Euroseas (ESEA) 20-F2019 FY Annual report (foreign)

Kea Shipowners Ltd, a company incorporated under the law of the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120948 (“Kea”); Spetses Shipowners Ltd, a company incorporated under the law of the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120949 (“Spetses”) and Hydra Shipowners Ltd, a company incorporated under the law of the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120950 (“Hydra” and, together with Kea and Spetses, the “Borrowers” and each a “Borrower”); and

HSBC BANK plc, of 8 Canada Square, London, E14 SHQ, England (the “Lender”). Preliminary

Kea has agreed to purchase the Kea Vessel from the Kea Seller on the terms of the Kea MOA and intends to register the Kea Vessel in its ownership under the laws and the flag of the Republic of Liberia.

Spetses has agreed to purchase the Spetses Vessel from the Spetses Seller on the terms of the Spetses MOA and intends to register the Spetses Vessel in its ownership under the laws and the flag of the Republic of Liberia.

Hydra has agreed to purchase the Hydra Vessel from the Hydra Seller on the terms of the Hydra MOA and intends to register the Hydra Vessel in its ownership under the laws and the flag of the Republic of Liberia.

The Lender has agreed to advance to the Borrowers on a joint and several basis up to the lesser of (a) $12,500,000 and (b) 49.9% of the aggregate Market Values of the Vessels to assist the Borrowers to finance part of the purchase prices of the Vessels.

Definitions In this Agreement:

the interest which the Lender should have received Per the period from the date of receipt of all or tiny part of the Loan or an 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,

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

is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 32 (Confidentiality); or

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

is known by the Lender before the date the information is disclosed to it by any Obligor, any other member of the Group or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with any Obligor or any other member of the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

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

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

from performing its payment obligations under the Finance Documents; or

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

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

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

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

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction,

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

moneys borrowed and debit balances at banks or other financial institutons;

any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);

any note purchase facility or the issue of bonds„ notes, debentures, loan stock or any similar instrument°

the amount of any liability in respect of any finance or capital lease;

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

any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or dose-out of that Treasury Transaction, that amount) shall be taken into account);

any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not an Obligor which liability would fall within one of the other sections of this definition or (ii) any liabilities of any Obligor relating to any post-retirement benefit scheme;

any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under GAAP;

any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of Page 7

any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and

the amount of any liability in respect of any guarantee or indemnity for any of the Items referred to in (a) to (j).

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency,. reorganisation and other laws generally affecting the rights of creditors;

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

similar principles, rights and defences under the laws of any Relevant Jurisdiction; and any other matters which are set out as qualifications or reservations as to matters of law of genera/ application in the Legal Opinions.

the applicable Screen Rate; or

(if (i) no Screen Rate is available for the currency of the Loan or (ii) no Screen Rate is available for the relevant Interest Period) the Reference Bank Rate,

it will remain the commercial or technical manager of that Vessel (as the case may be); and

it will not, without the prior written consent of the Lender, subcontract or delegate the commercial or technical management of that Vessel (as the case may be) to any third party; and

the interests of the Managers in the Insurances (other than the right to be reimbursed for protection and indemnity claims under the “pay and be paid” rule) will be assigned to the Lender with first priority; and

(following the occurrence of an Event of Default which is continuing) all claims of the Managers against a Borrower shall be subordinated to the claims of the Lender under the Finance Documents.

in respect of the Kea Vesscl Loan, an amocirit up to the lesser of (i) $4,900,10100 and (li) 49.9% of the Market lilalue of Keg Vessell as evidenced by a Valuation of that Vessel to be obtained pursuant to Schedule 1 Part I 2(f);

in respect of the Spetses Vessel Loan, an amount up to the lesser of (i) 4,100,000 and 00 49.9% of the Market Value of Spetses Vessel as evidenced by a Vaination of that Vessel to be obtained pursuant to Schedule 1 Part I 2 (f); and

In respect of Hydra Veessel Loan, an amount up to the lesser of (i) $3,5002000 and (ii) 49.9% of the Market Value of Hydra Vessel as evidenced by a valuation of that Vessel to be obtained pursuant to Schedule Part I 2 (f).

any Encumbrance created by the Finance Documents;

