
Completion of Drawdown Request

	(a)	
The Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:

		(i)	
it identifies each of the Tranches to be utilised;

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

		(iii)	
the currency and amount of the Drawdown comply with Clause 5.3 (Currency and amount); and

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

	(b)	
Only one Drawdown Request may be delivered in respect of all Tranches.

	(c)	
The Advances under all Tranches must be drawn down simultaneously.

	5.3	
Currency and amount

	(a)	
The currency specified in the Drawdown Request must be dollars.

	(b)	
The amount of the proposed Advance must be an amount which is not more than:

		(i)	
in respect of the Advance under Tranche A, $13,500,000;

		(ii)	
in respect of the Advance under Tranche B, $13,500,000; and

		(iii)	
in respect of the Advance under Tranche C, $8,000,000.

	(c)	
The aggregate amount of the proposed Advances under all Tranches must be an amount which is not more than the lower of:

		(i)	
$35,000,000; and

		(ii)	
55 per cent. of the aggregate Initial Market Value of the Vessels.

	(d)	
The amount of the proposed Advance must be an amount which would not oblige the Borrowers to provide additional security or prepay part of any Advance if the ratio set out in Clause 24 (Security Cover) were applied and notice was given by the Facility Agent under Clause 24.1 (Minimum required security cover) immediately after that Advance was made.

31

	5.4	
Lenders' participation

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

	(b)	
The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Commitment to the Total Commitments immediately before making that Advance.

	(c)	
The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its participation in that Advance by the Specified Time.

	5.5	
Cancellation of Commitments

The Commitments in respect of any Tranche which are unutilised at the end of the Availability Period shall then be cancelled.

32

SECTION 4

 REPAYMENT, PREPAYMENT AND CANCELLATION

	6	
REPAYMENT

	6.1	
Repayment of Loan

The Borrowers shall repay the Loan as follows:

	(a)	
Tranche A shall be repaid by:

		(i)	
24 equal consecutive quarterly instalments, each in an amount of $281,250 (each a "Tranche A Instalment"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche A Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche A Instalment shall be repaid on the Maturity Date; and

		(ii)	
a balloon instalment of $6,750,000 ("Tranche A Balloon Instalment") shall be repaid on the Maturity Date together with the last Tranche A Instalment.

	(b)	
Tranche B shall be repaid by:

		(i)	
equal consecutive quarterly instalments, each in an amount of $281,250 (each a "Tranche B Instalment"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche B Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche B Instalment shall be repaid on the Maturity Date; and

		(ii)	
a balloon instalment of $6,750,000 ("Tranche B Balloon Instalment") shall be repaid on the Maturity Date together with the last Tranche B Instalment; and

	(c)	
Tranche C shall be repaid by:

		(i)	
24 equal consecutive quarterly instalments, each in an amount of $285,000 (each a "Tranche C Instalment" and together with the Tranche A Instalments and the Tranche B Instalments, the "Instalments"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche C Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche C Instalment shall be repaid on the Maturity Date; and

		(ii)	
a balloon instalment of $1,160,000 ("Tranche C Balloon Instalment" and together with the Tranche A Balloon Instalment and the Tranche B Balloon Instalment, the "Balloon Instalments") shall be repaid on the Maturity Date together with the last Tranche C Instalment,

and each of the Instalments and the Balloon Instalments shall be a "Repayment Instalment",

Provided that, if the amount advanced under a Tranche is less than the maximum amount of such Tranche, the amount of the Repayment Instalments relating to that Tranche shall be reduced proportionately.

33

	6.2	
Effect of cancellation and prepayment on scheduled repayments

	(a)	
If the Available Commitment in respect of any Tranche of any Lender is cancelled under Clause 7.1 (Illegality) then the Repayment Instalments in respect of that Tranche falling after that cancellation will reduce pro rata by the amount of the Available Commitments in respect of that Tranche so cancelled.

	(b)	
If the whole or any part of any Available Commitment in respect of a Tranche is cancelled in accordance with Clause 7.2 (Automatic cancellation) or if the whole or part of any Commitment in respect of a Tranche is cancelled pursuant to Clause 5.5 (Cancellation of Commitments), the Repayment Instalments in respect of that Tranche falling after that cancellation will reduce pro rata by the amount of the Commitments so cancelled.

	(c)	
If any part of a Tranche is repaid or prepaid in accordance with Clause 7.1 (Illegality) then the Repayment Instalments in respect of that Tranche for each Repayment Date falling after that repayment or prepayment will reduce pro rata by the amount of the Tranche repaid or prepaid.

	(d)	
If any part of a Tranche is prepaid in accordance with Clause 7.3 (Voluntary prepayment of Loan) then the amount of the Repayment Instalments in respect of that Tranche for each Repayment Date falling after that repayment or prepayment will reduce pro rata by the amount of the Tranche repaid or prepaid.

	(e)	
If any part of the Loan is prepaid in accordance with Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), the amount of the Loan prepaid shall be applied first against the Tranche which has been used in part financing the relevant Vessel and thereafter any balance shall reduce pro rata the then outstanding Repayment Instalments of the other Tranches.

	6.3	
Maturity Date

On the Maturity Date, the Borrowers shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.

	6.4	
Reborrowing

No Borrower may reborrow any part of the Facility which is repaid or prepaid.

	7	
PREPAYMENT AND CANCELLATION

	7.1	
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 an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

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

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

	(c)	
the Borrowers shall prepay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no

34

earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation prepaid.

	7.2	
Automatic cancellation

The unutilised Commitment (if any) of each Lender in respect of a Tranche shall be automatically cancelled at close of business on the date on which that Tranche is made available.

	7.3	
Voluntary prepayment of Loan

	(a)	
Subject to paragraph (b) below, the Borrowers may, if they give the Facility Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $500,000 or a multiple of that amount).

	(b)	
The Loan or any part thereof may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

	7.4	
Mandatory prepayment on sale, arrest or Total Loss

If a Vessel is sold, arrested or becomes a Total Loss, the Borrowers shall prepay the Relevant Amount of the Loan. Such repayment shall be made:

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

	(b)	
in the case of any arrest of that Vessel, where that Vessel is not within 30 days redelivered to the full control of the relevant Borrower, on or before the date falling 150 days after the date of the arrest of that Vessel; or

	(c)	
in the case of a Total Loss (excluding, for the avoidance of doubt, any arrest of a Vessel where that Vessel is not within 30 days redelivered to the full control of the relevant Borrower, in which case paragraph (b) above applies), on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss.

In this Clause 7.4, "Relevant Amount" means an amount equal amount equal to the higher of:

		(i)	
the Tranche applicable to the Vessel which is sold, arrested or becomes a Total Loss; and

		(ii)	
an amount which, after the application of the prepayment to be made pursuant to this Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), results in the Security Cover Ratio being the greater of (i) the Security Cover Ratio that applied immediately prior to the applicable event described in paragraph (a), (b) or (c) of this Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) and (ii) the Security Cover Ratio required to be maintained pursuant to Clause 24.1 (Minimum required security cover).

	7.5	
Restrictions

	(a)	
Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this

35

Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

	(b)	
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and all other amounts accrued under the Finance Documents and, subject to the fee provided for in Clause 11.3 (Prepayment fee) and any Break Costs, without premium or penalty.

	(c)	
No Borrower may reborrow any part of the Facility which is prepaid.

	(d)	
No Borrower shall 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.

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

	(f)	
If the Facility Agent receives a notice under this Clause 7 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.

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

	7.6	
Application of prepayments

Any prepayment of any part of the Loan (other than a prepayment pursuant to Clause 7.1 (Illegality)) shall be applied pro rata to each Lender's participation in that part of the Loan.

36

SECTION 5

 COSTS OF DRAWDOWN

	8	
INTEREST

	8.1	
Calculation of interest

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

	(a)	
the Margin; and

	(b)	
LIBOR.

	8.2	
Payment of interest

	(a)	
The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").

	(b)	
If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.

	8.3	
Fixed rate of interest

	(a)	
The Borrowers may, by giving not less than five Business Days' notice in writing, request that a fixed rate of interest shall apply on the whole of the Loan or a Tranche for a period of 12 months or more by giving to the Facility Agent a notice which shall specify the period for which the fixed rate of interest shall apply and shall be given at least five Business Days before the end of the then current Interest Period of the Loan or that Tranche (as applicable). The Facility Agent shall notify the Borrowers of the fixed rate of interest to apply (which shall be determined at the level of the actual refinancing rates available to the Lenders (as certified by them) for the relevant period to which such fixed rate is to apply plus the Margin) and the Borrowers shall either accept or refuse the offer promptly in writing and in any event within one Business Day. Such offer and acceptance shall be in a form that shall constitute a Finance Document. Once accepted, the Borrowers may not revoke their acceptance and the relevant fixed rate of interest shall apply to the Loan or a Tranche from the first day of the next Interest Period of the Loan or that Tranche (as applicable). If the Borrowers refuse the offer or fail to accept it within the time permitted for acceptance, the other provisions of this Clause 8 (Interest) shall continue to apply.

	(b)	
The Borrowers acknowledge and agree that in fixing the interest rate under this Clause 8.3 (Fixed rate of interest), a Lender may enter into internal or external interest rate swaps and that any claim, expense, liability or loss arising as a result of the early termination of such internal or external rate swap shall be for the account of the Borrowers.

	8.4	
Default interest

	(a)	
If a Transaction Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum

37

had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent. Any interest accruing under this Clause 8.4 (Default interest) shall be immediately payable by the Obligors on demand by the Facility Agent.

	(b)	
If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not

the last day of an Interest Period relating to the Loan or that part of the Loan:

		(i)	
the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and

		(ii)	
the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

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

	8.5	
Notification of rates of interest

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

	(b)	
The Facility Agent shall promptly notify the Borrowers of each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.

	9	
INTEREST PERIODS

	9.1	
Selection of Interest Periods

	(a)	
The first Interest Period for a Tranche as specified in the Drawdown Request for that Tranche shall be three Months from the Drawdown Date.

	(b)	
Subject to paragraph (g) below, the Borrowers may select each subsequent Interest Period in respect of that Tranche in a Selection Notice.

	(c)	
Each Selection Notice is irrevocable and must be delivered to the Facility Agent by the Borrowers not later than the Specified Time.

	(d)	
If the Borrowers fail to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (b) and (c) above, the relevant Interest Period will, subject to Clause 9.2 (Changes to Interest Periods) and paragraph (g) below, be three Months.

	(e)	
Subject to Clause 8.3 (Fixed rate of interest) and this Clause 9 (Interest Periods), the Borrowers may select an Interest Period of three Months or any other period (up to a maximum of 12 Months) agreed between the Borrowers and the Facility Agent (acting on the instructions of all the Lenders).

	(f)	
An Interest Period in respect of a Tranche shall not extend beyond the Maturity Date.

38

	(g)	
In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of a Tranche equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of that Tranche.

	(h)	
Subject to paragraph (i) below, the first Interest Period for a Tranche shall start on the Drawdown Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.

	(i)	
Except for the purposes of paragraph (g) above and Clause 9.2 (Changes to Interest Periods) below, each Tranche shall have one Interest Period only at any time and all Tranches shall have the same Interest Period.

	9.2	
Changes to Interest Periods

	(a)	
In respect of a Repayment Instalment related to a Tranche, prior to determining the interest rate for that Tranche, the Facility Agent may establish an Interest Period for a part of a Tranche equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of that Tranche shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (e) of 9.1 (Selection of Interest Periods).

	(b)	
If after the Borrowers have selected and the Lenders have agreed an Interest Period longer than three Months, any Lender notifies the Facility Agent within two Business Days after the Specified Time relating to the Drawdown Request or Selection Notice that it is not satisfied that deposits in dollars for a period equal to the Interest Period will be available to it in the Relevant Interbank Market when the Interest Period commences, the Facility Agent shall shorten the Interest Period to three Months.

	(c)	
If the Facility Agent makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrowers and the Lenders.

	9.3	
Non-Business Days

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

	10	
CHANGES TO THE CALCULATION OF INTEREST

	10.1	
Unavailability of Screen Rate

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

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

		(i)	
dollars; or

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

39

the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan.

	(c)	
Cost of funds: If paragraph (b) above applies but no Reference Bank Rate is available for dollars or the relevant Interest Period there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.

	10.2	
Calculation of Reference Bank Rate

	(a)	
Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.

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

	10.3	
Market disruption

If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 10 per cent. of the Loan or the relevant part of the Loan as appropriate) (the "Relevant Lender") that the cost to it of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 10.4 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.

	10.4	
Cost of funds

	(a)	
If this Clause 10.4 (Cost of funds) applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

		(i)	
the Margin; and

		(ii)	
the rate notified to the Facility 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 the relevant Lender of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select.

	(b)	
If this Clause 10.4 (Cost of funds) applies and the Facility Agent or the Borrowers so require, the Facility Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

	(c)	
Subject to Clause 42.4 (Replacement of Screen Rate), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

	(d)	
If paragraph (e) below does not apply and any rate notified to the Facility Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.

40

	(e)	
If this Clause 10.4 (Cost of funds) applies pursuant to Clause 10.3 (Market disruption) and:

		(i)	
a Lender's Funding Rate is less than LIBOR; or

		(ii)	
a Lender does not supply a quotation by the time specified in sub-paragraph (ii) of paragraph (a) above,

the cost to that Lender of funding its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be LIBOR.

	10.5	
Notification to Borrowers

If Clause 10.4 (Cost of funds) applies the Facility Agent shall, as soon as is practicable, notify the Borrowers.

	10.6	
Break Costs

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

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

	11	
FEES

	11.1	
Commitment fee

	(a)	
The Borrowers shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 1.00 per cent. per annum on that Lender's Available Commitment from time to time for the Availability Period.

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

	11.2	
Arrangement fee

The Borrowers shall pay to the Arranger a non-refundable arrangement fee in the amount of $350,000 on the date of this Agreement.

	11.3	
Prepayment fee

	(a)	
Subject to paragraph (c) below, the Borrowers must pay to the Facility Agent for each Lender a prepayment fee on the date of prepayment of all or any part of the Loan in the case of a refinancing of all or any part of the Loan by any bank, financial institution, trust, fund or any entity other than a Lender.

	(b)	
The amount of the prepayment fee is:

41

		(i)	
if the prepayment occurs on or before the first anniversary of the Drawdown Date, three per cent. of the amount prepaid;

		(ii)	
if the prepayment occurs after the first but on or before the second anniversary of the Drawdown Date, two per cent. of the amount prepaid; and

		(iii)	
if the prepayment occurs after the second but on or before the third anniversary of the Drawdown Date, one per cent. of the amount prepaid.

	(c)	
No prepayment fee shall be payable under this Clause if the prepayment is made after the third anniversary of the Drawdown Date.

42

SECTION 6

 ADDITIONAL PAYMENT OBLIGATIONS

	12	
TAX GROSS UP AND INDEMNITIES

	12.1	
Definitions

	(a)	
In this Agreement:

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

"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.

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

"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

	(b)	
Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

	12.2	
Tax gross-up

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

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

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

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

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

43

	12.3	
Tax indemnity

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

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

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

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

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

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

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

		(A)	
is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or

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

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

	(d)	
A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 (Tax indemnity), notify the Facility Agent.

	12.4	
Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

	(a)	
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and

	(b)	
that Finance Party has obtained and utilised that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

44

	12.5	
Stamp taxes

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

	12.6	
VAT

	(a)	
All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

	(b)	
If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

		(i)	
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

		(ii)	
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

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

	(d)	
Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union)) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a

45

member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).

	(e)	
In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

	12.7	
FATCA Information

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

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

		(A)	
a FATCA Exempt Party; or

		(B)	
not a FATCA Exempt Party; and

		(ii)	
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

		(iii)	
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

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

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

		(i)	
any law or regulation;

		(ii)	
any fiduciary duty; or

		(iii)	
any duty of confidentiality.

	(d)	
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

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

46

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

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

		(iii)	
where that Borrower is not a US Tax Obligor, the date of a request from the Facility Agent, supply to the Facility Agent:

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

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

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

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

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

	12.8	
FATCA Deduction

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

	(b)	
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify each Obligor and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

47

	13	
INCREASED COSTS

	13.1	
Increased costs

	(a)	
Subject to Clause 13.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

		(i)	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

		(ii)	
compliance with any law or regulation made, 

in each case after the date of this Agreement; or

		(iii)	
the implementation, application of or compliance with Basel Ill or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.

	(b)	
In this Agreement:

		(i)	
"Basel III" means:

		(A)	
the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel Ill: A global regulatory framework for more resilient banks and banking systems", "Basel Ill: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

		(B)	
the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

		(C)	
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel Ill".

		(ii)	
"CRD IV" means:

		(A)	
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;

		(B)	
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and

		(C)	
any other law or regulation which implements Basel Ill.

		(iii)	
"Increased Costs" means:

48

		(A)	
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

		(B)	
an additional or increased cost; or

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

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

	13.2	
Increased cost claims

	(a)	
A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrowers.

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

	13.3	
Exceptions

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

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

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

	(c)	
compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);

	(d)	
compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost); or

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

	14	
OTHER INDEMNITIES

	14.1	
Currency indemnity

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

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

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

that Obligor shall, as an independent obligation, within two Business Days of demand, indemnify each Creditor Party to which 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

49

exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

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

	14.2	
Other indemnities

	(a)	
Each Obligor shall, within two Business Days of demand, indemnify each Creditor Party against any cost, loss or liability incurred by it as a result of:

		(i)	
the occurrence of any Event of Default;

		(ii)	
a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties);

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

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

	(b)	
Each Obligor shall, within two Business Days of demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person"), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Vessel unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.

	(c)	
Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

		(i)	
arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or

		(ii)	
in connection with any Environmental Claim.

	(d)	
Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 (Other indemnities) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

50

	14.3	
Mandatory Cost

Each Borrower shall, within two Business Days of demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:

	(a)	
in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank (or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and

	(b)	
in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),

which, in each case, is referable to that Lender's participation in the Loan.

	14.4	
Indemnity to the Facility Agent

Each Obligor shall, within two Business Days of demand, indemnify the Facility Agent against:

	(a)	
any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

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

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

		(iii)	
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and

	(b)	
any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 33.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents.

	14.5	
Indemnity to the Security Agent

	(a)	
Each Obligor shall, on demand, indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:

		(i)	
in relation to or as a result of:

		(A)	
any failure by a Borrower to comply with its obligations under Clause 15 (Costs and Expenses);

51

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

		(C)	
the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;

		(D)	
the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

		(E)	
any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;

		(F)	
any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and

		(G)	
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.

		(ii)	
acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).

	(b)	
The Security Agent and every Receiver and Delegate may, in priority to any payment to the Creditor Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

	15	
COSTS AND EXPENSES

	15.1	
Transaction expenses

The Obligors shall, within two Business Days of demand, pay the Facility Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any Creditor Party in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

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

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

	15.2	
Amendment costs

If:

	(a)	
a Transaction Obligor requests an amendment, waiver or consent; or

	(b)	
an amendment is required pursuant to Clause 33.9 (Change of currency); or

52

	(c)	
a Transaction Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,

the Obligors shall, within two Business Days of demand, reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Creditor Party in responding to, evaluating, negotiating or complying with that request or requirement.

	15.3	
Enforcement and preservation costs

The Obligors shall, on demand, pay to each Creditor Party the amount of all costs and expenses (including legal fees) incurred by that Creditor Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against that Creditor Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.

53

SECTION 7

 GUARANTEE AND JOINT AND SEVERAL LIABILITY OF BORROWERS

	16	
GUARANTEE AND INDEMNITY

	16.1	
Guarantee and indemnity

The Guarantor irrevocably and unconditionally:

	(a)	
guarantees to each Finance Party punctual performance by each Borrower of all of that Borrower's obligations under the Finance Documents;

	(b)	
undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

	(c)	
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 16 (Guarantee and Indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

	16.2	
Continuing guarantee

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

	16.3	
Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Transaction Obligor or any security for those obligations or otherwise) is made by a Creditor Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 16 (Guarantee and Indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

	16.4	
Waiver of defences

The obligations of the Guarantor under this Clause 16 (Guarantee and Indemnity) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 16.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 16 (Guarantee and Indemnity) or in respect of any Transaction Security (without limitation and whether or not known to it or any Creditor Party) including:

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

54

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

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

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

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

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

	(g)	
any insolvency or similar proceedings.

	16.5	
Immediate recourse

The Guarantor waives any right it may have of first requiring any Creditor Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 16 (Guarantee and Indemnity). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

	16.6	
Appropriations

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

	(a)	
refrain from applying or enforcing any other moneys, security or rights held or received by that Creditor Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and

	(b)	
hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 16 (Guarantee and Indemnity).

	16.7	
Deferral of Guarantor's rights

All rights which the Guarantor at any time has (whether in respect of this Guarantee, a mortgage or any other transaction) against any Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Creditor Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, the Guarantor will not exercise any rights which it may have (whether in

55

respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 16 (Guarantee and Indemnity):

	(a)	
to be indemnified by a Transaction Obligor;

	(b)	
to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;

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

	(d)	
to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 16.1 (Guarantee and indemnity);

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

	(f)	
to claim or prove as a creditor of any Transaction Obligor in competition with any Creditor Party.

If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Creditor Parties by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Creditor Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 33 (Payment Mechanics).

	16.8	
Additional security

This Guarantee and any other Security given by the Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Creditor Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.

	16.9	
Applicability of provisions of Guarantee to other Security

Clauses 16.2 (Continuing guarantee), 16.3 (Reinstatement), 16.4 (Waiver of defences), 16.5 (Immediate recourse), 16.6 (Appropriations), 16.7 (Deferral of Guarantor's rights) and 16.8 (Additional security) shall apply, with any necessary modifications, to any Security which the Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.

	16.10	
Release of Guarantor

If a Permitted Ultimate Beneficial Ownership Change is effected (subject to the terms of paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)), the Finance Parties will release the Guarantor from its obligations under this Guarantee subject to:

	(a)	
a person in all respects acceptable to the Facility Agent (acting with the authorisation of all the Lenders in their sole and absolute discretion) (the "New Guarantor") providing, in substitution

56

of this Guarantee, a guarantee of all the Borrowers' obligations under this Agreement and the other Finance Documents in such form and by no later than such date as the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) may require; and

	(b)	
the Facility Agent receiving any other documents as it or any other Finance Party may require in connection with the New Guarantor and the release of the Guarantor (including, but not limited to, those referred to at paragraphs 1, 4 and 5 of Part A of Schedule 2) in form and substance satisfactory to the Facility Agent.

	17	
JOINT AND SEVERAL LIABILITY OF THE BORROWERS

	17.1	
Joint and several liability

All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.

	17.2	
Waiver of defences

The liabilities and obligations of a Borrower shall not be impaired by:

	(a)	
this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;

	(b)	
any Lender or the Security Agent entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;

	(c)	
any Lender or the Security Agent releasing any other Borrower or any Security created by a Finance Document; or

	(d)	
any time, waiver or consent granted to, or composition with any other Borrower or other person;

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

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

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

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

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

	(j)	
any insolvency or similar proceedings.

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	17.3	
Principal Debtor

Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.

	17.4	
Borrower restrictions

	(a)	
Subject to paragraph (b) below, during the Security Period no Borrower shall:

		(i)	
claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

		(ii)	
take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower; or

		(iii)	
set off such an amount against any sum due from it to any other Borrower; or

		(iv)	
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or

		(v)	
exercise or assert any combination of the foregoing.

	(b)	
If during the Security Period, the Facility Agent, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Facility Agent's notice.

	17.5	
Deferral of Borrowers' rights

Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Borrower will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

	(a)	
to be indemnified by any other Borrower; or

	(b)	
to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.

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SECTION 8

 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

	18	
REPRESENTATIONS

	18.1	
General

Each Obligor makes the representations and warranties set out in this Clause 18 (Representations) to each Finance Party on the date of this Agreement.

	18.2	
Status

	(a)	
It is a corporation, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.

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

	18.3	
Share capital and ownership

	(a)	
Each of Borrower A and Borrower B is authorised to issue 500 registered shares with a par value of $20 each, all of which shares have been issued fully paid.

	(b)	
Borrower C is authorised to issue 500 registered and/or bearer shares without par value, all of which shares have been issued in registered form fully paid.

	(c)	
The Guarantor is authorised to issue 1,000,000,000 registered shares of common stock with a par value of $0.01 each and 500,000,000 registered preferred shares with a par value of $0.01 each, of which 104,274,708 registered shares of common stock have been issued and are outstanding as at the date of this Agreement.

	(d)	
The legal title to and beneficial interest in the shares in each Borrower is held free of any Security (other than Permitted Security) or any other claim by the Shareholder.

	(e)	
Each Borrower is 100 per cent. owned directly or indirectly (but, if indirectly, only through the Shareholder), by the Guarantor (unless a Permitted Ultimate Beneficial Ownership Change has been effected in accordance with, and subject to, the terms of paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)).

	(f)	
The ultimate beneficial ownership and control of at least 50.1 per cent. of the issued and outstanding common stock of the Guarantor (and the voting rights attaching to those shares) is held, directly or indirectly, by the Ultimate Beneficial Owner.

	(g)	
None of the shares in a Borrower is subject to any option to purchase, pre-emption rights or similar rights.

	18.4	
Binding obligations

The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.

59

	18.5	
Validity, effectiveness and ranking of Security

	(a)	
Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.

	(b)	
No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.

	(c)	
The Transaction Security granted by it to the Security Agent or any other Creditor Party has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking security.

	(d)	
No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.

	18.6	
Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:

	(a)	
any law or regulation applicable to it;

	(b)	
the constitutional documents of any Transaction Obligor; or

	(c)	
any agreement or instrument binding upon it or any Transaction Obligor or any Transaction Obligor's assets or constitute a default or termination event (however described) under any such agreement or instrument.

	18.7	
Power and authority

	(a)	
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:

		(i)	
its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents; and

		(ii)	
in the case of a Borrower, its registration of the Vessel owned by it under the relevant Approved Flag.

	(b)	
No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

	18.8	
Validity and admissibility in evidence

All Authorisations required or desirable:

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

60

	(b)	
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,

have been obtained or effected and are in full force and effect.

	18.9	
Governing law and enforcement

	(a)	
The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.

	(b)	
Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.

	18.10	
Insolvency

No:

	(a)	
corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 26.8 (Insolvency proceedings); or

	(b)	
creditors' process described in Clause 26.9 (Creditors' process),

has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 26.7 (Insolvency) applies to a member of the Group.

	18.11	
No filing or stamp taxes

Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents.

	18.12	
Deduction of Tax

It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.

	18.13	
No default

	(a)	
No Event of Default and, on the date of this Agreement and on the Drawdown Date, no Default is continuing or might reasonably be expected to result from the making of the Drawdown or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

	(b)	
No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject.

61

	18.14	
No misleading information

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

	(b)	
The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

	(c)	
Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.

	18.15	
Financial Statements

	(a)	
Its Original Financial Statements were prepared in accordance with GAAP consistently applied.

	(b)	
Its Original Financial Statements give a true and fair view of its financial condition as at the end of the relevant financial year and results of operations during the relevant financial year (consolidated in the case of the Guarantor).

	(c)	
There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Guarantor) since 31 December 2016.

	(d)	
Its most recent financial statements delivered pursuant to Clause 19.2 (Financial statements):

		(i)	
have been prepared in accordance with Clause 19.4 (Requirements as to financial statements); and

		(ii)	
give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Guarantor).

	(e)	
Since the date of the most recent financial statements delivered pursuant to Clause 19.2 (Financial statements) there has been no material adverse change in its business, assets or financial condition (or the business or consolidated financial condition of the Group, in the case of the Guarantor).

	18.16	
Pari passu ranking

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

	18.17	
No proceedings pending or threatened

	(a)	
No material litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have been started or threatened against it or any other Transaction Obligor (in the case of an Approved Manager, in connection with a Vessel or a Borrower), other than as disclosed to the Facility Agent and the public filings of the Guarantor with the US Securities and Exchange Commission.

62

	(b)	
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor (in the case of an Approved Manager, in connection with a Vessel or a Borrower).

	18.18	
Validity and completeness of the Transaction Documents

	(a)	
Each of the Transaction Documents to which any Charterer and each Transaction Obligor is a party constitutes legal, valid, binding and enforceable obligations of that Charterer and each Transaction Obligor.

	(b)	
The copies of the Transaction Documents delivered to the Facility Agent before the date of this Agreement are true and complete copies.

	(c)	
No amendments or additions to the Transaction Documents have been agreed nor has any Charterer or any Transaction Obligor waived any of its respective rights under the Transaction Documents.

	18.19	
Valuations

	(a)	
All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Facility Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.

	(b)	
It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.

	(c)	
There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.

	18.20	
No breach of laws

It has not (and no other Transaction Obligor has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

	18.21	
No Charter

Except as disclosed by the Borrowers to the Security Agent in writing on or before the date of this Agreement, no Vessel is subject to any Charter other than a Permitted Charter.

	18.22	
Compliance with Environmental Laws

All Environmental Laws relating to the ownership, operation and management of each Vessel and the business of each Transaction Obligor (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.

63

	18.23	
No Environmental Claim

No Environmental Claim has been made or threatened against any Transaction Obligor or any Vessel.

	18.24	
No Environmental Incident

No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

	18.25	
ISM and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, each Approved Manager and each Vessel have been complied with.

	18.26	
Taxes paid

	(a)	
It is not materially overdue in the filing of any Tax returns and it is not overdue in the payment of any amount in respect of Tax.

	(b)	
No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.

	18.27	
Financial Indebtedness

	(a)	
No Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.

	(b)	
No Borrower has acquired or invested in any additional assets and/or investments other than its Vessel.

	18.28	
Overseas companies

No Transaction Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.

	18.29	
Good title to assets

It and each other Transaction Obligor has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.

	18.30	
Ownership

	(a)	
Each Borrower is the sole legal and beneficial owner of all rights and interests which any Charter creates in favour of that Borrower.

	(b)	
Each Borrower is the sole legal and beneficial owner of the Vessel owned by it, its Earnings and its Insurances.

64

	(c)	
With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.

	(d)	
The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of a Borrower on creation or enforcement of the security conferred by the Security Documents.

	18.31	
Place of business

No Transaction Obligor has a place of business in the United Kingdom or the United States of America.

	18.32	
No employee or pension arrangements

No Transaction Obligor (other than an Approved Manager) has any employees or any liabilities under any pension scheme.

	18.33	
Sanctions

	(a)	
No Transaction Obligor:

		(i)	
and no director or officer, or to the best of its knowledge employee, of a Transaction Obligor, is a Prohibited Person;

		(ii)	
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person; or

		(iii)	
owns or controls a Prohibited Person.

	(b)	
No proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

	18.34	
US Tax Obligor

No Transaction Obligor is a US Tax Obligor.

	18.35	
Repetition

The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of the Drawdown Request and the first day of each Interest Period.

	19	
INFORMATION UNDERTAKINGS

	19.1	
General

The undertakings in this Clause 19 (Information Undertakings) remain in force throughout the Security Period unless the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders), may otherwise permit.

65

	19.2	
Financial statements

	(a)	
Subject to paragraph (c) below, each Obligor shall supply to the Facility Agent in sufficient copies for all the Lenders:

		(i)	
as soon as they become available, but in any event within 180 days after the end of each of its financial years (commencing with the financial year ended on 31 December 2017):

		(A)	
the unaudited financial statements of each Borrower for that financial year; and

		(B)	
the audited consolidated financial statements of the Guarantor for that financial year;

		(ii)	
as soon as the same become available, but in any event within 90 days after the end of each half of each of its financial years (commencing with the financial half year ended on 31 December 2017), the unaudited financial statements of each Borrower for that financial half year; and

		(iii)	
as soon as the same become available, but in any event within 90 days after the end of each quarter of each of its financial years (commencing with the financial quarter ended on 31 December 2017), the unaudited consolidated financial statements of the Guarantor for that financial quarter.

	(b)	
The financial statements required to be provided by the Obligors under paragraph (a) above shall include, or shall be supplemented by, updated details of all off balance sheets and time charter hire commitments.

	(c)	
To the extent that the financial statements and other information required to be provided by each Obligor to the Facility Agent under paragraph (a) above are published on the internet by, or on behalf of such Obligor, such statements and information must be made immediately available to the Facility Agent and in any event within 5 Business Days of such publication.

	19.3	
Compliance Certificate

	(a)	
The Guarantor shall supply to the Facility Agent, with each set of financial statements delivered pursuant to paragraph (a)(i)(B) and paragraph (a)(iii) of Clause 19.2 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up and including, without limitation, valuations (at the cost of the Borrowers) in a form acceptable to the Facility Agent evidencing the Market Value of each Fleet Vessel.

	(b)	
Each Compliance Certificate shall be signed by an officer or any other authorised signatory of the Guarantor.

	19.4	
Requirements as to financial statements

	(a)	
Each set of financial statements delivered by an Obligor pursuant to Clause 19.2 (Financial statements) shall be certified by an officer or any other authorised signatory of the company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.

66

	(b)	
Each Borrower shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 19.2 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of that Obligor) deliver to the Facility Agent:

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

		(ii)	
sufficient information, in form and substance as may be reasonably required by the Facility 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 that Obligor's Original Financial Statements.

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

	19.5	
Information: miscellaneous

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

	(a)	
upon the Facility Agent's request, all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;

	(b)	
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, or to the best of the Obligor's knowledge threatened or pending, against any Transaction Obligor or any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;

	(c)	
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Transaction Obligor or any member of the Group and which might have a Material Adverse Effect;

	(d)	
promptly, its constitutional documents where these have been amended or varied;

	(e)	
promptly, such further information and/or documents regarding:

		(i)	
each Vessel, goods transported on each Vessel, its Earnings, its Insurances, the Shareholder or any other Transaction Obligor;

		(ii)	
the Security Assets;

		(iii)	
compliance of the Transaction Obligors with the terms of the Finance Documents; and

67

		(iv)	
the financial condition, business and operations of any member of the Group,

as any Finance Party (through the Facility Agent) may reasonably request; and

	(f)	
promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it or as may be required by any regulatory authority.

	19.6	
Notification of Default

	(a)	
Each Obligor shall, and shall procure that each other Transaction Obligor shall, notify the Facility Agent:

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

		(ii)	
promptly upon becoming aware of the same, of any breach of any Sanctions applicable to any Vessel, any Transaction Obligor or any party to any agreement relating to any Vessel.

	(b)	
Promptly upon a request by the Facility Agent, each Borrower shall supply to the Facility Agent a certificate signed by an authorised signatory on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

	19.7	
Use of websites

	(a)	
Each Obligor may satisfy its obligation under the Finance Documents to which it is a party to deliver any information in relation to those Lenders (the "Website Lenders") which accept this method of communication by posting this information onto an electronic website designated by the Borrowers and the Facility Agent (the "Designated Website") if:

		(i)	
the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;

		(ii)	
both the relevant Obligor and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and

		(iii)	
the information is in a format previously agreed between the relevant Obligor and the Facility Agent.

