Exhibit 4.1

SHARE PURCHASE AGREEMENT

Between

Knutsen NYK Offshore Tankers AS

(as Seller)

And

KNOT Shuttle Tankers AS

(as Buyer)

for the sale and purchase of the shares in

Knutsen Shuttle Tankers 19 AS

SHARE PURCHASE AGREEMENT

This agreement (this “ Agreement ”) is entered into the 1 November 2016 between:

(1) Knutsen NYK Offshore Tankers AS , company registration no. 995 221 713

(the “ Seller ”), and

(2) KNOT Shuttle Tankers AS , company registration no. 998 942 829

(the “ Buyer ”).

The Seller and the Buyer are hereinafter individually referred to as a “ Party ” and jointly the “ Parties ”.

WHEREAS:

In this Agreement, the following definitions shall have the following meanings:

Subject to the terms and conditions set forth in this Agreement, the Seller agrees to sell, and the Buyer agrees to purchase, the Shares, together with all rights attached to them.

The Shares shall be transferred to the Buyer on the Closing Date, free and clear from any Encumbrances, other than pursuant to the Raquel Facility.

The Seller agrees to sell and transfer to the Buyer, and the Buyer agrees to purchase from the Seller for USD 116,500,000, less USD 79,500,000 of outstanding principal under the Raquel Facility (including the Facility Prepayment Amount) and less USD 24,018,943 of outstanding principal under the NYK Shareholder Loan (the “ Purchase Price ”), plus the Purchase Price Adjustments, all in accordance with and subject to the terms and conditions set forth in this Agreement, the Shares.

The Purchase Price is to be settled by way of a seller’s credit (the “ Seller’s Credit ”) in the amount of USD 12,981,057 from the Seller to the Buyer. In addition, the Seller shall extend a seller’s loan (the “ Seller’s Loan ”) in an amount of USD 12,018,943. The Seller’s Credit and the Seller’s Loan will be documented by way of a loan agreement in form and with content as set forth in Schedule 1 hereto. The obligations of the Buyer under the Seller’s Credit and the Seller’s Loan shall be guaranteed in full by the Partnership.

Subject to the satisfaction or waiver of the conditions set forth in Clause 6, the completion of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of the Seller at such time and date as the Parties agree.

At the Closing, the Seller shall:

At the Closing, the Buyer shall

(i) the Company’s working capital as of 00:01 hours CET on the Closing Date;

(ii) the Swap Balance;

(iii) the Capitalized Fees to be paid by the Buyer; and

(iv) the net intercompany balance between the Company and KNOT Management AS.

(the “ Purchase Price Adjustments ”).

The obligations of the Buyer to purchase the Shares and to take the other actions required to be taken by it at the Closing are subject to the satisfaction of each of the following conditions (any of which may be waived in whole or in part by the Buyer) on or before the Closing Date:

The obligations of the Seller to sell the Shares and to take the other actions required to be taken by it at the Closing are subject to the satisfaction of each of the following conditions (any of which may be waived in whole or in part by the Seller) on or before the Closing Date:

The obligations of Seller to sell the Shares and the obligations of Buyer to purchase the Shares are subject to the satisfaction (or waiver by each of Seller and Buyer) on or prior to the Closing Date of the following conditions:

The Buyer represents and warrants to the Seller that as of the Signing Date and on the Closing Date, unless otherwise expressly stated:

The Buyer is duly incorporated, validly existing and in good standing under the laws of Norway.

The Buyer has not been declared insolvent; become the subject of a petition in bankruptcy; had a receiver appointed with respect to it or to the Business or part thereof; entered into any arrangement with, or made an assignment for the benefit of, its creditors; or ceased to function as a going concern.

This Agreement and each other document or instrument delivered or to be delivered in connection with this Agreement has been duly authorised by all necessary corporate action(s) of the Buyer and constitutes or will, when executed, constitute valid and binding obligations of the Buyer enforceable in accordance with its respective terms.

The execution by the Buyer of this Agreement and each other document or instrument delivered or to be delivered in connection with it, and the performance by the Buyer of its obligations under this Agreement and the consummation of the transactions provided for in this Agreement, do not and will not result in a breach of any provision of the articles of association of the Buyer or of any applicable law, order, judgment or decree of any court or Governmental Authority or of any agreement to which the Buyer is bound.

The Buyer is not required to obtain any authorisations, consents, approvals or exemptions by any Governmental Authority in connection with the entering into or performance of its obligations under this Agreement.

The Seller represents and warrants to the Buyer as of the Signing Date and on the Closing Date, unless otherwise expressly stated:

Each of the Company and the Seller is duly incorporated, validly existing and in good standing under the laws of Norway.

Each of the Company and the Seller has not been declared insolvent; become the subject of a petition in bankruptcy; had a receiver appointed with respect to it or to the Business or part thereof; entered into any arrangement with, or made an assignment for the benefit of, its creditors; or ceased to function as a going concern.

This Agreement and each other document or instrument delivered or to be delivered in connection with this Agreement has been duly authorised by all necessary corporate action(s) of each of the Company and the Seller, as appropriate, and constitutes or will, when executed, constitute valid and binding obligations of each of the Company and the Seller, as appropriate, enforceable in accordance with its respective terms.

The execution by each of the Company and the Seller, as appropriate, of this Agreement and each other document or instrument delivered or to be delivered in connection with it, and the

performance by each of the Company and the Seller, as appropriate, of its obligations under this Agreement and the consummation of the transactions provided for in this Agreement, do not and will not result in a breach of any provision of the articles of association of each of the Company and the Seller, as appropriate, or of any applicable law, order, judgment or decree of any court or Governmental Authority or of any agreement to which each of the Company and the Seller, as appropriate, is bound.

