Schedule 1: The Original lenders

Schedule 2: Conditions Precedent

Schedule 3: requests

Schedule 4: Form of transfer certificate

Schedule 5: Form of Compliance Certificate

Schedule 6: Form of Interest Notification

Schedule 7: Form of Valuation Certificate

THIS AGREEMENT is dated 20 October 2015 and made between:

(1)	DHT LEOPARD LIMITED., The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 , Marshall Islands as borrower   (the “ Borrower ”);

(2)	DHT HOLDINGS, INC., The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 , Marshall Islands   as guarantor (the “ Guarantor ”);

(3)	NORDEA BANK NORGE ASA, acting through its offices at   Middelthuns gate 17, 0368 Oslo, Norway; and

DNB BANK ASA , acting through its offices at Dronning Eufemias gate 30, 0191 Oslo, Norway as bookrunners and mandated lead arrangers (the “ Mandated Lead Arrangers ”);

(4)	THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the “ Original Lenders ”);

(5)	NORDEA BANK FINLAND PLC acting through its offices at   Aleksanterinkatu 36, Helsinki, Finland; and

DNB BANK ASA , acting through its offices at Dronning Eufemias gate 30, 0191 Oslo, Norway (the “ Hedging Banks ”);

(6)	NORDEA BANK NORGE ASA , acting through its offices at Middelthuns gate 17, 0368 Oslo, Norway as agent of the other Finance Parties (the “ Agent ”); and

(7)	NORDEA BANK NORGE ASA , acting through its offices at Middelthuns gate 17, 0368 Oslo, Norway as security agent of the other Finance Parties and the Hedging Banks (the “ Security Agent ”).

 

 

IT IS AGREED as follows:

 SECTION 1
INTERPRETATION

 

1.	DEFINITIONS AND INTERPRETATION

1.1	Definitions

In this Agreement:

“ Account Bank ” means Nordea Bank Norge ASA.

“ 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.

“ Agreement ” means this facility agreement, as it may be amended, supplemented and varied in writing from time to time, including its schedules.

“ Approved Brokers ” means Nordic Shipping, Clarksons Platou Limited, SSY, Poten & Partners, Arrow and Fearnleys.

“ Approved Ship Registry ” means the Marshall Islands Ship Registry, the Hong Kong Ship Registry and any ship registry as approved in writing by the Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Assignment Agreement ” means a general assignment agreement for an assignment on first priority of the Earnings, the insurance proceeds in respect of all Insurances, the Earnings Accounts, any claims of Borrower in respect of any Intra Group Loans and any rights under any Hedging Agreement to be executed by the Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance acceptable to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“ Availability Period ” means the period from and including the date of this Agreement to and including the earlier of (i) the scheduled delivery date of the Vessel taking into account the maximum permissible delays under the relevant Shipbuilding Contract before the Borrower is entitled to cancel such Shipbuilding Contract, or (ii) 31 April 2016, or such later date as the Agent (on behalf of the Finance Parties) may agree.

“ Available Facility ” means the aggregate of each Lender’s Commitment.

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

(a)

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

exceeds:

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London 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.

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in Oslo, London and New York City. For the purpose of Utilisation, Seoul, Hong Kong and Singapore (or any other relevant place of payment of the proceeds) shall be included.

“ Cash ” means the aggregate amount of cash, bank deposits and fully marketable securities (issued by an A rated or better financial institution), excluding restricted cash which is not at the disposal of the relevant company.

“ Change of Control ” means if any person or a group of persons acting in concert gain ownership or control of 33 1/3 % or more of the voting rights of the Guarantor. For the purposes of this definition, “ control ” of the Guarantor means (i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 33 1/3 % of the maximum number of votes that might be cast at a general meeting of the Guarantor, and/or (ii) the holding beneficially of more than 33 1/3 % of the issued share capital of the Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), and “ acting in concert ” means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of 33 1/3 % of the Guarantor.

“ Charterer ” means any charterer approved by the Agent (on behalf of the Finance Parties) under a Charterparty.

“ Charterparty ” means any time or bareboat charter or any pool agreement or any other agreements of employment entered or to be entered into between the Borrower and the relevant Charterer for the chartering of the Vessel for a period exceeding 24 Months, in form and substance acceptable to the Agent (on behalf of the Finance Parties).

“ Code ” means the US Internal Revenue Code of 1986 as amended.

“ Commercial Management Agreement ” means any agreement made or to be made between the Borrower and the Commercial Manager for the commercial management of the Vessel.

“ Commercial Manager ” means any commercial manager acceptable to the Agent (on behalf of the Finance Parties).

“ Commitment ” means:

(a)

in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 ( The Original Lenders ) 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 substantially in the form set out in Schedule 5 ( Form of Compliance Certificate ).

“ Confidential Information ” means all information relating to any Obligor, 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 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 Obligor or any of its advisers; or

(b)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or any of its advisers,

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 information that:

(i)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 37 ( Confidentiality ); or

(ii)

is identified in writing at the time of delivery as non-confidential by any Obligor or any of its advisers; or

(iii)

is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) 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 any Obligor 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.

“ Current Assets ” means the aggregate of the current assets of a company as determined in accordance with GAAP.

“ Current Liabilities ” means the aggregate of the current liabilities of a company, however excluding the current portion of long term debt maturing six (6) Months or more after the date of computation as well as excluding any balloon instalments under any financing arrangement.

“ Deed of   Assignment ” means one or more general deed of assignment in respect of any Charterparty (including any guarantees or other security for the Charterer’s obligations thereunder), to be executed by the Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks), in form and substance acceptable to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Default ” means an Event of Default or any event or circumstance specified in Clause 24 ( Events of Default ) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“ Delivery Date ” means in respect of the Vessel, the date of actual delivery of the Vessel to the Borrower.

“ DOC ” means in relation to the Technical Manager a valid document of compliance relevant to the Vessel issued to such company pursuant to paragraph 13.2 of the ISM Code.

“ Earnings ” means all moneys whatsoever which are now or later become, payable (actually or contingently) to the Borrower in respect of and/or arising out of the use of or operation of the Vessel, including (but not limited to):

(a)

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

(b)

any claim under any guarantees related to hire payable to the Vessel as a consequence of the operation of the Vessel;

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

any other money which arise out of the use of or operation of the Vessel and moneys whatsoever due or to become due to the Borrower from third parties in relation to the Vessel.

“ Earnings Accounts ” means any account to be nominated and designated as Earnings Accounts for this purpose by the Borrower or the Guarantor in cooperation with the Agent, with the Account Bank, or such other accounts as designated by the Agent.

“ Environmental Claim ” means any claim, proceeding, formal notice or investigation by any person or company in respect of any Environmental Law or Environmental Permits.