If any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Facility Agent shall notify the Obligors accordingly and each Obligor shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event each Obligor shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.

	(b)	
The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Obligors or any of them and the Facility Agent.

	(c)	
An Obligor shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

68

		(i)	
the Designated Website cannot be accessed due to technical failure;

		(ii)	
the password specifications for the Designated Website change;

		(iii)	
any new information which is required to be provided under this Agreement is posted onto the Designated Website;

		(iv)	
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

		(v)	
if that Obligor becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

If an Obligor notifies the Facility Agent under sub-paragraph (i) or (v) of paragraph (c) above, all information to be provided by the Obligors under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.

	(d)	
Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Obligors shall comply with any such request within 10 Business Days.

	19.8	
"Know your customer" checks

	(a)	
If:

		(i)	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

		(ii)	
any change in the status of a Transaction Obligor (or of a Holding Company of a Transaction Obligor) (including, without limitation, a change of ownership of a Transaction Obligor) after the date of this Agreement; or

		(iii)	
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges a Finance Party (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

	(b)	
Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all

69

necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

	20	
FINANCIAL COVENANTS

	20.1	
Borrowers' minimum liquidity

Each Borrower shall ensure that, as from the Drawdown Date and at all times thereafter during the Security Period, an amount of not less than $1,000,000 (the "Minimum Liquidity Amount") shall:

	(a)	
unless paragraph (b) below applies, be credited in its entirety to its Earnings Account; or

	(b)	
where that Borrower has opened and elected to place funds on its Time Deposit Account, be credited in its entirety to that Borrower's Time Deposit Account.

The Minimum Liquidity Amount in respect of each Borrower shall be pledged in its Earnings Account or its Time Deposit Account pursuant to the relevant Account Security and shall remain blocked and may not be withdrawn.

	20.2	
Guarantor's financial covenants

The Guarantor shall ensure that at all times during the Security Period the following covenants shall be complied with:

	(a)	
the Working Capital shall be greater than zero;

	(b)	
it has Cash and Cash Equivalents of the Guarantor (on a consolidated basis) of at least $15,000,000; and

	(c)	
the ratio of Total Net Liabilities to Net Market Value Adjusted Total Assets shall be less than 50 per cent.

In this Clause 20.2 (Guarantor's financial covenants).

"Cash and Cash Equivalents" means, at any time, the aggregate of:

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

		(b)	
Marketable Securities valued at their then published market value rates owned by the members of the Group at that date; and

		(c)	
any other instrument, security or investment approved by the Majority Lenders,

		(d)	
which are free from any Security and/or restrictions and to which any member of the Group is beneficially entitled at that time and which are readily available to the members of the Group and capable of being applied against Financial Indebtedness, but also including any cash deposit which is blocked and/or otherwise restricted and/or subject to a Security if the sole purpose of such deposit and/or restriction and/or Security is the maintenance of a minimum liquidity covenant under borrowing arrangements of any member of the Group, as demonstrated by the then most recent Financial Statements.

70

"Current Assets" means, in respect of any Relevant Period, the amount of the current assets of the Guarantor and the members of the Group (on a consolidated basis) as shown in the Latest Financial Statements.

"Current Liabilities" means, in respect of any Relevant Period, the amount of the current liabilities of the Guarantor and the members of the Group (on a consolidated basis) (as shown in the Latest Financial Statements) less the current liabilities maturing after six (6) months of the relevant Testing Date, as shown in the Latest Financial Statements.

"Fleet Vessels" means all vessels (including the Vessels) from time to time directly or indirectly owned by the Guarantor (each, a "Fleet Vessel").

"Latest Financial Statements" means the financial statements of the Guarantor which are required to be delivered pursuant to Clause 19.2 (Financial statements) relating to a period ending on a Testing Date.

"Market Value Adjusted Total Assets" means, in respect of any Relevant Period, Total Assets adjusted to reflect the difference between the book values of all Fleet Vessels and the aggregate Market Value of all Fleet Vessels.

"Marketable Securities" means any bonds, stocks, notes or bills payable in a freely convertible and transferable currency and which are listed on a stock exchange acceptable to the Facility Agent.

"Net Market Value Adjusted Total Assets" means, in respect of any Relevant Period, Market Value Adjusted Total Assets less Cash and Cash Equivalents, each as shown in the Latest Financial Statements.

"Relevant Period" means each period of three months ending on 31 March, 30 June, 30 September and 31 December in each financial year of the Guarantor.

"Testing Date" means the last date of any quarterly period at the end of which the financial statements of the Guarantor that are required to be delivered pursuant to paragraph (a) of Clause 19.2 (Financial statements) are prepared.

"Total Assets" means, in respect of any Relevant Period, the aggregate book value of all current assets, fixed assets, and other assets and restricted cash of the Guarantor on a consolidated basis as shown in the Latest Financial Statements but excluding any assets held on trust.

"Total Liabilities" means, in respect of any Relevant Period, the aggregate book value of all liabilities of the Guarantor at any time on a consolidated basis as shown in the Latest Financial Statements.

"Total Net Liabilities" means, in respect of any Relevant Period, Total Liabilities less Cash and Cash Equivalents, each as shown in the Latest Financial Statements.

"Working Capital" means, in respect of any Relevant Period, Current Assets less Current Liabilities.

71

	20.3	
Testing

The financial covenants set out in Clause 20.2 (Guarantor's financial covenants) shall be calculated as per each Testing Date in accordance with GAAP and tested by reference to each of the financial statements of the Guarantor delivered pursuant to paragraphs (a)(i)(B) or (a)(iii) of Clause 19.2 (Financial statements) and/or each Compliance Certificate delivered pursuant to Clause 19.3 (Compliance Certificate).

	21	
GENERAL UNDERTAKINGS

	21.1	
General

The undertakings in this Clause 21 (General Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit (such permission not to be unreasonably withheld in the case of Clause 21.12 in relation to an Approved Manager).

	21.2	
Authorisations

Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly:

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

	(b)	
supply certified copies to the Facility Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the applicable Approved Flag at any time of each Vessel to enable it to:

		(i)	
perform its obligations under the Transaction Documents to which it is a party;

		(ii)	
ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction and in the state of the Approved Flag at any time of each Vessel or any Transaction Document to which it is a party; and

		(iii)	
own and operate the relevant Vessel (in the case of a Borrower).

	21.3	
Compliance with laws

Each Obligor shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.

	21.4	
Environmental compliance

Each Obligor shall, and shall procure that each other Transaction Obligor will:

	(a)	
comply with all Environmental Laws;

	(b)	
obtain, maintain and ensure compliance with all requisite Environmental Approvals;

	(c)	
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

72

	21.5	
Environmental claims

Each Obligor shall, and shall procure that each other Transaction Obligor will, (through the Guarantor), promptly upon becoming aware of the same, inform the Facility Agent in writing of:

	(a)	
any Environmental Claim against any member of the Group which is current, pending or threatened; and

	(b)	
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,

where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.

	21.6	
Taxation

	(a)	
Each Obligor shall, and shall procure that each other Transaction Obligor (other than an Approved Manager) will, pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

		(i)	
such payment is being contested in good faith;

		(ii)	
adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its latest financial statements delivered to the Facility Agent under Clause 19.2 (Financial statements); and

		(iii)	
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

	(b)	
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor (other than an Approved Manager) will, change its residence for Tax purposes.

	21.7	
Overseas companies

Each Obligor shall, and shall procure that each other Transaction Obligor (other than an Approved Manager) will, promptly inform the Facility Agent if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Facility Agent regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.

	21.8	
Pari passu ranking

Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

	21.9	
Title

	(a)	
Each Borrower shall hold the legal title to, and own the entire beneficial interest in:

73

		(i)	
the Vessel owned by it, its Earnings and its Insurances; and

		(ii)	
with effect on and from its creation or intended creation, any other assets the subject of any Transaction Security created or intended to be created by that Borrower.

	(b)	
The Guarantor shall hold the legal title to, and own the entire beneficial interest in, with effect on and from its creation or intended creation, any assets the subject of any Transaction Security created or intended to be created by the Guarantor.

	21.10	
Negative pledge

	(a)	
No Borrower shall, and the Obligors shall procure that the Shareholder will not, create or permit to subsist any Security over any of its assets (which are, in the case of the Shareholder, the subject of the Security created or intended to be created by the Finance Documents).

	(b)	
No Borrower shall:

		(i)	
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Transaction Obligor;

		(ii)	
sell, transfer or otherwise dispose of any of its receivables on recourse terms;

		(iii)	
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

		(iv)	
enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

	(c)	
Paragraphs (a) and (b) above do not apply to any Permitted Security.

	21.11	
Disposals

Subject to Clause 23.17 (Restrictions on chartering, appointment of managers etc.), no Borrower shall, and the Obligors shall procure that the Shareholder will not, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation any Vessel, its Earnings or its Insurances) which is, in the case of the Shareholder, the subject of the Security created or intended to be created by the Finance Documents.

	21.12	
Merger

No Obligor shall and the Obligors shall procure that no other Transaction Obligor will enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction (except in the case of a reorganisation of a Borrower arising in connection with a Permitted Ultimate Beneficial Ownership Change and subject to paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)).

	21.13	
Change of business

	(a)	
The Guarantor shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.

74

	(b)	
No Borrower shall engage in any business other than the ownership and operation of its Vessel.

	21.14	
Financial Indebtedness

No Borrower shall incur or permit to be outstanding any Financial Indebtedness except (i) Permitted Financial Indebtedness and (ii) Financial Indebtedness owed to trade creditors of that Borrower in the ordinary course of its business in relation to the trading and operation of its Vessel.

	21.15	
Expenditure

No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing its Vessel.

	21.16	
Share capital

	(a)	
No Borrower shall:

		(i)	
purchase, cancel or redeem any of its share capital;

		(ii)	
increase or reduce its authorised share capital;

		(iii)	
issue any further shares except to the Shareholder and provided such new shares are in registered form and made subject to the terms of the relevant Shares Security immediately upon the issue of such new shares in a manner satisfactory to the Facility Agent and the terms of the relevant Shares Security are complied with;

		(iv)	
appoint any further director or officer of that Borrower (unless the provisions of the relevant Shares Security are complied with); or

		(v)	
convert any of its shares into bearer form.

	(b)	
The Guarantor shall ensure that none of the shares in a Borrower or the Shareholder are converted into, or issued in, bearer form.

	21.17	
Dividends

	(a)	
No Obligor shall make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of an Event of Default which is continuing or where the making or payment of such dividend or distribution would result in the occurrence of an Event of Default.

	21.18	
People of significant control regime

Each Obligor shall (and the Guarantor shall ensure that each other Transaction Obligor will):

	(a)	
within the relevant timeframe, comply with any notice it receives pursuant to Part 21A of the Companies Act 2006 from any company incorporated in the United Kingdom whose shares are the subject of the Transaction Security; and

	(b)	
promptly provide the Security Agent with a copy of that notice.

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	21.19	
Accounts

No Borrower shall open or maintain any account with any bank or financial institution except its Accounts.

	21.20	
Other transactions

No Borrower shall:

	(a)	
be the creditor in respect of any loan or any form of credit to any person other than another Transaction Obligor and where such loan or form of credit is Permitted Financial Indebtedness;

	(b)	
give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which a Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents other than the incurrence of liabilities to trade creditors in the ordinary course of its business in relation to the trading and operation of its Vessel.

	(c)	
enter into any material agreement other than:

		(i)	
the Transaction Documents;

		(ii)	
any other agreement expressly allowed under any other term of this Agreement; and

	(d)	
enter into any transaction on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or

	(e)	
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks.

	21.21	
Unlawfulness, invalidity and ranking; Security imperilled

No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:

	(a)	
make it unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents;

	(b)	
cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid, binding or enforceable;

	(c)	
cause any Transaction Document to cease to be in full force and effect;

	(d)	
cause any Transaction Security to rank after, or lose its priority to, any other Security; and

	(e)	
imperil or jeopardise the Transaction Security.

	21.22	
Separate corporate existence

Each Borrower shall maintain separate corporate existence and identity, shall keep separate records, books and accounts and shall not co-mingle its assets nor become a member of a VAT Group.

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	21.23	
Accounting reference date

No Obligor shall change its year end accounting reference date.

	21.24	
Securitisation

Each Obligor shall, and the Obligors shall procure that each other Transaction Obligor (other than an Approved Manager) will, assist the Facility Agent and/or any Lender in achieving a successful securitisation (or similar transaction) in respect of the Facility and the Finance Documents and such Transaction Obligor's reasonable costs for providing such assistance shall be met by the relevant Lender. Each Borrower, if requested by the Facility Agent, shall provide documentation evidencing the purchase price of the Vessel owned by it when acquired by that Borrower.

	21.25	
Constitutional documents

Without prejudice to Clause 21.16 (Share capital) and the terms of any Shares Security, no Obligor shall allow any amendment or variation to its constitutional documents unless such amendment or variation would clearly be immaterial to this Agreement and the other Finance Documents.

	21.26	
Further assurance

	(a)	
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Security Agent do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Security Agent may specify (and in such form as the Security Agent may require in favour of the Security Agent or its nominee(s)):

		(i)	
to create, perfect, vest in favour of the Security Agent or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of any of the Creditor Parties provided by or pursuant to the Finance Documents or by law;

		(ii)	
to confer on the Security Agent or confer on the Creditor Parties Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;

		(iii)	
to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or

		(iv)	
to enable or assist the Security Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.

77

	(b)	
Each Obligor shall, and shall procure that each other Transaction Obligor will take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Creditor Parties by or pursuant to the Finance Documents.

	(c)	
At the same time as an Obligor delivers to the Security Agent any document executed by itself or another Transaction Obligor pursuant to this Clause 21.26 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Security Agent a certificate signed by an officer of that Obligor or that Transaction Obligor which shall:

		(i)	
set out the text of a resolution of that Obligor's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Security Agent; and

		(ii)	
state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors and is valid under that Obligor's or Transaction Obligor's articles of incorporation, articles of association or other constitutional documents.

	21.27	
Charterparty Assignment

Upon a Borrower entering into an Assignable Charter, it shall enter into a Charterparty Assignment in respect of that Assignable Charter and shall procure that all relevant documents pursuant to that Charterparty Assignment in the agreed form are (and shall use its best endeavours to procure that the Charterer's acknowledgement to that Charterparty Assignment is) delivered to the Facility Agent in a form satisfactory to it and any supporting legal opinions as may be required by it.

	21.28	
Subordination

Each Obligor shall ensure that any loans to any Borrower, any sums owed to any Approved Manager in connection with any Borrower and/or any Ship, any claims of the Guarantor against any Borrower and any intra-group debt are fully subordinated to the Secured Liabilities.

	22	
INSURANCE UNDERTAKINGS

	22.1	
General

The undertakings in this Clause 22 (Insurance Undertakings) remain in force on and from the Drawdown Date and throughout the rest of the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.

	22.2	
Maintenance of obligatory insurances

Each Borrower shall keep the Vessel owned by it insured at its expense against:

	(a)	
hull and machinery plus freight interest and hull interest and/or increased value and any other usual marine risks (including excess risks);

	(b)	
war risks (including the London Blocking and Trapping addendum or its equivalent);

78

	(c)	
protection and indemnity risks (including liability for oil pollution for an amount of no less than $1,000,000,000 and excess war risk P&I cover) on standard Club Rules, covered by a Protection and Indemnity association which is a member of the International Group of Protection and Indemnity Associations (or, if the International Group ceases to exist, any other leading protection and indemnity association or other leading provider of protection and indemnity insurance) (including, without limitation, the proportion (if any) of any collision liability not covered under the terms of the hull cover);

	(d)	
freight, demurrage and defence; and

	(e)	
any other risks against which the Facility Agent acting on the instructions of the Majority Lenders considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for the Borrowers to insure and which are specified by the Facility Agent by notice to the Borrowers.

	22.3	
Terms of obligatory insurances

Each Borrower shall effect such insurances in respect of the Vessel owned by it:

	(a)	
in dollars;

	(b)	
in the case of hull and machinery and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:

		(i)	
an amount which, when aggregated with the amounts for which the other Mortgaged Vessels are insured for such risks, equals 120 per cent. of the Loan; and

		(ii)	
the Market Value of that Vessel;

	(c)	
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market but such amount shall not be less than $1,000,000,000;

	(d)	
in the case of protection and indemnity risks, in respect of the full tonnage of its Vessel;

	(e)	
in the case of the hull and machinery insurance, on the basis that the deductible is not higher than the Major Casualty figure;

	(f)	
in the case where a Vessel is insured on a fleet policy, on the basis that each vessel insured on that fleet policy is deemed to be insured on an individual basis;

	(g)	
on approved terms; and

	(h)	
through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

	22.4	
Further protections for the Finance Parties

In addition to the terms set out in Clause 22.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:

79

	(a)	
subject always to paragraph Error! Reference source not found., name that Borrower as the sole named insured unless the interest of every other named insured is limited:

		(i)	
in respect of any obligatory insurances for hull and machinery and war risks;

		(A)	
to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

		(B)	
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

		(ii)	
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

and every other named insured has undertaken in writing to the Security Agent (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

	(b)	
name the Security Agent as loss payee with such directions for payment as the Facility Agent may specify;

	(c)	
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Agent shall be made without set off, counterclaim or deductions or condition whatsoever;

	(d)	
provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Agent or any other Finance Party; and

	(e)	
provide that the Security Agent may make proof of loss if that Borrower fails to do so.

	22.5	
Renewal of obligatory insurances Each Borrower shall:

	(a)	
at least 10 days before the expiry of any obligatory insurance effected by it:

		(i)	
notify the Facility Agent of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which that Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and

		(ii)	
obtain the Facility Agents' approval to the matters referred to in sub-paragraph (i) of paragraph (a) above;

	(b)	
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Facility Agent's approval pursuant to paragraph (a) above; and

80

	(c)	
procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Facility Agent in writing of the terms and conditions of the renewal.

	22.6	
Copies of policies; letters of undertaking

Each Borrower shall ensure that the Approved Brokers provide the Security Agent with:

	(a)	
pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and

	(b)	
a letter or letters or undertaking in a form required by the Facility Agent and including undertakings by the Approved Brokers that:

		(i)	
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 22.4 (Further protections for the Finance Parties);

		(ii)	
they will hold such policies, and the benefit of such insurances, to the order of the Security Agent in accordance with such loss payable clause;

		(iii)	
they will advise the Security Agent immediately of any material change to the terms of the obligatory insurances;

		(iv)	
they will, if they have not received notice of renewal instructions from that Borrower or its agents, notify the Security Agent not less than 14 days before the expiry of the obligatory insurances;

		(v)	
if they receive instructions to renew the obligatory insurances, they will promptly notify the Facility Agent of the terms of the instructions;

		(vi)	
they will not set off against any sum recoverable in respect of a claim relating to the Vessel owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of other vessels under the fleet cover to which that Vessel relates or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts in relation to other vessels under the fleet cover and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts in relation to other vessels under that fleet cover and will arrange for a separate policy to be issued in respect of that Vessel forthwith upon being so requested by the Security Agent; and

		(vii)	
they will arrange for a separate policy to be issued in respect of the Vessel owned by that Borrower forthwith upon being so requested by the Facility Agent.

	22.7	
Copies of certificates of entry

Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Vessel owned by it is entered provide the Security Agent with:

	(a)	
the certificate of entry for that Vessel;

81

	(b)	
a letter or letters of undertaking in such form as may be required by the Facility Agent acting on the instructions of Majority Lenders; and

	(c)	
each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Vessel.

	22.8	
Deposit of original policies

Each Borrower shall ensure that all policies relating to obligatory insurances effected by it deposited with the Approved Brokers through which the insurances are effected or renewed.

	22.9	
Payment of premiums

Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Facility Agent or the Security Agent.

	22.10	
Guarantees

Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

	22.11	
Compliance with terms of insurances

	(a)	
No Borrower shall do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.

	(b)	
Without limiting paragraph (a) above, each Borrower shall:

		(i)	
take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (b) of Clause 22.6 (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Facility Agent has not given its prior approval;

		(ii)	
not make any changes relating to the classification or classification society or manager or operator of the Vessel owned by it approved by the underwriters of the obligatory insurances without obtaining the prior consent of the insurers;

		(iii)	
make (and promptly supply copies to the Facility Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

		(iv)	
not employ the Vessel owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

82

	22.12	
Alteration to terms of insurances

No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.

	22.13	
Settlement of claims

Each Borrower shall:

	(a)	
not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and

	(b)	
do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

	22.14	
Provision of copies of communications

Each Borrower shall provide the Security Agent, at the time of each such communication, with copies of all written communications between that Borrower and:

	(a)	
the Approved Brokers;

	(b)	
the approved protection and indemnity and/or war risks associations; and

	(c)	
the approved insurance companies and/or underwriters,

which relate directly or indirectly to:

		(i)	
that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

		(ii)	
any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

	22.15	
Provision of information

Each Borrower shall promptly provide the Facility Agent (or any persons which it may designate) with any information which the Facility Agent (or any such designated person) requests for the purpose of:

	(a)	
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

	(b)	
effecting, maintaining or renewing any such insurances as are referred to in Clause 22.16 (Mortgagee's interest, additional perils and mortgagee's rights insurances) or dealing with or considering any matters relating to any such insurances,

and the Borrowers shall, forthwith upon demand, indemnify the Facility Agent in respect of all fees and other expenses incurred by or for the account of the Facility Agent in connection with any such report as is referred to in paragraph (a) above.

83

	22.16	
Mortgagee's interest, additional perils and mortgagee's rights insurances

The Security Agent shall be entitled from time to time to effect, maintain and renew:

	(a)	
a mortgagee's interest insurance in an amount of not less than 120 per cent. of the Loan;

	(b)	
a mortgagee's interest additional perils insurance in an amount of not less than 120 per cent. of the Loan;

	(c)	
if applicable, a mortgagee's rights insurance in an amount of not less than 110 per cent. of the Loan,

and the Borrowers shall upon demand fully indemnify the Finance Parties in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

	23	
POST-DELIVERY VESSEL UNDERTAKINGS

	23.1	
General

The undertakings in this Clause 23 (Post-Delivery Vessel Undertakings) remain in force on and from the Drawdown Date and throughout the rest of the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.

	23.2	
Vessel's names and registration

Each Borrower shall, in respect of the Vessel owned by it:

	(a)	
keep that Vessel registered in its name under the relevant Approved Flag from time to time at its port of registration;

	(b)	
not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled; and

	(c)	
not change the name of that Vessel.

	23.3	
Repair and classification

Each Borrower shall keep the Vessel owned by it in a good and safe condition and state of repair:

	(a)	
consistent with first class ship ownership and management practice; and

	(b)	
so as to maintain that Vessel's Approved Classification free of overdue recommendations and conditions.

	23.4	
Modifications

No Borrower shall make any modification or repairs to, or replacement of, any Vessel or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Vessel or materially reduce its value.

84

	23.5	
Removal and installation of parts

	(a)	
Subject to paragraph (b) below, no Borrower shall remove any material part of the Vessel owned by it, or any item of equipment installed on that Vessel unless:

		(i)	
the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;

		(ii)	
the replacement part or item is free from any Security in favour of any person other than the Security Agent; and

		(iii)	
the replacement part or item becomes, on installation on that Vessel, the property of that Borrower and subject to the security constituted by the Mortgage and, where applicable, the Deed of Covenant in respect of that Vessel.

	(b)	
A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Vessel owned by that Borrower.

	23.6	
Surveys

Each Borrower shall submit the Vessel owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting on the instructions of the Majority Lenders, provide the Facility Agent, with copies of all survey reports.

	23.7	
Inspection

	(a)	
Each Borrower shall permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Vessel owned by it at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

	(b)	
The cost of all inspections under this Clause 23.7 (Inspection) shall be for the account of the Borrowers Provided that if no Event of Default has occurred and the relevant Vessel is found to be in a condition satisfactory to the Facility Agent (acting on the instructions of the Majority Lenders) in all respects, the Borrowers shall not have to pay for more than one inspection in respect of that Vessel in each calendar year.

	23.8	
Prevention of and release from arrest

	(a)	
Each Borrower shall, in respect of the Vessel owned by it, promptly discharge:

		(i)	
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Vessel, its Earnings or its Insurances;

		(ii)	
all Taxes, dues and other amounts charged in respect of that Vessel, its Earnings or its Insurances; and

		(iii)	
all other outgoings whatsoever in respect of that Vessel, its Earnings or its Insurances.

	(b)	
Each Borrower shall immediately upon receiving notice of the arrest of the Vessel owned by it or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.

85

	23.9	
Compliance with laws etc.

Each Borrower shall:

	(a)	
comply, or procure compliance with all laws or regulations:

		(i)	
relating to its business generally; and

		(ii)	
relating to the Vessel owned by it, its ownership, employment, operation, management and registration,

including, but not limited to, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the relevant Approved Flag;

	(b)	
obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals;

	(c)	
without limiting paragraph (a) above, not employ the Vessel owned by it nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions; and

	(d)	
not appoint any manager or agent to manage the Vessel owned by it unless such party undertakes to procure that any agreement entered into relating to the management, employment or operation of that Vessel contains a clause in which the counterparty undertakes to comply with all Sanctions.

	23.10	
ISPS Code

Without limiting paragraph (a) of Clause 23.9 (Compliance with laws etc.), each Borrower shall:

	(a)	
procure that the Vessel owned by it and the company responsible for that Vessel's compliance with the ISPS Code comply with the ISPS Code; and

	(b)	
maintain an ISSC and an IAPPC for that Vessel; and

	(c)	
notify the Facility Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

	23.11	
Green scrapping

	(a)	
Each Borrower shall use reasonable endeavours (including the implementation of internal policies) to ensure that any scrapping of the Vessel owned by it is carried out in accordance with the IMO Convention for the Safe and Environmentally Sound Recycling of Ships.

	(b)	
Each Borrower shall use reasonable endeavours to obtain (in its first survey) and to maintain (in subsequent surveys) a green passport notification (based on the inventory of hazardous materials) for the Vessel owned by it from the relevant Approved Classification Society.

	23.12	
Sanctions and Vessel trading

Without limiting Clause 23.9 (Compliance with laws etc.), each Borrower shall procure:

	(a)	
that the Vessel owned by it shall not be used by or for the benefit of a Prohibited Person;

86

	(b)	
that the Vessel owned by it shall not be used in trading in any manner contrary to Sanctions (or which could be contrary to Sanctions if Sanctions were binding on each Transaction Obligor); and

	(c)	
that the Vessel owned by it shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances.

	23.13	
Trading in war zones

In the event of hostilities in any part of the world (whether war is declared or not), no Borrower shall cause or permit any Vessel to enter or trade to any zone which is declared a war zone by any government or by that Vessel's war risks insurers unless:

	(a)	
the prior written consent of that Vessel's war risks insurers has been obtained and prior written notice has been given by the Borrowers to the Facility Agent; and

	(b)	
that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Agent acting on the instructions of the Majority Lenders may require.

	23.14	
Monitoring

	(a)	
Each Borrower shall (or shall procure that the relevant Approved Technical Manager shall) allow the Security Agent (or its agents), at any time and from time to time, to access all information pertaining to the Vessel owned by it (including the movement of that Vessel) using any and all available means.

	(b)	
All costs incurred by the Security Agent (and any of its agents) under paragraph (a) of Clause 23.14 (Monitoring) above shall be for the account of the Lenders.

	23.15	
Provision of information

Without prejudice to Clause 19.5 (Information: miscellaneous) each Borrower shall, in respect of the Vessel owned by it, promptly provide the Facility Agent with any information which it requests regarding:

	(a)	
that Vessel, its employment, position and engagements;

	(b)	
its Earnings and payments and amounts due to its master and crew;

	(c)	
any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Vessel and any payments made by it in respect of that Vessel;

	(d)	
any towages and salvages; and

	(e)	
its compliance, each Approved Manager's compliance and the compliance of that Vessel with the ISM Code and the ISPS Code,

and, upon the Facility Agent's request, each Borrower shall promptly provide copies of class records, any inspection reports obtained for the Vessel owned by it, any current Charter relating to that Vessel, any current guarantee of any such Charter, that Vessel's Safety Management Certificate and any relevant Document of Compliance.

87

	23.16	
Notification of certain events

Each Borrower shall, in respect of the Vessel owned by it, immediately notify the Facility Agent in writing, of:

	(a)	
any casualty to that Vessel which is or is likely to be or to become a Major Casualty;

	(b)	
any occurrence as a result of which that Vessel has become or is, by the passing of time or otherwise, likely to become a Total Loss;

	(c)	
any requisition of that Vessel for hire;

	(d)	
any requirement or recommendation made in relation to that Vessel by any insurer or classification society or by any competent authority which is not immediately complied with;

	(e)	
any arrest or detention of that Vessel, any exercise or purported exercise of any lien on that Vessel or the Earnings;

	(f)	
any intended dry docking of that Vessel;

	(g)	
any Environmental Claim made against that Borrower or in connection with that Vessel, or any Environmental Incident;

	(h)	
any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Vessel; or

	(i)	
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,

and that Borrower shall keep the Facility Agent advised in writing on a regular basis and in such detail as the Facility Agent shall require as to that Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.

	23.17	
Restrictions on chartering, appointment of managers etc.

No Borrower shall, in relation to the Vessel owned by it:

	(a)	
let that Vessel on demise charter for any period;

	(b)	
enter into any time, voyage or consecutive voyage charter in respect of that Vessel other than a Permitted Charter;

	(c)	
change, cancel or terminate any Assignable Charter or any Charter Guarantee in respect of such Assignable Charter;

	(d)	
change, cancel or terminate a Management Agreement;

	(e)	
appoint a manager of that Vessel other than an Approved Manager or agree to any alteration to the terms of an Approved Manager's appointment;

	(f)	
de activate or lay up that Vessel; or

	(g)	
put that Vessel into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency)

88

unless that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Vessel or its Earnings for the cost of such work or for any other reason.

	23.18	
Notice of Mortgage

Each Borrower shall keep the relevant Mortgage registered against the Vessel owned by it as a valid first priority or preferred (as the case may be) mortgage, carry on board that Vessel a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Vessel a framed printed notice stating that that Vessel is mortgaged by that Borrower to the Security Agent.

	23.19	
Sharing of Earnings

No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings.

	23.20	
Nuclear materials

No Borrower shall permit the Vessel owned by it to carry any nuclear material or any nuclear waste.

	23.21	
Notification of compliance

Each Borrower shall promptly provide the Facility Agent, upon the Facility Agent's request, from time to time with evidence (in such form as the Facility Agent requires) that it is complying with this Clause 23 (Post-Delivery Vessel Undertakings).

	24	
SECURITY COVER

	24.1	
Minimum required security cover

Clause 24.2 (Provision of additional security; prepayment) applies if the Facility Agent notifies the Borrowers that:

	(a)	
the aggregate Market Value of the Mortgaged Vessels; plus

	(b)	
the net realisable value of additional Security previously provided under this Clause 24.1 (Minimum required security cover),

is below 130 per cent. of the Loan.

	24.2	
Provision of additional security; prepayment

	(a)	
If the Facility Agent serves a notice on the Borrowers under Clause 24.1 (Minimum required security cover), the Borrowers shall, on or before the date falling one Month after the date on which the Facility Agent's notice is served (the "Prepayment Date"), prepay such part of the Loan as shall eliminate the shortfall.

	(b)	
The Borrowers may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that the Guarantor or a third party has provided, additional security (in the form of cash or otherwise) which, in the opinion of the Facility Agent acting on the instructions of the Majority Lenders:

		(i)	
has a net realisable value at least equal to the shortfall; and

89

		(ii)	
is documented in such terms as the Facility Agent may approve or require,

before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.

	24.3	
Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 24.2 (Provision of additional security; prepayment) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.

	24.4	
Valuations binding

Any valuation under this Clause 24 (Security Cover) shall be binding and conclusive as regards each Borrower.

	24.5	
Provision of information

	(a)	
Each Borrower shall promptly provide the Facility Agent and any shipbroker acting under this Clause 24 (Security Cover) with any information which the Facility Agent or the shipbroker may request for the purposes of the valuation.

	(b)	
If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Facility Agent considers prudent.

	24.6	
Prepayment mechanism

Any prepayment pursuant to Clause 24.2 (Provision of additional security; prepayment) shall be made in accordance with the relevant provisions of Clause 7 (Prepayment and Cancellation) and shall be treated as a voluntary prepayment pursuant to Clause 7.3 (Voluntary prepayment of Loan).

	24.7	
Provision of valuations

	(a)	
The Facility Agent shall be entitled to test the security requirements under Clause 24.1 (Minimum required security cover) by reference to valuations in respect of each Vessel from the required number of Approved Valuers semi-annually and in the case of a sale or Total Loss of a Vessel pursuant to Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), and on dates to be selected by the Facility Agent.

	(b)	
The Facility Agent shall at the request of the Lenders additionally be entitled to test the security cover requirement under Clause 24.1 (Minimum required security cover) by reference to a valuation in respect of each Vessel from the required number of Approved Valuers at any time and each such valuation shall be at the expense of the Lenders except where the Borrowers are by means of such valuation(s) shown to be in breach of Clause 24.1 (Minimum required security cover).

	(c)	
Subject to paragraph (d) below, the Market Value of any Vessel shall be determined by reference to one valuation of that Vessel as given by an Approved Valuer selected and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent.

90

	(d)	
If requested by the Borrowers in relation to paragraph (c) above, a second Approved Valuer shall be selected by the Borrowers and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent, and the Market Value of that Vessel shall be the arithmetic average of the two valuations.

	(e)	
If one such valuation in respect of a Vessel obtained pursuant to paragraphs (c) and (d) above differs by at least 10 per cent. from the other valuation, then a third valuation for that Vessel shall be obtained from an Approved Valuer selected by the Borrowers and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent, and the Market Value of that Vessel shall be the arithmetic average of all three such valuations.

	(f)	
The Facility Agent may at any time after a Default has occurred and is continuing obtain valuations of any Vessel and any other vessel over which additional security has been created in accordance with Clause 24.2 (Provision of additional security; prepayment) from Approved Valuers to enable the Facility Agent to determine the Market Value of that Vessel and any other vessel.

	(g)	
The valuations referred to in paragraph (a), (b), (c), (d), (e) and (f) above and the valuations required to determine the Market Value of the Fleet Vessels at all required times (starting from the Drawdown Date) pursuant to Clause 20.2 (Guarantor's financial covenants), shall be obtained at the cost and expense of the Borrowers (except where specified in paragraph (b) above) (in addition to any set of valuations required in respect of each Vessel for the purposes of Drawdown) and the Borrowers shall within three Business Days of demand by the Facility Agent pay to the Facility Agent all costs and expenses incurred by it in obtaining any such valuations.

	25	
ACCOUNTS AND APPLICATION OF EARNINGS 25.1 Account bank

	25.1	
Account bank

Subject to Clause 25.9 (Location of Accounts), each Account must be held with the Account Bank.