Each of the Company and the Seller, as appropriate, is not required to obtain any authorisations, consents, approvals or exemptions by any Governmental Authority in connection with the entering into or performance of its obligations under this Agreement.

The Seller has full ownership to the Shares. The Shares are fully authorised, validly issued, fully paid and at Closing, free and clear from any Encumbrances, other than pursuant to the Raquel Facility.

There is no outstanding subscription, option or similar rights relating to the Shares.

The Company’s articles of association and shareholders’ register are true, accurate, up-to-date and complete.

The Seller has supplied to the Buyer true and correct copies of the Charter and any related documents, as amended to the Closing Date. The Charter is a valid and binding agreement of the Company enforceable against the Company in accordance with its terms and, to the knowledge of the Seller, the Charter is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with its terms.

The Accounts have been prepared in accordance with the Accounting Principles and in accordance with the books and records of the Company. The Accounts give a true and accurate view of the financial position, solvency, assets, liabilities, liquidity, cash flow and the result of the operations of the Company as of the Accounts Date.

Neither the Company nor the Vessel has any Encumbrances, or other liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, and whether due or to become due (including, without limitation, any liability for Taxes and interest, penalties and other charges payable with respect to any such liability or obligation), except for such liabilities or obligations arising under the Charter, the Raquel Facility, the NYK Shareholder Loan, the Swap Agreements, the management agreement relating to the Vessel with KNOT Management AS, the inter-company balances described in Clause 8.8 c) and the Encumbrances appearing in the ship registry of the Vessel and arising under the Raquel Facility and the Swap Agreements.

All loans and other financial facilities available to the Company have been made available for review by the Buyer.

No event has occurred which gives, or after notice or lapse of time, or both, would give any third party the right to call for repayment from the Company prior to normal maturity of any loan or other financial facility. The Company shall not be indebted, directly or indirectly, to any person who is an officer, director, stockholder or employee of any of the Seller or any spouse, child or other relative or any affiliate of any such person, nor shall any such officer, director, stockholder, employee, relative or affiliate be indebted to the Company.

At the Closing Date, the Company shall not be using assets in the Business that it neither owns nor has the right to use pursuant to written agreements with third parties. At the Closing Date, the assets of the Company will comprise all the assets necessary for carrying on the Business fully and effectively to the extent to which it is conducted at the Signing Date.

Since the Accounts Date, there has not occurred or arisen:

Each Material Agreement is in full force and effect. No other Material Agreements will be entered into by the Company prior the Closing Date without the prior consent of the Buyer (such consent not to be unreasonably withheld). The Company has fulfilled all material obligations required pursuant to the Material Agreements to have been performed by it prior to the Signing Date and has not waived any material rights thereunder.

There has not occurred any material default on the part of the Company under any of the Material Agreements, or to the knowledge of the Seller, on the part of any other party thereto, nor has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of the Company under any of the Material Agreements nor, to the knowledge of the Seller, has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of any other party to any of the Material Agreements.

The term “ Material Agreement ” means each agreement, contract or other undertaking by or of the Company (a) that is of material importance to the Business or (b) the value of which, in respect of total turnover during one year, is not less than NOK 500,000, provided, however, that such term includes the Charter, the Raquel Facility, the NYK Shareholder Loan and the Swap Agreements.

The Company maintains insurance policies on fire, theft, loss, disruption, product and general liability and other forms of insurance with reputable insurers that would reasonably be judged to be sound and required for the Business.

The Company’s insurance policies do not contain any provisions regarding a change of control or ownership of the insured.

The Company is in compliance with all terms and conditions contained in the insurance policies, and nothing has been done or omitted to be done that would make any insurance policy or insurance void or voidable or that would result in a reduction of the coverage ( No: avkortning ).

The Company is not and has not been in breach of any applicable laws (whether civil, criminal or administrative), statutes, regulations, directives, codes, judgments, orders or any other measures imposed by any governmental, statutory or regulatory body with regard to the pollution or the protection of the environment or to the protection of human health or human safety, or any other living organisms supported by the environment.

There is no current governmental investigation or disciplinary proceeding relating to any alleged breach of any law or permit by the Company, and none is pending, nor threatened.

The Company has not, other than as permitted under applicable permits or applicable laws or regulations held from time to time, disposed of, discharged, released, placed, dumped or emitted any hazardous substances, such as pollutants, contaminants, hazardous or toxic materials, wastes or chemicals. Neither the Seller nor the Company has received any formal or informal notice or other communication from which it appears that the Company may be or has been in violation of any laws or permits. There are no actual or contingent obligations on the Company to pay money or carry out any work in order to keep or be granted an extension or renewal of any existing permit. There are no facts or circumstances that could result in such an obligation. The properties used by the Company are not made of or do not contain any form of asbestos or any other toxic substance that may cause damage to the health of the persons working or visiting the premises.

The Company has at all times conducted the Business in accordance with and has complied with any applicable laws in Norway and in any other relevant countries relating to its operations and the Business.

All necessary licences, consents, permits and authorisations have been obtained by the Company to enable the Company to carry on the Business in the places and in the manner in which such Business is now conducted and all such licences, consents, permits and authorisations are valid and subsisting and have been complied with in all respects.

There are no claims, actions, lawsuits, administrative, governmental, arbitration or other legal proceedings (including but not limited to proceedings related to Taxes) pending or threatened against or involving the Company, the Business or properties or assets of the Company and which would result in a Material Adverse Effect if adversely determined.