“ Environmental Law ” means any applicable law or regulation which relates to:

(a)

the pollution or protection of the environment or to the carriage of material which is capable of polluting the environment;

(b)

harm to or the protection of human health;

(c)

the conditions of the workplace; or

(d)

any emission or substance capable of causing harm to any living organism or the environment.

“ Environmental Permits ” means any permit, licence, consent, approval and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of business conducted on or from the properties owned or used by the relevant company.

“ Event of Default ” means any event or circumstance specified as such in Clause 24 ( Events of Default ).

“ Excess Values ” means the positive or negative (as the case may be) difference between (i) the Market Value (in respect of the Vessel) or the market value as established in accordance with the procedure described in the definition of “ Market Value ” (in respect of other vessels), and (ii) the book value of the Vessel.

“ FA Act ” means the Norwegian Financial Agreements Act of 25 June 1999 No. 46 (in No. finansavtaleloven ).

“ 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 Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

“ Fallback Interest Period ” means three (3) months.

“ FATCA ” means:

(a)

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

(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 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)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2015;

(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 2017; 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 2017, 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.

“ Fee Letter ” means any letter or letters between the Agent and the Borrower setting out any of the fees referred to in Clause 11 ( Fees ).

“ Finance Document ” means this Agreement, any Security Document, any Fee Letter and any other document designated as such by the Agent and the Borrower.

“ Finance Party ” means the Agent, the Security Agent, a Mandated Lead Arranger or a Lender.

“ Financial Indebtedness ” means any indebtedness for or in respect of:

(a)

moneys borrowed;

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

(i)

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

“ Funding Rate ” means any individual rate notified by a Lender to the Agent pursuant to Clause 10.4 ( Cost of Funds ).

“ GAAP ” means generally accepted accounting principles such as IFRS.

“ Guarantee ” means the irrevocable, unconditional and on-first-demand guarantee given by the Guarantor under Clause 18 ( Guarantee and Indemnity ) of this Agreement.

“ Hedging Agreement ” means any master agreement (as amended at any time) and/or any swap transaction, confirmation, schedule or hedging agreement pursuant to such master agreement for the purpose of hedging the interest rate risk entered or to be entered into between the Borrower and the Hedging Banks.

“ Historic Screen Rate ” means, in relation to any Loan, the most recent applicable Screen Rate for USD and for a period equal in length to the Interest Period of that Loan and which is as of a day which is no more than one (1) day before the Quotation Day.

“ Holding Company ” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

“ IAPPC ” means the International Air Pollution Prevention Certificate required under Regulation 6 of the International Convention for the Prevention of Pollution From Ships 1973/1978 (MARPOL).

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

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

“ Interest Payment Date ” means the last day of each Interest Period, and in respect of Interest Periods exceeding three (3) months, also the date falling three (3) months after the commencement thereof, and each date falling at quarterly intervals thereafter.

“ Interest Period ” means, in relation to the Loan, each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

“ Intra Group Loans ”   means any loans granted by (i) the Borrower to any of their Affiliates or (ii) the Guarantor to the Borrower.

“ Intra Group Loans Assignment Agreement ” means one or more general assignment agreements on first priority of any claims any Obligor may have in respect of any Intra Group Loans, to be executed by any Obligor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Interpolated Historic Screen Rate ” means, in relation to any 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 most recent applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and

(b)

the most recent applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,

each for USD and each of which is as of a day which is no more than one (1) day before the Quotation Day.

“ Interpolated Screen Rate ” means, in relation to any 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 that Loan; and

(b)

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

each for the relevant period of time for USD.

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

“ 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.

“ ISSC ” means an International Ship Security Certificate issued by the Classification Society confirming that the Vessel is in compliance with 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 25 ( Changes to the Lenders ),

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

“ LIBOR ” ( London Interbank Offered Rate) means, in relation to the Loan:

(a)

the applicable Screen Rate at 11:00 GMT hours on the Quotation Day for the offering of deposits in USD and for a period equal in length to the Interest Period of that Loan; or

(b)

as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate) ,

and, if such rate is below zero, LIBOR will be deemed to be zero.

“ Loan ” means the total principal amount outstanding for the time being under the Facility.

“ Majority Lenders ” means:

(a)

if there are no amounts then outstanding, a Lender or Lenders whose Commitments aggregate more than 66 2 / 3 % 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 % of the Loan.

“ Margin ” means two point twenty five per cent (2.25 %) per annum.

“ Market Value ” means the fair market value of the Vessel as (i) determined by one (1) independent Approved Broker appointed by the Borrower, or (ii) at the request of the Agent (on behalf of any Lender), calculated as the average of valuations of the Vessel obtained from two (2) Approved Brokers (of which one is appointed by the Borrower and one is appointed by the Agent), in each case, with or without physical inspection of the Vessel (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and a willing seller, on an “as is, where is” basis, free of any existing charter or other contract of employment and/or pool arrangement, provided however that if the higher of the two valuations is more than one hundred and ten per cent (110%) of the lower, a third valuation shall be obtained from another Approved Broker and the fair market value shall be the arithmetic average of the three (3) valuations.

“ Material Adverse Effect ” means any event or occurrence that in the reasonable opinion of the Lenders has or would have materially adversely affected or could materially adversely affect:

(a)

the business, condition (financial or otherwise), operations, performance, assets or prospects of an Obligor since the date at which its latest audited financial statements were prepared; or

(b)

the ability of an Obligor to perform its obligations under the Finance Documents; or

(c)

the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to, any Finance Document; or

(d)

the right or remedy of a Finance Party in respect of a Finance Document.

“ Maturity Date ” means five (5) years from the Utilisation Date, but in any event no later than 31 March 2021.

“ 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)

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.

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

“ Mortgage ” means the first priority mortgage (and deed of covenants collateral thereto (if applicable)), to be executed and recorded by the Borrower against the Vessel in favour of the Finance Parties and the Hedging Banks in the relevant Approved Ship Registry, in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Mortgaged Assets ” means:

(a)

the Vessel;

(b)

the Earnings;

(c)

any Charterparty;

(d)

the Shares;

(e)

any Hedging Agreement;

(f)

any Intra Group Loans;

(g)

the Insurances; and

(h)

the Earnings Accounts.

“ Obligor ” means the Borrower or the Guarantor.

“ Original Financial Statements ” means the audited financial statements of the Guarantor for the financial year ended 31 December 2014.

“ Outstanding Indebtedness ” means the aggregate of all sums of money at any time and from time to time owing to the Finance Parties under or pursuant to the Finance Documents.

“ Party ” means a party to this Agreement.

“ Pledge of Earnings Accounts ” means a pledge of the Earnings Accounts to be executed by the Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Pledge of Shares ” means a pledge of the Shares to be executed by the Guarantor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

“ Quotation Day ” means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period.