	25.2	
Accounts

	(a)	
Each Borrower must operate each of its Accounts in accordance with this Clause 25 (Accounts and Application of Earnings) and the provisions of the Account Security.

	(b)	
Account Security must be provided in respect of any Account opened after the date of this Agreement.

	25.3	
Payments into the Time Deposit Accounts

Upon opening each Time Deposit Account and the execution of Account Security in relation to such Account, each Borrower may, provided that there is no Event of Default which is continuing, transfer the Minimum Liquidity Amount in respect of that Borrower from its Earnings Account to its Time Deposit Account.

	25.4	
Payments out of the Time Deposit Accounts

	(a)	
The Security Agent shall instruct the Account Bank to transfer any amount standing to the credit of a Time Deposit Account:

91

		(i)	
on expiry of the term of the deposit on that Time Deposit Account, at the Borrowers' request, in accordance with the provisions of the Account Bank's Terms and Conditions; or

		(ii)	
at any time (subject to the payment of any break costs payable in accordance with the terms of the deposit), to meet any Borrower's prepayment obligations under any of Clauses 7.1 (Illegality) or 7.4 (Mandatory prepayment on sale, arrest or Total Loss),

Provided that in each case:

		(A)	
there is no Event of Default which is continuing; and

		(B)	
no breach of Clause 20.1 (Borrowers' minimum liquidity) has occurred or will occur as a result of such transfer.

	(b)	
Where no transfer can be made as a result of the proviso under paragraph (a) above, interest shall be payable on the amount then standing to the credit of the relevant Time Deposit Account at the Account Bank's discretion and in accordance with market standard conditions at that time.

In the event of any conflict between the provisions of the Terms and Conditions and this Agreement, this Agreement shall prevail.

	25.5	
Payment of Earnings

Each Borrower shall ensure that, subject only to the provisions of the relevant General Assignment, all the Earnings in respect of the Vessel owned by it are paid in to its Earnings Account.

	25.6	
Application of Earnings

The Borrowers shall transfer from the Earnings Accounts to the Facility Agent:

	(a)	
on each Repayment Date, the amount of the Repayment Instalment then due on the Repayment Date; and

	(b)	
on the last day of each Interest Period, the amount of interest then due on that date; and

	(c)	
on any day on which an amount is otherwise due from any Borrower under a Finance Document, an amount necessary to meet that due amount,

and each Borrower irrevocably authorizes and instructs:

		(i)	
the Account Bank to make those transfers in accordance with the instructions of the Facility Agent (copied to the Security Agent, who, as security taker under the Account Security, agrees for itself and on behalf of the other pledgees that such transfers may be made);

		(ii)	
the Facility Agent to apply the transferred amounts in payment of the relevant Repayment Instalment, interest amount or other amount due.

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	25.7	
Shortfall in Earnings

	(a)	
If the credit balance on the Earnings Accounts is insufficient for the required amount to be transferred under Clause 25.6 (Application of Earnings), the Borrowers shall make up the amount of the insufficiency.

	(b)	
The Borrowers may not make up all or any part of the insufficiency by utilising the Minimum Liquidity Amount in any Earnings Account.

	25.8	
Application of funds

Until an Event of Default occurs, the Facility Agent shall on each Repayment Date and on each Interest Payment Date distribute to the Finance Parties in accordance with Clause 33.2 (Distributions by the Facility Agent) so much of the then balance on the Earnings Accounts as equals:

	(a)	
the Repayment Instalment due on that Repayment Date; and

	(b)	
the amount of interest payable on that Interest Payment Date,

in discharge of the Borrowers' liability for that Repayment Instalment or that interest.

	25.9	
Location of Accounts

Each Borrower shall promptly:

	(a)	
comply with any requirement of the Facility Agent as to the location or relocation of the Accounts (or any of them); and

	(b)	
execute any documents which the Facility Agent specifies to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) each Account.

	25.10	
Miscellaneous Accounts provisions

	(a)	
No Finance Party is responsible or liable to any Transaction Obligor for:

	(b)	
any non-payment of any liability of a Transaction Obligor which could be paid out of moneys standing to the credit of an Earnings Account; or

	(c)	
any withdrawal wrongly made, if made in good faith.

	25.11	
Withdrawals from Earnings Accounts

Subject to Clause 20.1 (Borrowers' minimum liquidity), Clause 25.6 (Application of Earnings) and Clause 25.7 (Shortfall in Earnings), a Borrower shall be entitled to withdraw any balance standing to the credit of its Earnings Account Provided that:

	(a)	
each Borrower is in compliance with Clause 20.1 (Borrowers' minimum liquidity), Clause 25.6 (Application of Earnings) and Clause 25.7 (Shortfall in Earnings) at the relevant time; and

	(b)	
no Event of Default has occurred and is continuing or would result from such withdrawal.

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	26	
EVENTS OF DEFAULT

	26.1	
General

Each of the events or circumstances set out in this Clause 26 (Events of Default) is an Event of Default except for Clause 26.18 (Acceleration) and Clause 26.19 (Enforcement of security).

	26.2	
Non-payment

A Transaction Obligor (other than an Approved Manager) does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

	(a)	
its failure to pay is caused by:

		(i)	
administrative or technical error; or

		(ii)	
a Disruption Event; and

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

	26.3	
Specific obligations

A breach occurs of Clause 4.5 (Waiver of conditions precedent), Clause 20 (Financial Covenants), Clause 21.9 (Title), Clause 21.10 (Negative pledge), Clause 21.21 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 22.2 (Maintenance of obligatory insurances), Clause 22.3 (Terms of obligatory insurances), Clause 22.5 (Renewal of obligatory insurances), Clause 23.9 (Compliance with laws etc.) in relation to Sanctions or Clause 24 (Security Cover).

	26.4	
Other obligations

	(a)	
A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 26.2 (Non-payment) and Clause 26.3 (Specific obligations)).

	(b)	
No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the Facility Agent giving notice to the Borrowers or (if earlier) any Transaction Obligor becoming aware of the failure to comply.

	26.5	
Misrepresentation

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

	26.6	
Cross default

	(a)	
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.

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

94

	(c)	
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).

	(d)	
Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).

	(e)	
No Event of Default will occur under this Clause 26.6 (Cross default) in respect of the Group taken as a whole (other than the Borrowers) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above in respect of the Group taken as a whole (other than the Borrowers) is less than $10,000,000 (or its equivalent in any other currency).

	26.7	
Insolvency

	(a)	
A Transaction Obligor (other than an Approved Manager):

		(i)	
is unable or admits inability to pay its debts as they fall due;

		(ii)	
is deemed to, or is declared to, be unable to pay its debts under applicable law;

		(iii)	
suspends or threatens to suspend making payments on any of its debts; or

		(iv)	
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.

	(b)	
The value of the assets of any Transaction Obligor is less than its liabilities (taking into account contingent and prospective liabilities).

	(c)	
A moratorium is declared in respect of any indebtedness of any Transaction Obligor. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

	26.8	
Insolvency proceedings

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

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

		(ii)	
a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor (other than an Approved Manager);

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

		(iv)	
enforcement of any Security over any assets of any Transaction Obligor (other than an Approved Manager),

95

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

	(b)	
Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement.

	26.9	
Creditors' process

Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor (which is not an Approved Manager) (other than an arrest or detention of a Vessel in which case paragraph (b) of Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) shall apply) having in the case of the Guarantor an aggregate value in excess of $500,000 (or its equivalent in any other currency), and is not discharged within 14 days.

	26.10	
Ownership of the Obligors and the Shareholder

	(a)	
A Borrower or the Shareholder is not or ceases to be a 100 per cent. directly or indirectly owned Subsidiary of the Guarantor.

	(b)	
The Ultimate Beneficial Owner ceases to be the direct or indirect beneficial owner of at least 50.1 per cent. of the issued and outstanding common stock (and the ultimate voting rights attaching to such stock) of the Guarantor or ceases to control directly or indirectly the Guarantor.

	(c)	
For the purpose of paragraph (b) above "control" means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

		(i)	
cast, or control the casting of, more than 50.1 per cent. of the maximum number of votes that might be cast at a general meeting of the Guarantor; or

		(ii)	
appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; or

		(iii)	
give directions with respect to the operating and financial policies of the Guarantor with which the directors or other equivalent officers of the Guarantor are obliged to comply.

	(d)	
The Ultimate Beneficial Owner ceases to be the chairman of the board of directors and/or the chief executive officer of the Guarantor.

	(e)	
Without the prior written consent of all the Lenders, the shares of the Guarantor cease to be listed on the Nasdaq Stock Market or another stock exchange acceptable to the Facility Agent (acting on the instructions of all the Lenders).

	(f)	
No Event of Default under paragraph (a) above will occur if, in connection with a Permitted Ultimate Beneficial Ownership Change, the Ultimate Beneficial Owner becomes the ultimate, direct or indirect, legal and beneficial holder of 100 per cent. of the issued share capital of each Borrower, subject to:

		(i)	
the Ultimate Beneficial Owner giving at least 30 days' prior written notice to the Facility Agent of its intention to make a Permitted Ultimate Beneficial Ownership Change, including full details of the entity wholly beneficially owned by the Ultimate Beneficial Owner which would become the new legal and direct owner of all the issued share

96

capital of each Borrower in place of the Shareholder pursuant to the Permitted Ultimate Beneficial Ownership Change (the "New Shareholder");

		(ii)	
the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) giving its written consent to such Permitted Ultimate Beneficial Ownership Change and approving the New Shareholder;

		(iii)	
the Ultimate Beneficial Owner becoming the ultimate beneficial owner, and the New Shareholder becoming the legal and direct owner, of all of the issued share capital of each Borrower simultaneously;

		(iv)	
the New Shareholder providing Security over the share capital of each Borrower in favour of the Security Agent in form and substance in all respects satisfactory to the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) on the date on which the Permitted Ultimate Beneficial Ownership Change is effected; and

		(v)	
the Transaction Obligors executing and delivering to the Facility Agent by no later than the date on which the Permitted Ultimate Beneficial Ownership Change is effected, an agreement or deed in form and substance in all respects satisfactory to the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) amending, supplementing and/or restating this Agreement and the other Finance Documents for the purpose of implementing any amendments which the Finance Parties may deed necessary in connection with the Permitted Ultimate Beneficial Ownership Change and paragraph (f) of this Clause 26.10 (Ownership of the Obligors and the Shareholder).

	26.11	
Unlawfulness, invalidity and ranking

	(a)	
It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.

	(b)	
Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.

	(c)	
Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than a Finance Party) to be ineffective.

	(d)	
Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.

	26.12	
Security imperilled; flag instability

	(a)	
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.

	(b)	
The state of the Approved Flag of any Vessel is or becomes involved in hostilities or civil war or there is a seizure of power in such state by unconstitutional means, or any other event occurs in relation to that Vessel, the relevant Mortgage or its Approved Flag and in the reasonable opinion of the Facility Agent such event is likely to have a Material Adverse Effect unless the relevant Borrower, within 30 days of the occurrence of such event (or such longer period as may be agreed by the Facility Agent acting with the authorisation of the Lenders) re-registers that Vessel on an alternative flag approved pursuant to Clause 23.2 (Vessel's names and registration) and subject to:

97

		(i)	
that Vessel remaining subject to Security created by a first priority or preferred ship mortgage on that Vessel and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority security) on substantially the same terms as the relevant Mortgage and if applicable, the relevant Deed of Covenant and on such other terms and in such other form as the Facility Agent, acting with the authorisation of the Lenders, shall reasonably approve or require; and

		(ii)	
the execution of such other documentation amending and supplementing the Finance Documents, as the Facility Agent, acting with the authorisation of the Lenders, shall reasonably approve or require.

	26.13	
Cessation of business

Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.

	26.14	
Expropriation

The authority or ability of any Transaction Obligor (other than an Approved Manager) to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Transaction Obligor (other than an Approved Manager) or any of its assets (and the aggregate value of any such action in relation to the Guarantor being in excess of $1,000,000 (or its equivalent in any other currency)) other than:

	(a)	
an arrest or detention of a Vessel (in which case paragraph (b) of Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) shall apply);

	(b)	
any Requisition; or

	(c)	
an expropriation of a Vessel which is reversed within 30 days of its initial occurrence with the relevant Borrower having full and unrestricted control over, and possession of, that Vessel.

	26.15	
Repudiation and rescission of agreements

A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.

	26.16	
Litigation

Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened, or any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made, in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or against any Transaction Obligor (other than an Approved Manager) or any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.

98

	26.17	
Material adverse change

Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.

	26.18	
Acceleration

On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrowers:

	(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 immediately due and payable, whereupon it shall become immediately due and payable; and/or

	(c)	
declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Facility Agent acting on the instructions of the Majority Lenders,

and the Facility Agent may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Security Agent may take any action referred to in Clause 26.19 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.

	26.19	
Enforcement of security

On and at any time after the occurrence of an Event of Default the Security Agent may, and shall if so directed by the Majority Lenders, take any action which, as a result of the Event of Default or any notice served under Clause 26.18 (Acceleration), the Security Agent is entitled to take under any Finance Document or any applicable law or regulation.

99

SECTION 9

 CHANGES TO PARTIES

	27	
CHANGES TO THE LENDERS

	27.1	
Assignments and transfers by the Lenders

Subject to this Clause 27 (Changes to the Lenders), a Lender (the "Existing Lender") may:

	(a)	
assign any of its rights; or

	(b)	
transfer by novation any of its rights and obligations,

under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the "New Lender").

	27.2	
Conditions of assignment or transfer

	(a)	
The prior written consent of an Obligor is required for an assignment or transfer by an Existing Lender unless the assignment or transfer is:

		(i)	
to another Lender or an Affiliate of a Lender;

		(ii)	
if the Existing Lender is a fund, to a fund which is a Related Fund; or

		(iii)	
made after the occurrence of an Event of Default,

in each of which cases no Obligor's consent will be required.

The consent of an Obligor to an assignment or transfer by an Existing Lender shall not be unreasonably withheld or delayed. An Obligor shall be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by that Obligor within that time.

The consent of an Obligor to an assignment or transfer by an Existing Lender shall not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 (Mandatory Cost).

	(b)	
The consent of the Facility Agent is required for an assignment or transfer by an Existing Lender, such consent not to be unreasonably withheld.

	(c)	
An assignment will only be effective on:

		(i)	
receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Creditor Parties as it would have been under if it were an Original Lender; and

		(ii)	
performance by the Facility Agent of all necessary "know your customer" or other

 similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.

100

	(d)	
A transfer will only be effective if the procedure set out in Clause 27.5 (Procedure for transfer) is complied with.

	(e)	
If:

		(i)	
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

		(ii)	
as a result of circumstances existing at the date the assignment, transfer or change occurs, a Transaction Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph (e) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.

	(f)	
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that:

		(i)	
the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender; and

		(ii)	
it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

	27.3	
Assignment or transfer fee

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $10,000.

	27.4	
Limitation of responsibility of Existing Lenders

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

		(i)	
the legality, validity, effectiveness, adequacy or enforceability of the Transaction Documents, the Transaction Security or any other documents;

		(ii)	
the financial condition of any Transaction Obligor;

		(iii)	
the performance and observance by any Transaction Obligor of its obligations under the Transaction Documents or any other documents; or

101

		(iv)	
the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document,

and any representations or warranties implied by law are excluded.

	(b)	
Each New Lender confirms to the Existing Lender and the other Finance Parties and the Creditor Parties that it:

		(i)	
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Transaction Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Transaction Document or the Transaction Security; and

		(ii)	
will continue to make its own independent appraisal of the creditworthiness of each Transaction Obligor and its related entities throughout the Security Period.

	(c)	
Nothing in any Finance Document obliges an Existing Lender to:

		(i)	
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 27 (Changes to the Lenders); or

		(ii)	
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Transaction Documents or otherwise.

	27.5	
Procedure for transfer

	(a)	
Subject to the conditions set out in Clause 27.2 (Conditions of assignment or transfer), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate. Upon execution by the Facility Agent, the Security Agent shall also execute the Transfer Certificate.

	(b)	
The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

	(c)	
Subject to Clause 27.9 (Pro rata interest settlement), on the Transfer Date:

		(i)	
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Transaction Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the "Discharged Rights and Obligations");

102

		(ii)	
each of the Transaction Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Transaction Obligor and the New Lender have assumed and/or acquired the same in place of that Transaction Obligor and the Existing Lender;

		(iii)	
the Facility Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Arranger and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and

		(iv)	
the New Lender shall become a Party as a "Lender".

	27.6	
Procedure for assignment

	(a)	
Subject to the conditions set out in Clause 27.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement. Upon execution by the Facility Agent, the Security Agent shall also execute the Assignment Agreement.

	(b)	
The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

	(c)	
Subject to Clause 27.9 (Pro rata interest settlement), on the Transfer Date:

		(i)	
the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;

		(ii)	
the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and

		(iii)	
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

	(d)	
Lenders may utilise procedures other than those set out in this Clause 27.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 27.5 (Procedure for transfer), to obtain a release by that Transaction Obligor from the obligations owed to that Transaction Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 27.2 (Conditions of assignment or transfer).

103

	27.7	
Copy of Transfer Certificate or Assignment Agreement to Borrowers

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.

	27.8	
Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 27 (Changes to the Lenders), each Lender may, with the prior written consent of an Obligor (such consent not to be unreasonably withheld or delayed), at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

	(a)	
any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and

	(b)	
any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Security shall:

		(i)	
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

		(ii)	
require any payments to be made by a Transaction Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

		(iii)	
An Obligor shall be deemed to have given its consent to the creation of any charge, assignment or other Security referred to in this Clause 27.8 (Security over Lenders' rights), five Business Days after a Lender has requested it unless consent is expressly refused by that Obligor within that time.

	27.9	
Pro rata interest settlement

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 27.5 (Procedure for transfer) or any assignment pursuant to Clause 27.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

	(a)	
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

	(b)	
The rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

104

		(i)	
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

		(ii)	
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 27.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

	(c)	
In this Clause 27.9 (Pro rata interest settlement) references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.

	28	
CHANGES TO THE TRANSACTION OBLIGORS

	28.1	
Assignment or transfer by Transaction Obligors

No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

	28.2	
Release of security

	(a)	
If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:

		(i)	
the disposal is permitted by the terms of any Finance Document;

		(ii)	
all the Lenders agree to the disposal;

		(iii)	
the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or

		(iv)	
the disposal is being effected by enforcement of a Security Document,

the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document. However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).

	(b)	
If the Security Agent is satisfied that a release is allowed under this Clause 28.2 (Release of security) (at the request and expense of the Borrowers) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release. Each other Finance Party irrevocably authorises the Security Agent to enter into any such document. Any release will not affect the obligations of any other Transaction Obligor under the Finance Documents.

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SECTION 10

 THE FINANCE PARTIES

	29	
THE FACILITY AGENT, THE ARRANGER AND THE REFERENCE BANKS

	29.1	
Appointment of the Facility Agent

	(a)	
Each of the Arranger and the Lenders appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

	(b)	
Each of the Arranger and the Lenders authorises the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.

	29.2	
Instructions

	(a)	
The Facility Agent shall:

		(i)	
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:

		(A)	
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

		(B)	
in all other cases, the Majority Lenders; and

		(ii)	
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).

	(b)	
The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

	(c)	
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

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

		(i)	
where a contrary indication appears in a Finance Document;

		(ii)	
where a Finance Document requires the Facility Agent to act in a specified manner or to take a specified action;

106

		(iii)	
in respect of any provision which protects the Facility Agent's own position in its personal capacity as opposed to its role of Facility Agent for the relevant Finance Parties.

	(e)	
If giving effect to instructions given by the Majority Lenders would in the Facility Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 (Amendments and Waivers), the Facility Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Facility Agent) whose consent would have been required in respect of that amendment or waiver.

	(f)	
In exercising any discretion to exercise a right, power or authority under the Finance Documents where it has not received any instructions as to the exercise of that discretion the Facility Agent shall do so having regard to the interests of all the Finance Parties.

	(g)	
The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

	(h)	
Without prejudice to the remainder of this Clause 29.2 (Instructions), in the absence of instructions, the Facility Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties. The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.

	(i)	
The Facility Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

	29.3	
Duties of the Facility Agent

	(a)	
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

	(b)	
Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

	(c)	
Without prejudice to Clause 27.7 (Copy of Transfer Certificate or Assignment Agreement to Borrowers), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.

	(d)	
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

	(e)	
If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

107

	(f)	
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Arranger or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.

	(g)	
The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

	29.4	
Role of the 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.

	29.5	
No fiduciary duties

	(a)	
Nothing in any Finance Document constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.

	(b)	
Neither the Facility Agent nor the Arranger shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.

	29.6	
Application of receipts

Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 33.5 (Application of receipts; partial payments).

	29.7	
Business with the Group

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

	29.8	
Rights and discretions

	(a)	
The Facility Agent may:

		(i)	
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

		(ii)	
assume that:

		(A)	
any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

		(B)	
unless it has received notice of revocation, that those instructions have not been revoked; and

		(iii)	
rely on a certificate from any person:

		(A)	
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

108

		(B)	
to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

	(b)	
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:

		(i)	
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 26.2 (Non-payment));

		(ii)	
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

		(iii)	
any notice or request made by any Borrower (other than the Drawdown Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

	(c)	
The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

	(d)	
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.

	(e)	
The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

	(f)	
The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

		(i)	
be liable for any error of judgment made by any such person; or

		(ii)	
be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

unless such error or such loss was directly caused by the Facility Agent's gross negligence or wilful misconduct.

	(g)	
Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.

	(h)	
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility 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 a fiduciary duty or duty of confidentiality.

109

	(i)	
Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

	29.9	
Responsibility for documentation

Neither the Facility Agent nor the Arranger is responsible or liable for:

	(a)	
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document;

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

	(c)	
any determination as to whether any information provided or to be provided to any Finance Party or Creditor Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

	29.10	
No duty to monitor

The Facility Agent shall not be bound to enquire:

	(a)	
whether or not any Default has occurred;

	(b)	
as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or

	(c)	
whether any other event specified in any Transaction Document has occurred.

	29.11	
Exclusion of liability

	(a)	
Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 33.11 (Disruption to Payment Systems etc.) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

		(i)	
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

		(ii)	
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

110

		(iii)	
any shortfall which arises on the enforcement or realisation of the Security Property; or

		(iv)	
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

		(A)	
any act, event or circumstance not reasonably within its control; or

		(B)	
the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

	(b)	
No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

	(c)	
The Facility 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 Facility Agent if the Facility 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 Facility Agent for that purpose.

	(d)	
Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out:

		(i)	
any "know your customer" or other checks in relation to any person; or

		(ii)	
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

on behalf of any Finance Party and each Finance Party confirms to the Facility 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 Facility Agent or the Arranger.

	(e)	
Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or

111

anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.

	29.12	
Lenders' indemnity to the Facility Agent

	(a)	
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 33.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by a Transaction Obligor pursuant to a Finance Document).

	(b)	
Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.

	(c)	
Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.

	29.13	
Resignation of the Facility Agent

	(a)	
The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

	(b)	
Alternatively, the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders may appoint a successor Facility Agent.

	(c)	
If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent.

	(d)	
If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 29 (The Facility Agent, the Arranger and the Reference Banks) and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent's normal fee rates and those amendments will bind the Parties.

	(e)	
The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees)

112

properly incurred by it in making available such documents and records and providing such assistance.

	(f)	
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.

	(g)	
Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 (Indemnity to the Facility Agent) and this Clause 29 (The Facility Agent, the Arranger and the Reference Banks) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent. Any fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

	(h)	
The Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrowers.

	(i)	
The consent of the Borrowers (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.

	(j)	
The Facility Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either:

		(i)	
the Facility Agent fails to respond to a request under Clause 12.7 (FATCA Information) and a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

		(ii)	
the information supplied by the Facility Agent pursuant to Clause 12.7 (FATCA Information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

		(iii)	
the Facility Agent notifies the Borrowers and the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and that Lender, by notice to the Facility Agent, requires it to resign.

	29.14	
Confidentiality

	(a)	
In acting as Facility Agent for the Finance Parties, the Facility 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.

113

	(b)	
If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

	(c)	
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.

	29.15	
Relationship with the other Finance Parties

	(a)	
Subject to Clause 27.9 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

		(i)	
entitled to or liable for any payment due under any Finance Document on that day; and

		(ii)	
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

	(b)	
Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Finance Party shall deal with the Security Agent exclusively through the Facility Agent and shall not deal directly with the Security Agent.

	(c)	
Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 36.5 (Electronic communication) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 36.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 36.5 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

	29.16	
Credit appraisal by the Finance Parties

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible

114

for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

	(a)	
the financial condition, status and nature of each member of the Group;

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

	(c)	
whether that Finance Party 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

	(d)	
the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

	(e)	
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

	29.17	
Facility Agent's management time

Any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Facility Agent), Clause 15 (Costs and Expenses) and Clause 29.12 (Lenders' indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 (Fees).

	29.18	
Deduction from amounts payable by the Facility Agent

If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

	29.19	
Reliance and engagement letters

Each Creditor Party confirms that each of the Arranger and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arranger or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters

115

on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

	29.20	
Full freedom to enter into transactions

Without prejudice to Clause 29.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:

	(a)	
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);

	(b)	
to deal in and enter into and arrange transactions relating to:

		(i)	
any securities issued or to be issued by any Transaction Obligor or any other person; or

		(ii)	
any options or other derivatives in connection with such securities; and

	(c)	
to provide advice or other services to the Borrowers or any person who is a party to, or referred to in, a Finance Document,

and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

	29.21	
Role of Reference Banks

	(a)	
No Reference Bank is under any obligation to provide a quotation or any other information to the Facility Agent.

	(b)	
No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

	(c)	
No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 29.21 (Role of Reference Banks) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

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	29.22	
Third Party Reference Banks

A Reference Bank which is not a Party may rely on Clause 29.21 (Role of Reference Banks), Clause 42.3 (Other exceptions) and Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

	30	
THE SECURITY AGENT

	30.1	
Trust

	(a)	
The Security Agent declares that it holds the Security Property on trust for the Creditor Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 30 (The Security Agent) and the other provisions of the Finance Documents.

	(b)	
Each other Finance Party authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.

	30.2	
Parallel Debt (Covenant to pay the Security Agent)

	(a)	
Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.

	(b)	
The Parallel Debt of an Obligor:

(i)          shall become due and payable at the same time as its Corresponding Debt;

		(ii)	
is independent and separate from, and without prejudice to, its Corresponding Debt.

	(c)	
For the purposes of this Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)), the Security Agent:

		(i)	
is the independent and separate creditor of each Parallel Debt;

		(ii)	
acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and

		(iii)	
shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

	(d)	
The Parallel Debt of an Obligor shall be:

		(i)	
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and

		(ii)	
increased to the extent that its Corresponding Debt has increased,

and the Corresponding Debt of an Obligor shall be:

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		(A)	
decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and

		(B)	
increased to the extent that its Parallel Debt has increased,

in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.

	(e)	
All amounts received or recovered by the Security Agent in connection with this Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) to the extent permitted by applicable law, shall be applied in accordance with Clause 33.5 (Application of receipts; partial payments).

	(f)	
This Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) shall apply, with any necessary modifications, to each Finance Document.

	30.3	
Enforcement through Security Agent only

The Creditor Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

	30.4	
Instructions

	(a)	
The Security Agent shall:

		(i)	
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by:

		(A)	
all Lenders (or the Facility Agent on their behalf) if the relevant Finance Document stipulates the matter is an all Lender decision; and

		(B)	
in all other cases, the Majority Lenders (or the Facility Agent on their behalf); and

		(ii)	
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).

	(b)	
The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or the Facility Agent on their behalf) (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

	(c)	
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

118

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

(i)          where a contrary indication appears in a Finance Document;

		(ii)	
where a Finance Document requires the Security Agent to act in a specified manner or to take a specified action;

		(iii)	
in respect of any provision which protects the Security Agent's own position in its personal capacity as opposed to its role of Security Agent for the relevant Creditor Parties.

		(iv)	
in respect of the exercise of the Security Agent's discretion to exercise a right, power or authority under any of:

		(A)	
Clause 30.28 (Application of receipts upon enforcement);

		(B)	
Clause 30.29 (Permitted Deductions); and

		(C)	
Clause 30.30 (Prospective liabilities).

	(e)	
If giving effect to instructions given by the Majority Lenders would in the Security Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 (Amendments and Waivers), the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Agent) whose consent would have been required in respect of that amendment or waiver.

	(f)	
In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:

		(i)	
it has not received any instructions as to the exercise of that discretion; or

		(ii)	
the exercise of that discretion is subject to sub-paragraph (iv) of paragraph (d) above,

the Security Agent shall do so having regard to the interests of all the Creditor Parties.

	(g)	
The Security Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

	(h)	
Without prejudice to the remainder of this Clause 30.4 (Instructions), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

	(i)	
The Security Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

119

	30.5	
Duties of the Security Agent

	(a)	
The Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

	(b)	
The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party.

	(c)	
Except where a Finance Document specifically provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

	(d)	
If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

	(e)	
The Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

	30.6	
No fiduciary duties

	(a)	
Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Transaction Obligor.

	(b)	
The Security Agent shall not be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account.

	30.7	
Business with the Group

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

	30.8	
Rights and discretions

	(a)	
The Security Agent may:

		(i)	
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

		(ii)	
assume that:

		(A)	
any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents;

		(B)	
unless it has received notice of revocation, that those instructions have not been revoked; and

		(C)	
if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and

		(iii)	
rely on a certificate from any person:

120

		(A)	
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

		(B)	
to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

	(b)	
The Security Agent shall be entitled to carry out all dealings with the other Finance Parties through the Facility Agent and may give to the Facility Agent any notice or other communication required to be given by the Security Agent to any Finance Party.

	(c)	
The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Creditor Parties) that:

		(i)	
no Default has occurred;

		(ii)	
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

		(iii)	
any notice or request made by a Borrower (other than the Drawdown Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

	(d)	
The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

	(e)	
Without prejudice to the generality of paragraph (d) above or paragraph (f) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.

	(f)	
The Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

	(g)	
The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

		(i)	
be liable for any error of judgment made by any such person; or

		(ii)	
be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

unless such error or such loss was directly caused by the Security Agent's gross negligence or wilful misconduct.

	(h)	
Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.

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	(i)	
Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

	(j)	
Notwithstanding any provision of any Finance Document to the contrary, the Security Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

	30.9	
Responsibility for documentation

None of the Security Agent, any Receiver or Delegate is responsible or liable for:

	(a)	
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

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

	(c)	
any determination as to whether any information provided or to be provided to any Creditor Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

	30.10	
No duty to monitor

The Security Agent shall not be bound to enquire:

	(a)	
whether or not any Default has occurred;

	(b)	
as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or

	(c)	
whether any other event specified in any Transaction Document has occurred.

	30.11	
Exclusion of liability

	(a)	
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:

		(i)	
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

122

		(ii)	
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

		(iii)	
any shortfall which arises on the enforcement or realisation of the Security Property; or

		(iv)	
without prejudice to the generality of sub-paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

		(A)	
any act, event or circumstance not reasonably within its control; or

		(B)	
the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

	(b)	
No Party other than the Security Agent, that Receiver or that Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

	(c)	
The Security 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 Security Agent if the Security 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 Security Agent for that purpose.

	(d)	
Nothing in this Agreement shall oblige the Security Agent to carry out:

		(i)	
any "know your customer" or other checks in relation to any person; or

		(ii)	
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

on behalf of any Finance Party and each Finance Party confirms to the Security Agent 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 Security Agent.

	(e)	
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate, any liability of the Security Agent or any

123

Receiver or Delegate arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss. In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.

	30.12	
Lenders' indemnity to the Security Agent

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

	(b)	
Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.

	(c)	
Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.

	30.13	
Resignation of the Security Agent

	(a)	
The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

	(b)	
Alternatively, the Security Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders may appoint a successor Security Agent.

	(c)	
If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent.

	(d)	
The retiring Security Agent shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

	(e)	
The Security Agent's resignation notice shall only take effect upon:

124

		(i)	
the appointment of a successor; and

		(ii)	
the transfer, by way of a document expressed as a deed, of all the Security Property to that successor.

	(f)	
Upon the appointment of a successor, the retiring Security Agent shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 30.25 (Winding up of trust) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 (Indemnity to the Security Agent) and this Clause 30 (The Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent. Any fees for the account of the retiring Security Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

	(g)	
The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrowers.

	(h)	
The consent of the Borrowers (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.

	30.14	
Confidentiality

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

	(b)	
If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

	(c)	
Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.

	30.15	
Credit appraisal by the Finance Parties

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Security Agent 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 Transaction Document including but not limited to:

	(a)	
the financial condition, status and nature of each member of the Group;

	(b)	
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made

125

or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

	(c)	
whether that Finance Party 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

	(d)	
the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

	(e)	
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

	30.16	
Security Agent's management time

	(a)	
Any amount payable to the Security Agent under Clause 14.5 (Indemnity to the Security Agent), Clause 15 (Costs and Expenses) and Clause 30.12 (Lenders' indemnity to the Security Agent) shall include the cost of utilising the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 11 (Fees).

	(b)	
Without prejudice to paragraph (a) above, in the event of:

		(i)	
a Default;

		(ii)	
the Security Agent being requested by a Transaction Obligor or the Majority Lenders to undertake duties which the Security Agent and the Borrowers agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

		(iii)	
the Security Agent and the Borrowers agreeing that it is otherwise appropriate in the circumstances,

the Borrowers shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.

	(c)	
If the Security Agent and the Borrowers fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrowers or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrowers) and the determination of any investment bank shall be final and binding upon the Parties.

126

	30.17	
Reliance and engagement letters

Each Creditor Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

	30.18	
No responsibility to perfect Transaction Security

The Security Agent shall not be liable for any failure to:

	(a)	
require the deposit with it of any deed or document certifying, representing or constituting the title of any Transaction Obligor to any of the Security Assets;

	(b)	
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;

	(c)	
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;

	(d)	
take, or to require any Transaction Obligor to take, any step to perfect its title to any of the Security Assets or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or

	(e)	
require any further assurance in relation to any Security Document.

	30.19	
Insurance by Security Agent

	(a)	
The Security Agent shall not be obliged:

		(i)	
to insure any of the Security Assets;

		(ii)	
to require any other person to maintain any insurance; or

		(iii)	
to verify any obligation to arrange or maintain insurance contained in any Finance Document,

and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.

	(b)	
Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Majority Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.

127

	30.20	
Custodians and nominees

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

	30.21	
Delegation by the Security Agent

	(a)	
Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.

	(b)	
That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Creditor Parties.

	(c)	
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate.

	30.22	
Additional Security Agents

	(a)	
The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

		(i)	
if it considers that appointment to be in the interests of the Creditor Parties; or

		(ii)	
for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or

		(iii)	
for obtaining or enforcing any judgment in any jurisdiction,

and the Security Agent shall give prior notice to the Borrowers and the Finance Parties of that appointment.

	(b)	
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.

	(c)	
The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

	30.23	
Acceptance of title

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Transaction Obligor may have to any of the Security

128

Assets and shall not be liable for or bound to require any Transaction Obligor to remedy any defect in its right or title.