The Company has properly filed with the appropriate Tax authorities all Tax returns and reports required to be filed for all Tax periods ending prior to the Closing Date. Such filings are true, correct and complete. All information required for a correct assessment of Taxes has been provided.

The Tax returns of the Company have been assessed and approved by the Tax authorities through the Tax years up to and including the years for which such assessment and approval is required, and the Company is not subject to any dispute with any such authority.

All Taxes that have become due have been fully paid or fully provided for in the Accounts, and the Company shall not be liable for any additional Tax pertaining to the period before the Accounts Date. All Taxes for the period after the Accounts Date have been fully paid when due.

There are no Tax audits, Tax disputes or Tax litigation pending or threatened against or involving the Company. There is no basis for assessment of any deficiency in any Taxes against the Company that has not been provided for in the Accounts or that has not been paid.

The Company is not and has not been involved in any transaction that could be considered as Tax-evasive. All losses for Tax purposes incurred by of the Company are trading losses and are available to be carried forward and set off against income in succeeding periods without limitation and have been accepted by the relevant Tax authorities.

The Company is not and has not been subject to any Tax outside its respective country of fiscal residence.

Except as disclosed to the Buyer, there are no written or oral agreements or arrangements between the Company and the Seller, and no liabilities or obligations (contingent or otherwise) owed by the Company to the Seller.

No services provided by the Seller to the Company are necessary in the ordinary course of business.

No payments of any kind, including, but not limited to management charges, have been made by the Company to the Seller, save for payments under agreements or arrangements made on an arm’s-length basis in accordance with applicable law and regulations.

All documents provided to the Buyer by or on behalf of the Seller or the Company are true and correct, and no document provided to the Buyer by or on behalf of the Seller or the Company contains any untrue statement of a relevant fact or omits to state a relevant fact necessary to make the statements contained in the document not misleading.

There are no facts or circumstances known to the Seller, relating to the affairs of the Company, that have not been disclosed to the Buyer, which, if disclosed, reasonably could have been expected to influence the decision of the Buyer to purchase the Shares on the terms of this Agreement.

The Seller confirms that the Seller, prior to the Signing Date, has made, and until the Closing Date, shall continue to make, all investigations necessary in order to ensure that the statements in Clauses 7, 8 and 9 are correct.

The Seller represents and warrants to the Buyer as of the Signing Date and on the Closing Date, unless otherwise expressly stated:

The Company is the registered owner of the Vessel and has good and marketable title to the Vessel, free and clear of any and all Encumbrances, other than those arising under the Raquel Facility and the Swap Agreements. The Vessel is properly registered in the name of the Seller under and pursuant to the flag and law of Malta, and all fees due and payable in connection with such registration have been paid.

The Vessel is entered with DNV GL and has the highest classification rating. The Vessel is in class without any recommendations or notation as to class or other requirement of the relevant classification society, and if the Vessel is in a port, it is in such condition that it cannot be detached by any port state authority or the flag state authority for any deficiency.

The Vessel has been maintained in a proper and efficient manner in accordance with internationally accepted standards for good ship maintenance, is in good operating order, condition and repair and is seaworthy, and all repairs made to the Vessel during the last two years and all known scheduled repairs due to be made and all known deficiencies have been disclosed to the Buyer.

The Vessel is not (a) under arrest or otherwise detained, (b) other than in the ordinary course of business, in the possession of any person (other than her master and crew) or (c) subject to a possessory lien.

The Vessel is supplied with valid and up-to-date safety, safety construction, safety equipment, radio, loadline, health, tonnage, trading and other certificates or documents as may for the time being be prescribed by the law of Malta or of any other pertinent jurisdiction, or that would otherwise be deemed necessary by a shipowner acting in accordance with internationally accepted standards for good ship management and operations.

No blacklisting or boycotting of any type has been applied or currently exists against or in respect of the Vessel.

There are not outstanding any options or other rights to purchase the Vessel.

The insurance policies relating to the Vessel are as set forth on Schedule 2 hereto, each of which is in full force and effect and, to the Seller’s knowledge, not subject to being voided or terminated for any reason.

From the Signing Date to the Closing Date, the Seller shall cause the Company to conduct its business in the usual, regular and ordinary course in substantially the same manner as previously conducted. The Seller shall not permit the Company to enter into any contracts or other written or oral agreements prior to the Closing Date, other than such contracts and agreements as have been disclosed to the Buyer prior to the Signing Date, without the prior consent of the Buyer (such consent not to be unreasonably withheld). In addition, the Seller shall not permit the Company to take any action that would result in any of the conditions to the purchase and sale of the Shares set forth in Clause 6 not being satisfied. Furthermore, the Seller hereby agrees and covenants that it:

The Buyer hereby agrees and covenants that during the period of time after the Signing Date and prior to the Closing Date, the Buyer shall, in respect of the Shares to be transferred on the Closing Date, take, or cause to be taken, all necessary company action, steps and proceedings to approve or authorize validly and effectively the purchase and sale of the Shares and the execution and delivery of this Agreement and the other agreements and documents contemplated hereby.

This Agreement may be terminated, and the transactions contemplated by this Agreement may be abandoned, at any time prior to the Closing Date:

If this Agreement is terminated pursuant to Clause 11.1, all further obligations of the Parties pursuant to this Agreement shall terminate without further liability of a Party to the other, provided, however, that the obligations of the Parties contained in Clause 13 (Costs) and Clause 17 (Governing Law and arbitration) shall survive such termination, and further provided, that if this Agreement is terminated by a Party because of the breach of this Agreement by the other Party or because one or more of the conditions to the terminating Party’s obligations under this Agreement is not satisfied as a result of the other Party’s failure to comply with its obligations under this Agreement, the terminating Party’s right to pursue all legal remedies will survive such termination unimpaired.