“ Reference Bank Quotation ” means any quotation supplied to the 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 Agent at its request by the Reference Banks:

(a)

(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in USD 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; or

(b)

if different, as the rate (if any and 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,

and, if such rate is below zero, Reference Bank Rate will be deemed to be zero.

“ Reference Banks ” means the Mandated Lead Arrangers and such other banks or financial institutions as may be agreed between the Borrower and the Lenders.

“ Repayment Date ” means a date on which a repayment instalment is required to be made pursuant to Clause 6 ( Repayment ).

“ Repeating Representations ” means each of the representations set out in Clause 19 ( Representations ).

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

“ Restricted Party ” means a person:

(a)

that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);

(b)

that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws which attach legal effect to being domiciled, registered as located in, having its main place of business in and/or being incorporated under the laws of such country;

(c)

that is directly or indirectly owned or controlled (by 50% or more) by a person referred to in paragraphs (a) and/or (b) above; or

(d)

with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

“ Sanctions Authority ” means the Norwegian State, the United Nations, the European Union, the member states of the European Union (including without limitation the United Kingdom), the United States of America, any country to which any Obligor or any Affiliate of any of them is bound, and any authority acting on behalf of any of them in connection with Sanctions Laws including without limitation, the Office of Foreign Assets Control of the US Department of Treasury, the United States Department of State, and Her Majesty’s Treasury.

“ Sanctions Laws ” means any economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

“ Sanctions List ” means any list of persons or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority.

“ Screen   Rate ” means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for USD for the relevant period, displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate), or such other information service which publishes that rate from time to time in place of 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 Borrower.

“ Security ” means a mortgage, charge, pledge, lien, assignment, subordination or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

“ Security Document ” means each document listed in Clause 17 ( Security ) and any other document agreement agreed between the Parties to be a Security Document.

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

(a)

all amounts which have become due for payment by the Borrower under the Finance Documents and any Hedging Agreement have been paid;

(b)

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

(c)

none of the Obligors have any future or contingent liability under any provision of this Agreement, the other Finance Documents or any Hedging Agreement; and

(d)

the Agent, the other Finance Parties or any Hedging Bank do not consider that there is a significant risk that any payment or transaction under a Finance Document or any Hedging Agreement would be set aside, or would have to be reversed or adjusted, in any present or possible future proceeding relating to a Finance Document or any Hedging Agreement or any asset covered (or previously covered) by a Security created by a Finance Document.

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

“ Shares ” means all current and future shares in the Borrower.

“ Shipbuilding Contract ” means the Shipbuilding Contract entered into between the Guarantor as buyer and the Yard as builder for the construction of the Vessel.

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

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

“ Subsidiary ” means an entity of which a person has direct or indirect control (whether through the ownership of voting capital, by contract or otherwise) or owns directly or indirectly more than 50 % of the shares and for this purpose an entity shall be treated as controlled by another if that entity is able to direct its affairs and/or to control the composition of the board of directors or equivalent body.

“ 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).

“ Technical Management Agreement ” means any technical management agreement made between the Technical Manager and the Borrower for the technical management of the Vessel.

“ Technical Manager ” means any technical manager acceptable to the Agent (on behalf of the Finance Parties).

“ Total Commitments ” means the aggregate of the Commitments being USD 50,000,000 at the date of this Agreement.

“ Total Interest Bearing Debt ” means all debt and financial instruments (including financial leases) which bear interests.

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

(a)

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

(b)

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

“ Total Loss Date ” means:

(a)

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

(b)

in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date falling three (3) months after notice of abandonment of the Vessel was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the Borrower with the Vessel’s insurers in which the insurers agree to treat the Vessel as a total loss; or

(c)

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

“ Transaction Documents ” means the Finance Documents, the Shipbuilding Contract, any Hedging Agreement, any Technical Management Agreement, any Commercial Management Agreement and any Charterparty, together with the other documents contemplated herein or therein.

“ Transfer Certificate ” means a certificate substantially in the form set out in Schedule 4 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrower.

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

(a)

the proposed Transfer Date specified in the relevant Transfer Certificate; and

(b)

the date on which the Agent executes the relevant Transfer Certificate.

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

“ US Tax Obligor ” means:

(a)

a Borrower which is resident for tax purposes in the US; or

(b)

an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

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

“ Utilisation ” means the utilisation of the Facility.

“ Utilisation Date ” means the date of a Utilisation, being the date on which the Loan is to be made.

“ Utilisation Request ” means a notice substantially in the form set out in Schedule 3 ( Requests ).

“ Valuation Certificate ” means a certificate substantially in the form set out in Schedule 7 ( Form of Valuation Certificate ).

“ Value Adjusted Tangible Net Worth ” means Value Adjusted Total Assets, less the value of all liabilities and intangible assets, as determined by GAAP.

“ Value Adjusted Total Assets ” means on consolidated basis, the book value of all assets (both tangible and intangible) at the relevant time, as determined by GAAP, adjusted with Excess Values.

“ VAT ” means value added tax and any other tax of a similar nature in the relevant jurisdiction.

“ Vessel ” means one (1) 300,000 dead weight ton new building VLCC Vessel to be built at the Yard with Hull Number 2783 for USD 98,800,000 and to be registered in an Approved Ship Registry in the name of the Borrower on the Delivery Date. Delivery of the Vessel is scheduled to take place in the first quarter of 2016.

“ Working Capital ” means Current Assets less Current Liabilities.

“ Yard ” means Hyundai Heavy Industries Co. Ltd., Ulsan, Korea.

1.2	Construction

(a)

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

(i)

the “ Agent ”, the “ Security Agent ”, any “ Mandated Lead Arranger ”, any “ Finance Party ”, any “ Lender ”, the Hedging Banks, or any “ Party ” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

(ii)

“ assets ” includes present and future properties, revenues and rights of every description;

(iii)

a “ Finance Document ” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

(iv)

“ 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;

(v)

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

(vi)

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 of any regulatory, self-regulatory or other authority or organisation;

(vii)

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

(viii)

words importing the singular shall include the plural and vice versa; and

(ix)

a time of day is a reference to Oslo time unless specified otherwise.

(b)

Section, Clause and Schedule headings are for ease of reference only.

(c)

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.

(d)

A 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.

(e)

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

SECTION 2
THE FACILITY

 

 

2.	THE FACILITY

2.1	The Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrower a USD secured term loan facility in the amount being the lower of (i) USD 50,000,000, and (ii) 50 % of the Market Value of the Vessel at the Delivery Date.

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 or the Hedging Banks under or in connection with the Finance Documents and any Hedging Agreement are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrower and/or the Guarantor shall be a separate and independent debt.