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

liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and management practice and not being enforced through arrest;

liens for salvage;

liens for master’s disbursements incurred in the ordinary course of trading in accordance with first class ship ownership and management practice and not being enforced through arrest; and

any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Vessel:

its Original Jurisdiction;

any jurisdiction where any asset (other than a Vessel) subject to or intended to be subject to a Security Document to be executed by it is situated and, in relation to a Vessel, the flag of that Vessel;

any jurisdiction where it conducts its business; and

imposed by any law or regulation of the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State , the United Nations Security Council, the European Union, Her Majesty’s Treasury or the Hong Kong Monetary Authority, whether or not any Obligor or any other member of the Group or any Affiliate is legally bound to comply with the Forgoing; or

otherwise imposed by any law or regulation by which any Obligor, any other member of the Group or any Affiliate of any of them is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Obligor, any other member of the Group or any Affiliate of any of them.

an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or

the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire); or

the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (b)), unless a Vessel is released and returned to the possession of the relevant Borrower within 60 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.

an Obligor which is resident for tax purposes in the US; or

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

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

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

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

the “Lender”, any “Borrower”, any “Secured Party” or any “Party” shall be construed so as to include its successors in title permitted assignees and permitted transferees;

a document in “agreed form" is a document which is previously agreed in writing by or on behalf of the Borrowers and the Lender  or, if not so agreed, is in the form specified by the Lender;

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

a “Finance Document”, a “Security Document”, a “Relevant Document” or any other document is a reference to that Finance Document, Security Document, Relevant Document or other document as amended, novated, supplemented, extended or restated from time to time;

“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;

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

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;

a provision of law, is a reference to that provision as amended or re-enacted from time to time; and

a time of day (unless otherwise specified) is a reference to London time.

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

Defined terms 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.

Default A Default (and/or an Event of Default) is “continuing” if it has not been remedied or waived.

Currency symbols and definitions “$”, “USD” and “dollars” denote the lawful currency of the United States of America.

Third party rights A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.

Offer letter This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrowers or their representatives before the date of this Agreement.

In this Clause 1.9:

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

Purpose The Borrowers shall apply the Loan for the purposes referred to in Preliminary (B).

Monitoring The Lender shall not be bound to monitor or verify the application of any amount borrowed under this Agreement.

The Lender will only be obliged to advance a Vessel Loan if:

Conditions subsequent The Borrowers undertake to deliver or to cause to be delivered to the Lender within 14 days after the relevant Utilisation Date the

$3,500,000 in respect of Hydra Vessel,

any sum payable to the Lender by the Borrowers is required to be increased under Clause 12.2.2 (Tax gross-up); or

the Lender claims indemnification from the Borrowers under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs);

On the last day of the Interest Period, in respect of each Vessel Loan, which ends after the Borrowers have given notice under Clause 7.4.1 (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Vessel Loan together with all interest and other amounts accrued under the Finance Documents.

Restrictions Any notice of prepayment or cancellation given under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment or cancellation is to be made and the amount of that prepayment or cancellation.

the payment could have been made to the Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date the Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or

the Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:

an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the ITA which relates to the payment and that Lender has received from the Borrowers or from any other Obligor making the payment a certified copy of that Direction; and

the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

the Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:

the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrowers, on the basis that the Tax Confirmation would have enabled the Borrowers to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or

the Lender is a Treaty Lender and a Borrower or the other Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had the Lender complied with its obligations under Clause 12.2.6;

If the Lender is a Treaty Lender which holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, the Lender shall confirm its scheme reference number and its jurisdiction of tax residence to the Borrowers, and, having done so, the Lender shall be under no obligation pursuant to (a).

with respect to any Tax assessed on the Lender:

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

under the law of the jurisdiction in which the 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 the Lender; or

to the extent a loss, liability or cost:

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

would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up) but was not so

relates to a FATCA Deduction required to be made by a Party.

confirm to that other Party whether it is:

a FATCA Exempt Party; or

not a FATCA Exempt Party; and

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

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.

any law or regulation;

any fiduciary duty; or

any duty of confidentiality.

where a Borrower is a US Tax Obligor, the date of this Agreement; or

where a Borrower is not a US Tax Obligor, the date of a request from that Borrower, supply to the Borrowers:

a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or

any withholding statement or other document, authorisation or waiver as the Borrowers may require to certify or establish the status of the Lender under FATCA or that other law or regulation.

a reduction in the rate of return from the Loan or on the Lender’s (or its Affiliate’s) overall capital;

an additional or increased cost; or

a reduction of any amount due and payable under any Finance Document, which is incurred or suffered by the Lender or any of its Affiliates as a result of the events referred to in Clause 13.1 to the extent that it is attributable to the Lender having entered into any Finance Document or funding or performing its obligations under any Finance Document.