Following the Closing, the Seller shall be liable for, and shall indemnify, defend and hold harmless the Buyer and its respective officers, directors, employees, agents and representatives (the “ Buyer Indemnitees ”) from and against, any Losses, suffered or incurred by such Buyer Indemnitees:

Following the Closing, the Buyer shall be liable for, and shall indemnify, defend and hold harmless the Seller and its respective officers, directors, employees, agents and representatives (the “ Seller Indemnitees ”) from and against, any Losses, suffered or incurred by such Seller Indemnitees by reason of, arising out of or otherwise in respect of any inaccuracy in, breach of any representation or warranty, or a failure to perform or observe fully any covenant, agreement or obligation of, the Buyer in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by the Buyer.

If the Seller or the Buyer, as the case may be (an “ Indemnified Party ”), shall receive notice of any claim by a third party that is or may be subject to indemnification or compensation from the other Party pursuant to this Agreement (a “ Third-Party Claim ”), the Indemnified Party shall give the other Party (the “ Indemnifying Party ”) prompt written notice of such Third-Party Claim and the Indemnifying Party shall, at the Indemnifying Party’s option, have the right to participate in the defence thereof by counsel at the Indemnifying Party’s own cost and expense. If the Indemnifying Party acknowledges within 30 days from such written notice in writing its obligation to indemnify the Indemnified Party against all Losses that may result from such Third-Party Claim, the Indemnifying Party shall be entitled, at the Indemnifying Party’s option, to assume and control the defence of such Third-Party Claim at the Indemnifying Party’s cost and expense and through counsel of the Indemnifying Party’s choice. No such Third-Party Claim may be settled by the Indemnifying Party without the written consent of the Indemnified Party, unless the settlement involves only the payment of money by the Indemnifying Party. No Third-Party Claim that is being defended in good faith by the Indemnifying Party shall be settled by the Indemnified Party without the written consent of the Indemnifying Party. The Indemnifying Party shall have no obligation to indemnify the Indemnified Party for any losses resulting from the settlement of Third-Party Claims in violation of the provisions of this Clause 12.3.

Notwithstanding any other provision of this Agreement, the Seller shall be liable for, and shall indemnify, defend and hold harmless the Partnership and any person controlled by the Partnership, including the Buyer, from and against the matters set forth in Section 7.2 c) and Article XIII of the Omnibus Agreement, subject to the terms and conditions set forth therein.

The Seller’s indemnification obligations under this Clause 12.4 shall (a) only be subject to limitations insofar as such limitations are set forth in Section 7.2 c) and Article XIII of the Omnibus Agreement and (b) be in addition to and independent of its indemnification obligations pursuant to Clause 12.1. For the avoidance of doubt, the indemnification provided pursuant to this Clause 12.4 shall be without duplication of any other amounts payable to the Buyer Indemnities pursuant to Clause 12.1.

All notices, requests, demands, approvals, waivers and other communications required or permitted under this Agreement must be in writing in the English language and shall be deemed to have been received by a Party when:

All such notices and communications shall be addressed as set forth below or to such other addresses as may be given by written notice in accordance with this Clause 14.

If to the Seller:

Knutsen NYK Offshore Tankers AS

Attention: CEO

Smedasundet 40, Postboks 2017, 5504 Haugesund, Norway

Fax no.: +47 52 70 40 40

If to the Buyer:

KNOT Shuttle Tankers AS

Attention: Chairman of the Board

Smedasundet 40, Postboks 2017, 5504 Haugesund, Norway

Fax no.: +47 52 70 40 40

This Agreement shall be binding upon and inure to the benefit of the successors of the Parties, but shall not be assignable by any of the Parties without the prior written consent of the other Party. The benefit of this Agreement may, however, be assigned by either of the Parties to any group directly or indirectly controlling, controlled by or under common control of the assignor, provided that the assignor shall remain liable for its own debt and for all obligations under this Agreement.

From time to time after the Signing Date, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and shall do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (b) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended so to be and (c) more fully and effectively to carry out the purposes and intent of this Agreement.

This Agreement, the Schedules hereto and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to its subject matter hereof. This Agreement, the Schedules hereto and the instruments referenced herein contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the Parties hereto after the Signing Date.

No one is entitled to receive any finder’s fee, brokerage or other commission in connection with the purchase of the Shares or the consummation of the transactions contemplated by this Agreement.

This Agreement shall be governed by and construed in accordance with Norwegian law.

The Parties shall seek to solve through negotiations any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity hereof. If the Parties fail to solve such dispute, controversy or claim by a written agreement within 60 days after one of the Parties has requested such negotiations by notice to the other Party, such dispute, controversy or claim shall be finally settled by arbitration in Haugesund in the English language in accordance with the Norwegian Arbitration Act. The arbitration tribunal shall consist of three arbitrators, of which the Buyer shall appoint one arbitrator and the Seller shall appoint one arbitrator. The arbitrators so appointed shall appoint the third arbitrator, who shall be the chairman of the arbitration tribunal. In the event of failure by a Party to appoint its arbitrator within 30 days after the request for arbitration first is given, or the failure by the first two arbitrators to appoint the third arbitrator within 30 days after appointment of the last of the first two arbitrators to be appointed, such arbitrator or arbitrators shall be appointed by the district judge (No: “ Sorenskriver ”) of Haugesund District Court. Any Party may seek judgement upon any award in any court having jurisdiction, or an application may be made to such court for the judicial acceptance of the award and for an order of enforcement.