(c)

A Finance Party or the Hedging Banks may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents and any Hedging Agreement. The rights of the Hedging Banks shall be subordinated to the rights of the Finance Parties under the Finance Documents.

3.

PURPOSE

3.1

Purpose

The Borrower shall apply all amounts borrowed by it under the Facility towards the part financing of the Vessel and for general corporate purposes.

3.2	Monitoring

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

4.	CONDITIONS OF UTILISATION

4.1	Initial conditions precedent

(a)

The Finance Parties’ obligations hereunder are subject to the Agent’s receipt of all of the documents and other evidence listed in Schedule 2 ( Conditions precedent ) Part I no later than 30 October 2015. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

(b)

The Borrower may not deliver the Utilisation Request unless the Agent has received all of the documents and other evidence listed in Schedule 2 ( Conditions precedent ) Part II, except those documents which specifically will only be available on the Utilisation Date or within another specified date. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

4.2	Further conditions precedent

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

(a)

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

(b)

the Repeating Representations to be made by the Borrower and the Guarantor are true in all material respects.

4.3	Maximum number of drawings

The Facility may be drawn in one (1) drawing.

4.4	Form and content

All documents and evidence delivered to the Agent pursuant to this Clause 4 ( Conditions of Utilisation ) shall:

(a)

be in form and substance satisfactory to the Agent;

(b)

if required by the Agent, be in original; and

(c)

if required by the Agent, be certified, notarized, legalized or attested in a manner acceptable to the Agent.

4.5	Waiver of conditions precedent

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

5.	UTILISATION

5.1	Delivery of the Utilisation Request

The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than 12:00 noon Oslo time on the date falling three (3) Business Days prior to the Utilisation Date.

5.2	Completion of the Utilisation Request

The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(a)

the proposed Utilisation Date is a Business Day within the Availability Period;

(b)

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

(c)

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

5.3	Currency and amount

(a)

The currency specified in the Utilisation Request must be USD.

(b)

The amount of the proposed Loan must be an amount which is not more than the Available Facility.

5.4	Lenders’ participation

(a)

If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.

(b)

The amount of each Lender’s participation in the Loan will be equal to the proportion borne by its Commitment to the Available Facility immediately prior to making the Loan.

(c)

The Agent shall notify each Lender of the amount of the Loan and the amount of its participation in the Loan upon receipt of the Utilisation Notice from the Borrower.

5.5	Cancellation of Commitment

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period. Also, any part of the Commitments outstanding after the Utilisation shall be immediately cancelled.

6.

REPAYMENT

6.1	Repayment of Loans

(a)

The Borrower shall repay the Loan by 20 (twenty) consecutive quarterly repayment instalments commencing three (3) months after the Utilisation Date, each instalment in the amount of USD 625,000.00, in total USD 12,500,000.00, plus a balloon payment of USD 37,500,000.00 payable concurrently with the last instalment. Should the Utilisation of the Loan be lower than USD 50,000,000, each instalment and the balloon shall be reduced accordingly on a pro-rata basis. Should the instalments and balloon be reduced as aforesaid, the Agent shall deliver a statement to the Lenders and the Borrower with details of the new repayment schedule.

(b)

Any Outstanding Indebtedness is due and payable on the Maturity Date.

6.2	Re-borrowing

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

7.	PREPAYMENT AND CANCELLATION

7.1	Voluntary cancellation

The Borrower may, if they give the Agent not less than five (5) days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 500,000 or multiples thereof) of the Available Facility. Any cancellation under this Clause 7.1 ( Voluntary cancellation) shall reduce the Commitments of the Lenders proportionately.

7.2	Voluntary prepayment of Loans

(a)

The Borrower may, if they give the Agent not less than three (3) Business Days (or such shorter period as the Majority Lenders may agree) prior written 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 USD 500,000 or multiples thereof).

(b)

Any prepayment under this Clause 7.2 ( Voluntary prepayment of Loans ) shall be applied against the remaining instalments excluding the balloon payment on a pro-rata basis.

7.3	Illegality

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

(a)

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

(b)

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

(c)

the Borrower 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 date specified by the relevant Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

7.4	Total Loss or sale of the Vessel

If the Vessel is sold or suffers a Total Loss, the Agent shall cancel the Total Commitments and declare the Outstanding Indebtedness immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable.

Any prepayment under this Clause 7.4 ( Total Loss or sale of the Vessel ) shall (i) in case of a sale be made on or before the date on which the sale is completed by delivery of the Vessel to the buyer, or (ii) in the case of a Total Loss, on the earlier of the date falling ninety (90) days after the Total Loss Date and the receipt by the Agent of the proceeds of Insurance relating to such Total Loss (or in the event of a requisition for title of the Vessel, immediately after the occurrence of such requisition of title), and be applied as full repayment of the Outstanding Indebtedness.

7.5	Market Value

(a)

If the Market Value of the Vessel is less than 135 % of the Loan the Borrower shall, unless otherwise agreed with the Agent (on behalf of the Lenders) within fifteen (15) Business Days, either

(i)

prepay the Loan or a part of the Loan (as the case may be) required to restore the aforesaid ratio; or

(ii)

provide the Lenders with such additional security, in form and substance satisfactory to the Lenders (it being understood that cash collateral in USD shall be deemed acceptable and be valued at par).

(b)

Any prepayment under this Clause 7.5 ( Market Value ) shall be applied first against the balloon payment and then against the instalments in inverse order of maturity.

7.6	Change of Control

If a Change of Control occurs,

(a)

the Borrower shall promptly notify the Agent upon becoming aware of that event;

(b)

a Lender shall not be obliged to fund the Utilisation;

(c)

the Agent shall cancel the Total Commitments; and

(d)

the Borrower shall within thirty (30) Business Days prepay the Outstanding Indebtedness in full.

7.7	Right of replacement or repayment and cancellation in relation to a single Lender

(a)

If:

(i)

any sum payable to any Lender by the Borrower and/or the Guarantor is required to be increased under paragraph (c) of Clause 12.2 ( Tax gross-up ); or

(ii)

any Lender claims indemnification from the Borrower under Clause 12.3 ( Tax indemnity ) or Clause 13.1 ( Increased costs ),

the Borrower 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 procure the repayment of that Lender’s participation in the Loan or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.

(b)

On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

(c)

On the last day of each Interest Period which ends after the Borrower have given notice of cancellation under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender’s participation in the Loan.

(d)

The replacement of a Lender pursuant to paragraph (a) above shall be subject to the following conditions:

(i)

the Borrower shall have no right to replace the Agent;

(ii)

neither the Agent nor any Lender shall have any obligation to find a replacement Lender; and

(iii)

in no event shall the Lender replaced under paragraph (a) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

7.8	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 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, subject to any Break Costs, without premium or penalty.