	30.24	
Releases

Upon a disposal of any of the Security Assets pursuant to the enforcement of the Transaction Security by a Receiver, a Delegate or the Security Agent, the Security Agent is irrevocably authorised (at the cost of the Obligors and without any consent, sanction, authority or further confirmation from any other Creditor Party) to release, without recourse or warranty, that property from the Transaction Security and to execute any release of the Transaction Security or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.

	30.25	
Winding up of trust

If the Security Agent, with the approval of the Facility Agent determines that:

	(a)	
all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and

	(b)	
no Creditor Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Transaction Obligor pursuant to the Finance Documents,

then

		(i)	
the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

		(ii)	
any Security Agent which has resigned pursuant to Clause 30.13 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Security Document.

	30.26	
Powers supplemental to Trustee Acts

The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.

	30.27	
Disapplication of Trustee Acts

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents. Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

129

	30.28	
Application of receipts upon enforcement

All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document, under Clause 30.2 ((Parallel Debt (Covenant to pay the Security Agent)) or in connection with the realisation or enforcement of all or any part of the Security Property (for the purposes of this Clause 30 (The Security Agent), the "Recoveries") shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the remaining provisions of this Clause 30 (The Security Agent)), in the following order of priority:

	(a)	
in discharging any sums owing to the Security Agent (in its capacity as such) other than pursuant to Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) or any Receiver or Delegate;

	(b)	
in payment or distribution to the Facility Agent, on its behalf and on behalf of the other Creditor Parties, for application towards the discharge of all sums due and payable by any Transaction Obligor under any of the Finance Documents in accordance with Clause 33.5 (Application of receipts; partial payments);

	(c)	
if none of the Transaction Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Transaction Obligor; and

	(d)	
the balance, if any, in payment or distribution to the relevant Transaction Obligor.

	30.29	
Permitted Deductions

	(a)	
The Security Agent may, in its discretion:

		(i)	
set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and

		(ii)	
pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

	(b)	
For the purposes of sub-paragraph (i) of paragraph (a) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.

	30.30	
Prospective liabilities

Following acceleration, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 33.5 (Application of receipts; partial payments) in respect of:

	(a)	
any sum to the Security Agent, any Receiver or any Delegate; and

130

	(b)	
any part of the Secured Liabilities,

that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.

	30.31	
Investment of proceeds

Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 33.5 (Application of receipts; partial payments) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of this Clause 30.31 (Investment of proceeds).

	30.32	
Currency conversion

	(a)	
For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.

	(b)	
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

	30.33	
Good discharge

	(a)	
Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Creditor Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

	(b)	
The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) above in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.

	30.34	
Amounts received by Obligors

If any of the Obligors receives or recovers any amount which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will hold the amount received or recovered on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement.

	30.35	
Application and consideration

In consideration for the covenants given to the Security Agent by each Obligor in relation to Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) the Security Agent agrees with each Obligor to apply all moneys from time to time paid by such Obligor to the Security Agent in accordance with the foregoing provisions of this Clause 30 (The Security Agent).

131

	30.36	
Full freedom to enter into transactions

Without prejudice to Clause 30.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:

	(a)	
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);

	(b)	
to deal in and enter into and arrange transactions relating to:

		(i)	
any securities issued or to be issued by any Transaction Obligor or any other person; or

		(ii)	
any options or other derivatives in connection with such securities; and

	(c)	
to provide advice or other services to the Borrowers or any person who is a party to, or referred to in, a Finance Document,

and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

	31	
CONDUCT OF BUSINESS BY 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 the extent, order and 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.

	32	
SHARING AMONG THE FINANCE PARTIES

	32.1	
Payments to Finance Parties

If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from a Transaction Obligor other than in accordance with Clause 33 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due to it under the Finance Documents then:

132

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

	(b)	
the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 33 (Payment Mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

	(c)	
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 33.5 (Application of receipts; partial payments).

	32.2	
Redistribution of payments

The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 33.5 (Application of receipts; partial payments) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.

	32.3	
Recovering Finance Party's rights

On a distribution by the Facility Agent under Clause 32.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from a Transaction Obligor, as between the relevant Transaction Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Transaction Obligor.

	32.4	
Reversal of redistribution

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

	(a)	
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and

	(b)	
as between the relevant Transaction Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Transaction Obligor.

	32.5	
Exceptions

	(a)	
This Clause 32 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.

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

		(i)	
it notified that other Finance Party of the legal or arbitration proceedings; and

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

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SECTION 11

 ADMINISTRATION

	33	
PAYMENT MECHANICS

	33.1	
Payments to the Facility Agent

	(a)	
On each date on which a Transaction Obligor or a Lender is required to make a payment under a Finance Document, that Transaction Obligor or Lender shall make an amount equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

	(b)	
Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Facility Agent) and with such bank as the Facility Agent, in each case, specifies.

	33.2	
Distributions by the Facility Agent

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 33.3 (Distributions to a Transaction Obligor) and Clause 33.4 (Clawback and pre funding) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London), as specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrowers in the Drawdown Request.

	33.3	
Distributions to a Transaction Obligor

The Facility Agent may (with the consent of the Transaction Obligor or in accordance with Clause 34 (Set-Off)) apply any amount received by it for that Transaction Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Transaction Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

	33.4	
Clawback and pre-funding

	(a)	
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

	(b)	
Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest

135

on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

	(c)	
If the Facility Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrowers before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrowers:

		(i)	
the Facility Agent shall notify the Borrowers of that Lender's identity and the Borrowers shall on demand refund it to the Facility Agent; and

		(ii)	
the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

	33.5	
Application of receipts; partial payments

	(a)	
If the Facility Agent or the Security Agent (as applicable) receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Facility Agent or the Security Agent (as applicable) shall apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in the following order:

		(i)	
first, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver or any Delegate under the Finance Documents;

		(ii)	
secondly, in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;

		(iii)	
thirdly, in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement; and

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

	(b)	
The Facility Agent shall, if so directed by the Majority Lenders, vary, or instruct the Security Agent to vary (as applicable), the order set out in sub-paragraphs (ii) to (iv) of paragraph (a) above.

	(c)	
Paragraphs (a) and (b) above will override any appropriation made by a Transaction Obligor.

	33.6	
No set-off by Transaction Obligors

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

136

	33.7	
Business Days

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

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

	33.8	
Currency of account

	(a)	
Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.

	(b)	
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

	(c)	
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

	33.9	
Change of currency

	(a)	
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

		(i)	
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrowers); and

		(ii)	
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

	(b)	
If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

	33.10	
Currency Conversion

	(a)	
For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.

	(b)	
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

137

	33.11	
Disruption to Payment Systems etc.

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrowers that a Disruption Event has occurred:

	(a)	
the Facility Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

	(b)	
the Facility Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

	(c)	
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

	(d)	
any such changes agreed upon by the Facility Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 42 (Amendments and Waivers);

	(e)	
the Facility Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 33.11 (Disruption to Payment Systems etc.); and

	(f)	
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

	34	
SET-OFF

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

	35	
BAIL-IN

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

	(a)	
any Bail-In Action in relation to any such liability, including (without limitation):

		(i)	
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

138

		(ii)	
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

		(iii)	
a cancellation of any such liability; and

	(b)	
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

	36	
NOTICES

	36.1	
Communications in writing

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

	36.2	
Addresses

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:

	(a)	
in the case of the Borrowers, that specified in Schedule 1 (The PartiesThe Parties);

	(b)	
in the case of each Lender or any other Obligor, that specified in Schedule 1 (The PartiesThe Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;

	(c)	
in the case of the Facility Agent, that specified in Schedule 1 (The PartiesThe Parties); and

	(d)	
in the case of the Security Agent, that specified in Schedule 1 (The PartiesThe Parties),

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.

	36.3	
Delivery

	(a)	
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

		(i)	
if by way of fax, when received in legible form; or

		(ii)	
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

and, if a particular department or officer is specified as part of its address details provided under Clause 36.2 (Addresses), if addressed to that department or officer.

	(b)	
Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 (The PartiesThe Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).

139

	(c)	
All notices from or to a Transaction Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.

	(d)	
Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.

	(e)	
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

	36.4	
Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 36.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

	36.5	
Electronic communication

	(a)	
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:

		(i)	
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

		(ii)	
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

	(b)	
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.

	(c)	
Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.

	(d)	
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

	(e)	
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 36.5 (Electronic communication).

	36.6	
English language

	(a)	
Any notice given under or in connection with any Finance Document must be in English.

	(b)	
All other documents provided under or in connection with any Finance Document must be:

140

		(i)	
in English; or

		(ii)	
if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

	37	
CALCULATIONS AND CERTIFICATES

	37.1	
Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

	37.2	
Certificates and determinations

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

	37.3	
Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

	38	
PARTIAL INVALIDITY

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

	39	
REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Creditor Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of a Creditor Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.

	40	
SETTLEMENT OR DISCHARGE CONDITIONAL

Any settlement or discharge under any Finance Document between any Finance Party and any Transaction Obligor shall be conditional upon no security or payment to any Finance Party by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

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	41	
IRREVOCABLE PAYMENT

If the Facility Agent considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to a Creditor Party under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.

	42	
AMENDMENTS AND WAIVERS

	42.1	
Required consents

	(a)	
Subject to Clause 42.2 (All Lender matters) and Clause 42.3 (Other exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and, in the case of an amendment, the Obligors and any such amendment or waiver will be binding on all Parties.

	(b)	
The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 42 (Amendments and Waivers).

	(c)	
Without prejudice to the generality of Clause 29.8 (Rights and discretions), the Facility Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

	42.2	
All Lender matters

Subject to Clause 42.4 (Replacement of Screen Rate), an amendment of or waiver or consent in relation to any term of any Finance Document that has the effect of changing or which relates to:

	(a)	
the definition of "Majority Lenders" in Clause 1.1 (Definitions);

	(b)	
a postponement to or extension of the date of payment of any amount under the Finance Documents;

	(c)	
a reduction in the Margin or the amount of any payment of principal, interest, fees or commission payable;

	(d)	
a change in currency of payment of any amount under the Finance Documents;

	(e)	
an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Facility;

	(f)	
a change to any Transaction Obligor;

	(g)	
any provision which expressly requires the consent of all the Lenders;

	(h)	
this Clause 42 (Amendments and Waivers);

	(i)	
any change to Clause 2 (The Facility), Clause 3 (Purpose), Clause 5 (Drawdown), Clause 6.2 (Effect of cancellation and prepayment on scheduled repayments), Clause 7.4 (Mandatory

142

prepayment on sale, arrest or Total Loss), Clause 8 (Interest), paragraph (a) of Clause 24.7 (Provision of valuations), Clause 25 (Accounts and Application of Earnings), Clause 27 (Changes to the Lenders), Clause 32 (Sharing among the Finance Parties), Clause 46 (Governing Law) or Clause 47 (Enforcement);

	(j)	
any release of, or material variation to, any Transaction Security, guarantee, indemnity or subordination arrangement set out in a Finance Document (except in the case of a release of Transaction Security as it relates to the disposal of an asset which is the subject of the Transaction Security and where such disposal is expressly permitted by the Majority Lenders or otherwise under a Finance Document);

	(k)	
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:

		(i)	
the guarantee and indemnity granted under Clause 16 (Guarantee and Indemnity);

		(ii)	
the Security Assets; or

		(iii)	
the manner in which the proceeds of enforcement of the Transaction Security are distributed,

(except in the case of sub-paragraphs (ii) and (iii) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document);

	(l)	
the release of the guarantee and indemnity granted under Clause 16 (Guarantee and Indemnity) or of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document shall not be made, or given, without the prior consent of all the Lenders.

	42.3	
Other exceptions

	(a)	
An amendment or waiver which relates to the rights or obligations of a Servicing Party or the Arranger or a Reference Bank (each in their capacity as such) may not be effected without the consent of that Servicing Party, the Arranger or that Reference Bank, as the case may be.

	42.4	
Replacement of Screen Rate

	(a)	
Subject to Clause 42.3 (Other exceptions), if the Screen Rate is not available for dollars, any amendment or waiver which relates to providing for another benchmark rate to apply in relation to dollars, in place of that Screen Rate (or which relates to aligning any provision of a Finance Document to the use of that benchmark rate) may be made with the consent of the Majority Lenders and the Obligors.

	(b)	
If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) above within 10 Business Days (unless the Borrowers and the Facility Agent agree to a longer time period in relation to any request) of that request being made:

143

		(i)	
its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and

		(ii)	
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

	42.5	
Obligor Intent

Without prejudice to the generality of Clauses 1.2 (Construction) and 16.4 (Waiver of defences) each Obligor expressly confirms that it intends that any guarantee contained in this Agreement or any other Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

	43	
CONFIDENTIAL INFORMATION

	43.1	
Confidentiality

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 43.2 (Disclosure of Confidential Information) and Clause 43.3 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

	43.2	
Disclosure of Confidential Information

Any Finance Party may disclose:

	(a)	
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

	(b)	
to any person:

		(i)	
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

144

		(ii)	
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction including a securitisation under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

		(iii)	
appointed by any Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (b) of Clause 29.15 (Relationship with the other Finance Parties);

		(iv)	
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;

		(v)	
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation including any applicable data protection laws;

		(vi)	
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;

		(vii)	
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 27.8 (Security over Lenders' rights);

		(viii)	
who is a Party, a member of the Group or any related entity of a Transaction Obligor;

		(ix)	
as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or

		(x)	
with the consent of the Borrowers;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

		(A)	
in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

		(B)	
in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

		(C)	
in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its

145

confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

	(c)	
to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the relevant Finance Party; and

	(d)	
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors.

	43.3	
Disclosure to numbering service providers

	(a)	
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Transaction Obligors the following information:

		(i)	
names of Transaction Obligors;

		(ii)	
country of domicile of Transaction Obligors;

		(iii)	
place of incorporation of Transaction Obligors;

		(iv)	
date of this Agreement;

		(v)	
Clause 46 (Governing Law);

		(vi)	
the names of the Facility Agent and the Arranger;

		(vii)	
date of each amendment and restatement of this Agreement;

		(viii)	
amount of Total Commitments;

		(ix)	
currency of the Facility;

		(x)	
type of Facility;

		(xi)	
ranking of Facility;

		(xii)	
Maturity Date for Facility;

		(xiii)	
changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and

		(xiv)	
such other information agreed between such Finance Party and the Borrowers,

146

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

	(b)	
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Transaction Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

	(c)	
Each Obligor represents, on behalf of itself and the other Transaction Obligors, that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

	(d)	
The Facility Agent shall notify the Guarantor and the other Finance Parties of:

		(i)	
the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Transaction Obligors; and

		(ii)	
the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Transaction Obligors by such numbering service provider.

	43.4	
Entire agreement

This Clause 43 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

	43.5	
Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

	43.6	
Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:

	(a)	
of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 43.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

	(b)	
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 43 (Confidential Information).

147

	43.7	
Continuing obligations

The obligations in this Clause 43 (Confidential Information) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:

	(a)	
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

	(b)	
the date on which such Finance Party otherwise ceases to be a Finance Party.

	44	
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS

	44.1	
Confidentiality and disclosure

	(a)	
The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.

	(b)	
The Facility Agent may disclose:

		(i)	
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrowers pursuant to Clause 8.5 (Notification of rates of interest); and

		(ii)	
any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender or Reference Bank, as the case may be.

	(c)	
The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:

		(i)	
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this sub-paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;

		(ii)	
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so

148

inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;

		(iii)	
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and

		(iv)	
any person with the consent of the relevant Lender or Reference Bank, as the case may be.

	(d)	
The Facility Agent's obligations in this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 8.5 (Notification of rates of interest) provided that (other than pursuant to sub-paragraph (i) of paragraph (b) above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.

	44.2	
Related obligations

	(a)	
The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.

	(b)	
The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:

		(i)	
of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (c) of Clause 44.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

		(ii)	
upon becoming aware that any information has been disclosed in breach of this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations).

	44.3	
No Event of Default

No Event of Default will occur under Clause 26.4 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations).

	45	
COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

149

SECTION 12

 GOVERNING LAW AND ENFORCEMENT

	46	
GOVERNING LAW

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

	47	
ENFORCEMENT

	47.1	
Jurisdiction

	(a)	
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute").

	(b)	
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.

	(c)	
This Clause 47.1 (Jurisdiction) is for the benefit of the Creditor Parties only. As a result, no Creditor Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Creditor Parties may take concurrent proceedings in any number of jurisdictions.

	47.2	
Service of process

	(a)	
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

		(i)	
irrevocably appoints Ince Process Agents Limited at its registered office for the time being, presently at Aldgate Tower, 2 Leman Street, London E18QN, England, as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

		(ii)	
agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

	(b)	
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another agent for this purpose.

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

150

SCHEDULE 1

THE PARTIES

PART A

THE OBLIGORS

	
Name of Borrower

	
Place of Incorporation

	
Registration

number (or

equivalent, if

 any)

	
Address for Communication

	 	 	 	 
	
Quora Owners Inc.

	
Marshall Islands

	
899950

	
c/o TMS BULKERS LTD.

Athens Licenced Shipping Office

11 Fragkokklisias Street

15125, Maroussi

 Attiki, Greece

 

Fax: +30 210 8090205

Email: finance@tms-management.org

Attn: Mr. Dimitrios Glynos

	 	 	 	 
	
Phoenix Owners Inc.

	
Marshall Islands

	
89603

	
c/o TMS BULKERS LTD.

Athens Licenced Shipping Office

11 Fragkokklisias Street

15125, Maroussi

 Attiki, Greece

 

Fax: +30 210 8090205

Email: finance@tms-management.org

Attn: Mr. Dimitrios Glynos

	 	 	 	 
	
Roscoe Marine Ltd.

	
Marshall Islands

	
17715

	
c/o TMS BULKERS LTD.

Athens Licenced Shipping Office

11 Fragkokklisias Street

15125, Maroussi

 Attiki, Greece

 

Fax: +30 210 8090205

Email: finance@tms-management.org

Attn: Mr. Dimitrios Glynos

151

	
Name of Borrower

	
Place of Incorporation

	
Registration

number (or

equivalent, if

 any)

	
Address for Communication

	 	 	 	 
	
Dryships Inc.

	
Marshall Islands

	
11911

	
c/o TMS BULKERS LTD.

Athens Licenced Shipping Office

11 Fragkokklisias Street

15125, Maroussi

 Attiki, Greece

 

Fax: +30 210 8090205

Email: finance@tms-management.org

Attn: Mr. Dimitrios Glynos

	 	 	 	 

152

PART B

THE ORIGINAL LENDERS

	
Name of Original Lender

	
Commitment

	
Address for Communication

	 	 	 
	
DVB Bank SE, Amsterdam Branch

	
35,000,000

	
WTC Schiphol Tower F

6th Floor

Attn: Transaction Management

Schiphol Boulevard 255

1118 BH Schiphol

The Netherlands

 

Fax: +31 88 399 8113

Email: TLS.TM.Amsterdam@dvbbank.com

 

with copy to DVB Bank SE

3, Moraitini Street &

1, Palea Leof. Posidonos,

Bldg. K4

Delta Paleo Faliro

175 61 Athens

Email: D-Shipping Athens@dvbbank.com

153

PART C

THE SERVICING PARTIES

	
Name of Arranger

	
Address for Communication

	 	 
	
DVB Bank SE, Amsterdam Branch

	
WTC Schiphol Tower F

6th Floor

Attn: Transaction Management

Schiphol Boulevard 255

1118 BH Schiphol

The Netherlands

 

Fax: + 31 88 399 8113

Email: TLS.TM.Amsterdam@dvbbank.com

 

with copies to:

 

DVB Bank SE, Athens Branch

3, Moraitini Street 8'

1, Palea Leof. Posidonos, Bldg. K4

Delta Paleo Faliro

175 61 Athens

Email: D-Shipping Athens@dvbbank.com

and

 

DVB Bank SE, London Branch

Park House

16-18 Finsbury Circus

London EC2M 7EB

only in relation to loan administration

Email: TLS.LA.LONDON@DVBBANK.COM

154

	
Name of Facility Agent

	
Address for Communication

	 	 
	
DVB Bank SE, Amsterdam Branch

	
WTC Schiphol Tower F

6th Floor

Attn: Transaction Management

Schiphol Boulevard 255

1118 BH Schiphol

The Netherlands

 

Fax: + 31 88 399 8113

Email: TLS.TM.Amsterdam@dvbbank.com

 

with copies to:

 

DVB Bank SE, Athens Branch

3, Moraitini Street 8'

1, Palea Leof. Posidonos, Bldg. K4

Delta Paleo Faliro

175 61 Athens

Email: D-Shipping Athens@dvbbank.com

and

 

DVB Bank SE, London Branch

Park House

16-18 Finsbury Circus

London EC2M 7EB

only in relation to loan administration

Email: TLS.LA.LONDON@DVBBANK.COM

155

	
Name of Security Agent

	
Address for Communication

	 	 
	
DVB Bank SE, Amsterdam Branch

	
WTC Schiphol Tower F

6th Floor

Attn: Transaction Management

Schiphol Boulevard 255

1118 BH Schiphol

The Netherlands

 

Fax: + 31 88 399 8113

Email: TLS.TM.Amsterdam@dvbbank.com

 

with copies to:

 

DVB Bank SE, Athens Branch

3, Moraitini Street 8'

1, Palea Leof. Posidonos, Bldg. K4

Delta Paleo Faliro

175 61 Athens

Email: D-Shipping Athens@dvbbank.com

and

 

DVB Bank SE, London Branch

Park House

16-18 Finsbury Circus

London EC2M 7EB

only in relation to loan administration

Email: TLS.LA.LONDON@DVBBANK.COM

156

SCHEDULE 2

CONDITIONS PRECEDENT AND SUBSEQUENT

PART A

CONDITIONS PRECEDENT TO DRAWDOWN REQUEST

	1	
Transaction Obligors

	1.1	
A copy of the constitutional documents of each Transaction Obligor.

	1.2	
A copy of a resolution of the board of directors of each Transaction Obligor:

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

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

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

	1.3	
An original of the power of attorney of any Transaction Obligor authorising a specified person or persons to execute the Finance Documents to which it is a party.

	1.4	
A certified copy of the passport of each person authorised by the resolution referred to in paragraph 1.2 above, bearing a specimen of his/her signature.

	1.5	
A copy of a resolution signed by the Shareholder as the holder of the issued shares in each Borrower, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Borrower is a party.

	1.6	
A certificate of each Transaction Obligor (signed by an officer) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on that Transaction Obligor to be exceeded.

	1.7	
A certificate of each Transaction Obligor that is incorporated outside the UK (signed by an officer) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.

	1.8	
A certificate of an authorised signatory of the relevant Transaction Obligor certifying that each copy document relating to it specified in this Part A of Schedule 2 (Conditions Precedent and Subsequent) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

	1.9	
Evidence of satisfactory shareholding structure of the Transaction Obligors.

157

	2	
Finance Documents

	2.1	
A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent and Subsequent).

	2.2	
A duly executed original of any other document required to be delivered by each Finance Document if not otherwise referred to in this Schedule 2 (Conditions Precedent and Subsequent).

	3	
Security Documents

	3.1	
A duly executed original of each of the Account Security and the Shares Security in respect of each Borrower (and of each document to be delivered under each of them) including confirmation of the appointment of any process agent under the relevant Account Security.

	4	
Legal opinions

	4.1	
A legal opinion of Watson, Farley & Williams, legal advisers to the Arranger, the Facility Agent and the Security Agent in England, substantially in the form distributed to the Original Lenders before signing this Agreement.

	4.2	
A legal opinion of Watson Farley & Williams (New York) LLP, legal advisers to the Arranger, the Facility Agent and the Security Agent in the Marshall Islands, substantially in the form distributed to the Original Lenders before signing this Agreement.

	4.3	
A legal opinion of Watson Farley & Williams, legal advisers to the Arranger, the Facility Agent and the Security Agent in Germany, substantially in the form distributed to the Original Lenders before signing this Agreement.

	5	
Other documents and evidence

	5.1	
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document.

	5.2	
The Original Financial Statements of each Borrower and the Guarantor.

	5.3	
The original of any mandates or other documents required in connection with the opening or operation of each Account.

	5.4	
Such evidence as the Facility Agent may reasonably require for the Finance Parties to be able to satisfy each of their "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.

158

PART B

CONDITIONS PRECEDENT TO DRAWDOWN

	1	
Transaction Obligors

A certificate of an authorised signatory of the relevant Transaction Obligor certifying that each corporate and copy document provided by it under Part A of Schedule 2 (Conditions Precedent and Subsequent) remains correct, complete and in full force and effect as at the Drawdown Date.

	2	
Borrowers

A certificate of an authorised signatory of each Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent and Subsequent) is correct, complete and in full force and effect as at the Drawdown Date.

	3	
Vessel and other security

	3.1	
A duly executed and dated original of the Mortgage, the Deed of Covenant (if applicable), the General Assignment and any Charterparty Assignment in respect of each Vessel and of each document to be delivered under or pursuant to each of them.

	3.2	
Documentary evidence that the Mortgage in respect of each Vessel has been duly registered or recorded (as the case may be) as a valid first preferred or priority (as the case may be) ship mortgage in accordance with the laws of the jurisdiction of the relevant Approved Flag.

	3.3	
Documentary evidence that each Vessel:

	(a)	
is definitively and permanently registered in the name of the relevant Borrower under the relevant Approved Flag;

	(b)	
is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;

	(c)	
maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and

	(d)	
is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.

	3.4	
Copies of each Vessel's class certificate, class maintenance certificate and Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to each Vessel including without limitation an ISSC and an IAPCC.

	3.5	
The Commercial Management Agreement and the Technical Management Agreement in respect of each Vessel, both on terms acceptable to the Facility Agent acting with the authorisation of all of the Lenders, together with:

	(a)	
a duly executed and dated original of the Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager in respect of each Vessel; and

159

	(b)	
copies of the relevant Approved Technical Manager's Document of Compliance.

	3.6	
A valuation or, as the case may be, valuations of each Vessel (at the cost of the Borrowers), addressed to the Facility Agent on behalf of the Finance Parties, stated to be for the purposes of this Agreement and dated not earlier than 30 days before the Drawdown Date (unless otherwise agreed by the Facility Agent) from an Approved Valuer or Approved Valuers and prepared in accordance with Clause 24.7 (Provision of valuations), showing the Initial Market Value for that Vessel.

	3.7	
A favourable opinion from Bankserve or any independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances in respect of each Vessel as the Facility Agent may require.

	4	
Legal opinions

	4.1	
Draft agreed form legal opinions of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the jurisdiction of the Approved Flag of each Vessel, England and the Marshall Islands and such other relevant jurisdictions as the Facility Agent may require.

	5	
Other documents and evidence

	5.1	
Evidence that any process agent referred to in Clause 47.2 (Service of process), if not an Obligor, has accepted its appointment.

	5.2	
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 15 (Costs and Expenses), including legal fees, have been paid or will be paid by the Drawdown Date.

	5.3	
Confirmation from the Account Bank that the Minimum Liquidity Amount in respect of each Borrower is standing to the credit of the relevant Earnings Account or the relevant Time Deposit Account.

160

PART C

CONDITIONS SUBSEQUENT

	1	
Legal opinions

Executed legal opinions in agreed form of the legal advisers to the Facility Agent and the Security Agent in the jurisdiction of the Approved Flag of each Vessel, England and such other relevant jurisdictions as the Facility Agent may require.

	2	
Vessel and other security

	2.1	
Evidence that the Security Documents have been duly registered or recorded in such jurisdictions as the Facility Agent may require and that all notices of assignment (where applicable) required under or in connection with the relevant Security Documents have been served.

	2.2	
A duly executed original or copy (as available) of a Letter of Undertaking from the Approved Brokers in a form acceptable to the Facility Agent.

	2.3	
A duly executed original or copy (as available) of a Letter of Undertaking from any protection and indemnity club or war risks association through or with whom any obligatory insurances are placed or effected in a form acceptable to the Facility Agent.

161

SCHEDULE 3

REQUESTS

PART A

DRAWDOWN REQUEST

	
From:

	
Quora Owners Inc.

Phoenix Owners Inc. and

Roscoe Marine Ltd.

	 	 
	
To:

	
DVB Bank SE, Amsterdam Branch

	 	 
	 	 
	 	
Dated: [●] 2018

	 	 

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

	
1

	
We refer to the Agreement. This is the Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.

	 	 
	
2

	
We wish to borrow the Advances under Tranche A, Tranche B and Tranche C on the following terms:

	 	 
	 	
Proposed Drawdown Date:

	
[●] 2018 (or, if that is not a Business Day,

 the next Business Day)

	 	 	 
	 	
Amount:

	 
	 	 	 
	 	
Tranche A:

	
$[●]

	 	
Tranche B:

	
$[●]

	 	
Tranche C:

	
$[●]

	 	 
	 	
Aggregate amount of all Tranches:    $[●] or, if less, the Available Facility

	 	 
	 	
Interest Period:

	
3 Months

	 	 	 
	
3

	
We confirm that each condition specified in Clause 4.1 (Conditions precedent to delivery of the Drawdown Request) and paragraph (a) of Clause 4.2 (Conditions precedent to Drawdown) of this Agreement is satisfied on the date of this Drawdown Request.

	 	 
	
4

	
The proceeds of these Advances should be credited to:

	 	 
	 	
account number: [●]

	 	 
	 	
name and SWIFT of account bank: [●]

	 	 

162

	 	
name and SWIFT of US correspondent bank: [●]

	 	 
	
5

	
This Drawdown Request is irrevocable.

	 	 	 

Yours faithfully

	 	 	 
	
[●]

authorised signatory for

QUORA OWNERS INC.

	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
[●]

authorised signatory for

PHOENIX OWNERS INC.

	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
[●]

authorised signatory for

ROSCOE MARINE LTD.

	 	 
	 	 	 
	 	 	 
	 	 	 

163

PART A

DRAWDOWN REQUEST

	
From:

	
Quora Owners Inc.

Phoenix Owners Inc. and

Roscoe Marine Ltd.

	 	 
	
To:

	
DVB Bank SE, Amsterdam Branch

	 	 
	
Dated:

	
[●]

	 	 
	 	 

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

	
6

	
We refer to the Agreement.  This is a Selection Notice.  Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

	 	 
	
7

	
We request that, subject to paragraph (g) of Clause 9.1 (Selection of Interest Periods) of the Agreement, the next Interest Period for the Loan be [●].

	 	 
	
8

	
This Selection Notice is irrevocable.

	 	 

Yours faithfully

	 	 	 
	
[●]

authorised signatory for

Quora Owners Inc.

	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
[●]

authorised signatory for

Phoenix Owners Inc.

	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
[●]

authorised signatory for

Roscoe Marine Ltd.

	 	 
	 	 	 
	 	 	 
	 	 	 

164

SCHEDULE 4

FORM OF TRANSFER CERTIFICATE

	
From:

	
DVB Bank SE, Amsterdam Branch as Facility Agent and DVB Bank SE, Amsterdam Branch as Security Agent

	 	 
	
To:

	
[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

	 	 
	
Dated:

	
[●]

	 	 
	 	 

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

	1	
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

	2	
We refer to Clause 27.5 (Procedure for transfer) of the Agreement:

	(a)	
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participation in the Loan under the Agreement as specified in the Schedule in accordance with Clause 27.5 (Procedure for transfer) of the Agreement.

	(b)	
The proposed Transfer Date is [•].

	(c)	
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 36.2 (Addresses) of the Agreement are set out in the Schedule.

	3	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 27.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

	4	
The New Lender hereby confirms that it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

	5	
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

	6	
This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.

165

	7	
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

166

THE SCHEDULE

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details

for notices and account details for payments.]

	
[Existing Lender]

	
[New Lender]

	 	 
	
By: [●]

	
By: [●]

	 	 
	 	 
	 	 
	 	 
	 	 

This Transfer Certificate is accepted by the Facility Agent [and the Security Agent] and the Transfer Date is confirmed as [•].

	
[Facility Agent]

	 
	 	 
	
By: [●]

	 
	 	 
	
[Security Agent]

	 
	 	 
	
By: [●]

	 
	 	 

167

SCHEDULE 5

FORM OF ASSIGNMENT AGREEMENT

	
To:

	
DVB Bank SE, Amsterdam Branch as Facility Agent, DVB Bank SE, Amsterdam Branch as Security Agent and Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. as Borrowers, for and on behalf of each Transaction Obligor

	 	 
	
From:

	
[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

	 	 
	
Dated:

	
[●]

	 	 
	 	 

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

	1	
We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

	2	
We refer to Clause 27.6 (Procedure for assignment):

	(a)	
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender's Commitment and participations in the Loan under the Agreement as specified in the Schedule.

	(b)	
The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitments and participations in the Loan under the Agreement specified in the Schedule.

	(c)	
The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

	3	
The proposed Transfer Date is [●].

	4	
On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.

	5	
The Facility Office and address, fax, number and attention details for notices of the New Lender for the purposes of Clause 36.2 (Addresses) are set out in the Schedule.

	6	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 27.4 (Limitation of responsibility of Existing Lenders).

	7	
The New Lender hereby confirms that it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

168

	8	
This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 27.7 (Copy of Transfer Certificate or Assignment Agreement to Borrowers), to the Borrowers (on behalf of each Transaction Obligor) of the assignment referred to in this Assignment Agreement.

	9	
This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.

	10	
This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

	11	
This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

THE SCHEDULE

Commitment rights and obligations to be transferred by assignment, release and accession

[insert relevant details]

[Facility Office address, fax number and attention details for notices

 and account details for payments.]

	
[Existing Lender]

	
[New Lender]

	 	 
	
By: [●]

	
By: [●]

	 	 
	 	 

This Assignment Agreement is accepted by the Facility Agent [and the Security Agent] and the Transfer Date is confirmed as [●].

Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.

	
[Facility Agent]

	 
	 	 
	
By: 

	 
	 	 
	
[Security Agent]

	 
	 	 
	
By: 

	 
	 	 

169

SCHEDULE 6

FORM OF COMPLIANCE CERTIFICATE

	
To:

	
DVB Bank SE, Amsterdam Branch as Facility Agent

	 	 
	
From:

	
Dryships Inc.

	 	 
	 	 
	 	
Dated: [●]

	 	 

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

	1	
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

	2	
We confirm that:

	(a)	
an amount of $1,000,000 remains credited to each [Earnings Account][Time Deposit Account];

	(b)	
as at the 3-month period ending on [●] to which the financial statements referred to below were prepared, the Guarantor is in compliance with the following covenants under Clause 20.2 (Guarantor's financial covenants):

		(i)	
the Working Capital is [●];

		(ii)	
the Cash and Cash Equivalents are $[●];

		(iii)	
the ratio of Total Net Liabilities to Net Market Value Adjusted Total Assets is [●]; and

		(iv)	
To evidence such compliance, we attach a copy of the latest [annual][quarterly] consolidated financial statements of the Group together with calculations and evidence setting out in reasonable detail the data and calculations made above (including valuations in a form acceptable to the Facility Agent evidencing the Market Value of each Fleet Vessel which were used to calculate the Market Value Adjusted Total Assets of the Group as at [●]).