Notwithstanding the above, either Party may bring an action in any court of competent jurisdiction (a) for provisional relief pending the outcome of arbitration, including, without limitation, provisional injunctive relief or pre-judgement attachment of assets, or (b) to compel arbitration or enforce any arbitral award. For purposes of any proceeding authorised by this Clause 17, each Party hereby consents to the non-exclusive jurisdiction of Haugesund, Norway.

* * *

This Agreement has been executed in two original copies, of which each Party has retained one copy.

Schedule 1

FORM OF SELLER’S CREDIT AND SELLER’S LOAN

THE UNDERSIGNED, KNOT SHUTTLE TANKERS AS, of Smedasundet 40, 5529 Haugesund, Norway, a company registered in Norway with registration number 998 942 829 (the “ Borrower ”)

HEREBY ACKNOWLEDGES that it owes to KNUTSEN NYK OFFSHORE TANKERS AS, of Smedasundet 40, 5529 Haugesund, Norway, a company registered in Norway with registration number 995 221 713 (the “ Creditor ”)

THE INITIAL PRINCIPAL AMOUNT of USD 25,000,000 (the “ Loan Amount ”), pursuant to the terms and conditions of a seller’s credit in the amount of USD 12,981,057 (the “ Seller’s Credit ”) and a Seller’s Loan in the amount of USD 12,018,943 (the “ Seller’s Loan ”) as set out below (the “Seller’s Credit and Seller’s Loan”):

THIS SELLER’S CREDIT AND SELLER’S LOAN have been entered into on [●] December 2016.

Guarantee

By our co-signature on this Seller’s Credit and Seller’s Loan we, KNOT Offshore Partners LP, hereby unconditionally and irrevocably guarantee, as primary obligor as and for its own debt and not merely as surety to the Creditor the due and punctual payment by the Borrower of any and all sums which are now or at any time hereafter will be payable by the Borrower under or in respect of the Seller’s Credit and Seller’s Loan.

If and whenever the Borrower shall make default in the payment of any sums due and payable under the terms of the Seller’s Credit and Seller’s Loan, we shall forthwith, following demand by Creditor to us, pay to the Creditor in such manner as notified by the Creditor the moneys in regard to which such default has been made, with the default interest (if any) thereon.

Our total liability under this Guarantee shall, in the aggregate, always be limited to the Loan Amount plus all unpaid interest and default interest.

Schedule 1: Definitions

Hull & Machinery

War Risk

Schedule 3

ACCOUNTS

[Separate attachment]

Exhibit 4.2

DATED 17 December 2014

USD 90,000,000

FACILITY AGREEMENT

for

KNUTSEN SHUTTLE TANKERS 19 AS

as Borrower

and

KNUTSEN NYK OFFSHORE TANKERS AS

as Guarantor

with

THE FINANCIAL INSTITUTIONS listed in Schedule 1

acting as Original Lenders

and

SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED

COMMBANK EUROPE LIMITED

acting as Mandated Lead Arrangers

and

SMBC NIKKO CAPITAL MARKETS LIMITED

COMMONWEALTH BANK OF AUSTRALIA, LONDON BRANCH

acting as Hedging Banks

and

SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED

acting as Bookrunner, Structuring Bank and Agent

CONTENTS

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THIS AGREEMENT is dated 17 December 2014 and made between:

COMMBANK EUROPE LIMITED , acting through its offices at Level 3, Strand Towers, 36 The Strand, Silema SLM1022, Malta,

as mandated lead arrangers (the “ Mandated Lead Arrangers ”);

COMMONWEALTH BANK OF AUSTRALIA, LONDON BRANCH , acting through its offices at Senator House, 85 Queen Victoria Street, London EC4V 4HA, United Kingdom,

as hedging banks (the “ Hedging Banks ”); and

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

In this Agreement:

“ Accession Letter ” means an accession letter signed and presented to the Agent by the Borrower, KNOT and KNOP in respect of the Drop Down and the replacement of KNOT by KNOP as Guarantor substantially in the form set out in Schedule 6 ( Form of Accession Letter )

“ Account Bank ” means DNB Bank ASA, acting through its offices at Solheimsgaten 7C, N-5058 Bergen, Norway.

“ Accounts ” means together:

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and “ Account ” means any of them.

“ 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 Ship Registry ” means the Maltese ship registry or any other ship registry as approved in writing by the Agent.

“ Assignment Agreement I ” means an agreement dated on or about the date hereof for the assignment of the Earnings, the Insurances and any Requisition Compensation and the pledge of the Accounts between the Borrower and the Agent in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“ Assignment Agreement II ” means an agreement dated on or about the date hereof for the assignment of the Shipbuilding Contract, the Charterparty and the Management Agreement between the Borrower and the Agent in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“ Assignment of Hedging Agreements ” means an agreement dated on or about the date hereof for the assignment of the Borrower’s rights under the Hedging Agreements between the Borrower and the Agent in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

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

“ Availability Period ” means the period from and including the date the Agent has received all of the documents and other evidence listed in Part I ( Conditions Precedent to Signing ) and Part II ( Conditions Precedent to Utilisation ) of Schedule 2 ( Conditions Precedent ), except those documents which specifically will only be available on the Utilisation Date or within another specified date to and including the earlier of (a) the backstop date on which the Borrower is entitled to terminate the Shipbuilding Contract, (b) the Delivery Date, (c) the date when the Facility is fully drawn or cancelled and (d) 30 April 2015.