(c)

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

(d)

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

(e)

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

(f)

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

(g)

If all or part of the Loan is repaid or prepaid and is not available for redrawing, an amount of the Commitments (equal to the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this paragraph (g) shall reduce the Commitments of the Lenders proportionately.

8.

INTEREST

8.1	Calculation of interest

(a)

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

(i)

Margin; and

(ii)

LIBOR.

(b)

For the purpose of the Norwegian Financial Contracts Act of 1999 the Borrower has been informed of the nominal and effective interest rate by a letter from the Agent substantially in the form set out in Schedule 6 ( Form of Interest Notification ).

(c)

Interest shall be calculated on the actual number of days elapsed on the basis of a three hundred and sixty (360) day year.

8.2	Payment of interest

The Borrower shall pay accrued interest on the Loan on each Interest Payment Date.

8.3	Default interest

(a)

If the Borrower or Guarantor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two (2) per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably) above the Margin. Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Borrower and/or the Guarantor on demand by the Agent.

(b)

If any overdue amount 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:

(i)

the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

(ii)

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

(c)

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

8.4	Notification of rates of interest

The Agent shall promptly notify the Lenders and the Borrower of (i) the determination of a rate of interest under this Agreement and (ii) the Funding Rate relating to the Loan.

9.	INTEREST PERIODS

9.1	Selection of Interest Periods

(a)

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

(b)

Each Selection Notice for the Loan is irrevocable and must be delivered to the Agent by the Borrower not later than 12:00 noon Oslo time on the date falling three (3) Business Days prior to the last day of the current Interest Period.

(c)

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

(d)

The Borrower may select an Interest Period of three (3) or six (6) Months or any such longer periods as the Agent may agree.

(e)

An Interest Period for the Loan shall not extend beyond the Maturity Date.

(f)

The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period shall start on the last day of its preceding Interest Period.

9.2	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, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.

(b)

Shortened Interest Period: If no Screen Rate is available for LIBOR for:

(i)

USD; or

(ii)

the Interest Period of the Loan and it is not possible to calculate the Interpolated Screen Rate,

the Interest Period of the Loan shall (if it is longer than the applicable Fallback Interest Period) be shortened to the applicable Fallback Interest Period and the applicable LIBOR for that shortened Interest Period shall be determined pursuant to the definition of “LIBOR”.

(c)

Shortened Interest Period and Historic Screen Rate: If the Interest Period of the Loan is, after giving effect to paragraph (b) above, either the applicable Fallback Interest Period or shorter than the applicable Fallback Interest Period and, in either case, no Screen Rate is available for LIBOR for:

(i)

USD; or

(ii)

the Interest Period of the Loan and it is not possible to calculate the Interpolated Screen Rate,

the applicable LIBOR shall be the Historic Screen Rate for that Loan.

(d)

Shortened Interest Period and Interpolated Historic Screen Rate: If paragraph (c) above applies but no Historic Screen Rate is available for the Interest Period of the Loan, the applicable LIBOR shall be the Interpolated Historic Screen Rate for a period equal in length to the Interest Period of that Loan.

(e)

Reference Bank Rate: If paragraph (d) above applies but it is not possible to calculate the Interpolated Historic Screen Rate, the Interest Period of that Loan shall, if it has been shortened pursuant to paragraph (b) above, revert to its previous length and the applicable LIBOR shall be the Reference Bank Rate as of the relevant time for USD and for a period equal in length to the Interest Period of that Loan.

(f)

Cost of funds: If paragraph (e) above applies but no Reference Bank Rate is available for USD or the relevant Interest Period there shall be no LIBOR for that Loan and Clause 10.4 ( Cost of funds ) shall apply to that 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 noon on the Quotation Day, 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 Agent receives notifications from a Lender or Lenders that the cost to it of funding its participation in the Loan from the wholesale market for USD would be in excess of LIBOR then Clause 10.4 ( Cost of funds ) shall apply to that Loan 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 relevant 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 Agent by that Lender as soon as practicable and in any event within five (5) Business Days of the first day of that Interest Period (or, if earlier, on the date falling 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 the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select.

(b)

If this Clause 10.4 ( Cost of funds ) applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest.

(c)

Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

(d)

If this Clause 10.4 ( Cost of funds ) applies but any Lender does not supply a quotation by the time specified in sub-paragraph (a)(ii) above the rate of interest shall be calculated on the basis of the quotations of the remaining Lenders.

10.5	Break Costs

(a)

The Borrower shall, within three (3) 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 Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

(b)

Each Lender shall, as soon as reasonably practicable after a demand by the 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 Borrower shall pay to the Agent (for the account of each Lender) a fee computed at the rate of forty per cent (40 %) of the Margin per annum and calculated on the undrawn portion of the Facility from 18 June 2015.

(b)

The accrued commitment fee is payable on the date of this Agreement and thereafter on the last day of each fiscal quarter after the date of this Agreement and, if cancelled in full, on the time the cancellation is effective.

12.	TAX GROSS UP AND INDEMNITIES

12.1	Definitions

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 ).

12.2	Tax gross-up

(a)

All payments under the Facility shall be made free and clear of all present and future taxes, levies or duties of any nature whatsoever, levied either now or at any future time.

(b)

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

(c)

The Borrower 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 Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and the Guarantor.

(d)

If a Tax Deduction is required by law to be made by the Borrower and/or the Guarantor, 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.

(e)

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.

(f)

Within thirty (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 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.

12.3	Tax indemnity

(a)

The Obligors shall (within three (3) Business Days of demand by the 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 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 Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

(d)

A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 ( Tax indemnity ), notify the 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 either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and

(b)

that Finance Party has obtained, utilised and retained that Tax Credit,

the Finance Party shall pay an amount to that 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 that Obligor.

12.5	Stamp taxes

The Borrower shall pay and, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance 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 set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, that Party shall pay to the 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 such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).

(b)

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 thereof 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.

12.7	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)

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 (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.

(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 (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 Finance Party to do anything , and 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 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 made 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.

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 the Borrower and the Agent shall notify the other Finance Parties.

13.	INCREASED COSTS

13.1	Increased costs

(a)

Subject to Clause 13.3 ( Exceptions ) the Borrower shall, within three (3) Business Days of a demand by the 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 after the date of this Agreement.