If the Lender intends to make a claim pursuant to Clause 13.1 (Increased costs) the Lender shall promptly notify the Borrowers of the event giving rise to the claim.

The Lender shall, as soon as practicable after a demand by the Borrowers, provide a certificate confirming the amount of its Increased Costs.

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

attributable to a Tax Deduction required by law to be made by the Borrowers;

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

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

Currency indemnity If any sum due from a Borrower 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:

making or filing a claim or proof against that Borrower, or

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

the occurrence of any Event of Default which is continuing;

a failure by an Obligor to pay any amount due under a Finance Document on its due date;

funding, or making arrangements to fund, a Vessel Loan following delivery by the Borrowers of an Utilisation Request but that Vessel Loan not being advanced by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone); or

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

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

in connection with any Environmental Claim.

any failure by the Borrowers to comply with its obligations under Clause 16 (Costs and Expenses);

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

the taking, holding, protection or enforcement of the Security Documents;

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;

any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents to which it is a party; or

acting as holder of any of the Security Documents, Receiver or Delegate or otherwise relating to any of the Charged Property (otherwise, in each case, than by reason of the relevant Lender’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

first, in or towards payment of any unpaid fees, costs, expenses and default interest due to the Lender and any Receiver or Delegate under all or any of the Finance Documents, such application to be apportioned between the Lender and any Receiver or Delegate pro rata to the aggregate amount of such items due to each of them;

second, in or towards payment of any accrued interest, fee or commission due but unpaid under this Agreement;

third, in or towards payment of any principal due but unpaid under this Agreement;

fourth, in or towards payment of any other sum due and payable to the Lender but unpaid under all or any of the Finance Documents,

Valuation certificates The Lender may obtain at the cost and expense of the Borrowers:

Representations Each Borrower makes the representations and warranties set out in this Clause 18 to the Lender:-

Status Each of the Obligors:

is duly incorporated and validly existing under the law of its jurisdiction of incorporation; and

has the power to own its assets and carry on its business as it is being conducted.

Binding obligations Subject to the Legal Reservations:

the obligations expressed to be assumed by each of the Obligors in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable obligations; and

(without limiting the generality of Clause 18.1.2(a)) each Security Document to which it is a party creates the security interests which that Security Document purports to create and those security interests are valid and effective.

Non-conflict with other obligations The entry into and performance by each of the Obligors of, and the transactions contemplated by, the Relevant Documents do not conflict with:

any law or regulation applicable to such Obligor;

the constitutional documents of such Obligor; or

any agreement or instrument binding upon such Obligor or any of such Obligor’s assets or constitute a default or termination event (however described) under any such agreement or instrument.

Power and authority

Each of the Obligors 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 Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.

No limit on the powers of any Obligor will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Relevant Documents to which it is a party.

Validity and admissibility in evidence All Authorisations required or desirable:

to enable each of the Obligors lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to enable the Lender to enforce and exercise all its rights under the Relevant Documents; and

to make the Relevant Documents to which any Obligor is a party admissible in evidence in its Relevant Jurisdictions,

have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part II of Schedule 1 (Conditions Subsequent).

Governing law and enforcement

The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.

Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.

Insolvency No corporate action, legal proceeding or other procedure or step described in Clause 22.1.7 (Insolvency proceedings) or creditors’ process described in Clause 22.1.8 (Creditors’ process) has been taken or, to the knowledge of any Borrower, threatened in relation to an Obligor; and none of the circumstances described in Clause 22.1.6 (Insolvency) applies to an Obligor.

No filing or stamp taxes Under the laws of the Relevant Jurisdictions of each relevant Obligor it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or similar tax or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except for the registration of each Mortgage at the Ships Registry where title to the relevant Vessel is registered in the ownership of the relevant Borrower and payment of associated fees, which registration and fees will be made and paid promptly after the date of the relevant Finance Document.

Deduction of Tax None of the Obligors is required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender which is:

a Qualifying Lender falling within (a) of the definition of Qualifying Lender; or, except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, a Qualifying Lender falling within (b) of the definition of Qualifying Lender; or

a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488).

No default

No Event of Default and, on the date of this Agreement and on each Utilisation Date, no Default is continuing or Is reasonably likely to result from the advance of any Vessel Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any of the Obligors or to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.