170

	3	
We confirm that no Default is continuing.*

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
Signed:

	 	 
	
[Authorised Signatory]

	 
	
of

	 
	
DRYSHIPS INC.

	 
	 	 
	 	 
	 	 

*If this statement cannot be made, the Compliance Certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.

171

SCHEDULE 7

TIMETABLES

	
Delivery of a duly completed Drawdown Request (Clause 5.1 (Delivery of Drawdown Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))

	 	
Three Business Days before the intended Drawdown Date (Clause 5.1 (Delivery of Drawdown Request)) or the expiry of the preceding Interest Period (Clause 9.1 (Selection of Interest Periods))

	 	 	 
	
Facility Agent notifies the Lenders of an Advance in accordance with Clause 5.4 (Lenders' Participation)

	 	
Three Business Days before the intended Drawdown Date.

	 	 	 
	
LIBOR is fixed

	 	
Quotation Day as of 11:00 am London time

	 	 	 
	
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 10.2 (Calculation of Reference Bank Rate)

	 	
Noon on Quotation Day

172

EXECUTION PAGES

BORROWERS

	
SIGNED by Dimitrios Glynos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Dimitrios Glynos

	 
	
QUORA OWNERS INC.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
SIGNED by Dimitrios Glynos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Dimitrios Glynos

	 
	
PHOENIX OWNERS INC.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
SIGNED by Dimitrios Glynos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Dimitrios Glynos

	 
	
ROSCOE MARINE LTD.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
GUARANTOR

	 	 	 
	 	 	 	 
	
SIGNED by Dimitrios Glynos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Dimitrios Glynos

	 
	
DRYSHIPS INC.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 

173

	
LENDERS

	 	 	 
	 	 	 	 
	
SIGNED by Vassiliki Georgopoulos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Vassiliki Georgopoulos

	 
	
DVB BANK SE, AMSTERDAM BRANCH

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
ARRANGER

	 	 	 
	 	 	 	 
	
SIGNED by Vassiliki Georgopoulos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Vassiliki Georgopoulos

	 
	
DVB BANK SE, AMSTERDAM BRANCH

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
FACILITY AGENT

	 	 	 
	 	 	 	 
	
SIGNED by Vassiliki Georgopoulos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Vassiliki Georgopoulos

	 
	
DVB BANK SE, AMSTERDAM BRANCH

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
SECURITY AGENT

	 	 	 
	 	 	 	 
	
SIGNED by Vassiliki Georgopoulos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Vassiliki Georgopoulos

	 
	
DVB BANK SE, AMSTERDAM BRANCH

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 

174

	
ACCOUNT BANK

	 	 	 
	 	 	 	 
	
SIGNED by Vassiliki Georgopoulos

	
)

	 	 
	
duly authorised for

	
)

	 	 
	
and on behalf of

	
)

	
/s/ Vassiliki Georgopoulos

	 
	
DVB BANK SE, AMSTERDAM BRANCH

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
Witness' signature: /s/ Ilias Vassilios Tsigos

	 	 	 
	
Witness' name: Ilias Vassilios Tsigos

	 	 	 
	
Witness' address: 348 Syngrou Avenue

	 	 	 
	
                              176 74 Kallithea

	 	 	 
	
                              Athens – Greece

	 	 	 

175Exhibit 4.69

 

Date 8 March 2018

AMATHUS OWNING COMPANY LIMITED

NOUFARO OWNERS INC.

as joint and several Borrowers

- and -

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

 

- and -

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 2

as Swap Banks

 

- and -

 

ABN AMRO BANK N.V.

as Arranger, Agent and Security Trustee

______________________________

LOAN AGREEMENT

_______________________________

 

relating to a secured term loan

of up to US$30,000,000 re

m.v.'s "RARAKA" and "JUDD"

 

CONSTANT & CONSTANT

149 Karaiskou Street

185 38 Piraeus

 Greece

 

 

INDEX

 

	
CLAUSE NO.

	
PAGE NO

	 	 
	
1.

	
INTERPRETATION

	
- 1 -

	
2.

	
FACILITY

	
- 18 -

	
3.

	
POSITION OF THE LENDERS AND THE SWAP BANKS

	
- 18 -

	
4.

	
DRAWDOWN

	
- 19 -

	
5.

	
INTEREST

	
- 20 -

	
6.

	
INTEREST PERIODS

	
- 22 -

	
7.

	
DEFAULT INTEREST

	
- 23 -

	
8.

	
REPAYMENT AND PREPAYMENT

	
- 24 -

	
9.

	
CONDITIONS PRECEDENT

	
- 27 -

	
10.

	
REPRESENTATIONS AND WARRANTIES

	
- 28 -

	
11.

	
GENERAL UNDERTAKINGS

	
- 31 -

	
12.

	
CORPORATE UNDERTAKINGS

	
- 36 -

	
13.

	
INSURANCE

	
- 37 -

	
14.

	
SHIP COVENANTS

	
- 41 -

	
15.

	
SECURITY COVER

	
- 45 -

	
16.

	
PAYMENTS AND CALCULATIONS

	
- 47 -

	
17.

	
APPLICATION OF RECEIPTS

	
- 49 -

	
18.

	
APPLICATION OF EARNINGS

	
- 50 -

	
19.

	
EVENTS OF DEFAULT

	
- 51 -

	
20.

	
FEES AND EXPENSES

	
- 55 -

	
21.

	
INDEMNITIES

	
- 57 -

	
22.

	
NO SET-OFF OR TAX DEDUCTION

	
- 59 -

	
23.

	
ILLEGALITY, ETC

	
- 61 -

	
24.

	
INCREASED COSTS

	
- 62 -

	
25.

	
SET-OFF

	
- 63 -

	
26.

	
TRANSFERS AND CHANGES IN LENDING OFFICES

	
- 63 -

	
27.

	
VARIATIONS AND WAIVERS

	
- 67 -

	
28.

	
NOTICES

	
- 68 -

	
29.

	
SUPPLEMENTAL

	
- 71 -

	
30.

	
JOINT AND SEVERAL LIABILITY

	
- 72 -

	
31.

	
LAW AND JURISDICTION

	
- 73 -

	
SCHEDULE 1 LENDERS AND COMMITMENTS

	
– 75 -

	
SCHEDULE 2 SWAP BANKS

	
– 76 -

	
SCHEDULE 3 DRAWDOWN NOTICE

	
– 77 -

	
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS

	
– 78 -

	
SCHEDULE 5 DESIGNATION NOTICE

	
– 82 -

	
SCHEDULE 6 TRANSFER CERTIFICATE

	
– 83 -

- 1 -

	
SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE

	
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EXECUTION PAGES

	
- 89 -

 

 

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THIS LOAN AGREEMENT is made on 8 March 2018

 

BETWEEN:

 

	(1)	
AMATHUS OWNING COMPANY LIMITED and NOUFARO OWNERS INC., each being a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as joint and several Borrowers;

 

	(2)	
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

 

	(3)	
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 2, as Swap Banks;

 

	(4)	
ABN AMRO BANK N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands as Arranger; and

 

	(5)	
ABN AMRO BANK N.V., having its registered office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands, EA8550 as Agent; and

 

	(6)	
ABN AMRO BANK N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands as Security Trustee.

 

WHEREAS

 

	(A)	
The Lenders have agreed to make available to the Borrowers a secured term loan of up to the lesser of (i) US$30,000,000 and (ii) 50% of the aggregate Fair Market Value of m.v.'s "RARAKA" and "JUDD" for the purposes of refinancing part of the acquisition cost of the Ships.

 

	(B)	
The Swap Banks have agreed to enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.

 

	(C)	
The Lenders have agreed with the Swap Banks that the Swap Banks will share in the security to be granted to the Security Trustee pursuant to this Agreement on a pari passu basis.

 

IT IS AGREED as follows:

 

	1.	
INTERPRETATION

 

	1.1	
Definitions. Subject to Clause 1.5, in this Agreement:

 

"Accounting Information" means the annual audited financial statements and the quarterly unaudited financial statements for the Group to be provided to the Agent in accordance with Clauses 11.6 (a) and (b) of this Agreement and clause 11.5 (a) and (b) of the Corporate Guarantee (as the context may require);

 

"Accounts Pledge" means, in relation to each Borrower, the deed or deeds of pledge creating security over the Operating Accounts and the Retention Account, to be executed by the Borrowers in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"Affected Lender" has the meaning given in Clause 5.5;

 

"Affiliate" means a Subsidiary of that person or a parent company of that person or any other Subsidiary of that parent company;

 

- 1 -

 

"Agency and Trust Deed" means the agency and trust deed to be executed between the Borrowers, the Lenders, the Swap Banks, the Agent and the Security Trustee, in such form as the Lenders may approve or require;

 

"Agent" means ABN AMRO Bank N.V., having its registered office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands, EA 8550 or any successor of it appointed under clause 5 of the Agency and Trust Deed;

 

"Amathus" means Amathus Owning Company Limited, a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

 

"Approved Brokers" means each of Clarksons Platou AS, Arrow Sale & Purchase (UK) Limited of London, Fearnleys A/S of Oslo, Simpson Spence and Young of London, Barry, Rogliano & Salles, Braemar Seascope Valuations Limited of London and Lorentzen & Stemoco of Oslo or any other independent firm of shipbrokers agreed in writing from time to time between the Borrowers and the Agent (acting on the instructions of the Majority Lenders);

 

"Approved Flag" means, in relation to a Ship, the Republic of Malta, the Republic of the Marshall Islands, the Republic of Liberia, the Hellenic Republic, the Cayman Islands and the Republic of Cyprus, or such other flag as the Agent may, in its sole and absolute discretion, approve as the flag on which a Ship shall be registered;

 

"Approved Flag State" means, in relation to a Ship, the Republic of Malta, the Republic of the Marshall Islands, the Republic of Liberia, the Hellenic Republic, the Cayman Islands and the Republic of Cyprus, or any other country in which the Agent may, in its sole and absolute discretion, approve that a Ship be registered;

 

"Approved Manager" means, in relation to a Ship, TMS Bulkers Ltd., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands in its capacity as technical, commercial and operational manager of that Ship, or any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time (it being agreed that a company which is in the same ultimate beneficial ownership as TMS Bulkers Ltd. shall be deemed to be approved by the Lenders) as the commercial, technical and operational manager of a Ship and which shall be acceptable to the Lenders in their sole and absolute discretion;

 

"Approved Manager's Undertaking" means, in relation to a Ship, a letter of undertaking to be executed by the Approved Manager in favour of the Security Trustee in the terms required by the Security Trustee, agreeing certain matters in relation to the Approved Manager and subordinating the rights of the Approved Manager against that Ship and the Borrower which is the owner thereof to the rights of the Creditor Parties under the Finance Documents, in such form as the Lenders may approve or require;

 

"Arranger" means ABN AMRO Bank N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands;

 

"Auditors" means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or another firm which is approved, provided such approval is permitted by law;

 

"Availability Period" means the period commencing on the date of this Agreement and ending on:

 

		(a)	
the date falling sixty (60) days after the date of this Agreement or such later date as the Lenders may agree with the Borrowers; or

 

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		(b)	
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

 

"Bail-In Action" means the exercise of any Write-down and Conversion Powers;

 

"Bail-In Legislation" means, in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;

 

"Basel III" means:

 

		(a)	
the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

		(b)	
the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement — Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

		(c)	
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

 

"Borrowers" means each of Amathus and Noufaro;

 

"Business Day" means a day other than a Saturday or Sunday on which banks are open in London, Rotterdam, Amsterdam, Utrecht, Athens and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

 

"Change of Control" shall have the meaning given to it in Clause 8.7;

 

"Code" means the United States Internal Revenue Code of 1986 (as amended);

 

"Commitment" means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments" means the aggregate of the Commitments of all the Lenders);

 

"Compliance Certificate" means a certificate referring to a Compliance Date in the form set out in Schedule 7 (or in any other form which the Agent approves) to be provided together with the financial statements provided in accordance with Clauses 11.6 and 12.6;

 

"Compliance Date" means 31 March, 30 June, 30 September and 31 December of each calendar year (or such other dates as the Agent may agree pursuant to Clause 12.6);

 

"Confirmation" and "Early Termination Date", in relation to any continuing Designated Transaction, have the meanings given in each Master Agreement;

 

"Contractual Currency" has the meaning given in Clause 21.5;

 

"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender;

 

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"Corporate Guarantee" means the guarantee of the obligations of the Borrowers under this Agreement and the other Finance Documents to which they are a party, to be given by the Corporate Guarantor in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"Corporate Guarantor" means DryShips Inc., a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

 

"CRD IV" means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC;

 

"Creditor Party" means the Agent, the Security Trustee, the Arranger, any Lender or any Swap Bank, whether as at the date of this Agreement or at any later time;

 

"CRR" means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

 

"Deed of Covenant" means, in relation to a Ship, the first priority deed of covenant collateral to the Ship Mortgage over that Ship, to be executed by the Borrower owning that Ship in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"Designated Transaction" means a Transaction which fulfils the following requirements:

 

		(a)	
it is entered into by the Borrowers pursuant to a Master Agreement with a Swap Bank which, at the time the Transaction is entered into, is also a Lender;

 

		(b)	
its purpose is the hedging of all or part of the Borrowers' exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment Date; and

 

		(c)	
it is designated by the Borrowers, by delivery by the Borrowers to the Agent of a notice of designation in the form set out in Schedule 5, as a Designated Transaction for the purposes of the Finance Documents;

 

"Dollars" and "S" means the lawful currency for the time being of the United States of America;

 

"Drawdown Date" means, in relation to the Loan, the date requested by the Borrowers for the Loan to be made or (as the context requires) the date on which the Loan is actually made;

 

"Drawdown Notice" means, in relation to the Loan, a notice in the form set out in Schedule 3 (or in any other form which the Agent approves or reasonably requires);

 

"Earnings" means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):

 

		(a)	
all freight, hire and passage moneys, compensation payable to the Borrower owning that Ship or the Security Trustee in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;

 

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		(b)	
all moneys which are at any time payable under Insurances in respect of loss of hire;

 

		(c)	
contributions of any nature whatsoever in respect of general average; and

 

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

 

"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway;

 

"Environmental Claim" means:

 

		(a)	
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

 

		(b)	
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

 

and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

 

"Environmental Incident" means:

 

		(a)	
any release of Environmentally Sensitive Material from a Ship; or

 

		(b)	
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or the owner of a Ship and/or any operator or manager is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

		(c)	
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where the owner of a Ship and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

 

"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

 

"Environmentally Sensitive Material" means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

 

"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

 

"Event of Default" means any of the events or circumstances described in Clause 19.1; 

 

"Fair Market Value" means:

 

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		(a)	
in relation to a Ship, the market value of that Ship determined from time to time in accordance with Clause 15.3; and

 

		(b)	
in relation to the other Fleet Vessels, the market value of such other Fleet Vessels determined from time to time in accordance with Clause 15.3;

 

"FATCA" means:

 

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

 

		(b)	
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

 

		(c)	
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;

 

"FATCA Application Date" means:

 

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

 

		(b)	
in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or

 

		(c)	
in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019,

 

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement;

 

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA;

 

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction;

 

"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Creditor Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction;

 

"FATCA Non-Exempt Lender" means any Lender who is not a FATCA Exempt Party;

 

"FATCA Protected Lender" means any Lender irrevocably designated as a "FATCA Protected Lender" by the Borrowers by notice to that Lender and the Agent at least six months prior to the earliest FATCA Application Date for a payment by a Party to that Lender (or to the Agent for the account of that Lender);

 

"Finance Documents" means:

 

		(a)	
this Agreement;

 

		(b)	
the Drawdown Notice;

 

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		(c)	
the Agency and Trust Deed;

 

		(d)	
the Master Agreement;

 

		(e)	
the Master Agreement Security Deed;

 

		(f)	
the Corporate Guarantee;

 

		(g)	
the Shares Pledges;

 

		(h)	
the Mortgages;

 

		(i)	
the Deeds of Covenant;

 

		(j)	
the General Assignments;

 

		(k)	
the Accounts Pledges;

 

		(1)	
the Approved Manager's Undertakings;

 

		(m)	
any Time Charter Assignment;

 

		(n)	
any Transfer Certificate; and

 

		(o)	
any other document (whether creating a Security Interest or not) which is executed at any time by any of the Borrowers, the Corporate Guarantor, the Approved Manager, the Shareholder or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the documents referred to in this definition;

 

"Financial Indebtedness" means, in relation to a person (the "debtor"), a liability of the debtor:

 

		(a)	
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

 

		(b)	
under any loan stock, bond, note or other security issued by the debtor;

 

		(c)	
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;

 

		(d)	
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

 

		(e)	
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

 

		(f)	
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person;

 

"Financial Year" means, in relation to each Borrower and the Corporate Guarantor, each period of 1 year commencing on 1 January in respect of which its accounts are or ought to be prepared;

 

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"Fleet Market Value" means, as of the date of calculation, the aggregate of:

 

		(a)	
the Fair Market Value of each of the Ships; and

 

		(b)	
the aggregate Fair Market Value of all other Fleet Vessels (other than the Ships), as most recently determined pursuant to valuations of such vessels;

 

"Fleet Vessel" means each Ship and any other vessel owned by any Group Member (but excluding any vessels under construction);

 

"GAAP" means generally accepted accounting principles as from time to time in effect in the United States of America including IFRS;

 

"General Assignment" means, in relation to a Ship, a general assignment of the Earnings, the Insurances and any Requisition Compensation in respect of that Ship, to be executed by the Borrower owning that Ship in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"General Banking Terms and Conditions" means the Agent's general banking terms and conditions of business (algemene bankvoorwaarden), as amended and/or supplemented from time to time;

 

"Group" means the Corporate Guarantor and its Subsidiaries for the time being and, for the purposes of Clauses 11.6 and 12.5, any other entity required to be treated as a Subsidiary in the Guarantor's consolidated financial statements in accordance with GAAP and/or any applicable law;

 

"Group Member" means the Borrowers and any other entity which is part of the Group;

 

"Hedging Exposure" means, as at any relevant date and in relation to a Swap Bank, the amount certified by that Swap Bank to the Agent to be the aggregate net amount in Dollars which would be payable by the Borrowers to that Swap Bank under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement entered into by that Swap Bank with the Borrowers if an Early Termination Date had occurred on the relevant date in relation to all continuing Designated Transactions entered into between the Borrowers and that Swap Bank, the Borrowers being the defaulting party;

 

"IFRS" means international accounting standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable to the relevant financial statements;

 

"Insurances" means, in relation to a Ship:

 

		(a)	
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, her Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and

 

		(b)	
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;

 

"Interbank Market" means the London interbank market;

 

"Interest Period" means, in relation to the Loan, a period determined in accordance with Clause 6;

 

"Interpolated Screen Rate" means in relation to LIBOR for the Loan (or any part of it), the rate which results from interpolating on a linear basis between:

 

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

 

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

 

each as of 11:00 am (London time) on the relevant Quotation Day;

 

"Inventory of Hazardous Materials" means a document describing the materials present in each Ship's structure and equipment that may be hazardous to human health or the environment along with their respective location and approximate quantities;

 

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) (as amended by MSC 104 (73)) and A.913(22) (superseding Resolution A.788(19)), as the same may be amended, supplemented or superseded from time to time (and the terms "safety management system", "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the ISM Code);

 

"ISPS Code" means the International Ship and Port Facility Security Code adopted by the International Maritime Organisation (as the same may be amended, supplemented or superseded from time to time);

 

"ISSC" means, in relation to a Ship, a valid and current International Ship Security Certificate issued under the ISPS Code;

 

"JUDD" means m.v. "JUDD" being a 2015 built 205,000 dwt newcastlemax bulk carrier registered in the ownership of Noufaro under the Malta flag with Official Number/IMO Number 9639476;

 

"Lender" means, subject to Clause 26.6:

 

		(a)	
a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.14) or its successor or assign, unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

 

		(b)	
the holder for the time being of a Transfer Certificate;

 

"LIBOR" means, in relation to the Loan or any part of it:

 

		(a)	
the applicable Screen Rate; or

 

		(b)	
if no Screen Rate is available for the relevant Interest Period, the Interpolated Screen Rate for the Loan (or the relevant part of it); or

 

		(c)	
if:

 

		(i)	
no Screen Rate is available for the currency of the Loan; or

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

- 9 -

 

the Reference Bank Rate, as of 11:00 a.m. (London time) on the Quotation Day for the offering of deposits in dollars for a period comparable to the Interest Period for the Loan or relevant part of it, and if (in any of the above cases) that rate is less than zero (0), then LIBOR shall be deemed to be zero (0);

 

"Loan" means the principal amount for the time being outstanding under this Agreement;

 

"Major Casualty" means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 (inclusive of deductible) or the equivalent in any other currency;

 

"Majority Lenders" means:

 

		(a)	
before the Loan has been made, Lenders whose Commitments are equal to or greater than 66 2/3 per cent. of the Total Commitments; and

 

		(b)	
after the Loan has been made, Lenders whose Contributions are equal to or greater than 66 2/3 per cent. of the Loan;

 

"Mandatory Costs" shall have the meaning given to it in Clause 21.8; 

 

"Margin" means two point five zero per cent (2.50%) per annum;

 

"Master Agreement" means, in relation to a Swap Bank, the master agreement (on the 2002 ISDA (Multicurrency - Crossborder) form) made between the Borrowers and that Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under that master agreement;

 

"Master Agreement Security Deed" means, in relation to each Master Agreement, the deed to be executed by the Borrowers in favour of the Security Trustee in respect of all of the Borrowers' rights under that Master Agreement, in such form as the Lenders may approve or require;

 

"Material Adverse Effect" means a material adverse effect on;

 

		(a)	
the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Group taken as a whole; or

 

		(b)	
the ability of any Obligor to perform its respective obligations under the Finance Documents; or

 

		(c)	
the legality, validity or enforceability of, or the effectiveness or ranking of, any Security Interest granted or purported to be granted pursuant to any of the Finance Documents or the rights or remedies of any Creditor Party under any of the Finance Documents;

 

"Material Adverse Change" means any event or series of events which, in the reasonable opinion of the Majority Lenders, has or will have a Material Adverse Effect;

 

"Mortgage" means, in relation to a Ship, the first priority ship mortgage to be executed by the Borrower owning that Ship in favour of the Security Trustee on that Ship under the Approved Flag (and Deed of Covenant collateral thereto if applicable), in such form as the Lenders may approve or require;

 

"Negotiation Period" has the meaning given in Clause 5.8;

 

"Notifying Lender" has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;

 

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"Noufaro" means Noufaro Owners Inc., a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

 

"Obligors" means the parties to the Finance Documents (other than the Creditor Parties and any Time Charterer);

 

"Operating Account" means, in relation to a Ship, an account in the name of the Borrower owning that Ship with the Agent in Rotterdam designated "[Name of Borrower] — Operating Account", or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Operating Account for that Ship for the purposes of this Agreement;

 

"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union;

 

"Party" means a party to this Agreement or a Finance Document;

 

"PATRIOT Act" means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

 

"Payment Currency" has the meaning given in Clause 21.5;

 

"Permitted Holders" means collectively:

 

		(a)	
the individual disclosed in writing by the Obligors to the Arranger and the Lenders on or before the date of this Agreement as being the ultimate beneficial owner of (i) no less than 50% of the issued and outstanding voting share capital of the Corporate Guarantor and (ii) 100% of the issued and outstanding share capital and voting share capital of the Approved Manager;

 

		(b)	
his direct lineal descendants;

 

		(c)	
the personal estate of any of the above persons;

 

		(d)	
any trust, foundation or other similar entity created for the benefit of one or more of the above persons and their respective estates; and

 

		(e)	
any corporation or other legal entity beneficially owned (at least as to 100% of (i) its issued and outstanding share capital or (ii) its issued and outstanding voting share capital) and controlled by any of the above persons;

 

"Permitted Security Interests" means:

 

		(a)	
Security Interests created by the Finance Documents;

 

		(b)	
liens for unpaid master's and crew's wages in accordance with usual maritime practice;

 

		(c)	
liens for salvage;

 

		(d)	
liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

 

		(e)	
liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure

 

 

- 11 -

 

amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower owning that Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(g);

 

		(f)	
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Borrower is prosecuting or defending such action in good faith by appropriate steps;

 

		(g)	
Security Interests arising by operation of law in respect of taxes which are not overdue for payment, other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and

 

		(h)	
any security created pursuant to the General Banking Terms and Conditions (algemene bankvoorwaarden) of ABN AMRO Bank N.V.;

 

"Pertinent Jurisdiction", in relation to a company, means:

 

		(a)	
England and Wales;

 

		(b)	
the country under the laws of which the company is incorporated or formed;

 

		(c)	
a country in which the company's central management and control is or has recently been exercised;

 

		(d)	
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

 

		(e)	
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

 

		(f)	
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

 

"Potential Event of Default" means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition that would, reasonably and justifiably as per the conditions of this Agreement, constitute an Event of Default;

 

"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Interbank Market for a currency, in which case the Quotation Day for that currency shall be determined by the Agent in accordance with market practice in the Interbank Market (and if quotations would normally be given by leading banks in the Interbank Market on more than one (1) day, the Quotation Day will be the last of those days);

 

"RARAKA" means m.v. "RARAKA" being a 2012 built 76,100 dwt panamax bulk carrier registered in the ownership of Amathus under Malta flag with Official Number/IMO Number 9584504;

 

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by each Reference Bank as the rate at

 

- 12 -

 

which the relevant Reference Bank could borrow funds in the Interbank Market, in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period;

 

"Reference Banks" means, in respect of LIBOR, ABN AMRO Bank N.V. and/or such other banks as may be appointed by the Agent in consultation with the Borrowers;

 

"Relevant Person" has the meaning given in Clause 19.9;

 

"Repayment Date" means a date on which a repayment is required to be made under Clause 8;

 

"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";

 

"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers;

 

"Restricted Party" means a person:

 

		(a)	
listed on or owned or controlled by a person listed on any Sanctions List; or

 

		(b)	
located in, organised under the laws of or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory which is a subject of country-wide or territory-wide Sanctions (including, without limitation, at the date of this Agreement, Cuba, Iran, North Korea, Syria and Sudan); or

 

		(c)	
otherwise a subject of Sanctions;

 

"Retention Account" means an account in the name of the Borrowers with the Agent in Rotterdam designated "Amathus/Noufaro — Retention Account" and with account number NL39ABNA0814030939, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Retention Account for the purposes of this Agreement;

 

"Sanctions" means any trade, economic or financial sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by a Sanctions Authority;

 

"Sanctions Authority" means:

 

		(a)	
the Security Council of the United Nations;

 

		(b)	
the United States;

 

		(c)	
the United Kingdom;

 

		(d)	
the European Union;

 

		(e)	
any member state of the European Union (including, without limitation, The Netherlands);

 

		(f)	
any country to which any Obligor is bound; and

 

- 13 -

 

		(g)	
the governments and official institutions or agencies of any of paragraphs (a) to (f) above, including without limitation the U.S. Office of Foreign Asset Control ("OFAC"), the U.S. Department of State and Her Majesty's Treasury ("HMT");

 

"Sanctions List" means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list maintained by, or public announcement of a Sanctions designation made by, a Sanctions Authority, each as amended, supplemented or substituted from time to time;

 

"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars and the relevant period displayed on the appropriate pages LIBOR 01 or LIBOR 02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers and the Lenders;

 

"Secured Liabilities" means all liabilities which the Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or by virtue of the Finance Documents or any judgment relating to any of the Finance Documents; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

 

"Security Interest" means:

 

		(a)	
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

 

		(b)	
the rights of the plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and

 

		(c)	
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

 

"Security Party" means the Corporate Guarantor, the Approved Manager, the Shareholder and any other person (except a Creditor Party and any relevant charterer) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within paragraph (o) of the definition of "Finance Documents";

 

"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:

 

		(a)	
all amounts which have become due for payment by the Borrowers or any Security Party under the Finance Documents have been paid;

 

		(b)	
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

 

		(c)	
none of the Borrowers nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 below or any other provision of this Agreement or another Finance Document; and

 

- 14 -

 

		(d)	
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of any of the Borrowers or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

 

"Security Trustee" means ABN AMRO Bank N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands or any successor of it appointed under clause 5 of the Agency and Trust Deed;

 

"Shareholder" means Drybulk Investments Inc., a corporation incorporated in the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands and which holds all shares in each of the Borrowers;

 

"Shares Pledge" means, in relation to each Borrower, the pledge of all of the shares in that Borrower, to be executed by the Shareholder in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"Ships" means each of "JUDD" and "RARAKA";

 

"Subsidiary" of a person means any other person:

 

		(a)	
directly or indirectly controlled by such person; or

 

		(b)	
of whose dividends or distributions on ordinary voting share capital such person is entitled to receive more than 50%;

 

"Swap Bank" means a bank or financial institution listed in Schedule 2 and acting through its branch indicated in Schedule 2;

 

"Time Charter" means, in relation to a Ship, any time charter or voyage charter or contract of affreightment made between the Borrower owning that Ship and a charterer acceptable to the Agent (the "Time Charterer"), for the charter of that Ship on terms acceptable to the Agent for a duration of more than twelve (12) months;

 

"Time Charter Assignment" means, in relation to a Ship, the assignment of all of the rights of the Borrower owning that Ship under any time charter of that Ship which is in excess of twelve (12) months in duration, to be executed by that Borrower in favour of the Security Trustee, in such form as the Lenders may approve or require;

 

"Total Loss" means, in relation to a Ship:

 

		(a)	
actual, constructive, compromised, agreed or arranged total loss of that Ship;

 

		(b)	
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than her 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 government or official authority, excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension unless it is within 45 days redelivered to the full control of the Borrower owning that Ship;

 

		(c)	
any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 45 days redelivered to the full control of the Borrower owning that Ship;

 

- 15 -

 

"Total Loss Date" means, in relation to a Ship:

 

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

 

		(b)	
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:

 

		(i)	
the date on which a notice of abandonment is given to the insurers; and

 

		(ii)	
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning that Ship, with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and

 

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

 

"Transaction" has the meaning given in each Master Agreement;

 

"Transfer Certificate" has the meaning given in Clause 26.2;

 

"Trust Property" has the meaning given in clause 3.1 of the Agency and Trust Deed; and

 

"US Tax Obligor" means:

 

		(a)	
a Party which is a "United States person" within the meaning of Section 7701 of the Code; or

 

		(b)	
a Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes;

 

"Write-down and Conversion Powers" means, in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

 

	1.2	
Construction of certain terms. In this Agreement:

 

"approved" means, for the purposes of Clause 13, approved in writing by the Agent;

 

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

 

"company" includes any partnership, joint venture and unincorporated association;

 

"consent" includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

 

"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained;

 

"document" includes a deed; also a letter or fax;

 

"excess risks" means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of her insured value being less than the value at which that Ship is assessed for the purpose of such claims;

 

- 16 -

 

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

 

"law" includes any form of delegated legislation, any order or decree, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

 

"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

 

"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

 

"months" shall be construed in accordance with Clause 1.3;

 

"obligatory insurances" means, in relation to a Ship, all insurances effected, or which the Borrower owning that Ship is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;

 

"parent company" has the meaning given in Clause 1.4;

 

"person" includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

 

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision in the Norwegian Marine Insurance Plan;

 

"regulation" includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is reasonable in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

 

"successor" includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;

 

"tax" includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

 

"war risks" includes the risk of mines and all risks excluded by clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or clause 24 of the Institute Time Clauses (Hulls) (1/11/95).

 

	1.3	
Meaning of "month". A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

 

- 17 -

	(a)	
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

 

	(b)	
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day; and "month" and "monthly" shall be construed accordingly.

 

	1.4	
General Interpretation.

 

	(a)	
In this Agreement:

 

		(i)	
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

 

		(ii)	
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise; and (iii)words denoting the singular number shall include the plural and vice versa.

 

	(b)	
Clauses 1.1 to 1.3 and paragraph (a) of this Clause 1.4 apply unless the contrary intention appears.

 

	(c)	
References in Clause 1.1 to a document being in the form of a particular Schedule include references to that form with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.

 

	(d)	
The clause headings shall not affect the interpretation of this Agreement.

 

	1.5	
Event of Default. A Potential Event of Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.

 

	2.	
FACILITY

 

	2.1	
Amount of facility. Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a secured term loan facility of up to $30,000,000 in a single advance for the purposes and upon the terms and conditions set out in this Agreement.

 

	2.2	
Lenders' participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

 

	2.3	
Purpose of Loan. Each of the Borrowers undertakes with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.

 

	3.	
POSITION OF THE LENDERS AND THE SWAP BANKS

 

	3.1	
Interests of Lenders several. The rights of the Lenders and of the Swap Banks under this Agreement and each Master Agreement are several; accordingly each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under a Master Agreement

 

- 18 -

without joining the Agent, the Security Trustee, any other Lender or any other Swap Bank as additional parties in the proceedings.

 

	3.2	
Proceedings by individual Lender. However, without the prior consent of the Majority Lenders, no Lender and no Swap Bank may bring proceedings in respect of:

 

	(a)	
any other liability or obligation of any of the Borrowers or a Security Party under or connected with a Finance Document; or

 

	(b)	
any misrepresentation or breach of warranty by any of the Borrowers or a Security Party in or connected with a Finance Document.

 

	3.3	
Obligations of Lenders several. The obligations of the Lenders and the Swap Banks under this Agreement and each Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or the failure of a Swap Bank to perform its obligations under the Master Agreement to which it is a party shall not result in:

 

	(a)	
the obligations of the other Lenders or (as the case may be) the Swap Banks being increased; nor

 

	(b)	
any of the Borrowers, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document, and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform its obligations under this Agreement or a Master Agreement.

 

	3.4	
Parties bound by certain actions of Majority Lenders. Every Lender, every Swap Bank, each Borrower and each Security Party shall be bound by:

 

	(a)	
any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;

 

	(b)	
any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document;

 

	(c)	
any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.

 

	3.5	
Reliance on action of Agent. However, each Borrower and each Security Party:

 

	(a)	
shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and

 

	(b)	
shall not be entitled to require any evidence that such an instruction or authorisation has been given.

 

	3.6	
Construction. In Clauses 3.4 and 3.5 references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.

 

	4.	
DRAWDOWN

 

	4.1	
Request for the Loan. Subject to the following conditions, the Borrowers may request the Loan to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Rotterdam time) 2 Business Days prior to the intended Drawdown Date.

 

- 19 -

 

	4.2	
Availability. The conditions referred to in Clause 4.1 are that:

 

	(a)	
the Drawdown Date has to be a Business Day during the Availability Period;

 

	(b)	
the amount of the Loan shall not exceed the lesser of (i) $30,000,000 and (ii) 50% of the aggregate Fair Market Value of the Ships as at the Drawdown Date and shall be applied in refinancing part of the acquisition cost of the Ships; and

 

	(c)	
the Borrowers have complied with the provisions of Clause 9.1 with respect to the Loan.