(b)

In this Agreement “ Increased Costs ” means:

(i)

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

(ii)

an additional or increased cost; or

(iii)

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

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its 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 Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

(b)

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

13.3	Exceptions

(a)

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

(i)

attributable to a Tax Deduction required by law to be made by the Borrower and/or the Guarantor;

(ii)

attributable to a FATCA Deduction required to be made by a Party;

(iii)

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);

(iv)

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

(v)

attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“ Basel II ”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Lender or any of its Affiliates)

(b)

In this Clause 13.3 ( Exceptions) ,

(i)

a reference to a “ Tax Deduction ” has the same meaning given to the term in Clause 12.1 ( Definitions ); and

(ii)

“ Basel III ” means 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, and any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

14.	OTHER INDEMNITIES

14.1	Currency indemnity

(a)

If any sum due from the Obligors 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;

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

The Obligors shall, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party in any jurisdiction (including but not limited to any cost, loss or liability incurred by any of the Finance Parties arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions Laws) as a result of:

(a)

the occurrence of any Event of Default;

(b)

a failure by the Borrower and/or the Guarantor 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 29 ( Sharing among the Finance Parties );

(c)

funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in the Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement;

(d)

a third party claim related to the Finance Documents, the Obligors or the Vessel, hereunder any Environmental Claims or any non-compliance by any Obligor, the Technical Manager, the Commercial Manager and/or any Charterer with applicable laws including Sanctions Laws;

(e)

any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred by the Agent or any other Finance Party as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, in relation to any Sanctions Laws; or

(f)

the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower,

in each case other than by reason of default or negligence by that Finance Party alone.

14.3	Indemnity to the Agent

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

(a)

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

(b)

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

15.	MITIGATION BY THE LENDERS

15.1	Mitigation

(a)

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.3 ( Illegality ), Clause 12 ( Tax gross-up and indemnities ) or Clause 13 ( Increased costs ) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b)

Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

15.2	Limitation of liability

(a)

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

(b)

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

16.	COSTS AND EXPENSES

16.1	Transaction expenses

The Borrower shall promptly on demand pay the Agent, the Finance Parties and the Hedging Banks the amount of all costs and third party expenses (including legal fees, travel expenses and out of pocket expenses) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:

(a)

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

(b)

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

16.2	Amendment and enforcement costs

The Borrower shall, within three (3) Business Days of demand, reimburse the Agent and any Finance Party or Hedging Bank for the amount of all duly documented costs and expenses (including but not limited to legal fees and other professional fees) incurred by the Agent and any such Finance Party or Hedging Bank in connection with:

(a)

responding to, evaluating, negotiating or complying with a request or requirement for any amendment, waiver or consent;

(b)

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

(c)

any amendment or variation of a Finance Document; and

(d)

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

For the avoidance of doubt, costs payable by the Borrower under Clause 16.1 ( Transaction expenses ) and this Clause 16.2 ( Amendment and enforcement costs ) remain payable whether or not any Utilisation is ever made.

17.

SECURITY

17.1

Security

The obligations and liabilities of the Borrower and the Guarantor under the Finance Documents and any Hedging Agreement, whether present and future, actual or contingent, whether as primary obligor or as guarantor, including (without limitation) the Borrower’s obligation to repay the Loan together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrower towards the Finance Parties or the Hedging Banks in connection with this Agreement or any Hedging Agreement, shall at any time until all amounts due to the Finance Parties or the Hedging Banks under any Finance Document and any Hedging Agreement have been paid and/or repaid in full, be secured on a cross-collateralized basis by the following security:

(a)

the Mortgage;

(b)

the Guarantee;

(c)

the Assignment Agreement;

(d)

any Pledge of Earnings Accounts;

(e)

any Intra Group Loans Assignment Agreement;

(f)

any Deed of Assignment; and

(g)

the Pledge of Shares, including customary power of attorney for sale of the Shares and signed but undated letters of resignation from each director.

and any other document that may have been or shall from time to time hereafter be executed as Security for the Borrower’s obligations under or pursuant to the Finance Documents and any Hedging Agreement.

The Security Documents shall rank with first priority and shall include any obligations under the Finance Documents and any Hedging Agreement, always subject to the provision of Clause 30.5 ( Partial Payments ).

17.2	Perfection etc.

The Borrower undertakes to ensure that the Security Documents are duly executed by the parties thereto in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) and/or the Lenders (as the case may be) in accordance with Clause 4 ( Conditions of Utilisation ), legally valid and in full force and effect, and to execute or procure the execution of such further documentation as the Security Agent may reasonable require in order for the relevant Finance Parties and the Hedging Banks, to maintain the security position envisaged hereunder.

17.3	Further assignment of Earnings and Charterparty and Shareholders Loans

In the event that the Borrower enters into a Charterparty, the Borrower shall prior to the relevant commencement date use commercially reasonable efforts to assign by way of a Deed of Assignment such Charterparty and any Earnings accruing thereunder in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

In the event that any of the Obligors enter into any Intra Group Loans, the relevant Obligor shall prior to the relevant commencement date assign by way of an Intra Group Loans Assignment Agreement such claims the relevant Obligor may have thereunder in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

17.4	Security - Hedging Agreement

The Borrower’s obligations and liabilities under any Hedging Agreement, whether present and future, actual or contingent, whether as primary obligor or as guarantor, together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrower towards a Hedging Bank in connection with any Hedging Agreement, shall at any time until all amounts due to a Hedging Bank under any Hedging Agreement have been paid and/or repaid in full, be secured by the Security Documents and the guarantee liabilities of the Guarantor pursuant to Clause 18 ( Guarantee and indemnity ), however on subordinated basis to the rights of the other Finance Parties.

18.	GUARANTEE AND INDEMNITY

18.1	Guarantee and indemnity

The Guarantor irrevocably and unconditionally:

(a)

guarantees to each Finance Party and the Hedging Banks punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents and any Hedging Agreement.

(b)

undertakes with each Finance Party and the Hedging Banks that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document and any Hedging Agreement, it shall immediately on demand pay that amount as if it was the principal obligor; and

(c)

agrees with each Finance Party and the Hedging Banks 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 or Hedging Banks immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document and any Hedging Agreement on the date when it would have been due. The amount payable by the relevant Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 ( Guarantee and indemnity ) if the amount claimed had been recoverable on the basis of a guarantee;

provided, however, that the maximum guarantee liability of the Guarantor hereunder shall always be limited to USD 60,000,000 plus (i) any interest, default interest, Break Cost or other costs, fees and expenses related to the Borrower’s obligations under the Finance Documents and any Hedging Agreement and (ii) any default interest or other costs, fees and expenses related to the liability of the relevant Guarantor hereunder.

18.2	Continuing guarantee

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

18.3	Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party or the Hedging Banks 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 18 ( Guarantee and indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.4	Waiver of defences

The obligations of the Guarantor under this Clause 18 ( Guarantee and indemnity ) will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18 ( Guarantee and indemnity ) (without limitation and whether or not known to it or any Finance Party or the Hedging Banks) including:

(a)

any time, waiver or consent granted to, or composition with, the Borrower or other person;

(b)

the release of the Borrower or any other person under the terms of any composition or arrangement with any creditor of the Borrower;

(c)

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, the 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;

(d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Borrower 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 Hedging Agreement 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, any Hedging Agreement or other document or security;

(f)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Hedging Agreement or any other document or security; or

(g)

any insolvency or similar proceedings.