No misleading information Save as disclosed in writing to the Lender prior to the date of this Agreement:

all material information provided to the Lender by or on behalf of any of the Obligors or any other member of the Group on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to the Lender on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and

all other written information provided by any of the Obligors or any other member of the Group (including its advisers) to the Lender was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.

The Original Financial Statements were prepared in accordance with GAAP consistently applied unless expressly disclosed to the Lender in writing to the contrary.

The unaudited Original Financial Statements fairly represent the Guarantor’s consolidated financial condition and results of operations for the relevant financial year unless expressly disclosed to the Lender in writing to the contrary prior to the date of this Agreement.

The audited Original Financial Statements give a true and fair view of the Guarantor’s consolidated financial condition and results of operations during the relevant financial year unless expressly disclosed to the Lender in writing to the contrary prior to the date of this Agreement.

There has been no material adverse change in any Obligor’s assets, business or financial condition since the date of the Original Financial Statements.

The Guarantor’s most recent financial statements delivered pursuant to Clause 19.1 (Financial statements):

have been prepared in accordance with GAAP as applied to the Original Financial Statements; and

give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.

Since the date of the most recent financial statements delivered pursuant to Clause 19.1 (Financial statements) there has been no material adverse change in the business, assets or financial condition of any of the Obligors.

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

No breach of laws None of the Obligors or any other member of the Group has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

Each of the Obligors and each other member of the Group is in compliance with Clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.

No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of the Obligors or any other member of the Group where that claim has or is reasonably likely, if determined against that Obligor or other member of the Group, to have a Material Adverse Effect.

None of the Obligors is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.

No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Obligors with respect to Taxes.

Each of the Obligors (other than the Managers) is resident for Tax purposes only in its Original Jurisdiction.

Anti-corruption law None of the Obligors, or any member of the Group nor, to the knowledge of any Borrower, any director, officer, agent, employee, Affiliate or other person acting on behalf of any of the Borrowers, an Obligor or any of their Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of any applicable anti-corruption and anti-bribery law, including but not limited to, the UK Bribery Act and the FCPA. Furthermore, the Borrowers and, to the knowledge of each Borrower, their Affiliates, any member of the Group and each Obligor have conducted their businesses in compliance with the UK Bribery Act, the FCPA and similar laws, rules or regulations and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

No Encumbrance (other than any Permitted Encumbrance) exists over (i) all or any of the present or future assets of a Borrower and (ii) the shares of the Chargor in each Borrower; and

No Borrower has any other Financial Indebtedness outstanding other than as permitted by this Agreement.

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

It is not necessary under the laws of the Relevant Jurisdictions of any of the Obligors:

in order to enable the Lender to enforce its rights under any Finance Document; or

by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,

The Lender is not and will not be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Obligors by reason only of the execution, performance and/or enforcement of any Finance Document.

Ownership of a Borrower and Chargor Each Borrower is a wholly owned subsidiary of the Chargor and the Chargor is a wholly owned subsidiary of the Guarantor.

Disclosure of material facts No Borrower is aware of any material facts or circumstances which have not been disclosed to the Lender and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.

Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrowers to the Lender in accordance with Clause 4 (Conditions of Utilisation) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Lender.

No Immunity No Obligor or any of its assets is immune to any legal action or proceeding.

Money laundering Any borrowing by a Borrower under this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities.

Sanctions None of the Obligors, or any of their respective Subsidiaries or any director or officer, or any employee, agent, or Affiliate, of any of the Obligors or any of their respective Subsidiaries is an individual or entity (“Person”) that is, or is owned or controlled by Persons that are, (i) the target of any sanctions administered or enforced by the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or the Hong Kong Monetary Authority, or (ii) located, organised or resident in a country or territory that is, or whose government is, the target of Sanctions, including, without limitation, the Crimea region, Cuba, Iran, North Korea, Sudan and Syria.

US Tax Obligor No Obligor is a US Tax Obligor.

Repetition Each Repeating Representation is deemed to be repeated by each Borrower by reference to the facts and circumstances then existing on the date of each Utilisation Request, on each Utilisation Date, on the first day of each Interest Period and, in the case or those contained in Clauses 18.1.12(d) and 18.1.12(f) (Financial statements) and for so long as any amount is outstanding under the Finance Documents or any part of the Loan is undrawn and available, on each day.