 

	4.3	
Notification to Lenders of receipt of the Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the Drawdown Notice and shall inform each Lender of:

 

	(a)	
the amount of the Loan and the Drawdown Date;

 

	(b)	
the amount of that Lender's participation in the Loan; and

 

	(c)	
the duration of the first Interest Period for the Loan.

 

	4.4	
Drawdown Notice irrevocable. The Drawdown Notice must be signed by a director or other authorised representative of each of the Borrowers;` and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

 

	4.5	
Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on the Drawdown Date under Clause 2.2.

 

	4.6	
Disbursement of Loan. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrowers shall be made:

 

	(a)	
to the account which the Borrowers specify in the Drawdown Notice; and

 

	(b)	
in the same funds as the Agent received the payments from the Lenders.

 

	4.7	
Disbursement of Loan to third party. The payment by the Agent under Clause 4.6 shall constitute the making of the Loan and the Borrowers shall thereupon become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.

 

	4.8	
Cancellation. The Borrowers shall pay a commitment fee on any cancelled portion of the Commitment calculated in accordance with Clause 20.1 (b), proportional to the amount cancelled, to be paid on the date that the cancellation is effective.

 

	5.	
INTEREST

 

	5.1	
Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period applicable to it shall be paid by the Borrowers on the last day of that Interest Period.

 

	5.2	
Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period applicable to it shall be the aggregate of (i) the Margin, (ii) LIBOR for that Interest Period and (iii) the Mandatory Costs (if any).

 

- 20 -

 

	5.3	
Payment of accrued interest. In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

 

	5.4	
Notification of Interest Periods and rates of normal interest. The Agent shall notify the Borrowers and each Lender of:

 

	(a)	
each rate of interest; and

 

	(b)	
the duration of each Interest Period;

 

as soon as reasonably practicable after each is determined. Subject to Clause 5.5, if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 am (London time) on the Quotation Day, LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

 

	5.5	
Market disruption. The following provisions of this Clause 5 apply if:

 

	(a)	
before close of business in London on the Quotation Day for the relevant Interest Period, a Lender or Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if the Loan has not been made, Commitments amounting to more than 50 per cent. of the Total Commitments) notify the Agent that the cost to them of funding their participation in the Loan from whatever source they may reasonably select would be in excess of LIBOR (provided always that any such notifications by any such Lender or Lenders shall be duly substantiated); or

 

	(b)	
at or about noon on the Quotation Day for the relevant Interest Period for which LIBOR is to be determined by reference to the Reference Banks, none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period.

 

	5.6	
Notification of market disruption. The Agent shall promptly notify the Borrowers and each of the Lenders stating the circumstances falling within Clause 5.5 which have caused its notice to be given (the "Market Disruption Event").

 

	5.7	
Market Disruption Event. 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 relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

	(a)	
the applicable Margin; and

 

	(b)	
the rate notified to the Agent by that Lender as soon as practicable and in any event not later than five (5) Business Days before the date on which interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.

 

	5.8	
Alternative basis of interest or funding.

 

	(a)	
If a Market Disruption Event occurs and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest.

 

	(b)	
Any alternative basis agreed pursuant to Clause 5.8(a) above shall, with the prior consent of all the Lenders, be binding on all Parties.

 

	5.9	
Notice of prepayment. If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.7, the Borrowers may give the Agent not less than 15 Business

 

- 21 -

 

Days' notice of their intention to prepay the Loan at the end of the relevant interest period.

 

	5.10	
Prepayment; termination of Commitments. A notice under Clause 5.9 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrowers' notice of intended prepayment; and:

 

	(a)	
on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and

 

	(b)	
on the last Business Day of the relevant interest period, the Borrowers shall prepay (without premium or penalty) the Loan together with accrued interest thereon at the applicable rate, plus the Margin and the Mandatory Costs (if any).

 

	5.11	
Application of prepayment. The provisions of Clause 8 shall apply in relation to the prepayment.

 

	5.12	
Interest Rate Hedging. The Borrowers shall sign a Master Agreement with ABN AMRO Bank N.V. as a Swap Bank on the date of this Agreement. At any time during the Security Period, the Borrowers may request such Swap Bank to conclude Designated Transactions to fix the interest rate for the Loan for more than 12 months, following drawdown of the Loan. Unless such Swap Bank agrees otherwise, any such hedging arrangements shall be from floating rate to fixed rate only and shall not (i) exceed the amount of the Loan or (ii) extend beyond the final Repayment Date. Signature of the said Master Agreement does not commit such Swap Bank to conclude Transactions, or even to offer terms for doing so, but does provide a contractual framework within which Designated Transactions may be concluded and secured, assuming that such Swap Bank is willing to conclude any Designated Transaction at the relevant time and that, if that is the case, mutually acceptable terms can then be agreed at the relevant time. If at any time the aggregate notional amount of the Designated Transactions exceeds the outstanding principal amount of the Loan, the notional amount of the Designated Transactions shall be reduced by way of termination notified by either party on or about the date the Designated Transactions exceed the amount of the Loan, so that the aggregate notional amount of the Designated Transactions reflect the then outstanding principal amount of the Loan. Such termination shall be treated under the said Master Agreement as an Additional Termination Event (as defined in section 14 of the Master Agreement) with the Borrowers as the sole Affected Party (as defined in section 14 of Master Agreement). The Borrowers' obligations under the said Master Agreement shall be secured on a pari passu basis with their obligations under this Agreement.

 

	6.	
INTEREST PERIODS

 

	6.1	
Commencement of Interest Periods. The first Interest Period applicable to the Loan shall commence on the Drawdown Date of the Loan and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period applicable to it.

 

	6.2	
Duration of normal Interest Periods. Subject to Clauses 6.3 and 6.4, each Interest Period shall be:

 

	(a)	
3 months as notified by the Borrowers to the Agent not later than 11.00 am (Rotterdam time) 3 Business Days before the commencement of the Interest Period; or

 

	(b)	
3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or

 

	(c)	
such other period as the Agent may, with the Majority Lenders' authority, agree with the Borrowers.

 

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	6.3	
Duration of Interest Periods for repayment instalments. In respect of an amount due to be repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that Repayment Date. No Interest Period shall extend beyond the final Repayment Date.

 

	6.4	
Non-availability of matching deposits for Interest Period selected. If, after the Borrowers have selected and the Lenders have agreed to an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00 a.m. (Rotterdam time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 3 months.

 

	7.	
DEFAULT INTEREST

 

	7.1	
Payment of default interest on overdue amounts. The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

 

	(a)	
the date on which the Finance Documents provide that such amount is due for payment; or

 

	(b)	
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

 

	(c)	
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.

 

	7.2	
Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be two per cent. (2%) above:

 

	(a)	
in the case of an overdue amount of principal, the higher of the rates set out at paragraphs (a) and (b) of Clause 7.3; or

 

	(b)	
in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 7.3.

 

	7.3	
Calculation of default rate of interest. The rates referred to in Clause 7.2 are:

 

	(a)	
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);

 

	(b)	
the Margin and the Mandatory Costs (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

 

		(i)	
LIBOR; or

 

		(ii)          	if the Agent determines that Dollar deposits for any such period are not being made available to a Lender or (as the case may be) Lenders by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Agent from such other sources as the Agent may from time to time determine.

 

	7.4	
Notification of interest periods and default rates. The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent's notification.

 

- 23 -

 

	7.5	
Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

 

	7.6	
Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

 

	7.7	
Application to Master Agreements. For the avoidance of doubt, this Clause 7 does not apply to any amount payable under a Master Agreement in respect of any continuing Designated Transaction as to which section 9 (h) (Interest and Compensation) of that Master Agreement shall apply.

 

	8.	
REPAYMENT AND PREPAYMENT

 

	8.1	
Amount of repayment instalments. The Borrowers shall repay the Loan by twenty four (24) equal consecutive quarterly instalments in the amount of $625,000 each, together with a balloon payment of $15,000,000. The first instalment shall be repaid on the date falling three (3) months after the Drawdown Date, each subsequent instalment shall be paid at three monthly intervals thereafter and the balloon payment shall be paid concurrently with the twenty fourth and final repayment instalment, which shall be repaid on the date falling on the earlier of (i) the sixth anniversary of the Drawdown Date and (ii) 31 March 2024.

 

Provided always that if the amount of the Loan drawndown hereunder is less than $30,000,000 then the amount of the repayment instalments and of the balloon payment shall be reduced on a pro rata basis.

 

	8.2	
Final Repayment Date. On the final Repayment Date for the Loan, the Borrowers shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.

 

	8.3	
Voluntary prepayment. Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period.

 

	8.4	
Conditions for voluntary prepayment. The conditions referred to in Clause 8.3 are that:

 

	(a)	
a partial prepayment shall be in the minimum amount of Five hundred thousand Dollars ($500,000) or a multiple thereof;

 

	(b)	
the Agent has received from the Borrowers at least 5 Business Days prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period);

 

	(c)	
the Borrowers have provided evidence satisfactory to the Agent that any consent required by any of the Borrowers or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects any of the Borrowers or any Security Party has been complied with; and

 

	(d)	
the Borrowers have complied with Clause 8.11 on or prior to the date of prepayment.

 

	8.5	
Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.

 

- 24 -

 

	8.6	
Notification of notice of prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.4(c).

 

	8.7	
Mandatory prepayment. The Borrowers shall be obliged to prepay the Relevant Portion of the Loan if a Ship is sold (which sale shall be subject to the prior written consent of the Lenders), refinanced by another bank or financial institution or becomes a Total Loss, or if there occurs a Change of Control in any of the Borrowers or the Corporate Guarantor:

 

	(a)	
in the case of a sale of a Ship (whether for further trading or scrapping), on the earlier of the date on which the sale is completed by delivery of that Ship to the buyer and (ii) the date of receipt by the relevant Borrower of the sale proceeds; or

 

	(b)	
in the case of a refinancing of a Ship, on or before the date on which the refinancing takes place; or

 

	(c)	
in the case of a Total Loss of a Ship, on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss; or

 

	(d)	
in the case of a Change of Control in any of the Borrowers or the Corporate Guarantor, on the date falling 60 days from receipt of the Agent's notice of such Change of Control.

 

For the purposes of this Clause 8.7:

 

"Relevant Portion of the Loan" means:

 

		(i)	
in relation to the sale, Total Loss or refinancing of a Ship, such amount as shall be necessary to ensure that following application of the mandatory prepayment amount, the outstanding amount of the Loan shall be no more than the lesser of (i) such amount as shall be necessary to maintain compliance with the provisions of Clause 15.1 following the sale, refinancing or loss (as the case may be) of the relevant Ship and (ii) such amount as shall be equal to the ratio of the Fair Market Value of the Ship sold, refinanced or lost to the aggregate Fair Market Values of all of the Ships subject to a Mortgage (together with accrued interest and costs) immediately prior to such sale, refinancing or loss of the relevant Ship. All amounts prepaid under this Clause 8.7 shall be applied pro rata against the remaining repayment instalments and the balloon payment for the Loan specified in Clause 8.1;

 

		(ii)	
in relation to a Change of Control, the outstanding amount of the Loan;

 

"Change of Control" occurs if at any time without the prior written consent of the Majority Lenders:

 

		(i)	
any Borrower ceases to be a direct or an indirect wholly-owned Subsidiary of the Corporate Guarantor; or

		(ii)	
the Permitted Holders cease to control, directly or indirectly, the Corporate Guarantor; or

		(iii)	
the Permitted Holders cease to own legally and beneficially, either directly or indirectly, at least 50% of either of (i) the issued and outstanding share capital, or (ii) the issued and outstanding voting share capital, of the Corporate Guarantor; or

		(iv)	
a person or persons acting in concert (other than the Permitted Holders):

		(aa)	
own legally and/or beneficially, either directly or indirectly, more than 50% of the aggregate issued share capital of, or more than 50% of the aggregate issued voting share capital of, the Corporate Guarantor; and/or

- 25 -

		(bb)	
have the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent of it) of the Corporate Guarantor.

	8.8	
Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period, together with any sums payable under Clause 21.1(b) but without premium or penalty (subject always to the provisions of Clause 20.1(c)).

 

	8.9	
Application of partial prepayment. Each partial prepayment of the Loan made pursuant to Clauses 8.3, 8.4 or any other provisions of this Agreement (including, for the avoidance of doubt, Clause 15.2) shall be in proportionate reduction of the remaining repayment instalments and the balloon payment for the Loan specified in Clause 8.1.

 

	8.10	
No reborrowing. No amount prepaid or repaid may be reborrowed.

 

	8.11	
Unwinding of Designated Transactions. On or prior to any repayment or prepayment of the Loan under this Clause 8 or any other provision of this Agreement, the Borrowers shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1.

 

	8.12	
Prepayment fee. If the Loan is fully prepaid (through any refinancing by another bank or financial institution) at any time during the period commencing on the Drawdown Date and ending on the date falling on the second anniversary thereof, the Borrowers shall pay to the Agent on the date on which they prepay the Loan a prepayment fee equal to zero point fifty per cent (0.50%) of the amount of the Loan outstanding at the time of such prepayment.

 

	8.13	
Mandatory repayment and cancellation of FATCA Protected Lenders. If on the date falling six months before the earliest FATCA Application Date for any payment by a Party to a FATCA Protected Lender (or to the Agent for the account of that Lender), that Lender is not a FATCA Exempt Party and, in the opinion of that Lender (acting reasonably), that party will, as a consequence, be required to make a FATCA Deduction from a payment to that Lender (or to the Agent for the account of that Lender) on or after that FATCA Application Date (a "FATCA Event"):

 

	(a)	
that Lender shall, reasonably promptly after that date, notify the Agent of that FATCA Event and the relevant FATCA Application Date;

 

	(b)	
if, on the date falling one month before such FATCA Application Date, that FATCA Event is continuing:

 

		(i)	
that Lender may, at any time between one month and two weeks before such FATCA Application Date, notify the Agent;

 

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

 

		(iii)          	the Borrowers shall repay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Agent has notified the Borrower or, if earlier, the last Business Day before the relevant FATCA Application Date.

 

- 26 -

 

	8.14	
Right of repayment and cancellation in relation to a single Lender.

 

	(a)	
If:

 

		(i)	
any sum payable to any Lender by the Borrowers is required to be increased under Clause 22.2; or

 

		(ii)          	any Lender claims indemnification from the Borrowers under Clause 21.1 or Clause 24.2,

 

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

	(b)	
The Borrowers may, in the circumstances set out in paragraph (a) above, on 5 Business Days' prior notice to the Agent and that Lender, replace that Lender by requesting that Lender to transfer pursuant to Clause 26 all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrowers which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 26 for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of the Loan relating to that Lender and all accrued interest, break costs and other amounts payable in relation thereto under the Finance Documents.

 

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

 

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

 

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

 

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

 

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

 

	(d)	
For the avoidance of doubt, the replacement of a Lender pursuant to paragraph (b) does not in any way prejudice the continued application of Clause 22.2, Clause 21.1 or Clause 24.2 and nothing in this Clause 8.14 shall remove the Borrowers' obligation to pay to any Lender any amounts payable to any Lender by the Borrowers pursuant to those Clauses.

 

	(e)	
Any partial prepayment under this Clause 8.14 shall reduce pro rata the amount of each repayment instalment and the balloon payment for the Loan falling after that prepayment by the amount prepaid.

 

	9.	
CONDITIONS PRECEDENT

 

	9.1	
Documents, fees and no default. Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:

 

- 27 -

 

	(a)	
that, on or before the date of signing of this Agreement, the Agent receives the documents described in Part A of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;

 

	(b)	
that, on or before the date of drawdown of the Loan, the Agent receives the documents described in Part B of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;

 

	(c)	
that, on or before the service of the Drawdown Notice, the Agent receives the relevant fees payable pursuant to Clause 20.1 and has received payment of the expenses referred to in Clause 20.2;

 

	(d)	
that at the date of the Drawdown Notice, at the Drawdown Date, on the first day of each Interest Period and on the date of each Compliance Certificate:

 

		(i)	
no Event of Default or Potential Event of Default has occurred or is continuing or would result from the borrowing of the Loan;

 

		(ii)	
the representations and warranties in Clause 10 and those of the Borrowers or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

 

		(iii)	
none of the circumstances contemplated by Clause 5.5 has occurred and is continuing;

 

		(iv)	
there has not been a Material Adverse Change in the financial positon or state of affairs of any of the Borrowers or the Corporate Guarantor from that disclosed to the Agent prior to the date of this Agreement;

 

	(e)	
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Loan, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

 

	(f)	
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date.

 

	10.	
REPRESENTATIONS AND WARRANTIES

 

	10.1	
General. Each of the Borrowers represents and warrants to each Creditor Party as follows.

 

	10.2	
Status. Each of the Borrowers, the Corporate Guarantor and the Shareholder is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands with registration number 39581 (in the case of Amathus), 88947 (in the case of Noufaro), 11911 (in the case of the Corporate Guarantor) and 88437 (in the case of the Shareholder); and none of the Borrowers nor the Corporate Guarantor nor any other Security Party is a FATCA FFI or a US Tax Obligor.

 

	10.3	
Share capital and ownership. Each of the Borrowers is authorised to issue 500 registered shares with par value of $20 per share, all of which shares have been issued; the legal title of all those shares is held, free of any Security Interest or other claim, by the Shareholder; the ultimate beneficial ownership of not less than 50% (in the case of the Corporate Guarantor) and not less than 100% (in the case of the Approved Manager) of the issued and outstanding voting share capital of the Corporate Guarantor and the Approved Manager (as the case may be) is held directly or indirectly by the Permitted Holders.

 

- 28 -

 

	10.4	
Corporate power. Each of the Borrowers has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

 

	(a)	
to keep its Ship registered in its name under the Approved Flag;

 

	(b)	
to execute the Finance Documents to which it is a party; and

 

	(c)	
to borrow under this Agreement, to enter into Designated Transactions under the Master Agreements and to make all the payments contemplated by, and to comply with, the Finance Documents to which that Borrower is a party.

 

	10.5	
Consents in force. All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.

 

	10.6	
Legal validity; effective Security Interests. The Finance Documents to which each of the Borrowers is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

 

	(a)	
constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and

 

	(b)	
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, subject to any relevant insolvency laws affecting creditors' rights generally.

 

	10.7	
No third party Security Interests. Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:

 

	(a)	
each Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

 

	(b)	
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

 

	10.8	
No conflicts. The execution by each Borrower of each Finance Document to which it is a party, and the borrowing by each Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

 

	(a)	
any law or regulation; or

 

	(b)	
the constitutional documents of that Borrower; or

 

	(c)	
any contractual or other obligation or restriction which is binding on that Borrower or any of its assets, and will not have a Material Adverse Effect.

 

	10.9	
No withholding taxes. All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

 

	10.10	
No default. No Event of Default or Potential Event of Default has occurred and is continuing.

 

	10.11	
Information. All information which has been provided in writing by or on behalf of each Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.6; all audited and unaudited financial statements which have been so provided satisfied the requirements of Clause 11.7; and there has been no Material Adverse Change in the financial position or state of

 

- 29 -

 

affairs of any of the Borrowers or the Corporate Guarantor from that disclosed in the latest of those financial statements which constitutes a Material Adverse Effect.

 

	10.12	
No litigation. Other than as disclosed to the Lenders prior to the date of this Agreement, no legal or arbitral or administrative action involving any of the Borrowers or any Obligor (other than the Approved Manager) (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to any Borrower's knowledge, is likely to be commenced or taken which, in either case and if determined adversely, would be likely to have a Material Adverse Effect.

 

	10.13	
Compliance with certain undertakings. At the date of this Agreement, each Borrower is in compliance with Clauses 11.2, 11.4, 11.8 and 11.12 and 11.19.

 

	10.14	
Taxes paid. Each of the Borrowers has paid all taxes applicable to, or imposed on or in relation to it, its business and the Ship owned by it.

 

	10.15	
ISM Code and ISPS Code compliance. All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, the Approved Manager and the Ships have been complied with.

 

	10.16	
No Money Laundering. Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their respective obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which each Borrower is a party, each of the Borrowers confirms that (i) it is acting for its own account, (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement and (iii) that the foregoing will not involve or lead to contravention of any law, official requirements or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).

 

	10.17	
No immunity. None of the Borrowers nor any of their respective assets is entitled to immunity on the grounds of sovereignity or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement).

 

	10.18	
PATRIOT Act. To the extent applicable each Borrower is in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the PATRIOT Act. No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

	10.19	
Restricted Party. None of the Borrowers nor any Security Party, nor any of their respective directors, officers, agents, employees or any person acting on behalf of any of the Borrowers or any Security Party, is a Restricted Party nor acts directly or indirectly on behalf of a Restricted Party.

 

	10.20	
Legal opinions. The representations made or to be made by the Borrowers under or pursuant to this Clause 10 are and shall be construed as being made subject to the reservations or qualifications as to matters of law set forth in the legal opinions to be delivered to the Agent pursuant to Clause 9.

 

- 30 -

 

	11.	
GENERAL UNDERTAKINGS

 

	11.1	
General. Each of the Borrowers undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

 

	11.2	
Title; negative pledge; pari passu. Each of the Borrowers will:

 

	(a)	
hold the legal title to, and own the entire beneficial interest in the Ship owned by it, the Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents, and except for Permitted Security Interests;

 

	(b)	
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any asset, present or future (including, but not limited to, that Borrower's rights against a Swap Bank under a Master Agreement or all or any of that Borrower's interest in any amount payable to that Borrower by a Swap Bank under a Master Agreement); and

 

	(c)	
procure that its liabilities under the Finance Documents to which it is a party to and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

 

	11.3	
No disposal of assets. None of Borrowers will (without the prior written consent of the Lenders) transfer, lease or otherwise dispose of:

 

	(a)	
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

 

	(b)	
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.

 

	11.4	
No other liabilities or obligations to be incurred. No Borrower will incur any liability or obligation except (i) liabilities and obligations under the Finance Documents to which it is a party; (ii) liabilities or obligations reasonably incurred in the ordinary course of its business of operating and chartering the Ship owned by it; (iii) in respect of any Designated Transaction; and (iv) unsecured inter-group loans from the Corporate Guarantor or other Group Members, subject to the Corporate Guarantor or those other Group Members expressly and fully subordinating and assigning their rights to those of the Creditor Parties under the Finance Documents and executing such documents as may be required by the Agent to evidence such subordination and assignment.

 

	11.5	
Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of each Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

 

	11.6	
Provision of financial statements. Each of the Borrowers will send to the Agent:

 

	(a)	
as soon as possible, but in no event later than 180 days after the end of each Financial Year (commencing with the Financial Year ended 31 December 2017), the annual audited consolidated financial statements of the Group for that Financial Year;

 

	(b)	
as soon as possible, but in no event later than 90 days after the end of each three month period ending on 31 March, 30 June, 30 September and 31 December in each Financial Year (commencing with the three month period ending on 31 March 2018), the unaudited consolidated quarterly management prepared financial statements of the Group for that three month period and certified as to their correctness by a director or officer of the

 

- 31 -

 

Corporate Guarantor or Cby any other persons agreed in writing from time to time between the Borrowers and the Agent;

 

	(c)	
together with the Accounting Information referred to in paragraphs (a) and (b) above, a Compliance Certificate;

 

	(d)	
together with each set of annual financial statements and quarterly financial statements for the second quarter of each Financial Year, valuations of each Ship and of each other Fleet Vessel, each determined and obtained in accordance with the provisions of Clause 15, to be delivered together with each Compliance Certificate; and

 

	(e)	
upon the Agent's demand, such further information about the financial condition, assets and operations of the Group and/or any Group Member as any Creditor Party may reasonably request.

 

	11.7	
Form of financial statements. All financial statements (audited and unaudited) delivered under Clause 11.5 will:

 

	(a)	
be prepared in accordance with all applicable laws and GAAP consistently applied;

 

	(b)	
include a profit and loss account, a balance sheet and a cash flow statement and shall (in the case of annual financial statements) be audited by the Auditors and without being subject to any qualification in such Auditor's opinion;

 

	(c)	
give a true and fair view of (in the case of annual financial statements) or fairly represent (in other cases) the financial condition (consolidated where applicable) and operations of the Group as at the date at which those financial statements were drawn up; and

 

	(d)	
fully disclose or provide for all significant liabilities of the Group.

 

	11.8	
Consents. Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

 

	(a)	
for that Borrower to perform its obligations under each of the Finance Documents to which it is party;

 

	(b)	
for the validity or enforceability of each or any Finance Document to which it is party, and each Borrower will comply (and will ensure that the Corporate Guarantor complies) with the terms of all such consents.

 

	11.9	
Maintenance of Security Interests. Each of the Borrowers will:

 

	(a)	
at its own cost, do all that is necessary to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

 

	(b)	
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

 

	11.10	
Notification of litigation. Each of the Borrowers will provide the Agent with details of any legal, arbitral or administrative proceedings involving that Borrower, the Corporate Guarantor and any other Obligor (other than the Approved Manager) or Group Member, or the Ship owned by that Borrower, its Earnings or its Insurances as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted,

 

- 32 -

 

provided that such proceedings (if adversely determined) might have a Material Adverse Effect or which would involve a liability (or a potential or alleged liability) exceeding $7,000,000 (or its equivalent in other currencies).

 

	11.11	
No amendment to Master Agreements. No Borrower will agree to any amendment or supplement to, or waive or fail to enforce, any Master Agreement or any of its provisions, or enter into any Transaction pursuant to any Master Agreement (except Designated Transactions).

 

	11.12	
Principal place of business. Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address disclosed to the Lenders in writing on or prior to the date of this Agreement; and that Borrower will not establish, nor do anything as a result of which it would be deemed to have, a place of business in any other country.

 

	11.13	
Confirmation of no default. Each of the Borrowers will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by the sole director of that Borrower and which:

 

	(a)	
states that no Event of Default or Potential Event of Default has occurred; or

 

	(b)	
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

 

The Agent may serve requests under this Clause 11.13 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent of the Loan or (if the Loan has not been made) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.13 does not affect the Borrowers' obligations under Clause 11.14.

 

	11.14	
Notification of default. Each of the Borrowers will notify the Agent as soon as that Borrower, becomes aware of:

 

	(a)	
the occurrence of an Event of Default or a Potential Event of Default; or

 

	(b)	
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred; and will thereafter keep the Agent fully up-to-date with all developments.

 

	11.15	
Provision of further information. Each of the Borrowers will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:

 

	(a)	
that Borrower, the Ship owned by that Borrower, its Insurances or its Earnings; or

 

	(b)	
any other matter relevant to, or to any provision of, a Finance Document (including, but not limited to, details of any claim, action, suit, proceeding or investigation with respect to Sanctions), 

 

which may be requested by the Agent, the Security Trustee, any Lender or any Swap Bank at any time.

 

	11.16	
Provision of customer information.

 

	(a)	
Each of the Borrowers will produce such documents and evidence as the Lenders shall from time to time require, based on applicable laws and regulations from time to time and the Lenders' own internal guidelines from time to time, relating to the Lenders' knowledge of its customers including (without limitation) obtaining, verifying and

 

- 33 -

 

recording certain information and documentation that will allow the Agent and each of the Lenders to identify each Borrower and each other Obligor in accordance with the requirements of the PATRIOT Act;

 

	(b)	
If:

		(i)	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

		(ii)	
any change in the status of an Obligor or the composition of the shareholders of an Obligor, after the date of this Agreement;

 

		(iii)	
a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer; or

 

		(iv)	
any anti-money laundering or anti-terrorism financing laws and regulations applicable to the Agent or any Lender,

 

obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

	11.17	
Treasury Services. No Borrower shall enter into any treasury related contract with a bank or financial institution (other than pursuant to a Master Agreement) with the Agent or a Lender as swap bank, without the prior written consent of the Agent.

 

	11.18	
Shareholder and creditor notices. Each of the Borrowers will send to the Agent, at the same time as they are dispatched, copies of all material communications sent by either of the Borrowers or any of the other Obligors to its shareholders or its creditors (or any class of either of them).

 

	11.19	
Sanctions.

 

	(a)	
Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) comply with all Sanctions.

 

	(b)	
No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) become a Restricted Party or act on behalf of, or as an agent of, a Restricted Party, to the extent this would lead to non-compliance by it or any other Party with any applicable Sanctions.

 

	(c)	
No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) use, lend, contribute or otherwise make available the proceeds of the Loan or other transaction contemplated by this Agreement directly or indirectly for the purpose of financing any trade, business or other activities with any Restricted Party, to the extent, in each case, such use, lending, contributing or otherwise making available the proceeds would lead to non-compliance by it or any other Party with any applicable Sanctions.

 

- 34 -

 

 

	(d)	
No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) use any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Creditor Parties to the extent such use would lead to non-compliance by it or any other Party with any applicable Sanctions.

 

	(e)	
Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) procure that no proceeds from any activity or dealing with a Restricted Party are credited to any bank account held with any Creditor Party or any Affiliate of a Creditor Party, to the extent crediting such bank account would lead to non-compliance by it, any Creditor Party or any Affiliate of a Creditor Party with any applicable Sanctions.

 

	(f)	
Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) to the extent permitted by law and promptly upon becoming aware of them, supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.

 

	11.20	
Compliance with laws. Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) comply in all respects with all laws and regulations to which it may be subject including without limitation (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order thereto and (ii) the PATRIOT Act.

 

	11.21	
Most favoured nation. In the event that and each time that any Borrower or the Corporate Guarantor or any other member of the Group agrees to, or grants, or agrees to grant, any financial covenants (but as long as such financial covenants relate to the Corporate Guarantor) to, for the benefit of, or in favour of, any lender or creditor of any indebtedness of any member of the Group (the "more favourable rights"), which are in any respect more favourable to such lender or creditor than the provisions of this Agreement and the Corporate Guarantee relating to the financial condition of any Borrower and the Corporate Guarantor (the "Financial Condition Provisions") are for the Creditor Parties, each Borrower undertakes and agrees with the Creditor Parties:

 

	(a)	
to notify the Agent within five days after the granting of or any agreement to grant (as the case may be) such more favourable rights;

 

	(b)	
without prejudice to paragraph (c) below, within thirty (30) days after the date when such more favourable rights have been agreed or granted, to agree to, provide and grant, such more favourable rights also in favour of the Agent under or in connection with this Agreement, by entering into (and/or by procuring that the Corporate Guarantor or any Security Party or any other person shall enter into) such documentation as the Agent shall reasonably require, immediately after the Creditor Parties' request to the Borrowers; and

 

	(c)	
notwithstanding paragraph (b) above, that any such more favourable rights shall in any event apply to this Agreement and the other Finance Documents automatically from the time they are granted to the other lenders or creditors, and irrespective of whether the Borrowers and the Corporate Guarantor have complied with their obligations under the Financial Condition Provisions, except if the Agent at any time advises the Borrowers that such or certain of such more favourable rights will not so apply and always without prejudice to the terms and conditions of this Agreement and the other Finance Documents.

 

	11.22	
Financial presentations. If required by the Agent, once in every Financial Year (or more frequently if requested to do so by the Agent, if the Agent reasonably suspects an Event of Default is continuing or may have occurred or may occur), the Borrowers shall procure that a representative of the Borrowers gives a presentation to the Creditor Parties

 

- 35 -

 

 

about the on-going business and financial performance of the Group and any other matter which a Creditor Party may reasonably request.

 

	11.23	
Provision of copies and translation of documents. Each of the Borrowers will supply the Agent with a sufficient number of copies of the documents referred to above to provide one (1) copy for each Creditor Party; and if the Agent, so requires in respect of any of those documents, the Borrowers will provide a certified English translation prepared by a translator approved by the Agent.

 

	12.	
CORPORATE UNDERTAKINGS

 

	12.1	
General. Each of the Borrowers also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

 

	12.2	
Maintenance of status. Each of the Borrowers will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.

 

	12.3	
Negative undertakings. None of the Borrowers will:

 

	(a)	
carry on any business other than the ownership, chartering and operation of the Ship owned by it; or

 

	(b)	
make any form of distribution (other than payment of a dividend pursuant to Clause 12.4) or effect any form of redemption, purchase, reduction or return of share capital or issue, allot or grant any person a right to any shares in its capital; or

 

	(c)	
without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), provide any form of credit or financial assistance (unless fully subordinated to the Loan and on terms otherwise acceptable to the Lenders) or issue any guarantee to any person, or enter into any transaction with or involving such a person, unless in the ordinary course of business; or

 

	(d)	
without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), open or maintain any account with any bank or financial institution except accounts with the Agent for the purposes of the Finance Documents and accounts notified to the Agent prior to the date of this Agreement; or

 

	(e)	
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative (other than a Designated Transaction); or

 

	(f)	
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation, or change its name; or

 

	(g)	
purchase any further assets, either directly or indirectly (through subsidiaries); or

 

	(h)	
without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), incur any other Financial Indebtedness (including, but not limited to, loans from the Shareholder or the Corporate Guarantor), other than trade debt incurred in the ordinary course of business. Any shareholder loans, inter company loans, affiliate loans and third party loans to any of the Borrowers shall be fully subordinated and assigned to the rights of the Creditor Parties under the Loan Agreement and the Finance Documents, on terms satisfactory to the Agent in its sole discretion.

 

- 36 -

 

 

	12.4	
Dividends. For the avoidance of doubt, the Borrowers may pay dividends during the Security Period provided that no Event of Default or Potential Event of Default has occurred or would occur as a result of any such payment.

 

	12.5	
Minimum liquidity. Each of the Borrowers shall ensure that, from the date of this Agreement and at all times thereafter during the Security Period, it maintains on each Operating Account a minimum daily cash balance of not less than $500,000 per Ship which amount is not subject to any Security Interest (other than pursuant to the Accounts Pledges).

 

	12.6	
Compliance Check. On each Compliance Date, compliance with the undertakings contained in Clauses 11.6, 12.5 and 15.1 shall be determined by reference to the Accounting Information for the first three quarterly periods in each Financial Year of each Borrower and the Corporate Guarantor (commencing with the three month period ending on 31 March 2018) and for the twelve month period in each Financial Year of each Borrower and the Corporate Guarantor (commencing with the twelve month period ended on 31 December 2017) delivered to the Agent pursuant to this Agreement and the Corporate Guarantee. At the same time as it delivers that Accounting Information, each Borrower and the Corporate Guarantor shall deliver to the Agent a Compliance Certificate signed by a director or officer of each Borrower and a director or officer of the Corporate Guarantor or by any other persons agreed in writing from time to time between the Borrowers and the Agent, together with (i) the relevant valuation certificates for the Ships (prepared in accordance with Clause 15.3) and (ii) the relevant valuation certificates for the other Fleet Vessels (prepared in accordance with Clause 15.3), setting out (in reasonable detail) computations as to compliance with Clauses 11.6, 12.5 and 15.1 of this Agreement and Clause 11.21 of the Corporate Guarantee, and including any supporting schedules or other information and evidence as the Agent may require. If, prior to the delivery of a Compliance Certificate, the Borrowers become aware that such undertakings will not be complied with, the Borrowers shall immediately notify the Agent thereof.