18.5	Immediate recourse

The Guarantor waives any right it may have of first requiring any Finance Party or the Hedging Banks (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Clause 18 ( Guarantee and indemnity ). This waiver applies irrespective of any law or any provision of a Finance Document and any Hedging Agreement to the contrary.

18.6	Appropriations

Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents and any Hedging Agreement have been irrevocably paid in full, each Finance Party and the Hedging Banks (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 Finance Party or Hedging Banks (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 18 ( Guarantee and indemnity ).

18.7	Deferral of the Guarantor’s rights

Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents and any Hedging Agreement have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by them of their obligations under the Finance Documents and any Hedging Agreement or by reason of any amount being payable, or liability arising, under this Clause 18 ( Guarantee and indemnity ):

(a)

to be indemnified by the Borrower;

(b)

to claim any contribution from any other guarantor of the Borrower’s obligations under the Finance Documents or any Hedging Agreement;

(c)

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

(d)

to bring legal or other proceedings for an order requiring the Borrower to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 18.1 ( Guarantee and indemnity );

(e)

to exercise any right of set-off against the Borrower; and/or

(f)

to claim or prove as a creditor of the Borrower in competition with any Finance Party or the Hedging Banks.

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 Finance Parties and the Hedging Banks by the Borrower under or in connection with the Finance Documents and any Hedging Agreement to be repaid in full on trust for the Finance Parties and the Hedging Banks and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 30 ( Payment mechanics ).

18.8	Additional security

The guarantee given by the Guarantor herein is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party or the Hedging Banks.

18.9	Norwegian Financial Agreements Act

The Guarantor specifically waives all rights under the provisions of the FA Act not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as indicated in the brackets):

(a)

§ 29 (as the Agent and/or any Finance Party and/or the Hedging Banks shall be entitled to exercise all its rights under this Agreement and applicable law in order to secure payment. Such rights shall include the right to set-off any credit balance in any currency, on any bank account the Guarantor might have with each of the Finance Parties or the Hedging Banks individually against the amount due);

(b)

§ 63 (1) – (2) (to be notified of an Event of Default hereunder and to be kept informed thereof);

(c)

§ 63 (3) (to be notified of any extension granted to the Borrower in payment of principal and/or interest);

(d)

§ 63 (4) (to be notified of the Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter);

(e)

§ 65 (3) (that its consent is required for it to be bound by amendments to the Finance Documents or any Hedging Agreement that may be detrimental to its interest);

(f)

§ 67 (2) (about any reduction of its liabilities hereunder, since no such reduction shall apply as long as any amount is outstanding under the Finance Documents and any Hedging Agreement);

(g)

§ 67 (4) (that its liabilities hereunder shall lapse after ten (10) years, as it shall remain liable hereunder as long as any amount is outstanding under any of the Finance Documents and any Hedging Agreement);

(h)

§ 70 (as it shall not have any right of subrogation into the rights of the Finance Parties and the Hedging Banks under the Finance Documents and any Hedging Agreement until and unless the Finance Parties and the Hedging Banks shall have received all amounts due or to become due to them under the Finance Documents and any Hedging Agreement);

(i)

§ 71 (as the Finance Parties and the Hedging Banks shall have no liability first to make demand upon or seek to enforce remedies against the Borrower or any other Security Interest provided in respect of the Borrower’s liabilities under the Finance Documents and any Hedging Agreement before demanding payment under or seeking to enforce its guarantee obligations hereunder);

(j)

§ 72 (as all interest and default interest due under any of the Finance Documents and any Hedging Agreement shall be secured by its obligations hereunder);

(k)

§ 73 (1) – (2) (as all costs and expenses related to a termination event or an Event of Default under this Agreement shall be secured by its guarantee obligations hereunder); and

(l)

§ 74 (1) – (2) (as it shall not make any claim against the Borrower for payment by reason of performance by it of its obligations under the Finance Documents and any Hedging Agreement until and unless the Finance Parties and the Hedging Banks first shall have received all amounts due or to become due to them under the Finance Documents and any Hedging Agreement).

18.10

Guarantee Limitations

The guarantee and liability set out in this Clause 18 ( Guarantee and indemnity ) does not apply to any liability if and to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of applicable provisions under the laws of the relevant jurisdiction of the Guarantor.

19.	REPRESENTATIONS

Each of the Borrower and the Guarantor makes the representations and warranties set out in this Clause 19 ( Representations ) to each Finance Party on the date of this Agreement.

19.1

Status

(a)

Each Obligor is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

(b)

Each Obligor and each of its Subsidiaries have the power to own its assets and carry on its business as it is being conducted.

(c)

No Obligor is a US Tax Obligor.

19.2	Binding obligations

(a)

The obligations expressed to be assumed by the relevant Obligor in each Finance Document are, subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to Clause 4 ( Conditions of Utilisation ), legal, valid, binding and enforceable obligations.

(b)

Save as provided herein or therein and/or as have been or shall be completed prior to the Utilisation Date, no registration, filing, payment of tax or fees or other formalities are necessary or desired to render the Finance Documents enforceable against the Obligors, and in respect of the Vessel, for the Mortgage to constitute valid and enforceable first priority mortgage over the Vessel.

19.3	Non-conflict with other obligations

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

(a)

any law, statute, rule or regulation applicable to it, or any order, judgment, decree or permit to which it is subject, including any law, statute, rule or regulation implemented to combat money laundering and bribery;

(b)

its or any of its Subsidiaries’ constitutional documents; or

(c)

any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries’ assets.

19.4	Power and authority

(a)

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

(b)

All necessary corporate, shareholder and other action have been taken by each Obligor to approve and authorize the execution of the Finance Documents and the Transaction Documents, the compliance with the provisions thereof and the performance of its obligations thereunder.

(c)

The Borrower acts for its own account by entering into the Finance Documents and obtaining the Facility.

19.5	Validity and admissibility in evidence

All Authorisations required or desirable:

(a)

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

(b)

to make the Finance Documents and the Transaction Documents admissible in evidence in its jurisdiction of incorporation; and

(c)

in connection with each Obligor’s business and ownership of assets,

have been obtained or effected and are in full force and effect, and there are no circumstances which indicate that any of the same are likely to be revoked in whole or in part.

19.6	Governing law and enforcement

(a)

The choice of Norwegian law and any other applicable law respectively as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.