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

exceeds:

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“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in New York, London, Oslo, Malta and Paris.

“ Charterer ” means Repsol Sinopec Brazil BV, a company incorporated in Brazil and ultimately owned 60% by Repsol Brazil SA (“ Repsol ”) and 40% by China Petrochemical Corporation (“ Sinopec ”).

“ Charterparty ” means a ten-year (plus 3+2-year options) time charterparty dated 9 January 2013, entered into between the Borrower and the Charterer for the chartering of the Vessel at a charter rate net of commission of USD 50,000/day if the Vessel is delivered in Brazil (USD 49,000/day if the Vessel is delivered ex-Shipyard).

“ Closing Date ” means the date the Agent has received, or (as the case may be) the Lenders have waived, all of the documents and other evidence listed in Part I ( Conditions Precedent to Signing ) and Part II ( Conditions Precedent to Utilisation ) of Schedule 2 ( Conditions Precedent ).

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

“ Commitment ” means:

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

“ Companies Act ” means the Norwegian Limited Liability Companies Act of 13 June 1997 No. 44 (in No. aksjeloven ).

“ Compliance Certificate ” means a certificate substantially in the form set out in Schedule 5 ( Form of Compliance Certificate ).

“ 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 the date of delivery of the Vessel from the Shipyard to the Borrower pursuant to the Shipbuilding Contract.

“ Disruption Event ” means either or both of:

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and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

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

“ Drop Down ” means the potential acquisition by KNOP (or a Subsidiary of KNOP) of 100% of the shares in the Borrower.

“ Drop Down Account ” means the bank account(s) of KNOT, which shall be held with the Account Bank or such other banking institution as the Majority Lenders may approve and into which all proceeds payable from KNOP (or a Subsidiary of KNOP) to KNOT in connection with the Drop Down shall be paid.

“ Drop Down Date ” means the date on which a Drop Down actually takes place, as determined in accordance with sub-paragraph (c) of Clause 26.2 ( KNOP as replacement Guarantor ).

“ DSR Account ” means USD account no. 1250.05.25043, held in the name of the Borrower with the Account Bank.

“ 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):

“ Earnings Account ” means USD account no. 1250.04.94415, held in the name of the Borrower with the Account Bank.

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“ 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:

“ Environmental Permits ” means any permit, licence, consent, approval and other 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 an Obligor.

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

“ 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 Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

“ Factoring Agreement ” means a Norwegian law factoring agreement in the amount of USD 110,000,000 dated on or about the date hereof between the Borrower and the Agent in form and substance satisfactory to the Agent (on behalf of the Finance Parties), to be registered against the Borrower with the Norwegian Registry of Movable Property (in No. Løsøreregisteret ).

“ FATCA ” means:

“ FATCA Application Date ” means:

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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 dated on or about the date of this Agreement between the Agent and the Borrower setting out any of the fees referred to in Clause 11 ( Fees ).

“ Final Maturity Date ” means the date falling ten (10) years after the Delivery Date.

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

“ Finance Party ” means the Agent, the Structuring Bank, the Bookrunner, a Mandated Lead Arranger, a Hedging Bank or a Lender.

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

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“ GAAP ” means generally accepted accounting principles in (a) Norway in respect of the Borrower, the Manager and KNOT, (b) the US in respect of KNOP and (c) Brazil in respect of the Charterer, in each case including IFRS (if relevant).

“ General Partner ” means KNOT Offshore Partners GP LLC, a company incorporated under the laws of the Marshall Islands and having its registered office at 2 Queen’s Cross, Aberdeen, Aberdeenshire, AB15 4YB, United Kingdom being the general partner in KNOP.

“ Group ” means:

and in any event together with its Subsidiaries.

“ Guarantor ” means:

“ Hedging Agreement ” means any master agreement (as amended at any time) and/or any swap transaction, schedule or hedging agreement pursuant to such master agreement for the purpose of regulating any exchange trades, including bunker derivatives, interest rate swaps or other financial hedging contracts entered or to be entered into between the Borrower and a Hedging Bank.

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

“ 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 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 ).

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

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each as of 11:00 a.m. in London on the Quotation Day for USD.

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

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

“ ISSC ” means an International Ship Security Certificate issued by the Classification Society confirming that the Vessel is in compliance with the ISPS Code.

“ KNOP ” means KNOT Offshore Partners L.P., a master limited partnership listed on the New York Stock Exchange, with registered offices at 2 Queen’s Cross, Aberdeen, Aberdeenshire, AB15 4YB, United Kingdom.

“ Lender ” means:

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

“ LIBOR ” means, in relation to the Loan:

the Reference Bank Rate,

as of in the case of paragraphs (a) and (c) above, 11.00 a.m. London time on the Quotation Day for USD and for a period equal in length to the Interest Period of the Loan and, if that rate is less than zero (0), LIBOR shall be deemed to be zero (0).

“ Loan ” means the Loan made or to be made under the Facility or the principal amount outstanding for the time being of the Loan.

“ Majority Lenders ” means:

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

“ Manager ” means KNOT Management AS or one of its Affiliates acceptable to the Agent.

“Manager’s Undertaking ” means an undertaking by the Manager in form to be determined by Agent.

“ Margin ” means two per cent. (2.00%) per annum.

“ Market Value ” means the fair market value of the Vessel, being the average of valuations of the Vessel obtained from two (2) brokers approved by the Agent (for the sake of good order, Fearnleys and Lorentsen & Stemoco are pre-approved) addressed to the Agent (on behalf of the Finance Parties) 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 charter and/or similar arrangement.