Information Undertakings

Financial statements Each Borrower shall procure that the Guarantor supplies to the Lender:

as soon as the same become available, but in any event within 180 days after the end of each of the Guarantor’s financial years, the Guarantor’s consolidated audited financial statements (including profit and loss accounts and balance sheets) for that financial year; and

as soon as the same become available, but in any event within 90 days after the end of each half year during each of the Guarantor’s financial years, the Guarantor’s consolidated unaudited semi-annual financial statements for that half year.

Compliance Certificate

Each Borrower shall procure that the Guarantor supplies to the Lender, with each set of its annual consolidated financial statements delivered pursuant to Clause 19.1.1 (Financial statements) and each set of its semi-annual consolidated financial statements delivered pursuant to Clause 19.1.2 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up.

Each Compliance Certificate shall be signed by two directors of each Borrower and the Guarantor shall be reported on by the Guarantor’s auditors in the form agreed by the Borrowers, the Guarantor and the Lender before the date of this Agreement.

Requirements as to financial statements

shall be certified by a director of the Guarantor as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up;

shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Lender:

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

sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether Clause 20 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

Information: miscellaneous Each Borrower shall supply to the Lender:

at the same time as they are dispatched, copies of all documents dispatched by that Borrower to its shareholders generally (or any class of them) or dispatched by that Borrower or any other Obligor to its creditors generally (or any class of them);

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Obligor and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;

promptly, such information as the Lender may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Document including without limitation cash flow analyses and details of the operating costs of any Vessel; and

promptly on request, such further information regarding the financial condition, affairs, commitments, assets and operations of any Obligor or any other member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement and an up to date copy of its shareholders’ register (or equivalent in its Original Jurisdiction)) as the Lender may reasonably request.

Notification of default

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

Promptly upon a request by the Lender, each Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its

“Know your customer” checks If:

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

any change in the status of an Obligor after the date of this Agreement; or

a proposed assignment or transfer by the Lender of any of its rights and obligations under this Agreement; or

any of the Lender’s internal compliance rules, policies and procedures, obliges the Lender (or, in the case of Clause 19.6.3, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower, the Guarantor or any other member of the Group which has a loan with the Lender and has issued registered shares shall promptly upon the request of the Lender, supply, or procure the supply of, such documentation and other evidence as is requested by the Lender at its absolute satisfaction, prior to the date of this Agreement (for itself or, in the case of the event described in Clause 19.6.3, on behalf of any prospective new Lender) in order for the Lender or, in the case of the event described in Clause 19.6,3, any prospective new Lender to carry out and be satisfied it has complied with or has refreshed all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

Financial Covenants

Guarantor’s Covenants Each Borrower shall procure that the Guarantor shall maintain at all times during the Facility Period:

Maximum Leverage not higher than 75%; and

Liquidity of an amount of not less than:

$200,000 in respect of each Fleet Vessel from the date of this Agreement up to and including 29 September 2020; and

$300,000 in respect of each Fleet Vessel from 30 September 2020 and throughout the remainder of the Facility Period; and

Net Worth of not less than fifteen million dollars ($15,000,000).

Cash Collateral Amount The Borrowers shall maintain in the Cash Collateral Account:

an amount of $300,000 during the period commencing on the first Utilisation Date up to but excluding the second Utilisation Date, or, if only one Utilisation is made, throughout the remainder of the Facility Period;

an amount of $600,000 during the period commencing on the second Utilisation Date up to but excluding the third Utilisation Date, or, if only two Utilisations are made, throughout the remainder of the Facility Period; and

an amount of $900,000 during the period commencing on the third Utilisation Date and throughout the remainder of the Facility Period,

General Undertakings

Authorisations Each Borrower shall promptly:

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

supply certified copies to the Lender of,

enable any Obligor to perform its obligations under the Finance Documents to which it is a party;

ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and

enable any Obligor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

Compliance with laws

Each Borrower shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall comply), in all respects with all laws to which it may be subject, if (except as regards Sanctions, to which Clause 21.2.2 applies, and anti-corruption laws to which Clause 20.5 applies) failure so to comply has or is reasonably likely to have a Material Adverse Effect.

Each Borrower shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall comply) in all respects with all Sanctions.

Environmental compliance Each Borrower shall:

comply with all Environmental Laws;

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

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

Environmental Claims

any Environmental Claim against any of the Obligors or any other member of the Group which is current, pending or threatened; and

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

No part of the proceeds of the Loan will be used, directly or indirectly, for any payments that could constitute a violation of any applicable anti-bribery law, including, without limitation the UK Bribery Act, the FCPA or other similar legislation in other jurisdictions.