(b)

Any judgment obtained in Norway and/or any other applicable jurisdiction in relation to a Finance Document will be recognised and enforced in the relevant Obligor’s jurisdiction of incorporation.

19.7	Insolvency

No corporate action, legal proceeding or other procedure or step described in Clause 24.6 ( Insolvency ), Clause 24.7 ( Insolvency proceedings ) or Clause 24.8 ( Creditors’ process ) is currently pending or, to its knowledge, threatened in relation to any Obligor, and none of the circumstances described in Clause 24.6 ( Insolvency ), Clause 24.7 ( Insolvency proceedings ) or Clause 24.8 ( Creditors’ process ) applies to any of the Obligors.

19.8	Deduction of Tax

No Obligor is required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.

19.9	No filing or stamp taxes

Under the law of the relevant Obligor’s jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents (other than the Mortgage and as otherwise stated in any legal opinion obtained by the Agent in connection with this Agreement).

19.10

No default

(a)

No Event of Default is continuing or might reasonably be expected to result from the making of the Utilisation.

(b)

No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on any Obligor or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which might have a Material Adverse Effect.

19.11

No misleading information

(a)

Any factual information provided by any Obligor 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 information provided by any Obligor has been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

(c)

Nothing has occurred or been omitted and no information has been given or withheld that results in the information provided by any Obligor being untrue or misleading in any material respect.

19.12

Financial statements

(a)

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

(b)

Its Original Financial Statements fairly represent its financial condition and operations (consolidated in the case of the Guarantor) during the relevant financial year.

(c)

There has been no material adverse change in its business or financial condition (or the business or consolidated financial condition of any Obligor) since the date of delivery of its latest financial statements.

19.13

Pari passu ranking

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

19.14

No proceedings pending or threatened

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor or any of its Subsidiaries.

19.15

Title

The relevant Obligor will hold the legal title and/or will be the beneficial party, as the case may be, to the Mortgaged Assets.

19.16

No security

None of the Mortgaged Assets will from the Utilisation Date be affected by any Security, and no Obligor will be a party to, nor is it or any of the Mortgaged Assets bound by any order, agreement or instrument under which it is, or in certain events may be, required to create, assume or permit to arise any Security over any of the Mortgaged Assets, save for (i) the Security created under the Security Documents, (ii) for liens (including but not limited to maritime liens defined as such pursuant to applicable law) arising solely by operation of law and/or in the ordinary course of business or (iii) otherwise as agreed with the Agent (on behalf of the Finance Parties and the Hedging Banks).

19.17

No immunity

No Obligor, nor any of their assets, are entitled to immunity from suit, execution, attachment or other legal process, and the relevant Obligor’s entry into of the Finance Documents and the Transaction Documents constitutes, and the exercise of its rights and performance of and compliance with its obligations under Finance Documents and the Transaction Documents will constitute, private and commercial acts done and performed for private and commercial purposes.

19.18

Ranking of Security Documents

The Security created by the Security Documents has or will have the ranking in priority which it is expressed to have in the Security Documents and the Security is not subject to any prior ranking.

19.19

Taxation

(a)

No Obligor is overdue in the filing of any Tax returns.

(b)

To the best of its knowledge and belief, no claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor with respect to Taxes which is reasonably likely to have a material adverse effect on its ability to perform its obligations under the Finance Documents.

(c)

The relevant Obligor is resident for Tax purposes only in the jurisdiction of its incorporation, unless the Agent shall have been otherwise informed in writing.

19.20

Environmental compliance

Each of the Borrower (and any of its Affiliates), the Technical Manager and any Charterers (if applicable) have performed and observed all Environmental Laws, Environmental Approvals and all other covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with the Vessel.

19.21

Environmental Claims

No Environmental Claim has been commenced or (to the best of its knowledge and belief, having made due and careful enquiry) is threatened against it where that claim has or is reasonably likely to have a material adverse effect on its ability to perform its obligations under the Finance Documents and the Transaction Documents.

19.22

ISM Code and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to the Borrower (or any of their Affiliates), the Technical Manager, any Charterers and the Vessel have been complied with.

19.23

The Vessel

The Vessel will on the Utilisation Date be:

(a)

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

(b)

registered in the name of the Borrower with the relevant Approved Ship Registry under the laws and flag applicable for the relevant Approved Ship Registry;

(c)

operationally seaworthy in every way and fit for service; and

(d)

classed with ABS or such other classification society as approved by the Agent, free of all overdue requirements and other recommendations.

19.24

Financial Indebtedness

No Obligor is in breach of or in default under any agreement or other instrument relating to Financial Indebtedness to which it is a party or by which it is bound (nor would it be with the giving of notice or lapse of time or both).

19.25

Sanctions

(a)

Each Obligor, each of their Affiliates, their joint ventures, and their respective directors, officers, employees, agents or representatives has been and is in compliance with Sanctions Laws;

(b)

No Obligor, nor any of their Affiliates, their joint ventures, and their respective directors, officers, employees, agents or representatives:

(i)

is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or

(ii)

is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

19.26

Repetition

The Repeating Representations are deemed to be made by each of the Borrower and the Guarantor by reference to the facts and circumstances then existing on the date of the Utilisation Request and the first day of each Interest Period and on the date of delivery of each Compliance Certificate (or, if no such Compliance Certificate is forwarded, on each day such certificate should have been forwarded to the Agent at the latest).

20.	INFORMATION UNDERTAKINGS

The undertakings in this Clause 20 ( Information undertakings ) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

20.1	Financial statements

The Borrower shall supply or procure to supply to the Agent copies for all the Lenders of:

(a)

as soon as they are available and public, but in any event with 120 days after the end of its financial year;

(i)

the audited consolidated financial statements of the Guarantor for that financial year;

(ii)

the unaudited management accounts (profit and loss statement and balance sheet) of the Borrower for that financial year;

(b)

as soon as they are available and public, but in any event within 90 days after the last day of each quarter the unaudited consolidated financial statements of the Guarantor for that financial quarter;

(c)

as soon as they are available, but in any event within 90 days after the end of its financial year, the financial projections of the Guarantor on an annual basis; and

(d)

such other financial and other information of any Obligor as the Lenders shall reasonably require from time to time.

20.2	Compliance Certificate

The Borrower shall supply to the Agent, with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 20.1 ( Financial statements ), a Compliance Certificate signed by the chief financial officer of the Guarantor setting out (in reasonable detail) computations as to compliance with Clause 21 ( Financial covenants ) as at the date as at which those financial statements were drawn up.

20.3	Requirements as to financial statements

(a)

The Guarantor shall procure that each set of financial statements delivered pursuant to Clause 20.1 ( 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 Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the relevant Obligor) deliver to the 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 Agent, to enable the Lenders to determine whether Clause 21 ( 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.

20.4	Information: miscellaneous