 

	12.7	
Application of FATCA

 

	(a)	
None of the Borrowers shall become (and shall procure that no Security Party shall become) a FATCA FFI or a US Tax Obligor, without the prior written consent of the Lenders.

 

	(b)	
If so directed by the Agent (acting on the instructions of the Majority Lenders), the Borrowers shall procure that any Borrower or any Security Party that does become a FATCA FFI or US Tax Obligor shall resign from its position as a Borrower or Security Party prior to the earliest FATCA Application Date relating to any payment by that Security Party (or any payment by the Agent which relates to a payment by that Borrower or that Security Party).

 

	13.	
INSURANCE

 

	13.1	
General. Each of the Borrowers undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period except as the Agent may (with the authorisation of the Majority Lenders) otherwise permit.

 

	13.2	
Maintenance of obligatory insurances. Each of the Borrowers shall keep the Ship owned by it insured at the expense of that Borrower against:

 

	(a)	
fire and usual marine risks (including hull and machinery and excess risks);

 

	(b)	
war risks (including war protection and indemnity risks liabilities); and

 

	(c)	
protection and indemnity risks (including cover for oil pollution liability risks); and

 

- 37 -

 

	(d)	
any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower.

 

	13.3	
Terms of obligatory insurances. Each of the Borrowers shall effect such insurances:

 

	(a)	
in Dollars;

 

	(b)	
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) the Fair Market Value of the Ship owned by it and (ii) an amount which, when aggregated with the insured value of the other Ships subject to a Mortgage, is equal to or greater than 120% of the amount of the Loan;

 

	(c)	
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

 

	(d)	
in relation to protection and indemnity risks in respect of the full value and tonnage of the Ship;

 

	(e)	
on approved terms; and

 

	(f)	
through approved brokers and with approved insurance companies and/or underwriters and/or war risks and protection and indemnity risks associations.

 

	13.4	
Further protections for the Creditor Parties. In addition to the terms set out in Clause 13.3, each of the Borrowers shall procure that the obligatory insurances shall:

 

	(a)	
subject always to paragraph (b), name the Borrowers as the main named assured unless the interest of every other named assured is limited:

 

		(i)	
in respect of any obligatory insurances for hull and machinery and war risks;

 

		(A)	
to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

 

		(B)	
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

 

		(ii)	
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it,

 

and every other named assured has undertaken in writing to the Security Trustee (in such form as it requires) that any deductible shall be apportioned between the Borrowers and every other named assured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

 

	(b)	
name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;

 

	(c)	
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions for premiums due from other vessels;

 

- 38 -

 

	(d)	
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

 

	(e)	
provide that the Security Trustee may make proof of loss if the relevant Borrower fails to do so.

 

	13.5	
Renewal of obligatory insurances. Each of the Borrowers shall:

 

	(a)	
at least 21 days before the expiry of any obligatory insurance:

 

		(i)	
notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that insurance and of the proposed terms of renewal; and

 

		(ii)	
in case of any substantial change in insurance cover, obtain the Security Trustee's approval to the matters referred to in paragraph (i) above;

 

	(b)	
at least 14 days before the expiry of any obligatory insurance, renew the insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and

 

	(c)	
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly before the expiry of the current insurances notify the Security Trustee in writing of the terms and conditions of the renewal.

 

	13.6	
Copies of policies; letters of undertaking. Each of the Borrowers shall ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:

 

	(a)	
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;

 

	(b)	
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

 

	(c)	
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

 

	(d)	
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

 

	(e)	
if the insurances form part of a fleet cover, they will not set off any claims on the Ship owned by that Borrower against premiums due for other vessels under the fleet cover or against premiums due for other insurances; neither will they cancel the insurance cover of that Ship for reason of non-payment of such premiums; and they will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.

 

	13.7	
Copies of certificates of entry. Each of the Borrowers shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered, provides the Security Trustee with:

 

	(a)	
a certificate of entry for that Ship; and

 

- 39 -

 

	(b)	
a letter or letters of undertaking in such form as may be required by the Security Trustee.

 

	13.8	
Deposit of original policies. Each of the Borrowers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

 

	13.9	
Payment of premiums. Each of the Borrowers shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.

 

	13.10	
Guarantees. Each of the Borrowers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

 

	13.11	
Restrictions on employment. None of the Borrowers shall employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances unless the underwriters' consent has been obtained.

 

	13.12	
Compliance with terms of insurances. None of the Borrowers shall do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and, in particular:

 

	(a)	
each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.7(c) above) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

 

	(b)	
no Borrower shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances unless the underwriters' consent has been obtained; and

 

	(c)	
no Borrower shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

 

	13.13	
Alteration to terms of insurances. None of the Borrowers shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee.

 

	13.14	
Settlement of claims. None of the Borrowers shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

 

	13.15	
Provision of copies of communications. Each of the Borrowers shall, if required by the Security Trustee, provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Borrower and:

 

	(a)	
the approved brokers; and

 

	(b)	
the approved protection and indemnity and/or war risks associations; and

 

	(c)	
the approved insurance companies and/or underwriters, which relate directly or indirectly to:

 

- 40 -

 

 

		(i)	
that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

 

		(ii)	
any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

 

	13.16	
Provision of information. In addition, each of the Borrowers shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:

 

	(a)	
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

 

	(b)	
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 below or dealing with or considering any matters relating to any such insurances, 

 

and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a) above.

 

	13.17	
Mortgagees' interest, additional perils. The Lenders shall be entitled from time to time to effect, maintain and renew a mortgagee's interest additional perils pollution insurance and a mortgagee's interest insurance in an amount equal to 120% of the aggregate of the Loan and the Hedging Exposure and otherwise on such terms, through such insurers and generally in such manner as the Lenders may from time to time consider appropriate and each of the Borrowers shall upon demand fully indemnify the Creditor Parties in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

 

	13.18	
Review of insurance requirements. The Security Trustee shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Security Trustee, significant and capable of affecting any of the Borrowers or any of the Ships and its or their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which any of the Borrowers may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrowers.

 

	13.19	
Modification of insurance requirements. The Security Trustee shall notify the Borrowers of any reasonable proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Security Trustee considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 and shall bind the Borrowers accordingly.

 

	13.20	
Compliance with mortgagee's instructions. The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.19.

 

	14.	
SHIP COVENANTS

 

	14.1	
General. Each of the Borrowers also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period

 

- 41 -

 

except as the Agent (with the authorisation of the Majority Lenders) may otherwise permit.

 

	14.2	
Ship's name and registration. Each of the Borrowers shall keep the Ship owned by it registered in its name under the Approved Flag; shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry or flag of a Ship without the prior written consent of the Agent (acting on the authority of the Majority Lenders).

 

	14.3	
Repair and classification. Each of the Borrowers shall keep the Ship owned by it in a good and safe condition and state of repair:

 

	(a)	
consistent with first-class ship ownership and management practice;

 

	(b)	
so as to maintain that Ship with the highest classification available for vessels of the same age, type and specification as the Ship with Lloyd's Register of Shipping (or such other first class classification society being a member of IACS and as may be approved by the Security Trustee), free of outstanding recommendations and conditions affecting that Ship's class which continue unremedied after expiration of the allowance period set by the surveyor appointed by each classification society; and

 

	(c)	
so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

 

	14.4	
Modification. None of the Borrowers shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on her which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce her value.

 

	14.5	
Removal of parts. None of the Borrowers shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Lenders and becomes on installation on that Ship the property of the Borrower owning that Ship and subject to the security constituted by the relevant Mortgage Provided that a Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.

 

	14.6	
Surveys. Each of the Borrowers shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and at such other times as may be required by the Agent (in its sole discretion), at the cost and expense of the Borrowers, and (if so required by the Agent) provide the Agent with copies of all survey reports. The Agent shall have the right to request one or more technical survey reports of each Ship by surveyors appointed to by the Agent at the cost of the Borrowers, provided that the frequency of such reports shall be limited to one per year (unless an Event of Default shall have occurred).

 

	14.7	
Inspection. Each of the Borrowers shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board each Ship at all reasonable times to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections, on condition that no interference with the day to day management and operation of that Ship will occur. Provided that a Ship is found to be in satisfactory condition, the cost of such inspections shall be borne by the Borrowers not more than once per year.

 

	14.8	
Prevention of and release from arrest. Each of the Borrowers shall promptly discharge:

 

- 42 -

 

	(a)	
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;

 

	(b)	
all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

 

	(c)	
all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

 

and, forthwith upon receiving notice of the arrest of a Ship, or of her detention in exercise or purported exercise of any lien or claim, the Borrower owning that Ship shall procure her release by providing bail or otherwise as the circumstances may require.

 

	14.9	
Compliance with laws etc. Each of the Borrowers shall:

 

	(a)	
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by it, its ownership, operation and management or to the business of the Borrower owning that Ship (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port);

 

	(b)	
comply (and each other Obligor shall comply and the Corporate Guarantor shall procure that each member of the Group will comply) in all aspects with all Sanctions;

 

	(c)	
not employ the Ship owned by it nor allow her employment in any manner contrary to any law or regulation in any relevant jurisdiction, including (but not limited to) concluding transactions with any entities or countries subject to sanctions imposed by OFAC in the US, the United Nations, the European Union or otherwise, or pursuant to the ISM Code and the ISPS Code;

 

	(d)	
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Majority Lenders has been given and the Borrower owning that Ship has (at its expense) effected any special, additional or modified insurance cover which the Majority Lenders may require;

 

	(e)	
adopt and comply with responsible ship recycling policies; and

 

	(f)	
ensure that the Ship owned by it has, from the Drawdown Date (or by latest its next scheduled dry-dock), obtained an Inventory of Hazardous Materials which shall be maintained throughout the Security Period.

 

	14.10	
Provision of information. Each of the Borrowers shall promptly provide the Security Trustee with any information which the Majority Lenders request regarding:

 

	(a)	
the Ship owned by it, her employment, position and engagements;

 

	(b)	
the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

 

	(c)	
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;

 

	(d)	
any towages and salvages;

 

- 43 -

 

	(e)	
its compliance, the Approved Manager's compliance or the compliance of the Ship owned by that Borrower with the ISM Code 

 

and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship and of any current charter guarantee, and copies of the ISM Code and ISPS Code documentation.

 

	14.11	
Notification of certain events. Each of the Borrowers shall immediately notify the Security Trustee by letter of:

 

	(a)	
any casualty which is or is likely to be or to become a Major Casualty;

 

	(b)	
any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

 

	(c)	
any requirement or recommendation made by any insurer or classification society (or any withdrawal of class) or by any competent authority which is not immediately complied with;

 

	(d)	
any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or her Earnings or any requisition of that Ship for hire;

 

	(e)	
any intended dry-docking, cold lay-up or deactivation of a Ship;

 

	(f)	
any Environmental Claim made against a Borrower or in connection with the Ship owned by it or any Environmental Incident;

 

	(g)	
any claim for breach of the ISM Code or the ISPS Code being made against a Borrower, the Approved Manager or otherwise in connection with the Ship owned by that Borrower; or

 

	(h)	
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,

 

and each Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Manager's or any other person's response to any of those events or matters.

 

	14.12	
Restrictions on chartering, appointment of managers, etc. None of the Borrowers shall without the prior written consent of the Agent (acting on the authority of the Majority Lenders):

 

	(a)	
let a Ship on demise charter for any period;

 

	(b)	
enter into any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

 

	(c)	
enter into any charter in relation to that Ship owned by it under which more than 2 months' hire (or the equivalent) is payable in advance;

 

	(d)	
charter the Ship owned by it otherwise than on bona fide arm's length terms (including charter to an Affiliate or below market rate/terms) at the time when that Ship is fixed;

 

	(e)	
appoint a commercial, technical or operational manager of the Ship owned by it (other than the Approved Manager) or agree to any alteration to the terms of the Approved Manager's appointment;

 

	(f)	
de-activate or lay up the Ship owned by it;

 

- 44 -

 

	(g)	
change the legal or beneficial ownership of the shares in the Ship owned by it;

 

	(h)	
put the Ship owned by it into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed Five hundred thousand United States Dollars ($500,000) (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or her Earnings for the cost of such work or otherwise; or

 

	(i)	
change the classification society with which the Ship owned by it is classed.

 

	14.13	
Notice of Mortgage. Each of the Borrowers shall keep the Mortgage registered against the Ship owned by it as a valid first priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that such Ship is mortgaged by that Borrower to the Security Trustee.

 

	14.14	
Sharing of Earnings.  None of the Borrowers shall enter into any agreement or arrangement for the sharing of any Earnings, except for customary profit sharing provisions usually included in pooling agreements or charterparties at the time the relevant Ship is fixed.

 

	14.15	
ISPS Code. Each of the Borrowers shall comply with the ISPS Code and in particular, without limitation, shall:

 

	(a)	
procure that the Ship owned by it and the company responsible for such Ship's compliance with the ISPS Code, comply with the ISPS Code; and

 

	(b)	
maintain for that Ship an ISSC; and

 

	(c)	
notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

 

	14.16	
Time Charter Assignment. If any Borrower (with the consent of the Agent pursuant to Clause 14.12 (b)) enters into any time charter or contract of affreightment in respect of a Ship which is in excess of twelve (12) months in duration, that Borrower shall execute in favour of the Security Trustee a Time Charter Assignment and notice of assignment (and the Borrower shall use its best efforts to procure that such notice is acknowledged by the relevant charterer) of such time charter or contract of affreightment in such form and on such terms as the Agent may require (subject to the relevant charterer accepting such form); and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 4 hereof as the Agent may require.

 

	14.17	
Sustainable dismantling. Each of the Borrowers confirms that as long as it is in a lending relationship with ABN AMRO Bank N.V., it will ensure that any Ship controlled by it or sold to an intermediary with the intention of being scrapped, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and/or EU Ship regulation.

 

	15.	
SECURITY COVER

 

	15.1	
Minimum required security cover. Clause 15.2 applies if the Agent notifies the Borrowers that:

 

	(a)	
the Fair Market Value (determined as provided below) of the Ships; plus

 

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	(b)	
the net realisable value of any additional security previously provided under this Clause 15,

 

is below one hundred and forty per cent (140%) of the aggregate amount of the Loan and the Hedging Exposure.

 

	15.2	
Provision of additional security; prepayment. If the Agent serves a notice on the Borrowers under Clause 15.1, the Borrowers shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 1 month after the date on which the Agent's notice is served under Clause 15.1 (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date they have provided, or ensured that a third party has provided, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which has been documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

 

	15.3	
Valuation of Ships/Fleet Vessels. The Fair Market Value of a Ship or of another Fleet Vessel (as the case may be) shall be determined:

 

	(a)	
in Dollars, as at the date of (or no earlier than 15 days prior to) such valuation, provided however that the valuations to be provided by the Borrowers to the Agent together with the Compliance Certificate will have the same date as the applicable Compliance Certificate;

 

	(b)	
by taking the average of two written valuations prepared by any two of the Approved Brokers;

 

	(c)	
with or without physical inspection of the relevant Ship or other Fleet Vessel (as the Agent may require), provided that no interference with the day to day management and operation of that Ship or that other Fleet Vessel occurs;

 

	(d)	
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment;

 

	(e)	
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

 

Provided that if, pursuant to Clause 15.3(b), one such valuation differs by more than 10 per cent. from the other valuation, then the Agent may select a third Approved Broker under Clause 15.3 (b) to provide a valuation of that Ship or that other Fleet Vessel (as the case may be) in accordance with this Clause 15.3 and the Market Value of that Ship or that other Fleet Vessel (as the case may be) shall be the arithmetic average of all three such valuations.

 

	15.4	
Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by way of a valuation complying with the requirements of Clause 15.3.

 

	15.5	
Valuations binding. Any valuation under Clause 15.3 or 15.4 shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

 

	15.6	
Provision of information. The Borrowers shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the

 

 

 

- 46 -

valuation may be made on any basis and assumptions which the shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.

 

	15.7	
Payment of valuation expenses. Without prejudice to the generality of the Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any shipbrokers or experts instructed by the Agent under this Clause 15 and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause 15, provided that unless an Event of Default or a Potential Event of Default has occurred, the Borrowers shall only be obliged to pay the fees and expenses for two sets of valuations of each Ship carried out in each 12-month period pursuant to Clause 15.3.

 

	15.8	
Frequency of valuations. The Agent shall be entitled to obtain written valuations of each Ship and each other Fleet Vessel at drawdown of the Loan and any time during the Security Period, provided that after drawdown of the Loan the costs and expenses of such shall only be borne by the Borrowers twice per year (unless an Event of Default or a mandatory prepayment event under Clause 8.7 has occurred, in which case the Agent shall be entitled to obtain valuations at any time, at the cost and expense of the Borrowers). Such valuations at the time of drawdown of the Loan shall be in addition to the valuations to be provided by the Borrowers together with the Compliance Certificates pursuant to Clauses 11.6 and 15.3(a).

 

	15.9	
Application of prepayment. Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2.

 

	15.10	
Notification to Agent. Each of the Borrowers shall promptly notify the Agent of any indication that the asset cover ratio in Clause 15.1 may not be met.

 

	16.	
PAYMENTS AND CALCULATIONS

 

	16.1	
Currency and method of payments. All payments to be made by the Lenders or by any of the Borrowers under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

 

		(i)	
by not later than 11.00 a.m. (New York City time) on the due date;

 

		(ii)	
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

 

		(iii)	
if in Dollars, to the account of the Agent with such bank in New York as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and 

 

		(iv)	
(iv) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

 

	16.2	
Payment on non-Business Day. If any payment by any of the Borrowers under a Finance Document would otherwise fall due on a day which is not a Business Day:

 

	(a)	
the due date shall be extended to the next succeeding Business Day; or

 

	(b)	
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day

 

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

 

- 47 -

 

	16.3	
Basis for calculation of periodic payments. All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

 

	16.4	
Distribution of payments to Creditor Parties. Subject to Clauses 16.5, 16.6 and 16.7:

 

	(a)	
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, a Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, that Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

 

	(b)	
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders or the Swap Banks generally shall be distributed by the Agent to each Lender and each Swap Bank pro rata to the amount in that category which is due to it.

 

	16.5	
Permitted deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or a Swap Bank, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or that Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or that Swap Bank to pay on demand.

 

	16.6	
Agent only obliged to pay when monies received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to any of the Borrowers or any Lender or any Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to any of the Borrowers or that Lender or that Swap Bank until the Agent has satisfied itself that it has received that sum.

 

	16.7	
Refund to Agent of monies not received. If and to the extent that the Agent makes available a sum to any of the Borrowers or a Lender or a Swap Bank, without first having received that sum, the Borrowers or (as the case may be) the Lender or the Swap Bank concerned shall, on demand:

 

	(a)	
refund the sum in full to the Agent; and

 

	(b)	
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

 

	16.8	
Agent may assume receipt. Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

 

	16.9	
Creditor Party accounts. Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

 

	16.10	
Agent's memorandum account. The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

 

- 48 -

 

 

	16.11	
Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrowers or a Security Party to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor Party.

 

	17.	
APPLICATION OF RECEIPTS

 

	17.1	
Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:-

 

	(a)	
FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:

 

		(i)	
first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrowers under Clauses 20, 21 and 22 of this Agreement or by any of the Borrowers or any Security Party under any corresponding or similar provision in any other Finance Document);

 

		(ii)	
secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression "interest" shall include any net amount which the Borrowers have become liable to pay or deliver under section 2(e) (Obligations) of a Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and 

 

		(iii)	
thirdly, in or towards satisfaction of the Loan and the Hedging Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder) on a pari passu basis;

 

	(b)	
SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a); and

 

	(c)	
THIRDLY: any surplus shall be paid to the Borrowers.

 

	17.2	
Variation of order of application. The Agent may, with the authorisation of the Majority Lenders and the Swap Banks by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

 

	17.3	
Notice of variation of order of application. The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

 

	17.4	
Appropriation rights overriden. This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrowers or any Security Party.

 

- 49 -

 

	18.	
APPLICATION OF EARNINGS

 

	18.1	
Payment and application of Earnings. Each of the Borrowers undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of each General Assignment), all the Earnings of each Ship are paid to the Operating Account for that Ship and shall be applied as follows:

 

	(a)	
first, towards payment of all sums other than principal and interest due to the Lenders under this Agreement and the other Finance Documents;

 

	(b)	
secondly, towards payment of the next instalment of principal and the next payment of interest due to the Lenders in accordance with the provisions of Clause 18.2, and towards payments due to a Swap Bank under a Master Agreement; and

 

	(c)	
thirdly, any surplus shall (subject always to the other provisions of this Clause 18 and provided no Event of Default is continuing) be available to the Borrowers.

 

	18.2	
Monthly retentions. Each of the Borrowers undertakes with each Creditor Party to ensure that, in each calendar month of the Security Period commencing one month after the Drawdown Date, on such dates as the Agent may from time to time specify, there is transferred to the Retention Account out of the Earnings received in the Operating Accounts during the preceding calendar month:

 

	(a)	
one-third of the amount of the repayment instalment falling due under Clause 8 on the next Repayment Date; and

 

	(b)	
the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest under this Agreement.

 

The "relevant fraction" is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or, if the period is shorter, the number of months from the later of the commencement of the current Interest Period or the last due date for payment of interest to the next due date for payment of interest under this Agreement).

 

	18.3	
Shortfall in Earnings. If the aggregate Earnings received in the Operating Accounts are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 18.2, the Borrowers shall make up the amount of the insufficiency on demand from the Agent; but, without thereby prejudicing the Agent's right to make such demand at any time, the Agent may, if so authorised by the Majority Lenders, permit the Borrowers to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 18.2 from the Earnings received in the next or subsequent months.

 

	18.4	
Application of retentions. Until an Event of Default or a Potential Event of Default occurs, the Agent shall on each Repayment Date and on each due date for the payment of interest under this Agreement distribute to the Lenders in accordance with Clause 16.4 so much of the balance on the Retention Account as equals:

 

	(a)	
the repayment instalment due on that Repayment Date; or

 

	(b)	
the amount of interest payable on that interest payment date;

 

in discharge of the Borrowers' liability for that repayment instalment or that interest.

 

	18.5	
Designated Transactions. All payments by a Swap Bank to the Borrowers under each Designated Transaction shall be credited to the Operating Accounts.

 

	18.6	
Location of accounts. Each of the Borrowers shall promptly:

 

- 50 -

 

 

	(a)	
comply with any requirement of the Agent as to the location or re-location of the Operating Accounts and the Retention Account (or any of them);

 

	(b)	
execute any documents which the Agent specifies to create or maintain in favour of the Agent a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Operating Accounts and the Retention Account.

 

	18.7	
Debits for expenses etc. The Agent shall be entitled (but not obliged) from time to time to debit the Operating Accounts without prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.

 

	18.8	
Borrowers' obligations unaffected. The provisions of this Clause 18 (as distinct from a distribution effected under Clause 18.4) do not affect:

 

	(a)	
the liability of the Borrowers to make payments of principal and interest on the due dates; or

 

	(b)	
any other liability or obligation of the Borrowers or any Security Party under any Finance Document.

 

	19.	
EVENTS OF DEFAULT

 

	19.1	
Events of Default. An Event of Default occurs if:

 

	(a)	
any of the Borrowers or any Security Party (other than the Approved Manager) fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document or unless such failure to pay is caused by an administrative or technical error or any disruption event in the payment/communication system which is beyond the control of the Borrowers, in which case the Borrowers shall rectify such error within three (3) Business Days; or

 

	(b)	
any breach occurs of Clauses 11.2, 11.12, 11.19, 11.20, 11.21, 12.2, 12.3, 12.4, 12.5, 12.6, 13.2, 13.3, 15.1 or 15.2 of this Agreement or clause 11.21 of the Corporate Guarantee; or

 

	(c)	
any breach by the Borrowers or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 5 Business Days after written notice from the Agent requesting action to remedy the same; or

 

	(d)	
(subject to any applicable grace period specified in the Finance Document) any breach by the Borrowers or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c); or

 

	(e)	
any representation, warranty or statement made or repeated by, or by an officer of or by any other persons agreed in writing from time to time between the Borrowers and the Agent of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

 

	(f)	
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person which exceeds $7,000,000 (or the equivalent in any other currency) in aggregate:

 

		(i)	
any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

 

- 51 -

 

		(ii)	
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

 

		(iii)	
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

 

		(iv)	
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

 

		(v)	
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

 

	(g)	
any of the following occurs in relation to a Relevant Person:

 

		(i)	
the Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or

 

		(ii)	
any assets of the Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency unless such execution, attachment, arrest, sequestration or distress is being contested in good faith and on substantial grounds and is discussed or withdrawn within thirty (30) days of the occurrence thereof; or

 

		(iii)	
any administrative or other receiver is appointed over any asset of a Relevant Person; or

 

		(iv)	
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

 

		(v)	
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

 

		(vi)	
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

 

		(vii)	
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person, or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

 

- 52 -

 

		(viii)	
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb)within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

 

		(ix)	
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

 

		(x)	
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step be taken or should be taken if certain conditions materialise or fail to materialise; or

 

		(xi)	
in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

 

	(h)	
any of the Borrowers or the Corporate Guarantor or the Approved Manager ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

 

	(i)	
it becomes unlawful in any Pertinent Jurisdiction or impossible:

 

		(i)	
for a Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

 

		(ii)	
for the Agent, the Security Trustee, the Lenders or the Swap Banks to exercise or

 enforce any right under, or to enforce any Security Interest created by, a Finance Document; or (i)

 

	(j)	
any consent necessary to enable any of the Borrowers to own, operate or charter the Ship owned by it or to enable any of the Borrowers or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

 

- 53 -

 

	(k)	
any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

 

	(l)	
the security constituted by a Finance Document is in any way materially imperilled or in jeopardy (including, but not limited to, termination of registration under the Approved Flag State or failure to renew same within 90 days, or failure to lift an arrest of a Ship within 30 days); or

 

	(m)	
an Event of Default (as defined in section 14 of a Master Agreement) occurs; or

 

	(n)	
a Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Agent, acting with the authorisation of the Majority Lenders; or

 

	(o)	
any other event occurs or any other circumstances arise or develop including, without limitation:

 

		(i)	
a Material Adverse Effect; or

 

		(ii)	
any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; or

 

		(iii)	
political risks events in the Approved Flag State or other Pertinent Jurisdiction involving hostilities or civil war or seizure of power by unconstitutional means;

 

which, in the Agent's opinion, is likely to have a Material Adverse Effect and that any of the Borrowers has not taken such action as the Agent has specified within 14 days of the Agent's notice to so do.

	19.2	
Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default:

 

	(a)	
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

 

		(i)	
serve on the Borrowers a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or

 

		(ii)	
serve on the Borrowers a notice stating that all or part of the Loan, together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

 

		(iii)	
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

 

	(b)	
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Banks are entitled to take under any Finance Document or any applicable law.

 

	19.3	
Termination of Commitments. On the service of a notice under paragraph (a)(i) of Clause 19.2, the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.

 

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	19.4	
Acceleration of Loan. On the service of a notice under paragraph (a)(ii) of Clause 19.2, all or, as the case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrowers or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

 

	19.5	
Multiple notices; action without notice. The Agent may serve notices under paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

 

	19.6	
Notification of Creditor Parties and Security Parties. The Agent shall send to each Lender, each Swap Bank, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any of the Borrowers or any Security Party with any form of claim or defence.

 

	19.7	
Creditor Parties' rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or Swap Banks under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

 

	19.8	
Exclusion of Creditor Party liability. No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to any of the Borrowers or a Security Party:

 

	(a)	
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

 

	(b)	
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset;

 

except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the gross negligence or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

 

	19.9	
Relevant Persons. In this Clause 19, a "Relevant Person" means each Borrower, the Corporate Guarantor, any other Security Party (other than the Approved Manager) and any other Group Member; but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

 

	19.10	
Interpretation. In Clause 19.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) "petition" includes an application.

 

	19.11	
Position of Swap Banks. Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of a Swap Bank except to the extent that such Swap Bank is also a Lender.

 

	20.	
FEES AND EXPENSES

 

	20.1	
Arrangement, commitment, agency fees. The Borrowers shall pay to the Agent:

 

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	(a)	
a non-refundable arrangement fee for the account of the Arranger in the amount of $300,000 upon signing of this Agreement;

 

	(b)	
quarterly in arrears during the period from (and including) 5 February 2018 (being the date on which the Borrowers and the Corporate Guarantor accepted the Arranger's offer letter in respect of the Loan) to the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period and on the last day of that period, for the account of the Lenders, a commitment fee at the rate of forty per cent (40%) per annum of the amount of the Margin, for distribution to the Lenders pro rata to their Commitments; and

 

	(c)	
an agency fee if any part of the Loan is syndicated out to one or more financial institutions, in an amount to be set out in a separate fee letter between the Agent and the Borrowers.

 

	20.2	
Costs of negotiation, preparation etc. The Borrowers shall pay to the Agent on its demand the amount of all expenses (including, but not limited to, all legal expenses and VAT, if applicable) incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.

 

	20.3	
Costs of variations, amendments, enforcement etc. The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party in connection with:

 

	(a)	
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

 

	(b)	
any consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

 

	(c)	
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security;

 

	(d)	
where the Security Trustee, in its absolute opinion, considers that there has been a material change to the Insurances in respect of a Ship, the review of the Insurances of that Ship pursuant to Clause 13.18; and

 

	(e)	
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

 

There shall be recoverable under paragraph (e) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

 

	20.4	
Documentary taxes. The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.

 

	20.5	
Certification of amounts. A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.

 

- 56 -

 

	21.	
INDEMNITIES

 

	21.1	
Indemnities regarding borrowing and repayment of Loan. Each of the Borrowers shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

 

	(a)	
the Loan not being borrowed on the date specified in the Drawdown Notice for the Loan for any reason other than a default by the Lender claiming the indemnity;

 

	(b)	
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

 

	(c)	
any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 7);

 

	(d)	
the occurrence and/or continuance of an Event of Default or a Potential Event of Default (including, but not limited to, a breach of Clauses 11.20 or 11.21) and/or the acceleration of repayment of the Loan under Clause 19; 

 

and in respect of any tax (other than an Excluded Tax) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

 

	21.2	
Breakage costs. Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, incurred by a Lender:

 

	(a)	
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

 

	(b)	
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

 

	21.3	
Miscellaneous indemnities. The Borrowers shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind ("liability items") which may be made or brought against, or incurred by, a Creditor Party, in any country, as a result of or in connection with:

 

	(a)	
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;

 

	(b)	
any breach of Sanctions;

 

	(c)	
any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or

 

- 57 -

previously covered) by a Security Interest created (or intended to be created) by a Finance Document;

 

other than liability items which are shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.

 

Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

 

	21.4	
Currency indemnity. If any sum due from the Borrowers or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

 

	(a)	
making or lodging any claim or proof against any of the Borrowers or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

 

	(b)	
obtaining an order or judgment from any court or other tribunal; or

 

	(c)	
enforcing any such order or judgment; 

 

the Borrowers shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

 

In this Clause 21.4, the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (Rotterdam time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

 

This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

 

	21.5	
Application to Master Agreements. For the avoidance of doubt, Clause 21.4 does not apply in respect of sums due from the Borrowers to a Swap Bank under or in connection with a Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of that Master Agreement shall apply.

 

	21.6	
Certification of amounts. A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.

 

	21.7	
Sums deemed due to a Lender. For the purposes of this Clause 21, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

 

	21.8	
Mandatory Costs. The Borrowers shall, on demand by the Agent, pay to the Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Agent against documentary evidence of the amount necessary to compensate it for complying with:

 

- 58 -

 

 

	(a)	
in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that lending office; and

 

	(b)	
in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Loan.

 

	22.	
NO SET-OFF OR TAX DEDUCTION

 

	22.1	
No deductions. All amounts due from the Borrowers under a Finance Document shall be paid:

 

	(a)	
without any form of set-off, cross-claim or condition; and

 

	(b)	
free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.

 

	22.2	
Grossing-up for taxes. If a Borrower is required by law to make a tax deduction from any payment:

 

	(a)	
that Borrower shall notify the Agent as soon as it becomes aware of the requirement;

 

	(b)	
that Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

 

	(c)	
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received;

 

	(d)	
in the event that a Creditor Party receives a refund (whether in the form of cash or a reduction or offset of taxes) of a tax for which an additional amount was paid pursuant to sub-paragraph (c), the Creditor Party shall, within 30 days upon receiving or recognizing such refund, pay the amount of such refund to the Borrower.

 

	22.3	
Evidence of payment of taxes. Within 1 month after making any tax deduction, that Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

 

	22.4	
Exclusion of tax on overall net income. In this Clause 22 "tax deduction" means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income, a FATCA Deduction, or a tax imposed by a jurisdiction in which the Creditor Party is incorporated, organized or resident for such jurisdiction's income tax purposes (collectively, an "Excluded Tax").

 

	22.5	
Application to Master Agreements. For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrowers to a Swap Bank under or in connection with a Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of that Master Agreement shall apply.

 

- 59 -

 

	22.6	
FATCA Information.

 

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

 

		(i)	
confirm to that other Party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

 

		(ii)	
supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

 

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

 

	(c)	
Paragraph (a) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such party for purposes of this paragraph (c).

 

	(d)	
If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then:

 

		(i)	
if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

 

		(ii)	
if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

 

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

	22.7	
FATCA Withholding.

 

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

 

	(b)	
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrower, the Agent and the other Creditor Parties.

 

- 60 -

 

	22.8	
Contractual recognition of Bail-In.

 

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

	(a)	
any Bail-In Action in relation to any such liability, including (without limitation):

 

		(i)	
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

 

		(ii)	
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

 

		(iii)	
a cancellation of any such liability; and

 

	(b)	
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

 

	23.	
ILLEGALITY, ETC

 

	23.1	
Illegality. This Clause 23 applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become:

 

	(a)	
unlawful or prohibited (including, without limitation, due to a breach of Clauses 11.20 or 11.21) as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

 

	(b)	
contrary to, or inconsistent with, any regulation, for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

 

	23.2	
Notification of illegality. The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.

 

	23.3	
Prepayment; termination of Commitment. On the Agent notifying the Borrowers under Clause 23.2, the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender's Contribution in accordance with Clause 8.

 

	23.4	
Mitigation. If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

 

	(a)	
have an adverse effect on its business, operations or financial condition; or

 

	(b)	
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

 

	(c)	
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

 

- 61 -

 

	24.	
INCREASED COSTS

 

	24.1	
Increased costs. This Clause 24 applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender considers that as a result of:

 

	(a)	
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of an Excluded Tax); or

 

	(b)	
the effect of complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement (including, but not limited to, Basel III, CRR and CRD IV costs),

 

is that the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost", that is to say,:

 

		(i)	
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; or

 

		(ii)	
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

 

		(iii)	
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

 

		(iv)	
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

 

but not an item attributable to a change in the rate of an Excluded Tax of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or which is attributable to a FATCA Deduction.