Each Borrower shall (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall):

conduct its businesses in compliance with applicable anti-corruption laws; and

maintain policies and procedures designed to promote and achieve compliance with such laws.

Taxation

Each Borrower shall (and shall procure that each other Obligor shall) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

such payment is being contested in good faith;

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Lender under Clause 19.1 (Financial statements); and

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

No Borrower may (and each Borrower shall procure that no other Obligor may) change its residence for Tax purposes.

Evidence of good standing Each Borrower will from time to time if requested by the Lender provide the Lender with evidence in form and substance satisfactory to the Lender that the Obligors and all corporate shareholders of any of the Obligors (other than in respect of the Guarantor’s corporate shareholders) remain in good standing.

Pari passu ranking Each Borrower shall (and shall procure that each other Obligor shall) ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pan passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

Negative pledge

Each Borrower shall:

not create nor permit to subsist any Encumbrance (other than any Permitted Encumbrance) over any of its assets; and

procure that the Chargor will not create nor permit to subsist any Encumbrance over the shares of the Chargor in a Borrower.

No Borrower shall:

sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor;

sell, transfer or otherwise dispose of any of its receivables on recourse terms;

enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

enter into any other preferential arrangement having a similar effect,

Disposals

No Borrower shall (and each Borrower shall procure that no other Obligor other than the Guarantor will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

Each Borrower shall procure that the Chargor shall not enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, transfer or otherwise dispose of its shares in a Borrower.

Arm’s length basis

No Borrower shall enter into any transaction with any person except on arm’s length terms and for full market value.

Fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Lender under Clause 4.1 (Initial conditions precedent) or agreed by the Lender shall not be a breach of this Clause 21.11.

Merger No Borrower shall (and each Borrower shall procure that no other Obligor will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction without the prior written consent of the Lender.

Change of business No Borrower shall (and each Borrower shall procure that no other Obligor will) make any substantial change to the general nature of its business from that carried on at the date of this Agreement.

No other business No Borrower shall (and each Borrower shall procure that no other Obligor other than the Guarantor will) engage in any business other than the ownership, operation, chartering and management of a Vessel.

No acquisitions No Borrower shall acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company.

No Joint Ventures No Borrower shall:

enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or

transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).

No borrowings No Borrower shall incur or allow to remain outstanding any Financial Indebtedness (except for the Loan).

No substantial liabilities Except in the ordinary course of business, no Borrower shall incur any liability to any third party which is of a substantial nature.

No loans or credit No Borrower shall, without the Lender’s prior written consent, be a creditor in respect of any Financial Indebtedness unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of its Vessel.

No guarantees or indemnities No Borrower shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

No Borrower shall (and each Borrower shall procure that the Guarantor will not):

declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of the Borrower’s share capital and the Guarantor’s common share capital (or any class of the Borrower’s share capital and any class of the Guarantor’s common share capital (as applicable));

repay or distribute any dividend or share premium reserve in respect of the Borrower and repay or distribute any dividend or common share premium reserve in respect of the Guarantor (as applicable); or

redeem, repurchase, defease, retire or repay any of the Borrower’s share capital and the Guarantor’s common share capital (as applicable) or resolve to do so,

Ownership and management of a Borrower No change in the management or the legal or beneficial ownership of a Borrower shall occur from that advised to the Lender by the Borrowers at the date of this Agreement. Subject to Clause 7.6 (Mandatory prepayment on change of ownership of Guarantor), for the avoidance of doubt, the Lender consents and agrees to any changes relating to the shareholders of the Guarantor’s trading shares in the normal course of business,

No change of CEO The Borrowers shall ensure (and shall procure that the Guarantor shall ensure) that throughout the Facility Period no change in the chief executive officer of the board of directors and/or the chairman of the Guarantor shall occur, without the Lender’s prior written consent.

Inspection of records Each Borrower will permit the inspection of its financial records and accounts from time to time by the Lender or its nominee.

No change in Relevant Documents Without the prior written consent of the Lender, no Borrower shall (and each Borrower shall procure that no other Obligor will) materially amend (and for the avoidance of doubt, but without limitation, any amendment in respect of the fees (but excluding any amendment in respect of the fees already agreed under the Management Agreements), reduction of hire, duration of a Charter, termination events of a Charter and governing law of any of the Relevant Documents will be considered material), vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Fknance Documents, or any other document delivered to the Lender pursuant to Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) or Clause 4.3 (Conditions subsequent).