“ Material Adverse Effect ” means, in the reasonable opinion of the Agent, a material adverse effect on:

“ 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:

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

“ Mortgage ” means the first priority mortgage in the amount of USD 110,000,000 (and deed of covenants or declaration of pledge collateral thereto (if applicable)), to be executed and recorded by the Borrower against the Vessel in favour of the Agent (on behalf of the Finance Parties) in the relevant Approved Ship Registry, in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

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“ Mortgaged Assets ” means:

“ Obligor ” means the Borrower or the Guarantor.

“ Original Financial Statements ” means:

“ 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.

“ Participating Member State ” means any member state of the European Union that has adopted the EURO as its lawful currency.

“ Party ” means a party to this Agreement.

“ Quiet Enjoyment Letter ” means a letter dated on or about the date hereof in form and substance acceptable to all Lenders, executed or to be executed by the Agent and the Charterer, setting out the Charterer’s right to “quiet enjoyment” of the Vessel.

“ 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 unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

“ 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 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.

“ Reference Banks ” means the principal London offices of Sumitomo Mitsui Banking Corporation Europe Limited and Commonwealth Bank of Australia or such other banks as may be appointed by the Agent in consultation with the Borrower.

“ Relevant Interbank Market ” means the London interbank market.

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“ 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 ).

“ Requisition Compensation ” means all sums of money or other compensation from time to time payable in respect of any requisition for title of other compulsory acquisition, requisition, expropriation or similar of the Vessel by any governmental entity.

“ Restricted Party ” means a person that (i) is listed on any Sanctions List, (ii) is located in or incorporated under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions, (iii) is directly or indirectly owned or controlled by, or acting on behalf of, a person referred to in (i) and/or (ii) above, or (iv) with whom a subject of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities.

“ Sanctions ” means any applicable economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) Norwegian Government, (ii) the United States Government; (iii) the United Nations; (iv) the European Union or its Member States, including without limitation, the United Kingdom; (iv) Australia; (v) any country to which any Obligor, or any other member of the Group or any Affiliate of any of them is bound; or (vi) the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“ OFAC ”), the United States Department of State, and Her Majesty’s Treasury (“ HMT ”) (together “ Sanctions Authorities ”, and each a “ Sanctions Authority ”).

“ Sanctions List ” means the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC, the “Consolidated List of Financial Sanctions Targets”, maintained by HMT or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities, including, but not limited to, the Norwegian Government, the European Union or the United Nations.

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

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

“ Share Pledge ” means an agreement for the charge/pledge of the Shares dated on or about the date hereof in agreed form between (a) KNOT or KNOP (or a Subsidiary of KNOP) (as the case may be, prior to and as from the Drop Down Date) and (b) the Agent (on behalf of the Finance Parties).

“ Shares ” means all authorised and issued shares in the Borrower.

“ Shipbuilding Contract ” means a shipbuilding contract dated 21 December 2012, entered into between the Borrower and the Shipyard for the construction of the Vessel.

“ Shipyard ” means Cosco Zhoushan, China.

“ Signing Date ” means the date of signing of this Agreement.

“ 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.

“ Swap Break Costs ” means any break costs related to the unwinding of any transaction made under any Hedging Agreement.

“ Subsidiary ” means a subsidiary (in No. datterselskap ) within the meaning of Section 1-3 of the Companies Act.

“ 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).

“ Total Commitments ” means the aggregate of the Commitments being the lesser of USD 90,000,000 and 80% of the Total Delivery Cost.

“ Total Delivery Cost ” means the aggregate of:

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“ Total Loss ” means:

“ Total Loss Date ” means:

“ Transaction Documents ” means each Management Agreement, the Charterparty and the Shipbuilding Contract, together with the other documents contemplated herein or therein, and “ Transaction Document ” means any of them.

“ Transfer Certificate ” means a certificate substantially in the form set out in Schedule 5 ( 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:

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

“ US ” means the United States of America.

“ US Tax Obligor ” means:

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“ Utilisation ” means a 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 Part I ( Utilisation Request ) of Schedule 3 ( Requests ).

“ VAT ” means value added tax as provided for in the Norwegian Value Added Tax Act of 19 June 2009 no. 58 (in No. Merverdiavgiftsloven ) and any other tax of a similar nature.

“ Vessel ” means MT “Raquel Knutsen”, IMO no. 9685396, a 152,000 dwt shuttle tanker constructed by the Shipyard and to be delivered in 2015, registered or to be registered in the name of the Borrower with an Approved Registry.

“ Vessel Contract Price ” means the agreed contract price for the Vessel as set out in the Shipbuilding Contract, being no more than USD 98,000,000.

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“ $ ”, “ USD” and “ dollars ” denote the lawful currency of the United States of America and “kr”, “ NOK ” and “ norske kroner ” denote the lawful currency of Norway.

SECTION 2

THE FACILITY

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

The Borrower shall apply all amounts borrowed by it under the Facility towards part financing the Total Delivery Cost.

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

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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:

The Facility may be drawn in 1 – one – Loan.

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

The conditions specified in this Clause 4 ( Conditions of Drawdown ) 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).

SECTION 3

UTILISATION

The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than 11:00 a. m. London time on the date falling three (3) Business Days prior to the relevant Utilisation Date.

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

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The Commitments which, at that time, are unutilised shall be immediately cancelled at the earlier of (a) the end of the Availability Period and (b) the utilisation of the Facility on the Utilisation Date (whether or not the full Facility is utilised).