 

For the purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

 

	24.2	
Notification to Borrowers of claim for increased costs. The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.

 

	24.3	
Payment of increased costs. The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

 

	24.4	
Notice of prepayment. If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, the Borrowers may give the Agent not less than 14 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

 

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	24.5	
Prepayment; termination of Commitment. A notice under Clause 24.4 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:

 

	(a)	
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

 

	(b)	
on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

 

	24.6	
Application of prepayment. Clause 8 shall apply in relation to the prepayment.

 

	25.	
SET-OFF

 

	25.1	
Application of credit balances. Each Creditor Party may without prior notice:

 

	(a)	
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of any of the Borrowers at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from any of the Borrowers to that Creditor Party under any of the Finance Documents; and

 

	(b)	
for that purpose:

 

		(i)	
break, or alter the maturity of, all or any part of a deposit of any of the Borrowers;

 

		(ii)	
convert or translate all or any part of a deposit or other credit balance into Dollars;

 

		(iii)	
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

 

	25.2	
Existing rights unaffected. No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

 

	25.3	
Sums deemed due to a Lender. For the purposes of this Clause 25, a sum payable by any of the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

 

	25.4	
No Security Interest. This Clause 25 gives the Creditor Parties a contractual right of set off only, and does not create any equitable charge or other Security Interest over any credit balance of any of the Borrowers.

 

	25.5	
No Borrower set off. None of the Borrowers shall have a right of set off in relation to sums that may be due from any Creditor Party under this Agreement or any of the other Finance Documents.

 

	26.	
TRANSFERS AND CHANGES IN LENDING OFFICES

 

	26.1	
Transfer by Borrowers. The Borrowers may not:

 

	(a)	
without the prior written consent of the Agent (given on the instructions of all of the Lenders), transfer any of its rights or obligations under any Finance Document;

 

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	(b)	
without the prior written consent of the Agent (given on the instructions of all the Lenders), enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.

 

	26.2	
Transfer by a Lender. Subject to Clause 26.4, a Lender (the "Transferor Lender") may at any time cause:

 

	(a)	
its rights in respect of all or part of its Contribution; or

 

	(b)	
its obligations in respect of all or part of its Commitment; or

 

	(c)	
a combination of (a) and (b);

 

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution or 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 (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 6 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

 

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be dealt with separately in accordance with the Agency and Trust Deed.

 

A transfer pursuant to this Clause 26.2 shall:

 

		(i)	
be effected without the consent of; but with notice to, the Borrowers;

 

		(A)	
following the occurrence of an Event of Default;

 

		(B)	
if such transfer is to a Subsidiary or any other company or financial institution which is in the same ownership or control as the Transferor Lender; or

 

		(C)	
if such transfer is required by a banking authority; and

 

		(ii)	
require the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) in all other circumstances.

 

	26.3	
Transfer Certificate, delivery and notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

 

	(a)	
sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee, each of the other Lenders and each of the Swap Banks;

 

	(b)	
on behalf of the Transferee Lender, send to the Borrowers and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

 

	(c)	
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,

 

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender.

 

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	26.4	
Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 on or before that date.

 

	26.5	
No transfer without Transfer Certificate. No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrowers, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

 

	26.6	
Lender re-organisation; waiver of Transfer Certificate. However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender. In addition, where security rights (such as pledge and mortgage rights) created in the interest of the Lender concerned were transferred to the successor as a result of such a merger, de-merger or other reorganisation, then such rights will serve as if they were created in the interest of the successor.

 

	26.7	
Effect of Transfer Certificate. A Transfer Certificate takes effect in accordance with English law as follows:

 

	(a)	
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrowers or any Security Party had against the Transferor Lender;

 

	(b)	
the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

 

	(c)	
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

 

	(d)	
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

 

	(e)	
any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrowers or any Security Party against the Transferor Lender had not existed;

 

	(f)	
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

 

	(g)	
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the

 

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loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

 

The rights and equities of the Borrowers or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

 

	26.8	
Maintenance of register of Lenders. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days prior notice.

 

	26.9	
Reliance on register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

 

	26.10	
Authorisation of Agent to sign Transfer Certificates. Each of the Borrowers, the Security Trustee, each Lender and each Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

 

	26.11	
Registration fee. In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 from the Transferor Lender or (at the Agent's option) the Transferee Lender.

 

	26.12	
Sub-participation; subrogation assignment. A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrowers, any Security Party, the Agent or the Security Trustee or any other Creditor Party; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

 

	26.13	
Disclosure of information. A Lender may disclose to a potential Transferee Lender or sub-participant any information necessary to effect the relevant transaction which the Lender has received in relation to any of the Borrowers, any Security Party or their affairs under or in connection with any Finance Document, provided that the potential Transferee Lender or sub-participant shall have first signed an adherence letter to that Lender's non disclosure agreement..

 

	26.14	
Change of lending office. A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

 

	(a)	
the date on which the Agent receives the notice; and

 

	(b)	
the date, if any, specified in the notice as the date on which the change will come into effect.

 

	26.15	
Notification. On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

 

	26.16	
Security over Lenders' rights. In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from the Borrowers or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights

 

- 66 -

 

under any Finance Document to secure obligations of that Lender including, without limitation:

 

	(a)	
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

 

	(b)	
in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;

 

except that no such charge, assignment or Security Interest shall:

 

		(i)	
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for Lender as a party to any of the Finance Documents; or

 

		(ii)	
require any payments to be made by the Borrowers or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

 

	26.17	
Consent to disclosure.  Each of the Borrowers authorises any of the Lenders to disclose all information related or connected to:

 

	(a)	
the Ships or any other vessel owned or operated by a Security Party;

 

	(b)	
the negotiation, drafting and content of this Agreement and the Finance Documents;

 

	(c)	
the Loan; or

 

	(d)	
any Security Party,

 

to any service provider (included but not limited to professional advisers, auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisers and brokers) which any of the Lenders may in its discretion deem necessary or desirable in connection with this Agreement or any other Finance Documents and/or the protection or enforcement of its rights thereunder.

 

	27.	
VARIATIONS AND WAIVERS

 

	27.1	
Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrowers, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

 

	27.2	
Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender and each Swap Bank":

 

	(a)	
a reduction in the Margin;

 

	(b)	
a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, or other sums payable under this Agreement;

 

	(c)	
an increase in any Lender's Commitment;

 

- 67 -

 

 

	(d)	
a change to the definition of "Majority Lenders", "Finance Documents", "Restricted Party", "Sanctions", "Sanctions Authority" or "Sanctions List";

 

	(e)	
a change to the preamble or to Clause 2, 3, 4, 5.1, 11.19, 11.20, 11.21, 17, 19 or 30;

 

	(f)	
a change to Clause 3 or this Clause 27;

 

	(g)	
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

 

	(h)	
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.

 

	27.3	
Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

 

	(a)	
a provision of this Agreement or another Finance Document; or

 

	(b)	
an Event of Default; or

 

	(c)	
a breach by any of the Borrowers or a Security Party of an obligation under a Finance Document or the general law; or

 

	(d)	
any right or remedy conferred by any Finance Document or by the general law, and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

 

	27.4	
Notification of Variation or Waiver. No variation or waiver may be made before the date falling ten (10) Business Days after the terms of that variation or waiver have been notified by the Agent to the Lenders, unless each Lender is a FATCA Protected Lender. The Agent shall notify the Lenders reasonably promptly of any variations or waivers proposed by the Borrowers.

 

	27.5	
Variation or Waiver: FATCA.

 

	(a)	
Notwithstanding the foregoing, if the Agent or a Lender reasonably believes that an amendment or waiver may constitute a "material modification" for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and the Agent accordingly, that amendment or waiver may, subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender (as the case may be).

 

	(b)	
The consent of a Lender shall not be required pursuant to paragraph (a) above if that Lender is a FATCA Protected Lender.

 

	28.	
NOTICES

 

	28.1	
General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

 

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	28.2	
Addresses for communications. A notice by letter or fax shall be sent:

 

	
(a)

	
to a Borrower:

	
c/o TMS Bulkers Ltd.

	 	 	
11 Fragoklissias Street

	 	 	
151 24 Marousi

	 	 	
Greece

	 	 	 
	 	 	
Email: finance@tms-management.org

	 	 	 
	
(b)

	
to a Lender/Swap Bank:

	
At the address below its name in Schedule 1 or

	 	 	
Schedule 2 or (as the case may require) in the relevant Transfer Certificate;

	 	 	 
	
(c)

	
to the Arranger and

	
ABN AMRO Bank N.V.

	 	
Security Trustee:

	
93 Coolsingel

	 	 	
3012 AE

	 	 	
Rotterdam

	 	 	
The Netherlands

	 	 	 
	 	 	
Fax No: +31 10 401 5323

	 	 	
Attn: Global Transportation and Logistics

	 	 	 
	
(d)

	
to the Agent:

	
ABN AMRO Bank N.V.

	 	 	
Daalsesingel 71

	 	 	
3511 SW Utrecht

	 	 	
The Netherlands, EA8550

	 	 	 
	 	 	
Fax: +31 20 628 6985

	 	 	
Email: agency.shipping@nl.abnamro.com

	 	 	
Attn: Agency Syndicated Loans (PAC EA 8550)

	 	 	 

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders, the Swap Banks and the Security Parties.

 

	28.3	
Effective date of notices. Subject to Clauses 28.4 and 28.5:

 

	(a)	
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

 

	(b)	
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

 

	28.4	
Service outside business hours. However, if under Clause 28.3 a notice would be deemed to be served:

 

	(a)	
on a day which is not a business day in the place of receipt; or

 

	(b)	
on such a business day, but after 5 p.m. local time; the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

 

	28.5	
Illegible notices. Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within one hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

 

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	28.6	
Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

 

	(a)	
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

 

	(b)	
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

 

	28.7	
Electronic communication.

 

	(a)	
Any communication to be made between the Agent and a Lender or a Swap Bank under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

 

		(i)	
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

 

		(ii)	
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

		(iii)	
notify each other of any change to their respective addresses or any other such information supplied to them.

 

	(b)	
Any electronic communication made between the Agent and a Lender or a Swap Bank will be effective only when actually received in readable form and, in the case of any electronic communication made by a Creditor Party to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose

 

	28.8	
English language. Any notice under or in connection with a Finance Document shall be in English.

 

	28.9	
Meaning of "notice". In this Clause 28, "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

 

	28.10	
Use of websites.

 

	(a)	
Unless otherwise agreed, the Borrowers shall satisfy their obligation under this Agreement to deliver any information by submitting the information to the Agent for posting onto the Intralinks or Debt domain system or other electronic website designated by the Agent (the "Designated Website").

 

	(b)	
The Agent shall supply each Lender and each Borrower with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrowers and the Agent in order for the Borrowers and the Lenders to obtain their respective passwords.

 

	(c)	
The Borrowers and the Lenders shall promptly upon any of them becoming aware of its occurrence notify the Agent if:

 

		(i)	
the Designated Website cannot be accessed due to technical failure;

 

		(ii)	
the password specifications for the Designated Website change;

 

- 70 -

 

		(iii)	
any new information which is required to be provided under this Agreement is posted onto the Designated Website;

 

		(iv)	
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

 

		(v)	
the Borrowers or any Lender becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

 

If the Agent is notified under paragraphs (i) or (v) above, and until the Agent and each Lender is satisfied that the circumstances giving rise to the notification are no longer continuing, (aa) all information to be provided by the Borrowers under this Agreement after the date of that notice shall be supplied to the Agent in paper form and (bb) any Lender may request that the Borrowers supply such Lender, through the Agent, with a paper copy of any information required to be provided under this Agreement. The Borrowers shall comply with any such request within ten (10) Business Days.

 

	29.	
SUPPLEMENTAL

 

	29.1	
Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to each Creditor Party are:

 

	(a)	
cumulative;

 

	(b)	
may be exercised as often as appears expedient; and

 

	(c)	
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

 

	29.2	
Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

 

	29.3	
Third Party rights. A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

 

	29.4	
Counterparts. A Finance Document may be executed in any number of counterparts.

 

	29.5	
Parallel Debt.

 

	(a)	
Each of the Borrowers irrevocably and unconditionally undertakes to pay to the Security Trustee amounts equal to, and in the currency or currencies of, its Corresponding Debt.

 

	(b)	
The Parallel Debt of the Borrowers:

 

		(i)	
shall become due and payable at the same time as its Corresponding Debt;

 

		(ii)	
is independent and separate from, and without prejudice to, its Corresponding Debt.

 

	(c)	
For purposes of this Clause 29.5, the Security Trustee:

 

		(i)	
is the independent and separate creditor of the Parallel Debt;

 

		(ii)	
acts in its own name and not as agent, representative or trustee of the Creditor Parties and its claims in respect of the Parallel Debt shall not be held on trust; and

 

- 71 -

 

		(iii)	
shall have the independent and separate right to demand payment of the Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

 

	(d)	
The Parallel Debt of the Borrowers shall be (i) decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged and (ii) increased to the extent to that its Corresponding Debt has increased; and the Corresponding Debt of the Borrowers shall be (iii) decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged and (iv) increased to the extent that its Parallel Debt has increased, in each case provided that the Parallel Debt of the Borrowers shall never exceed its Corresponding Debt.

 

	(e)	
All amounts received or recovered by the Security Trustee in connection with this Clause 29.5, to the extent permitted by applicable law, shall be applied in accordance with Clause 17 (Application of receipts).

 

	(f)	
In this Clause 29.5:

 

		(i)	
"Corresponding Debt" means any amount which each of the Borrowers owes to a Creditor Party under or in connection with the Finance Documents; and

 

		(ii)	
"Parallel Debt" means any amount which each of the Borrowers owes to the Security Trustee under this Clause.

 

	29.6	
PATRIOT Act Notice.  Each of the Agent and the Lenders hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies the Borrowers and each Security Party, which information includes the name and address of the Borrowers and each Security Party and such other information that will allow the Agent and each of the Lenders to identify the Borrowers and each Security Party in accordance with the PATRIOT Act.

 

	30.	
JOINT AND SEVERAL LIABILITY

 

	30.1	
General. All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.

 

	30.2	
No impairment of Borrowers' obligations. The liabilities and obligations of a Borrower shall not be impaired by:

 

	(a)	
this Agreement being or later becoming void, unenforceable or illegal as regards any of the other Borrowers;

 

	(b)	
any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any of the other Borrowers;

 

	(c)	
any Lender or the Security Trustee releasing any of the other Borrowers or any Security Interest created by a Finance Document; or

 

	(d)	
any combination of the foregoing.

 

	30.3	
Principal debtors. Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of any of the other Borrowers under this Agreement.

 

- 72 -

 

 

	30.4	
Subordination. Subject to Clause 30.5, during the Security Period, none of the Borrowers shall:

 

	(a)	
claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

 

	(b)	
take or enforce any form of security from any other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or

 

	(c)	
set off such an amount against any sum due from it to any other Borrower; or

 

	(d)	
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower or other Security Party; or

 

	(e)	
exercise or assert any combination of the foregoing.

 

	30.5	
Borrowers' required action. If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 30.4, in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent's notice.

 

	31.	
LAW AND JURISDICTION

 

	31.1	
English law. This Agreement (and any non-contractual obligations connected with it) shall be governed by, and construed in accordance with, English law.

 

	31.2	
Exclusive English jurisdiction. Subject to Clause 31.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.

 

	31.3	
Choice of forum for the exclusive benefit of the Creditor Parties. Clause 31.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

 

	(a)	
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and

 

	(b)	
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

 

No Borrower shall commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Agreement.

 

	31.4	
Process agent. Each of the Borrowers irrevocably appoints Ince Process Agents Ltd at their registered office for the time being, presently at Aldgate Tower, 2 Leman Street, London El 8QN, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.

 

	31.5	
Creditor Party rights unaffected. Nothing in this Clause 31 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

 

- 73 -

 

 

	31.6	
Meaning of "proceedings". In this Clause 31, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure.

 

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year first before written.

 

 

- 74 -

 

SCHEDULE 1

 

LENDERS AND COMMITMENTS

 

 

	
Lender

	
Lending Office

	
Commitment

 

	
ABN AMRO Bank N.V.

	
93 Coolsingel

3012 AE

Rotterdam

The Netherlands

Fax No: +31 10 401 5323

Attn: Global Transportation and Logistics

	
$30,000,000

 

 

 

 

 

 

- 75 -

 

 

SCHEDULE 2

 

SWAP BANKS

 

	
Swap Bank

	
Booking Office

 

	
ABN AMRO Bank N.V.

	
Gustav Mahlerlann 10,

1082 PP Amsterdam

 The Netherlands

 

Fax No:- +31 10 459 05 38

Email: mdu@nl.abnamro.com

	 

 

 

 

 

 

 

- 76 -

 

SCHEDULE 3

 

DRAWDOWN NOTICE

 

To:          ABN AMRO Bank N.V.

93 Coolsingel 3012 AE

Rotterdam

The Netherlands

 

Attention: Global Transportation and Logistics

2018

 

DRAWDOWN NOTICE

 

	1.	
We refer to the loan agreement (the "Loan Agreement") dated                                     2018 and made between (1) ourselves as joint and several Borrowers, (2) the Lenders and the Swap Banks referred to therein and (3) yourselves as Arranger, Agent and as Security Trustee in connection with a senior secured term loan of up to US$30,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

 

2.          We request to borrow as follows:

 

(a)          Amount: US$[                  ];

 

(b)          Drawdown Date: [                ] 2018;

 

(c)          Duration of the first Interest Period shall be [          ] months;

 

	(d)	
Payment instructions : account of [                       ] and numbered [                   ] with [                 ] of [                ].

 

	3.	
We represent and warrant that:

 

	(a)	
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;

 

	(b)	
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.

 

	4.	
This notice cannot be revoked without the prior consent of the Majority Lenders.

 

	5.	
[We authorise you to deduct the arrangement fee and any accrued commitment fee referred to in Clause 20.1 from the amount of the Loan.]

 

________________________________________

 

Attorney-in-Fact

for and on behalf of

AMATHUS OWNING COMPANY LIMITED

NOUFARO OWNERS INC.

 

- 77 -

 

SCHEDULE 4

 

CONDITION PRECEDENT DOCUMENTS

 

PART A

 

The following are the documents referred to in Clause 9.1(a):

 

	1.	
A duly executed original of this Agreement, the Agency and Trust Deed, the Master Agreement, the Master Agreement Security Deed, the Corporate Guarantee, the Shares Pledges, [the Negative Pledge Letter] and the Accounts Pledges.

 

	2.	
Copies of the certificate of incorporation and constitutional documents of each of the Borrowers, the Shareholder and the Corporate Guarantor, together with up to date evidence of the good standing of each of the Borrowers, the Shareholder and the Corporate Guarantor.

 

	3.	
Originals of resolutions of the directors and (if required) shareholders of each of the Borrowers, the Shareholder and the Corporate Guarantor authorising the execution of each of the Finance Documents referred to at 1 above to which each of the Borrowers, the Shareholder and the Corporate Guarantor is a party and (in the case of the Borrowers) authorising named officers to give the Drawdown Notice and other notices under this Agreement.

 

	4.	
The original of any power of attorney under which any Finance Document referred to at 1 above is executed on behalf of each of the Borrowers, the Shareholder and the Corporate Guarantor.

 

	5.	
Copies of all consents which the Borrowers or any Security Party requires to enter into, or make any payment under, any Finance Document.

 

	6.	
All documentation required by the Agent in respect of the Borrowers, the Shareholder and the Corporate Guarantor and any other Security Party pursuant to each Lender's "Know Your Customer" requirements, together with such other documents or evidence as the Lenders may reasonably require with respect to money laundering regulations and PATRIOT Act and OFAC compliance requirements, including (but not limited to) copies of the passports of the directors and officers of the Borrowers.

 

	7.	
A copy of any Time Charter (and all addenda thereto), together with evidence of authorisation with respect to the execution thereof by the relevant Borrower and (if available) by the Time Charterer.

 

	S.	
Documentary evidence that the agent for service of process named in Clause 30 of this Agreement has accepted its appointment.

 

	9.	
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Agent may require.

 

	10.	
The originals of any mandates or other documents required in connection with the opening and operation of the Operating Accounts and the Retention Account.

 

	11.	
Receipt by the Agent and the Arranger of all fees and commitment commission due under Clause 20 of this Agreement.

 

	12.	
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

 

- 78 -

 

PART B

 

The following are the documents referred to in Clause 9.1(b):

 

	1.	
A duly executed original of the Mortgage, the Deed of Covenant and the General Assignment over "JUDD" (together with all notices of assignment and acknowledgements required thereunder), together with original resolutions of directors/shareholders and a power of attorney of Noufaro with respect to the execution of such Finance Documents by Noufaro.

 

	2.	
Documentary evidence that:

 

	(a)	
"JUDD" is definitively and permanently registered in the name of Noufaro under the Approved Flag;

 

	(b)	
"JUDD" is in the absolute and unencumbered ownership of Noufaro save as contemplated by the Finance Documents relating to that Ship;

 

	(c)	
"JUDD" is classed with the highest available class with Lloyd's Register of Shipping (or IACS equivalent) free of outstanding recommendations and conditions of such classification society in accordance with the provisions of Clause 14.3 (b);

 

	(d)	
the Mortgage in respect of "JUDD" has been executed by Noufaro and has been, or will immediately following drawdown of the Loan be, registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State; and

 

	(e)	
"JUDD" is insured in accordance with the provisions of this Agreement and all requirements therein in respect of Insurances shall have been complied with.

 

	3.	
Documents establishing that "JUDD" is managed by the Approved Manager on terms acceptable to the Agent, together with:

 

	(a)	
the Approved Manager's Undertaking in respect of that Ship, together with a copy of the ship management agreement for that Ship;

 

	(b)	
copies of the Document of Compliance and Safety Management Certificate and ISSC;

 

	(c)	
copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to Noufaro have requested not later than 2 days before the Drawdown Date;

 

	(d)	
subordination letters from any other co-assureds named in the insurance policies for that Ship (other than Noufaro and the Approved Manager), in the form required by the Agent; and

 

	(e)	
a copy of the Inventory of Hazardous Materials in respect of "JUDD" or, if no such copy is available, a letter issued by Noufaro in favour of the Agent undertaking to provide the Agent with a copy of such Inventory of Hazardous Materials at the time of the next scheduled dry-docking of "JUDD".

 

	4.	
Two valuations of "JUDD" addressed to the Agent (at the cost and the expense of the Borrowers), prepared in accordance with Clause 15 of this Agreement and not older than fourteen (14) days prior to the Drawdown Date, in a form satisfactory to the Agent.

 

	5.	
Evidence that the sum of US$500,000 is standing to the credit of the Operating Account held by Noufaro with the Agent, by way of required minimum free liquidity pursuant to the provisions of Clause 12.5 of this Agreement.

 

- 79 -

 

 

	6.	
A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the Insurances for "JUDD" as the Agent may require, and at the cost and expense of the Borrowers.

 

	7.	
A duly executed original of the Mortgage, the Deed of Covenant and the General Assignment over "RARAKA" (together with all notices of assignment and acknowledgements required thereunder), together with original resolutions of directors/shareholders and a power of attorney of Amathus with respect to the execution of such Finance Documents by Amathus.

 

	8.	
Documentary evidence that:

 

	(a)	
"RARAKA" is definitively and permanently registered in the name of Amathus under the Approved Flag;

 

	(b)	
"RARAKA" is in the absolute and unencumbered ownership of Amathus save as contemplated by the Finance Documents relating to that Ship;

 

	(c)	
"RARAKA" is classed with the highest available class with Lloyd's Register of Shipping (or IACS equivalent) free of outstanding recommendations and conditions of such classification society in accordance with the provisions of Clause 14.3 (b);

 

	(d)	
the Mortgage in respect of "RARAKA" has been executed by Amathus and has been, or will immediately following drawdown of the Loan be, registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State; and

 

	(e)	
"RARAKA" insured in accordance with the provisions of this Agreement and all requirements therein in respect of Insurances shall have been complied with.

 

	9.	
Documents establishing that "RARAKA" is managed by the Approved Manager on terms acceptable to the Agent, together with:

 

	(a)	
the Approved Manager's Undertaking in respect of that Ship and a copy of the ship management agreement for that Ship;

 

	(b)	
copies of the Document of Compliance and Safety Management Certificate and ISSC;

 

	(c)	
copies of such other ISM Code or ISPS Code documentation as the Lender may by written notice to Amathus have requested not later than 2 days before the Drawdown Date;

 

	(d)	
subordination letters from any other co-assureds named in the insurance policies for that Ship (other than Amathus and the Approved Manager), in the form required by the Agent; and

 

	(e)	
a copy of the inventory of hazardous materials in respect of "RARAKA".

 

	10.	
Two valuations of "RARAKA" addressed to the Agent (at the cost and the expense of the Borrowers), prepared in accordance with Clause 15 of this Agreement and not older than fourteen (14) days prior to the Drawdown Date, in a form satisfactory to the Agent.

 

	11.	
Evidence that the sum of US$500,000 is standing to the credit of the Operating Account held by Amathus with the Agent, by way of required minimum free liquidity pursuant to the provisions of Clause 12.5 of this Agreement.

 

	12.	
A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the Insurances for "RARAKA" as the Agent may require, and at the cost and expense of the Borrowers.

 

- 80 -

 

 

	13.	
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Republic of Malta and such other relevant jurisdictions as the Agent may require.

 

	14.	
Receipt by the Agent of all commitment commission and any other fees due under Clause 20 of this Agreement.

 

Every copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrowers.

 

 

 

 

- 81 -

 

SCHEDULE 5

 

DESIGNATION NOTICE

 

To:          ABN AMRO Bank N.V.

Daalsesingel 71

3511 SW Utrecht

The Netherlands, EA 8550

 Attn: Agency Syndicated Loans (PAC EA 8550)

 

2018

 

Dear Sirs,

 

Loan Agreement dated                             2018 (the "Loan Agreement") and made between (i) Amathus Owning Company Limited and Noufaro Owners Inc. as joint and several Borrowers, (ii) the Lenders, (iii) the Swap Bank, (iv) and yourselves as Agent, Arranger, Swap Bank and Security Trustee

 

We refer to:

 

 

	1	
the Loan Agreement;

 

	2	
the Master Agreement dated as of                       2018 made between ourselves and ABN AMRO Bank N.V.; and

 

	3	
a Confirmation delivered pursuant to the said Master Agreement dated                            2018 and addressed by ABN AMRO Bank N.V. to us.

 

In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.

 

Yours faithfully, 

 

____________________________________

 

for and on behalf of

AMATHUS OWNING COMPANY LIMITED

NOUFARO OWNERS INC.

 

 

- 82 -

SCHEDULE 6

 

TRANSFER CERTIFICATE

 

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

 

	To:	
ABN AMRO Bank N.V. for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender and each Swap Bank, as defined in the Loan Agreement referred to below.

 

	1.	
This Certificate relates to a Loan Agreement (the "Loan Agreement") dated 2018 and made between (1) Amathus Owning Company Limited and Noufaro Owners Inc., as joint and several borrowers (together the "Borrowers"), (2) the banks and financial institutions named therein as Lenders, (3) the banks and financial institutions named therein as Swap Banks and (4) ABN AMRO Bank N.V. as Arranger, Agent and Security Trustee, for a secured term loan of up to US$30,000,000.

 

	2.	
In this Certificate:

 

"the Relevant Parties" means the Agent, each Borrower, each Security Party, the Security Trustee, each Lender and each Swap Bank;

 

"the Transferor" means [full name] of [lending office]; 

 

"the Transferee" means [full name] of [lending office].

 

Terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate.

 

	3.	
The effective date of this Certificate is                    Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

 

	4.	
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [         ] per cent. of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:

 

Contribution                                                                                          Amount transferred

 

	5.	
By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[         ]] [from [         ] per cent. of its Commitment, which percentage represents $[         ]] and the Transferee acquires a Commitment of $[         ].

 

	6.	
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

 

- 83 -

 

	7.	
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

 

	8.	
The Transferor:

 

	(a)	
warrants to the Transferee and each Relevant Party that:

 

		(i)	
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and

 

		(ii)	
this Certificate is valid and binding as regards the Transferor;

 

	(b)	
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4;

 

	(c)	
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

 

	9.	
The Transferee:

 

	(a)	
confirms that it has received a copy of the Loan Agreement and each other Finance Document;

 

	(b)	
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Arranger, the Security Trustee, any Lender or any Swap Bank in the event that:

 

		(i)	
the Finance Documents prove to be invalid or ineffective,

 

		(ii)	
any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under the Finance Documents;

 

		(iii)	
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of any of the Borrowers or any Security Party under the Finance Documents;

 

	(c)	
agrees that it will have no rights of recourse on any ground against the Agent, the Arranger, the Security Trustee, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;

 

	(d)	
warrants to the Transferor and each Relevant Party (i) that it has full capacity to enter into this transaction and has taken all corporate action and obtained all official consents which it needs to take or obtain in connection with this transaction; and (ii) that this Certificate is valid and binding as regards the Transferee; and

 

	(e)	
confirms the accuracy of the administrative details set out below regarding the Transferee.

 

	10.	
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

 

- 84 -

 

 

	11.	
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 above as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

 

	
[Name of Transferor]

	
[Name of Transferee]

 

	
By:

	
By:

 

	
Date:

	
Date:

 

Agent

 

Signed for itself and for and on behalf of itself

 as Agent and for every other Relevant Party

 

ABN AMRO Bank N.V.

 

By:

 

Date:

 

- 85 -

 

Administrative Details of Transferee

 

 

Name of Transferee:

 

Lending Office:

 

Contact Person

 (Loan Administration Department):

 

Telephone:

 

Telex:

 

Fax:

 

Contact Person

 (Credit Administration Department):

 

Telephone:

 

Telex:

 

Fax:

 

Account for payments:

 

 

 

 

 

		Note:	
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.

 

- 86 -

 

SCHEDULE 7

 

FORM OF COMPLIANCE CERTIFICATE

 

To:          ABN AMRO Bank N.V

Daalsesingel 71

3511 SW Utrecht

The Netherlands, EA 8550

Attn: Loans Administration

 

2018

 

Dear Sirs,

 

Loan Agreement dated                       2018 (the "Loan Agreement") made between (i) Amathus Owning Company Limited and Noufaro Owners Inc. as joint and several Borrowers, (ii) the Lenders and the Swap Banks referred to therein and (iii) ABN AMRO Bank N.V. as Arranger, Agent and Security Trustee in connection with a loan facility of up to $30,000,000.

 

Guarantee dated          2018 (the "Guarantee") made beteween DryShips Inc. as Guarantor and the Security Trustee.

 

Terms defined in the Loan Agreement and the Guarantee have their defined meanings when used in this Compliance Certificate.

 

We enclose with this certificate a copy of the [quarterly unaudited consolidated management prepared financial statements of the Obligors for the 3 month period ending on [               ]/[the annual audited consolidated financial statements of the Obligors for the financial year ending on [        ]]. The financial statements (i) have been prepared in accordance with all applicable laws and GAAP consistently applied, (ii) give a true and fair view of the state of affairs of the Obligors at the date of the financial statements and of their respective profit for the period to which the financial statements relate and (iii) fully disclose or provide for all significant liabilities of the Obligors.

 

We also enclose copies of (i) the relevant valuation certificates for the Ships (prepared in accordance with Clause 15.3 of the Loan Agreement) and (ii) the relevant valuation certificates for the other Fleet Vessels (prepared in accordance with Clause 15.3 of the Loan Agreement), which are used in calculating the Total Market Value Adjusted Assets of the Guarantor and the Fair Market Value of the Ships and the other Fleet Vessels as at [                    ].

 

Each of the Borrowers and the Guarantor represents that no Event of Default has occurred as at the date of this certificate [(except for the following matter or event [set out all material details of matter or event]).]

 

We now certify that, as at [                    ]:

 

	(a)	
the asset cover ratio under Clause 15.1 of the Loan Agreement is [               ]%;

 

	(b)	
a minimum daily cash balance of $500,000 was maintained on each Operating Account (free of any Security Interest other than the Accounts Pledges) throughout the [3] [12] months ending as at the date to which the enclosed accounts are prepared;

 

	(c)	
the Consolidated Leverage Ratio under clause 11.21 (a) of the Guarantee is [                    ];

 

	(d)	
the minimum liquidity under clause 11.21 (b) of the Guarantee is $[                    ];

 

	(e)	
the Working Capital under clause 11.21 (c) of the Guarantee is $[                    ]; and

 

	(f)	
The Market Adjusted Net Worth under clause 11.21 (d) of the Guarantee is $[                    ].

 

- 87 -

 

 

We hereby repeat the representations and warranties set out in Clause 10 of the Loan Agreement and Clause 10 of the Guarantee, and confirm that they remain true and correct by reference to the facts and circumstances existing on the date of this Compliance Certificate.

 

This certificate shall be governed by, and construed in accordance with, English law. 

 

Signed

 

_________________________

[                         ]

for and on behalf of

Amathus Owning Company Limited

Noufaro Owners Inc.

_________________________

[                         ]

 for and on behalf of

DryShips Inc.

- 88 -

 

EXECUTION PAGES

 

BORROWERS

 

	
SIGNED by Savvas Tournis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Savvas Tournis

	 
	
AMATHUS OWNING COMPANY LIMITED

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	
SIGNED by Savvas Tournis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Savvas Tournis

	 
	
NOUFARO OWNERS INC.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	
LENDERS

	 	 	 
	 	 	 	 
	
SIGNED by Stelios Andreiotis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Stelios Andreiotis

	 
	
ABN AMRO BANK N.V.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	
SWAP BANKS

	 	 	 
	 	 	 	 
	
SIGNED by Stelios Andreiotis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Stelios Andreiotis

	 
	
ABN AMRO BANK N.V.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
ARRANGER

	 	 	 
	 	 	 	 
	
SIGNED by Stelios Andreiotis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Stelios Andreiotis

	 
	
ABN AMRO BANK N.V.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	
AGENT

	 	 	 
	 	 	 	 
	
SIGNED by Stelios Andreiotis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Stelios Andreiotis

	 
	
ABN AMRO BANK N.V.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	
SECURITY TRUSTEE

	 	 	 
	 	 	 	 
	
SIGNED by Stelios Andreiotis

	
)

	 	 
	
for and on behalf of

	
)

	
/s/ Stelios Andreiotis

	 
	
ABN AMRO BANK N.V.

	
)

	 	 
	
in the presence of:

	
)

	 	 
	 	 	 	 
	
/s/ Anastasia G. Pavli

	 	 	 
	
Anastasia G. Pavli

	 	 	 
	
Attorney-at-Law

	 	 	 
	
52 Ag. Konstantinou Street – 151 24 Marousi

	 	 	 
	
Athens, Greece

	 	 	 
	
Tel: +30 210 6140580

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

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