Sanctions No Borrower will, directly or indirectly, use the proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the target of Sanctions or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loan, whether as underwriter, advisor, investor or otherwise).

Banking operations Each Borrower shall conduct all banking operations in connection with its Vessel through the Lender or any other branch nominated by the Lender in its discretion.

Vessels’ Trading No Borrower shall allow its Vessel to trade in areas prohibited by (a) the law applicable to that Vessel’s flag, (b) the applicable law of the country of incorporation of that Borrower and (c) the applicable law of the nationality of the officers and crew of that Vessel.

No change of Vessels’ ownership or management There shall be no change in the ownership or management of a Vessel, without the Lender’s prior written consent.

ISM Code compliance Each Borrower shall comply and shall procure that each of the Guarantor and the Manager comply with the ISM Code.

Each Borrower shall (and shall procure that each other Obligor shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Lender may reasonably specify (and in such form as the Lender may reasonably require in favour of the Lender or its nominee(s)):

to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Lender or the Secured Parties provided by or pursuant to the Finance Documents or by law;

to confer on the Lender or confer on the Secured Parties an Encumbrance over any property and assets of that Borrower (or that other Obligor as the case may be) located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or

to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents, in respect of which any Encumbrance has become enforceable following the occurrence of an Event of Default which is continuing.

Each Borrower shall (and shall procure that each other Obligor shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Lender or the Secured Parties by or pursuant to the Finance Documents.

Events of Default Each of the events or circumstances set out in this Clause 22.1 is an Event of Default.

Non-payment An Obligor does not pay on the due date any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless:-

its failure to pay is caused by:

administrative or technical error; or

a Disruption Event; and

payment is made within two (2) Business Days of its due date.

Art Obligor does not comply with any provision of a Finance Document (other than those referred to in Clause 22.1.1 (Non-payment) and Clause 22.1.2 (Other specific obligations).

NO Event of Default under this Clause 22.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the earlier of (i) the Lender giving notice to the Borrowers and (ii) the Borrowers becoming aware of the failure to comply.

Misrepresentation Any representation or statement made or deemed to be repeated by an Obligor in any Finance Document or any other document delivered by or on behalf of an Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.

Cross default Any Financial Indebtedness of an Obligor (other than the Managers):

is not paid when due nor within any originally applicable grace period; or

is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described); or

is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event.

An Obligor is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

The value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities).

A moratorium is declared in respect of any indebtedness of an Obligor or any other member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

Insolvency proceedings Any corporate action, legal proceedings or other procedure or step is taken for:

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration,bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of an Obligor;

a composition, compromise, assignment or arrangement with any creditor of an Obligor ;

the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of an Obligor or any of its assets; or

enforcement of any Encumbrance over any assets of an Obligor,

Creditors’ process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Borrower, the Guarantor or the Chargor.

Ownership of a Borrower A Borrower is not or ceases to be a 100% directly owned Subsidiary of the Chargor.

Change of chairman or CEO of Guarantor Mr Aristeidis J. Pittas ceases to be throughout the Facility Period the chief executive officer of the board of directors and/or the chairman of the Guarantor.

Delisting of Guarantor The Guarantor is delisted for any reason whatsoever from the Nasdaq stock exchange.

It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents to which it is a party or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective.

Any obligation or obligations of any Obligor under any Finance Documents to which it is a party are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lender under the Finance Documents.

Any Finance Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Lender) to be ineffective,

Cessation of business An Obligor ceases, or threatens to cease, to carry on all or a substantial part of its business,

Change in management, ownership or control of a Borrower There is any change in the management, beneficial ownership or control of a Borrower from that advised to the Lender by that Borrower at the date of this Agreement. Subject to Clause 7.6 (Mandatory prepayment on change of ownership of Guarantor), for the avoidance of doubt, the Lender consents and agrees to any changes relating to the shareholders of the Guarantor’s trading shares in the normal course of business and confirms that such changes do not violate the terms of this Agreement.

An Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document.

Subject to Clause 22.1.16 (c), any party to any of the Relevant Documents that is not a Finance Document rescinds or purports to rescind or repudiates or purports to repudiate that Relevant Document in whole or in part where to do so has or is, in the reasonable opinion of the Lender, likely to have a material adverse effect on the interests of the Lender under the Finance Documents.