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

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

The Borrower may, if it gives the Agent not less than five (5) Business 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 2,500,000 and in multiples thereof) of the Facility. Any cancellation under this Clause 7.1 ( Voluntary cancellation ) shall reduce the Commitments of the Lenders proportionately.

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The Borrower shall make a mandatory prepayment representing 20% of the original amount of the Loan on the Utilisation Date upon the Drop Down Date (the “ Drop Down Mandatory Prepayment’’ ), to be applied upfront on the then outstanding amount of the Loan without impacting the balloon of the Loan. In the absence of Drop Down within two (2) years from the Delivery Date, the repayment profile will be adjusted accordingly so that prepayments in the same amount as the Drop Down Mandatory Prepayment will be fully effected by the seventh anniversary of the Delivery Date as per the repayment schedule detailed in Schedule 8 ( Repayment schedule ).

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:

If the Vessel is sold or suffers a Total Loss, the Agent shall:

cancel the Total Commitments and declare the outstanding Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable.

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If a Transaction Document (except a Management Agreement, provided such Management Agreement is replaced with a new Management Agreement acceptable to the Lenders with a Manager acceptable to the Lenders which becomes effective latest from the time of cancellation of the then existing Management Agreement) is cancelled for whatever reason before its agreed expiry or maturity date, the Agent shall on or before the date on which the cancellation becomes effective cancel the Total Commitments and declare the outstanding Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable.

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.

the Borrower, on thirty (30) Business Days’ prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 25 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in

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accordance with Clause 25 ( Changes to the Lenders ) for a purchase price in cash payable at the time of the transfer in an amount equal to the outstanding principal amount of such Lender’s participation in the outstanding Loan and all accrued interest (to the extent that the Agent has not given a notification under Clause 25.6 ( Pro rata interest settlement )), Break Costs and other amounts payable in relation thereto under the Finance Documents.

Any prepayment of a Loan pursuant to Clause 7.2 ( Voluntary prepayment of Loan ) or Clause 7.6 ( Market Value ) shall be applied pro rata to each Lender’s participation in the Loan.

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SECTION 5

COSTS OF UTILISATION

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

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

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).

Subject to Clause 10.2 ( Market disruption ), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 a.m. London time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

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The Borrower shall pay to the Agent an upfront fee, a structuring fee and an annual agency fee in the amount and at the times agreed in a Fee Letter.

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

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

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The Borrower shall pay and, within three 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.

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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.

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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.

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

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

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

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

The Borrower shall promptly on demand pay the Agent, the Mandated Lead Arrangers and the Structuring Bank the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:

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

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.

SECTION 7

SECURITY

The obligations and liabilities of the Borrower under the Finance Documents, 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 in connection with this Agreement, shall at any time until all amounts due to the Finance Parties under any Finance Document have been paid and/or repaid in full, be secured by the following security:

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.

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

The Borrower undertakes to ensure that the Security Documents are duly executed by the parties thereto in favour of the Agent (on behalf of the Finance Parties) on or about the Utilisation Date 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 Agent may reasonable require in order for the relevant Finance Parties, to maintain the security position envisaged hereunder.

The Guarantor irrevocably and unconditionally:

subject however, to Clause 18.2 ( Guarantee limitations ) below.

Notwithstanding the obligations of the Guarantor pursuant to the guarantee set out in this Clause 18 ( Guarantee and indemnity ):

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

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 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.

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) including:

The Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person 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 to the contrary.

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

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents 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 it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18 ( Guarantee and indemnity ):

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 by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties 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 ).

This guarantee 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.

The Guarantor, to the extent it is deemed to be a guarantor pursuant to the FA Act, 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):

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SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

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

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

All Authorisations required or desirable:

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.

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

It is not required to make any Tax Deduction (as defined in Clause 12.1 ( Definitions ) from any payment it may make under any Finance Document.

Under the law of its 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 registration of the registration of the Mortgage with the relevant Approved Ship Registry and the Factoring Agreement with the Norwegian Registry of Moveable Property (in No. Løsøreregisteret ).

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Its 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.

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

The Borrower will hold the legal title and/or will be the beneficial party, as the case may be, to the Mortgaged Assets (other than the Shares, to which the Guarantor will hold title).

None of the Mortgaged Assets are affected by any Security, and it is not 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 the Security created under the Security Documents, for liens arising solely by operation of law and/or in the ordinary course of business or otherwise as agreed with the Agent.

Neither it, nor any of its assets, are entitled to immunity from suit, execution, attachment or other legal process, and its 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.

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.

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The Borrower and the Manager 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.

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, if determined against it, to have a material adverse effect on its ability to perform its obligations under the Finance Documents and the Transaction Documents.

It and parties acting on its behalf shall observe and abide with all applicable laws and regulations applicable to it, inter alia to bribery and corrupt practices and to SOLAS conventions.

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

The Vessel will on the Utilisation Date be:

It is not 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).

No Obligor, nor any of their joint ventures, nor any of their respective directors, officers, employees, agents or representatives or any other persons acting on any of their behalf, as far as the Obligor is or ought to be aware:

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The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request, on the Drop Down Date (by KNOP as Guarantor) 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).

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.

The Borrower shall supply to the Agent in sufficient copies for all the Lenders:

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All financial statements shall include or be supplemented by updated details of all off-balance sheet and time-charter hire commitments.

The Borrower shall supply to the Agent, with each set of financial statements delivered pursuant to paragraph (a)(i) or (b)(i) of Clause 20.1 ( Financial statements ), a Compliance Certificate signed by the Chief Financial Officer of the each Obligor 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.

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.

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

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