The Management Agreement is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date and is not immediately replaced by a similar agreement in form and substance satisfactory to the Lender.

Conditions subsequent Any of the conditions referred to in Clause 4.3 (Conditions subsequent) is not satisfied within the time reasonably required by the Lender.

Revocation or modification of Authorisation Any Authorisation of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Obligors or any other person (except the Lender) to comply with any of their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender considers is, or may be, prejudicial to the interests of the Lender, or ceases to remain in full force and effect.

Reduction of capital An Obligor (other than the Guarantor) reduces its issued or subscribed capital.

Loss of Vessel A Vessel suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Lender as security for the payment of all or any part of the Indebtedness, except that a Total Loss (which term shall for the purposes of the remainder of this Clause 22.1.20 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:

that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances; and

no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Lender in its discretion that any such refusal or dispute is likely to occur; and

payment of all insurance proceeds in respect of the Total Loss is made in full to the Lender within 180 days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Lender may in its discretion agree.

Challenge to registration The registration of a Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.

War The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced and the relevant Borrower fails to comply with the Lender’s request to (a) change the flag of its Vessel to a country acceptable to the Lender in its absolute discretion by paying promptly any costs and expenses related to such registration under the new flag, (b) provide any additional documentation including any additional security documents required pursuant to such registration under the new flag and (c) record a substitute mortgage over its Vessel and any additional security required pursuant to such recordation within 15 Business Days.

Notice of determination The Guarantor gives notice to the Lender to determine any obligations under the Guarantee.

Litigation Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Relevant Documents or the transactions contemplated in the Relevant Documents or against an Obligor or its assets which have or are reasonably likely to have a Material Adverse Effect.

Material adverse change Any event or circumstance occurs which the Lender reasonably believes has or is reasonably likely to have a Material Adverse Effect.

Any of the Obligors, any other member of the Group or any Affiliate of any of them becomes a Prohibited Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Prohibited Person or any of such persons becomes the owner or controller of a Prohibited Person.

Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise is, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

Any of the Obligors, any other member of the Group or any Affiliate of any of them is not in compliance with all Sanctions.

Acceleration On and at any time after the occurrence of an Event of Default which is continuing the Lender may:

by notice to the Borrowers, cancel the availability of the Loan, at which time it shall immediately be cancelled;

by notice to the Borrowers, declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, at which time they shall become immediately due and payable;

by notice to the Borrowers, declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Lender; and/or

exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

Assignments and transfers by the Lender Subject to this Clause 23, the Lender may:

assign any of its rights; or

transfer by novation any of its rights and obligations, under any Finance Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).

The Lender shall not be required to consult with the Borrowers or obtain the Borrowers’ prior consent in connection with an assignment or transfer pursuant to Clause 23.1 (Assignments and transfers by the Lender).

If:

the Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrowers would be obliged to make a payment to the New Lender or the Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs), then the New Lender or the Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Lender or the Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

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

the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents;

the financial condition of any Obligor;

the performance and observance by any Obligor of its obligations under the Relevant Documents or any other documents; or

the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document,

Each New Lender confirms to the Lender that it:

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Lender in connection with any of the Relevant Documents; and

will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any part of the Loan is undrawn and available.

Nothing in any Finance Document obliges the Lender to:

accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or

support any losses directly or indirectly Incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Relevant Documents or otherwise.

Securitisation The Lender may disclose the size and term of the Loan and the name of each of the Obligors to any investor or potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of the Lender’s rights or obligations under the Finance Documents.

No assignment or transfer by Obligors No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

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

oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

Payments to the Lender On each date on which an Obligor is required to make a payment under a Finance Document, that Obligor shall make the same available to the Lender for value on the due date at the time and, in such funds, as required by the Finance Documents or, if not specified therein, as specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

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

first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents;

second, in or towards payment of any accrued interest, fee or commission due but unpaid under this Agreement;

third, in or towards payment of any principal due but unpaid under this Agreement;

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

The Lender may vary the order set out in Clauses 26.2.1(b) to 26.2.1(d).

Clauses 26.2.1 and 26.2.2 will override any appropriation made by an Obligor.

No set-off by Obligors All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off, counterclaim, taxes, stamp duties, levies of any governmental or other authority.

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

Subject to Clauses 26.5.2 to 26.5.5, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.